The Parable of Falling Empires, or What Happens to (Your) Wealth as America Collapses

I have a friend. Poor guy, because he’s going to be the center of a little parable I’m about to tell you.

I know you’ve been wondering: how high is the price of American collapse going to be? What’ll be left? Of society, of prosperity, of the economy, of my own wealth? I’m going to teach you how to answer that question, my this little parable, and by the end, in hard terms, we’ll get to what the price of a collapsing empire, once the the heart of a global economy, really is. You will have a concrete way to understand how much of your wealth is at risk, and society’s too.

Now. This is going to teach you a lot, and you need to know it, to stay grounded in times like these, so sit with me around the campfire, and listen to my story.

My friend. He’s a successful enough fellow. Corporate executive, owns a nice house in a respectable suburb, drives a nice car, and so on. All the trappings of upper middle class levels of wealth, which if it sounds condescending, shouldn’t, because in today’s America, that’s no mean feat. It is a rare accomplishment, to be savored.

And yet my friend is miserable. Stressed. Depressed. Don’t worry, it’s not me I’m secretly talking about—I’m every bit the cliche of the cool guy, prowling the empty streets at 3AM, walking Snowy, and writing poetry under the starlight.

What is my friend so worried about? He’s got two kids he’s about to have to send to college. The axe could fall on him at any moment, and he knows he’s just a cog in capitalism’s ruthless, ugly, stupid machine. Money, money, money. That’s what’s got my friend so stressed, because in America these days, where money is losing its meaning, and a coffee can set you back $8, even a healthy income isn’t a guarantee of a healthy mind, set of relationships, life.

So my friend asks me, the famous cool economist, what to do. And I tell him, because, well, we’re old college buddies, and I want him to be happy.

But first I ask him a question.

What do you think the future holds for America?

He laughs, bitterly. The future? Just look at the present. He’s not a fool. He knows what I mean when I use terms like institutional dysfunction and social collapse and capital flight. He’s got graduate degrees from America’s finest universities, in finance no less.

And so I ask him another question. If you know that America’s future is bleak, as in, you fully understand that authoritarianism is here, and the damage now being done isn’t magically going to go away…then what are youdoing about it?

Not in terms of being an activist or, I don’t know, an agitator. It’s not social pressure I mean. I’m just asking…in terms of wealth.

And he looks at me quizzically.

I sigh a little inside. Because I have this conversation now many times a day. And it’s usually much the same.

So I try again, in a different way. Where is your money, anyways, I ask.

It’s in all the right places, he says.

What do you mean, I ask again, politely.

Everybody knows, he says, rolling his eyes, where your money should be.

And where’s that, I ask, frowning, almost theatrically.

Come on! It’s in…in…

He rattles off The List.

It’s in AI! It’s in Tech! It’s in Big Banking! It’s in the S&P 500 and the Nasdaq and the Dow Jones Industrial Average. And T-Bills!

Jesus, dude, he says, miffed, perplexed, irritated. Why are you asking me such a dumb question!

So your money’s in The List, I say, gently.

If that’s what you want to call it, he grunts.

Do you see a little problem here, I ask.

No, he says. I don’t have time for—

Alright. Let’s rewind, I say.

You just told you that you don’t think America has much of a future. At least, let’s say, the future’s at severe risk, and institutions are compromised, and society seems to have made its peace—maybe not you and me, but certainly most power centers and social groups—with the path America’s on, which is eminently not good.

He nods.

And you also just told me that your money’s…invested in America. Not just “in America,” which means a lot of things, but even worse, in the most cliched possible places to put it as far as America goes, which is where everyone else is putting it, and that’s the very definition of a bubble, but not just any bubble, something more like a Despair Bubble.

He pauses.

And then he begins to get it.

Look, he says, finally. I know I’m…I know I’m…

Succumbing to weakness? Sort of blindly following the herd? Not thinking it through clearly? I don’t say any of that out loud.

…I’m trying to listen, he sighs.

Good, I say. I mean, it’s your life, and your money, and I’m just here as your friend, who doesn’t want to see you lose it.

So you’re saying that I shouldn’t put my money in all the obvious places, just because…they’re…come on, man, that’s where to invest.

Is it, I ask. Who said so?

Everyone says so! Now he’s exasperated. Come on, dude, literally I hear it fifty times a day. Where else am I supposed to put the 401K and Mikey’s college savings and everything else? I mean, this is what the entire world is saying.

It’s not, though, really, is it, I object, again, gently. The entire world is running away from America. Did you see how Trump just raided a Hyundai plant, and then South Korea pulled billions in investment? That’s just a tiny, tiny tip of one iceberg.

What you hear repeated over and over again is the orthodox wisdom from inside America. Its financial industry. Your finance dorks, who are part of it. And the truth is that I don’t need to sort of teach you why it’s poor advice, because you already saw the error you’re making, which is that if America has no future, then why would you trust it with your wealth?

He splutters a little bit. Then he’s quiet. Then finally, he says. So you want me not to invest in the AI bubble, and yes I know it’s a bubble, but don’t worry, I can get out in time, and you want me not to invest in Big Tech, and yes I know it’s poisoning my kids souls, but come on, they need to go to college, and you want me to, what, sort of toss away what everyone’s saying?

I shrug. He’s known me for thirty years. We were boys together. I don’t have to remind him that I predicted every last brutal inch of American collapse.

Thanks, dude, he says.

And we both know what’s going to happen next, because it happens every month. He’s going to go away, not change a thing, and then feel even more anxious and panicked and stressed, and ask me all over again, next month. And I’ll tell him the same thing. Only this time next month, maybe the bubble will have popped. Maybe Trump will have declared martial law. Or maybe the Treasury will have started to default on the debt. Who knows?

We both know what’s going to happen next, which is nothing. As far as his wealth is concerned.

Let me draw out the tale of my parable for you now.

There are many, many fine and intelligent people out there. Who are making a mistake so vast, that it’ll probably be among the biggest of their lives, if not the biggest. They are smart enough to understand that America is collapsing, but they aren’t strong or wise enough to follow through on what that understanding means, particularly for their wealth.

And I shouldn’t have to spell out for you the conclusion. Let me just distill the lesson. There is a difference between being intelligent, understanding something intellectually, and acting on it. There is a difference between having a smart mind, and being the smart money.

Right now, many intelligent people, with smart minds, are being part of the dumb money. Seduced by bubbles, torn into by greed, stunned into inaction, paralyzed by indecision. But if you understand that America will probably not be the same again, at least not in our lifetimes, then, well, my suggestion is that you should act like it. At the very least where your wealth is concerned. If you don’t want it to go up in smoke, that is.

And I know, too, that many Americans who are smart and intelligent people think in fact that they’re smarter and more intelligent than figures like little old me. That’s sort of like being an anti-vaxxer when it comes to economics, unless you’ve also written the books and won the awards.

So let me give you something nasty and bitter to chew on, which we’ll dig deeper into in later posts.

Before the British Empire truly fell, which was at the end of the World Wars, do you know what it was worth? Go ahead, guess. If you need a reference point, today, it’s worth about $1.30.

But then? It was worth $5.

That is the price of a falling empire. And Britain, make no mistake, while it’s a pale shadow of what it used to be, isn’t currently experiencing American levels of collapse. Britain’s empire just got carved up over decades. America is collapsing at light speed, into something far more Soviet.

So now think of my poor friend again. He know he’s not mega rich, but he’s desperate to preserve what wealth he has. And when I tell him the stakes, he sort of dimly gets it, but only in a pallid, not-quite-there way. A light bulb flickers, and then sputters out.

He’s a smart guy. But as another good friend of mine says about me, in a different context: how can a guy so smart be so dumb? We all have our failings. But the question is how much they will cost us.

In my friend’s lifetime, it’d be more of a surprise at this point if the ancient story of falling empires wasn’t inscribed on over the decline of his own wealth, thanks to his own poor choices—than if America somehow remained a bastion of prosperity.

How would you like to be left with about 20 cents on every dollar of your wealth?

That’s what the parable of falling empires, which I’ve really recounted for you through my poor friend’s fatal, agonizing reluctance to act wisely, tells us. Intelligence does not always equal wisdom.

You’ve been wondering. How high will the price of all this be?

Now you have a pretty good way to think about it. I hope that was worth the read, old friends. Many thanks for joining me, and stay tuned—Havens is launching soon.

Love,

Umair (and Snowy!!)