Yes, you should be worried about civil unrest in the USA

The growing levels of riots, looting, violence on the streets, etc. have never been more intense today than at any time over the past 30 years that I’ve lived in the USA.  My first experiences of it started in about 1992 during the Los Angeles Riots in which an onlooker video taped the beating of Rodney King, causing the city to turn to violence.  But that was nothing compared to the constant barrage of violence since then all over the USA.  I want to talk about what I think is really driving this, and why this isn’t going to stop any time soon.

The answer as to why there is so much unrest is due to many factors:

• Income & opportunity inequality
• Race 
• Politics & corruption
• Banks & monetary policy
• Media sensationalism & bias
• Long term, state sponsored propaganda programs

I’m sure there are others, but these are enough to turn a quiet little town into an all out armed warfare conflict, more like Beirut or Baghdad than Toledo.  However as we’ve all seen on the nightly news, what would have been considered quiet cities in the past erupts into armed conflict, and often with fatalities.  I’ve seen people taking to the streets as armed militia in dozens of cities, creating more of a sense of civil war like we’ve seen in Syria, than an orderly society.

Unfortunately I don’t see this changing any time soon, and I want to go over all the reasons why.

Income & opportunity inequality

This is the big one.  If you live in a world where you are barely scraping to get by, living on predatory pay day lenders, food charities, and constantly negotiating with your landlord on when you can pay the rent, things are not good.  You are more likely to be homeless and a further burden to society.

But we all go through tough times in our lives.  What brings us out of those times is the sense of hope of a better future, and that there are opportunities that we can engage with that will find the income we need for our survival.  What if, however, those opportunities are no longer there, or only go to a select few while the majority starve?

In 2013, the US White House promoted the idea of “The Gatsby Curve”.  This was a study underwritten by the World Bank that ranked countries by income inequality against opportunity inequality.  Those countries that tend to rank better in both categories had a lower level of civil unrest and hence civil violence.  

This is the graph today:

You can see that most of western Europe sits in a low risk category, but most countries that have enormous divides between income inequality and opportunity inequality also share a high risk of civil war, civil unrest, etc.  This was clearly on the mind of the administration as they published this data on the official White House website.

The interesting observation was that opportunity in the USA was often defined by parents and where they were on the economic food chain.  Wealthy parents typically provided better opportunity to their kids.  I would argue that this is done through a “plausible deniability” layer called the US College system.  If parents can afford to send their kids to Harvard, Yale, Stanford, etc. then the kid gets showered with opportunity.  Are the parents evil against society for doing this?  No, but the fact that they can hide behind the college system is horrible.  We all recently saw the criminal sentences brought down upon Hollywood stars for paying massive amounts of money to get their kids into the “right college” (called the “College Admissions Scandal”).  But this is not a scandal that is specific to those parents.  This is a problem WE own.  We have created a layer of protection between parents and kids where opportunities are only given to those that can afford the cost of the permission slip, that is the college degree.

I’ve argued that the best place to fix this is with the social mantra - it should be challenged because I do not believe it works anymore.  Colleges have little efficacy in terms of education; they are only there to further this opportunity divide that is widening and widening and forcing parents to go into more and more debt, egged on by banks with non-dischargeable student loan debt.

Look at the other countries on the scale and you will see that most have constant civil wars, riots, protests, lootings, etc. to the point where it limits the peace & prosperity of the country itself.  When they seem to be able to break free and give opportunity to all, things start to calm down.  The USA is far from being in a “safe” place in regards to this, which we are seeing play out on the nightly news every day.

Race

There’s a long history of racial inequality that dates well back to before the discovery and founding of the USA.  Racial inequality is not a distinctly American thing.  It is just that when you mix it with income & opportunity inequality in the richest country in the world, it is easier to mask it as that.  And the fact it has been rampant, especially against the black community, now becomes headline news because a bystander caught it on their smartphone.  The decencitized citizenry finally seem willing to stand up and act upon it, but why has it taken so long?  And is it enough to change the course of history?

The concept of a master/slave relationship occurs through most countries history in some form, however most of the other countries in the world got a handle on this by way of a concerted effort to provide equal access to opportunities to all.  But the US never did.

Instead the physical well-being of black Americans is threatened in such a way that the strongest buckle under the pressure.  It is clearly unfair when statistics show us the level of incarceration falls unevenly to the black community, and that opportunity that is restricted by the college permission slip is taken from such a huge and valuable segment of society.  Whereas I have never had any issues with finding and engaging with opportunity, if my skin color was different my story would be entirely different in the USA.  I understand that.  I'm humbled by it.  I'm also disgusted by it.  I always remember hearing Warren Buffet talk about the luck of birth and that we all could have been born into poverty or a tribe in the Sahara or the English royalty.  We have no control of this, and its all luck.  Those of us who got some lucky break at birth should be showing some empathy and support to those that didn't.  And to deny such empathy & support because of the color of someone's skin, is simply evil.

Not only are African Americans discriminated against in the banking sector, whereas they are preyed upon by high interest lenders, but those of other races, including those of Latino descent are rejected from entry outright to the USA, despite the education, qualifications or experience that they may bring to the country.  Statistics show us that someone is picking the winners & losers of prosperity, and they are not giving out the winning tickets evenly.  When I saw lines and lines of Mexicans in Mexico City waiting outside of the US Embassy for limited VISAs that were only issued on one day of the year from my hotel next door, I got it.  The door is closed to them, whereas for me it was wide open.  Australians can come to the USA for 90 days on a VISA waiver program, and although they are not allowed to work, they can meet companies that might need their services, obtain contracts of work and do it remotely over the Internet.  People from India can come to the USA and try and get access to the H1B program, which about 85% of those VISAs are issued to Indian head hunter corporations resulting in the huge population of Indian workers in the Silicon Valley.  Those from Europe have similar access to the USA.

But not Mexicans despite the fact they are our neighbor to the south.  Hence those that came across the border illegally or over-stayed some VISA, live in the shadows.  We pretend they are bad and here illegally but we are happy for them to mow our lawns, clean our tables in restaurants, pick our vegetables and look after our elderly.  Basically the jobs that Americans refuse to do is given to them, but without any legal status we perpetuate the master/slave relationship.

Although this is not perfect, many countries have created cultural awareness and policy to deal with this, resulting in less civil unrest.  But it isn’t the Latino population that is uprising.  It is the Black community because, despite them having US citizenship, they are discriminated against in a way that they can never escape - the obvious visible skin color determines attitude of the rest of society and you can’t change your skin color.  The fact that law enforcement groups them into categories, despite there being clear laws against racial profiling, needs to change.  And with such a large number of African Americans in law enforcement positions, you’d think that this could be changed from within.

But no - politics based on financial campaign financing from banks is determining police policy.  Not community integration and serving the constituents that vote.  The financing of political campaigns from the wealthy further perpetuates the policy that keeps opportunities only to the families that have the money or power or methods to obtain them.

Yet African Americans, when traveling to other countries in the world, are met with open arms and welcomed.  We saw that with the rise of Jazz music in the 1920s and later, where black musicians who could not get opportunities to play in the USA (their homeland) found their careers in Europe.  The likes of Charlie Parker demonstrated this and the same is true today.  There is no barrier to entry for any African American to “go where they are treated best” just as the same lack of barrier exists for all other races.  The only issue may simply be having the money to afford the trip.

Politics & corruption

Regardless of your political tribe, US politics for all elected officials is corrupt AF.   To quote Henry Kissinger, “Corrupt politicians make the other ten percent look bad.”.  Yes, absolute power corrupts absolutely, and it seems that the way to hide this corruption is by an unholy relationship between those in government with those in the private sector.

With term limits, politicians can obtain financing from their private sector connections, and can vote on policy that would benefit the private sector organization, with either overt kickbacks or some promise that after they leave office, there is a multi-million dollar gig for them waiting.  Look to the wealth levels of politicians who are either in office, or who have left office, and you can tell me that they are not any particular business whizz-kid.  And this is evenly distributed across all parties in power.  Corruption doesn’t have party affiliation.

So when you hear party A attacking party B during an election over lies, corruption, grifting the population, its the pot calling the kettle black.  That’s why it rarely comes up in debates because the best defense of that attack is to put up a mirror.  No one in government is honest it would seem - those that manage to maintain some honestly can’t even make it to the debates or get on the ballot because the wealthy & powerful don’t need the status quo changed here.

Money bail outs go to the benefactors and not to the people.  The “too big to fail” term doesn’t apply to you or me.  It applies to Goldman Sachs, JP Morgan, Citibank, AIG, Boeing, etc. - those that are well connected into politics that get first dibs at the treasury give away, that ultimately reflects in increasing costs of goods & services for all of us - furthering the income divide.

Banks and Monetary Policy

The unholy alliance of banks with the “private” US Federal Reserve is clouded in mystery since its inception.  Although it has been given congressional license by the US congress to act as the bank of last resort, and to fund the US treasury, it is not held with any form of oversight as to how it does this, who are the participants and it never (to my memory) has been audited by the US government, despite countless calls for this from ex-Representative Dr. Ron Paul.

Consequently the production of money that is coming from debt issuance means that there is no actual accountable level of debt and money issuance.  The more they print, the less each dollar is worth.  But with a built in system of inflation, the math works to try and stabilize the US dominance as the world reserve currency.  Since 80% of other countries drank the KoolAid and got on board with this, it is pretty much too late to abandon it.  Instead of actually addressing the fact that money printing is bad, they bring forward all this illusionary math that allows you to delay the innevitable results of bad behavior.  Technology gives us cheaper goods as robots make it, so the drop in pricing gives license to create a fiction based inflation level, and that gives license to print more money.  Meanwhile every service level cost is rising at astounding rates.  Health care costs which are specifically not factored into the formula used by the Federal Reserve for inflation calcuation have risen 45% over the past 5 years, where the average US worker has their employer paying about $20,000 a year to provide them with health insurance.  

The problem, however, is that the concept of free market capitalism is almost juxtaposed with the monetary policies of the Fed.  You and I cannot get access to 0% interest rate money, but the member banks and their affiliates can.  Hence they don’t need your savings, and there is no meaningful interest paid for savers.  This means our senior members of the citizenry who are saving for their retirement, get no benefit for doing this.  It would be easier if they just took out a $2 million loan over 50 years, and live off that until the day they died.  Of course the banks won’t participate in that, but this seems to be the underlying methodology of finding security for the future.

As the debt level in the USA grows, there is more call for the wealthy to pay more tax to pay it off.  However it has reached levels that no taxation could afford to pay it off, so rather than trying to slowly and gradually reduce it so that it can be brought back to those levels, our elected officials are spending money with little or no accountability on pet projects that they might think will get them re-elected.  The cost of things like border walls, despite being proven over and over to be inefficient and unnecessary (there are more US people leaving the USA for Mexico, than Mexicans coming in), we still are expected to pay billions and billions for this pork project.  The money is taken from military budgets and then the military go to congress to get more money on the proviso that “You don’t want to underfund the military and we get attacked” and no politician is willing to stand up to that, so the money just keeps on being printed.

Here's the reason why more taxes won't work.  It wasn't for a lack of taxation that elected officials are spending money with abandon.  If they had a surplus, they could choose to either re-invest it into the country (ie. infrastructure) or to reduce taxes.  Pretty simple math there.  But the problem isn't a lack of taxes.  It is a lack of constraint by way of spending and a lack of willingness to even make the idea of paying down debt an issue for voters in an upcoming election.  They only want to tell you what they can give you to get your vote.  They won't tell you the truth, and that's just disgusting.  The truth is that our future is directly linked to us taking the blindfold off, getting real with the fact that debt is evil and paying it off.  Yes, it will hurt.  But its a small pain vs. a total systemic collapse that is a more likely scenario the more we avoid to embrace this issue and deal with it.

When a true global crisis happens, the Fed kick into full gear to print money, but little actually makes its way to the people.  Despite the fury over an $800 billion dollar TARP fund after the 2008 global financial crisis, in 2020 during the COVID pandemic, the US treasury issued $3T in money (4 times the amount of 2008) in an attempt to fund and stimulate the economy, but little of that money made it to the citizens.  Those that did get fundings got it from states, where some states were able to acquire capital and others had a hard time based on the political allegiance.

But all large donor corporations received fundings, forcing the stock markets to return back to all-time high (bubble territory) levels, and forcing savers to participate in riskier and riskier asset speculation.  To reduce risk, rather than returning to any form of sound money, my prediction is that the US government will enter the stock market and attempt to socialize it, as 50% of that market is being run by passive investment funds anyway (ie. Vanguard, Fidelity, etc) as an alternative to US Social Security.  We saw this in countries like Australia that mandated superannuation by employers to divert the responsibility of funding seniors from the government back to the banks.

The government further underwrites the banks by providing them with non-dischargable student loan debts so that the banks can be the responsible party of opportunity distribution by way of college degrees, yet most students who graduate with said degree will take 20 years to pay off the student loans.

Media sensationalism & bias

I think everyone agrees that the news media in the USA are horrible.  There is no incentive provided by commercial media to fund actual journalism.  In fact what is being marketed as journalism is celebrity personality presenters, mixed with constant repetition of the same catch phrases, same stories and each looks to their competitors to steal the same story.

No one actually goes out into the field and discovers and reports on what is going on.  This is deeply disturbing because it is not something you find in many other countries.  Sure, there are “editorialized” news media outlets that lean towards a particularly political leaning (ie. Fox, Sky News, etc.) but then they are usually offset with non-profit level news outlets which are often funded by government money.  In the USA, however, those outlets have been left to fend for themselves (ie. PBS) and rely on donations from wealthy benefactors.  And just like the power of government, those benefactors expect something in return for their money - ie. don’t ever tell the truth about our behaviors or we’ll pull the funding.

So we live in a world of hyped up media, shock & awe, and parroting of the same stories that are often fake, or deeply editorialized to slant towards a particular political leaning.

This just hypes up the tribalism in society and turns the nightly news & politics into a sporting even to team A vs team B, rather than an effort to benefit the citizenry.

Long term, state sponsored propaganda programs

This is probably the most controversial but I believe it lays the foundation for what anger and dissent there is in US society today.  Back in the 1980s, G. Edward Griffin interviewed the ex-KGB Russian agent Yuri Bezmenov, who had defected from the USSR to the Canada.

He explained the entire methodology that the KGB & USSR enacted over time against the USA to breed dissent into society.  This process has never stopped.  In fact the full interview is on YouTube below if you wish to see it.

Now this playbook is not uniquely soviet Russia.  The Viet Cong did this in the war of Vietnam - broadcasting loud speakers into US camps and territory to try and erode the loyalty of troops and to help create dissent.  This (again) is a communist tactic.  We can see similar things being done in China through the CCP as we see in North Korea.  If you control the dissemination of information, you can control the behavior of citizens.

But the Russians have taken this to a new level by using the Internet as a means to broadcast propaganda that turns American on American.  The Facebook scandals of 2016 are a small part of this, but they have not stopped.  In fact, through other outlets such as Twitter, YouTube comments, etc. you can see the level of anger and hatred that is now a normal part of US culture.

So what does the future hold

These problems didn’t happen overnight and they won’t be solved overnight either.  90% of Americans believe that if Trump or Biden is elected, they will solve all of these problems.  They won’t.  Neither the Republicans or Democrats have been successful in wrestling these issues over decades.  In fact, they are just getting continually worse.

At some point the Great Gatsby Curve becomes a deterministic means of measuring when a civil war will begin.  Who knows what the trigger is for that, but it could be an election, a party that refuses to accept the results of an election, widescale poverty and unemployment, and a “Eat the Rich” attitude to wealth.  The race to the bottom is alive and well here and unfortunately the cost of buying weapons might be prioritized over paying rent.

Unfortunately the rest of the world is looking on.  The 80% of the nations that signed up as the $USD is the world reserve currency are seriously questioning that position, particularly with the rise of China.  More and more are detaching, and even large private corporations are now willing to settle their transactions in other currencies not tied to the $USD.

As the world detaches from the USA, the money flows out of one bucket and into another.  The money never disappears - it just goes to a different bucket and bucket holder.  The wealth migration may be followed by physical migration, but the unfortunate reality is that the history of the USA dominating other countries and their politic will not be forgotten any time soon.  There is a vast willingness for other countries to detach and be their own decentralized society without the reliance or tethering to the USA while they see the likelihood of unrest and civil disturbance.

The solution

I believe that decentralization is the answer.  We need to create a society of smaller groups that have a protocol to connect with other smaller groups.  This network model of a society has been well documented in “The Starfish & the Spider” by Ori Brafman and Rod Beckstorm, and explains how the Aztec empire was conquered by the Spanish and the weakness of a hierarchical society vs. the strength of a networked model.  

By breaking free of reliance on a central point, you remove your ability to be weakened when it is attacked.  That means detachment from much of that central model - don’t use their currency, don’t consume their media, don’t subscribe to their attitude towards race relations and be good and equal to all, and create a world of opportunity based on your own discoveries and problem solving skills that empowers all around you evenly.

This is a Utopian idea, but it only seems to work in regional areas that are decentralized by design.  There are still places on this planet that embrace a level of freedom by the way of dysfunctional government that can never be efficient enough to organize and impose will.  Much of South & Central America fall into that category, despite the wide gaps of inequality.  The sense of community and family is much stronger in those regions, which provides the decentralized framework needed to empower the citizen and dis-empower the politician.

It also suggests that wealth will be re-distributed but not necessarily within the US domestic boundaries.  It is a more feasible situation, as I can see it, that wealth will disappear from the USA and fill up the buckets of other countries.  Ideally countries will retain a trading relationship with the USA which still is the largest marketplace in the world.  But with the threat of China usurping the USA as #1 super power and #1 economy, the option for other countries to tether with China seems to be more likely.  We have certain seen that over the past 20 years or so, and often to the peril of those countries.  The real answer is for each country to become sustainable based on its own resources, and to trade with others in a more respectful and win/win method.

I see that countries that can become efficient markets and can trade with the USA but retain their own sense of identity and pride, will benefit.  For me, I’m putting my money on Mexico for this.  I believe that there is enormous untapped opportunity there, and over the next five years, the trade imbalance will move towards a surplus economy in Mexico with the USA, rather than the small deficit they currently have.  The enormous workforce, low costs and government investment in infrastructure, despite its challenges with Cartels, etc., will create a powerhouse for trade.

But this is just one country and there are another 200 or so that could also benefit here.  When the bucket of money starts to leave the USA to other regions, the money just makes those other regions more buoyant.

If you are like me, and you want to find times to buy low and sell high, the movement of capital flows out of the USA has to be watched carefully.  It will tell you where the real opportunities are.  If you invest as much time in research that as you do watching the hypnosis of the nightly news, or being triggered by some political election, you might come out ahead.  Just a thought.