Tuesday, March 30, 2021

Glenn Campbell's "Tweet Albums" — Master Index of My Photo/Video Collections on Twitter

"Tweet Albums" are Twitter-based archives of my own photos and videos on my @BadDalaiLama account. Each "album" consists of a 🧵 of tweets organized by state, country or topic. Each album begins with a header tweet (tagged with #gpc_TweetAlbum) to which additional videos and photos are linked. Every thread is open-ended and I may add more to it at any time. [See bottom⇩ for more notes.]

A similar concept is followed in "Tweet Essays" which are text-based. They are listed in a separate Master Index of Tweet Essays.

My @BadDalaiLama Twitter Account contains a lot more that Tweet Albums. My bons mots go all the way back to 2010.

For more about me and access to my vast oeuvre, see my home page: Glenn-Campbell.com

📜 Album Index

  • 📇 Album Master Index - #de_AlbumIndex 2021-03-19 ✓ - An album of albums. Every other Tweet Album is retweeted here once, generally in the order in which the album was created.
  • All #gpc_TweetAlbum header tweets, latest first.

🌎 Countries & Overseas Regions

🇺🇸 USA States & Regions

🐶 Topics

🎡 Local Attractions

🛫 Tweet Essays Concerning Travel

📝Notes on Tweet Essays and this Index Page

  • Each entry below leads to the header tweet for that series. 
  • Each header tweet has a unique hashtag beginning #de_ or #gy_. The provides an alternative way to find the header tweet if you don't have the URL. It could be useful for referring to the album in you own tweets or finding the header in case you have only a printed version of this post.
  • The date (2021-03-20) indicates the date when the thread was started, but tweets can be added long after. No Tweet Album is ever "finished".
  • A checkmark✓ indicates that the thread includes a link to the Master Album as well as to this Blog Index. I have also confirmed that it is included in the Master Album and has been retweeted on @DoomLite.
  • The short link for this blog entry is j.mp/gpc_tweetalbums
  • Album header tweets usually contain links to my relevant Facebook albums (dating to 2008) and Instagram hashtags (dating to June 2013). YouTube playlists and Twitter searches are usually provided in a separate tweet.
  • My Tweet Album format was started in March 2021, but material can be drawn in from anytime in the past.

Why I Created Tweet Albums

I created the Tweet Album and Tweet Essay format to draw together all of my past and present work from multiple social media and website sources. I am active on Instagram, Facebook, YouTube, Websites and many minor formats. Tweet threads are supposed to be a way to tie them all together.

Of all the social media formats around today, I think Twitter is most likely to last. (For example, I think Twitter is more likely to be around 20 years from now than, say, Facebook.) Although my own body will eventually give up the 👻, it is my hope that my Tweets outlive me.

Wednesday, March 24, 2021

56. The Zero-Inflation Theory: New Insight on a Collapsing Economy

This is the transcript for my Demographic Doom Podcast episode #56, released on 30 March 2021. The "home page" for this episode—with annotations, links, corrections and a place for comments—is the YouTube version (39 minutes). The audio version is housed at Podbean and is available on most major podcast platforms, including iTunes and Google Podcasts. The main website for this project is DemographicDoom.com. Twitter: @DemographicDoom. Glenn's home page: Glenn-Campbell.com

This is the original script, written before recording, corrected after release to reflect the final version. 

I'm Glenn Campbell. I call myself a demographic philosopher. I'm looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, like aliens would see us from space.

In this episode, I'm looking at the giant elephant in the room that threatens us all: That's a massive monetary collapse caused by rampant government debt and money printing. I have a new theory about why there is no consumer inflation in spite of all this created money, and it suggests a mechanism for the final collapse.

My inspiration for this episode is the recent Biden Administration Coronavirus Package, which is supposed to provide aid to the most vulnerable Americans after the economic devastation of the Covid-19 pandemic. I'm not going to analyze the contents of the package except to note that it involves sending direct payments of $1400 to most US taxpayers and the fact that it costs $1.9 trillion. I'm mainly concerned about that cost. How it's going to be paid for, and the bottom line is: It won't be paid for—not now or ever. 

This $1.9 Trillion is borrowed money that can never, ever be repaid. It is physically impossible, because the government hasn't balanced its budget in 20 years, let alone paying down its debt. 

There was a time, around the turn of this century, when the government did balance its budget, albeit briefly, during the Clinton Administration, but it can't do it again due to our deteriorating demographics. Twenty years ago, the Baby Boomers were at the peak of their earning power and their taxpaying power, and today they're just a drain on us all, paying less tax and drawing on more government services, so the idea of a balanced budget just isn't possible anymore. This condition is destined to persist indefinitely: that is, there are going to be too many old people and not enough young people to replace them, and as long as that's true, the government can't balance its budget and the debt just grows and grows.

Official government debt has grown from about $22 trillion before the pandemic [correction: ~$24T] —already an unsupportable amount—to something like $27 trillion now and certainly well over $30 trillion by the end of 2021. In addition, there’s unofficial debt, called “unfunded obligations”, which is debt that we know is coming down the line at us but that isn't on the books right now. By some accounts, the US government is $50-100 trillion in the hole, with that debt growing rapidly, and its income is only about $3 trillion—that's the [annual] amount it collects in taxes. In the end, all this debt will be funded by money printing—that is, the government or Federal reserve just inventing money out of thin air.

Every government that issues its own currency is tempted to print more money to pay its bills. This sin dates back to the Roman era, when the currency was silver coins called the Denarius. Back then, the government cheated the system by progressively reducing the silver content in the Denarius, replacing it with base metal—in other words, a physical debasement of the currency. 20th Century governments did the same by simply printing more paper currency to pay their bills, and in modern governments, money is created electronically without the inconvenience of actual paper.

Historically, this has always resulted in inflation, even hyperinflation, as happened in Venezuela, in Zimbabwe and Weimar Germany and countless other banana republics. In our banana republic, inflation hasn't really happened yet, at least in consumer staples, and it has been a bit of a mystery why not, since the US government is printing money on similar scales.

That's where my theory comes in. I call it the "Zero Inflation Theory" because it proposes that large amounts of money can be printed without inflation. Now I'm not talking about Modern Monetary Theory here, which seems to propose endless amounts of money can be printed with no negative consequences. I am suggesting disastrous consequences for money printing, but it doesn't have to involve consumer inflation.

The alternative would be a massive asset crash. Imagine stocks, bonds, real estate and other assets all collapsing at once or in rapid succession—I mean like falling 60% or more in dollar terms. This would be devastating for the people who own the assets, but it would not result in the debasement of the currency. On the contrary, it could result in the strengthening of the currency as investors desperate to get out of the market scramble for cash instead.

Under this theory, all the new money the government has printed has flowed into assets markets—like stocks, bonds and real estate—creating these huge asset bubbles instead of consumer inflation. The end game is that all those asset bubbles is that they simply pop. Markets will collapse just like they did at the beginning of the Great Depression.

Now this isn't a new prediction. I've been making the same prediction on this podcast since the beginning a year and a half ago, and many experienced investors have been doing the same. Due to policies of the Federal Reserve—including both money printing and artificially low interest rates—stocks and other assets are vastly overvalued right now, at least by any traditional metric. Whenever assets are overpriced, there's going to be a reckoning—a crash of some kind—where prices return to reasonable and supportable levels.

My only new insight came to me about a week ago. I'd like to say I was in my bathtub when it happened and I jumped up and cried, "Eureka!" but I don't know where I was, and I haven’t taken a bath in a bathtub for ages now.

My insight was, "Eureka! That's where the money is going to die: in the stock market!" So what will happen is that everybody and his brother will put all of their money into the stock market, as they are doing now, and all of a sudden prices crash and everybody's money goes away. It's like—Poof!—by magic, all that money that the Federal Reserve printed suddenly goes away. It vanishes.

So in other words, to avoid inflation, you have to have a balance of the creation and destruction of money. If something creates money, then some other process has to destroy money, or you get inflation, because you've got more money chasing fewer goods.

Now we know that the government and Federal Reserve create new money, but they generally don't destroy it. The Federal Reserve is capable of destroying money, by selling bonds it already owns, but the Fed isn't the only entity capable of [it]. And you and I can destroy money simply by burning it. Let's say you take all the paper money in your wallet, crumple it up, set fire to it, and—Violá!—you've done your good deed for the day by reducing the money supply.

Of course, people won't burn their own money voluntarily, so the markets have to do it for them. Another way you can destroy money is to put it into stock markets just before the markets crash. I had friends who did this just before the Dot-Com bubble and the Global Financial Crisis. I remember trying to warn various friends when they talked about the hot stock market they were into, and I don't think they heard me. The Siren's call of a rising stock is too powerful for the average investor to resist. 

Traditionally, what's bad for one asset is good for another, but I think it's possible for all assetsto crash all at once. Imagine stocks, bonds, real estate, gold and even bitcoin all collapsing simultaneously or in rapid succession. Given all the creation of money, a corresponding destruction of money needs to happen to restore stability to the monetary system, and this is how it could occur. If the Federal Reserve doesn’t have the discipline to to it, then Nature will step in and an asset crash to take care of things neatly.

In the sort of broad-based crash I’m proposing, nearly all investors lose, but the buying power of the US dollar holds steady, because the fall in assets would effect remove from circulation all the new money the government has created.

How would a crash happen? All you really need for it is a stock investors lose faith, which can happen in an instant. There may be precipitating events—some sort of world crisis—but that main thing that fuels financial collapses is shift in thinking by investors—from greed to fear, so to speak—and this can happen rapidly and without warning. I could even happen in a period that looks optimistic on the future, like the one we're in now.

Right now, in late March 2021, it appears that the pandemic is drawing to a close, with vaccines being widely distributed. I got mine about a month ago as a former cancer patient, and soon everyone will be eligible. This ought to be good news, right? The assumption now is that life will go back to normal—but only in the sense of the animals returning to the forest after the forest fire. The Covid Relief Bill is supposed to help get the country back on its feet by providing various forms of direct and indirect aid to Americans. 

For example, most Americans and their dependents are getting $1400 direct payments—added to their bank account or sent to them in a check. This is what economists call "helicopter money", where money is dropped from figurative helicopters to try to stimulate the economy. The most important issue to me is the fact that the $1.9 trillion is completely unfunded. None of it is coming from collected taxes. It is 100% borrowed, and that money theoretically has to be paid back by future generations.

So how much is $1.9 trillion? First of all, let's be honest call is $2 trillion, which is close enough for government work. No government program even comes in under budget, so $2 trillion is the minimum the government can be expected to spend, above and beyond what it normally spends in a pre-pandemic year.

For perspective, before the pandemic, the US Federal government spent roughly $4 trillion every year while collecting $3 trillion in taxes. That means that the government has been borrowing $1 trillion every year, even in supposedly good times. In 2021, as in 2020, the government is on track to spend roughly twice as much money it collects in taxes—that is, spending about $6 trillion on a tax income that's barely $3 trillion, and the entire shortfall is borrowed and ultimately printed.

The mechanism for this is that the government issues bonds—or pieces of paper promising to pay in the future—and investors buy those bonds, giving the government cash in return. Sometimes, the Federal Reserve will buy the bonds itself and issue new currency in exchange, and this is formal money printing, but to me this final step is inconsequential. In my view, the money is created the moment the bonds are issued [see caveats in video description], because investors trade these bonds among themselves as though they were cash—like $10,000 bills. You hardly get any interest on them, so that's all that bonds are nowadays: $10,000 bills where you can store your cash in a supposedly "safe" form.

Since the government had been spending more money than it makes for two decades now, a mystery among experienced investors and economists is why there hasn't been any consumer inflation, and that’s the question I’ve been pondering for months now.

Now in my own little world, my own gauge for inflation is the Dollar Tree stores that I visit every few days while traveling. Everything in the store is one dollar—absolutely everything—and these stores have been selling roughly the same products since the 1980s. If there were significant consumer inflation, they'd have to change their pricing model, which they haven't had to do so far. In fact, Dollar Tree stores seem to be prospering. There's more of them now in America than McDonald's restaurants, and they are especially well patronized in bad economic times like these. 

My latest theory says that Dollar Tree will NOT have to change its pricing plan anytime soon. Eventually it might have to, but not on the near term. Although the government is printing money at breakneck speed, an asset crash will soon take care of the excess, and dollars themselves—at least the paper kind—will hold their value.

Now I remember inflation from my own youth, when I saw the price of a standard candy bar, like a Snickers, go from 5 cents to 7 cents to 10 cents to 25 cents, and eventually stabilize at about $1 at the checkout, or a lot less if you buy in bulk. That's where prices have stayed for consumer goods since the 1980s, as long as you shop at Walmart and not some high-priced neighborhood supermarket.

On that other hand, there has been substantial inflation in things like rent, health care, higher education and assets like stocks and bonds. The cost of buying a house or renting an apartment has gone through the roof, at least in the most desirable cities, so it isn't accurate to say there's been no inflation, just no inflation in mass-produced consumer goods.

And this is a key distinction. Consumer goods have held steady, while anything that you might buy and hold for investment purposes has inflated. Assets like stocks, bonds, real estate, fine art, gold and bitcoin have all exploded, and rents are high mainly because landlords have had to pay huge prices for their properties. All of these investable assets have gone up, commensurate with what you'd expect with all the money creation. Asset prices are in Zimbabwe territory, even if Dollar Tree prices haven't changed. 

Symbolic of asset inflation is stock prices. As I speak, US stock indexes like the S&P, remain near all-time highs, in spite of the pandemic that has severely depressed the underlying businesses that the prices are supposed to reflect. Of course, that may not be true by the time you listen to this podcast, sometime in the future, but it's true as I speak. 

So the economic disaster of the pandemic has led to the counterintuitive rise in stock prices, which I never would have predicted when the pandemic began. When stocks first dipped in March 2020, I was thinking, "This is it—this is the crash I was expecting," but the rout didn't last. Stocks didn't just rebound from their lows but surged to all-time highs. It was utterly insane.

So why has there been inflation in assets but little in consumer goods? I think I finally have a mechanistic theory to explain it, and to explain my theory to you, I want to go back to those $1400 checks that the US government is sending out to people.

The theory of helicopter money is that once people receive it, they're going to go out and spend it in the consumer economy, thereby stimulating it and putting people back to work. As a side effect of all this spending is supposed to be moderate inflation, since more moneywould be chasing fewer goods. 

But I believe that's not how real people are spending their $1400 checks. Most people are doing one of two things with their $1400: either they're paying down existing debt, or they're investing money in assets like stocks and bitcoin, neither of which simulates the economy or generates inflation.

Now for the sake of this argument, either you're rich or you're poor, and I define rich and poor in this context by how you use your stimulus check. Poor people have stayed alive during the pandemic by going deeply into debt. They've charged food to their credit cards, or they've paid for food by delaying on mortgage or rent. When their $1400 comes through, they're not going to buy more food. They're going to use their money to pay down back rent or pay down their credit cards. In fact, that's what I'm going to do, because I charged up my own credit cards during my cancer treatment last year. The $1400 is not going to change my buying habits, which remain pretty frugal.

Now this is something that has changed since the Great Depression. During the Great Depression, consumers did not have access to credit. If they didn't make any money, they starved. They didn't have credit cards to charge the food onto. They didn't have mortgages to a large extent. They had rent, and if they couldn't pay the rent, they got thrown out in the street. 

Today, what is different is everyone has credit, so in hard times everyone spends up their credit cards, and things don't work like traditional economists think they should. You've got this credit card buffer. So when the government sends out $1400, people just apply it to their credit cards and it doesn't stimulate the economy.

Now if you happen to be rich, you don't need the $1400 check, but it comes in anyway. Your credit cards are already paid, so what are you going to do with the money? You could spend it on something frivolous, like a vacation, but people are still hunkered down now and aren't taking many vacations yet. Spending even among the rich is pretty conservative right now. So what are these people going to do with the extra money?

Well, they're going to invest it, of course. "Investment" is seen to be a good word, because it implies that you are being sensible with your money and saving it for a rainy day. Today, it actually implies the opposite. It implies speculation: You're putting even more money into markets that are already in bubble territory.

These investments can take various forms: You can put your money into the stock market, which is easier than ever thanks to idiot-friendly apps like RobinHood. You can buy gold or bitcoin or some other vehicle that is supposed to preserve value—although it's still only the perception of value, since you can't eat gold or bitcoin or do much else with them. Even if you just leave your money in a bank account, you're making a speculative investment of sorts, because you're really loaning money to the bank so they can speculate with it.

Alternatively, you could take your $1400 out of the bank, turn it into 14 crisp $100 bills and store them under your mattress. Even this might seem like a speculative investment because you're gambling that $100 holds its value and will continue to buy you the things that it always bought you, but I'm actually beginning to believe that's the safest place for your money, as crisp $100 bills stored under your mattress.

There's a risk that inflation will diminish the value of those bills, but I think an even greater risk is that the institution you trust with your money simply collapses and you don't get your money back. This isn't supposed to happen with regular bank accounts, because they're insured by the government, but what if the government fails and can't fulfill its obligation? I say that's not out of the question, and failure is certainly certainly possible for any kind of investment fund, which has no insurance by the government.

I think the mindset of the average citizen right now is to put their money into stocks. They see the huge recent price gains and think, "I want a piece of that!" In theory, stocks are a hedge against inflation, because as the price of consumer goods goes up, so should stock prices. I can't give you a percentage, but many of the so-called rich people who don't need the $1400 are going to be putting it into stocks or bitcoin or something else ridiculous. Even some no-so-rich people are going to do it because of the huge apparent gains of recent months. It seems so much sexier to put your money in places where it can earn huge returns, rather than just pay off your debt. Some people are even borrowing money to play the stock market, and we all know where that usually leads.

So what will all this new investment do to the stock market? I say it's going to inflate it even more! In the next few weeks, as the $1400 hits people's bank accounts, I'm expecting even more stock market highs. The simple fact is, there are only so many marketable assets you can buy, and if there's more money chasing those assets, naturally prices are going to rise.

The destination of those $1400 checks gives me insight into why government money printing causes asset inflation but not consumer inflation. Money printing over the past decade has put more cheap cash into the hands of the investor class, who are tempted to speculate with it, while artificially low interest rates have pushed people out of so-called "safe" investments like bonds and into more speculative ones. The money gets plowed into various assets markets, from stocks to Bitcoin. So the speculative mania has been going on for several years, and now the government is making things even worse by sending out these $1400 checks.

I don't think there's any mystery about where manias end: They always end in tragedy. You just don't know when. Could be tomorrow. Could be months from now. Certainly the rise in stock markets in 2020 was something I never expected, and it has delayed the timeline, but it's still going to happen. Now in the past year, I've learned my lesson and now refrain from predicting when assets will crash, only that they will. As the old adage goes: "Markets can stay irrational longer than you can stay solvent."

My only insight lately is that now I see how a market crash—when it happens—can neutralize inflation by destroying money. The government creates money and asset markets will soon destroy it. We certainly have plenty of things to worry about when markets collapse, but I don't think inflation is one of them—at least at the beginning. Now after markets crash, if the government keeps printing, then there could be inflation, but during a panic, cash will be king.

And I have a related prediction: I'm thinking that there could be a shortage of paper currency coming soon, coinciding with the crash in markets. In fact, there was a shortage of coins a few months ago, near the start of the lockdowns, and many stores were asking people to use exact change or credit cards. That shortage seems to have been abated lately, perhaps as people get out more and start spending coins from their piggy banks. In any case, I don't see signs in the stores anymore asking for exact change.

What I'm looking ahead to is a time when paper bills—especially $100 bills—are in temporary short supply. This would happen when some store or other entity offers to give you more than $100 in value for your $100 in bills. For example, stores might charge one price if you pay by credit card but give you a substantial discount if you pay with paper cash. Some gas stations have been doing this for years, because it helps them avoid credit card fees, but if there's crisis, this policy could become a lot more widespread.

The reason I'm thinking this way is that when there's a panic, there's a race by investors to redeem their assets and turn them into cash, and if you’re really scared [and] you don't even trust your bank, you're going to want cash-cash, or paper money you can hold in your hands. That's when the $1400 you saved under your mattress might command a premium.

That's not deflation, per se, because eventually the Bureau of Engraving and Printing will crank up the physical printing presses and produce more $100 bills, but there could be short-term shortage of paper currency in a time of panic.

So what kind of panic am I predicting? An 80% drop in stock prices is not implausible. It has happened before—from the Roaring 20s to the midst of the Depression—and it can happen again. The key issue to me is that there is far more perceived wealth in the world than actual wealth.

I've discussed this in earlier podcasts—like Episodes 52, 40, 20, 7... If you think you're wealthy, it's because you own virtual title to money-producing assets, like rental property or ownership in a company or a government bond. And these things realistically cannot produce the future income that the current price implies. It's like a stock selling for 40 times annual profits when 10-20 times is more the norm. Sooner or later, markets have to settle back to a rational price, and it typically happens in a disorderly way—in other words, in a panic.

One of the factors that could help accelerate the panic is the ascendency of index funds—also known as passive investing—where people put their money in a single fund that buys all the stocks of a certain index, like the S&P 500.

These funds are supposed to mirror the performance of the index—which might have been true when they were a tiny portion of the market. Today, roughly 50% of stock market investments are now held in these kinds of vehicles. [See correction in video comments.] I repeat: roughly 50% or half of all investments in the stock markets are held in index funds. That's a huge amount. That means these funds aren't mirroring the market anymore. They are driving the market.. Their presence greatly amplifies any shift in prices—for better or worse. Index funds helped inflate the market during the past boom, and they will help sink the markets in the coming bust.

So if you don't know about index funds, let me give you a little primer. They hold only the stocks that constitute a market index, like the S&P 500 or the Dow Jones Industrial Average. If you put your money into these funds, the fund managers have no discretion. They have to go out and buy the underlying stocks, regardless of the price. Presumably, they do this on a daily basis, based on the cumulative inflows and redemptions on that day. Their demand for stocks in the index has nothing to do with how well each of the individual companies are doing. It's strictly a function of new investments comin into the fund. That's why it's called "passive" investing. No one is making any decisions—compared to active investing where a fund manager is looking at the actual performance and prospects of the company they are buying.

In the past few years, passive funds have vastly outperformed active ones. I think it's because active managers see how irrational current markets are and are sitting on the sidelines while passive funds are completely blind. The index funds form a self-reinforcing loop. As long as these funds go up, small-time investors keep putting money into them, forcing these funds to buy more stocks, which continues to inflate the prices of those stocks far beyond any normal valuation.

This is great for index fund investors in the upward side of the roller coaster, who experience these huge gains on paper. They don't realize that the same thing can happen in reverse: As soon as investors get a scared and start pulling money out of index funds, these funds will be forced to sell, which will accelerate the downward trend. As the market falls, more investors get scared and pull their money out, which forces more sales and further depress prices. It will be a self-reinforcing cycle that could really, truly end in a 80% collapse.

So that's what I confidently predict will happen. I just can't tell you when. One scenario says it will be soon. The pandemic generated a paradoxical asset boom, and solving the pandemic could do the opposite: triggering a massive bust in all asset classes. Huge amounts of wealth will be wiped off the face of the Earth, but in the process, a semblance of equilibrium will be restored to the monetary system.

What this would mean, in effect, is that all the past deficits of the US government will eventually be funded by the investor class, in the form of loss of wealth. All the rich people with asset investments will suddenly become a lot less rich—maybe 80% less rich. In effect, this will be their involuntary contribution to the US deficit.

There may seem to be some poetic justice in this—seeing the rich get their just desserts—but there will be plenty of collateral damage among the poor and the nation as a whole. First of all, asset markets aren't just funded by the rich. Your parents and grandparents probably have their retirement savings tied up in asset markets, mainly stocks and bonds but also the house they're living in. Think of the terrible position they'll be in if all of their investments crash by 80%. 

Even bonds will not be immune. As I speak, bond markets are also in a bubble. This is represented in ridiculously low yields for both government and corporate bonds. For example, the interest rate you might expect to earn on a 10-year government bond in times of low inflation is 5-6%. Today, it's less than 2%, or right around the official inflation rate. In other words, if you loan the money to the US government, you're getting virtually no return on it, despite the substantial risk of inflation sometime in the future.

A bond is little more than a $10,000 bill that you can store under your mattress, yet it's even less secure than a $100 bill, because the market value of a bond can fall. For example, you can buy a $10,000 from the government for $10,000 today but if the market yield subsequently goes up—say to 5%—the book value of the bond you already hold will go down to something below $10,000. So if Grandma and Grandpa are invested in government bonds instead of stocks, they could still lose money in a crash, just not as fast. And if they're invested in corporate bonds, the issuer could default altogether, and Grandma and Grandpa lose everything.

Once the crash begins, the end game is also hard to predict, but I'd say that a good reference point is the historical bond yields and asset prices of a fairly sane period, like the mid 1990s. Back then, yield for a 10-year bond was about 5-6% and stocks were trading at normal PE ratios—let's say between 15 and 20 times earning compared to about 35 or 40 times earnings today. That's what we can expect in a "rational" world, and it is not unreasonable to expect markets to eventually revert to that rationals level, and that means today at least a 40-50% drop in stock markets.

The trouble is, a rational world has simply become unsupportable now. For example, the current level of Federal debt is sustainable only if interest rates remain 2% or below. If the rate the government pays rose to the historical norm of 5-6%, most of the government budget would go to interest payments alone—dwarfing other expenditures like the military or social spending. Personally, I think the government should be paying even more than 5-6%, because it's a dodgy creditor. It's not that the government would default, because it can always print money to pay off creditors, but eventually there will be inflation, enough to wipe out at 5-6% interest rate.

My Zero Inflation Theory only suggests that there may be little inflation during a crash. There could be inflation after the crash, if the government keeps printing money, because it has no other way to fund itself. When all confidence in the government is lost, that's when you're in Zimbabwe territory.

The key issue is what happens to the US government if it doesn't have access to dirt-cheap credit. How will the government survive if it can't borrow affordably anymore? What happens if investors begin to realize what a dodgy creditor the government is? In that case, the government won't be able to rescue anyone anymore, and it won't even have the money for its normal operations. 

Governments have gone through crises like that before, and it hasn't been pretty. There's Weimar Germany before the rise of Hitler. There's Argentina, Venezuela and most of the countries in Africa at some point. Right now, the prospect of a government debt crisis is a little too much for my overloaded brain—and maybe yours, too—so I'll put it off to another episode. What happens to ordinary Americans and society at large if a government truly can't pay its bills and can't borrow money anymore.

The only thing I can say right now is, that according to my Zero-Inflation Theory, rising prices may not be an immediate crisis. Inflation is always possible, but I would bet that the Dollar Tree stores will continue to sell the same range of products for only a dollar, at least for as long as assets markets are crashing. Once everyone is wiped, then inflation might be along to finish us all off.

———

Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there. See here for all my podcast scripts on this blog.



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Thursday, February 18, 2021

55. Jim Rogers on the Next Economic Crisis — Demographic Doom Podcast Transcript

This is the transcript for my Demographic Doom Podcast episode #55, released on 19 February 2021. The definitive version of this episode, with annotations, is housed on YouTube (19 minutes), with the audio-only version at Podbean. Available on most major podcast platforms, including iTunes and Google Podcasts. See the description on the YouTube version for extensive annotations, links and corrections. You can also comment on this episode there. The main website for this project is DemographicDoom.com

This is the original script, written before recording, corrected after the recording to reflect what was actually said.

I'm Glenn Campbell. I call myself a demographic philosopher. I'm looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, like aliens would see us from space.

In this episode, I'm going to return once again the dire monetary collapse that is heading our way. I probably won't be saying anything new in this episode, just repeating what I've said before, but this time I'm going to give you someone else's perspective—that of Jim Rogers, a well-known investor.

Why do I keep harping on this? It's like I'm on the Titanic after it hit the iceberg. I know the ship is sinking, even if most of the other people haven't caught on. I have countless interests on board the ship, but my attention keeps coming back again and again to the fact that the ship is sinking and all my interests are going to be swamped.

And it's not like I'm even trying to warn people, because there's not a lot anyone can do. My audience right now is miniscule, but even if I had a million listeners who all agreed with me, there's little we can do to stop this. You can't negotiate with a sinking ship. It's still going down.

We've been in a pandemic for about a year now, and we're still recovering from the trauma of the Trump Administration, but all of that pales in comparison to the freight train that's coming down the track at us. It's a massive monetary collapse that will change everything. It will totally disrupt society and will make the pandemic look like a mere appetizer of disaster.

But don't just take my word for it. I'm going to start off by playing a 4-minute clip from Jim Rogers, a well-known 78-year-old investor. I don't know where the interview comes from, but it was apparently recorded in mid-2020, when the pandemic was less than 6 months old. I've done some editing to to it make it more compact.

So here is Jim Rogers...

This certainly has been the worst in my lifetime. We've had a huge rally because governments everywhere have printed and spent staggering amounts of money. But it just means the next time it's going to be worse still. You know, unless you think we'll never have economic problems and market problems again, the next one's going to be worse because [of] the debt. 

In 2008, we had a problem because of debt. Since then the debt has skyrocketed—skyrocketed!— everywhere in the world. So unless you think we're not ever going to have problems again, then the next one is going to be worse. People say it cannot get [worse]. It can get worse!

The printing presses are running at unbelievable speed. Every day, the Bank of Japan goes to work and cranks up the printing presses, and as he said, we will print unlimited—that's his word “unlimited”—amounts of money. That's happening all over the world.

I mean if you get into trouble, you just call up and say, “Help me, help me, help me, save me!” And somebody comes along and saves you. No, we haven't had any gigantic problems yet, but the debt is building up everywhere. 

Maybe I'm wrong. Maybe this time is different. Maybe the world has learned a solution so that it’s different this time, but I doubt it.

Six months ago [probably late 2019], the United States was the largest debtor nation in the history of the world. Never had anybody been so deep in debt. Since then, the U.S. has increased its debt by trillions—with a “t” trillions—more.

You know if you give me a few trillion dollars, I will show you a very, very good time. We will all have a wonderful time with a few trillion dollars, but somebody eventually has to pay the price, because somebody has to worry about paying it back. You know, these days are not good for old people. They are not at all good for young people. I have young children. Oh my gosh, America is leaving them a terrible, terrible legacy which they're going to struggle with all their lives. 

Whenever there's a problem in the world, people look around for an easy way to solve the problem. Once upon a time, there was a guy named “Marx”, Mr. Marx. Mr. Marx had a wonderful theory, and many people accepted it and tried it for a long time. Nobody believes in Mr. Marx anymore. We found that it didn't work.

But right now, there's another one called “More Money Today”—MMT. Give me some money. More money, free money. Well, everybody loves it, so many people are starting to try it. Nobody's saying it out loud, but the British are doing it, some people [in] China, the Japanese are doing them. So we're going to find easy ways. Politicians always find easy ways. Will it work in the long term? As I said, being a young person in America right now is not a good thing to be. All of us peasants know. We may not have studied economics at an Ivy League university, but we know that when you print money and borrow money, subconsciously, we know this leads to problems. 

As I said, watch Kitko news. You will see that the world is really doing strange, unusual things. Never before in the history of the world have interest rates been negative. Never before has a major bank like the Bank of Japan said: “We will print unlimited amounts of money.” Sure, Zimbabwe prints unlimited amounts of money. Countries have done it, but now you have major people doing it. So, yeah, this could turn into a huge bubble.

So I like his folksy manner, but it's entirely calculated. This is a guy who was educated at Yale and Oxford, so I think that whole "peasant" bit is a bit contrived. But a folksy manner is just what you need right now to explain this thing because it's really quite simple. The US government and others around the world have been spending far more money than they're taking in. This was true before the pandemic and it's doubly true now.

The only way governments can cover this shortfall is by printing money. They effectively print it simply by issuing bonds. Some of those bonds are purchased by central banks like the Federal Reserve, which creates new currency in return, but to me, whether it's bonds or cash is immaterial. As soon as a government issues a bond, money is effectively created, because investors trade bonds among themselves as though they were cash.

As Jim Rogers points out, this money printing just can't go on. You can construct all sorts of fantastic theories like Modern Monetary Theory—which he calls "More Money Today"—but you can't defy the laws of physics for very long. If you keep printing money, bad things are going to happen that put a stop to it.

In Zimbabwe or Weimar Germany, the bad things were pretty straightforward: If you keep printing money, the value of each unit of that currency will fall, leading to hyperinflation. You can't get something for nothing. There's no such thing as a perpetual motion machine, even though they've tried to do it again and again. Some of really look good, these perpetual motion machines, but they always fail in the end.

And the question comes up again and again: If the government can just print unlimited amounts of money with no ill effects, then why does anyone pay taxes? Logically, that's where things are leading: No one pays taxes and the government just prints money to give out to people. You know, intuitively, that cannot work, so the system has to break somewhere along the line.

In the case of the US dollar, the dynamic is much more complicated and unpredictable than it was for Zimbabwe. For example, I would have never predicted that a worldwide pandemic would lead to an all-time high in stock markets. Economic historians will be dissecting that for ages, writing books and papers trying to explain why it happened, but it's just not normal. It's not a healthy response to an obvious economic injury. What is feels like, anecdotally, is the government has printed all this new money, and it's all going into asset inflation rather than into consumer inflation.

It's easy to get sucked into the rabbit hole of trying to figure out what is happening right now, but I'd rather look at the end result. The end result of runaway money printing is that your currency is debased, devalued, and that process is going to cause a lot of other bad things to happen all thoughout society and the economy. I'm not willing to predict what will happen and when, because I've been burned too many times by that. I'm only predicting "bad things". When things blow up, they can blow up in unpredictable ways. 

Think of the Trump administration. That Trump would get elected in 2016 was entirely unpredictable and outrageous two years earlier, and lots of events come out of the blue like that. They will eventually seem to make sense in the hands of any competent historian, but they couldn't have been predicted before they happened. The fabric of history is like that: In a complex system, you don't know the exact ways things are going to interact.

What you can predict with some certainty is what happens to packages of things. Take Planet Earth. I have no idea what human society will look like in 500 years. I can't predict the news stories or the human events 500 years from now, but I can predict—or at least astronomers can—exactly where in space Earth will be 500 years from now. It's a very simple calculation, even though life on Earth is very complex. 

Likewise, I can't predict how the economy will evolve over the coming months or what world events will happen. What I can predict is that the current economic model is unsustainable and has to collapse is some dramatic fashion. Whether you're a government or an individual, you can't keep spending more money than you make. You know the end result: a debased currency and a gutted government. You just don't know what sort of crazy things humans on board the ship are going to be doing as it is going down.

Stock markets right now are a reflection more of human sentiment than a reflection of fundamental value. In the end, fundamentals will win, but in the short term, stock markets can do some crazy things, as they've been doing over the past few weeks. Even today, as I'm recording this, the S&P 500 is near its all-time high, even as the pandemic continues. This bubble may have popped by the time you listen to this episode, but it's inflated now, and I would have never predicted that a year ago.

One thing you can predict about money printing is that the government will eventually lose the ability to borrow. Either the government will default on its bonds, or inflation will erode their value, in which case no one will want to loan money to the government at affordable rates. The end-game for the US government it that either will collapse altogether, or it will have to find some way to live within its means, spending only the taxes it actually takes in. That sounds like a good idea, but it's far messier than it seems, because you can't just cut the government budget in half without major political upheaval. 

The other thing that you can reasonably predict is a massive evaporation of wealth. Essentially, wealth consists of paper promises, as I described in Episode 52. For example, you could have pieces of paper that are redeemable for chickens, and those pieces of paper are only perceived wealth. It is only perceived wealth, not realized wealth, because you don't actually have the chickens in hand. You only have a promise of chickens.

The general state of the world right now is that there are far more promises outstanding than can possibly be redeemed. That's what Jim Rogers means by too much debt. For example, there are far more government bonds than the government can ever pay off. That's simple mathematical reality, especially if there is no more significant population growth to fuel the economy.  

Wealth evaporation happens when markets realize that all those pieces of paper aren't worth nearly as much as people think they are. If you thought you had a piece of paper that promised you a thousands chickens, but it's really only good for a hundred chickens, then you've lose wealth as soon as that fact becomes known. Until that time, you can trade your piece of paper as though it was worth a thousand chickens, but once we know it's not possible, then wealth evaporates.

And I think that's what's coming down the line for anyone with assets, be it a house or fine art or a 401K plan invested in the stock market. Suddenly, during some unspecified future crisis, people are going to discover that they're not nearly as wealthy as they thought they were. Vast amounts of wealth can vanish almost overnight and have done so in the past—for example when a stock market crashes. All it takes is a change of attitude from investors, shifting from greed to fear. In a panic, people's portfolios of promises can be devalued in an instant.

Not just wealthy investors are affected, but anyone with an IRA or a bank account. And onnce people start losing this wealth, they're going to stop buying things, especially those things they don't really need, as I describe in Episode 41. This passes the crisis along to people who do not have any assets, who are living paycheck-to-paycheck, because they'll lose their job in these non-essential businesses.

The late 20th Century was a period of globalization, where the world become increasingly integrated. I predict the 21st Century will be a period of localization, or fragmentation, where all sorts of big systems like governments break down and people have to rely more and more on local solutions. The pandemic has already started the ball rolling, confining everyone to their own country. Even if all those restrictions are lifted tomorrow, people have become more localized now and more conservative in their spending and may not want to travel. In any case, we will never again have the same level of global integration we had in the 2010s. Increasingly, it will be every country and region for itself, trying to find solutions to its problems within its own borders.

I take the Fall of Rome analogy very seriously. At its peak, the Western Roman Empire linked most of Europe together into a unified system. But it was an economically unsustainable system that eventually collapsed on itself. It took a lot longer to collapse than I would have predicted at the time, but it did collapse. What emerged in its place was a lot of independent fiefdoms fending for themselves.

When the big collapse comes, in whatever form it takes, humans will continue to survive, just as they survived after the Fall of Rome, but they are going to do it in ways we can't predict right now. There will be a lot of compromises on the road to survival that we aren't willing to make today. They will be forced upon us.

But we will survive. Humans always do. We're clever. We're resourceful. When pushed to the wall, we'll figure things out and come up with new ways to organize ourselves. It's just going to be a very painful journey getting there.

———

Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there. See here for all my podcast scripts on this blog.

{Above reconciled with actual: 2/19/21}
{This script backed up to Email on: 2/19/21}
{Visual version of this script backed up to Twitter on: 2/19/21}

Saturday, February 13, 2021

54. Parentification in the Post-Nuclear Family — Demographic Doom Podcast Script

This is the script for my Demographic Doom Podcast episode #54, recorded and released on 13 February 2021. The definitive version of this episode, with annotations, is housed on YouTube, with the audio-only version at Podbean. Available on most major podcast platforms, including iTunes and Google Podcasts. See the description on the YouTube version for extensive annotations, links and corrections. You can also comment on this episode there. The main website for this project is DemographicDoom.com

This is the original script, written before recording, corrected after the recording to reflect what was actually said. There may be minor discrepancies between the script and the actual broadcast.

I'm Glenn Campbell. I call myself a demographic philosopher. I'm looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, like aliens would see us from space.

In this episode, I'm continuing my discussion of my proposed post-nuclear family, where a large number of children are raised in a single household. It is kind of like a village church, where a number of adults contribute to the upkeep of the church but none of them actually live there. The idea is to reduce the costs and risks to individual parents while raising better children overall.

Today, I'd like to address the issue of “parentification” of the children, which I acknowledge is a critical part of my system. We have older children caring for and essentially raising younger ones, while simultaneously helping to care for their elderly relatives.

If you have any experience in child welfare, “parentification” is a bad word. The typical situation is that Child Protective Services comes into the home and finds a 13-year-old in charge. They are serving as the parent to their parent, because their parent is strung out on drugs or alcohol. They may also be serving as the parent to their younger siblings, getting them dressed and fed and off to school because the real parent is somehow absent or disabled. This is usually considered child abuse, and the children may be taken from the home.

My plan sounds similar, at least on the surface. I am explicitly saying that older children should care for younger ones. I'm not proposing that they care for their own parents, but I do think it appropriate for them to help care for their elderly relatives. Their "job" as children is caring for others in their family, in whatever capacity they are capable of at their age. I see this not just as a labor-saving device but as an important part of their socialization, instilling in them a culture of service. Childhood shouldn't just be entertainment and formal schooling. Every kid should have important real-world responsibilities, and there's no more natural responsibility than caring for other family members.

In my system, adults do not prepare meals. Kid's do. Adults provide the kitchen. They provide the raw ingredients, but kids put it all together and make it happen. Adults may "help" with dinner, just like a kid would, but they don't plan it or manage it. There's a teenager who's responsible for dinner, and the adults are expected to follow their instructions.

In my view, nearly all repetitive, time-consuming household tasks should be performed by children, not adults. This includes the changing of diapers and other routine care of infants. When it comes to the laborious task of teaching a child language, older children can do the job just as well as any adult with a PhD, so let's put this labor force to work. The older children gain skills almost as much as the young children do, and the adult with a PhD can use their own skills for something more valuable.

The difference between this and what CPS sees is that in my system there's usually a responsible adult present and actively monitoring the family. Adults are the high-level managers assuring that everything gets done and that the system runs smoothly and that things don't go off the rails, but they tend to delegate authority rather than doing things themselves. If everything is running smoothly, they can back off and let the kids handle things.

Wherever possible, adults don't tell kids what to do. They "partner" with the kids to get things done. If this is Laundry Day, the adult may be participate in the sorting and folding of clothes, but they aren't directing the operation. Laundry Day has been going on since the beginning of time, so the kids ought know what to do. Sometimes, they even tell the adult what to do. If everything is running fine, the adult is just one of the kids, but if a complex issues arises, the adult can step up and take responsibility. Maybe the washing machine breaks down. This is something the teens probably can't handle on their own, so an adult has to take over.

Parentification aside, a family does need adults. It needs adults because if children are left to their own devices they're going to eat pizza every night. You need adults to guide the operation and to veto any lamebrain schemes, but the general goal is instill in kids the ability to make sound judgments on their own, and they need to be given the space to practice that.

The on-duty adult has the power to order kids to do things, but ideally they rarely need to use it. If there's a real crisis, like a fire, the adult snaps into management mode and issues orders; otherwise negotiation is the preferred way get things done.

So, yes, I'm turning children into parents. I see this as healthy for all the parties involved. The younger children have daily access to their parental figures, just like kids today, but their perceived parent might be a teenager. This teaches the teenagers responsibility while freeing up the adults for more high-value tasks, like protecting the whole household.

Now, the mother of the child is a special case. As I discussed in Episode 50, I think the most efficient source of babies would be the family's own daughters who give birth in the late teens and early 20s. In that case, your mother is still your mother for life, as it has always been. As a matter of ethics, I think child and birth mother should never be forcefully separated. At the same time, I want to shift the parental bond to the siblings whenever possible. A new mother can mother can cuddle and talk to her infant all she wants, but she doesn't have to change diapers and might even be discouraged from doing so. Any of the tedious tasks of parenting can be handed off to someone else. 

This seems to me like the best of all possible worlds for the mother: They get all the joys of parenthood and few of the responsibilities. Most of the diaper changing, the story reading, the feeding, the running of baths and the putting to bed can all be handled by the mother's trusted younger siblings, who she herself helped raise. After her childbearing duties end—say, around age 22—she has her whole adult life ahead of her with few responsibilities. She has a lot of exciting things to do, and the family won't hold her back, because she has done her duty, and her babies are in good hands.

The post-nuclear family is designed to foster strong bonds among the siblings, especially those who spend their formative years in the same household. These are the people, in adulthood, who you turn to for advice, or for help in times of trouble. The bonds with ones siblings are going to wax and wane in adulthood, but you're probably always going to be drawn back to your brothers and sisters. You'll go off into the outside world and do things, but when you eventually become old and weak, you'll probably want to come back to the household of your youth and reconnect with the siblings who are still part of your nervous system. Even today, a lot of elderly adults are like that. They want to return to their roots, and the post-nuclear family gives them that option.

The family—and any good family—isn't just a childrearing unit. It's a lifelong support system and eventually an old age home. Elderly people can be a great resource for the family. They've got plenty of time and, theoretically, they've got a lot of hard-won wisdom to share. I think they would make great on-duty parents, while young and middle-aged adults can be focused more on their careers. They can go off and travel the world—pretty much without restriction so long as they pay their family taxes.

The point here is that parentification isn't just a cost-saving device. It's an essential training mechanism for the healthy socialization of children. In the society that I'm in right now, the pendulum has swung far too much in the direction of individuality. In today's society, every child is expected to be a rock star, and they're crushed when it turns out they can't be. Loyalty to their family and contributing to the family's future are very low on their current priority list. It's quite normal for today's young adults to head out into the world and see their parents only once a year. Their families are dissolved once they leave the nest, and this makes for a lot of very unhappy and rootless people.

In my system, I want to bring the focus back to the family. Now, I'm no traditionalist. I'm no Christian, but I think there's merit in the position that society has lost its family anchor and needs to get back to it. This could be especially important as society disintegrates, as I see it doing in the coming years. That's an issue I talk about in other podcasts: Monetary systems are destined to collapse, and perhaps governments with them. They future, as I see it, will be more locally centered, and people may need to draw together into a family tribe just to survive.

The pandemic has given us a taste of this, where people can't travel internationally. Maybe in future disasters, it will be hard to get out of your home region. I take the whole Fall of Rome analogy quite seriously. What happens if the US government can't function anymore? Well, then local fiefdoms may take over, and the most basic fiefdom of all is the family. It has to be a strong one and a large one if you hope to survive.

The post-nuclear family is designed to build the bonds of family loyalty from an early age, perhaps even more so than families of the past. If children spend 18 years not just in close proximity with their siblings but actively caring for them, you're going to have some powerful lifelong bonds. Sure, in adulthood, you're free to go anywhere and do anything, but most people in a well-bonded family are probably going to stay pretty close to home. They may travel, and you want them to, but there may be more of a sense of "What can I find out there that I can bring back to my family?"

While ever individual can have goals and dreams and need their own property and identity, the family should probably still be the core of their existence. No one can truly go it alone. You have to have this core source of strength and structure that the family provides. Maybe you go off and become a rock star, but it's not for your own glory. If the prizes you win are to mean anything, you have to bring them home to your family.

———

Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there. See here for all my podcast scripts on this blog.

{Above reconciled with actual: 2/14/21}
{This script backed up to Email on: 2/14/21}
{Visual version of this script backed up to Twitter on: 2/14/21}

Wednesday, February 3, 2021

53. Fifteen Defining Features of the Post-Nuclear Family ⸺ Demographic Doom Podcast Transcript

This is the transcript for my Demographic Doom podcast Episode #53 recorded in Eastham, Massachusetts on 3 February 2021 and released the next day from Provincetown, Mass. The audio master for this episode is found at Podbean and a video version is on YouTube (below). Also available on all major podcast platforms like iTunes and Google PodcastsSee the description on the YouTube version for extensive annotations, links and corrections. You can also comment on this episode there. The main website for this project is DemographicDoom.com

This transcript was derived from the automatically generated YouTube transcript, reformatted and lightly edited for clarity.

I'm Glenn Campbell. I call myself a demographic philosopher. I'm looking at life and trying to predict the future through the lens of demography, or the study of human populations. I'm trying to view humanity from a distance, like aliens would see us from space.

For the past few days, I've been working on a series of web pages on the post-nuclear family trying to nail down some of its specifics. In this episode I'm going to give you a little dramatic reading of one of those web pages defining the main features of this system.

If you don't know what the post nuclear family is you might want to go back to my Podcast #46, which is the first time I describe it. But even if you haven't listened to that podcast, this web page I'm going to read is probably a pretty good introduction, because I'm starting off from scratch and just telling you what the system is all about. 

On this webpage,  I've listed 15 features that I believe define the post-nuclear family. I may come up with other features, but these 15 seem pretty stable. I've come up with a dozen other features I don't regard as essential but I think that they're strongly implied, so I'll read those features after the first 15. 

And then finally I'm going to give you a third list which is the items that need to be resolved by policy. These are things that the founding parents are going to have to determine on their own. I can't tell you, for example, what you should be teaching your children, in this family or any other. That's something that you have to work out. I have my own ideas, but they aren't part of the definition of the post-nuclear family. In this final list I can only list the questions that need to be resolved. I can't give you the answers, because that's for you to figure out.

So the webpage I'm reading from is currently located at demographicdoom.com/postnuclear — that's all lowercase with no dashes or spaces. Obviously, if you've already read the webpage you may not need to listen to this dramatic reading, but I could add some nuances or additional information that's not in the in the webpage.

So here is my dramatic reading of that web page… 

The Post-Nuclear Family: Main Features. 

The post-nuclear family is a system of collective parenting where between 9 and 18 children are raised in a single household by a group of cooperating adults who do not live there. The children are evenly spaced in age with a baby born into the family every 1 to 2 years. This wide spectrum of ages means that older children can care for younger ones and teach them basic skills, which relieves the adults of many routine tasks.

The household is supported financially by a system of family taxes levied on adult members, similar to a church tithe where members give 10% of their income. Children who age out of the main household can live however they choose and are free to move elsewhere, so long as these family taxes are paid. Their incentive for paying them is the promise of ongoing family support and eventual care in old age.

The post-nuclear family addresses five main issues:

➤ Number 1: How does my community or culture produce enough children to sustain itself.

➤ Number 2: How do we raise our children economically so we can afford to do it. 

➤ Number 3: How do we raise them intelligently and consistently so that they can achieve their potential. 

➤ Number 4: Who will care for me when I get old or sick and can't care for myself.

➤ Number 5: Who will support me emotionally and be there for me when I get in trouble.

So to address these five issues I've come up with a system of parenting that I call the post-nuclear family. The goal of the post-nuclear family is to raise a large number of children at a low per child cost without compromising the quality of their upbringing. The ultimate aim is to sustain and expand a local community or culture whose existence is otherwise threatened by low birth rates and the high cost of parenting. 

This plan is not presented as a solution to the demographic woes of a whole nation, and it does not require government sanction or support. It is instead an independent plan for raising children by any small group of adults who choose to form an alliance. 

The post-nuclear family is intended to preserve and perpetuate your culture, whatever you consider that to be. For a culture to survive beyond a single lifetime, it needs new members, ideally raised within that system from their earliest days. The post-nuclear family, like traditional families, is a vehicle for acculturation and character formation, as well as a safety net when members get in trouble. 

To entertain such a plan, you would have to see your culture as valuable and worth preserving beyond your own lifetime. You would have to be willing to make a substantial lifelong investment in this project, but it shouldn't be as costly in time or money as a traditional nuclear family is. Costs and risks would be distributed across multiple adults so no individual or couple is bearing an excess of burdens.

The post-nuclear family can be started as a simple parenting collective. For example, three or more couples, producing children in the traditional way, could choose to raise their children in a single shared household. The founding adults would not live in the shared home but would take turns as on-duty parents on a scheduled basis. This scheduling of responsibilities is intended to reduce competition among parents and grant more autonomy to the children. 

Children are expected to perform all of the routine tasks of the household that are within their ability, like preparing meals, cleaning house, changing diapers and teaching younger kids basic skills. The children are evenly distributed in age, from 0 to 18, which allows older children to care for younger ones. 

If the system is founded by three or more heterosexual couples, the original mothers would bring a new baby into the family every one to two years. The system becomes more complex when the fertility of those original mothers runs out, some 10 to 20 years after the collective is formed. To preserve its cumulative wisdom and culture, the post-nuclear family is intended to be a permanent institution, continuously raising children in perpetuity. If the system is to continue beyond the fertility of the founding mothers, decisions would eventually have to be made about where the next generation of babies come from, but initially they come from the traditional means of a loving couple making babies in the usual way.

This system is not a commune or a kibbutz or a group marriage. Apart from clearly defined responsibilities in support of the household, adults of the family can live any way they choose and retain all of their own assets. Like members of a church, they live away from the main household but close enough to it to perform their duties. They remain free to accumulate their own wealth and aren't expected to share it with other family members, except at their death. While alive, their only obligations to the family are taxes based on income and the sharing of parenting tasks according to a predefined schedule. Furthermore, they have to be available to devote special attention if some unexpected crisis arises.

So these are the 15 defining features of the post-nuclear family—the ones I've identified so far…

➤ Feature #1 is that between 9 and 18 kids are raised in a single dwelling. 

And here are a few notes I have on that… 

A large family allows economies of scale and systems of mutual care that aren't possible in smaller families. It also discourages any sense of entitlement, because no child is a prince or princess in a large family. They all have to cooperate to get what they want. If nothing else, a large family means lower childcare costs, because one on duty adult can manage all nine kids. 

Nine kids is considered the norm, but 18 kids is the target size when the family seeks to expand. Eventually, they would split into two families of nine kids. Although nine children is unusually large by today's standards, it's not implausible. It is similar to a very large blended family today or a traditional farm family of the past. 

You can imagine the Brady Bunch, a popular TV show, where there were six kids. Well, this is only 50% higher than that. 

➤ Feature #2: Children are evenly spaced in age, born every 1 to 2 years. 

This spacing is intended to reduce direct competition between kids and to create a natural hierarchy among them. Older kids have more privileges responsibility and authority. Since every child is a different age, each of them has a special place in the family and can be expected to be to be treated differently. This reduces claims of unfairness, because every child knows that he will eventually grow into the privileges that his older siblings get. 

Older children, once they learn a useful skill, can teach it to younger ones without much adult intervention. 

If the intention is to split the family in two at a later date, then new babies are added every year; otherwise every two years is considered the norm. The only kids that are likely to be the same age are twins born at the same time.

If family members are spaced every two years and average longevity is 80 years, the total size of the family—that's kids and adults—will eventually stabilize at about 40 members. This is consistent with a large extended family today.

Feature #3: Children themselves provide most of the routine labor of the household, children prepare meals, clean house and care for younger children. A child is given important household responsibilities at the earliest age when they can reasonably handle them. At age 17 or 18, a teenager can manage the whole family for short periods without an adult present at all. This might happen, for example, overnight. Adults are needed to supervise the tasks of the home, and they may pitch in to help, but the ultimate goal is a self-regulating system that needs little adult intervention for routine tasks. Freed of these repetitive tasks, adults can focus on higher level functions. 

➤ Feature #4: Adults provide supervision, education, mentoring, financial support, logistical support and long-term planning. They supply the physical dwelling and protection from outside threats—all the complex things that teenagers can't reasonably be expected to do. 

As a general rule, adults don't perform duties that children and teens are capable of, except, perhaps, to show how it is done or to share in those tasks on an equal footing. Adult interaction with the family should emphasize quality time that makes maximum use of their skills and creativity.

The adults also define and enforce the policies and rules that the kids and adults have to follow.

➤ Feature #5: Adults come into the household for assigned duties and social visits but they do not live there. 

They live separately in their own homes in any arrangement they choose. This gives the kids more autonomy and helps prevent adults from stepping on each other's toes. 

Although adults cooperate on the raising of children and supporting the household, they retain their own property, lifestyle, relationships and careers, independent of other adults in the group. This is not a commune, as I said. It's not a group marriage—unless the adults choose it to be. It is people living their lives as they do today but just cooperating on this one shared project.

The system is analogous to a community church, where many members contribute to the church and its functions, but no one lives in the church, and parishioners lead separate lives outside of it. The household may have an open-door policy where adult family members can visit anytime they want, but at any particular time, only one adult is in charge.

➤ Feature #6: Childrearing never ends.

As teenagers age out of the core household, new babies are brought in. Where the babies come from is a policy decision and not part of the core definition of the post-nuclear family. 

➤ Feature #7: Most basic knowledge, culture and training is passed from older children to younger ones. For example, language is taught primarily by older children to younger ones. Adults step in only to fine-tune these basic skills, teach advanced skills and provide a system of formal education.

➤ Feature #8: Admission to the initial group of founding adults is highly selective.

Before they form the collective, these adults have to have high confidence in each other and have to be in general agreement on all the basic principles of parenting.

➤ Feature #9: Once a child is born into the family, they are a member for life.

This is just like families today under normal circumstances. No one gets to choose their family, but once you're a member, you are a member forever. Now, people are certainly free to leave their families, and they do it today, but that's not human nature. Human nature under normal circumstances is that you remain connected with your family and your parents for life. Members can be excommunicated from a family, but they have to really do something bad. It's highly unusual in both today's families and in families of the future.

➤ Feature #10: the family is a lifelong support system—just like families of today ought to be. 

If you get in trouble as an adult, you know your family will do what they can to help you, usually without pay. Pride and mutual respect keep you from taking advantage of this system, but if you do get in trouble, you have your family to call on. 

➤ Feature #11: All adult members of the family are expected to support the family financially through a system of family taxes. 

This is similar to a church tithe where a percentage of your income is given to the group. 

➤ Feature #12: The family provides lifelong health care for its members. 

For example, they would provide health insurance in the U.S., and they provide appropriate care when a member gets sick or disabled. This includes care for the elderly when they can no longer care for themselves. 

➤ [Feature #13:] Unlike other adults, sick or elderly family members may live in the same household as the children or in lodging nearby. 

This allows the children to participate in the care of these elders, for example by providing meals

➤ Feature #14: Adults choose their own leadership structure and governing system. 

The system of governance is initially determined by the founding adults, perhaps in a written charter. That charter can be modified later by an established process. Authority among the adults is clearly defined. At any given time, one adult is clearly in charge, and they are probably going to elect a leader as well.

➤ Feature #15: One household can be split into two through a system of mitosis, which is making two households from one while preserving the family's culture and institutional memory. 

So what happens here is a new dwelling is prepared a short distance from the original home, and children of alternating ages are moved into the new household. It's kind of like the undoing of a zipper. This increases the number of households from one to two and grows the community while preserving the family's internal systems—their cumulative wisdom. 

In preparation for this division, the original family would be increased from 9 to 18 kids over the preceding 18 years—that is, a baby would be added every year instead of every two years. After the families are split, there would be two families of nine kids, each spaced every two years. The adults connected to the original family will also split, with half of them being assigned to the new family. 

This change need not be traumatic for the children, since they would have known about it for years. The new household could initially be located close to the old one to allow continued daily communication. You wouldn't lose contact with the people you've considered your siblings. It's just that they become cousins now. After a period of adjustment—maybe two years—the new household could be moved further away, as it becomes appropriate. 

This whole process of mitosis takes about 20 years, from the time the original family starts producing children every year to the time of division 18 years later, and then another two years for the system to stabilize. 

So those are the 15 core features, the defining features that I don't think the post-nuclear family can do without. 

Now I'm going to give you a list of what I call “implied” features—things that I think are likely but are not an essential part of the definition… 

➤ So one implied feature is that children are homeschooled under the supervision of a paid professional teacher. If you're going to go to all the trouble to establish this system, you're not going to turn its most important function over to a public school. You're going to do it yourself. You're going to establish a curriculum, and the contents of this curriculum is going to be a matter of a lot of debate and negotiation among the adults, because it's so important. The curriculum is the plan for what the children are going to learn and when, and it's not static. It's a continuously evolving organism that is going to be adapted to changes in the world and changes in philosophy. 

The teacher is assigned exclusively to this task. This is not a shared position. It's an exclusive position, and that's why you should be paying someone to do this. It can be one of the founding parents, but it doesn't have to be. He or she works a standard Monday-through-Friday schedule, managing the education plan of one family or maybe several of them. 

The teacher is really more of an educational manager than a teacher, per se, because they assign educational resources more than they actually teach. They will directly teach students only when other educational resources don't work. The educational resources they have available might be online learning, kids teaching other kids, textbook learning, standard exercises and any new options that technology might bring about. Formal education is going to be a on a fixed schedule during the day just like school today. During certain hours during the day, you are at school, you're doing your job of learning. 

➤ Another implied feature is that children of the family are genetically diverse. That means they come from a lot of different biological parents. I'm not declaring in advance where the babies come from, but it makes sense to have genetic diversity, because this allows a lot of talents to emerge and it encourages overall resilience in the population. 

Genetic diversity is a lot easier to achieve than some sort of genetic plan, which might be known as eugenics, where you're trying to breed a certain kind of person. Eugenics is a political minefield and ultimately, it's impractical. I think it doesn't work. The problem with trying to breed humans is their lifespan is so long, and it's so difficult to identify and isolate the traits that you want. How, for example, do you breed for intelligence? It's not just one gene that you can select for.

Dogs can be bred only because their time to reproductive maturity is short—that is, maybe two years—and the traits we expect from dogs are very simple. With humans, it's much more complicated. So rather than get into the whole eugenics thing, it's a lot easier just to seek out diversity—that is, a lot of different gametes from a lot of different parents. 

Where the babies come from is a policy decision, and it's not part of the core definition of the post-nuclear family. Whatever method you choose for making babies, there's going to be a lot of controversy. There's a lot of politics. There's a lot of negotiation. That's the way humans make babies. That's always been true, and it's going to continue to be true. What sperm is going to be united with what egg? That's always been a fraught topic, and it will continue to be. 

➤ Another implied feature is that the family should be evenly balanced between girls and boys, with roughly the same of each, ideally alternating. So in a 9-child household, the ideal sequence -would be boy-girl-boy-girl-boy-girl. If you have an 18-child household, intending to split it, the ideal sequence would be boy-boy-girl-girl-boy-boy-girl-girl. That way, when you divide the family, you get the traditional sequence of boy-girl-boy-girl. 

In theory, you don't need males at all. As a male, I'm allowed to say that. I mean, what good are males after all? you just collect a little bit of sperm, and that sperm goes a long way. So an all-female society is theoretically possible, but I just have the feeling it would be dangerous. I think it’s probably not a good idea unless you really know what you're doing. Nature has this 50-50 ratio, and I think you probably should stick with it. 

➤ Another implied feature: The primary parental bond between a young child and their parent is not going to be between a young child and an adult. It's going to be between that child and the person who cares for them most of the time, which is probably a teenager. So, yes, young children will have a firm parental bond, or maybe several of them, but it will be with their older siblings, probably not with the adults, because the adults only come in one day a week. 

I don't want to predetermine who bonds with whom, or who a child runs to for comfort, but generally speaking, a young child bonds with the person who is caring for them, who is there every day, who's talking to them. that's who they run to for comfort, and that's who they look to as a reference point as they're exploring the world. 

These roles could be emphasized by calling adults “aunts” and “uncles” rather than parents. For example, you could refer to one person as Aunt Mary and someone else is Uncle James when they come in to care for you—unless, of course, you know who your biological mother and father are. In that case, you can call them Mom and Dad, but your primary bond is going to be with this older sibling who cares for you.

Every child has a biological parent, at least a biological mother, and if that mother is known, you are allowed to have a special bond with your mother. They will always be your Mom, presumably because they nursed you and brought you into the world and breastfed you and have a special bond with you. I don't want to deny that to anyone. But these biological parents should not be allowed to give their child any kind of material benefit that other children don't get. They can have a special relationship with them, but they shouldn't be giving them special gifts that other children don't get. 

➤ Here's another implied feature: Most resources within the core household are shared. That includes food, clothing and toys and other equipment. A family naturally is a communistic system. You can't get around that, but children would also be allowed to own their own property. The way this would work is that your property has to fit into a defined space. I think it should be a footlocker that's at the end of your bed. Everything that's inside your footlocker is yours. For example, you go to the beach, and you collect some shells. Those are your shells, and you can keep them as long as they fit in your in your footlocker. That's a nice way to regulate private property. It all has to fit in this defined space. 

Individual kids cannot own pets, and the rationale here is that a pet isn't going to fit in your footlocker. Individuals can't own a dog, but the whole household can own a dog, and it's shared by everybody. Outside the main household, adults are not required to share, any more than you, as an adult, would share with your adult sibling [today]. You may share with them, but you still retain all your own assets. You don't give your brother or sister everything you own. The walls may come down a bit if your brother or sister gets in trouble and needs you. In that case, you may give them more of your resources than you normally would.

➤ Another implied feature: Regardless of the family's wealth, children should be raised in conditions of what I call “benign poverty”, where resources and privileges are relatively rare and have to be negotiated for. Toys, for example are going to be very well used, and most clothes are going to be hand-me-downs. 

This is another reason why adults should not reside in the house itself. Their accumulated wealth can corrupt the children. The sort of resources children get is a subject of negotiation and control, and it's something you want to be very conscious about. There's going to be plenty of healthy food supplied to the household from the outside. The kids shouldn't have to worry about where the food comes from, but it may not be exciting food. There may not be a lot of gourmet items or a lot of sweets. That stuff could be controlled. That's all a matter of policy. 

➤ Another implied feature is that children must obey an “Electronic Media Policy”, with the policy being determined by the adults. Electronic media could be television. It could be computers or video games. All of that stuff is so addictive and potentially destructive that it has to be very closely controlled. Since technology is rapidly evolving and its effects may not be fully known right away, this policy is always changing. It's always evolving. Books, I would imagine, are generally exempt. You can read any book you want at any time, but watching a movie, that’s a matter of negotiation. It's not automatic that you would watch any movie you want any time you want. And the same would apply to any other electronics. Once a child reaches adulthood they have access to everything, but up until that point, there's a gradation. There's a system for deciding what media you have access to. 

➤ Another implied feature is community service. So once a teen reaches the age of adulthood—whatever that's deemed to be—they enter a period of family service or community service for several years, which is similar to military service of some societies today. This labor can be used for a variety of purposes for the family or the community. It can also be used for child bearing, if that is deemed to be the policy. In other words women between the ages of 18 and 22 may bear babies for the family. 

➤ Another implied policy: After a young adult has completed their community service, they can conduct their lives any way they want. They can travel. They can live anywhere in the world. They can form any romantic relationship. They can pursue any career. There are no restrictions on people who graduate from the family, except that you have to pay your family taxes. 

You're also expected to keep in contact with the family, but that that comes naturally to most people. You always want to keep in touch with the people you grew up with.

➤ Another implied feature: When a graduate of the family eventually reaches retirement age at 65 or 70, it's generally expected that they will come back home. They will return to the family and serve as active parents and live out their final days with their birth family. This isn't a requirement it's only an expectation, but I think it's normal for most people even today. Retired people tend to have a strong desire to return home in their final years. 

➤ Another implied feature: The family is generally indifferent to the sexual relations of its adult members. You can marry. You can divorce. You can have a boyfriend, a girlfriend. You can do anything you want in adulthood, and it's not going to faze the family. The family really isn't interested because this all takes place outside of the main household. You can associate yourself with other people any way you want—as long as you're still paying your family taxes, as long as you're still attentive to your family obligations.

The family is only going to draw the line at childbearing. If you go off and have a tryst and produce a baby with someone else, there's not an automatic guarantee that your family will take that baby into its system, because this is something that has to be controlled. This is something that's a subject of negotiation. It's not a a matter of whim. When you produce a baby, it's produced on a plan, so this family's going to be very sensitive about you going off and having a baby without their permission. 

Due to something called the “Westermarck Effect”, sexual relations within the family are unlikely, because people naturally are not sexually attracted to their siblings. That's part of evolutionary psychology that was first discovered in the Kibbutz's of Israel. In the Kibbutz's of Israel, where you have a lot of children raised together from different parents, they very rarely married with each other. They always sought partners outside of the family. 

If you do get married, your spouse or romantic partner is certainly welcome to visit your family, but they are not automatically part of your family. In other words, they're not entitled to care in their elder years just because they married you. That's something that may be possible, but it has to be negotiated. It's not automatic, because obviously this other person hasn't paid into the system the way a normal family member would.

➤ Another implied feature: When a child of the family grows old and eventually dies, it is expected that they will leave all of their assets in their will to the family. So all of their accumulated wealth should be transferred to the family, which is what happens today in most families, and in the post-nuclear family it would be expected as well.

So that's my list of implied features that I think are likely based on those 15 original features. I'm probably going to add more implied features later, but in my final list I want to give you a list of things that I cannot determine in advance, that the founding parents and the adults of the family are going to have to determine. And here are those things… 

➤ How the family starts—how you're going to form this family. Initially, I have an idea that it should be three or four heterosexual couples joining together in this parenting collective, but that's just one option. It could be started in a lot of different ways, and that's not something that I'm not going to dictate. 

➤ I'm also not going to dictate where the babies come from. Initially, if you start this as a parenting collective, then the babies obviously come from the founding mothers, but when their fertility runs out, where do the babies come from? Well, that's not something I'm going to determine. I've recorded a podcast about it—I think Episode 50—but basically it's none of my business where the babies from. That's something that the parents have to negotiate. 

➤ The parents also have to negotiate how duties and financial responsibilities are assigned among the adults. All of that scheduling has to be worked out.

➤ The family also determines the rules the children must follow and the rules the adults must follow. It has to write that Electronic Media Policy. 

➤ It [also] has to define, more broadly how the world is presented to the children. What a family is, is protection from the outside world. No one as a baby is exposed to the full brunt of the outside world. They are protected from it in a sort of Disneyland, which is the family, and it's a topic of negotiation how we let the outside world to come into the family, just like the electronic media policy. 

➤ There [will] have to be systems developed for how disputes are resolved, and that includes disputes between children and disciplinary problems with children and disputes among adults. How are we going to resolve them? There should be some very clear procedure for doing so.

➤ And of course we have to come up with an educational curriculum. We have to decide among ourselves what we're going to teach our children and on what schedule we're going to teach that. What books are we going to require them to read? All of that is part of the educational curriculum. 

➤ And we have to decide how the family is going to be managed. How it's going to organize itself, and who's going to lead the family. 

➤ We obviously have to decide where the family lives. What part of the world do we start our family in? What kind of dwelling do we choose? Do we build a dwelling from scratch? Do we buy an existing dwelling? Where should it be located? Should it be in the city? Should it be in the country? That all has to be negotiated.

➤ And we have to negotiate family taxes. We have to figure out how we're going to fund this thing, and if we're going to assess taxes from family members, how much should the tax rate be? When will they be paying their taxes? How will these taxes be enforced? That all has to be worked out.

➤ And in the happy situation where you producing more taxes than you have expenses, how are we going to spend our additional funds? How are we going to do this? 

➤ And when are we going to divide the family? When should we take our family and divide it into two families? That has to be decided. 

So these are all the features that I can think of right now regarding the post-nuclear family. I'm sure I will come up with more, but for now I hope you enjoyed this dramatic reading of my web page. If you want to see if I've come up with any new items, you can look at the webpage itself: demographicdoom.com/postnuclear

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Written, recorded and edited by Glenn Campbell. For annotations, links and corrections, see the description on the video version of this podcast. You can also leave comments there. See here for all my podcast scripts on this blog.

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