Men in the city know that we live in a time of upheaval, a time of breakdown and renewal. Despite complacency from naïve Baby Boomers, denial from corporate betas, or reactionary dismissal from blue pilled normies the old world is burning, and the masses are beginning to smell the smoke. At the heart of the cyclic change erupting around us is the decline of luxury brand Americana. Luxury is not wealth in the same way that position is not power; luxury is a fugazi, fabricated to project an image that usually belies insecurity. America’s “Full, Faith and Credit” – the majesty of the dollar’s “Great Seal” – depends on brand recognition earned generations ago and squandered by today’s decrepit Gerontocracy.
Complacency is the hobgoblin of the luxuriant. The prolific historian Will Durant revealed decades ago that "A nation is born Stoic and dies Epicurean.” Translation – nations are built through hardship, discipline, and sacrifice, they are destroyed by complacency, self-indulgence, and extravagance. The ferocious boxer Marvin Hagler – like many fighters – knew that luxury sapped his fighting spirit when he told a journalist, “It’s tough to get out of bed to do roadwork at 5 AM when you’ve been sleeping in silk pajamas.” The “Global Elites,” Beta-Tyrants, the privileged and powerful have lost their way and are soon to expose America’s faux prosperity.
Behind the curtain concealing America’s feckless leadership there is no Wizard only clowns.
Behind the curtain concealing America’s feckless leadership there is no Wizard only clowns. The celebrated investors, public intellectuals, and slippery politicians of the Gerontocracy dismiss America’s decline. They insist the United States is stable, its economic power is robust, its freedoms remain the envy of the world, and the glue that binds a divided nation together. We have the top companies, attract the smartest people, the deepest capital markets, military supremacy, and above all we have democracy, a rule of law that empowers and protects the citizenry. Whatever “First World” problems we face are mere distractions or minor inconveniences compared to the sinful stench of Third World despots motivated by archaic nationalism and crippled by corruption, bigotry, and poverty. America is the greatest country in the world no questions asked, next subject.
This Time is Different
Flush with such dismissive arrogance, America’s elites are stumbling to their demise. For Wall Street bankers, London MPs, DC contractors, and perhaps even NIKKEI traders the Debt Ceiling is self-imposed theater, nothing serious. The Debt Ceiling was incepted in 1917 so Congress could constrain and control spending by the Executive Branch. It was intended to shore up division of power in the US Government (USG). Unfortunately, it has not served its purpose and Congress has raised the debt ceiling 78 time without recourse. Spending has been addictive like a drunk’s BAC after downing half-a-dozen Irish Car Bombs and chasing with shots of Tequila.
America’s real assets have been bludgeoned to death.
If the debt ceiling has not mattered since 1917 why would this time be different? A few metrics below should give us pause. Debt is just a number until Chapter 7 strikes. Debt is just a number until you are served an eviction notice, or your car is repossessed. Debt is just a number until you cannot eat. Debt is just a number until creditors seize your assets. The US is barreling towards the fiscal endgame and pushing the pedal to the metal until the engine blows up in a blaze of buffoonery.
Fed Balance Sheet:
In 2007: $800B
In 2023: $9T
USG National Debt:
In 2008: $10T
In 2023: $31T
Numbers never tell the full story. This time is different because America’s real assets: abundant food and energy, a shared Christian ethos, civil society, entrepreneurial spirit, vigorous middle class, sprawling infrastructure, and rule of law has been bludgeoned to death. The sources of America’s power have crumbled under the weight of ruinous brand mismanagement. Mythical references to nostalgic memories of luxury brand Americana are all that remains.
America already Defaulted
Default comes from the Latin word to “deceive” or “disappoint.” A default is a revelation of character, not a regulatory procedure or corporate liquidation. It is spirit rather than letter of the law that bankrupt individuals, companies, and nations. In truth, Americans (and the Western World) have been betrayed by the feeble Gerontocracy who rule them. Baby Boomers maxed out credit to finance a false self-image, an “American dream” that died long ago. Men in the city are stuck with the exorbitant tab of luxury brand Americana’s broken promises and illusory dreams. The bill is now due.
The cost is beginning to hit home, and standards of living are falling. The celebrated abundance of America’s natural resources and cheap energy is now a fantasy. Power outages are increasing in New England where LNG is imported from Trinidad and Tobago because no pipelines were built to carry natural gas from Appalachia, site of some of the largest natural gas reserves in the world. At the same time, American producers have so much abundant natural gas (drilling for oil in shale-rock releases natural gas) they are burning it (wasting it) and spewing excess into the atmosphere. Similarly, the state of California refuses to build natural gas pipelines overruling two thirds of Californians who depend on natural gas to heat their homes.
Americans have been betrayed by the feeble Gerontocracy who rule them.
A human tragedy is unraveling US sovereignty. Every month more than a hundred-thousand illegal immigrants are streaming across the border from Mexico. (The unofficial number is much higher) Border security is overwhelmed, and the rule of law has collapsed. Well financed drug cartels, human traffickers and coyotes control the South West, and the USG is employing its resources to transport hundreds of thousands (maybe millions) of "immigrants" across the United States to spread poverty and disorder. Nothing less than a humanitarian crisis is flaming into a violent confrontation with Mexico, a nation in chaos run by organized crime.
Wars overseas, censorship at home, and generational wealth inequality compound these disruptions. Escalation in Ukraine has sparked a global energy crisis and compromised America's “Geological discount rate” (see video above). Censoring popular news anchors like Tucker Carlson, lawfare against former President Donald Trump, and corrosive corporate media have eviscerated the credibility of America’s mainstream institutions. Finally, America’s economic vitality depends on job procurement, household formation, and a more equitable sexual marketplace. Each pillar is wobbling under the strain of financial-economic dislocation and the erosion of America’s traditional Christian ethos.
Financial Emergency
Wake up calls are emergencies. As the flailing Gerontocracy rinses and repeats unconvincing parables about luxury brand Americana, the world is divesting. Next month 80 countries around the world are meeting in Saint Petersburg to outline the next monetary order post-dollar hegemony. Bank runs are obliterating US regional banks and new studies suggest hundreds more are likely to fail if commercial real-estate buckles (read more here). Fears of financial surveillance via CBDC are spreading and confidence in America’s institutions – at home and abroad – is shaky. What happens next?
The world is divesting from luxury brand Americana.
The USG faces a perilous impasse. It must resolve and settle debt ceiling negotiations without causing volatility or panic. Congress and the President must present a unified front to sell luxury brand Americana yet again. Doing so will not prevent financial Armageddon but it will forestall it a little longer. However, given the fragility, uncertainty, and unpredictability of global affairs and domestic discord a swift resolution is unlikely. Turbulence in treasury markets seems unavoidable, and government employees, social security recipients, financial markets and beyond will feel the pinch.
The Gerontocracry is staring into the abyss. After decades of egregious misconduct, of outrageous scandals, and flagrant lawlessness Treasury Secretary Janet Yellen (she told us no more financial crisis in "our lifetimes") is tasked with cajoling (soon begging) foreigners, fiduciaries, and regular Americans to buy shares in a tarnished brand deep down no one trusts anymore. Despite rash claims to the contrary, it is anything but clear anyone will do so. The Japanese, the Chinese, the Saudis and others are net sellers while domestic banks and pension funds already own about 30% of supply, and then there is the Federal Reserve. My sense is that at the end of this game of musical chairs, only the Fed will buy more Treasuries in bulk, which means there is no real market, no real buyers or shareholders to prop up luxury brand Americana.
When that happens America will be totally fugazi and the real social cost will erupt like a financial Vesuvius.
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