Anatomy of the Endgame

Anatomy EndgameAs we continue in our discussion of America‘s Financial Endgame, we come to the anatomy of how this process is expected to unfold.  I have separate this process into five “phases” of progression toward an ultimate collapse and recovery.  These five phases are:

  1. Spending and Deficits
  2. Continued Quantitative Easing
  3. Bond Market Collapse
  4. Drastic Government Action
  5. Regress Toward a Sustainable Growth Trajectory

Within each of these phases is four separate steps in the progression toward the next phase.  Each separate step has its own implications toward the collapse of America’s financial system.

Separating these steps into their respective phases, we see the following progression of events:

Phase 1: Spending and Deficits

  1. Government Spending creates the appearance of growth
  2. Inflation held in check by a lack of private lending
  3. Banks restrict lending because of incentives from the Fed
  4. Deficits continue to mount as politicians spend without constraint

Phase 2: Continued Quantitative Easing

  1. The Fed continues to subsidize spending by monetizing debt
  2. Mounting Government Debt precipitates a Spiral
  3. The Fed’s quantitative easing spills over to broadly inflate prices
  4. Inflation causes civil unrest and riots

Phase 3: Bond Market Collapse

  1. The Fed reduces the money supply to stabilize prices
  2. Reductions in the Fed balance sheet spike yields
  3. Higher interest rates expand the Deficit and accelerate the spiral
  4. The Debt Spiral causes bond prices to collapse and spikes yields

Phase 4: Drastic Government Action

  1. The Government moves to socialize institutional retirement assets
  2. Dramatic increases in taxes
  3. Dramatic reductions in government spending
  4. Economic crash – continued riots, multiple burned out cities

Phase 5: Regress Toward a Sustainable Growth Trajectory

  1. Money stabilizes around either commodities or fixed growth rules
  2. Cycle of productive innovation resumes
  3. Stable money and prices keep economy on sustainable path
  4. Eventually, the “real” innovation results in “quantum leap” growth

The map for the future of America’s Financial Endgame is already beginning to unfold.  Many people feel that this is a highly frightening situation, and they are right.  However, the situation is moving regardless of whether we choose to pay attention to it or ignore it.  In my personal view, I certainly hope that the events I have outlined do not come to pass in the way that my analysis leads to believe that they will.  I would prefer that the wealth of an entire generation of American be spared the decimation of continued inflation and an economic collapse.

Unfortunately, as individuals we do not have the ability to directly impact the course of public policy.  There are forces at work which we cannot control.  All that we can do is ensure that the decisions we make are helping us to preserve and protect the physical and financial well being of the people we care about.

Our next discussion will enter the “Spending and Deficits” phase of the progression toward America’s Financial Endgame.

Categories: America's Financial Endgame | Tags: , , , , , , , , | 26 Comments

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26 thoughts on “Anatomy of the Endgame

  1. 607624 13286I see your point, and I totally appreciate your article. For what its worth I will tell all my friends about it, quite resourceful. Later. 60601

    • I think that the unwinding of America’s financial system is going to catch many people unprepared. Unfortunately, many people are capitalizing on future risks to scare people into buying sketchy financial products. Being informed and learning to see the opportunities that will be presented in the coming years will be paramount.

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    • I think you were on somebody else’s site. There are many (other) people using the “end game” concept for fear-based sales messages with auto-play recordings, etc. The fundamental thesis of my analysis is that there are different ways to invest successfully, depending on what is happening in the larger macro-economic environment.

      I am not trying to get you to buy gold through an affiliate account.

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