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What’s left are the ‘fatal synergies’ of soaring debt and leverage, diminishing returns on stimulus, the substitution of credit for savings and the coming deflationary tsunami that pops all the speculative bubbles. Imagine a once modest but sturdy home built near a cliff to maximize the vistas.

Events that devastate the majority financially greatly enrich the few who bet on non-linear dynamics. I see the same question in forums, threads, articles and emails: what can I do to protect myself and my family from whatever lies ahead?

I’m sure it’s no surprise that the next five years will be risky and challenging; to the degree that we will be reliant on those closest to us, we are sharing a virtual lifeboat. Consider a scenario in which we’re on a ship that’s sinking, and the lifeboats have been launched. Being some of the last still on board the doomed vessel, we can scan who’s in each lifeboat and choose which one we’ll clamber into.

The sheer weight of this outlandish asymmetry of wealth and power is pulling the nation into disorder. The U.S. Constitution doesn’t address a small elite owning most of the nation’s private wealth and using a sliver of that wealth to influence the federal government so their wealth and political power increase in a self-reinforcing feedback: as a result of their campaign contributions and lobbying, the elites’ wealth continues expanding, enhancing their political power to further expand their wealth, and so on.

When the warning light is flashing red, it’s prudent to have a capital preservation strategy in place. Not everyone has an IRA or 401K invested in the stock market, for those who do, the red warning light is flashing red:markets have reached historic extremes on numerous fronts.

The takeaway here is obvious: earn as little money as possible and invest your surplus labor in assets that can’t be expropriated. Expropriation: dispossessing the populace of property and property rights, via the legal and financial over-reach of monetary and political authorities.

This is how states and empires decay and slide into the dustbin of history. Democracy is fundamentally about advocacy: the people are free to advocate for their interests and form groups to represent their shared interests. In the broadest scope, the people are free to advocate for what they hold as the common good, policies and programs that benefit the entire populace rather than one special-interest group.

It’s all so pathetic, isn’t it? The only way left to get ahead in America is to leverage up the riskiest gambles. It’s painfully obvious that the only way left to get ahead in America is crazy-risky speculation, but nobody seems to even notice this stark and stunning reality.

America’s financial system and state are themselves the problems, yet neither system is capable of recognizing this or unwinding their fatal synergies. why do some systems/states emerge from crises stronger while similar systems/states collapse?

Nobody thinks a euphoric rally could ever go bidless, but as Greenspan belatedly admitted, liquidity is not guaranteed. The current market melt-up is taken as nearly risk-free because the Fed has our back, i.e. the Federal Reserve will intervene long before any market decline does any damage.

OK, now I get it. Take a couple tabs of Euphorestra and Hopium, and stick to talking about making money in the market. Greed won’t offend anyone. So I started to tell my buddy about my new screenplay idea: “There’s a global pandemic, and when they rush a bunch of vaccines to market, then….”

The Fed’s casino isn’t just rigged; it’s criminally unstable. The decay of America’s middle class has been well documented and many commentators have explored the causal factors. The bottom line is that this decay isn’t random; the income of the middle class isn’t going to suddenly increase at 15 times the growth rate of the income of the top 0.1%. (see chart below)

All the risks generated by gambling with trillions of borrowed and leveraged dollars didn’t actually vanish; they were transferred by the Fed to the entire system. The Federal Reserve is the nation’s Helicopter Parent, saving everyone from the consequences of their actions.