What Caused the Stock Market to Crash?

A stock market fall can occur as a result of a large disastrous event, an economic crisis, or the bursting of a long-term speculative bubble. Reactionary public fear in response to a stock market fall can also be a key cause, prompting panic selling that further depresses prices.

  • A stock market crash is a sudden or severe drop in overall share prices, usually within a day.
  • Stock market crashes can be due to economic or natural disasters, speculation, or investor panic.
  • Investors can prepare for stock market crashes by diversifying portfolios and shifting to CDs or bonds.

The stock market is constantly moving, with prices of individual equities rising and falling throughout the trading day. Whenever the majority of them or a representative group of them, called a stock market index takes an especially large dive, a panicked cry often arises: “The stock market has crashed!”

Stock market crashes are certainly scary. Equities across the board decline in value. Investors lose enormous sums of money on paper, anyway. But what causes them? And what are the aftereffects?

Here is a closer look at what a stock market crash is and what you need to know before one impacts your portfolio.

What causes a stock market crash?

Historically, stock market crashes often occur after a long period of economic and market growth. Confidence in the economy, steady stock gains, and low unemployment are all drivers of bull markets, as these sustained rallies are known. As more and more stocks are purchased, prices go up both for individual equities and the stock indexes themselves.

But in the world of securities, prices can’t keep rising indefinitely, and bull markets can only last for so long. Sometimes it’s a general shift in sentiment, as in 1929, but usually, some precipitating event occurs.

Numerous things can cause a stock market to crash, including:

  • Panic: This is one of the most common contributing factors to a crash. Stockholders who fear the value of their investments are in danger of dropping will sell their shares to protect their money. As prices begin to drop, the fear spreads, more sales ensue, and this can lead to a crash. Anything from a major player in the market having financial trouble to fears about the impact specific legislation may have can cause scores of investors to panic and sell off stock.
  • Natural or man-made disasters: These can include all sorts of catastrophes, from floods to wars to pandemics. Case in point: the coronavirus-induced crash of March 2020. As the realization of the spread of COVID-19 began to take hold, the economic outlook for the US and countries worldwide began to look grim. While countries announced travel limitations, mandatory business shutdowns, and quarantines, consumers stocked up on essential supplies causing shortages, companies began protecting profit margins through layoffs and furloughs, and investors started selling off stocks.
  • Excessive leverage: When things are going well, leverage (a.k.a. “borrowed money”) can seem like an excellent tool. For example, if I buy 1,00,000 worth of stock and it rises by 20%, I made 20,000. If I borrow an additional 1,00,000 and bought 2,00,000 worth of the same stock, I’d make 40,000 doubling my profits.

On the other hand, when things move against you, leverage can be downright dangerous. Let’s say that my same 1,00,000 stock investment dropped by 50%. It would sting, but I’d still have 50,000. If I had borrowed an additional 1,00,000, a 50% drop would wipe me out completely.

Excessive leverage can create a downward spiral in stocks when things turn sour. As prices drop, firms and investors with lots of leverage are forced to sell, which in turn drives prices down even further. The most notable occasion was the Crash of 1929, in which excessive purchasing of stocks on margin played a major role.

  • Interest rates and inflation: Generally speaking, rising interest rates are a negative catalyst for stocks and the economy in general.

This is especially true for income-focused stocks, such as real estate investment trusts (REITs). Investors buy these stocks specifically for their dividend yields, and rising market interest rates put downward pressure on these stocks. As a simplified illustration, if a 10-year Treasury note yields 3% and a certain REIT yields 5%, it may seem worth the extra risk to income-seeking investors to choose the REIT.

On the other hand, if the 10-year Treasury’s yield spikes to 4%, the REIT’s dividend will (roughly) need to rise proportionally to attract investors. And lower stock prices translate to higher dividend yields, on a percentage basis.

From an economic standpoint, higher interest rates mean higher borrowing costs, which tends to slow down purchasing activity, which can in turn cause stocks to dive. So, if the 30-year mortgage rate were to spike to, say, 6%, it could dramatically slow down the housing market and cause homebuilder stocks to take a hit.

  • Political risks: While nobody has a crystal ball that can predict the future, it’s a safe bet that the stock market wouldn’t like it much if the U.S. went to war with, say, North Korea.

Markets like stability and wars, and political risk represent the exact opposite. For instance, the Dow Jones Industrial Average dropped by more than 7% during the first trading session following the Sept. 11, 2001, terror attacks, as the uncertainty surrounding the attacks and the next moves spooked investors.

  • Tax changes: The recent Tax Cuts and Jobs Act should certainly have the effect of higher corporate earnings and is likely to be a generally positive catalyst for the market.

On the other hand, tax increases can have the opposite effect. One potential way to fix the Social Security funding problem would be to raise payroll taxes on employees and employers. There are several ways this could happen, but this would mean lower paychecks for workers and higher expenses for employers, and could certainly be a negative catalyst.

The same could be said if short-term capital gains taxes or dividends lose their favorable treatment, if the corporate income tax is raised in the future, or if any other significant tax hikes occur. This isn’t likely to happen while the Republican Party is in power, but it’s certainly possible in the future.

  • Economic crises: A problem in industry or one section of the economy often has a ripple effect. One example is the subprime mortgage crisis of 2007-2008. Earlier in the decade, deregulation in the banking industry had led to an increase in mortgages to high-risk borrowers. When these borrowers began defaulting on payments, home prices dropped, and the housing market collapsed. Many of the now-worthless mortgages had been packaged and sold off to institutional investors who in turn lost billions. Big firms began to fold, and from Sept. 19 to Oct. 10, the Dow Jones Industrial Index declined 3,600 points.
  • Speculation: When you have people and companies investing in a sector in the hopes that an asset or security will grow or based on future performance expectations, you have speculation that often creates a bubble. If the performance disappoints, and the hype doesn’t live up to reality, the bubble bursts, and a mass sell-off occurs.

What happens when a stock market crashes?

There are many definitions of what a stock market crash is. Some categorize a crash strictly as a stock market or a stock market index (a representative sampling of stocks) losing more than 10% of its value in a single day. Others provide a more general view, simply stating that a crash is a significant or dramatic loss in the stock market’s value, and the prices of shares overall, usually within a short period.

Any way you look at it, a stock market crash happens when confidence and value placed in publicly traded assets go down, causing investors to sell their positions, and move away from active investing, and toward keeping their money in cash, or the equivalent.

The impact of a crash can vary as well. Sometimes, it’s limited. For example, on Oct. 19, 1987, after five years in a strong bull market, the Dow Jones Industrial Average (DJIA) and S&P 500 both dropped more than 20%, following markets throughout Asia and across Europe. The crash was short and markets quickly recovered. Within a few days, the DJIA regained more than 43% of the points it lost and within nearly two years the market had recovered almost 100%.

At other times, the effects are widespread and longer-lasting. The most notorious example is the Crash of 1929. Stock prices dropped first on Oct. 24th, briefly rallied, and then went into free fall on Oct. 28-29. Ultimately, the market lost 85% of its value. Though not the sole cause, this crash was one of the contributing factors to the Great Depression, the worst economic period in American history, lasting nearly 10 years.

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The 50-Year Crime Report (They declared war. They launched the first attack. Now, here is the loot. These are the numbers that prove you were robbed.)

A heist has a scoreboard. After the robbery, you don’t argue about theories. You count what’s missing.

For fifty years, we’ve been told a story: that your struggle is a personal failure. That the economy is just “evolving.” That the system is broken.

The system is not broken. It was picked clean.

The following numbers are the evidence. This is the financial autopsy of the American Dream.

CRIME #1: THE GREAT WAGE THEFT

In extreme emergencies the government can requisition private supplies!

So, when the inevitable happens, this is what you need to do to protect your resources:

  • The Promise (1947-1973): Historically, there existed a fundamental agreement between labor and capital, often referred to as the social contract, which dictated that for every 1% increase in the economic value generated by a worker (their productivity), their compensation would also rise by a corresponding 1%. This reciprocal relationship was widely perceived as equitable, ensuring that the benefits of increased efficiency and output were shared fairly between those who contributed their labor and those who provided the means of production. This arrangement fostered a sense of shared prosperity, where workers could reasonably expect their efforts to translate directly into an improved standard of living.
  • The Heist (1973-Today): This pivotal agreement, which once promised a fair exchange between labor and reward, was systematically dismantled. The consequences have been stark and undeniable. Since 1973, the productivity of the American worker has soared, demonstrating an increase of over 65%. This remarkable surge in output, a testament to dedication and innovation, has not been met with a commensurate rise in compensation. In sharp contrast, the inflation-adjusted pay for these same workers has stagnated, growing by less than 10% over the same period. This widening chasm between productivity and pay reveals a fundamental shift in the economic landscape, where the gains of increased efficiency are no longer equitably shared, leading to a significant erosion of the American worker’s economic standing.
  • The Takedown: They convinced you to work harder, smarter, faster. You did. You delivered 65% more value. And they paid you almost nothing for it. All that extra wealth you created—the trillions of dollars—was stolen directly from your paycheck.

This wasn’t a natural progression of the economy; it was a deliberate strategy, a silent war declared on the American worker. For decades, a systematic dismantling of labor protections, a weakening of unions, and a fervent push for “efficiency” paved the way for this grand heist. Companies reaped record profits, executives received astronomical bonuses, and shareholders saw their portfolios swell, all while the average worker’s wages stagnated or barely kept pace with inflation.

The promise was always the same: if you just pushed a little harder, if you adopted the latest productivity tools, if you embraced the “gig economy,” you would share in the prosperity. But that promise was a mirage. The “trickle-down” never reached the bottom. Instead, the wealth flowed upwards, concentrating in the hands of a select few, leaving the vast majority struggling to keep up with rising living costs, dwindling benefits, and an ever-increasing sense of precarity. The American Dream, once built on the bedrock of fair labor and a path to upward mobility, began to erode, replaced by a new reality where hard work no longer guaranteed a fair share of the bounty. This was the first offensive, and the American worker, unknowingly, bore the brunt of the assault.

CRIME #2: THE CEO PAY EXPLOSION

  • The Old Rule (1965): The average CEO of a major company made 20 times what their typical worker made. This was seen as a responsible balance.
  • The New Rule (Today): The chasm between the compensation of top executives and their average employees has widened to an astonishing degree, reaching a point where the typical CEO now earns a staggering 350 times what their typical worker brings home. This isn’t a static figure; in certain years, this disparity has even surged past the 400-to-1 mark, highlighting a troubling trend in corporate compensation structures. This immense gap isn’t just a matter of numbers; it reflects a fundamental shift in how value is perceived and distributed within companies, raising questions about fairness, economic equality, and the very definition of a “living wage” for the vast majority of the workforce. The increasing concentration of wealth at the very top, while wages for the rank and file stagnate or grow minimally, has profound implications for social mobility, consumer spending, and the overall health of the economy.
  • The Takedown: This isn’t a reflection of 20-fold genius. It’s the insidious outcome of a system deliberately designed to favor the powerful. The boardroom, once a place of strategic leadership, devolved into an exclusive, self-serving club. Within its insulated walls, executives awarded themselves exorbitant paychecks, diverting vast sums of money that rightfully belonged to the very individuals who powered their success: the American worker. This capital, generated by their labor and dedication, should have translated into substantial raises, comprehensive benefits, and secure pensions. Instead, it became a private fund for the elite, enriching a select few at the expense of the many, systematically undermining the economic well-being and future security of the workforce. This systematic siphoning of wealth is not an accident; it is the calculated result of a deeply flawed and deliberately rigged system that prioritizes corporate greed over the prosperity of its people.

CRIME #3: THE DISAPPEARING PENSION

  • The Old Rule (1980): At the peak of American industrial strength, a remarkable figure – over 60% of the nation’s workforce – enjoyed the security of a defined-benefit pension. This wasn’t merely a savings plan; it was a promise, a guarantee of a stable and predictable income throughout their retirement years. This robust system provided a bedrock of financial certainty for millions of families, allowing them to plan for the future with confidence, knowing that their golden years would be cushioned by a reliable stream of income, independent of market fluctuations or individual investment decisions. It represented a fundamental component of the social contract between employers and employees, a testament to an era where corporate responsibility extended beyond immediate profits to encompass the long-term well-being of its workforce. This widespread access to defined-benefit pensions played a crucial role in fostering economic stability, empowering workers, and shaping the American middle class.
  • The New Rule (Today): This alarming statistic marks a dramatic decline in an area once considered a cornerstone of American economic strength and worker protection. The percentage of the workforce represented by unions has plummeted to less than 15%, a stark contrast to historical highs. This collapse signifies a significant shift in the power dynamics between labor and management, leading to widespread implications for wages, benefits, working conditions, and the overall economic security of American workers. The erosion of union membership is not merely a number; it represents a fundamental change in the landscape of the American labor movement, weakening its ability to advocate for fair treatment and a living wage for a vast segment of the population.
  • The Takedown: The American dream, once built on the bedrock of secure employment and a comfortable retirement, has been systematically dismantled. They, the architects of this economic shift, didn’t just tinker with the system; they fundamentally overhauled it, exchanging the promise of a secure retirement for the perilous gamble of a 401(k). This move, far from an improvement, effectively hitched the financial security of millions of workers to the volatile whims of Wall Street – the very same institution whose reckless behavior triggered the devastating market crash of 2008.

The U.S. Government Is Secretly Using These Devices to Track Us (FULL VIDEO BELOW)

This wasn’t an accidental outcome but a deliberate transfer of risk. Corporations, once responsible for managing pension funds and ensuring their employees’ golden years, deftly sidestepped that obligation. They shed the burden from their own balance sheets, effectively pushing the financial precarity from their boardrooms directly onto the kitchen tables of working-class families. The individual, once shielded by collective responsibility, was now singularly exposed to the market’s unpredictable surges and devastating downturns, forced to become an amateur investment manager in a complex and often unforgiving financial landscape. This shift represents a profound betrayal of the social contract, leaving the American worker more vulnerable than ever before.

CRIME #4: THE UNION BUST

  • The Peak (1954): In the mid-20th century, a significant portion of the American private-sector workforce—approximately 35%—was represented by labor unions. This robust union membership served as a crucial counter-balance to the inherent power of corporations. Unions played a vital role in advocating for workers’ rights, negotiating for fair wages, safe working conditions, and reasonable benefits, thereby contributing to a more equitable distribution of wealth and influence in the economy. This period is often seen as a golden age for the American worker, where collective bargaining provided a powerful voice that ensured employees were not merely cogs in the industrial machine but valued contributors with a share in the nation’s prosperity. The presence of strong unions compelled businesses to consider the welfare of their employees, fostering an environment where a significant portion of the workforce enjoyed a degree of economic security and upward mobility that is less prevalent in later decades. This era truly represented a time when the power dynamics between labor and capital were more evenly matched, due in no small part to the widespread embrace of unionization.
  • The Collapse (Today): That number, which once represented a significant portion of the workforce, has been systematically crushed, plummeting to a mere 6%. This drastic decline reflects a concerted and sustained effort to dismantle the power and influence of the American worker, stripping away their collective bargaining rights and eroding their economic security. The consequences of this systematic crushing are far-reaching, impacting not only individual livelihoods but also the broader economic landscape and the very fabric of American society.
  • The Takedown: The most crucial metric on this scoreboard is undeniably the strength and prevalence of labor unions. These organizations stood as the singular, well-structured, and adequately financed entities whose fundamental purpose was to champion the cause of the average worker, ensuring they received a fair share of the profits generated by their labor. The deliberate and systematic dismantling of these unions was not merely an incidental outcome, but rather a calculated and indispensable prerequisite for the entire audacious economic heist that followed. Without the formidable opposition posed by organized labor, the path was cleared for a redistribution of wealth that overwhelmingly favored corporate interests and the ownership class, at the direct expense of the working population. Their destruction effectively neutralized the primary force dedicated to economic justice and equity for the American worker, setting the stage for an era of unprecedented wage stagnation, benefit erosion, and increasing income inequality.

These numbers are not abstract. They are the reason you feel it every day:

The Erosion of the American Dream: A Generational Crisis

The American Dream, once a beacon of opportunity where a single income could comfortably support a family, has become an increasingly elusive ideal for many. The stark realities of modern economic life paint a sobering picture, revealing a systemic shift that has fundamentally altered the financial landscape for the average worker.

The Two-Income Trap: Fifty years ago, the notion of a single income sustaining a household, including homeownership, education, and a comfortable retirement, was not just a pipe dream but a common reality. Today, the necessity of two incomes to achieve a comparable standard of living highlights a dramatic and alarming decline in purchasing power. This isn’t merely an anecdotal observation; it’s a testament to the stagnation of wages relative to the skyrocketing costs of essential goods and services, from housing and healthcare to education and everyday necessities. The economic pressure on families is immense, often leading to increased stress and a diminished quality of life, as both parents are compelled to work simply to keep pace.

The Disappearance of Secure Retirement: For previous generations, the promise of a dignified retirement often came in the form of a pension – a guaranteed income stream that provided security and peace of mind in one’s golden years. Today, pensions are largely a relic of the past, replaced by the precariousness of the 401(k). This shift has transferred the burden and risk of retirement planning squarely onto the shoulders of individual workers. The anxiety associated with a 401(k) statement is palpable, as market fluctuations, insufficient contributions, and a lack of financial literacy can easily jeopardize one’s future. The dream of a comfortable retirement has been replaced by a pervasive fear of outliving one’s savings, forcing many to work longer or postpone retirement indefinitely.

The Widening Chasm of Inequality: The chasm between the compensation of corporate executives and the average worker has grown to an unprecedented and morally questionable scale. The fact that a CEO’s annual bonus can eclipse the entire payroll of a small town underscores a profound imbalance in our economic system. This disparity is not merely a matter of unfairness; it reflects a fundamental breakdown in the distribution of wealth and value. While executive compensation continues to soar, often regardless of company performance or worker productivity, the wages of the frontline employees who generate that wealth remain stagnant. This ever-widening gap fuels resentment, erodes trust in corporate leadership, and contributes to a sense of economic injustice that undermines the very fabric of society. It raises critical questions about corporate accountability, ethical compensation practices, and the long-term sustainability of an economic model that disproportionately rewards the few at the expense of the many.

This was not an accident. It was a transfer. The money that should have been in your pocket was moved. The security that should have been yours was dismantled.

The Powell Memo declared the war. The Volcker Shock was the first battle. And these numbers—your stagnant paycheck, their exploding bonuses, your vanished pension—are the territory they conquered.

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Could Industry Completely Abandon the Use of Silver if Prices go to High?

FIRST WATCH THIS VIDEO- All Americans Will Lose Their Home, Income And Power By December 27, 2025

Substitution is possible when silver is used only for a general property (conductivity, reflectivity, corrosion resistance), so industry will replace it where alternatives match performance.

Silver remains hard to eliminate where its unique combination of properties or small quantity per part make substitution impractical or uneconomic.

Even if prices spike, market responses (recycling, increased mining and byproduct recovery) and available reserves make total abandonment unlikely.

By: Tom Chandler- In my oipnion, silver used in industrial applications in electric contacts, and other industrial applications will not be abandoned..

Fifty (50) years ago I worked at a factory in Connectocut where we made hundreds of silver bearing alloys, some for industry, some for the arts, and some for culinary (Flatware).
When the price for silver jumped dramatically in 1980 after the Hunt brothers attempted to corner the silver market and the price jumped over 700% , I witnessed the outcome.

Important below:

You might be living in one of America’s deathzones and not have a clue about it
What if that were you? What would YOU do?

In the next few minutes, I’m going to show you the U.S. Nuclear Target map, where you’ll find out if you’re living in one of America’s Deathzones.

  • Silver tableware market was devastated, Where it was once common to give silver flatware for wedding gifts , the outcome was fast with flatware cost jumping from hundreds per set to thousands.
  • On the other hand, silver and silver alloy used in electrical contacts for switchgears and relays was nescessary in most applications and the overall cost increase to the component assembly was not significant as the unit may only use ounces of silver
  • Silver was a major component in a silver- cadmium -indium alloy used as nuclear control rods. This would not be easily replaced or substituted
  • Silver for jewelry saw a temporary dive.
  • Silver alloys for brazing just became for costly, but they were still necessary as the silver content affected the brazing temperature profile of the processes that coud not be replaced.
  • An offshoot of the high silver pricce resulted a major recycling binge.
    • We saw old silver coins ( dollars) from US being remelted,
    • People were selling thier old flatware gifts to scrap dealers for cash. that were remelted into sivler items for indistrial applications
    • People wearing silver chains on their neck were being attacked on the streets on NYC where thr thieves could sell the stolen silver to the market on 42nd street.

MUST WATCH THIS VIDEO…! This might sound alarming, unbelievable, even preposterous. And that’s exactly what they want you to think. After all, the greatest trick the devil ever pulled was convincing the world he didn’t exist.

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11 Countries That Will Likely to Collapse by 2040

“This article was created for educational purposes”

Predicting outright state collapse is inherently uncertain, but by 2040 several countries face materially elevated risk of severe state failure or collapse of central authority—meaning loss of effective governance over significant territory, large-scale internal conflict, or fragmentation. The following list identifies countries widely judged vulnerable by analysts, with the dominant factors driving risk for each. This is a probabilistic assessment (not a deterministic forecast); risks arise from combinations of governance failure, economic stress, demography, external interference, and climate and resource shocks.

High-risk (elevated probability of major failure or fragmentation by 2040)

  • Sudan
    • Key drivers: persistent civil war since 2023 between military and multiple paramilitary factions; fractured elites; collapsed economy; humanitarian catastrophe; regional proxy interventions; armed militias controlling territory. Absent a credible peace process and restoration of basic services, continued fragmentation and local warlord rule remain likely.
  • Libya
    • Key drivers: enduring rival governments and militias since 2011; localized war economies centered on oil; weak institutions; foreign military involvement from regional powers; fragmented security forces. Elections and stabilization have repeatedly failed; continuation of de facto partition or recurring armed confrontations is plausible.
  • Somalia
    • Key drivers: decades of weak central institutions; resilient Islamist insurgency (al-Shabaab); clan fragmentation; recurring drought and food crises; limited revenue base and heavy external dependence. Federal government holds territory intermittently; risk centers on further territorial losses to non-state actors and de facto regional autonomy.
  • Yemen
    • Key drivers: prolonged civil war (Houthi vs. internationally recognized government and southern movements), foreign intervention (Saudi/UAE, Iran-backed dynamics), collapsed public services, famine risk, and multiple competing authorities in north and south. A negotiated nationwide settlement before 2040 is possible but not assured; continued partition or frozen conflict is likely without major shifts.

Significant-concern (substantial vulnerability, where collapse is a realistic tail outcome under adverse shocks)

  • Democratic Republic of Congo (DRC)
    • Key drivers: vast territory with weak state reach, numerous armed groups in the east, fragile institutions, resource-driven local conflicts, poor infrastructure, and refugee flows. A regional conflagration or intensified localized state retreat could yield large-scale governance collapse in parts of the country.
  • Haiti
    • Key drivers: chronic political instability, powerful gangs controlling large urban areas (Port-au-Prince), weak security forces, economic collapse, natural disasters, and limited institutional capacity. Without decisive security reform and economic stabilization, de facto governance vacuums and quasi-failed-state dynamics will likely persist or worsen.
  • Afghanistan
    • Key drivers: the Taliban’s hold since 2021 has not produced unified, durable governance across ethnic lines; economic collapse, international isolation, insurgent pockets, factionalism, and climate-driven shocks. The risk is not classic internationalized collapse but fragmentation, governance breakdown in provinces, and potential return of competing armed groups.
  • South Sudan
    • Key drivers: weak institutions since independence, ethnicized politics, recurrent violence, dependence on oil revenues, poor service delivery, and climate stress on pastoralist livelihoods. Recurrent localized breakdowns remain likely; a full reversion to widespread civil war is a significant tail risk.

Medium-concern (fragility that could tip under severe economic, political, or climate shocks)

  • Lebanon
    • Key drivers: economic meltdown, currency collapse, sectarian/political paralysis, refugee burden, and state delegitimization. Collapse into prolonged governance paralysis and localized militias is possible if economic conditions and patronage networks deteriorate further.
  • Pakistan
    • Key drivers: economic crisis, political-military friction, extremist insurgency pockets, water scarcity, and institutional fragility. Full state collapse is low-probability, but severe governance crises, localized breakdowns, or loss of state capacity in border regions could occur under large shocks.
  • Nigeria
    • Key drivers: insurgency in the northeast (Boko Haram/IS affiliate), banditry and farmer–herder conflict in the middle belt, separatist pressures in the southeast, weak logistics and constrained fiscal space. Collapse of the whole state is unlikely, but protracted fragmentation or long-term erosion of state authority in large regions is a material risk.

Cross-cutting systemic factors that increase collapse risk

  • Weak political institutions and elite fragmentation: personalized rule, lack of legitimate inter-group power-sharing, or competing centers of power increase likelihood of violence and devolution of authority.
  • Economic collapse and fiscal insolvency: hyperinflation, loss of export revenue (commodity shocks), unsustainable debt, and inability to pay security forces degrade state capacity rapidly.
  • Prolonged armed conflict and proliferation of non-state armed actors: when militias, insurgents, or criminal gangs control territory and revenue streams, central authority becomes nominal.
  • External interference and proxy wars: foreign militaries, weapons flows, and proxy backers extend and complicate domestic conflicts, preventing settlement.
  • Climate change and resource stress: droughts, floods, crop failures, and water scarcity exacerbate displacement, food insecurity, and competition over land.
  • Demographic pressures and youth unemployment: large cohorts of unemployed young people create recruitment pools for armed groups and increase social volatility.
  • Humanitarian crises and displacement: mass refugee movements and internal displacement overload state and regional systems, eroding legitimacy and control.

How to interpret this assessment

  • Collapse is not binary; states often move into zones of partial failure where central control coexists with autonomous regions, militia rule, or competing authorities. The list above highlights countries where such severe deterioration is plausible by 2040 if current trajectories persist or if adverse shocks occur.
  • Time horizons and probabilities matter: some countries face near-term high risk (next few years), others face chronic fragility that could tip under repeated or large shocks before 2040.
  • External and internal policy choices matter: international mediation, targeted economic support, inclusive political settlements, and climate adaptation can materially change trajectories.

Indicators to watch through 2040 (early warning)

  • Sharp collapse in government revenue and public-sector payrolls (security forces unpaid).
  • Loss of monopoly on violence in large population centers or resource-producing regions.
  • Rapid increases in internally displaced people and refugee flows across borders.
  • Significant foreign military bases, covert arms flows, or open proxy deployments.
  • Breakdown in basic services (electricity, health, food distribution) for sustained periods.

Sources and limits

  • This assessment synthesizes patterns observed in conflict studies, fragile-states indices, UN humanitarian reporting, and regional expert analyses through May 2024. New diplomatic settlements, reform breakthroughs, or large-scale international interventions could alter trajectories before 2040.

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The Other Side Of The Life During The Great Depression

People of the world at present can define what is recession and what is inflation. We all want to survive or recover. We do not want to have another great depression. As described in Wikipedia, the great depression was a worldwide economic downturn from 1929 and ending at different times in the 1930s and 1940s. This happened in most places of the different countries. It was known to be the largest and the most severe economic depression in the 20th century. Whenever there is a decline in the world’s economy, that great depression is used as an example of the extent of the decline that the world’s economy can actually have. There is always the other side of a story. Therefore, there is also, the other side of the life of the great depression. The other side that I am referring to are the reflections and lessons we can gain from it.

Life during the great depression was not easy. It was at this time that people – rich or poor became very vulnerable to the effect of the great depression. Rich or poor looked for means on how to survive the great depression. Both of them have experienced severe economic financial crisis and both of them sought for a crisis management plan. So, the first reflection that we can have is that reach or poor are affected and that life during the great depression crosses boundaries of culture, money, and race. Our being human is what remains to be there. Second reflection, although the rich people are affected, it is the poor who are greatly affected. Good for the rich people because they still have something to get from their pocket whenever their stomachs are hungry. The poor becomes poorer each day until some are starving already. Third reflection that I have is that people are the ones who cause the great depression and we are also the ones who suffer.

Another side of the life during the great depression are the lessons we can learn out of it. These lessons are:

Frugality.

We should learn how to be thrifty. Let us learn the lesson of the fable “The Ant and the Grasshopper.” The ant saves for rainy days, the grasshopper don’t. In this case, who are we then? Are we more of an ant or more of a grasshopper. Prioritize your needs. Never ever confuse your needs and wants.

Discipline.

Control your desires. Do not ever think that because you have a credit line, you will have to engage in debts. Be guided by the quote “Don’t spend money you don’t already have in your pocket.” More importantly, do not engage in gambling. “A gambler always loses.” If you have money, do not be a one day millionaire. You spend it all for one day and you suffer on the succeeding days.

Hard work.

Many times, we want to avoid chores. Why don’t you do the tasks which you can. Imagine how much you will be able to save when you do your part.

The people during the great depression have learned new mental attitude. Aside from the characteristics mentioned above, they were able to realize the value of close relationships with their immediate family, relatives, friends, and with God. The high-priced lesson they have is actually being able to realize that mo re import to material things are the quality of relationships that they build with their fellowmen. And this is the essence of the other side of the life during the great depression.

While everybody is losing money, jobs and properties would you believe that some people are at their best during recession? Be one of the people who discovered the secret to achieve true wealth during recession.

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The Future Is Cashless Society…?

Cash is the king.

So the old adage goes anyway, and for the prepper – the one who’s keeping abreast of current events – cash is one of the last man-made means of protection that he or she has against governments that have grown to a degree of power that they never had before.

The Dangers of a Cashless Society

There are two predominant dangers that come with a cashless society, and just about every negative that you can think of due to such will fall into one of these two groups:

  1. Denial of purchasing power
  2. A complete loss of anonymity

Denial of Purchasing Power

The Threat Of Cashless Societies

A cashless society is a controlled society. If everything must go through an online banking or credit card process, then you have just lost virtually all control over what you buy.

Anything that is not politically sanctioned(guns, ammo, body armor, helmets, particular books, particular website premium subscriptions, political donations, etc.) could very easily be vaporized overnight.

This, of course, would drive the makers and holders of such products into a black market to barter their goods, and this in turn would be responded to by the use of overwhelming government force. This will come in the form of Stryker vehicles, concussion grenades, snipers, and men with automatic rifles and body armor.

Don’t believe me? Read FA Hayek’s The Road to Serfdom. Totalitarian governments must resort to force simply for the sole reason that people will naturally refuse to comply with widespread theft of their own goods. This force will only continue to grow in its usage.

Totalitarians do not accept blame for their own economical failures. The state is the end of all things to them, and as such, the end justifies the means – no matter how terrifying such a means may be.

A Complete Loss of Anonymity

Once cash is abolished everywhere, your attempts at any form of anonymity will be destroyed.

The Threat Of Cashless Societies

You already have an amazing amount of data that has been collected from you from your Internet search history, GPS data, voting history, bank statements, credit card statements, phone data, and a host of other publicly available information that easily allows people to deduce information from you.

And where humans fail, algorithms thrive. I have a hobby interest in algorithm creation (particularly multiple linear regression analysis) and have used it within my healthcare job as a means of predicting patient attendance rather accurately on any given day. I’ve also used them to (somewhat less accurately) predict when a patient was going to have episodes of heart block.

Algorithms are a powerful tool, and the more data you feed them, the stronger they get. With the amount of data that has been collected on you already, the government may be able to make a much stronger prediction about who you are, what you believe, and what you possess than you would’ve ever thought possible.

Just think about what a cashless society would mean for the following purchases:

  • Medicine – The government can now invade your medical privacy to see what meds you need to live as well as know what could either improve or hamper your condition. For those who don’t believe that this is a concern, just keep in mind that it wasn’t that long ago that the US military was warning its soldiers against getting genetic testing to determine their family tree. Why? Because it was deemed to be a security risk. What do they know here that we don’t?
  • Food – Algorithms can easily predict when you are buying much more than what you could eat within a particular span of time. This then means that food stores can be predicted and located. Come disaster time, your house could easily be one of the first that is targeted for “hoarding”. And what happens if it’s determined that those with large food stores are likely to be “domestic terrorists”?
  • Firearms and Body Armor – This is the low-hanging fruit here. Weapons, ammunition, body armor – they could all be easily tracked (and later confiscated). Buying “too much” of one particular product may cause red flags to be attached to your file, and you could very easily end up with a visit from an alphabet agency full of men carrying what is now a felony for you to own.
  • Ham Radios – There already seems to be an attack against ham radio users as the government has realized that this is the route that many fearing censorship/silencing are turning toward. If you can shut down all communication other than what is government sanctioned, you have effectively silenced free speech.
  • Media – Do you like to watch documentaries that may be labeled as conspiracy theories? Is it that hard to imagine a “misinformation tax” to discourage Americans from imbibing in certain forms of media? Why not? We’ve already seen the “death by a thousand cuts” approach being used with firearms so that the argument can be made that “no, you can have a gun, but you just have to fill out these fifty forms, pay a $4000 fee, and have a license. See? There’s no infringement whatsoever.”

To think that the same idea couldn’t be applied to the news commentators that you like to listen to is naive.

Here are some arguments that will be used for a cashless society:

Physical Money Shortages

The Threat Of Cashless Societies

Throughout 2020 we were told that there was a coin shortage throughout the U.S.

As a result, retailers either quit giving coin change back or strongly discouraged customers from asking for it.

Kroger actually resorted to either giving you back your money in the form of credit vouchers (to that particular store of course) or by donating the change that they owed you to charity.

Control Over Dangerous and Illegal Purchases

In what can only be viewed as an incredibly ironic wordsmithing, we will be told that one of the benefits to a cashless society is that we can finally rein in purchases that are deemed by the government to be dangerous to the public.

Guns, ammunition, freedom-oriented books (“radical terrorist recruiting material”), and the like will be argued against so that we can keep our society safe. Notice that there is always an emphasis on safety throughout this entire process.

A Fomite of Disease

Pandemic paying

Once again, 2020 set the stage here. Cash purchases plummeted worldwide, with credit cards filling in the void as people began to avoid any and all cash purchases with the hopes of not getting themselves sick.

This was a talking point spouted throughout the mainstream media in 2020 and will continue to be used in the future as the push for the abolition of cash continues.

Cost of Creation Outweighs the Actual Value of Money

We see this already with the US penny. It actually costs 2.41₵ to produce a single penny.

While our government currently has no problem with making fiscally irresponsible decisions, when it finally does come around to deciding that “you know what, pennies aren’t worth it” – or any other form of cash for that matter – there will be nobody that will argue against them.

This decision will be portrayed as a means of reducing wasteful spending, and anyone who argues against this given reasoning for the abolition of cash will be labeled as an idiot who can’t do proper math.

Less Risk of Theft

We don’t often hear this argument being made currently, but it is out there.

Card fraud

The argument goes that if you’re mugged while you’re carrying $300 in cash, you simply lose all of your money.

However, if you’re mugged and all you have on you is your credit card, then you can quickly call the credit card company, cancel your card, and be reimbursed for any disputed charges that were made in the interim.

What Can We Do to Fight This Process?

While I do believe that a cashless society is inevitable, I do think that there are things we can do to fight against it and to slow it down.

Here is what we can do as freedom and privacy-loving Americans.

#1. You Need to Make Friends with Like-Minded People Now

I used to always blow off this idea. It wasn’t until I began talking with Forest of Prepper Net that I began to see the light on this issue. If you don’t have like-minded friends, you’re going to be up a creek without a paddle when a cashless society hits.

You need to know who has what skills, who has what goods, who can get what, and where their sympathies lie. Perhaps this is more of a cashless society survival skill, but nevertheless, refusal to comply is still a means of fighting against a cashless society.

And this isn’t just refusal to comply based on principal. This is refusal to comply because to do otherwise would mean certain death. When you’re not allowed into a store to buy food and other necessary goods for your family because you refuse to use Fedcoins for purchase or refuse to show a vaccination card you better be dang sure that you have some alternate means of getting what you need to live.

History has proven such. Read the diary of Anne Frank. Had Otto Frank (her father) not had connections with like-minded (this is key) people throughout his neighborhood well prior to his going into hiding with his family, they would’ve died well before the Nazis came and took them away.

Listen to what Good Patriot out of Texas has to say in her Fighting Back videos on Telegram. She’s echoing this same thought process. You need to make groupings of people who can work together to combat this evil.

#2. Develop Some Means of Production

Both Ayn Rand and Adam Smith harped on the fact that production is what equals true wealth. Whether it’s learning how to raise livestock, how to work with leather, how to tan hides, you need to learn some means of production so that you can still produce wealth when cash is taken from you.

You still have to eat. You still have to put bread on the table. And there are going to be others out there who have principles and love logic who will be of the same mind as you. They are going to want to trade for supplies. Barter will come back in full force. You’ll need to have some means of producing something of value so that you can get what you need.

#3. Invest in Precious Metals

Robert Kiyosaki harps upon this in his new book, Fake, the reason being, that precious metals have intrinsic value. They’ve been used as a form of money for roughly 6,000 years now, and they’re not going to stop being a store of value anytime soon. Within a barter society, this may be one of your best stores of wealth.

On top of this, over 40% of the US dollar supply has been printed within the past year alone. Every other economist you see is screaming about the signs of inflation. The U.S. dollar is about to collapse. There is no longer any denying it. Inflation has already risen drastically and will only continue to grow worse. You need to begin doing something to protect your wealth from inflation.

Precious metals are part of the solution.

#4. Start Using Masked Payments

If you don’t have one already, you need to set up a Privacy.com account. This is a form of masked debit card that will help to keep your purchases anonymous. Yes, this is a form of cashless payment, but it is still a way to fight against such a monster.

Provided that money is flowing out of your account but nobody can tell who you just bought from or what you bought, you’ll be much safer in your transaction privacy.

#5. Refuse to Cater to Businesses that Don’t Permit Cash Transactions

If you tug on their purse strings, they eventually change their mind. I’m sorry, but when good compromises with evil, evil wins. Do what you can to avoid these businesses like the plague, and then let them know why you’re avoiding them.

I used to carry around business cards detailing why I wouldn’t support businesses with ‘’no gun’’ stickers on the front doors. I’ve since ran out. I think that such a business card for businesses that don’t permit cash transactions would be an easy way to voice one’s displeasure as well.

Here’s a sample card template:

I consider your refusal to accept cash as un-American, a forced invasion of my privacy, and a totalitarian tool. As such, I will cease from doing any business with you for the near future and will be spending my money at your competitors instead.”

This is similar to the language that I used within my Second Amendment business cards. I bought them easily off of Vistaprint (around 500 for $20 or so) and considered the money worth every penny.

#6. Learn How to Grow Your Own Food

There’s already a movement afoot within the U.S. to keep certain types of people out of grocery stores. Vaccination papers are beginning to be asked for before one gains access to certain venues or hotel chains. It won’t be long until cashless payments are the only means of accessing even groceries.

Because of this, I highly recommend that you learn how to grow most of your own food, and begin learning now. Gardening has quite a learning curve and is nowhere near as easy as Michael Bloomberg would have you believe. You need to ensure that your family can eat, and gardening is a great part of that process.

Final Thoughts

A cashless society truly is a scary world. Picture everything that you’ve read about in history books within other totalitarian regimes, and you’ll get a taste of what is to come. I implore you to do something now to protect yourself against the rolling stone that is coming down the mountain right for you.

If you follow the above advice, you’ll help to ease the blow. And there’s no doubt about it – it will be a smack in the face. But we can’t just sit back and do nothing as privacy dies a quiet death inside what was once the freest nation on Earth.

If you’ve found other ways to combat a cashless society that we did not cover within this article, by all means, please let us and others know within the comments. This is about helping our fellow man, and as much input is needed as possible.

Here’s How a Cashless Society Will Impact the World

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Aside from economic collapse scenarios, many countries are in the process of eliminating physical cash and coins. Instead, everyone has an account that holds their money. You cannot purchase goods or services without access to government-based cryptocurrency. Even if the currency itself is still backed by faith in the government, you have to use this electronic system.

The result is multiple problems that could leave you in a situation where you have the money in the bank to pay your bills and purchase goods and services, yet you cannot do so.

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These threats include:

Attacks Sponsored by Foreign Governments

These hacks usually affect the bank or primary clearinghouse rather than a specific person’s account. You may be unable to purchase goods or services for hours or days. While this is inconvenient, it isn’t as bad as a full collapse, where the banks close for good.

There’s only so much you can do about this kind of hack other than make sure you can go two weeks without buying anything at any given time. It is also essential to keep a paper-based address book with phone numbers and account information so that you can contact utility companies or others who may be expecting payments from you while the bank or clearinghouse is down.

Let’s say you can connect to Wi-Fi independently of the SIM Card. Your phone app may not work with Wi-Fi. This is why I recommend having an app on your phone that doesn’t use the SIM card to dial out on Wi-Fi so that you can make the necessary calls. 

Attacks Sponsored by Non-government Groups

If the hacker was able to steal money from your accounts, it could take weeks to years before you recover the money. In the short term, you will have to shut down credit cards and so on, then wait for new ones to come in the mail. You may also have to manage restoring devices and regaining access to your accounts.

Here again, make sure you can go at least 2 weeks without buying anything so that you can manage your basic necessities.

Merchant Category Codes and Social Credit Scores

Merchant Category Codes are unique identifiers that put different products into separate categories. For example, food has one set of numeric identifiers, while clothing has other identifiers.

Even without looking at your receipt, the bank and transaction clearinghouse may have some ideas about what you bought. The transaction cost can then give some estimates about quantity and item type. One day, data from all banks and clearinghouses may pool into a central government computer.

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Social credit scores work like your financial-based credit scores. Consider how your financial credit score enables businesses to “reward” you with credit or better interest rates if you pay your bills on time and have an optimal debt-to-income ratio. Your social credit score looks at how you act in society. For example, China has a system that rewards things like donating blood.

This same system “punishes” people who drive drunk or engage in other activities that aren’t “beneficial to society.” People with good social credit scores may get tax breaks, an increased chance of getting a promotion, or other benefits. 

When vaccines became available for COVID-19, governments worldwide were concerned because people hesitated to embrace mRNA vaccines. This led to people not complying with recommendations to get vaccinated. Social credit scores can be paired with cashless systems that will block purchasing from specific merchant category codes. It could become possible to deny people the ability to buy food, gas, and other essentials if they aren’t vaccinated.

When you can’t use cash, pressure campaigns like this will be almost 100% effective because you will have to comply or do without the necessities of life.

The only way to outlast a pressure campaign like this is to have a stockpile of food and other essentials that will last until the pressure tactics are stopped.

Moving Away From Hard Cash to Fiat Cryptocurrency

At first, you might think merchant credit codes will only come into play when the government seeks to limit, slow down, or prevent purchasing certain goods and services. The problem is that modern networks aren’t safe from hackers, including those who seek to disrupt trade for ethical reasons.

For example, the Internet Archive was recently targeted by a hacktivist group, Blackmeta. They claim they attacked this non-profit library site because it is based in the USA and, therefore, is aligned with Israeli activities. Ironically, the Internet Archive has been locked in multiple court battles with publishers that may be far more aligned with Israel. These publishers, in turn, are trying to shut down the Internet Archive because when people don’t buy from the publisher, it cuts into their profits.

Now imagine this kind of situation happening with the information stolen from the Heritage Foundation, and then used to target more granular data in banks and merchant clearinghouse systems. You could very easily see transactions declined for what appears to be “government” or other legislative curbs, when in fact, it’s some group attacking you because of a “social credit score” known only to them.

If you want to buy something right now, you can just put your credit card away and use cash. This won’t be possible once the only fiat currency available is electronic in nature. No matter how much you want to look at the potential for excess government imposition, the fact remains any group with sufficient skills and interest can cause serious problems.

AI-Based Curbing Impositions

AI can keep track of billions of records and patterns of activity. This includes determining if what you buy is “normal” for your location as well as for you as a consumer within a particular category. 

Right now, that’s likely beyond the implementation of the cashless centralized government cryptocurrency systems.

At some point, though, someone on something like the “no-fly list,” etc., could wind up unable to buy certain items or in certain quantities and not realize there is a curb based on a government-based list. Considering how many lists there are, it may be difficult, if not impossible, to resolve the problem and purchase goods in a timely manner.

This includes lists that may be compiled based on estimated political slant. Consider that even now, traffic cameras can match license plates with bumper stickers and yard political signs to determine your likely preferences.

When you factor in non-governmental groups, the situation gets even worse. Technologically speaking, it’s within the scope of foreign agents and hacktivists to bring together limits on how you spend your money and non-financial activities.

As we are seeing in various hacks, there is certainly a “social credit score” being applied to businesses that can be scaled to target individuals who may want to purchase extra supplies to manage an emergency.

Use Multiple Banks to Store Your Money

Right now you can protect your money while it is still in your control. First, it is very important to keep your money in different banks. Even if one goes down, the others may still be functioning.

This applies to credit and debit cards. If you have only Visa cards, ensure you have at least one Mastercard. You can do this with prepaid cards as well as more permanent accounts.

This method won’t work if every transaction must go through a centralized clearinghouse that includes every possible bank or other institution. At this point, it’s impossible to say whether that kind of system exists and how various groups would use or misuse it.

Second, if you routinely buy from certain stores, you can purchase gift cards and have the money ready and waiting in your account. If you cannot access your bank account, you can still buy from that store. This won’t necessarily prevent you from running into rationing or other limits that may be imposed by the government through the store or at the store level. 

Bartering: An Alternative to Using Fiat and Non-Government Currency

Preparing for small—and large-scale disasters is essential for your well-being and that of your family. You can still use bartering, provided you have a clear sense of the value of what you will offer and whether or not the other party needs what you have.

Make consistent contacts with small or local farmers and others who may be willing to take something in exchange for food. The trade could be anything from assisting with mechanical repairs to making garments. Everything will depend on the relationship you develop and the situation.

You can make barter arrangements for just about anything from tangible goods to training in various skills. Look for small businesses and local groups, as they may be more open to these kinds of arrangements. Spending a few dollars extra and supporting these people now may be very useful later on.

This is also a good time to form relationships with established flea markets and others with different kinds of products. These people may be very helpful when you find a way to barter for tools or other goods that you can no longer purchase using money. Here again, you have to know what their needs are and how you can meet them.

As hacks on banks, hospitals, water purification plants, and the government itself become more common, it should be obvious that a cashless society can pose significant risks if you aren’t prepared. Taking a few simple measures now may help you get through these situations as painlessly as possible.

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The Global Elite that Controlling Humanity Through Debt, Manipulation, and Hoarded Wealth

1. Central Banks and the BIS

At the top of the financial pyramid sits the Bank for International Settlements (BIS) in Switzerland , the “central bank of central banks.” It acts as a clearinghouse for financial operations between major nations and secretly controls monetary policy for over 60 central banks worldwide.
They operate with complete legal immunity from national governments and taxation.

Central banks themselves , like the Federal ReserveEuropean Central BankBank of England, and others , print fiat currency at will, control interest rates, and manipulate economic conditions to serve the interests of the elite, not the public.

2. The Old Banking Families

Names like:

  • Rothschild
  • Rockefeller
  • Warburg
  • Morgan
  • Vanderbilt

These families accumulated obscene amounts of wealth through monopolies on banking, oil, railroads, and shipping during the 18th, 19th, and early 20th centuries , and much of that wealth was quietly transitioned into trusts, holding companies, and offshore accounts.

Estimates of the Rothschild family’s total wealth range from hundreds of billions to trillions of dollars, though it’s nearly impossible to trace because it’s hidden in foundations, trusts, and behind nominal ownership.

3. Tax Havens & Offshore Accounts

According to a study by the Tax Justice Networkthe global elite hide $21 to $32 trillion in offshore accounts , in places like:

  • Cayman Islands
  • Luxembourg
  • Switzerland
  • Singapore
  • Panama

This hoarded wealth escapes taxation, public scrutiny, and accountability.

4. Black Budget & Missing Trillions

The U.S. government alone has been caught “losing track” of trillions:

  • In 2001, Donald Rumsfeld admitted the Pentagon couldn’t account for $2.3 trillion.
  • Catherine Austin Fitts, former HUD Assistant Secretary, has documented the “missing money” schemes siphoning public funds into off-books projects , believed by many to fund secret space programs, underground bases, and elite escape plans.

5. Land, Media, and Pharma Ownership

A handful of investment firms, BlackRock, Vanguard, and State Street, now collectively own controlling stakes in:

  • Over 90% of U.S. media
  • Most pharmaceutical companies
  • Key military contractors
  • Major agricultural companies (including those producing GMOs and pesticides)

They also control massive real estate portfolios , quietly buying up farmland, housing, and critical infrastructure worldwide.

6. The Vatican’s Hidden Fortune

The Vatican Bank holds untold billions in gold, real estate, and art. Documents have shown it profited from wars, colonial plundering, and financial schemes. Rumors persist about secret underground vaults loaded with treasures taken during centuries of conquest and conflict.

Why Is This Hoarded Wealth a Problem?

Because it’s not idle money — it’s used to:

  • Control governments through campaign funding and lobbying.
  • Manipulate markets via hedge funds and currency speculation.
  • Fund social engineering through foundations (think Gates, Soros, and Rockefeller initiatives).
  • Suppress new technology that could liberate humanity (free energy, advanced medicine, etc.).
  • Drive wars and migration crises to destabilize nations and consolidate power.

And while the average person struggles with inflation, debt, and taxes , these entities hoard enough wealth to end global poverty dozens of times over.

The idea of a global elite controlling humanity through debt, manipulation, and hoarded wealth isn’t a theory. It’s a fact that history’s empires have always functioned this way. The names and technology have changed, but the strategy hasn’t.

And when the people finally see how it works, it falls apart. Every time.

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How has the financial sector changed since 2009?

Since the 2008 crisis, four huge shifts take place that define the modern financial industry:

(1) Private Equity and Alternative Credit

Due to the strict regulatory policy adopted after the crisis, the post-2008 banking sector was uncompetitive relative to the pre-2008 banking sector, with the aggravating circumstance that the banks that survived the crash were buried in debt and deeply exposed in regards to their internal control mechanisms. In this context, the industrial sector sought for alternative, non-bank financing methods; namely private equity and alternative credit, with the latter occupying the power vacuum left by old-fashioned moneylenders that had been wounded by the housing market crash and the former constituting a revolutionary way of investing in company stock.

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(2) Passive Investing: Index Funds and ETFs

The most iconic finance job ever, the stockbroker, pretty much suffered its extinction during the 2008 crash. This opened the door for automated forms of investing in which the role of the intermediary – the broker – became trivial. Instead of investing on specific companies due to shareholder expectations of growth and performance, investors shifted towards large diversified funds listing hundreds of companies and tracking their growth over long periods of time. The vast majority of portfolios rarely list individual company stock anymore; instead you’ll find passive investments on the S&P 500 or similar indexes.

(3) The Fall of Public Pension Plans

The pre-2008 get-rich-quick culture came to an end long ago, with the exception of online quasi-scams and compulsive gamblers stepping out of casinos and into the stock market. Nowadays, equity investments are much more sober, striving for low returns on the short term, but large gains in the long run due to compound interest. This focus on long-term wealth planning is but a consequence of the overall lack of confidence in the solvency public pension plans – a very reasonable public sentiment that has grown especially amongst young generations and that has pushed them to rely on private retirement systems.

(4) Democratization of Access to Alternative Investments

While fee compression already democratized the access to the stock market, small investors were still excluded from alternative investments such as private equity and venture capital. With the rise of alternative credit (as detailed in point 1) private equity funds did not only lower their minimum capital requirements, but we also witnessed the appearance of “feeder funds” aimed at collecting cash from small investors in order to meet the capital requirements of actual private equity funds. In occasions, markets have even experienced feeder funds of feeder funds, or feeder funds creating ETF-like portfolios combining investments on several private equity funds, such as EQT.

Summary

The financial sector is arguably a more mature sector due to developments taking place since the 2008 crisis. This is mainly due to automatization of middleman roles and thence a democratization of access to investment opportunities, a soberized portfolio management culture, the rise of non-bank financing methods, and a declining confidence in public pension plans.

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