What Went Wrong With The 21st Century?

Tyler Durden's picture

Authored by Bonner & Partners' Bill Bonner, annotated by Acting-Man's Pater Tenebrarum,

Fools and Rascals

And it’s time, time, time

And it’s time, time, time

It’s time, time, time that you love

And it’s time, time, time…

– Tom  Waits

Tom Waits rasps about time


“So how much did you make last night?”

“We made about $15,000,” came the reply from our eldest son, a keen cryptocurrency investor.

“Bitcoin briefly pierced the $3,500 mark – an all-time high. The market cap of the entire crypto market shot up, too… with daily trading volume also rising.

“And remember, this is still a tiny market. Most people don’t own any crypto-currencies. Most people don’t even know what crypto-currencies are. The whole market is only one sixty-fifth the size of the entire gold market. There’s a lot of room to grow. Eventually, everyone will be using cryptos.”


Bitcoin is going bonkers again – from a technical perspective, it has just overcome another major resistance level. The chart is highly reminiscent of the chart of gold in the late 1970s (see further below) – click to enlarge.


The rise of cryptocurrencies is our subject for this week. According to our source, cryptos are not only the most profitable investment in the history of mammon…  but also the most important innovation in the financial world since King Croesus minted the first gold coin in Lydia, in modern-day Turkey, nearly 3,000 years ago.


Lydian gold stater minted under King Croesus ~540 BC.


We have been connecting the dots. Between money and economic growth. Between real money and real resources. Between gold and crypto-currencies. Between gold, crypto-currencies… and time.

Today, we stand back – and our mouth drops open as we behold a bigger picture – a breathtaking tableau worthy of Bruegel or perhaps Bosch. Yes, there are the sinners and the saints, the fools and the rascals, the blessed and the damned. All there.

The scene brought to light by the latest connecting of dots answers the No. 1 economic question of our time: What went wrong with the 21st century? The simple answer: Economists backed a truck over it.


Gold in the late 1970s: the chart pattern is eerily reminiscent of the one that has formed in BTC over the past few years. Of course, bubble patterns almost always display certain similarities, but they are particularly conspicuous in this case (if one zooms further out and includes the rally into the initial gold peak in 1974 and the subsequent mid-cycle correction into 1976, the similarities are even more striking – we will show such a longer-term comparison in an upcoming post) – click to enlarge.


Flaming Dud

To bring readers fully up to speed, the 21st century has been a flaming dud. In practically every way. Despite more new technology than ever, more PhDs, more researchers, more patents, more earnest strivers than ever before sweating to move things ahead…

And despite more “stimulus” from the Fed ($3.6 trillion) than ever in history, U.S. GDP growth rates are only half of those of the last century. And household incomes, after you factor in inflation, are flat.

In fact, by some calculations – using non-fiddled measures of inflation – growth has been negative for the whole 21st century. Meanwhile, there are more people tending bar or waiting tables… and fewer people with full-time breadwinner jobs. And productivity and personal savings rates have collapsed. And those are only the measurable trends.

Political and social developments have been similarly dud-ish – including the longest, losingest war in U.S. history,  the biggest government deficits, the most vulgar public life, the least personal freedom and, in our hometown, Baltimore, a record murder rate.

What went wrong? Herewith, a hypothesis. It suggests three “causes,” all three linked by a single shared element: time.


From the valuable possessions department: Time


Elastic Measure

First, we no longer have real money. We have been operating with the feds’ fake dollars since 1971, when President Nixon finally took the U.S. off the gold standard. These fake dollars have no connection to time.

They are unlimited in supply, unrestrained by available resources, and unhinged from the real world. Like an elastic tape measure, they give you no way to honestly or accurately measure value.

So mistakes, misallocation of resources, and claptrap projects waste time and resources.

Some examples:

  1. On Main Street, malls got overbuilt – as retailers expanded with cheap credit to sell products to consumers who couldn’t afford them.
  2. On Wall Street, private equity hustlers and corporate insiders borrowed heavily at ultra-low rates, paid themselves huge fees and bonuses and left their businesses to go broke (Sears…  Payless).
  3. In Washington, the Deep State used fake money to transfer real wealth to itself, its clients, and its cronies (defense contractors, Big Pharma, insurers, even private prison operators). The federal government is now looking at average deficits of $1 trillion a year over the next 10 years – which would have been impossible to fund with real money.


Mountains of debt and not much to show for it – click to enlarge.


Second, we have too much debt. The consequence of having an almost infinite amount of “money” to lend at derisorily low rates is that you end up with a lot more debt. Consumer, business, and government debt, even stock market margin debt, are at or near record highs.

Debt is a burden that the past imposes on the future. As the weight increases, it becomes harder and harder to move forward. (In their book This Time Is Different, Harvard professors Rogoff and Reinhart showed that as debt increases, growth declines.)

Third, we waste too much time. Internet revolutionaries had scarcely found their pitchforks when – in these very pages – we wondered whether the innovation would turn out to be a great boon to the economy or just a time waster like TV.

Now, 20 years into the Internet Era – with all its POTUS tweets and Facebook whistles – we can see it is a bust. At least for economic growth. The average Joe now spends 5.6 hours a day consuming digital media (that’s in addition to the five hours he spends watching TV!).

Is he learning how to increase productivity? Is he sharpening his masonry skills? Is he studying ancient Greek or brushing up on his calculus? Nah… he’s on a porno site. Or a political rant on Twitter. Or a Facebook blab-fest.

And precious time goes by.


Wasting time on the intertubes… far right: wasting time before the advent of the internet


Ultimate Constraint

Fake money causes people to waste time and money. And central bank policies discourage savings by lowering interest rates – even pushing them into negative territory. Instead of saving them for the future, resources are consumed today.

These mistakes accumulate as debt, which then forces people to spend more time servicing the mistakes of the past. Meanwhile, the internet gives people a new way to waste time. At home. At work. On the high plains. Or in the lowlife back alleys. People spend their precious time on idle distractions and entertainments.

That leaves fewer people doing the real work that progress requires – saving, investing, and working for the future. Time is always the ultimate constraint. You can substitute one resource for another. You can switch from oil to solar, or copper to aluminum. But there’s no swapping out time.

There’s nothing like it. Get on the wrong side of time, and you are out of luck.


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christiangustafson's picture

End of the postwar era and $USD as world reserve currency. 

It's going to be quite a show, unwinding an 80+ year credit bubble.

peopledontwanttruth's picture

Better question is What has Gone Right in the 21th Century

Philo Beddoe's picture

Free porn and electronic cigarettes.

VD's picture

wait till quantum computers crack buttcoin while central banks pull out their fiat from thin air to teach the debt-slaves a lesson...

there's a reason gold has been used as money for over 6k years, and every hundred or so there's that "game changing" innovation, but this time it's different in crypto.


JRobby's picture

All of the shit that went down after November 1963

OR, all the shit that went down after the CIA's first successful "regime change (1952)

OR, the stage was set for a 100 year termination / collapse in 1913 when the Federal Reserve & Internal Revenue Acts were passed. (Can't have one without the other. It won't work)

ThirteenthFloor's picture

++. Yep.

It took JFK about 20 months to understand the corrections needed.

1) issue silver certificates instead of FRNs
2) get the CIA back to its charter
3) severely cut income taxes on the working force
4) reduce military spending and shrink the MIC

It took the CIA only 10 months to devise a plan to kill him, and stop the US from that treacherous(/s) path Jack was taking us down.

Erek's picture

@ Christangustafson

"End of the postwar era and $USD as world reserve currency."

Which war are you referring to? There have been quite a few since 1945.

Al Gophilia's picture

We fell under the spell of Keynesians, that's what.

ThirteenthFloor's picture

You got fiat...

any fucking economic theory or policy is meaningless when legal tender is issued by a select few private 'bankers' period.

The Cooler King's picture

So I guess, since the bitcoin market is "so small" and therefore "has so much more room to run", the natural solution is for every man, woman, & child, to max out the credit card right now and BUY 1 bitcoin each.


Watch the price rocket to the moon, and then have EVERYBODY pay off their portion of the $20 trillion national debt. I doubt anyone would be bothered by that because, naturally, bitcoin was created by egalitarian 'do gooders' whose only desire was to level the playing field against those evil GREEDY banking cartels. NOBODY who buys bitcoin is greedy in any way.


Voila! Problem solved! Maybe we could build a few DEATH STARS with the excess proceeds and blow ourselves (& Mars) up before Elon Musk even gets there.


So easy, a caveman could do it!



Apocalicious's picture

While facetious, I can tell you as I age, the thought of buying lots and lots of inflation sensitive (i.e. things that go up when the value of money goes down) on debt becomes more appealing. If it works, I win. If it doesn't the banks lose, which means I still sort of win. Frankly, I'd rather die with loads of debt that banks have to eat - and enjoy the ride - then live like a pauper and leave my kids ten grand, after taxes and funeral expenses. Plus, a foreclosure is soooo much easier to deal with than estate sales and clearing out all my shit.  

The Cooler King's picture

Tell it to the boatman. He's greedy too (but at least he works for his 2 coins).

FreeNewEnergy's picture

I upvoted you because that's what I've been thinking, and, to some extent, doing.

Got a bunch of credit cards and a settlement on the fake foreclosure of my deceased father's house (he died in debt, but with lots of "things"), bought some land, silver, lots of useful things, and skedaddled to flyover country. Just bought a 35" camper to go with my 29" motorhome. Buying more solar panels, too, before the rush.

Still buying silver using 0% interest credit and rolling it over. It's a plan. Bankruptcy is a plan. Complete financial collapse is a plan. I figure, if the global economy goes completely tits up, the small amounts I owe on 15 credit cards wouldn't even be worth contesting in court for the big boyz, considering how many people with $60k or more in debt they'd be trying to chase down.

The difference, for me, is that I have land, water, and woods, so I can grow things, water them (and myself if need be), and supply heat from downed trees. Most other people are vastly different. They get their food from a grocery store. Water and heat come from public utilities.

He-He That Tickles's picture

A .270 with a nice scope can get two campers with some land one day.

SaulAzzHoleSky's picture

OK. A 29" motorhome and 35" camper. Are you 3" tall like Kevin Harvick in the change your oil annually commercial? Seriously, being prepared is a great idea but I am not sure if this is the best way to go about it. If the collapse doesn't happen you will have a new set of issues to deal with...

Lucretius's picture

Wise move in my opinion. I just picked up a teens/twenties 4 cyl. International w/magneto ign, with a 7500kw alternator hanging on the end... After a bit of love and labor, and a propane conversion, I'm my own utility! Thats enough power to run my tiny kingdom,well, shop, etc, and maybe a neighbor, if they are really REALLY nice to me. Bitchez!

There is no point in saving. I'm trying to use everything up NOW, "Sustainable", save the planet my AZZ!
You never own anything, you just get to rent it from the state .

Hugh_Jorgan's picture

Here's hoping you'll be able to defend it from all the n'er-do-well zombies if the time comes. I wouldn't even think about firing that sucker up until 30-90 days after the "event" if you want to keep it.

FixItAgainTony's picture

I never thought I would see civilization tottering on the edge of collapse, but here it is, if you have the stomach to investigate the ruling class's betrayals of the public's trust.

ShorTed's picture

"So easy, a caveman could do it!"

...and yet the whole concept escaped your all-knowing brilliance.  Hmm

Reichstag Fire Dept.'s picture

As a Libertarian, I see only one problem with your plan...

Taxation is theft and is used to pay for the interest said "National Debt". ALL government spending is "new" spending with newly printed money.

Refuse to use the little green cash debt notes and it's over right there!

Use some other kind of medium of exchange.

Disclosure: I stack gold but I'm not against crypto...just an alternate medium of exchange...if I could find a way to get paid in either, I would do it.

falak pema's picture

taxation is no moar theft than Kings and Popes filling their own pockets and Capitalist monopolies or oligopolies skimming off the top of a so called "free market"; in fact a front run racket where all true competition is not allowed.

At least the taxes are justfied in a place of debate where the arguments and trade-offs and reasons for redistributive mechanisms of taxation are made PUBLIC to those who vote for the legislators.

In the case of Capitalism the scam is opaque and protected by corruption of the elected; time and again. No debate and no transparency; just strong armed private law and graft.

How can any adult talk such fact proven fallacy like it were printed in concrete of timeless truth, all in the name of a vacuous philosophy called "libertarian"... A libertarian who denies reality ? 

Having said that : excessive taxation is a crime against the people as much as excessive corporate crony front run profit making off the top.

Its two of a kind.

Only way out : open debate and reform of the legislative/executive/judicial systems of we the people. If not, may the devil take u.

peippe's picture

hey at least the pope has the plan to buy skydaddie's love & affection with his pot of ill-gotten loot.

what will you offer skydaddy when he re-arrives to see if you did all the stuff in his books? /xtra sarc

Apocalicious's picture

When you debase money, 1) massive misallocation of capital occurs and 2)  the value of hard work declines. Sooooo, there we are.

29.5 hours's picture

Bill Bonner is always a reading pleasure.

He will surely be burned at a stake for the crime.


A. Boaty's picture

In April, 2005, Dr. Michael Burry invented the credit default swap on sub-prime mortgage bonds. The rest looks like footnotes and commentary.

shizzledizzle's picture

Central Bank Intervention for $500 alex. I'm thinking that when things start to head south the SNB is going to unwind their $80 something billion in holdings as rapidly as possible (not to mention other central banks) and the narrative from the FED will be "We HAD TO jump in and buy those assets (stocks). Never mind that we have been buying them for the past 8 fucking years off the record but now we have admitted it. Our hand is forced by our other stupid hand. SInce everyone now knows this there is no need to look at our balance sheet in detail.

Yours in christ, Janet Yellen

JRobby's picture

By design.

CBs holding equities in corporations is a transition strategy prior to reset (collapse)

AlphaSeraph's picture

Agreed. Communist-fascist new world order inbound. They will own nearly all the assets, debt and governments.


What a fucking nightmare. 

JRobby's picture

By design.

CBs holding equities in corporations is a transition strategy prior to reset (collapse)

FORD_FIESTA's picture

What went wrong was.........of everything Humans have invented since time began,,,,,,,,95 percent has been useless shit and a waste of time.


Lucretius's picture


BTW, I giggle every time I see your "name", it reminds me of the old SNL skit for the Ford Adobe...

WallHoo's picture

The same thing that went wrong ever since the end of the middle ages(somewhere around 1600s).


A debt based economy...


Everything else is a silly rhetoric for the left-right  armies...

Cardinal Fang's picture

21st Century = Age of Nihilism

Nihilism + Time = 0

Cardinal Fang's picture

-1 means I did not make myself clear.

Socialism + Time = 0

falak pema's picture

You talk like a true cardinal with a red hat which he never eats... pity.

fuckstar's picture

Public Relations was invented

bjax's picture

In a word America, they ruined it.

TuPhat's picture

The good thing about this century is that you don't even have to have any tulips to be tulip wealthy.

The Cooler King's picture

When the taxicab driver tells you about the tulip vendor he knows that now accepts bitcoin. You'll know the end is near.

Seasmoke's picture

Zionist came out of hiding in the 21st Century.

Mimir's picture

And lately, together with the fascists, racists and xenophobes.

SillyWabbits's picture

It’s time to wake up!

That’s what time it is.

Libertas, Fraternitas, Equitas!

For whom?

Who promotes it?

Who practices it?

Are there hypocrites?

Who are they?

falak pema's picture

What went wrong with the 21st century from your perspective is :  that "towering colossus" that heralded the NWO-- to force manu militari regime change on others and to crow over the world like it were its own oyster--now looks like the Colossus of Rhodes...

One of the seven wonders of the Old Western order : Pax Romana, Pax Byzantium, Pax Francorum, Pax Espagna, Pax Francaie-Pax Napoleon, Pax Britannica... now Pax Americana.

Looks like its time for an Asian Pivot! 

The sons of Gengis Khan !

Yikes! But that is how the wheel of fortune turns! 

What we sow we now reap in western lands.

But coming back to Croesus and the first golden coin he minted--I wrote on that score here at the Hedge--

I also pointed out what Solon said to Croesus when he got cleaned out by Cyrus on his rise to ruling the ancient world : all that glitters is not gold buddy, we greeks know that and we have as antidote our belief in Laws and in Logic and in self defence... it will challenge both the Imperial wishes of Cyrus, as the greed of your own strain...

I am sure History will prove that! 

Solon needs to rise once again in the West. Not a Croesus clone called the Duck !

And don't blame the economic shamans, they were just providing the justification for their Masters of Universe...Friedman and Nixon etc.

Greenspazm's picture

I want to worship at the altar of Satoshi. Anyone have his phone number?

Moustache Rides's picture

I think Satoshi's phone number begins with a Langley, Virginia area code.

The Cooler King's picture

Yeah, it's right in the middle of Turkey Run Park. Hard to miss with all the turkeys running around pretending to be spies.



Urban Roman's picture

Not enough cowbell.

John Humphrey's picture

What went wrong with the 21st century? Very simple answer and obvious to anyone. Western societies let liberals have their way. That's what's wrong. Period.