Decline Becoming Clearer
By Alex Saitta
July 27, 2020
Introduction:
For more than 10 years now I’ve been writing about the moral, social, spiritual and economic slide of our country. The moral slide: how our culture is suffering from a collective mental illness rooted in losing our sense of right and wrong. The social slide: how we can no longer unify behind a common good. The spiritual slide: how we no longer fear God and have ignored his teachings here on earth. The economic slide: how due to rising debt the standard of living is falling for many.
I started this “long slide ending in collapse” theme in January 2009 when I wrote: “The U. S. Government has proven it is willing to back stop the economy. Thus, as long as confidence continues in the U.S. government, this will remain a recession and not turn into an economic collapse… It is unlikely our government leaders will take the necessary steps to avert the collapse that is heading our way sometime within the next 20 years. Use this time wisely to get your fiscal situation in order. Live within your means, pay down your debt and put money aside for the storm that is coming.”
When? What Does It Look Like?
For me the question wasn’t which direction we heading in. I figured out in 2009 the direction was down. Heck, most realized this as well. The right direction/ wrong direction surveys have been negative for about 8 years now. The challenging question was, how long would it take to go from bad to worse and what would worse look like?
Three Indicators:
Other than saying there will be a collapse in some way, shape or form “sometime with the next 20 years”, I realized timing was going to be difficult to uncover. As a result, I looked to three indicators to tell me things were going from bad to worse and said, “watch U.S. interest rates and the U.S. dollar (and gold too).”
I surmised things would continue to decay, but stay afloat as long as confidence remained high, and those three indicators provided a good gauge of overall confidence or a lack of. I watched them closely over the years.
In June 2010 The Next Decade Became Clearer:
"The country will continue on the same course of spending more than we earn and sooner or later one of these crises will trigger a worldwide economic collapse and an economic depression will follow. This will be accompanied by social and political unrest.”
From January 2011:
“By the way, when I write about a collapse occurring in the next decade or two, I’m talking about a financial and economic slide and then collapse. That is stocks fall significantly, interest rates rise significantly and economic growth becomes depressed. I’m not talking about a total collapse and destruction of the nation and its boarders. To me such an economic/ financial collapse will have the effect of something like the fall of the Roman Empire, British Empire or the USSR. The US will survive an economic/financial collapse as a country, but it will lose much of its superpower status in my opinion. In some ways that decline has already started.”
In October 2013 I Warned About The Bogus CPI:
“The government’s official inflation gauge (CPI — Consumer Price Index) states inflation is only 1.5%, but like most economic measures, the CPI was made more rosy in the early 1990’s. Using the old CPI, inflation is truly running at about 6%. Put that together with the fact average household income is rising at 2%, we are all falling behind. Doing the math, the typical person’s purchasing power is declining about 4% a year. This will continue, continuing to erode our standard of living.”
In January 2015 I Talked About The Role of All This Stimulus:
“Also, the 70-month and counting period of zero interest rates and easy money encourages more borrowing, less savings and more speculation in stocks, bonds and derivatives. All the things that led to the Great Recession and financial crisis of 2008-09. To me, all of this is like feeding a marathon runner speed every time he needs to rest. Each time, to get him to run again, you have to give him more speed. It sounds like the US economy to me. Record stimulus is being applied every time it slows down and it is just eking out 2% GDP growth. At some point, without notice, the runner just gives out. Over the next decade or two I think economic growth continues to slide (lower and lower GDP growth over time), and at some point the economy just gives out and the government will not be able to lift it back up.”
In February 2020 I Said Some Event Would Trigger The Next Phase:
“Reading their comments, the CBO sees daunting problems after 2030. I think it hits sooner, sometime in this decade. My guess something triggers it. Maybe it’s Bernie in 2020 or 2024. Or a recession and a G8 country defaults. This a pile of gasoline soaked rags vulnerable to a careless strike of a match.”
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July 2020 Update:
I was wrong about a lot of different things, one being the rate of decline. I thought the 2010 decade would have slower growth than the 2000’s. The former the 2000’s averaged 1.8% annual GDP and the 2010’s 2.1%.
However, I wrote a million posts repeating these points over the past ten years and they have held up well as things slowly have gotten worse.
As I said, the question I struggled with was when would it go from bad to worse and what would the final phases of the decline look like?
Answers to those remaining two questions is now clearer. Gold has taken off, close to $2,000 an ounce. (Gold and silver are up 9% and 37% respectively since I recommended them on June 25th.)
The dollar is beginning to roll over. Interest rates are still low, though, but this is enough evidence to conclude things are ratcheting down a good measure here.
There has been a major step-up in borrowing, printing and spending of money. This will result in a marked acceleration of inflation in assets, goods and services. Rising inflation in the face of flat or falling incomes, will cause more and more to fall behind. People will complain, there will be more social unrest, riots here and there, deaths as a result of, and an increase in political assassinations worldwide. In response, countries will borrow, print and spend more, making things worse in the long run.
States Vs. Federal:
In the US, far left liberals are in control of the media, many national organizations like the ACLU, and the most vocal national corporations. Most large cities are under the control of the left too. As things get worse, the middle 20% of voters, unsure, will put the Democrat party back in control in Washington DC sometime in this decade. At that point, nationally most all things will be run by the far left. Then the promises, give-aways and borrowing, printing and spending to pay for it all will enter warp drive.
The markets will say “No mas” and the financial and economic system will nose dive and large sectors of the economy and society worldwide will collapse. This time borrowing and printing even more money will not help, but make the situation even worse.
The liberals at the national level will demand the states pay for the national bailout. Many states will say “No” and demand reform at the federal level. Then a major conflict will occur.
Conclusion:
I am very unhappy about this and it is painful watching it unfold. Life will be tougher for us all in the 2020’s. However, it is what it is. None of us can control it, only react to it, try and protect ourselves from it.
The direction is clear – down. The speed of the decline is accelerating across the four measures (moral, social, economic and spiritual) and none of these people in Washington, organizations and institutions have a clue how to stop it. Frankly, most are contributing to the decent and most of our leaders have no idea what is coming down the pike.
However, I do think there is hope at the end of the tunnel. Like I have long said, the solution will lie with the states, counties and their leaders, in particular the strongest and most healthy states standing up to the federal government and reforming it. In sum, the states created this monster. Only the states will be able to fix it.