The Breaking Point

1. The US Economy is at a Breaking Point, driven by unsustainable debt and crony capitalism.

An economy that depends for growth on ever-increasing amounts of debt that cannot even be serviced at the lowest interest rates in 5,000 years must inevitably reach the Breaking Point.

Unsustainable debt. The United States is facing an inevitable economic disaster, characterized by a stagnant, rigged economy propped up by trillions in "fictitious capital." Since 2007, $60 trillion in public and private debt has been added, bringing the total to about $200 trillion, or 300% of GDP. With average nominal economic growth at 2.92% and average interest rates at 2%, the economy needs 6% nominal growth just to cover interest, creating an annual shortfall of half a trillion dollars.

Crony capitalist rackets. Decades of anti-market plunder have perverted the American political economy into a consortium of crony capitalist rackets. This system is sustained by spending from an empty pocket, funded by history's greatest debt bubble, simulating prosperity that is not real. The "Breaking Point" is where this unsustainable system exhausts its credit and collapses, leading to wealth evaporation and the breakdown of overly large institutions.

Discontent and disillusionment. The public's faith in fiat money and institutions is collapsing, as evidenced by the unexpected popularity of figures like Donald Trump and Bernie Sanders. Official pronouncements of prosperity are "lies," masking a deeper "Great Degeneration" where real earnings have fallen, and the government has become more powerful and intrusive, yet less productive.

2. Megapolitics reveals how fundamental forces, not just human choice, shape societal evolution.

Megapolitics is an analysis of the boundary forces that set the rules for life’s games.

Beyond linear trends. Most forecasts rely on simple linear projections of trends, but megapolitics offers a framework to understand the fundamental factors that counteract and reverse these trends. These "boundary forces" include technology, climate, microbes, topography, and the costs and rewards of violence, which ultimately determine the direction of social change.

Three games of life. Megapolitics identifies three interconnected "games":

• Economic game: People prosper within existing rules (free market).
• Political game: Individuals and groups change rules for their benefit (anti-market, crony capitalism).
• Nonconstitutional politics: The largest game, subject only to natural laws, where physical force is the ultimate arbiter (warlords, terrorists).

Technology's transformative power. William Playfair, the inventor of the trend line, understood that technology fundamentally alters power relations and societies. For example, gunpowder weapons changed warfare, shifting power from physically strong individuals to wealthy nations capable of affording expensive armaments, thus driving the development of sovereign states.

3. Crony Capitalism and Fiat Money are instruments of plunder, enriching elites at public expense.

The introduction of pure fiat money by Richard Nixon was perhaps the single most telling step toward the impoverishment of the middle class in the history of the United States.

The political economy of plunder. Capitalism suffers from mistaken identity; many attribute declining living standards to capitalism itself, rather than to corrupt political systems that deform it. This "crony capitalism" is a universal expression of plunder, where politicians act as "pimpos" – using taxpayer assets to benefit special interest groups.

Staggering returns on influence. Research shows that politically active corporations receive an average of $760 from the government for every dollar spent on lobbying, a 75,900% return. This incentivizes investment in political influence over productive capital investment, leading to:

• Reduced competition (e.g., airlines seeking to ban rivals, utilities banning rooftop solar).
• Market rigging (e.g., sugar subsidies costing consumers billions).
• Concentration of wealth among insiders.

Fiat money as ultimate plunder. Nixon's repudiation of the dollar's link to gold in 1971 enabled the creation of "fictitious capital" out of thin air, concentrating wealth in the hands of a few. Quantitative Easing (QE) further exacerbated this, slashing interest income for savers while funneling trillions to big banks and the wealthy, effectively acting as a "financial death sentence" for the middle class.

4. The "Big Fat Lie" in health and diet exemplifies systemic corruption and declining returns.

The food industry, Big Pharma, and the mainstream medical industry have successfully manipulated the system to promote the obesity epidemic at your expense.

Alimentary canal contribution. Citizens are expected to consume whatever "designer rations" the nanny state and its corporate partners deem suitable, regardless of health. If these "evo-deviant" diets lead to illness, it further stimulates the $3.8 trillion "sick care" system, creating a perverse economic stimulus.

The demonization of saturated fats. The "Big Fat Lie" is a prime example of crony capitalist manipulation, convincing a gullible public to abandon natural saturated fats for cheaper, processed alternatives like trans fats and high-fructose corn syrup. This shift, driven by food industry profit motives and government dietary guidelines, has led to:

• A 50-fold surge in obesity in America over the last century.
• Skyrocketing rates of type 2 diabetes and heart disease.
• Massive profits for the pharmaceutical industry (e.g., statins, diabetes drugs).

Medical establishment complicity. Mainstream medicine, influenced by industry, perpetuates misinformation. Studies like the re-analyzed Sydney Diet Heart Study and observations from the Framingham Heart Study contradict the "artery-clogging saturated fat" cliché, showing that those consuming more saturated fat were often healthier. Yet, official recommendations continue to promote diets that create patients, ensuring the prosperity of the sick care industry.

5. Energy Return on Energy Invested (EROEI) dictates economic growth, and its decline signals a "Great Slowdown."

The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy.

Energy as the engine of growth. Economic growth is fundamentally tied to the availability of surplus energy. The Industrial Revolution, and the unprecedented prosperity that followed, was an "energy revolution" fueled by hydrocarbon energy. More energy deployed since 1900 than in all previous human history underscores its critical role.

Plunging EROEI. The "flamboyant period" of consuming energy capital is ending due to a drastic decline in EROEI – the ratio of energy obtained to energy expended in extraction. This means:

• EROEI for new oil discoveries has fallen from over 100:1 in the 1930s to barely 10:1 or less today.
• Shale oil and tar sands have EROEIs as low as 5:1 or even negative.
• The overall EROEI for the world economy continues to dwindle, threatening economic viability below 8:1 or 4:1.

The Great Slowdown. This decline in net energy availability is the root cause of the "Great Slowdown" or "Secular Stagnation" of the 21st century. It's not a monetary problem, but a biophysical one. The economy cannot sustain itself when the energy required to extract energy consumes too much of the surplus, leading to:

• Falling real wages and productivity.
• Reduced investment in physical expansion.
• An inability to meet compounding debt obligations.

6. The "Global Warming" narrative is an "Ecofascist" hoax masking natural climate cycles and justifying control.

The remorseless pretense that humans are causing global warming masks a more ominous turn in the solar cycles that have heretofore driven history.

Ecocatastrophe as justification. The "global warming hoax" is a "crony capitalist rationalization for a multi-trillion-dollar rip-off," designed to justify "ecofascism." This policy aims to:

• Cartelize hydrocarbon energy.
• Conserve the "good life" for the rich while denying capital accumulation to others.
• Retract the promise of American-style prosperity for billions.

Natural climate drivers. The theory of anthropogenic global warming (AGW) is "geocentric," ignoring well-documented historical records of natural climate fluctuations driven by solar activity. Evidence includes:

• The Roman Warm Period and Medieval Warm Period occurred long before industrialization.
• Solar physicists predict a new Little Ice Age, similar to the Maunder Minimum, due to declining solar irradiance.
• CO2 is a tiny fraction of the atmosphere, and its human-caused increase is dwarfed by natural emissions.

"Greatest lie ever told." Claims of disastrous sea-level rise are "sheer nonsense," debunked by experts like Professor Niels-Axel Mörner and even Charles Darwin's work on coral atolls. The "science is settled" mantra echoes medieval scholasticism, stifling inquiry and serving political agendas, as evidenced by Al Gore's personal enrichment from green investments.

7. Erosion of the Rule of Law and pervasive surveillance mark the decline of the nation-state.

Obama and his all-powerful centralized state have set the cause of civil liberties back 800 years.

From Magna Carta to arbitrary power. The principles of the Magna Carta, establishing the rule of law and individual freedom against arbitrary authority, have been eroded. Today, the US government asserts rights like warrantless surveillance and the ability to kill citizens without charge, powers not even claimed by King John.

Pervasive surveillance. The US surveillance regime, particularly the NSA, collects more data on average Americans than the Stasi ever did on East Germans. This includes:

• Virtually every phone call, email, text, and internet search.
• Records of purchases, health, employment, and travel.
• This data is shared with federal, state, and local agencies, used to prosecute petty crimes while hiding its source.

Economic imprisonment. Policies like the Foreign Account Tax Compliance Act (FATCA) act as a "virtual Berlin Wall," making it nearly impossible for Americans to live or do business abroad. This economic lockdown, coupled with an estimated 10,000 to 300,000 federal criminal laws, means that "there is no one in the United States over the age of 18 who cannot be indicted for some federal crime."

8. The Deep State operates beyond democratic control, perpetuating costly, inefficient systems.

There is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country according to consistent patterns in season and out, connected to, but only intermittently controlled by, the visible state whose leaders we choose.

A shadow government. The "Deep State," a hybrid of public and private institutions, effectively governs the US without the consent of the governed. It has autonomous control over vast resources, prioritizing its own interests over public welfare. Examples include:

• NSA programs too secret for Congress to oversee.
• $1.7 billion spent on a Utah data center to store electronic lives.
• $7 billion to rebuild Baghdad's sewers while US infrastructure crumbles.

Crony capitalists with guns. The Deep State's "parasitic, extractive nature" thrives on appropriations, using top-secret clearances as a "crony capitalist mechanism for minimizing competition and controlling markets." This perpetuates massive military spending on ineffective systems, like the $1.5 trillion F-35 fighter that "can't even fly in the rain."

Perpetuating the status quo. The Deep State benefits from economic orthodoxy that favors government spending and financialization. Quantitative Easing (QE) temporarily defers intra-elite conflict by enriching both the Deep State and globalized elites, but this comes at the expense of the middle class and the long-term solvency of the nation.

9. The Debt Supercycle is ending, leading to a deflationary collapse and massive destruction of financial claims.

The only solution to this mismatch is the destruction of the value of money and debt on an unprecedentedly vast scale.

The deflationary trap. The current fiat money system, where most currency is borrowed into existence, creates a massive "short" position against the dollar. The $9 trillion in dollar debts owed by non-US borrowers, particularly in emerging markets, represents a colossal short squeeze risk. This debt, fueled by QE, has led to:

• Massive malinvestment, especially in China's overbuilt real estate and infrastructure.
• A collapse in commodity prices as artificial demand recedes.
• Triggering margin calls and bankruptcies globally.

Exter's Inverted Pyramid. This model illustrates how deflation unfolds, with investors deserting precarious, illiquid assets at the top (derivatives, unfunded liabilities) for safer, more liquid assets at the bottom, ultimately gold. The notional value of paper markets vastly exceeds underlying physical assets, making a massive destruction of financial claims inevitable.

Hyperinflation vs. Deflation. While some predict hyperinflation, the system's fragility and the predominant credit-based money supply make deflation more likely. Hyperinflation typically requires wholesale printing of physical currency, which central banks are currently trying to avoid, even contemplating abolishing cash to enforce negative interest rates.

10. The future points to a return of the "Organic Economy" and the rise of microsovereignties.

The new sovereignties that will emerge from the coming transition crisis will be microsovereignties: small states on the scale of cities and provinces rather than continental economies.

Pirenne's Pendulum. History shows a cyclical swing between periods of heavy regulation and economic freedom. The current era of "social legislation" and big government implies that Pirenne's Pendulum is primed to swing back towards greater economic freedom and smaller-scale governance.

Devolution of power. The nation-state is an anachronism, its scale no longer supported by megapolitical realities. The declining returns to scale in organizing violence and production, coupled with the rise of information technology and "spaces of flows," favor:

• Microsovereignties and city-states (e.g., Singapore, London as a city-state).
• Decentralized governance, potentially through nullification of federal laws or quasi-independent enclaves.
• A shift from territorial control to entrepreneurial provision of services.

Post-collapse opportunities. While the "declining state" will bring significant challenges, it also presents opportunities for those who can adapt. The elimination of counterproductive anti-market contrivances and crony capitalist distortions could unlock massive efficiency gains, leading to a new, freer entrepreneurial economy. This transition, though potentially chaotic, is not the end of civilization but a shift to a new phase of postmodern capitalism.