Kind: captions
Language: en
Twothirds of Americans now say the other
political party is not just wrong, but a
serious threat to the United States
itself. Trust in the government, has
collapsed to just 22%, which is near
historic lows. The middle class, the
glue that holds this country together,
has been absolutely hollowed out.
Housing is now at its least affordable
point in 30 years, locking young
Americans out of the only asset they
intuitively understand. And when people
are shut out, resentment fers. Which is
why 62%
of Americans under 30 now say they have
a positive view of one of history's most
murderous economic systems, socialism.
Worse than that, these aren't random
cracks in civilization. They're the same
fault lines that show up again and again
throughout history right before
society's collapse. Philosophers,
historians, economists, the best minds
across multiple eras all point to the
same sequence. Debt accumulates, the
middle class disappears, trust breaks
down, populism rises, elites get
overproduced,
wealthy people hedge against collapse,
and debt spirals wildly out of control
until violence erupts. If you want to
know where America is at on that
timeline, we just crossed $37 trillion
in government debt. That's more than
$100,000
of debt for every man, woman, and child
in the country. Only 18% of adults even
earn that much in a year. The debt to
GDP ratio is at a staggering
122% and climbing. and 130% is
considered a red line over which
virtually every country that has ever
spent any meaningful amount of time
above that line has collapsed. History
is screaming at us. The dashboard is
flashing red. If we do not take evasive
action immediately, if you can't afford
a bunker in New Zealand, your future is
going to be bleak. Today, we're going to
speedrun how countries collapse so we
can see exactly what we need to do to
avoid it. And if we can't avoid it as a
society, what you personally need to do
to make it to the other side better than
before the collapse, because collapses
always hurt most people, but they also
always help a select few. We're going to
cover this in five easy parts. Part five
is the playbook, but you are not going
to want to skip part four because if you
do, you're going to be in trouble. it
won't make any sense because that's
where I explain why the answer you're
currently being sold isn't going to
work. At least not alone. So, welcome to
part one, the anatomy of a collapse. In
the last years of the USSR, grocery
store shelves were so bare that by 1990,
the average Soviet family spent a third
of their income on food when it was
available and still faced chronic
shortages. Within a year, the empire was
gone. When Argentina defaulted on its
debt in 2001, poverty doubled in just
six months. Riots spread so fast that
the country cycled through five
presidents in 2 weeks. In 1923, debt
crushed Germany so hard they had to
hyperinflate their currency just to try
to survive. And at one point, it took
4.2 two trillion German marks to buy a
single US dollar. That was the collapse
that paved the way for Hitler. Now, I
encourage you guys to self radicalize by
researching how often countries actually
fail. It's not just the Roman Empire.
Despite all the memes, it's happened
over and over. And for better or worse,
history shows that when it comes to
economies, countries don't collapse
randomly. They follow a pattern. a
pattern you're gonna find distressingly
familiar to things you see happening
today. But before I break it down, let's
set some context. Most people just want
to live their lives. They want to fall
in love, make some money, raise a
family, and have a little bit of fun.
But to do that, they need a few things.
Namely, a stable government, law and
order, personal property rights,
affordable basics, a growing economy,
equal opportunity, and community trust.
You mess with that nice and simple list
at your peril. It is the ultimate fafo
because breaking any one of those
things, let alone a lot of them, and we
go from a species that can cooperate in
unparalleled fashion to a homicidal or
even genocidal species real fast. As
Alfred Henry Lewis said back in 1906,
there are only nine meals between
mankind and revolution. If supermarkets
stopped being supplied within 3 days,
people would panic and social order
would start breaking down. The question
is then, what causes grocery stores to
stop getting stocked? Unfortunately,
history has a readymade answer for us.
It starts with currency debasement.
Governments spend well beyond their
means. Debts pile up and the fastest way
to paper over the shortfalls is to print
more money. Rome debased its silver
daenerius until it was made of only
0.02%
silver. That's the same thing we're
doing to the dollar, by the way. It's
just hard to notice because the dollar
looks and feels the same. But it spends
like the 0.02%
silver daenerius or the Weimar Germany
mark. Governments just keep lowering its
value until the people revolt because
they can't afford anything anymore. As a
currency is inflated away, like we're
doing right now, the middle class begins
to disappear. When most people can no
longer afford the basics, a home,
groceries, education, and yet the ultra
wealthy have cir performers at their
weddings, resentment starts to boil.
Next is populism. As people on mass
start going to hell in a hand basket,
leaders rise up, promising easy
solutions, people to blame, and most
gloriously of all, people to punish.
Political scientists cast mud, calls
populism a thin ideology. It doesn't
solve problems, but it fuels people's
anger and gives them someone to hate.
And that feels a lot better than
hopelessness. But in the fullness of
time, history proves that populism only
accelerates the fall if it's left
uninterrupted. Next is the cultural
breakdown. As debt spirals, the middle
class disappears, and resentment
skyrockets, shared identity erodess, and
trust collapses. Robert Putnham showed
this in bowling alone. When social
capital disappears, communities
fragment. Pew's latest data shows that
only 22% of Americans trust their
government. We are in the late innings,
folks. The next thing that happens is
truly bizarre. As soon as I say it,
you're going to get it. But if you're
anything like me, it is so obvious, it's
invisible. It's what Peter Turin calls
elite over production. This is where way
too many credentialed elites are chasing
too few elite slots. We're going to talk
more about that later, but it is a very
important idea that goes something like
this. You got too many lawyers,
academics, financeers, and political
types for the available demand. And
while regular people struggle and the
number of people dying from opiate
addiction goes way up, the result
infighting at the top, resentment at the
bottom, and a ghost town in the middle
as the middle class is torn in two. Half
going up to the upper class because they
own assets, and half going down because
they don't. As a side note, assets are
the only thing that protect you from the
negative impact of inflation, but 10% of
Americans own 93% of the assets. And
finally, we get the elites hedging
against collapse. Ray Dallio is one of
my favorite people on planet Earth. But
it was a surreal experience bumping into
him backstage at a conference in Dubai
that we were both speaking at and I
realized, oh yeah, this is exactly what
people mean when they say that money
will move to wherever it's stable.
Wealthy people will get their money out.
Barring becoming a tyrannical government
that imprisons its own citizens, there's
no way to stop it. They will move assets
offshore. They will build their
companies elsewhere. They will buy
bunkers in New Zealand. And all of that
will reduce the tax base. And that will
force the government to print more money
because no one votes for the politician
who says we need to spend less. And
that's how it happens. That's why this
cycle repeats. It's what happened in
Rome, in the Ottoman Empire, in France
before the revolution, in Weimar Germany
before the rise of fascism, in the
Soviet Union before it dissolved, in
Argentina after World War I, in
Argentina again when Peron got elected,
and Argentina again in 2001. It's what
happened in Zimbabwe, in Venezuela, in
Greece during the Eurozone crisis. And
those are just the famous ones. And now
all of the signals are lighting up that
America is in the same dangerous
position. Currency debasement, a rapidly
disappearing middle class. Housing
prices make homes out of reach for the
vast majority of people. Populism is on
the rise. Cultural cohesion is breaking
down. There is massive elite
overprouction. The wealthy are hedging.
And under it all, the debt spiral is
tightening like a noose. This is the
anatomy of a collapse and we're living
it right now. But there is a way to
avoid it. But before we can get to that,
you have to understand why this
situation is so dangerous and difficult
to stop. So, welcome to part two. How do
you stop a country from bleeding to
death? I want you to imagine a car pins
someone against a wall. The collision
crushes the person's blood vessels so
badly that they should be dead, but that
same pressure also seals the wound shut
and keeps them alive. This is a real
phenomenon trauma doctors call the
tempenate effect. The patient will often
remain conscious, talking, sometimes
even able to call a loved one to say
goodbye. But the moment rescuers pull
the car away, the seal is gone and the
person is likely going to bleed to death
almost instantaneously. For this reason,
EMS teams are trained never to remove an
impaling object or release pressure in
the field because it almost always
results in immediate death. It's brutal,
but it happens way more often than we
want to think. And it's the perfect
metaphor for America's economy right
now. We are accumulating debt so rapidly
that barring extreme intervention, we
are going to go bankrupt. The equivalent
of bleeding to death. We'll try to tax
the rich, but they'll leave. Then we'll
try to tax the middle class, but they're
already broke because the wealthy will
have taken the jobs with them when
they're overt taxed. And that only
leaves money printing. And that's the
same as pulling the car back and letting
the patient bleed to death. The money
will hyperinflate. The government will
be forced to default on its debt. And
just like that, you're Argentina, a once
great country that no one trusts
anymore. And that's when you realize
that when your money isn't backed by
gold or anything else for that matter,
all you have is trust. And when that's
gone, it's game over. The reason this is
so terrifying is because once the cycle
begins, it behaves like a positive
feedback loop. The worse it gets, the
faster it accelerates. Each step in the
process, making it harder and harder to
reverse course. Debt is not inert. It
compounds. And compounding doesn't just
add pressure. It multiplies it until
there's nothing left to spend money on
other than the interest payments. Here's
exactly how it unfolds. At first,
governments try to do the obvious thing,
tax the rich. But high- netw worth
individuals are the most mobile people
on the planet. They have lawyers,
accountants, and second passports ready
to go. Don't believe me? It's happening
right now. According to Henley and
Partners, a record 142,000
millionaires are projected to relocate
in 2025. The UK alone is set to lose
more than 9,000 millionaires just this
year. one of the worst outflows in the
world ever recorded. Where are they
going? To countries with stronger
property right protections like the UAE,
Singapore, and the US itself. It's proof
the capital doesn't wait around to be
confiscated. It flees. That forces the
government to shift the burden down a
rung. Next, they turn to the middle
class. If we've got any fans of the
Nordic countries, this one's for you.
Taxing the life out of the middle class
is exactly how they're able to have such
a burdensome welfare state. But here's
the problem for the US. The middle class
is already drowning. Household debt in
America has just crossed 17.7 trillion
with credit card balances hitting a
record 1.3 trillion in 2024. We don't
just have a government debt problem. We
have corporate debt and individual debt
as well. The average American household
now pays over $1,200 a year just in
credit card interest payments. You can't
squeeze blood from a stone. And when you
try, all you do is accelerate defaults,
bankruptcies, and resentment. With the
rich gone and the middle class tapped
out, governments are left with only one
option. Print money. And this is how the
news tightens around our collective
necks. With each dollar they print,
every dollar becomes worth less.
Unfortunately, there's no such thing as
an infinite money glitch. Wish there
was, but there's not. If you print
money, inflation will rise. If inflation
goes up, interest rates go up, which
makes debt more expensive to service,
which leads to more money printing, so
the government doesn't have to default
on its loans. But by hyperinflating the
currency, it defaults nonetheless. They
may give you the promised dollars, but
the promised dollars are now worthless.
It's known as a debt death spiral. And
it's the same death spiral that killed
all the countries I listed before. And
it's not just a domestic problem.
foreign creditors will inevitably
notice. In fact, in the case of the US,
they already have. Both China and Japan,
the two biggest holders of US debt, have
been steadily reducing their exposure as
a vote of no confidence. China's
holdings have fallen to their lowest
level since 2009.
They've trimmed more than $500 billion
in the last decade. Once foreign
investors lose faith, yields spike in an
attempt to attract investors to buy our
debt. Perversely though, this sends our
own interest payments to the moon and we
all get to watch as that sends the debt
curve vertical. That's when it becomes
mathematically impossible to ever pay
the debt back. Despite that, as
borrowing costs explode, governments
will do what they always do, borrow even
more money. In the US, our debt already
exceeds our GDP. We're never going to
pay it back. At least not all of it. And
interest payments on the debt have
already hit $1 trillion annually, more
than the entire defense budget. That's
correct. We are now spending more to
service our debt than we do to protect
our country. It all sounds so
ridiculous, but it's also all true. And
this debt death spiral happens all the
time. It just hasn't happened in our
lifetimes here in the US. As legendary
investor Ray Dalio is very fond of
saying, just because it hasn't happened
in your lifetime doesn't mean it's not
common. And here's the kicker. Once
trust is gone, it's usually gone for a
very long time. Even just looking at
Argentina's most recent collapse in
2001, within six months, as I said,
poverty doubled. Five presidents fell in
just two weeks. People did not wait
around for reform. They storm banks and
looted grocery stores. Once faith in the
money dies, society doesn't adjust, it
revolts. That's the loop. Debt leads to
taxation. Taxation drives out capital
that hollows out the middle class. That
forces money printing. Money printing
destroys trust. And once trust is gone,
collapse accelerates into freef fall.
Unless you interrupt it with radical,
painful course corrections, it feeds
itself like a chain reaction. Honestly,
I miss the days when I didn't understand
any of this because once you see the
pattern, you can't unsee it. And right
now, as a country anyway, we only have
one option remaining. But before I can
explain that, I've got one more hard
truth I have to lay out. So, welcome to
part three. Countries always collapse
from within. A University of Chicago
survey found that one in four Americans
now believe violence against the
government may be justified. And in
June, proving the polls correct, a man
impersonating a police officer carried
out a politically motivated killing
spree, assassinating former Minnesota
House Speaker Melissa Hortman and her
husband, and then shooting state senator
John Hoffman and his wife in their home.
It was the most concentrated political
violence against state legislators in
modern US history. But it isn't just the
people versus the government anymore.
It's the people versus each other. Pew
research finds that twothirds of
Americans now say the other political
party is not just wrong but a serious
threat to the nation's survival. That's
the level of polarization that doesn't
end in debate. It ends in bloodshed.
Additionally, half the country believes
political elites are corrupt. And
researchers have shown that belief
directly fuels openness to violence.
According to Pew, among gun owners, 72%
say protection is the primary reason
they own a firearm, far above hunting or
sport. Layer on top of that the fact
that nearly half of Americans report
feeling persistently isolated. And what
you're witnessing is the collapse of the
very fabric we're counting on to hold
society together. And that's the rub. In
nearly every collapsing empire, the
story is the same. Debt piles up, taxes
sore, the wealthy flee, the money is
debased to deal with the debt, and the
culture fractures. This loop is going to
be very familiar by the end because it's
a feedback loop that tears society apart
from the inside over and over and over.
Peter Turchin saw this coming long
before it hit the headlines because it's
so predictable. Back in 2010, he
published research predicting that the
2020s would be a period of severe
instability in America. That was a
decade before the pandemic, the riots,
and the political assassinations. And in
2020, alongside Jack Goldstone, he
doubled down in an essay titled Welcome
to the Turbulent 20s, warning that the
US was entering its most vulnerable
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let's get back to the show. He saw that
when the economy buckles, the strain
doesn't stop at the ledger. It pulls at
the very threads of identity and
community until the country starts
consuming itself from within. Writing in
Nature in 2010, he said flatly, "The
next decade is likely to be a period of
growing instability in the United States
and Western Europe." Certainly nailed
that. He was flagging a rising
instability signal built from longunning
data. And a decade later, he and Andre
Kodv published a retrospective in Plus
One showing that exactly as forecast,
riots and mass demonstrations surged
throughout the 2010s. His predictions
weren't headline tracking. They came
from a framework he calls structural
demographic theory, or SDT for short.
Originally formalized by Jack Goldstone
and further developed by Turin, SDT
models how three slowm moving pressures
build until they break a society. One,
intra elite competition. Two, populist
economic squeeze. And three, state
fiscal stress. Turin operationalizes
these in a composite political stress
indicator he calls PSI. When PSI rises
and stays high, instability is
guaranteed to follow. Here's what each
of the individual pressures means in
practice and how they're measured in the
SDT model. One, elite overprouction. As
I mentioned at the beginning of the
video, this is when too many elite
aspirants are chasing too few elite
slots. This rises when elite incomes
fall relative to GDP per person and when
the number of elites seeking elite
positions is higher than the number of
elite positions available. Think
credential inflation, more degrees, more
lawyers, MBAs, power track grads. That
combo amplifies factional conflict at
the top. Patronage wars, hard ball
politics, and splintering coalitions are
going to ensue. Two, emiseration and
mass mobilization potential. This is the
ground level financial squeeze. When
worker wages lag GDP per person, a
relative fall in wages, when
urbanization concentrates, the
discontented, and when youth cohorts are
large, a youth bulge, societies get way
more combustible. In the model, this
pressure rises with the inverse of the
relative wage. Simply put, living
conditions get worse because the middle
class is getting cleaned out due to
things like globalization. Mechanically,
lower relative wages increase the
pressure and creates more people with
both the motive and due to urbanization,
the proximity to each other to organize
and mobilize out of anger. Three, state
fiscal distress. As the debt to GDP
climbs and trust in institutions fall,
the state loses room to buy calm, let's
say, via stimulus and loses the trust we
were talking about earlier that is so
critical to fiat currencies that are
backed by nothing. Fiscal pressure then
rises as the debt burden rises and
distrust rises. High debt and low trust
is a deadly combo. According to Turin,
these three pressures aren't additive,
they're multiplicative. And that
multiplicity is exactly how societies
break. Each pressure source amplifies
the other massively. Crowded elites
times squeezed households times a
fiscally strained government yields a
setup where every shock hits harder and
every policy fight turns existential.
Sound familiar? That's the math behind
Turin's 2010 prediction and exactly what
we're living through right now. Turchin
argued that all three pressures turned
on in the 1970s and climbed for decades,
putting the PSI on course to spike
around, you guessed it, 2020. His genius
wasn't predicting which spark would
start our problems. It was showing that
the kindling was in place and would
catch fire when any spark came along.
Bottom line is Turjan's thesis wasn't
that there was a big event coming. It
was that the structural elements were
and are in place for a big problem. Too
many elites, too hard of a financial
squeeze on households and a state way
too indebted and distrusted to absorb
the inevitable shocks. Once those three
align, instability is a guarantee. Now,
I wish I could stop there, but we
haven't yet dealt with populism. Ronald
Inglehart and Pippen Norris showed in
the research that populism rises not
just from economic collapse but also
from the fear that society itself is
changing too fast. In the age of AI and
open borders, can you imagine economic
anxiety plus cultural anxiety is the
recipe that fuels populism. And
unfortunately, populism doesn't solve
problems. It just points fingers. It
says the pure and good people are being
betrayed by the corrupt elite and in
difficult moments that message spreads
like wildfire because it gives people
someone to hate. That's exactly what you
see with immigration. To oversimplify a
very complicated issue, as globalism
soarses and nations weaken, the
government throws open the borders out
of guilt and demographic needs, which
burdens institutions and infrastructure
and forces the further accumulation of
additional debt. Additionally,
capitalists further weaken the middle
class by importing cheap labor,
employing illegals, and offshoring
manufacturing, all to lower costs. This
weakens employee bargaining power and
eliminates many high-paying blue collar
jobs. This additional financial strain
coupled with an easily identifiable
other for right-wing populists, for
example, to hate, and you have a recipe
for disaster. Rome flooded itself with
outsiders in its final years. Europe
nearly tore itself apart during the
migrant crisis of 2015 and is still
dealing with the cultural backlash that
comes with importing far too many people
far too quickly. And now in America,
after four years of effectively wide
open borders, the left and the right are
tearing at each other over how to handle
the issue. Success creates guilt, and
guilt creates overgenerosity. But as all
empires must apparently learn the hard
way, success is not a law of nature. If
you make bad decisions, you will get a
bad outcome. Just ask England, for whom
at one point the sun never set on their
empire, and now they're back to being a
small island country off the coast of
Europe. The hard truth is economic
prosperity is fragile and when its
fruits are shared carelessly, it
collapses under the weight of
expectationdriven debt. We all wish that
weren't true, but it is true. And
finally, you get the breakdown of
identity itself. As I mentioned earlier,
Robert Putnham warned about this decades
ago in Bowling Alone. When trust
collapses, when people no longer feel
they're part of a shared national
project, the nation itself stops being a
nation and reverts back to a rough
collection of factions. The latest Pew
data makes it abundantly clear. Trust in
government is circling the drain. And
once trust is gone, cooperation is gone.
And when cooperation disappears,
violence is all that's left. And that's
what Ray Dallio and many others quite
honestly note is the hallmark of the big
debt cycle, internal conflict. But make
no mistake, it's the big debt cycle that
has the patient pinned to the tree. It's
the debt that's crushing people. But
simply defaulting or forgiving the debt
is like backing up the car. And in the
world's strangest twist of fate, that's
exactly how you kill the patient in no
time flat. So, where do we go from here
if we're pinned up against a tree?
Welcome to part four. Everyone
eventually gets mugged by reality. A
recent survey found that 62% of
Americans under 30 now view socialism
favorably. The Democratic Socialists of
America are booming. Their 2025 National
Convention in Chicago drew tens of
thousands and underscored the movement's
growing political muscle. In city after
city, DSA backed candidates are winning.
That growth of support looks like
legitimate grassroots growth, not a
passing phase, much to my dismay.
Because the bad news, socialism doesn't
work. And socialist regimes don't fail
from an overabundance of goodwill
towards all. As some may want to think,
they all collapse due to violence.
According to esteemed author and
political scientist R.J. Rumble. Regimes
claiming to be socialist and/or
communist have killed over, get ready
for it, 260
million of their own citizens in the
20th century alone. Why? Because
socialism promises things for free,
attempts to confiscate the means of
production, and evenly distribute the
proceeds to the workers. It completely
eliminates the free market and destroys
pricing signals. However, a move that
ironically leads to shortages,
corruptions, black markets, and crazy
prices. Eventually, people's cooperation
can only be obtained at the end of a gun
barrel, and that has a way of
disincentivizing them. Even the Chinese
Communist Party had to resort to good
old-fashioned capitalism to stop
starving its people to death. The
evidence is overwhelming.
Every time socialism is tried, it begins
with promises of equality and ends with
poverty and repression. The free market
isn't just a bunch of greedy capitalists
setting prices to make themselves rich.
The reason that it survives, the reason
that it works as well as it does is
because the free market is a form of
distributed collective intelligence. It
uncovers what people actually want, what
they need, what's scarce, what's
abundant, and what things should cost.
Take that away and you end up with
things at a price no one will pay,
shelves full of things no one wants
and/or nothing of what people
desperately need. That's exactly what
happened in the Soviet Union. The state
controlled all production, but without
pricing signals, planners had no way to
allocate resources efficiently. So,
you'd have warehouses overflowing with
shoes that don't fit, while grocery
stores sat empty. The black market
became the only place to get goods that
people actually needed at a price they
were willing to pay. Basically, the
black market was the free market, just
illegal. Venezuela, same thing. Once one
of the wealthiest nations in Latin
America, thanks to its oil, but
absolutely destroyed by socialist
policies. Price controls like the ones
Kla Harris promised and M Donnie is
promising now led to chronic shortages,
inflation to skyrocket into the
thousands of percent and forced millions
to flee the country to escape hunger and
violence. And then there's the
aforementioned China, the most important
case of all. For decades, Mao's
experiments with socialist economics
starved tens of millions of Chinese
people to death. It wasn't until Deng
Xiaoping introduced capitalist reforms
in 1978, opening up markets, allowing
private enterprise, and even encouraging
foreign investment that China began
lifting hundreds of millions of people
out of poverty. It was the single most
successful poverty reduction program in
human history. And it didn't come from
socialism, it came from rejecting it. It
was capitalism with Chinese
characteristics, as they would say. The
pattern is always the same. Socialism
sounds compassionate, but in practice,
it's driven by envy for reasons I've
covered here in a previous video. And it
requires coercion. Once people realize
that their incentives for working hard
are gone, they stop producing and
governments are forced to compel them
with the threat of violence. Cooperation
breaks down, productivity collapses, and
the system spirals into authoritarianism
and mass death. So what does that leave?
growth. That's the playbook that's being
run by the current administration. Grow
your way out of the problem. That's
certainly part of a sane solution. But
the reality is that the growth is all
you need mantra is not going to work.
Why not? First of all, it's too late.
We're already sitting on 37 trillion in
debt. Even if you solve that problem,
though, by some miracle, there's still
corporate debt and personal debt to deal
with. It's just too much by historical
standards to naturally grow your way out
from under. Barring AI ushering in a
once- inhistory productivity miracle,
there's no plausible level of growth
that can outpace the compounding debt
curve. Between new debt and the
compounding interest on the existing
debt, the spiral is just too aggressive.
In the last two years alone, the US
added $1 trillion in new debt every 100
days. You don't outrun that with 3% GDP
growth, which is what we've averaged
without severe austerity measures. You'd
need roughly 7% GDP growth just to stop
the spiral from accelerating. More if
you want to actually lower our debt to
GDP ratio. To hit just 90% debt to GDP
ratio, you'd need a sustained decade of
about 8% growth. And the last time we
did that was in the 1970s. And bad news,
inflation was so high that despite 8%
GDP growth, it was still considered a
recession in real terms. So that
wouldn't work. Second, even if we did
somehow grow our way out of the debt,
we'd still be left with catastrophic
inequality. Right now, the top 10% of
Americans own 93% of all financial
assets. The middle class is locked out
of housing, the one asset they
intuitively understand, and rents are
devouring their paychecks. Growth on its
own just does not fix that. In fact,
history shows it usually makes it worse.
When the system is tilted, new wealth
flows to the people who already own the
assets. GDP might rise, but resentment
rises faster. And when resentment
metastasizes, societies crack,
regardless of what the headline growth
number says. Third, growth is blind. It
doesn't know who it helps. The last 40
years prove that. Globalization and
technology produced staggering growth.
Trillions in new wealth. But the spoils
went overwhelmingly to the top. While
the middle class was hollowed out and
entire regions were left behind. Growth
didn't heal America's divides, it
deepened them. Without structural
reform, more growth just accelerates the
exact same fractures we've already
talked about. put it all together. And
that's why Ray Dalio says the only real
way forward is what he calls a beautiful
deleveraging, which is a nice way of
saying do something so hard basically
nobody's going to do it. It's a very,
very delicate mix of spending cuts,
austerity, debt restructuring, wealth
transfers, and money printing. The goal
being to avoid violent revolution, and
reduce the debt burden without breaking
the economy, all while laying down a
path to future growth that doesn't blow
up inflation. If it sounds hard, it's
because it is. It is painful and it
requires an amount of cooperation I am
frankly completely unconvinced we are
capable of in a moment where socialism
is gaining in popularity. So no, there
are no easy free stuff for everyone or
just grow solutions that are before us.
Growth is necessary, wealth
redistribution is necessary, but in
isolation none of it is sufficient. The
pressure from the debt spiral, the
wealth gap, and the trust collapse will
continue to increase until something
explodes. So, if we're going to make it
through this, we need more than
platitudes. We need a real playbook. So,
welcome to part five, the playbook, aka
how to win in wild times. From 2020 to
2022, as the world reeled from a
pandemic, nearly $42 trillion in new
wealth was created. That wasn't over a
decade. That was in just two years. It
was the single fastest well surge in
human history, forged not in stability,
but in collapse. And history shows, as
much as this makes me sick to my
stomach, that's just how it works. When
economies crack, most get crushed, but a
select few are going to come out way
better than ever. Rockefeller made the
bulk of his fortune during the panic of
1873. The Rothschilds capitalized on
devastating European wars. Walter
Chrysler nearly tripled his company's
market share in the depths of the Great
Depression. George Soros made a cool
billion in a single day betting against
the British pound. John Pollson made $15
billion betting against the housing
market as millions were foreclosed on.
Michael Bur, the real big short guy,
also made nearly a billion for the same
reason. The list goes on and on again
and again. Collapses destroy most
people, but they make fortunes for the
prepared few. So, the question isn't
whether collapse is coming. The question
is, are you going to be one of the few
who comes out better than you went in?
Now, I doubt any of us are going to make
billions off of hard times. That's not
my pitch. that takes a lot of capital to
make concentrated bets. A rare financial
mind who can bet against the consensus
and be right and the coahones to stick
with a plan in the midst of massive
uncertainty, especially around timing. I
don't expect that even of myself, but I
do want to be prepared to weather any
storm and come out on the other side
better, even if I hedge my bets and
diversify my risk like a chicken. That
brings us to the playbook. Step one, get
into assets. Assets are the dividing
line between the rich and the poor. It's
that simple. It's that simple. Get the
bulk of your savings into a smart basket
of assets. If you sit in cash, inflation
will silently bleed you dry. In the last
century alone, the US dollar lost over
90% of its purchasing power. 90% 90.
During the stagflation of the 1970s,
gold, an asset, didn't just hold steady
in price. It exploded from $35 an ounce
in 1971 to $850
an ounce in 1980. Commodities like oil
also surged 400% protecting wealth.
While paper money was torched, even in
simple equities, like in the stock
market, the pattern is clear. A Yale
study of historical returns found that
over 200 years, stocks have returned an
average of 6.5%
after inflation. While cash just loses
value, assets are how the rich get
richer and not having them is how the
poor get poorer. Everyone is affected by
inflation, but only assets offer you any
protection. Step two, stay mobile. In
moments of collapse, your ability to
move to a region that is stable could be
the difference between safety and ruin.
The goal is to find a jurisdiction that
is capital friendly, high in financial
freedom, tax efficient, and safe. These
are the places that are likely to grow
and are exactly where you want to be in
times of turmoil. You do not want to be
geographically trapped somewhere that is
attempting to plunder the wealthy as
that is a sure sign that the economy is
going to grind to a halt and open
violence is right around the corner.
Here's what the wealthy know. Capital
doesn't wait to be confiscated. It moves
to safety. After India's emergency in
the 1970s, tens of thousands of wealthy
Indians immigrated, taking capital and
talent to London, Dubai, and Singapore.
After Argentina's 2001 collapse, an
estimated 200,000 citizens fled the
country within just two years. And as
mentioned earlier, right now,
millionaires are relocating around the
world in literal record- setting
numbers. I hope that tells you
something. Step three, choose
businessfriendly environments. Where
business is punished, collapse
accelerates. where business is protected
no matter how much people hate it. The
drivers of prosperity, namely
entrepreneurship and innovation, remain
possible. In times of trouble, figure
out where safety reigns, people are good
to each other, and the populace is
respectful of the physics of money. Go
there. Those locations will have strong
economies and be the bastions of growth
and opportunity. In the 2025 Heritage
Foundation Economic Freedom Index,
Singapore, Switzerland, and Ireland the
list. Compare that to Venezuela, which
ranks near the bottom. The same
Venezuela where GDP has collapsed by
over 75% since 2013 under socialist
controls. And in the World Justice
Project, Rule of Law Index, Denmark,
Norway, and Finland lead the world.
Nations where contracts are enforced,
corruption is minimal, and property
rights are sacred. By contrast,
countries at the bottom like Zimbabwe
and Afghanistan are the same places
where citizens have seen their savings
wiped out by inflation or just outright
confiscation. Guys, the pattern is
simple. Where businesses thrive, people
thrive. Kill business and you kill your
entire economy and rapidly your nation
as a whole. Step four, invest in your
skills. Assets can be seized. As I like
to remind Bitcoin owners, money can be
devalued. Businesses can be regulated to
death. But there's one thing no collapse
can take from you. Your skills. In 2023,
Georgetown University found that college
graduates earn 84% more over their
lifetime than high school graduates. And
technical skills amplify that even more.
A licensed electrician in the US today
can command $85 to $120 an hour, while
software engineers with AI expertise are
seeing starting salaries north of
180,000. And don't forget, the world's
best AI engineers are capable of
commanding billion
salaries. That's pure insanity and
speaks to the power of the right skill
set at the right time. You can also look
at Cuba. After Castro's revolution, tens
of thousands of professionals fled to
Miami. Within a decade, within a decade,
Cuban Americans owned nearly 40% of
Miami's small businesses. They lost
everything they had in Cuba, but carried
their skills to a new location. That was
enough for them to rebuild fortunes
quickly. If you want the safest hedge
against collapse, it's not gold or real
estate. It's you, your skills, your
family skills, and the value you can
create within a healthy economic system.
Step five, build parallel systems. But
this one is the most radical step, and I
considered not including it. But in the
interest of leaving no stone unturned,
for those of you who cannot remain
mobile or who are just so inclined,
consider creating alternate economic
systems. During Argentina's 2001
collapse, more than 7 million people
joined barter clubs, creating a shadow
economy where groceries and services
were exchanged without pesos. In Weimar,
Germany, entire towns resorted to script
and foreign currencies to get around the
worthless German marks. And today, as
trust in governments and banks Wayne,
decentralized finance and crypto
networks have surged. should come as no
surprise in 2021 global crypto adoption
rose by over 880%
yearonear largely in nations battling
inflation and capital controls people
always find a way PS research crypto
even though yes with enough violence the
government can seize it from you I'm a
big believer in Bitcoin this is a less
controversial take obviously by the day
but it's still something you'll need to
form your own opinion about Now,
building parallel systems does not mean
you have to go off-grid tomorrow or even
that you need to build the system
yourself. You can simply avail yourself
of the alternate system if it comes to
that. Start by looking at crypto as a
good alternative system that has already
gained relatively large adoption. Just
know that if big systems do in fact
wobble, there are still options at your
disposal. Don't allow yourself to feel
hopeless. I know this idea is pretty
radical, but history is clear. Those who
cling to failing systems past their
expiration date are going to get
crushed. Those who adapt to whatever
circumstances present themselves at
least have a much higher likelihood of
survival. And now is the time to adapt.
The economic and social signals that
warrant collapse are flashing all red.
Every empire that collapses follows a
similar pattern. And America is not
immune. First debt accumulates, then
money's printed, then inflation destroys
the middle class, then polarization
skyrockets and trust evaporates.
Populism rises, everyone joins a team
and fights like their lives depend on
it. Taxes are weaponized and ultimately
the wealthy flee or simply stop
producing and the economy collapses,
taking the country's stability with it.
That script is very familiar to anybody
paying attention to history. It plays
out over and over again. The ways to
avoid it are well documented, but also
almost never heated. So, if we can't
save everyone, at least we can try and
save the ones we love and hope that it
ripples out from there. And remember,
while a collapse destroys most people,
it also creates a massive opportunity
for a select few who adapt, who prepare,
and who refuse to be victims. History
never forgives the unprepared, but it
always rewards those who see the
collapse coming and take action. If you
want to join me as I explore topics like
this live, make sure to join me on
YouTube where you can heckle me and join
in on the discussion or just watch the
most entertaining and useful show on
YouTube. I hope I'll see you guys there
live Wednesday and Friday mornings at
6:00 a.m. Pacific time. Until then, my
friends, be legendary. Take care. Peace.
If you like this conversation, check out
this episode to learn more. In the late
90s, the internet minted millionaires at
a speed no one had ever seen before. By
1999, 7,000 new millionaires were being
created every week between