The fourth phase of America’s Financial Endgame™ is the point at which drastic government action is taken in response to the turmoil that is ripping through the economy and financial markets. By the time this phase takes hold, the economy will already be a shattered mess of failed attempts so stay the inevitable collapse that each bring that very collapse closer to reality. As is the case with most failed regimes, the predictable cycle of scapegoating, blame shifting, graft, and corruption by the people in charge will play out until a breaking point approaches.
The most likely breaking point will be when the US government can no longer borrow for low rates of interest. Or possibly if the US government finds that after a certain point they cannot find more buyers for sovereign debt at all. When this happens, the unpopular initiatives that had previously been untenable will likely be instituted via “emergency executive powers” granted to the government.
The reason why this stage of America’s Financial Endgame™ will be so dangerous is because the cycle of dependence will have grown so large by this point that any unpopular initiative generated by the government is all but certain to be directed at extracting more resources from the producers of the economy for the purpose of continuing both entitlement programs and subsidies to politically connected organizations. This will result in a destructive cycle that plunges the national economy deeper and deeper into recession as the burden on producers continues to increase for the purpose of subsidizing the acquisition of votes and political contributions from the dependent class. (Meaning both individuals and corporations who are dependent on government largesse for their subsistence)
What astute investors need to understand is that these steps toward economic destruction can be overcome by individuals who are attentive and action oriented. The spiral is not a foregone conclusion for everybody. There are many, many millions of people who will be absolutely devastated by these events. There are also some people who will learn how to use the volatility that is created by these major market gyrations to make intelligent investments that grow their wealth.
In the next section of America’s Financial Endgame™ we will discuss the stage where the government moves to socialize institutional retirement accounts.