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Page added on July 21, 2018

America The Insolvent

Watching the world these days, I’m experiencing the same fury that rises up from my gut when the driver in the car ahead me is weaving drunkenly, endangering everyone on the road.

Fury is a normal and rational human response when threatened with unnecessary harm. Women who are groped (or worse) by a disgusting predator like Harvey Weinstein, pensioners whose funds are stolen by Wall Street shysters, everyone who is being fleeced by corporations in search of a few extra dollars this quarter — all have the right to be infuriated.

It’s been especially hard of late for those of us who are “reality”-based; who value data, fundamentals and historical context.

I earn my living by reading, analyzing and making sense of the world, and then working to help orient people’s actions to align with both the current reality and future probabilities. But that’s become pretty damn difficult in a world where the financial markets are rigged and the main news outlets are unwilling (unable?) to cover the real issues, preferring instead to focus on distractions that mainly serve to keep us isolated and divided.

The trajectory our global society is on will not end well, and that infuraties me. And the fact that most of the coming suffering is unnecessary if only we’d make better choices — that really pisses me off.

Here’s just a small smattering of the threats we’ve created for ourselves:

$247 trillion of global debt, growing exponentially
Off-budget liabilities well over a quadrillion dollars globally ($220+ trillion in the US alone)
Massively underfunded pensions mathematically unable to meet their future obligations
A coming peak in world oil supply somewhere between 2020-2030 (and around 2022 for the US)
A global economy that requires perpetual growth, but can’t grow for much longer due to planetary resource constraints
Huge demographic imbalances in Japan, the US, the EU and Russia that will leave too few workers supporting too many elderly
Collapsing ecosystems and increasing heatwaves on both land and sea, threatening crop failures and food chain disruptions.

Collectively these all point to a future of less. Perhaps even a future of nothing.

Our only option for safely navigating towards a better future is to start dedicating a huge amount of focus, time, energy and resources to addressing these threats.

But, unfortunately, that’s simply not happening right now.

Unsustainable Finances

We don’t have much time left to get prepared. Yes, it’s rare for things to suddenly fall apart overnight — so if you’re playing the odds, we probably have a few years left before the status quo as we know it begins to break down. Maybe until 2020; possibly to 2023. But not much longer after that.

The trends are just too severe. And they’re building up steam.

Setting aside for a moment the frightening ecological and energy trends, a cursory glance at the fiscal and economic data still screams: This is unsustainable!

Look at the projected deficit for the US government:

The US government is currently in fiscal tax year 2018. That means next year’s projected deficit will breach the trillion mark, and things only get worse from there. By 2028 the deficit will be at least $1.7 trillion and possibly as much as $2.4 trillion.

It bears noting that current US tax receipts are just a smidge over $2 trillion. And as the chart below shows, they tend to drop precipitously during recessions:

Delusionionaly, the government’s projection of federal deficits doesn’t include any provisions for recessions over the next decade. This is nuts; recessions are a normal and recurring part of our economic system.

And due to the Federal Reserve’s tinkering to control the business cycle by replacing it with a credit cycle, the next recession is likely to be a doozy — because when credit cycles burst, they are immediately and powerfully contractionary.

So it’s not at all unthinkable that at some point between here and 2028 the US government will find itself borrowing more than 100%(!) of tax receipts in a given year.

That, my friends, is an express ticket to Venezuela-style insolvency.

But wait, there’s more. Two other very much out-of-control elements exacerbating these fiscal deficits will be rising interest costs and Social Security.

Debt Will Become More Costly To Service

Interest costs have a bad habit of being self-reinforcing. The more you borrow the higher your interest costs. But if you’re the government, there’s an added complexity: the more you borrow, the more you tend to also drive up the interest rate, which is an additional compounding factor.

Interest payments are already 25% of tax receipts and are certain to climb as the US federal government tacks on another $13 to $17 trillion in additional debt over the next ten years. Or possibly nearly twice that if a severe recession comes along, as is highly likely.

Under the best scenario (“only” $13 trillion) and assuming a very generous average rate of interest of 3%, that will result in some $400 billion of new, incremental yearly interest payments by 2028.

Under the worst scenario, (let’s assume an incremental $25 trillion of new debt at 5%) that would balloon to an incremental $1.25 trillion in new interest costs. Per year.

Social Security Reserves Are On Their Way To $0

Social Security is now in a cash deficit.

It’s drawing down its “trust fund”, even though this “fund” doesn’t have any actual money in it (just IOU’s from the US Treasury). Put simply, every time the SS administration draws upon the trust fund, it hands some of those IOUs to the US Treasury in return for cash.

And how does the US Treasury get that cash? That’s right: by issuing more debt.

As we can see in this next chart from the SS administration, nearly $3 trillion will be required over the 2018 to 2032 period. After which point, the SS trust fund reserves are gone:

NOTE: we will be going much deeper into these kinds of data at our Summit in New York City with David Stockman on Sep 16, 2018. As former head of the Office of Management and Budget under President Reagan, David has a near-unparalleled command of the vulnerabilities of the US economy and financial markets, as well as what likely repercussions their failure will bring. To learn more about that event, click here.

By Definition, This Will End

All of the above is simply an exercise to show that just when looking at the US economy alone — forget about the issues facing other countries and accelerating depletion of key resources (soil/aquifers/fossil fuels/pollinators/etc) around the world — the current trajectory is entirely unsustainable.

Meaning it must someday end. Whether that will manifest in a sudden castrophe, or in a drawn-out crescendo of accumulating crises, who knows?

But what won’t be happening is “more of the same”. Or a straight-line continuation of business as usual.

I can make the same trend extrapolation arguments for water aquifers and glacial flows serving billions of people. And with soil loss, and oceanic dead zones, and oil production.

None of this is sustainable.

This existential threat to our safety is the root reality, whether we’re conscious of it or not, underlying why so many of us are feeling infurated these days.

And while that fury often takes a partisan bent, our predicaments have nothing whatsoever to do with any particular political party. All are the same when it comes to fostering business as usual. All are identical in their support for endless growth. They merely argue over which misguided steps to take in pursuit of those doomed goals.

As the video below explains, everyone buying into the false ‘left vs right’ framing is being manipulated. Just as two rats in a cage, shocked by an unseen scientist, will direct their anger at each other, oblivious to the true assailant:

The Elites Are Already Making Preparations

The sheer obviousness of our collective predicaments combined with the near complete absence of any collective conversation about them is infuriating.

Worse, the powers that be are very busy propping markets in order to send the signal that “all is well” when everything is very much not well. Far too many people fall for this deception for my comfort.

As we can plainly see in the data presented above, the US is now utterly insolvent and headed towards bankruptcy. Most other nations are just as bad off, or worse. All are pursuing the same insane, impossible policy: Grow exponentially. Forever.

Which makes the current crop of politicians and monetary authorities no better than heavily-intoxicated truck drivers, drunkenly weaving their gigantic rigs in front of your family’s car. Their recklessness to everyone else’s well-being is infuriating.

The few paying attention, like you, can see that all of this falls apart sooner or later. The critical question to ask ourselves is: What should we prioritize doing now, in advance of the reckoning?

That’s the question an increasing number of elites are asking themselves. Yes, these are the people controlling the system today and benefitting the most from it, usually at our expense. But they can see that the racket they’re running has an expiration date. And they’re extremely worried about the hell that may break loose when it arrives.

You may have read some of the recent news stories about billionaires drawing up emergency plans for the social disorder they fear will erupt when the status quo breaks down. I can tell you from first-hand experience these stories are true. We’ve had a number ultra-wealthy individuals and families approach Peak Prosperity for consultations on the same topic.

In Part 2: The Rich Are Planning For Catastrophe, we explain what the wealthy are doing and what frightens them the most. Like them or not, these people have access to the best information and the most resources with which to take action. We’d be foolish not to pay attention to what they’re planning for and how they’re planning for it.

Time is short. The elites are making their own preparations. Be sure to get your own in place soon.

Peak Prosperity

162 Comments on "America The Insolvent"

Darrell Cloud on Sat, 21st Jul 2018 6:58 am

Anybody who has been awake knows we peaked back in the seventies. That being said, the inertia of the world economy has carried us forward for nearly half a century. The tell of the end of empire is currency debasement. Just for amusement, pull out a currently minted nickel and compare it to one minted in the 1970’s. The power of conjured money is so great because a billion souls around the world have a vested interest in its perpetuation.

Middle America has spawned the prepper movement with all that entails. About a third of the country has been preparing itself for what is coming. Deagel.com predicts that a third of our population will still be with us by 2025.

JuanP on Sat, 21st Jul 2018 7:08 am

Uruguay’s countryside is full of foreign multimillionaires building doomsteads and eco farms to the point that it is not possible to buy land down there and expect a decent return on investment because prices are too high. Uruguayans trying to buy land to farm are systematically outbid and giving up on their farming dreams.

The time to prepare is now. You don’t have to be rich, but you do have to be smart. Focus on health, food, water, energy, community, communications, and defense. Start small and add to it systematically. Prep for a week first, then a month, on to three and six months, and then a year. Once you’ve prepped for a year you will have the knowledge and experience to understand what you want to do next. If you can afford a place in a better location than your current one, go for it, and make it your permanent home or a vacation place.

Dooma on Sat, 21st Jul 2018 8:04 am

Juan, it makes my blood boil to hear about Western White people taking over a country that they wouldn’t have previously cared about either environmentally or culturally.

It isn’t enough that the main reason the world is in such bad shape because of these greedy people sans a moral compass. No, they have to push ANOTHER native collective off their land in a vain attempt to somehow extended their live’s as if they were somehow more important than the indigenous folk.

It is not good Karma to wish them bad luck, but it would be interesting to see how quickly the locals come running to help these invaders if they have trouble grazing livestock or similar issues.

Shortend on Sat, 21st Jul 2018 8:59 am

It’s called overshoot, followed by overkill

Davy on Sat, 21st Jul 2018 9:00 am

Dooma, last I checked Uruguay is white. You need to study up on your geography.

MASTERMIND on Sat, 21st Jul 2018 9:26 am

New Richard Heinberg Peer Reviewed Scholarly Paper, July 2018

Energy Decline and Authoritarianism

https://rdcu.be/3bYO

Duncan Idaho on Sat, 21st Jul 2018 10:13 am

Argentina is the same.
I floated a river for thee days, camping on the banks, as was still on the same persons property.
(Ted Turner)

GregT on Sat, 21st Jul 2018 10:16 am

“Dooma, last I checked Uruguay is white.”

You’re arguing for the sake of arguing again Davy.

“You need to study up on your geography.”

You need to study up on your basic English language comprehension skills, and learn how to respond intelligently, instead of reacting emotionally.

Davy on Sat, 21st Jul 2018 10:29 am

greggie, review this comment and ask me if you are arguing for the sake of arguing which is another term for pricking and something you do exclusively. You rarely contribute except for the noise of your stalking and pricking. Look this over grehgor, this is what dooma said:
“Juan, it makes my blood boil to hear about “Western White people” taking over a country that they wouldn’t have previously cared about either environmentally or culturally.”
Now greggor, Dooma would not have said that unless it was in regards to Uruguay being colored. I think you are pricking for the sake of pricking. You are wasting space and being emotional. You are attacking and not contributing. These are the exact same things those who contribute intelligent conversation are upset about. You are the worst one on this board for this grehgor.

“You need to study up on your basic English language comprehension skills, and learn how to respond intelligently, instead of reacting emotionally.”
Poor choice of word that you employ as a prick instead of being intelligent. You need to get back to seeing your therapist and talk about your personality problems that are demonstrated daily on this board.

GregT on Sat, 21st Jul 2018 10:32 am

“Juan, it makes my blood boil to hear about Western White people taking over a country that they wouldn’t have previously cared about either environmentally or culturally.”

It isn’t only western white people Dooma. Vancouver BC, for example, has been taken over by Asian multimillionaires, although many areas in the interior of the province have been taken over by Western white Europeans.

GregT on Sat, 21st Jul 2018 10:38 am

Davy,

What part of ;

“Western White people taking over a country that they wouldn’t have previously cared about either environmentally or culturally.”,

are you having problems understanding?

Darrell Cloud on Sat, 21st Jul 2018 10:42 am

Racial categories tend to change. Since a Hispanic named Zimmerman shot Trayvon, I have been moved into a new category by ATF, I am now a white Hispanic. The cracker half of me is pleased as punch the Mexican side of me is a little surprised. I am now legally a white person.

Ghung on Sat, 21st Jul 2018 11:04 am

“All we need is a voluntary, free-spirited, open-ended program of procreative racial deconstruction. Everybody just gotta keep fuckin’ everybody ’til they’re all the same color.”

Bullworth

Sissyfuss on Sat, 21st Jul 2018 11:16 am

The govt will keep printing and eventually write off the debt they owe themselves. It’s resource depletion, growing populations, and climate disruption that will lead us over the cliff.

Ghung on Sat, 21st Jul 2018 11:26 am

“The govt will keep printing and eventually write off the debt they owe themselves.”

In the US, the government owes that money to the Fed, private banks, China, Japan, Social Security, the States, etc….

Wondering how those folks will feel about the Federal Govt. writing that off.

MASTERMIND on Sat, 21st Jul 2018 11:27 am

sisy

Yup..Declining conventional oil supply will be the final nail in BAU..Because they can’t do anything about it..

https://imgur.com/a/rBtIrfg

GregT on Sat, 21st Jul 2018 11:44 am

“Yup..Declining conventional oil supply will be the final nail in BAU..Because they can’t do anything about it..”

Think BAU “lite”, which isn’t going to go over very well, especially not in places where people are used to high standards of living, and are already armed to the teeth.

Davy on Sat, 21st Jul 2018 12:04 pm

“What part of ; “Western White people taking over a country that they wouldn’t have previously cared about either environmentally or culturally.”, are you having problems understanding?”

Ah, greggor, so Uruguay is not white and western?
“Ethnicity, Language, & Religion of Uruguay – Safari the Globe”
https://tinyurl.com/y9ob7vs5

“Uruguay’s population is about 90% European with the rest of the population consisting of people of African descent or mestizos, which are people of both European and Amerindian descent. Of these ethnic Europeans, most are Spanish, but Italian, German, and Portuguese are also common.”

GregT on Sat, 21st Jul 2018 12:10 pm

Try reading the second half of the sentence Davy;

“wouldn’t have previously cared about either environmentally or culturally.”

And my username on this forum is GregT Davy, not greggor, grehgie, or grehggie.

Davy on Sat, 21st Jul 2018 12:18 pm

greggor, backtracking from accusing me of: “You’re arguing for the sake of arguing again Davy.”

“Busted” greggor is arguing for the sake of arguing which is a nice way to say stalking and pricking only this time he got busted? LMFAO

Davy on Sat, 21st Jul 2018 12:19 pm

your username is what I choose until you end your stalking and pricking…got it

GregT on Sat, 21st Jul 2018 12:28 pm

My username is GregT Davy. You didn’t choose it, I did.

The fact that you continue to constantly attack and belittle others is the very reason why this forum has become so dysfunctional. As long as you continue to act out like a spoiled rotten little child, the retaliations will continue.

Davy on Sat, 21st Jul 2018 1:11 pm

Your username is what I choose until you stop your daily stalking and pricking. You do not deserve respect until you show respect. If I had my way there would be no interaction between us. I find you lack intelligence and have an extremist anti-American agenda. You are a waste of time for me intellectually. The fact you choose to mess with me means I will mess with you back with interest. What happens with the rest of the members here is not your business. If you choose to make it your business in regards to me then you will be disrespected and your comment moderated. Got it?

JuanP on Sat, 21st Jul 2018 1:11 pm

Delusional Davy “your username is what I choose until you end your stalking and pricking…got it”
You are a seriously deluded motherfucker, Exceptionalist! You can call Greg whatever the fuck you want, but his username is GregT and there is nothing you can do about it and your opinion doesn’t matter.

Davy on Sat, 21st Jul 2018 1:16 pm

Boney Juan what I told Greggie goes for you too and go home you unappreciative parasite. .

JuanP on Sat, 21st Jul 2018 1:16 pm

You are a disgrace to your family and your country, Davy. You are a thoroughly repulsive human being.

JuanP on Sat, 21st Jul 2018 1:20 pm

Delusional Davy “Boney Juan what I told Greggie goes for you too and go home ”
You are truly losing it, Exceptionalist! Your delusions are completely taking over. God, I am going to really enjoy “bitch slapping you, pussy” for the foreseeable future. You keep behaving like this and we will keep confronting you with your behavior. You will reap what you are sowing. That is a promise, moron! LOL!

Davy on Sat, 21st Jul 2018 1:44 pm

Oh shut up stupid. You don’t know my family.

Go home

GregT on Sat, 21st Jul 2018 2:09 pm

“You are a disgrace to your family and your country, Davy. You are a thoroughly repulsive human being.”

Completely agree Juan.

MASTERMIND on Sat, 21st Jul 2018 2:11 pm

Political Instability and Economic Growth – (Alesina, 1996)

Low or negative economic growth leads to political instability and collapse.

https://www.scribd.com/document/384373317/Political-Instability-and-Economic-Growth-Alesina-1996

MASTERMIND on Sat, 21st Jul 2018 2:15 pm

You folks all need someone and something abstract to blame the collapse on..

Clogg he blames immigrants,

Greg blames the Jews and bankers

Davy blames the lying liberal elites

Juan and Madkat blame America

See you guys aren’t that different after all..

LMFAO!

GregT on Sat, 21st Jul 2018 2:20 pm

“Greg blames the Jews and bankers”

Incorrect MM. I don’t blame the Jewish people at all.

JuanP on Sat, 21st Jul 2018 3:00 pm

Delusional Davy “Oh shut up stupid. You don’t know my family”

I don’t have to know your family to know that you disgrace them by behaving the way you do, stupid. You would be a disgrace to any family and you are smart enough to know that.

Sissyfuss on Sat, 21st Jul 2018 3:08 pm

Yeah Ghung. None of those people or organizations are going to like the actions the US govt is going to take but when has the US govt given a shit about what others think?

MASTERMIND on Sat, 21st Jul 2018 3:40 pm

Top Economist: America: The Future Looks Broke

Professor Laurence Kotlikoff from the University of Boston is, according to The Economist, one of the 25 most influential economists in the world. He says America’s official debt paints an untrue fiscal picture.

“The problem is the official debt is only the debts that politicians decide to put on to the books. Politicians are able and free to put whatever they want on to the books and keep other things off the books.”

What doesn’t get recorded is the value of all future government liabilities and the value of all future receipts, what he calls fiscal gap accounting. Future liabilities would be social security benefits, pensions, health care benefits and defence. These liabilities minus future receipts gives the true picture, Kotlikoff says.

“For the US, the fiscal gap is not $US20 trillion, which is the size of the official debt, but it’s $US200 trillion, ten times larger. So the country’s bankrupt.”

https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018632011/america-the-future-looks-broke

Davy on Sat, 21st Jul 2018 3:40 pm

Greggor and Boney Juan , you two are a disgrace to the human race. You two represent the worst of human behavior disguised as respectable and honest. Rich spoiled brats that whine and point fingers at others. greggor, bite yourself and Boney Juan go home.

GregT on Sat, 21st Jul 2018 4:08 pm

I am a well respected member of both my family, and my community Davy. I could care less what a complete nutcase such as yourself says, or thinks.

Cloggie on Sat, 21st Jul 2018 4:08 pm

Exactly. From this point of view is Italy financially the most and the US the least stable:

https://deepresource.wordpress.com/2012/12/11/the-real-state-of-western-finances/

Kotlikoff is talking about the light-blue bars.

Davy on Sat, 21st Jul 2018 4:23 pm

Sure you are greggor, like I said people like you and Boney Juan have ugly personalies that are manifested at places like this. I imagine your family would think differently if they knew the dark side of the greggor. Maybe your therapist knows about it and maybe that is part of your couples counseling. You are likely abusive and dysfunctional at home like you are here.

MASTERMIND on Sat, 21st Jul 2018 4:30 pm

Neckbeards on 4chan found my dump of peak oil references..

https://archive.4plebs.org/pol/thread/177787357/

The word is getting out! The elites are panicking!

JuanP on Sat, 21st Jul 2018 4:46 pm

You are ridiculously pathetic, Exceptionalist! Have you ever done anything for anyone else. You are nothing more than a widdle whining bitch!

MASTERMIND on Sat, 21st Jul 2018 5:04 pm

CIA official: China wants to replace US as world superpower

https://edition.cnn.com/2018/07/20/politics/china-cold-war-us-superpower-influence/index.html

MASTERMIND on Sat, 21st Jul 2018 5:08 pm

Hit China hard!

First a trade war than a shooting war..nuke them back to the stone ages..

MASTERMIND on Sat, 21st Jul 2018 5:15 pm

The Chinese dragon shall spread it’s wings and fly!!

JuanP on Sat, 21st Jul 2018 6:21 pm

Delusional Davy “Greggor and Boney Juan , you two are a disgrace to the human race. You two represent the worst of human behavior …”

Projecting again, Exceptionalist? LOL! God, you are a pathetic bitch!

JuanP on Sat, 21st Jul 2018 6:30 pm

Is China prepping for nuclear war with USA?
https://www.rt.com/news/433904-china-more-nukes-deter-us/

Makati1 on Sat, 21st Jul 2018 6:31 pm

This forum is plagued by two mental cases, Davy and MM, and a few dreamers, Cloggie and Boat. None of the four are rational humans living in the real world. The rest of us try to have intelligent comments about, and responses to, world events.

Can it be blamed on their conditioning from birth? If they live in the Us or are in a Us puppet country, then Yes, they have been “conditioned”. I would say it is also from being aware of their declining lifestyles and the end of their “American Dream”. They are pretending a world that they can feel comfortable in, for now.

Their personalities are obvious to anyone who has been here for a while and read their posts. I am willing to consider the opinions of Cloggie and Boat because they are civil and don’t resort to immature bullying and putdowns. The other two are just trash talk, best ignored. Of no value.

Davy and MM haven’t realized that no one here gives a shit about what they think or what they post. They are just zeros in the 7+ billion of us who inhabit the planet. No lives of their own so they live on the internet.

JuanP on Sat, 21st Jul 2018 6:39 pm

This is today’s Global Times editorial piece. Apparently the Chinese goverment is evaluating its nuclear arsenal in view of the USA’s increasingly agressive actions in Taiwan and the South CHINA sea. What the fuck are US troops doing on the opposite side of the world? Bring the troops home; we need to invest that money at HOME, here in the USA, not waste it abroad.
http://www.globaltimes.cn/content/1111711.shtml

Makati1 on Sat, 21st Jul 2018 6:48 pm

A good article even though it is a sales pitch for whatever they are selling after you “pay” to read it. As I do not, I can assume it is more of the same, buy gold/silver, etc. I doubt that there is anything original behind the paywall.

If you are not prepared, I suggest you do so, even if it is only to keep a months supply of necessities and things that do not require electric or fuel to use.

Makati1 on Sat, 21st Jul 2018 6:57 pm

JuanP, as I live in the area where the Us is trying to get another war of choice going, I agree. The Us has no business in this area. I can imagine what would happen if the Chinese were doing the same in the Gulf of Mexico, or the Caribbean, or off the coast of California.

If the Us keeps poking a stick at the bear or dragon, it will not end well for Americans. The Chinese have “nuclear” weapons that do not need missiles. They hold enough Us debt to sink the American economy, not to mention the trade that supplies the Us with most of its necessities. And, of course, Russia has thousand of nukes aimed at the Us.

I suspect that the Us is going to get just what it deserves and it won’t be pretty.