Thoughts on Coming Apart and the Coming Great Reset

Turning and turning in the widening gyre
The falcon cannot hear the falconer
Kit Webster
Themes and Theses
Why I'm Contemplating Out Loud
(Initially formulated in the early 90s, following decades of reading history, philosophy, religion, psychology and a lot of contemplation, particularly on the subject of cycles. In the end, this is a relatively straightforward story about human nature and of history rhyming.)
The US will enter a period of crisis in the early 2000s. In the late 90s, I incorporated Strauss' and Howe's terminology of the Fourth Turning (without incorporating their generations paradigm) and agreed with Howe that the end stage of the crisis began with the Great Financial Crisis and would last into the early 2030s. We are now at the beginning of the end stage of the crisis.
The crisis will be serious and could be existential.
Internal strife will increase, up to and including secession and civil war.
International conflicts will increase as the vacuum created by the weakening of the US is filled by other players.
There will be many threads to the crisis, but the primary thread will be debt, deficits and entitlements. Other factors include, eg, demographics, a loss of meaning and myth and a loss of self-discipline.
Politics will move leftward as citizens look for some refuge from the chaos. The US will become increasingly susceptible to a (man) on a white horse, who can come from either the left or the right.
Inflation, as the most likely way to address debt since austerity is not politically acceptable, will significantly lower standards of living, exacerbating the civil crises.
Eventually, the dollar will be inflated away and lose its reserve status.
Once the old rot is cleared out, and assuming continuity, there will be the basis for the establishment of a new order.
There will be what Strauss and Howe calls a First Turning . It will be constructed out of the physical infrastructure, wealth, energy sources, thoughts and values in the culture at the time. At this point in time, those components are unknowable. We can anticipate that the next five years or so will be increasingly chaotic. We can anticipate that there will be destruction, and then reconstruction from some level. We cannot yet anticipate the form of the reconstruction or the level from which it will begin.
(Added around 2020) The loss of faith by our youth in our founding principles means that the new order will at least partially be based on new principles. As yet, I have no visibility as to what those principles might be.
(Added in the early 00s) While humans are contributing to global warming, policies implemented to address manmade global warming will create a significant energy crisis, probably toward the end of the Fourth Turning.
(Added in 2023) The lowering / elimination of standards in education, the judiciary, law enforcement, the military and other segments of our society will create a population unable to adequately comprehend, do or respond to the challenges of democracy and culture.
Glimmers of the First Turning
May 16, 2025
Quotes to Contemplate
We have still had very substantial inflation in the United States, but it's never been runaway…yet. And that's not something we want to try and experiment with, because it feeds on itself. I wouldn't want the job of trying to correct what's going on in revenue and expenditures of the United States — with roughly a 7% gap, when probably a 3% gap is sustainable. And the further away you get from that, the more you get to where the uncontrollable begins… It's a job I don't want, but it's a job I think should be done — and Congress does not seem good at doing it. – Warren Buffett
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Your empire is now like a tyranny: it may have been wrong to take it; it is certainly dangerous to let it go. - Pericles
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The West’s fixation on using sanctions to achieve geopolitical goals is one of the great mysteries of modern strategy. Much like advocates of renewable energy, proponents of this blunt diplomatic tool view each failure not as a reason to reconsider, but as an enticement to double down with more of the same. The effectiveness of sanctions is consistently overestimated, the ability of targeted nations to insulate themselves is underestimated, and the potential for blowback onto the sanctioning countries themselves is largely ignored. - Doomberg
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I don’t think people understand that even if Trump does a ‘deal’ with China, even if he retreats on tariffs, the game has changed and massive capital flight from the US is now unstoppable. - Ben Hunt
Summary of Primary Thoughts To Contemplate In This Issue
The ticking clock. In spite of the tariff agreement between the US and China, there is a hole in the flow of goods both ways that will show up in various ways over the summer. Everyone is scrambling to fill the holes.
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Trump is wreaking havoc with the world (economically - the foreign policy hits just keep coming). The big, beautiful tax bill seems to have $2 trillion deficits in it. Our Treasury bond market is tottering. So, technically it looks like a bull market and I am confused. We are at a critical juncture - the markets will probably go down from here in the short term, and then we will find out whether bull or bear. The continuing monstrous budget deficits will soften many blows ... until they don't.
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The coverup of Biden's issues led to serious credibility issues with the Executive Branch.
Glimmers of the First Turning
The end of the Fourth Turning is still ahead of us, maybe as much as a decade.
I have been trying mightily to think about what the First Turning - a time of renewal and rebuilding - will look like, without much success. There will just be too much chaos and too much change between now and then.
Literally everything is up for grabs.
But, for the moment, let's put aside all of the really bad outcomes and focus on what a future might look like, assuming infrastructure and energy and food supplies remain relatively intact.
Let's start by reviewing previous ends-of-Fourth-Turnings / beginnings-of-First-Turnings. Let's think about the profound change during each Fourth Turning.
Strauss and Howe mark the end of the first of America's Fourth Turnings as 1794. That Fourth Turning began in 1773. The Colonists had some disagreements with the Crown, but essentially everyone who sought independence, and they were in a distinct minority, thought that it was their state that would become independent. A United States was all but unimaginable. By the end of the Fourth Turning, a war had been fought, the mightiest army on Earth had been defeated, the states had united and a fledgling country had been born based on a Constitution and Bill of Rights.
The next Fourth Turning ended with the ending of the Civil War.
Before the Civil War, few thought slavery would be ended. Lincoln campaigned on stopping the expansion of slavery into new states; he did not campaign on the abolition of slavery. By the end of that Fourth Turning, some 600,000 people had died, the South was economically devastated and slavery was abolished.
The next Fourth Turning ended at the end of World War II. The beginning of that Fourth Turning was at the end of the Roaring 20s - a time of hedonistic excess. By the end of that Fourth Turning, we had endured both the Great Depression and World War II. At its beginning, Hitler had not yet gained power in Germany. Another outcome was that the United States had been fundamentally changed. From a country that valued states' rights and sturdy individualism, it had become centralized and increasingly socialized. Our Founders, for better and for worse, would have been astounded to see the 20th century United States.
Which brings us to today and the difficulty of even imagining the magnitude of the changes that are likely in our future.
Which does not prevent a little, low confidence speculation.
Essentially all of my contemplation has been about the current Fourth Turning. I have speculated that current institutions are dysfunctional and must be at least reconstructed if not torn down and replaced. I have also speculated that Fourth Turnings are ripe for (men) on white horses. It is an overstatement to say that Washington, Lincoln and FDR were autocratic, but you can see it from here. All three backed off when the task was done (well, actually, two died) and democracy was either initiated or reinstituted. We don't talk about it much, but it is only because of his extraordinary character that Washington did not become king. FDR, however, literally became president for life and his death allowed the system to start functioning again.
So, I would guess that we get a man on a white horse and will see where that leads. Trump is doing a good job of trying to be a man on a white horse, but he has appeared too early in the turning. The ground does not yet seem well prepared for autocracy. (An oligarchy is also a reasonable alternative.)
Another of my speculations is focused on our younger generations' frustration with the values, norms and structure of our culture. They do not understand the precious fragility of the freedoms we have. What they see are the messiness and the downsides. It is not clear that the Constitution survives as the foundational document of the coming First Turning.
We talk about creating a new Constitution, but that will be extraordinarily difficult. Our current Constitution was heatedly negotiated behind closed and locked doors, by a bunch of English white guys - and Hamilton - with no media presence. If there is some major threat or emergency, perhaps, but otherwise, I give it a snowball's chance in hell.
We also have two examples of cultures that decided to tear everything up and start over again at Day 0 - the French and Russian revolutions. Neither of those show much promise as role models.
Autocrats and oligarchs do not need constitutions.
I have speculated that the world's financial system will be fundamentally changed. The dollar may remain as a reserve currency, but only as one of several. The accumulated worldwide debt must be dramatically reduced to prepare the field for future growth. I think inflation will be a major weapon in this fight, but in any event, a lot of wealth must disappear.
Beyond that, the Oracle of Delphi was kind enough to give me a pair of her doves, so I could take a look at their entrails. Here's what the doves had to say.
I have discussed environmental and resource challenges in these spaces, but particularly in a book I wrote and released several years ago. These issues will increasingly be included in the future institutions and culture, but it is not clear to what extent. In a crisis, particularly an existential crisis, one does not think of whales. That would come during the Second Turning.
It is likely that our current moral and spiritual vacuum will be filled with something. As part of my return-to-basics theme, there could even be a spiritual re-awakening and flourishing of religion(s).
The primary thing the doves said was that there will be a return to small-c conservatism. Back to basics.
It is ironic that humans know the right thing to do, but the alternative is often more fun.
One of my slogans is that sex, drugs and rock and roll win every time.
But, that is no way to nourish human flourishing.
Let's change the primary metaphor from doves to pendulums.
Simplistically, since we have been focusing on individualism and identity, it is reasonable to think that we will turn to hard work, responsibility and valuing the collective. There will be time enough for hedonism in later Turnings.
Particularly interesting will be the roles of the family and of children in this new world.
It is ironic that changing society to provide for females to fully participate has, as unintended consequences, the significant devaluation of both the family and children. (Perhaps the ultimate irony is that the sexual revolution has led to people having less sex. As part of an overall theme I have not quite gotten my head around, there is less sex, but women are participating more fully when they participate.)
I speculated on this some time ago in a piece titled "You Only Had One Job," but we are basically creating a culture that does not create humans. Current trends literally lead to the extinction of the human race (never, never extrapolate these things forever - new forces will inevitably arise).
We value our individuality to the point of destruction of our existence.
Clearly, that has to stop, which has profound implications for self-fulfillment of females, and also for gender relations.
I have no idea, but we have created an "unnatural" situation that must change.
As I look back on Western history, the family has been a consistent, key feature of each culture, as has the suppression of women. Today, as we both highly treasure children and abort them en masse, we forget that valuing children and child development are also recent in human history. Children were variously expendable, labor for the farm, beings to be sent to boarding schools ... Emotional development was essentially never on anyone's list.
And, still, humanity continued and thrived.
We are unlikely to re-create any of these, but my point is that most of our assumptions about the way the world should work are fundamentally different than they were in the past. Clearly, if we are not to adapt an old model, we are going to have to create a brand new one.
Finally, I should speculate on the role of AI.
Unfortunately, I am in the camp that AI will upend our assumptions about employment and work. AI could even be an existential threat.
I have spent a good deal of time thinking about a world in which work is unavailable, either because existing resources will not support it or because AI has taken much work away - I will discuss these thoughts another time.
Since many humans get meaning and self-worth from work (together with taking up time (one day I will talk about the critically important topic of how we fill up time)), a world with little-to-no work will be a profoundly different world, inhabited by beings who will have redefined what it means to be human.
That's as far as I have gotten. There are too many contingencies for me to have a clearer view, and it is not obvious that things will become clearer anytime in the near future.
We are simply on the cusp of profound change.​
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Partial segue.
Remember Pippa Malmgren and how I think she waivers between brilliant and bonkers? Well she has another tome out.
Those who do not follow history may not realize that, at least in the US, we go through religious awakenings on a regular basis. Google describes four such Great Awakenings in our history.
A religious awakening could provide the basis for a principle around which various identities could rally and also small-c conservative values.
Through a glass darkly - I have no idea, but it is an intriguing idea I will keep track of.
Here's Pippa: "But, what religion has to do with the world economy these days. The answer is everything. Our beliefs shape our economies and our geopolitics. A peace movement is rippling through the Christian and Islamic worlds and amongst the young worldwide – the young in America, the young in China, the young in the Middle East, including Israel, and amongst the young in Europe too. The “No More War” Movement is gaining momentum. It now has religious leaders advocating for peace and intermediating between nations that are at, or on the brink of war. President Trump is surprising everyone by making alliances with religious figures and foreign warlords while turning the sniper scopes onto America’s home-grown warlords."
The Biden Thing
Books are starting to come out about how mentally impaired Biden was, who knew it, and how it was all covered up.
In spite of generally being written by Democrats, these revelations are a Republican's dream. Essentially everything you can imagine about the situation is correct. It is even worse than we thought and the coverups were extensive.
I began discussing it in 2019 and it was clearly signaled by Biden's campaign from the basement. If it was clear to me, it should have been blazingly obvious to Washington insiders and the press.
We had a coverup of epic proportions in which politicians, the press and "regular" people were coopted. We had a hijacking of government of epic proportions.
All of this is great soap opera, but it has profoundly serious implications.
The man elected to run the Executive Branch of our government was incompetent to do so. The cliche is that this is the guy with his finger on the nuclear button.
Someone else, or some group, some unknown, unelected someone else or unknown, unelected some group was actually running the country, subverting our entire process.
So far, these revelations do not discuss how decision-making was done.
But from energy policy to free money to freezing Russian reserves, these people permanently changed the course of our country and the world. And because Congress had both vacated the field and its Democrat members were part of the subversion, their plans were effective. By increasing authoritarianism and pursuing such policies as forgiveness of student debt, particularly in defiance of the Supreme Court, they laid the groundwork for Trump.
And, today, only a group of hardcore Democrats does not wonder about the functioning and integrity of the Executive Branch during the Biden administration.
The moral and emotional wounds may be more consequential than some of the misguided political actions.
I'm going to butcher this story, but it seems that some British group was about to commit an atrocity, perhaps in India. They would get away with it, without question. A British commander called the action off. His point was that performing the act created a wound on the souls of the perpetrators. It was not just the Indians who would be harmed, which was horrible, but the British would become lesser men, and atrocities would become normalized.
Exactly.
Markets
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> No change in outlook.
> Last week, I discussed how no one looks at the plumbing of the financial system, but that it is complicated and it is beginning to leak. I am probably being uncharitable when I say that most of the Trump administration does not think about second- and third- order effects of actions, but, at the stakes that are being played, they can be profound.
I am not being rhetorical when I say that Trump's tariff plan will literally break the world. Here is how Ben Hunt described the tariff crisis and how we came close to the brink.
"A one-week 65 basis point [two thirds of one percent] increase in US long-term interest rates in the face of a dramatic global growth slowdown is an impossible thing. Impossible, that is, if global capital believes that the United States is good for its debts. Impossible, that is, if global capital believes that US debt obligations provide the risk-free rate for the world.
“But it wasn’t impossible. It happened. The US Treasury market—the touchstone of every loan in the world, every insurance policy in the world, every equity valuation in the world—broke last month, and it broke because the full faith and credit of the United States came into question.
“The break was temporary. After the initial Treasury crash on Monday, April 7, and Tuesday, April 8, the Trump administration rushed to say, ‘Haha! Just kidding about those reciprocal tariffs on everyone!’ and folded a lot of its cards on Wednesday, April 9. It folded still more of its cards the following week after a resurgent Treasury crash that Friday, April 11.
“Why did the administration fold most of its tariff cards? Because another one-week 65 basis point increase in US long-term interest rates would break the world. Seriously, everything would break. Every insurer would be in regulatory forbearance and would need to raise capital, and so would most banks. The dollar would crash. Equity markets would crash. Lending and credit would come to a screeching halt. The Fed would be forced to engage in what’s called ‘yield curve control’ where they would flat-out buy (and effectively force big US banks to buy) these 10-year and 30-year Treasuries in order to keep their value propped up and their interest rates tamped down. Would that work? Probably. For a while. Maybe."
As we continue, I'm afraid the world will get an education in financial plumbing that it would rather not have.
> I wouldn't blame you if you are not keeping track, but, as things stand - and they can change dramatically - the budget bill being put together pretty much maintains the deficit at around $2 trillion. Trump and Congress are basically moving around the deck chairs.
So, You Say You Want A Revolution?
> The Empire strikes back - with litigation as far as the eye can see.
- Supreme Court extends freeze on use of wartime law for deportations.
- The Agriculture Department will restore climate change information that it had removed from its website, after farmers and environmental groups sued.
- A group of Democratic attorneys general from 20 states filed two lawsuits against the Trump administration on Tuesday, alleging that the White House threatened to withhold federal funds from the states unless they took specific immigration enforcement measures.
- U.S. District Judge Stephanie Haines ruled Tuesday that the Trump administration can use the 1798 Alien Enemies Act to deport alleged Venezuelan gang members. However, the administration must allow the individuals 21 days to file a lawsuit challenging their removal. The order—which applies only to Haines’ Pennsylvania district—diverged from decisions by three other federal judges, who deemed the administration’s use of the authority unlawful.
> The US and China reached a 90-day tariff deal. The U.S. said its tariffs on Chinese goods would be 30 percent, instead of 145 percent. China’s rate on American goods will be 10 percent, down from 125 percent.
> I'm shocked, shocked - Trump will accept a luxury jet from Qatar to be used as Air Force One, then transferred to his presidential library for personal use. The Emoluments Clause of the Constitution, specifically Article I, Section 9, Clause 8, prohibits federal officials from accepting gifts, emoluments, offices, or titles from foreign states without the consent of Congress. Fascinating disputes cropped up (again, I'm shocked) about how the gift is not to Trump but the country and whataboutism regarding Clinton and Biden. I will provide the answer - this transaction stinks.
> But this is a GREAT question from X (Preet Bharara) - Can girls have 30 dolls if they’re a gift from Qatar?
I am unworthy of standing in the presence of that magnitude of wit.
> Marjorie Taylor Greene is turning on Trump. She has used social media to fire a series of warning shots to the Trump administration that the party has lost touch with its base by wading further into wars in Ukraine or Yemen, and threatening military action in Iran. MTG may be my least favorite person in Congress, although it is a target-rich environment. But, since she has been such a rabid Trump supporter, and since Trump cancels people who say things like this, this could be a genuinely interesting turn of events.
> Trump has sat for only 12 daily intelligence briefings since taking office.
> The Department of Homeland Security launches investigation into the state of California for providing criminal aliens with federal benefits.
> Trump has signed the executive order lowering prescription drug prices by up to 80%. I don't understand the nuances, but the premise seems reasonable - quit having Americans subsidize the rest of the world's drug prices. Charge Americans basically a world price. Even for your humble, free-market author, this seems reasonable, given the barriers of national regulation of drugs. However, I'm missing something. Stock prices of drug companies increased on the announcement. Maybe that's just a case of - it could have been worse. The Economist says - "There are many problems with the plan. It ignores the fact, for instance, that generic drugs, which make up 90% of prescriptions in America by volume, cost around a third less than in other rich countries, according to the rand Corporation, a think-tank.
Branded drugs, though, are more than four times as pricey in America as in comparable markets. But pegging prices to those abroad may not achieve the president’s aims. America is by far the biggest market for most drugmakers, accounting for around two-fifths of sales and two-thirds of profits for the industry (see chart). Rather than cutting prices there, many firms would raise them abroad and perhaps pull out of some countries altogether, meaning Mr Trump’s policy would shrink their businesses while doing little to lower health-care costs in America."
> As part of its quarterly refunding announcement, the Treasury surprised the market when it unveiled a funding need for the current quarter that was $53 billion lower than it had initially forecast in February, and which we said "indicates that DOGE is indeed working and the US funding needs are actually declining."
> Uh oh - Donald Trump was filmed falling asleep during a briefing with Crown Prince Mohammed bin Salman in Riyadh, Saudi Arabia, Tuesday. Trump could be seen shutting his eyes and jerking awake.
> Just when you think things couldn't get worse - The conservative activist named by President Donald Trump as the head of the Justice Department’s “Weaponization Working Group” said Tuesday he planned to “name” and “shame” individuals the department determines it is unable to charge with crimes, in what would amount to a major departure from longstanding Justice Department protocols.
> Donald Trump signed a $1.2 trillion deal with Qatar in Doha on Wednesday. The agreement includes a record-breaking $96 billion order for Boeing and GE Aerospace to supply up to 210 aircraft to Qatar Airways.
> Walmart announces it is raising prices due to Trump’s tariffs. “Given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” Walmart CEO Doug McMillon said
Short Takes
> Dr. Pepper just replaced Pepsi as number 2 in the soft drink wars.
> Remember - he is a member of the Labour party - In the latest sign of rising anti-immigrant sentiment in the United Kingdom, Prime Minister Keir Starmer announced measures to reduce annual net immigration by 100,000 by 2029. The plan includes banning recruitment of care workers from abroad, cutting access to visas for skilled workers, and increasing English language requirements for all work visas. Net immigration into the UK reached a record 906,000 in the 12 months to June 2023.
> Who knew? New York Times Headline - Boys are more disruptive in school.
> He's running for President, you understand - Gavin Newsom has asked hundreds of cities and counties to ban homeless encampments on public land.
> Big, if true - CEO of Russian energy giant Gazprom Neft sounds the alarm - Russia's cheap oil reserves nearly depleted.

> About 80,000 people died from drugs in 2024, according to federal data released yesterday. That’s a decrease of nearly 27% from the previous year.
> CarbonBrief - For the first time, the growth in China’s clean power generation has caused the nation’s carbon dioxide (CO2) emissions to fall despite rapid power demand growth.
The new analysis for Carbon Brief shows that China’s emissions were down 1.6% year-on-year in the first quarter of 2025 and by 1% in the latest 12 months.
Electricity supply from new wind, solar and nuclear capacity was enough to cut coal-power output even as demand surged, whereas previous falls were due to weak growth.
Miscellany
I have attached a video along with this newsletter. If you like Monty Python, you should watch it; if not, not.
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They can retire the clickbait trophy.
Headline - Scientists calculate when the universe will end — it's sooner than expected - this one has shown up in several places around the internet.
Spoiler alert - "Sooner" still means a mind-bending 10 to the power of 78 years from now. That is a 1 followed by 78 zeros, which is unimaginably far into the future. However, in cosmic terms, this estimate is a dramatic advancement from the previous prediction of 10 to the power of 1,100 years, made by Falcke and his team in 2023.