Higgenbotham's Dark Age Hovel

[Higgenbotham]

The next question one might ask is whether the US is currently a psychopathic control system, or a pathocracy. The Soviet Union was, right? But is the US really? I don't think there's a clear answer to that one. We have Flock cameras today, millions of books being secretly destroyed by AI companies (obviously run by psychopaths), who knows what they will come up with tomorrow, but the trends are negative or as Gary North used to say we have Negatrends (as opposed to Megatrends).

What I can say at a minimum is that US corporations are by and large psychopathic control systems. And, like I said,

I think more important than this, because corporations are going to go bankrupt anyway, is the individuals who assume political control will tend to become more and more psychopathic over time. So people complain that Trump is a psychopath or more psychopathic than his predecessors (most often using different words) and that is arguable but you ain't seen nothing yet.

So when the corporations go bankrupt, the prisons can no longer be maintained, the police forces can no longer be paid, the ex military lose their disability payments, and so on, the psychopathic wells so to speak will empty out and try to assume political control because that's what they're going to be able to do best.

What will set the Negatrends into strong motion will therefore be the financial collapse.

[Higgenbotham]

Gary North used to say we have Negatrends.

What were the 12 deadly Nega-Trends Gary North listed?

AI Overview

In his 1985 book 12 Deadly Nega-Trends (sometimes referred to or subtitled as 12 Deadly Mega-Trends), economist and Christian Reconstructionist Gary North outlined a series of systemic economic, social, and political threats that he predicted could collapse modern Western civilization.

The 12 deadly trends listed by Gary North include:

Inflation – The devaluation of currency and erosion of purchasing power.
Government Debt – Runaway national deficit and state borrowing.
Social Security – The financial unsustainability and eventual collapse of government retirement systems.
Third-World Debt – Heavy defaults from developing nations crippling global financial systems.
Bank Failures – Systemic insolvency within banking networks leading to catastrophic bank runs.
Taxes – Smothering tax burdens placed on citizens by expanding governments.
Unemployment – High long-term unemployment and underemployment.
Displacement – Economic disruption displacing industrial workers and families.
Illegal Immigration – Rapid demographic and financial strains on infrastructure and borders.
Government by Emergency – The expansion of federal and state authority through perpetual executive overreach and declared crises.
Local Economic Dislocations – Regional collapse of industries, leaving local communities completely bankrupt.
Climatic Change and Geopolitical Insecurity – Broad environmental shifts paired with global military instability and political fragility.

North argued that these threats were structural flaws in modern society, and he frequently used them to advocate for financial preparedness, survivalism, and a transition to gold-backed biblical economic models.

As I best recall, I used to get mailings from people like Gary North, Richard Band, Doug Casey and a few others. They were all of this genre and were selling newsletters and books. At the time, I was buying and rehabbing rental properties in the Midwest Rust Belt. I recall this particular mailer from Gary North (born in 1942 and now deceased) but not all the details. Probably now is the time to listen up.

In the mid 1980s more people in the US were concerned about Federal debt and deficits than today.

The government ran budget deficits in the 1980s, during the Reagan Administration, and Americans worried about them then too. In Gallup Polls conducted in the 1980s, just over eight in 10 Americans said the deficit was a serious problem, including about six in 10 who called it very serious.

https://www.cbsnews.com/news/polls-show ... -deficits/

So Gary could sell lots of books and newsletters in the 1980s because most people agreed with him anyway.



Now is probably the time to be a lot more worried. I wouldn't be buying rental properties today either. Some of the ones I bought in the mid 1980s have recently sold for 15 times what I paid. That's way too high. There was very likely a lot of manipulation and fraud involved to get prices to that point in a basically dead economy. Probably 2/3 of that price increase is due to manipulation and fraud.

[Higgenbotham]

The stock market is a dead man walking.

Overvalued by at least a factor of 10 and probably more like 50.

Last night, I went through a bag of old hardware from the late 80s and early 90s. Nowadays, most everything is stamped Made in China, so I was curious as to whether I would find such a stamp on any of this old hardware. I did not. Most of the hardware items in the bag were not the type to be stamped (things like bolts) but of the ones that were stamped, all were Made in USA. They are shown below.

The US economy was very much alive in 1985 but heading in the wrong direction. Now it is almost completely dead.

[Higgenbotham]

Dent expounds on the coming crash. He's mostly right, but nobody will listen at this point. One area I think he's not completely right is on the size of the coming crash. He says it will go down as much as 95%. Probably as much as 98% is more accurate. I'm still slowly converting my double inverse into triple inverse. I did about 11 percent more last week.

https://www.youtube.com/watch?v=3oRNtmTE0gA

[Higgenbotham]

The Buffett Indicator
US Total Stock Market Cap divided by US GDP. Warren Buffett called it “probably the best single measure of where valuations stand at any given moment.”

Current value
241%

https://buffettindicator.org/

This is the highest value ever. For comparison, at the 1982 low it was 32%. The people at dshort.com are looking at a number of valuation measures and coming up with an average 156% overvalued.

That's not the whole story in my opinion. GDP since 1982 has been strongly dependent on debt growth. So in 1985, when the country was concerned about debt growth, it had just surpassed $1 trillion. Now there is some talk about it passing $40 trillion and inflation adjusted that may be up 10 fold or so. In a true economic boom, there's no need to grow your debt 10 fold; you just pay it off and retain some surpluses. The Buffett indicator shows an 8 fold growth.

The part no conventional analyst will consider is that GDP can fall. They just can't conceive of it. The other piece is profit margins. Now this sounds off the wall, but with so much misallocation of capital over the past 50 years GDP can easily fall by 2/3 and profit margins by half. That gets the stock market to the 98% loss vis a vis 1982 valuations on the Buffett Indicator.

That reminds me of a quote I put up on this board by Hugo Salinas Price, the Mexican billionaire and founder of Electra where he said

I think that we're going to see eventually a series of bankruptcies. And I think that the rise in the interest rate is probably the fatal sign which is going to ignite a derivatives crisis that is going to bring down the derivatives system. There is something like a quadrillion of derivatives and most of them are interest rate derivatives. The spiking of the interest rate in the United States may set that off.

--Hugo Salinas Price (transcribed from the link above)

At this point, anything could set off a series of bankruptcies. No rise in the interest rate is needed. Just a small perturbation somewhere that sets it off and I don't think anyone will be able to identify exactly what it was in retrospect.