Guest Post: If The US Goes, Won't The Rest Of The World Be Even Worse?

Tyler Durden's picture

From Simon Black of Sovereign Man

 If The US Goes, Won't The Rest Of The World Be Even Worse?

Today was one of those days when the PT lifestyle was... less than glamorous. It took nearly 24-hours of travel dealing with weather delays, in-flight diversions, and mind-numbing airline incompetency... but I've finally arrived to Mongolia. As I write this, it's a balmy -7 Celsius (19F) outside.

Despite the terrible weather, I'm excited to spend the next several days here sniffing around a few private placements and hopefully having some killer barbecue. More on Mongolia next week, let's move on to this week's questions.

First, Jennifer asks, "Simon, you've been writing a lot lately about the prospect of social unrest in the developed world, including the US. You suggest that international diversification is a great way to protect against this threat. But if there's social unrest in the US, won't there be total chaos everywhere else?"

Not by a long shot. I'll explain--

It's true that economic decay and social turmoil are inextricably linked. We're seeing signs of that now all over the world-- the violent protests in Greece, the Arab Spring, and now the Occupy Wall Street movement.

In a recent paper, economic historians Jacopo Ponticelli and Hans-Joachim Voth studied fiscal restructurings over the last nine decades. They gathered data from dozens of countries-- the UK, Switzerland, Yugoslavia, Russia, Denmark, Hungary, etc. and measured increases in riots, crime rates, and strikes.

The results showed a clear positive correlation. GDP declines and the imposition of austerity measures went hand-in-hand with social instability. The more severe the economic disorder, the worse the social unrest.

The insolvent nations of the developed world are going through a severe depression right now... and as politicians continue to talk of more bailouts, more money printing, and more stimulus programs, it seems like things are only going to get worse.

Each of these nations-- Italy, Japan, Ireland, the United Kingdom, the United States, etc. is so heavily indebted that their interest payment obligations has become a vice grip on economic growth. Greece, for example, blows through roughly 10% of GDP just paying interest on the national debt.

It becomes very difficult... almost impossible... to generate any meaningful growth when 10% of your entire nation's productivity goes out the door before you even get out of bed in the morning.

What's more, most of these countries are in the position where they have to borrow money just to pay interest on the money they've already borrowed. The United States is very solidly in this position.

This makes debt accumulation exponential-- it rises at a faster and faster rate, simultaneous with flat (or negative) economic growth. One day when confidence in this Ponzi scheme finally vanishes, borrowing costs will skyrocket, hastening the endgame and consequent social turmoil.

Thing is, most developed countries are woefully unprepared to deal with such turmoil. Places like the United States may have reached the zenith of consumerism, but most people have scant clue of how to function without their creature comforts.

Hardly anyone grows food, knows anything about automobile maintenance, generates their own electricity, or can actually 'make' something by hand. Few people have ever seen blood in the streets, hyperinflation, or a complete breakdown of the social structure.

In stark contrast, many countries in the developing world have experience with all of these. They're inherently mistrustful of their governments... they hoard precious metals and raise chickens in the backyard. Many people still work manual labor jobs and have the skills to be able to build and fix things themselves.

I'm not trying to make a blanket statement about every single person in these countries, but rather generalize societies' capabilities to deal with the knock on effects of economic decay. Western culture simply does not embrace self-reliance.

Ironically, it is the 'poor' countries that are much better positioned to deal with chaos. What's more, they're also fundamentally stronger economies with high savings rates, low debt levels, and strong growth potential.

The hard truth is that, while the United States leads the world in things like debt, bombs, and foreign military bases, many of the world's developing nations have much better insulated economies to ward off the social consequences of economic deterioration... and their societies are more capable of handling it.

This is why I've selected Chile for the site of our resilient community, a place where we can grow our own food, control our own water supply, and generate our own energy.

Next, Elizabeth asks, "Simon, you've been fairly negative on the euro. I have a question though. European leaders are meeting right now to fix the euro and work out a solution. Doesn't this give you any confidence that they can fix it?"

Not in the least, and I'm amazed that these rumors of plans are giving the market a boost.

Think about it-- the people who are responsible for the problem to begin with are having a 'meeting'... and that's supposed to inspire confidence??

A bunch of politicians sitting around talking about how to fix an economy is like a bunch of zoo keepers trying to figure out how to perform open heart surgery. It's not going to happen.

Last, Hugh asks, "Simon- it's clear you travel all the time, and I understand you have a number of passports. Which passport do you use when you travel?"

It depends, it's usually country specific. Coming into Mongolia this evening, I used my US passport simply because the US is one of the only nationalities that doesn't require a visa to enter Mongolia.

Conversely, going to a place like Brazil, I'll use another citizenship like my Western European passport. US citizens require a visa (and heavy fees) to enter Brazil, but with my European passport I glide right in.

This is one of the many, many benefits of having multiple citizenships, it certainly makes travel much more convenient. More options always mean more freedom.

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FranSix's picture

Action Forex reports that the $US dollar is at a new low against the Japanese ¥:

Action Forex

We might see a ¥ melt-up, but this might actually be because of a $US meltdown.

aus_punter's picture

Why does anyone believe this crap ? Do you seriously think he is in Mongolia ? Has this guy even been to Chile ?

Notice how generally he writes , with no particular detail "a few private placements" "killer barbecue" ....I mean this is a fucking insult to anyones intelligence

I strongly suspect "Simon" could really be a taxi driver who writes this bs from the comfort of his parents basement.  There is nothing of substance in any of these posts.

CompassionateFascist's picture

I'm putting a few rat-traps out in my backyard...maybe we can catch this guy. Kill the rat and barbacue it.

Harlequin001's picture

'This is one of the many, many benefits of having multiple citizenships, it certainly makes travel much more convenient. More options always mean more freedom.'

It also completely screws up the issue of which country has the taxing rights to your income and estate, and which of the numerous legal systems is going to handle the process of Probate when you die, since you can bet your ass they all will want to, for the tax purposes of course.

Good luck with that one...


DrunkenMonkey's picture

Each country deals with the assets held within it's borders, surely ?

glenn17's picture

Pretty good post. I will add bookmark on your blog and wanted to say that I have really enjoyed reading your blog posts. Any way I'll be subscribing to your feed and I hope you post again soon.

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XitSam's picture

Yes, it makes you subject to each countries' laws of which you are a citizen.  For example, mandatory military service, ie. the draft. 

glenn17's picture

I agree with you. Thank you for sharing the update. It is interesting to have it discussed widely so that we can gain more objective opinions.

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prains's picture

This is one of the many, many benefits of having multiple citizenships, it certainly makes travel much more convenient. More options always mean more freedom.


another great benefit is you can live your life as a complete WANKER and never fully self actualize that fact. TFM

Total Fucking Muppet

prains's picture



once again thank you for throwing meat into the cage for us, love a good rant.

Trimmed Hedge's picture

I am in complete envy of your jet-setting lifestyle!

GeneMarchbanks's picture

Precisely what he wants you to say/think. He's a sad, world weary, terribly insecure creature who bullshits people into a world-view which is, at best, illusory.

oddjob's picture

elitist globe trotting jet fuel junkie.

Dane Bramage's picture

Haha!  I wish Simon the best though.  Chile seems a nice spot.   In less troubling times I'd consider a vacation home (vineyard!) there.   One question (yet again) for Mr. Black however = got firearms & ammo (in Chile)?  In my view, no retreat is worthwhile if it isn't defensible in the most dire circumstances.

Harlequin001's picture

Wasn't General Pinochet a real nice, charitable, peace fomenting chap in that idyllic little paradise he's recommending?

SilverRhino's picture

I'm calling bullshit.   If he's such a bad ass world-traveller post some multiple passport pages .... I'll fucking believe THAT when I see it.  

GeneMarchbanks's picture

There is or are monied Americans that globe trot for various reasons, mostly boredom. Generally speaking, having run into a couple on my travels, they are vacuous individuals who have genuine emotional problems and need to project themselves as powerful and heroic. Hence Sovereign Man. Real macho type shit. It's not the travel I doubt, it's the glamor that is bullshit.

Zero Govt's picture

I'm trying to gain a 2nd Passport myself ...the benefits Simon mentions are worth the effort alone, not to mention others (tax free residence, options when the world implodes in hyper-deflation etc)

America should be relatively safe during this Great Depression as its people are stable and freedom loving. Note the Tea Party and Occupy protestors of left and right have coreectly selected the right targets (criminal Govt and bankers).

Here in Europe we have British opportunist youth raiding small shops (wrong target) and Greeks running riot damaging banks (excellent target, setting them alight and burning staff is not). Spain and Italy have socialist/fascist histories when their hot Med' tempers flare which makes them potentially unstable 

Options are a very good thing ...i'm amazed at the luddites posting slating Simons astute planning

GeneMarchbanks's picture

I have two passports. Nothing against that, good to have options. It's all the rest that is nonsense. Chile, fine.

Then he goes on and on about buying a Maple Leaf in HK, Mongolia, South Africa, Thailand. Too much bullshit.

FeralSerf's picture

Why don't you get a job as a flight attendant?

SheepHerder's picture

Greed and Materialism is a drug

Money in and of itself is not a bad thing.  Cars in and of themselves are not bad things.  I-pods, I-pods, and I-phones in and of themselves are not bad things.  Material is not a bad thing, but materialism and greed are.

America is addicted to greed and materialism.  In fact America on the whole is an addict. 

The first sign in recognizing an addict is that take away the drug and the addict becomes restless, irritable and discontent.  They become very restless with the present.  They feel unfulfilled and start searching for things to fill a void because of the lack of meaning and purpose in their lives.  They become very irritable.  They start becoming divisive, hating others around them and become selfish as they look to find the anything that will fill the discomfort and unease that is now in their life because their drug of choice has been taken from them.  Most of all they become discontent with the present.  Without their drug, the present moment becomes a painful question mark. They have nothing to numb them to the fact that they have no idea what their purpose is in life and what meaning there is in living.  

The second sign of an addict is that they are often in denial.  “Sure maybe I have small over-spending habit on shit I don’t necessarily need, but it’s nothing I can’t handle.”  “Sure I made a few risky investments that went south, but I’ve learned my lesson and won’t do it again.”  In the meantime they continue to rack up debt upon debt.  They continue to sprint toward the edge with their reckless behavior. The  banker looks at the irresponsible homeowner and says it’s your fault you took on a mortgage that was way over your head and the homeowner looks at the irresponsible banker and says it’s your fault you took my mortgage and sliced it every which way till Sunday and played fucking roulette with it.  Neither has the fortitude to look at themselves and admit they have a problem.

The third sign of an addict is that they lack the internal fortitude to admit they are getting their ass kicked by their addiction.  Despite thousands of dollars of debt, the consumer can’t help but go out and buy the latest gadget to get a temporary ego boost in thinking he is keeping up with the Jones and the envy of all his friends.  Despite the fact the firm’s business model is launching the bank towards insolvency, the banker can’t help but gamble in the market with its customer’s money.  They are powerless to adopt new behaviors.

The first step to a true American recovery is for our country to concede to ourselves that we have a major problem.  That problem is that we are addicted to greed and materialism.  We obsess over how to get more money and more possessions.  We may try to cut back for a while in spending and our accumulation like we did in 2008, but inevitably, the restlessness, irritability and discontentment bring us back to consuming and accumulating.  And given time a little consumption and accumulation leads back to rampant greed and materialism.  The more we obtain in money and material, the more we feel we need to fill some hole in what our country’s meaning and purpose is.

I have a question to ask?  What are the top five significant memories in our country’s history?  How much do those memories have to do with the people of the time, the character our country showed at the time and the natural world versus the amount of money in our country had on hand and the accumulative material possession we had?  Is collective our purpose in life to work 40 plus hours a week so we can make more money to buy more shit we don’t need?  Is the meaning of life really he who dies with the most toys wins?

I often wonder if animals watch us and quietly think, “What a bunch of fucking idiots!”

Angels on the sideline,
Puzzled and amused.
Why did Father give these humans free will?
Now they're all confused.

Don't these talking monkeys know that
Eden has enough to go around?
Plenty in these holy garden, silly monkeys,
Where there's one you're bound to divide it.
Right in two.

Angels on the sideline,
Baffled and confused.
Father blessed them all with reason.
And this is what they choose.
And this is what they choose...

Monkey killing monkey killing monkey
Over pieces of the ground.
Silly monkeys give them thumbs,
They forge a blade,
And where there's one
they're bound to divide it,
Right in two.
Right in two.

Monkey killing monkey killing monkey.
Over pieces of the ground.
Silly monkeys give them thumbs.
They make a club.
And beat their brother, down.
How they survive so misguided is a mystery.

Repugnant is a creature who would squander the ability to live to light a heaven conscious of his fleeting time here.

Cut it all right in two

Fight over the clouds, over wind, over sky
Fight over life, over blood, over prayer,
overhead and light
Fight over love, over sun,
over another, Fight...

Angels on the sideline again.
Been soon long with patience and reason.
Angels on the sideline again
Wondering when this tug of war will end.

Cut it all right in two

Right in two...


Use of Weapons's picture

Polite request - if you're going to post songs, just shove it in a nice link. [or if you're only interested in a song, not visuals with it, like so - ]


Modern minds multi-task open windows anyhow (16 open in front of me, about 10 I'm focused on) so we're well able to listen whilst reading, and get the meaning from both imputs.

Use of Weapons's picture


Seemed a pretty rational request there.

Space Potato's picture

HAHAHA! If there is any correlation between the breakdown of discourse on this site and the breakdown of society as a whole, then we're really screwed.

Use of Weapons's picture

Ah, I see - grudge match.


I've answered our last exchange, and apologised. Calma, calma & lets not let a fist fight escalate across the entire board, eh?

Subprime JD's picture

Fair response. We have a truce.

theabyss11's picture

Sorry to disregard the polite request you made earlier. Wasn't meaning to be a dick I just stopped scrolling when I came to the song. Wont happen again.

Use of Weapons's picture

You can totally disregard my request / suggestion, I even got a junk for it (?), but links are a bit more social.

Otherwise, I read it, go 'hmm, interesting', google lyrics to find the band / album, open youtube/grooveshark and listen to it anyway. Makes the experience a bit more disjointed. <shrug>



Also, it probably kills people viewing on mobiles.

theabyss11's picture

You like the tool as well I see. Beautiful song and great message like all of their songs. I have more of an Aenema feeling right now.

Some say the end is near
Some say we'll see armageddon soon
I certainly hope we will
I sure could use a vacation from this
Bull-shit, three-ring
Circus sideshow

Of freaks here in this
Hopeless fucking
Hole we call L.A.
The only way to fix it is
To flush it all away
Any fucking time
Any fucking day
Learn to swim
See you down in
Arizona Bay

Fret for your figure
And fret for your latte
And fret for your lawsuit
And fret for your hairpiece
And fret for your Prozac
And fret for your pilot
And fret for your contract
And fret for your car

It's a bull-shit, three-ring
Circus sideshow

Some say a comet will fall from the sky
Followed by meteor showers and tidal waves
Followed by fault lines that cannot sit still
Followed by millions of dumb-founded dipshits and

Some say the end is near
Some say we'll see armageddon soon
I certainly hope we will
I sure could use a vacation from this

Stupid shit
Silly shit
Stupid shit

One great big festering neon distraction
I've a suggestion to keep you all occupied

Learn to swim... Learn to swim... Learn to swim... Learn to swim...

Mom's gonna fix it all soon
Mom's coming 'round to put it back the way it oughta be

Fuck L. Ron Hubbard
And fuck all his clones
Fuck all these gun-toting
Hip gangster wanna-bes

Fuck retro anything
Fuck your tattoos
Fuck all you junkies
And fuck your short memory

Learn to swim... Learn to swim... Learn to swim... Learn to swim...

Fuck smilie glad-hands with hidden agendas
Fuck these dysfunctional, insecure actresses

Learn to swim... Learn to swim... Learn to swim... Learn to swim...

I'm praying for rain
I'm praying for tidal waves
I wanna see the ground give way
I wanna watch it all go down
Mom, please flush it all away
I wanna see it go right in and down
I wanna watch it go right in
Watch you flush it all away

Yeah, time to bring it down again
Yeah, don't just call a pessimist
Try and read between the lines

And I can't imagine why you wouldn't
Welcome any change, my friend

I wanna see it come down
Plug it down
Suck it down
Flush it down

The_Euro_Sucks's picture

Gotta love tool, why not include a link to the song?


For the chartists, tool made song based on fibonacci

thriftymost's picture

You're an addict yourself, SleepHerder, but don't know it.

Assuming you're human, it follows that you're addicted to breathing.  You're also addicted to eating and drinking.  You're addicted to the consciousness-altering practice of sleep, which I bet takes up about a third of your time each and every day.  You're probably addicted to many other things as well--most of them basically good, all with drawbacks (think of the opportunity cost associated with all that bedtime), and by bedtime, I don't mean sex, though without a sex addiction the human race would never have made it this far.

Addictions are fundamentally a good thing, since we tend, by nature, to gravitate toward the things that help us thrive and grow and be happy, and tend to want to perpetuate all that goodness.  Just be sure to practise moderation, SleepHerder, when and where necessary.  And remember to feed your head, not just your gut.


AnAnonymous's picture

So now addiction is that. Another valuable addition in this US driven world.

As addiction is a primary issue in US citizenism, it is funny how US citizens deal with that kind of issues.

Everytime, well, you discover that it is not an exception condition but a very common one.

So eating and drinking is an addiction.

Normalization of exceptional conditions.

It tells about what is coming up in this US world order.

I did it by Occident's picture



the band I mean, I wasn't insulting you or your post.  I just like the band.  :)


I did it by Occident's picture

their videos are the wierdest though, just sayin'

matrix2012's picture

WHY more greed and materialism? WHY only money and money only?

First, to consume till the death's calling! eg: for small guy, after having an iPhone, then iPhone 4S, next Android Google Nexus; iPad then iPad2; etc a long list here...please help

for big guys, after getting a Ferrari, then a 3-room condo, next is a yacht, further is a personal jet, and the long list continues...

Second, to secure a cool estate in the heaven! Property here. Property there!

Third, to finance the purchase of Indulgence from the "God's Representative on Earth" (take it as an investment in the afterlife insurance)


Now you all know why only money matters! :D


Anyhow, WELL SAID SheepHerder! :-) what a reading pleasure

Mugatu's picture

Flee to Chile Bitchez!

Decent wine and warm women!


falak pema's picture

they can't feed the whole world. Spread out the pain and the hope and pleasure.

earleflorida's picture

their dirt won't stop them from being buried once the world goes on strike - were all in the same hole - they'll just get buried in a mass grave atop ours 

lolmao500's picture

Even if the whole freaking world economy collapse, people in rural mongolia won't give a fuck.

Well until Russia and China go at it.

falak pema's picture

What has to go is pax americana, its cold war plus mid-east oil monopoly power play and the Reganomics legacy turned into NWO financial fallacy. Change those parameters and the world has hope. 

CrashisOptimistic's picture

Oil defines everything.

But you do not understand oil.  The number 1 producer of oil is not in the Middle East.  It is Russia.  Factor that into your worldview.

falak pema's picture

Russia is there but what is important is the potential export ratio not reservoir potential and russia does not have the export potential of combined Mid-east cheap oil export base. Ofcourse, that could all change and WILL change in next thirty years which is the time frame to move out of oil and massively into renewables. 

Truffle_Shuffle's picture

America......millions, soon to be hundreds of millions, of "useless eaters".

-Michelle-'s picture

I just don't understand the belief that Americans will be welcomed into these countries with open arms.  Half of my family is from Central America.  I hear how they talk about Americans who are buying land there.  It's not pretty and I get the feeling that they're holding back a little bit because the American relations are in hearing distance.  Who knows how they talk when we're not there?

If the whole thing goes to pot, I would rather be in the country and culture I grew up in.

AcidRastaHead's picture

Don't you just hate it when entire nations talk behind your back.

-Michelle-'s picture

I would be less concerned about the talking behind your back and more concerned with the sneaking up behind your back and hacking you with a machete.

Nothing like hearing an 80 year old woman talk about doing that if the foreigners get feisty.