We routinely straddle the line between avoiding ‘alarmism’ and still reporting on alarming information.
Right now, our forward-looking indicator system for social, political, and economic instability is flashing red. I don’t mean to alarm, but there’s a high risk of some very disruptive conditions.
These risks aren’t imminent, but they’re likely to develop over the next several years.
If you have a few minutes, I can explain…
A couple weeks ago, former White House strategist Steve Bannon gave a speech at the Oxford Union, in which he continued to outline the rationale for America’s right wing populist movement. Bannon, a former Goldman Sachs banker and self-described national populist, hammered the financial elite responsible for the 2008 financial crisis.
More importantly, speaking about the past decade of the central bank policy of low interest rates and cheap money, Bannon says of younger generations:
“You don’t own anything and you’re not going to own anything… That’s what’s going to make your generation impoverished. Right now the statistics are brutal. You are twenty percent behind — people in their mid-twenties, late twenties — twenty percent behind their parents’ generation [at the same time]… You can’t save because [interest rates after inflation] are zero, you can’t own any assets, you can’t buy a house [because it’s so expensive]. Every study shows the number one problem with family formation in the United States and the West, in twenties and thirties, is economic anxiety… They’re two paychecks away from oblivion.” [source]
Fundamentally, Bannon is speaking about wealth inequality. It’s a loaded term, but it’s real and it’s driving — and will continue to drive — social instability in the United States.
The protests and movements for minimum wage hikes, universal healthcare, universal basic income, and other left wing economic programs are a symptom of growing inequality. And as conditions worsen, we should expect those issues to be exploited and those movements to grow.
In 2014, millionaire investor Nick Hanauer gave a Ted Talk entitled, “Beware Fellow Plutocrats: The Pitchforks are Coming”, in which he warned that wealth inequality will drive social unrest.
“So what do I see in our future today?” Hanauer asks. “I see pitchforks. As in, angry mobs with pitchforks… The problem is that inequality is at historic highs today, and it’s getting worse every day. And if wealth, power, and income continue to concentrate at the very tippy top, our society will change from a capitalist democracy to a neo-feudalist, rentier society like 18th century France. That was, you know, France before the revolution and the mobs with the pitchforks… You show me a highly unequal society and I will show you a police state or an uprising. The pitchforks will come for us if we do not address this. It’s not a matter of if, it’s when.” [source]
Several other financial elites have given similar warnings, and I want to show you one more.
In January 2018, Ray Dalio, founder of the world’s most successful hedge fund, spoke to CNBC from the World Economic Forum in Davos, where he warned:
“[W]hat I’m concerned about is what would the next downturn be like? I’m not worried about an immediate downturn. But I would say if we were to look two years forward, okay, probably right before the next presidential election, there is a good chance that you will have a downturn and if you have a downturn for that segment, I’m worried about how we will be with each other in that element of cohesiveness. I mean, basically the formula for having problems, social with political problems, is have a difference between, a lot of difference between rich and poor people…”
There have been numerous articles written about wealthy New Yorkers and Californians purchasing “bug out” properties and preparing for what they see as a high risk of social instability. We’ve covered several of those here at Forward Observer.
Bottom Line:
All this is not to say that there’s an imminent threat, but there is absolutely a trend among at least some American financial elites who are clearly concerned about the future of the country. That’s worth noting.
When combined with my other indicators of social, political, and economic/financial instability, we get a much better picture of where our country is and where we’re headed.
In my next Dispatch, probably on Tuesday or Wednesday of next week, I’m going to share the latest Early Warning Indicator system we’ve developed to gauge 16 risk sectors in our country. It’s already providing some deep insight into our country’s health and future.
Always Out Front,
Samuel Culper
Director of Intelligence
Forward Observer
P.S. – These tectonic shifts in culture and politics are leading to an earthquake. You can maintain visibility on these structural risks, accelerators, and triggers of instability and violence through our Intelligence service. Try us out with a 7-Day Money Back Guarantee here.