3 Black Swans and 3 Extreme Megatrends

Monday, October 12, 2020
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Click here to watch my 15-minute video or read on for the transcript.

I’m reaching out to you today for one simple reason: America is at a crossroads, a pivotal point in time that will determine your financial future for years to come.

You may think I’m referring to the election, one of the most chaotic battles for the White House in the history of our nation … and yes, that IS a critical aspect of the crossroads for America.

But I’m not here to bring you a partisan message. I will give you strictly well-researched facts on how these events impact you and your money … plus what you can do to prepare and prosper.

Or perhaps you expect me to talk about a second wave in the pandemic, a second wave of corporate failures and a new tidal wave of social turmoil. And yes, whether we like it or not, those are also a part of America at a crossroads.

But no matter how ugly things are or how much uglier they may get, I’m not here to frighten you with scenarios of the future.

Rather, with this video, I begin a two-part series of chats here in my personal library to help you find safety and build wealth no matter what happens. Let’s call these chats together our “library chats.”

Today, in this first library chat, I will show you what’s really happening behind the crazy headlines, behind the countless social media posts, beyond any political controversy.

I will show you how all the chaotic events swirling around us create far more risk for your savings and at the same time, far less yield for your money.

Then, in our next library chat together, I will give you my solution to this dilemma.

Look, I understand how all the crazy things happening in America today — the pandemic, the economy, the election — are causing a lot of confusion and fear, and for good reason. This is a real crisis.

But precisely because it’s real, this is the time for you to step away from all the noise outside, take a deep breath and just focus on what YOU have to do to safely build your wealth. That’s what we’ll do in our second chat of this two-part series.

Today, we are experiencing the convergence of three EXTREME megatrends that are impacting every aspect of life in America — our society, our politics and your money.

And each of these extreme megatrends makes us vulnerable to unpredictable forces that are beyond our control …

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Like the black swan that attacked the very heart of our NATION on 9-11 with great loss of life and treasure, setting off a chain reaction of events that have continued to ricochet through time: The U.S. invasion of Iraq, the fall of Saddam Hussein, the rise of Al Qaeda, the global spread of the Islamic state and THEN …

Billions of dollars in new money printing by Federal Reserve Chairman Greenspan, slashing interest rates to 1% and gutting your income.

Or …

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Like the black swan that attacked the very heart of our economy.

It wasn’t Sept. 11, 2001.

It was Sept.15, 2008:

The Lehman Brothers failure, again, setting off a chain reaction of events that have continued to ricochet through time. America’s deepest recession since the 1930s, America’s largest bank failures and bailouts of all time and THEN …

A Fed Chairman Greenspan’s massive wave of central bank money printing that was many times larger than anything we’d ever seen before, driving rates down to zero and wiping out your income.

The black swan virus that has suddenly burst onto the scene, spread rapidly around the globe, and mutated into an even more contagious strain …

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Transforming our cities into ghost towns …

Plunging financial markets into a tailspin …

Prompting governments to lurch from inaction to reaction and then ...

Driving the Fed Chairman Powell to unleash a tsunami of money printing that makes all prior money-printing binges look tiny by comparison.

And this time, not only has he driven interest rates down to zero, he has vowed to KEEP rates at zero until 2023 — a permanent blow to your income!

So why is all this happening?

And why is the Fed printing so much money with such wild abandon?

I can assure you it’s not caused by the black swans themselves.

It’s not because of terrorist attacks, random financial failures, or pandemics. It’s not driven by events that are unknowable or unimaginable.

It’s caused by trends we can see, we can know, we can even measure and plot on a chart.

3 Extreme Megatrends

I’m talking about three extreme megatrends that have transformed our nation, that have made us ever more vulnerable to black swan events.

As you’ll see in a moment, these megatrends are not unfamiliar to you. You see them every day in your daily life. What you may not realize is how extreme they are, how they feed on each other, how they truly threaten your future and mine.

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In World War I and during the influenza pandemic, U.S. public debt surged to 33% of GDP. In the Great Depression, it reached 43% of GDP … and 106% of GPD soon after World War II. But that extreme debt load soon went away. This time, in the wake of the COVID-19 pandemic, it’s back to over 100% of GDP and it is NOT going away. The Congressional Budget Office expects it to surge to 200% of GDP, nearly double the worst level of World War II.

Extreme Megatrend No. 1
Massive Public Debt

We’re vulnerable to black swans because of extreme megatrend no. 1 — debt, especially federal debt held by the public.

This debt story begins one hundred years ago, during World War I and the pandemic of 1918.

The public debt surged to 33% of GDP, paralyzing the U.S. government and the economy.

Then, during the Great Depression of the 1930s, the public debt surged to 43% of GDP, crippling the government’s ability to rescue the economy.

The greatest public debt in American history came immediately after World War II, when it hit 106% of GDP. But that’s almost entirely caused by the war effort and just as soon as the war is over, the bulk of the problem goes away.

But today, if you include all government debts and obligations, the debt problem is far larger than it was in World War II and it’s NOT going away.

According to the U.S. Congressional Budget Office, the public debt in America is headed to 200% of GDP, or nearly double the worst level of World War II.

Extreme Megatrend No. 2
Wealth Concentration

But we’re also vulnerable to black swans because of extreme megatrend no. 2 — wealth concentration.

Not just the rich squeezing out the poor. Not just America’s millionaires squeezing out the middle class. But also America’s billionaires squeezing out America’s millionaires.

This story also starts one hundred years ago, and we can see it most clearly with the top 0.01%, the richest one in ten thousand American households.

In the 1920s, their share of the nation’s wealth rose from 5% to a peak of over 10% in 1929.

The trend is reversed with the great crash, which wiped out the fortunes of the super-rich … and then with the Great Depression, which drove their business enterprises into the gutter.

Fast forward to 1978. That’s when the concentration of wealth in America reached an all-time low, and that’s when it began to rise again …

Which brings us to that fateful 15th day of September 2008 when the second black swan hits America, the failure of Lehman Brothers.

Not coincidentally, 2008 is also the year when the wealth concentration of America matches the peak levels of another important turning point long ago — 1929.

In other words, this is when inequality in America matches the same level that, in the last century, also marked a major breaking point.

And sure enough, that’s precisely when the Great Recession begins.

But there’s a big difference between the Great Recession of the late 2000s and the Great Depression of the early 1930s.

The Great Depression nearly wiped out the wealth share of the super-rich.

The Great Recession did not.

Our leaders sensed that we had far more debts and a financial system which is far more vulnerable.

That’s why the government embarked on the largest bank bailouts of all time.

That’s why the Fed unleasheed a great wave of money printing.

That’s how most of the money flowed to elite companies and elite families of America.

And that helps explain why the concentration of wealth surges to the most extreme level in U.S. history. (See chart.)

The end result is the great social and cultural divide we have today, with all its powerful emotions — pride and shame, greed and envy, fear and anger.

All ingredients for more black swan events of the social kind — mass protests, riots or worse.

Extreme Megatrend No. 3
Political Division and Dysfunction

Finally, we are vulnerable to black swan events because of extreme megatrend no. 3, the political division and dysfunction in America.

In the chart above, the red line is a measure of polarization based on an exhaustive study of voting patterns in the U.S. House of Representatives.

As you can see, it moves up and down in tandem with wealth concentration.

When this red line is low, it means that Republicans and Democrats in Congress are crossing party lines and drafting legislation together based on the issues.

When the red line is high, it means that they’re voting strictly along party lines, throwing bricks at each other or worse.

What are some signs of this extreme polarization? You’ve seen them. They’re appearing every day. They’re all around us.

Three extreme megatrends that feed on each other — debt, wealth concentration and political division!

Three extreme megatrends that have propelled the Fed to print more and more money, wipe out your yield and income and continue to do so for years to come!

3 Urgent Reasons We Need to Talk Again

So I can give you my single best solution to this dilemma of high risk and low yield …

So I can help guide you to find safety and high income no matter how extreme the megatrends, no matter what the next black swans may be.

That’s what I will do in our second “library chat,” tomorrow at 2 p.m. Eastern Time.

If you’re already signed up, great! Just check your inbox tomorrow a few minutes before 2 p.m. and click on the link we provide.

If not, be sure to click here now to secure your free ticket.

It’s worth $129. And today is your last day to get it for free.

Good luck and God bless!

Martin

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