History as prophecy
There are seven stages to the collapse of an empire. The United States is in stage 5.
It seems inevitable. Growing nations start out economically or militarily strong, but become infatuated with becoming dominant beyond their borders. Macedonia (Alexander the Great), the Roman Empire, the Ottoman Empire, Spain, the British Empire, the Soviet Union. All rose, then fell; not because of outside invasions, but because of economic collapse. Two weeks ago, I reviewed Ted Lacksonen’s book The Eagle Has Crashed, which I called “strangely prophetic” because its economic forecasts were spot on about today.
In this post, I share with you a YouTube video I viewed recently. I cannot vouch for the authoritativeness of its source, Economy Rewind, but I have seen the seven steps presented in various ways before. Despite the sensational title, I am sure from my own study that it accurately projects what will happen to us if we do not change course very soon. It is well worth viewing; however, I will summarize the steps below.
The Seven Stage Collapse video (17:45)
The Seven Stages
Stage 1. Military overextension. We have troops in 150 countries and have treaty commitments to Europe (through NATO), Japan, South Korea, Taiwan, and the Philippines. Our military budget is $850 billion, larger than the next 10 countries combined (that includes Russia and China!). We cannot respond to multiple threats simultaneously because we are overextended.
Stage 2. Currency collapse. Since the dollar was uncoupled from gold in 1971, our currency has lost 97% of its purchasing power (relative to gold).
Stage 3. Debt spiral. Our national debt (as I mentioned two weeks ago) is over $37 trillion and continuing to rise. The federal government runs fiscal deficits every year, and interest payments on the debt now exceed defense expenditures.
Stage 4. Loss of productive capacity. We design. We finance. We consume. But we don’t produce. We import $800 billion more than we export annually. When we run out of dollars (or producing countries refuse to accept it), imports will grind to a halt.
Stage 5. Social decay. Homelessness is rising. Drug abuse kills 100,000 Americans each year. Now we are about to see hunger on an unprecedented scale because the President and Congress cannot agree to reopen the federal government. Our fertility rate is dropping. Emigration from the United States among the young and educated is increasing.
Stage 6. Loss of reserve currency status. We’re not there yet, but nations are beginning to abandon the dollar for international transactions in favor of the Chinese yuan and other arrangements. Many nations are actively buying gold.
Stage 7. Total collapse. When nations refuse to accept the dollar and we have little productive capacity, it becomes worthless. We cannot defend our interests abroad, and might find our military unable even to protect us at home. The collapse of Spain took a century, Britain took 20 years, the Soviet Union collapsed in 900 days. When the collapse occurs, some states will find their own way out (think California and Texas). As Ted Lacksonen’s scenario suggests, there may be a rump “United States of America,” but it will be a hollow shell of what we know now.
Economic Rewind observes that history has recorded this same sequence many times before. Each empire thought it was an exception to the rule, but there is an almost mathematical logic to this sequence.
We can take a path to reform or renewal, but it will also be painful — and time is running out. When collapse occurs, it will hit us overnight.
Our faith will sustain us, but only by respecting history and fundamental economics can we build our way out.
Faithful Citizen with Harold Thomas consists of the musings of a mainline Protestant, libertarian Boomer who tries to keep up with the news while remaining true to his faith and the principles of the American Founders. Harold is an author and retired business analyst with degrees in political science and foreign service living in Columbus, Ohio.
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Scary stuff.
Now if only we’d learn from history.