Repent now! The end is near!
A massive worldwide economic crash is coming. When it happens, many institutions, utilities and government
structures will stop functioning. After the initial shock, humanity will face a
long chaotic period—maybe even a new dark age—where nothing seems to work.
Many of the foundations modern society has been built on will crumble.
Politics will descend into chaos as governments struggle to provide even the
most basic services. People who once saw themselves as middle class will scramble
to stay alive. With local economies in shambles, vast waves of desperate
refugees will overwhelm the few islands of safety. All of these things are
preordained. There is little we can do to stop them.
I’m not the first to make such claims. Crackpots have been predicting the
end of the world since the beginning of the world, so why should you listen to
me? Maybe I’m a different kind of crackpot, backed up by a credible system of data
and logic. I could be delusional, but at least it’s a well-constructed delusion.
If nothing else, you can see my theories as an intellectual challenge: “Figure
out how this guy is wrong.”
To be clear, I’m not actually predicting the end of the world. Planet Earth
will not stop spinning and humans will not vanish from it. Instead, I foresee a
massive economic catastrophe I call the Great Reversal. It will be like the
Great Depression but even worse. Millions will starve. (I mean millions
more than are starving now.) Many previously solid institutions will collapse, like governments, banks and utilities. Around the world, economic growth will be a thing of the past.
“Contraction” will describe the world far into the future.
In simplest terms, the world will be brought down by a debt crisis.
Governments, corporations and individuals have accumulated too much
debt, which probably isn’t news to you.
What might surprise you is a different kind of crisis unfolding quietly in the background that is colliding with the debt crisis to guarantee a truly cataclysmic collapse.
The hidden crisis is this: Most countries of the developed world are on the cusp of dramatic population loss, thanks to a decades-long fall in birth rates. When these countries start losing population, as some already have, or their workforce merely plateaus, economic growth cannot be sustained and any illusion of paying down their debt will vanish. When investors realize the government bonds they hold are dubious, interest rates will rise, increasing the cost of the debt and making it even less supportable. As confidence wanes, the crisis will accelerate; panic will set in, and the whole house of cards will come tumbling down.
“But wait!” you say, “What population loss?” Isn’t the world suffering
from a population explosion? In the 20th Century, the total world census rose
from about 1.6 billion to over 6 billion, and it is now on the road to 8 and 9
billion. How can I claim populations will shrink?
The population explosion is an illusion. It no longer exists. Only a handful
of underdeveloped countries can still claim to be exploding. They are mostly in
Africa, largely isolated from the rest of the world, and even their birth rates
are slowing. Most countries on other continents are suffering from a baby shortage.
Since the 1960s, their birth rates have plummeted, to the point where
they are chronically below the number of babies needed to sustain their
populations.
The total population of most of these countries continues to grow due to a statistical
phenomenon known as demographic momentum, which introduces a time lag
into the process. When the birth rate falls, the total population doesn’t
necessarily fall until the people from the previous high-birth period start
dying of old age. As the boom generation retires and eventually passes on, the
total population will stabilize and then drop, like reaching the top of a
roller coaster. Once a population starts falling, it will do so at an
ever-accelerating rate until the downward trajectory roughly matches the upward
trend in the population explosion years.
And the decline will continue for the rest of the 21st Century!
Even if birth rates were to suddenly rise, it will be decades before the total population starts to recover from its downward plunge. That’s the other side of demographic momentum: Once population starts falling, it will continue to do so for years regardless of current birth rates.
As the population of a country falls, especially the number of working-age
people, total economic output must also fall. Quite simply, you can’t have the
same level of business activity if you don’t have as many workers producing
things and consumers buying things. Total tax revenues will drop, but the
outstanding debts of the country will not decline accordingly. Those debt
numbers are already fixed, like expenses already charged to your credit card.
If a country’s high debt load was dubious even in the boom times, it will be
absolutely unsustainable when the economy shrinks.
Voilà! There you have it. The perfect storm. Since population is certain to
decline in most developed countries, government default on national debt is
inevitable. Not every government has unsupportable debt right now, but when the
big ones fall, especially the United States, Japan and Britain, the economic vortex will take
everyone else down with them.
I contend this worldwide default is non-negotiable. It will happen
regardless of what we do today. Even if the political will could be found to
pay down national debts, it can’t be done fast enough to match the loss of
productive taxpaying workers. Although lack of babies is the core problem, it would
not stave off collapse if every developed country suddenly produced a lot of them,
because those babies won’t generate any significant tax revenue for at least
twenty years. Until then, children are a burden to the economy, not a benefit.
Other processes are exacerbating the world’s demographic
decline: Weaker countries are being drained of life by the flight of their
talent. Stronger countries, although benefitting from this flight, are
nonetheless being crushed by the pension and medical burdens of their aging
populations. Many countries in Africa continue their population explosion, pumping
instability into the rest of the world. Meanwhile, human procreation worldwide
continues to favor the least successful members of society,
who are likely to have more
babies than the most successful.
These issues are longer-term concerns than the debt crisis, but they won't go away.
They will have to be dealt with if humanity is going to survive.
If governments collapse under their obligations and the worldwide economy
dramatically contracts, much of our current civilization is under threat. Most
of the infrastructure we now rely on is incredibly complex and depends on a
high level of economic activity, technical expertise and government support,
which all hinge on a presumption of unlimited growth.
For example, do you know where your data is? All those videos, family photos
and business records you have uploaded to the “cloud” might not survive if
revenues dry up and providers of those services can’t afford their electricity
bills. Electric utilities, in turn, can’t function if big clients shut down and
income falls below the threshold needed to maintain their complex technical systems and
service their own high debt. When a natural disaster strikes, like an
earthquake or hurricane, many weakened utilities will never be restored because
they have no resiliency left.
For lack of a better analogy, the Great Reversal will be like the collapse
of the Western Roman Empire but a whole lot faster. When Rome fell, life on
Earth didn’t cease, but Europe’s underlying structure disintegrated. There was
no one to maintain the roads, aqueducts or public order. A lot of investors—or
the ancient version of them—lost everything. After the fall, the exercise of
power became more brutal as local tribes vied to fill the vacuum the Romans
left behind. In the end, Europeans built new societies even more sophisticated
than Rome’s, but it was a long, painful road getting there.
I’ve never seen myself as a Prophet of Doom, and I hope I’m wrong. I rather
enjoy our current empire, and I would never wish upon the world the turmoil and
outright starvation the Great Reversal implies. Still, when I run the numbers
and walk through the logic, I see what I see, and I haven’t found a way to
discount my conclusions. I am writing this book to give you the opportunity to
refute me, and I certainly hope you can.
I may be delusional or a crackpot, but one thing I am not is a conspiracy
theorist. There are no conspiracies in the collapse of populations, except
perhaps when one ethnic group tries to exterminate another. There are only
individuals pursuing their own interests, multiplied by millions. Intentional malice is no more significant here than in the rise and fall of the tides.
It’s just water molecules doing their thing under the influence of the moon’s
gravity with no intelligent control or sinister intent. A lot of foolish and short-sighted
government decisions may have led us to the Great Reversal, but there was
never any deliberate plan to screw things up.
I am also no salesman. I’m not peddling doom to try to get you to buy gold
or Bitcoin or invest in my Ponzi scheme. At the moment, I’m not even asking you
to buy this book. (It’s free to read while under construction.) I’m peddling doom
because I think it’s true. If I’m wrong and my theories don't pan out, I’ll be
happy to play the fool to save the planet. If I’m right, I have no reason to be
happy, because no one would wish this catastrophe on anyone.
I can’t tell you when, where or how the Great Reversal will occur. I can
only tell you why. It has to do with numbers. A major portion of the world’s
destiny is determined by the raw number of people in the various countries and
subcultures of our planet, along with their age and gender and
how these groups are changing. The study of these numbers is called demography.
It is a seemingly dull field mainly concerned with counting people and sorting
them into categories.
I used to have little interest in demography. Now I think it’s the most
important field in the world.
