The Looming Financial Apocalypse: America’s Debt Crisis and the Coming Global Reset

The Specter of Debt

There is a specter haunting the Western world—a specter of debt. It is not a new specter, nor is it one that has gone unnoticed. But like so many of the great crises of our age, it is one we have collectively chosen to ignore, hoping it will go away or resolve itself. It will not. The United States, the world’s largest economy and the engine of global financial stability, is drowning in a sea of red ink. The numbers are staggering, almost incomprehensible. The U.S. national debt now exceeds $34 trillion, a figure so vast that it defies analogy. To put it in perspective, if you spent $1 million every day since the birth of Christ, you would still not have spent $1 trillion. And yet, here we are, with a debt burden that grows by the second, fueled by reckless spending, political gridlock, and a collective refusal to confront reality.

The situation is far worse than it was just a few decades ago. In 1980, the U.S. national debt was $908 billion, or roughly 33% of GDP. Today, it is over 120% of GDP, a level not seen since the aftermath of World War II. But unlike the post-war era, when the U.S. was a rising industrial power with a booming population, today’s debt is being accumulated during a period of relative peace and prosperity. Worse still, we are passing this burden down to future generations, saddling them with a financial albatross that will constrain their opportunities and limit their potential.

The Decline of the American Dream

One of the most glaring symptoms of this crisis is the decline of the American Dream. In the 1950s and 1960s, a single income was often enough to buy a home, raise a family, and secure a comfortable retirement. Today, that dream is out of reach for millions of Americans, particularly the young.

In 1970, the median home price in the U.S. was $17,000, or roughly 2.7 times the median household income. By 2023, the median home price had soared to $431,000, or 7.5 times the median household income. This dramatic increase has made homeownership unattainable for many young people, with only 26% of millennials owning a home by the age of 34, compared to 37% of Gen Xers and 45% of baby boomers at the same age.

The problem is not just rising home prices but also stagnant wages and soaring student debt. The average student loan balance has more than doubled since 2009, reaching $37,000 in 2023. For many young Americans, the dream of homeownership has been replaced by the reality of lifelong debt servitude.

The Federal Reserve and the Banking System

To understand how we got here, we must look to the creation of the Federal Reserve in 1913. Ostensibly established to stabilize the financial system and prevent bank runs, the Fed has instead become a tool for perpetuating the power of major banks and enabling reckless government spending.

The Federal Reserve operates on a system of fractional reserve banking, a practice that is as absurd as it is dangerous. Under this system, banks are required to hold only a fraction of their deposits in reserve, lending out the rest. This creates a multiplier effect, where a single dollar of reserves can generate many dollars of credit. While this system allows banks to profit from interest on loans, it also makes them vulnerable to runs and panics.

The inherent instability of fractional reserve banking is compounded by the Fed’s ability to create money out of thin air. Through quantitative easing and other monetary policies, the Fed has injected trillions of dollars into the economy, inflating asset prices and exacerbating wealth inequality. The result is a financial system that is both fragile and corrupt, designed to enrich the few at the expense of the many.

Governmental Corruption and Influence Peddling

The rot in the financial system is mirrored by the rot in government. Corruption and influence peddling have become endemic, with politicians and regulators serving the interests of Wall Street rather than the public.

A glaring example is the case of Sam Bankman-Fried (SBF), the disgraced founder of FTX. Before his empire collapsed in fraud and scandal, SBF was the second-largest donor to the Democratic Party in the 2022 election cycle, contributing over $40 million. His donations bought him access to the highest levels of government, including meetings with regulators and lawmakers. The implications of this influence peddling are staggering: a man who allegedly defrauded investors of billions of dollars was able to shape policy and regulation to his advantage.

This is not an isolated incident but a symptom of a broader problem. The revolving door between Wall Street and Washington ensures that the interests of the financial elite are prioritized over those of ordinary citizens. The result is a system that is rigged, corrupt, and fundamentally unjust.

The Commercial Mortgage Crisis

Adding to the sense of impending doom is the commercial mortgage crisis. The COVID-19 pandemic accelerated the shift to remote work, leaving office buildings across the country empty. As a result, commercial real estate values have plummeted, and many property owners are struggling to service their debt.

The scale of the problem is enormous. According to the Mortgage Bankers Association, over $1.5 trillion in commercial real estate loans will mature by 2025. Many of these loans were issued at inflated valuations and low interest rates, making them difficult to refinance in today’s higher-rate environment. If property owners default en masse, it could trigger a wave of bank failures, as many regional banks have significant exposure to commercial real estate.

The potential fallout is terrifying. A collapse in commercial real estate could wipe out hundreds of billions of dollars in bank capital, leading to a cascade of failures that would dwarf the 2008 financial crisis. The Federal Deposit Insurance Corporation (FDIC) has already warned that 63 banks are at risk of failure due to their exposure to commercial real estate. If even a fraction of these banks go under, it could trigger a full-blown banking crisis.

What Can We Do?

In the face of such overwhelming challenges, it is easy to feel powerless. But there are steps we can take to protect ourselves and prepare for the future.

Invest in Tangible Assets: Historically, gold and silver have served as reliable stores of value during times of financial instability. Unlike fiat currencies, which can be devalued or inflated away, precious metals retain their intrinsic worth. Real estate is another solid option, as property tends to hold value over the long term and can generate income through rentals or other uses.
Build Resilient Businesses: In times of crisis, businesses that provide essential goods or services tend to fare better than those reliant on discretionary spending. Investing in or starting a business that meets basic needs—food, energy, healthcare—can provide both financial security and a sense of purpose.
Partner and Collaborate: There is strength in numbers. Forming financial partnerships or joining forces with like-minded individuals can help spread risk and pool resources. Whether it’s starting a community garden, a local co-op, or a small business, working together can create resilience that individuals alone cannot achieve.
Start a Credit Union or Community Bank: One of the most powerful ways to protect your financial future is to take control of your money. Credit unions and community banks are member-owned institutions that prioritize the needs of their communities over profit. By starting or joining one, you can ensure access to fair lending practices, lower fees, and a financial system that works for you, not against you.

The Power of Community

In times of crisis, the importance of community cannot be overstated. The coming financial reset will test not only our economic systems but also our social fabric. Encouraging people to partner more, to pool resources, and to work together will be essential for navigating the challenges ahead.

Community-based financial institutions, such as credit unions, offer a model for how we can rebuild trust and stability in the financial system. Unlike large, impersonal banks, credit unions are rooted in local communities and operate on principles of mutual aid and cooperation. By starting or supporting such institutions, we can create a financial system that is more resilient, equitable, and responsive to the needs of ordinary people.

Summary

The U.S. debt crisis is a ticking time bomb, and the warnings of economists like Ray Dalio and thinkers like Daniel Schmachtenberger cannot be ignored. The coming financial reset will be painful, but it also presents an opportunity to rebuild our economic systems on a more sustainable foundation.

To weather the storm, individuals should consider investing in tangible assets like gold, silver, and real estate, as well as building resilient businesses that meet essential needs. Equally important is the power of community—partnering with others, pooling resources, and creating local financial institutions like credit unions can provide a buffer against the chaos of a global financial collapse.

The road ahead will not be easy, but by taking proactive steps and working together, we can emerge from the crisis stronger and more prepared for the challenges of the future. The specter of debt may be haunting us, but it does not have to define us. The choice is ours.