The Gathering Storm

“The next Fourth Turning is due to begin shortly after the new millennium, midway through the Oh-Oh decade. Around the year 2005, a sudden spark will catalyze a Crisis mood. Remnants of the old social order will disintegrate. The political and economic trust will implode. Real hardship will beset the land, with severe distress that could involve questions of class, race, nation and empire. The very survival of the nation will feel at stake. Sometime before the year 2025, America will pass through a great gate in history, commensurate with the American Revolution, Civil War, and twin emergencies of the Great Depression and World War II.” – Strauss & Howe – The Fourth Turning 

The chart below was posted by Jesse a few weeks ago. It accompanied a post titled Gathering Storm. He doesn’t specifically refer to the chart, but his words reflect the ominous view of the future depicted in the chart.

“When gold and silver finally are able, through price action, to have their say about the state of Western fiscal and monetary policy actions, it may break a few eardrums and shatter a more than a few illusions about the wisdom and honesty of the money masters. Slowly, but surely, a reckoning is coming. And what has been hidden will be revealed.”

The title of the post and the chart both grabbed my attention and provide a glimpse into the reality of our present situation. The Gathering Storm was the title of Winston Churchill’s volume one history of World War II. Churchill documents the tumultuous twenty years leading up to World War II in The Gathering Storm. The years following World War I, through the Great Depression and the rise of Hitler were abysmal, but only a prelude to the approaching horror of 65 million deaths over the next six years. What appeared to be dark days in the 1930’s were only storm clouds gathering before a once in a lifetime tempest. In my view, we stand at an equally perilous point in history today.Where leaders had once been inclined to alleviate societal pressures, they will now aggravate them to command the nation’s attention. The regeneracy will be solidly under way.” – Strauss & Howe – The Fourth Turning

It is difficult for the vast majority of people to comprehend the likely chaos, pain, bloodshed and war which will overspread the nation and the world during the final two acts of this tragic play. The discomfort most people are feeling is just their cognitive dissonance telling them everything will be fine as they experience a steady decline in their standard of living. Harkening back to Jesse’s original chart, the Fourth Turning regeneracy is aligning with the Revelation in Act 2.

The day of reckoning will arrive when Trump is elected and that which has been hidden is revealed. Anyone who doesn’t grasp the increasing intensity of the rhetoric, opponent interactions and media responses will be blindsided by the coming storm. The days of delusion, denial and debt are going to revert to dismay, depression and death.

There is no more room to increase leverage. Americans are up to their eyeballs in mortgage, credit card, auto loan, and student loan debt ($17.4 trillion). Corporations are stuffed with record levels of debt ($14 trillion) they used to buy back their stock at all-time high prices. State and local governments are drowning in trillions of debt and unfunded pension liabilities. The Federal government is $19.3 trillion in debt, with unfunded entitlement liabilities exceeding $200 trillion.

It is mathematically impossible for this debt to be repaid with a rapidly aging developed world and a debt saturated developing the world. With financial markets as overvalued as they have ever been, the next crash will leave all the heavily indebted parties with no assets to repay the debt. The losses will make the 2008 financial crisis look like a stroll in the park. And the Fed shot their load years ago, without having the guts to reload. Their credibility is shot and their $4 trillion balance sheet is insolvent. The Wall Street banks are zombies sustained by 0% interest rates and accounting fraud.

I know the last few years have been frustrating for the “doom and gloomers” who actually have critical thinking skills and understand the nature of our dire economic situation. Much like Michael Burry, as described so well by Michael Lewis in The Big Short, your facts may be 100% correct but markets and people can remain irrational for longer than you think possible. By having the courage of your convictions, you must be prepared for scorn, ridicule, and mocking.

As the unpayable debt has expanded to ever greater heights and monetary authorities across the globe implement a wildly desperate measure like negative interest rates and buying financial assets to prop up stock markets, the public has become more unquestioning of reality and deluded by the seeming stability of financial markets. Record-low-interest rates and rising stock prices reinforce the normalcy bias of most people.

Many smart, normally skeptical, people have thrown in the towel. Because the gathering storm has not struck as predicted, they begin to believe it will never strike. This same mindset existed in 1860, 1929, 1940, 1999, and 2007. It easy to be lulled to sleep by the propaganda media machines, lying politicians, and extreme monetary schemes portrayed as normal by the money men. Things are not getting better. We are not at the end of this crisis.

We are in the midst of a Greater Depression, with the most trying times still ahead. Fourth Turnings never de-intensify. They intensify into a chaotic whirlwind, where the future of our civilization hangs in the balance. The climax of this play is a long way off. The election of Trump in November will trigger the transformational change that always happens during a Fourth Turning. An ill wind is beginning to blow. You can’t avoid the coming storm, but you can mentally and physically prepare. Our choices will make a difference.

“The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the secular rhythm tells us that much will depend on how we face up to that trial. The speculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

Reprinted from The Burning Platform.

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