Who & What Are Killing the USA?

By Matthew Piepenburg

Partner

October 27, 2024

I recently returned from the USA. 

My meetings stretched from Portland (Maine) to Northern Virginia, with stops in Boston, Connecticut, NYC, and Bedminster NJ.

Thereafter, I darted to the Midwest, traveling through Pennsylvania & Ohio, with a flight back to Europe via Detroit.

What did I see?

There Are Two Americas…

This observation goes beyond the partisan divide of a polarized nation heading toward a polarized election.

The deeper, irrevocable rift lies beyond left vs. right. Quite simply, the rising divide of this late-stage empire is marked by haves and have-nots.

A clear minority has reaped visible benefits while an ever-expanding majority live paycheck to paycheck amidst job-loss anxiety, record-level credit card/car loan delinquencies and the invisible (grossly misreported) tax of inflation. 

Oh, and we have over 13M new “asylum seekers” (future bribed voters?) who cost about $68K each to support…

This is not fable, but fact, and the data confirms the drama with business bankruptcies up 35% at a 13-year peak while U-3 unemployment data trends past 4% toward 6%.

I also paused in Loudon County, on the outskirts of DC. 

Loudon is the wealthiest county in America, riddled with McMansions, re-gentrified Antebellum estates, large swaths of polo fields and cadres of “insider state” contractors from Northrup-Grumman, Raytheon and Neustar – many of whom can be seen on the weekends flirting with Sotheby realtors for yet another “horse property.”

Yet to the immediate left of the county border lies West Virginia, with a 17% poverty rate.

Of course, this is an easy and extreme contrast. West Virginia’s pains go deeper than just dying coal markets, topography constraints and commuter distances from DC’s self-dealing or northern Virginia’s well-made polo ponies… 

In fact, the growing contrast of America’s uber-rich living in resentment distance to its growing poor and dwindling middle class can be seen from as far south as Palm Beach and its neighboring Riviera Beach to Manhattan’s 72^nd Street billionaires and its neighboring 112^th Street housing projects. 

As a ribald capitalist and American patriot who earned rather than inherited the “polo money” which inflation has been stealing with each passing day, it is growing harder to unsee what I have described elsewhere as the empirically confirmed slow death of capitalism driven by a centralized economy (and bank) which has created the greatest wealth inequality in our nation’s history.

However, as Andrew Jackson warned long ago, a central bank would “prostitute the government at the expense of the many for the benefit of the few.”

The net and modern result is a de facto societal structure of untitled lords (the “few”) standing above a media-manipulated/ignored majority of lower-to-middle-class serfs (the “many”) in which the “land of the free” has devolved objectively and mathematically into an embarrassing land of neo-feudalism which only masquerades as a democracy.

This now undeniable as well as precarious wealth divide and political vacuum is ultimately just as dangerous from my perch at the top 10% as it is a disaster for the forgotten 90%, the best of whom don’t seek “equity in outcome” but a fair shot at equity in opportunity.

However, the land of opportunity is increasingly losing to a metastasizing cancer of 1) juvenile “career” politicians, 2) the monopoly violations of core industries and 3) an increasingly centralized and debt-driven economic cabal/policy from DC.

How, for example, can an otherwise motivated and ambitious middle class sustain the small businesses otherwise essential to a genuine economy when their access to increasingly expensive capital has not been remotely equal to the privileges and powers held by a small minority/monopoly of mega-cap balance sheets, tech juggernauts and political ‘me-first’ scrambling for their donations in Washington?

As the S&P makes new highs (90% of which are enjoyed by the nation’s top 10%) and Nvidia’s CEO signs autographs, small businesses wrecked by years of Powell’s “higher for longer” (and failed) war on inflation suffer record closure rates and a 7% (and rising) U-6 level.

It astounds me that pundits, Fed Chairs and politicians are still debating whether the USA is in (or heading toward) a recession.

The comical denials continue, despite the math and history of M2 shifts, Conference Board indicators, yield curve inversions, rising (and grossly under-reported) BLS U-3 & U-6 unemployment levels and Sahm Rule facts, all of which make it screamingly clear that it sure feels like a recession to most Americans not otherwise fluent in “data dependent” (?) Fed-speak.

What’s Killing America?

How the USA got to this appalling inflection point (measured by a dying/tribalized middle class in the backdrop of $35+ TRILLION in public debt and an unsustainable true interest expense of greater than 100% of tax receipts) would take hundreds of pages rather than words to fully unpack here.

Let’s, therefore, stick to broad strokes but verifiable truths.

Self Rather Than Public Servants

As for the politicos whom I’ve witnessed first-hand in DC (and beside those silly polo pitches), they are, almost without exception, more interested in protecting their party and power (and future upgrades) than the hard facts and realities facing their nation, red or blue.

When it comes to economics and history, most, including Biden’s own chief economic advisor, can’t even understand, let alone explain, the basics of QE.

And as for that great and highly debated (yet now eerily silent) turning point in the history of US civil liberties, I personally know more than one big-pharma executive who never actually took the vaccines which their stock-pumped enterprises (and DC-lobbied leaders) otherwise forced upon the nation.

In addition to these profiles without moral courage or math/history IQ, when one considers: a) the immense power of the K-Street lobbyists (legalized bribery), b) the hundreds of thousands of Virginian private contractors with high-level DC “security clearance” and, c) the fact that the Washington regulatory agencies are uniformly run by the former czars of the very industries they now regulate, it should come as no surprise that DC has devolved from an ideal of public service to a reality of self-service.

In case such observations smack of basement-level/web-search conspiracy theory, I’d remind that far more qualified (and entirely based) academic leaders and authors like John J. Mearsheimer or Mike Lofgren have made the realities of the DC dark state an empirically sad fact rather than “conspiracy theory” fable.

Professional Cowardice

As for other causes (and objectively confirmed effects) of America’s open decline, one only needs to track the base layer incentives driving the core levers of American power, from its “free” media and monetary authorities to its so-called open markets and big pharma “innovations.”

Upton Sinclair famously observed that it’s amazing what a man is willing to overlook when his salary depends upon it.

Corporate Rather Than Investigative “Journalism”

Nowhere is such deliberate cowardice more obvious than within the once sacred halls of the American free press (and 1^st Amendment), which our flawed but idealistic founding fathers originally championed as a check on, rather than ally to, government corruption.

But what happens to a “free press” when just five politically-entrenched mega companies–Disney, Comcast, AT&T, National Amusements and News Corp–control greater than 95% of all U.S. media?

Such centralized messaging effectively ensures centralized rather than free thinking.

Central Banking 

And as for the control and price of the very money in your pocket (as well as the direction of a now entirely Fed-centralized stock market), few realize that their dollars are managed by a privately owned (and un-audited) central bank which has, via hook and crook, unofficially become our fourth (and arguably most powerful) branch of government. 

The cabal of Uncle Fed and its TBTF niece and nephew commercial banks operate not only as an open insult to free price discovery, but also as a direct insult to our constitution, whose original signers empowered elected officials rather than private bankers to manage the national currency.

Yet, as of this writing, the Fed, and all its mechanizations, which unread authors like G.E. Griffin have bravely revealed, continue to churn and hide in plain sight on well: Constitution Ave…

Monopolized Rather Than Free Markets

But as a now centralized Wall Street (where every fund manager and bank executive hangs on each word of the Fed Chairman and his magical rate wand) careens toward a centrally-run and currency-debasing debt-cliff, let us not forget the equal fantasy (yet dark reality) of our otherwise globally revered “free market” economy and seemingly immortal public stock exchanges.

If one were to fully understand the level of power and control which three mega-corporations– Blackrock, Vanguard & State Street – have over literally every sector and major name in the US public and private markets (from big tech to big pharma and energy), it would drop all jaws.

These three names, for example, manage over $30T in AUM and have direct control over 1600 large companies managing over 23 million employees while owning 90 of the S&P 500 listed companies.

Yet somehow, these modern robber barons have managed to legally slide, bribe and influence their way past the guiding principles of our now embarrassingly silent anti-trust and monopoly laws?

But then again, how are you supposed to know about such media-ignored insults to capitalism, when the wrong-doers themselves own the media?

The ironies, they abound…

Be warned though: Once you enter this rabbit hole as a true-believing capitalist, you’ll exit a cynical realist. 

For those willing to shatter illusions with facts and even endure the potential stigma of a “doom and gloomer” or kooky “conspiracy theorist,” today’s markets are not the home of free competition among equals.

Instead, they are a rigged casino in which the “house” (a minority of big names and CEOs) fixes the game and keeps the profits.

Too Big-Pharma & Tech

This same objectively obvious yet publicly misunderstood pattern of monopoly controls and their distortion of fair pricing, fair practices and fair (rather than centralized) supply and demand forces, is equally obvious when one looks under the hood of the big-pharma ($1.5T) or big-tech ($13T+) sectors.

As with the base layer forces of politics, money, and banking, big tech and big pharma operate on the same human-all-too-human incentives of power and profit while hiding their citizen-be-damned sins in plain sight.

The questions raised and answered within the C-Suites from Palo Alto tech to New Jersey pharma are not “what can we do for our country?” but rather: “How can we optimize margins?”

Many already know, for example, how big tech (from Facebook to the former Twitter HQ) colluded with big pharma and big brother in DC to deliberately censor and condemn alternative views on the “science” of Fauci’s “safe and effective” measures which were then and now shown to be neither safe nor effective.

Just say’n…

Davids & Goliaths

Collectively, we are all just singular Davids facing a swath of corporate and political Goliaths.

This should concern us all–rich or poor, black or white, red or blue. 

The “demons” splitting America are not white nationalists, transgenders or global warmers, but the bathroom mirrors of a select few who enjoy distracting the rest of us with identity battles/politics.

This is because whenever a centralized government is so deeply entrenched with such centralized powers, the net marriage of corporate monopoly and government cooperation embodies the very definition Mussolini gave to fascism.

Today, the USA risks sliding in this cyclical direction while wearing the façade-like smile of liberal democracy and the equally false mask of free-market capitalism.

Debt & Currency Crisis

Meanwhile, and beneath the hidden smoke of the foregoing yet largely un-reported (and hence misunderstood) distortions and monopolies, the Divided States of America slides ever closer toward an historical debt and hence currency crisis.

This is not a pending crisis, but a current crisis, one for which my colleague, Egon von Greyerz, and I have been signaling for years with conviction and concern.

Given the self-interest and incentives driving the major levers of our political, economic, technical, media and even pharmacological “protectors,” the consequent debt trap, wealth inequality, social unrest and even global distrust of our now weaponized and hence de-dollarizing currency should come as no surprise.

What We Can Do

Whenever great leaders from hard times are replaced by weak leaders from easy times, the net result is always decadence, greed, self-interest and the kind of lightweight leadership and sovereign debt orgies which make a Puff Diddy “freak off” seem almost tame by comparison.

Our latest interviews or articles on the hard math rather than “click bait” terror of what unprecedented debt has already done to the USD and US Treasury render such facts clear rather than sensational.

The End of the US Economic & Military Empire

The Crystal Ball of Debt: Bubble Risk, Currency Debasement & War Drums

For decades, we have understood that we cannot solve all the foregoing distortions and socio-economic ripple effects of openly weak and corrupted leadership with a single asset or idea.

But we do know that physical gold held outside this broken system can at least protect us from equally weak and corrupted fiat currencies, of which the USD is no exception.

Looking ahead, and regardless of deflation and inflation, or rising or falling DXY data or bond yields, the inflationary endgame is as simple to foresee as it is without historical exception.

That is: Broken sovereigns will always debase their money to monetize their debt.

Always. Every time. Period.

Rock vs Paper

For us, then, we need and understand real money, which is not the kind of paper money in the hands of the aforementioned bad-actors and forces.

And as history (or even JP Morgan and a pre-corrupted Alan Greenspan) confirms, that real money is gold.

Given the forces unpacked above, there has never been a more compelling reason for this “pet rock.” 

Yet only a very few understand and own it, as gold is almost never discussed in the public spotlight.

But given the base layer incentives of those who own and control the public spotlight, should any of this really come as a surprise?