The Beginning of The End
I've been telling you for a long time about how ~2032 is my estimate for the beginning of the end and I updated it later to say that Trump is an accellerant for this trend (so I suspect the end can come as early as 2028-2030, but it depends on many factors).
Below I show you the major components and much of my thinking.
This is just a part of my research, but you can, if you want to dig in deeper, learn about rentier analysis and replace oil/natural resources with capital and the state with the State per below.
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Numbers are approximate; thresholds are heuristic, but grounded in the data we already pulled.
0. Coordinate system recap (short) - State = top ~0.1–1% and their core institutions (big capital, FIRE, major oligarchic blocs).
- state = formal political machinery (elected office, bureaucracy, courts, central bank, etc.).
- public = everyone else who is net-taxed and/or net-disciplined by the system.
The tipping point is when State decides whether to:
- loosen its grip (redistributive reset), or
- lock in an openly rigged order (soft apartheid / autocracy),
- under pressure from demographics + debt + external shocks.
1. Cluster A – State dominance (wealth, rents, FIRE) A1. Top 1% / 0.1% wealth share - What it is: Share of net worth held by top 1% / 0.1%.
- Current ballpark (US)
- Top 1%: ~31–35% of wealth
- Top 0.1%: ~20–22%, back near 1929 levels
- Thresholds (top 1%)
- Green: = 25%
- Amber: 25–35%
- Red: > 35% and still rising
- Interpretation
- Red = State owns enough of the asset base that meaningful taxation or regulation of it becomes politically explosive and systemically risky. Any further drift pushes you toward “repress or reform”.
A2. FIRE share of GDP - What it is: Value added of Finance, Insurance, Real Estate & leasing as % of GDP.
- Current: ˜ 21–22% (Q2 2025)
- Thresholds
- Green: < 15%
- Amber: 15–22%
- Red: > 22% and rising faster than GDP trend
- Interpretation
- Red = the economy is structurally rent-extraction–dominated. State’s primary lifeblood is fees, interest, capital gains, and property—so State will fight very hard against any policy that threatens those streams.
A3. Financial + real-estate wealth vs GDP - What it is: Total financial + housing wealth as % of GDP.
- Current: ~700% of GDP in the US (financial ˜ 447%, housing ˜ 246%)
- Thresholds
- Green: < 400%
- Amber: 400–600%
- Red: > 600% and still decoupling from GDP
- Interpretation
- Red = asset prices are floating so far above the real economy that any serious move against State’s rents risks a financial crisis. Reform becomes systemically dangerous.
2. Cluster B – state fiscal/financial dependence B1. Deficit & interest burden - What it is: Federal deficit and interest outlays as % of GDP / spending.
- Current (FY 2023–24):
- Deficit ˜ 6–7% of GDP; ˜ 27–30% of outlays.
- Net interest ˜ 3–3.5% of GDP and rising.
- Thresholds
- Green:
- Deficit < 3% of GDP; net interest < 2%
- Amber:
- Deficit 3–6%; net interest 2–4%
- Red:
- Deficit > 6%; net interest > 4% and trend rising
- Interpretation
- Red = state depends chronically on capital markets (owned by State) just to stand still, and a bigger chunk of tax is diverted to interest—essentially a direct transfer to asset holders.
B2. Foreign share of public debt - What it is: Share of marketable Treasuries held by foreigners.
- Current: ˜ 30% and falling (domestic holders ˜ 70%)
- Thresholds
- This one is about transition risk, not a simple high/low:
- Green:
- Foreign share 25–40% and stable; no big dumping episodes.
- Amber:
- Foreign share falling fast while debt ratio rising; some politically motivated sales.
- Red:
- Foreign selling coincides with domestic doubts (political crisis, Fed pressure), yields spike ? forced fiscal adjustment.
- Interpretation
- Red = external shock to the State/state debt machine. State leans heavily on domestic FIRE + Fed, raising internal fragility and making austerity vs expropriation choices starker.
B3. Social Security / Medicare solvency - What it is: Years until trust funds hit depletion and automatic cuts kick in.
- Current:
- OASI trust fund depletion ˜ 2033; after that, payroll taxes only cover ~77–80% of scheduled benefits.
- Thresholds (years to depletion)
- Green: > 15 years
- Amber: 7–15 years
- Red: < 7 years, or already in post-depletion partial-pay mode
- Interpretation
- Red = state must openly choose:
- cut benefits (squeeze public),
- raise taxes (squeeze State),
- inflate / financial-engineer (squeeze both stealthily).
- That’s your forced-branch moment on this axis.
3. Cluster C – public condition & demography C1. Old-age dependency ratio & 65+ share - What it is: 65+ per 18–64; % of population 65+.
- Current:
- 65+ ˜ 17% now; projected ˜ 23% by 2050.
- Old-age dependency headed to ~36 per 100 working-age adults by 2050.
- Thresholds (rough US context)
- Green: 65+ < 18%; OADR < 30/100
- Amber: 18–22%; OADR 30–35/100
- Red: > 22%; OADR > 35/100 with underfunded systems
- Interpretation
- Red = a large older bloc with real needs and votes, but weak savings; perfect setup for either:
- “protect our pensions at any cost” ? soft authoritarian bargain, or
- “we have nothing to lose” ? radical rupture, depending on how hard they’re hit.
C2. Bottom 50% income/wealth share & retirement coverage - What it is: Share of national income / wealth going to bottom 50%; % of 55–64-year-olds with adequate retirement savings.
- Current:
- Bottom 50% income share ˜ 13% (down from 21% in 1980).
- Bottom half’s wealth share: low single digits (Fed DFA estimates).
- Large fraction of near-retirees have <$100k in retirement accounts (multiple surveys).
- Thresholds (bottom 50% income share)
- Green: = 18%
- Amber: 14–18%
- Red: = 14% and falling
- Interpretation
- Red = the majority has effectively no stake in the asset side of the system, and wages alone can’t support dignified retirement. That’s your “nothing to lose but chains” precondition.
C3. Perceived fairness / “rigged system” belief - What it is: Survey % agreeing with “the economy is rigged to benefit the rich”, “government is run by a few big interests”, etc.
- Current:
- US and UK surveys show majorities already think the very rich have too much political influence and that this threatens democracy.
- Thresholds
- Green: < 40% strongly agree
- Amber: 40–60%
- Red: > 60% and rising, with low trust in elections and institutions
- Interpretation
- Red = legitimacy crisis: the public believes your State/state framing. At that point, either you get managed coercion or serious systemic bargaining—muddling through forever is unlikely.
4. Cluster D – institutional capture & rules D1. Electoral integrity & minority-rule entrenchment - What it is: Composite of gerrymandering, voter suppression, partisan election administration, and the gap between vote share and seat share.
- Current (US):
- Clear signs of systematic gerrymandering, voting-rule warfare, and efforts to give partisan actors more control over certification. (Electoral Integrity Project and others flag the US behind many OECD peers.)
- Thresholds
- Green: small, random errors; independent election bodies; close vote–seat alignment.
- Amber: structural bias but still reversible within normal politics.
- Red: legal/constitutional moves that lock in minority rule and make reversal extremely hard (e.g., Supreme Court + key state legislatures locked for a generation while rewriting rules).
- Interpretation
- Red = the “soft apartheid” path you described: state is openly recoded to guarantee State’s preferred coalitions remain in charge.
D2. Judicial / oversight capture - What it is: Extent to which top courts, central bank, enforcement agencies are staffed and structured to protect State’s interests even against future majorities.
- Thresholds
- Green: appointments are partisan but rules of the game (terms, jurisdiction) stay stable.
- Amber: term changes, court-expansion threats, or jurisdiction-stripping proposals appear.
- Red: enacted changes that effectively shield key State interests from democratic revision (e.g., strong investor protections beyond reach, entrenchment of emergency powers, immunity regimes).
- Interpretation
- Red = the system is moving from informal capture to de jure lock-in—very similar to your apartheid-law analogy.
5. Cluster E – external system & dollar hegemony E1. Dollar share of reserves & trade - What it is: USD share of global FX reserves and trade invoicing.
- Current:
- FX reserves: ˜ 58% USD; stable last few years.
- Slow growth in yuan invoicing and non-dollar arrangements, but no collapse.
- Thresholds
- Green: USD share 55–70% and gradual decline; fragmentation manageable.
- Amber: USD share < 55%; visible acceleration of non-dollar regional blocs.
- Red: sudden drops or regionally coordinated moves to de-dollarize key trade flows (energy, tech) combined with political crises in the US.
- Interpretation
- Red = external constraint on State/state: ability to export crises and finance deficits cheaply is impaired. The domestic rentier game becomes harder to sustain.
E2. Alternative payment rails (CIPS, SPFS, CBDCs) - What it is: Share of global trade volume settling via non-SWIFT channels not easily surveilled/controlled by the US.
- Current:
- CIPS volume rising fast (trillions in RMB) but still a minority; SPFS limited to Russia-centered network.
- Thresholds
- Green: alternatives exist but are niche; US can still weaponize SWIFT with limited blowback.
- Amber: key blocs (China+BRICS, Gulf, etc.) can realistically route significant trade via non-SWIFT rails when threatened.
- Red: major commodity flows + big regional blocs operate routinely outside US-controlled rails.
- Interpretation
- Red = US ability to cope with internal crises by externalizing pain is diminished; more of the adjustment must happen on public vs State inside the borders.
6. How to use this dashboard for your tipping-point question 6.1 What “Red” actually means here It’s not “instant collapse.” It’s:
“You are in a regime where relatively small shocks can produce non-linear political change because:
- State’s dominance is structurally high,
- state’s fiscal/financial room is structurally low,
- public’s condition and demographic load are structurally strained,
- institutions are structurally tilted and hardening,
- and external cushions are thinner.”
In your terms: the machine has very little slack left.
6.2 Where I’d place the US roughly today (very approximate) - Cluster A (State dominance):
- Wealth shares: Amber?Red boundary.
- FIRE share: Amber, close to Red.
- Cluster B (state dependence):
- Deficit & interest: Amber, trending toward Red if rates stay high.
- SS/Medicare countdown: firmly Amber (˜9–10 years to OASI depletion).
- Cluster C (public & demography):
- Old-age ratio: Amber; baked-in path to Red in 2030s.
- Bottom 50% share: Red already.
- “Rigged system” belief: Amber?Red in many polls.
- Cluster D (institutions):
- Electoral/judicial capture: Amber—real damage, but not fully locked.
- Cluster E (external):
- Dollar & SWIFT: Green?Amber; fragmentation growing but not decisive.
So:
- We’re not at an immediate singular tipping point,
- But we are in a configuration where many indicators are Amber trending Red, especially in Clusters A, C, and soon B.
6.3 What would “we’ve crossed into true danger” look like? In your coordinate system, I’d define a high-tipping-risk regime as:
- A: Top 1% wealth share > 35% and still climbing; FIRE > 22% and rising.
- B: Net interest > 4% of GDP; deficit > 6–7% with no credible consolidation; < 7 years to SS/Medicare cliff.
- C: Bottom 50% income share = 13% and old-age dependency > 35/100 and > 60% think the system is rigged.
- D: Clear minority-rule lock-in moves succeed (e.g., irreversible court + electoral changes shielding State’s rents).
- E: Noticeable de-dollarization in key blocs + partial bond market revolt (external and internal) pushing yields sharply up.
When 3+ clusters hit Red simultaneously, and especially if B+C+D do, you’re not “maybe stressed” anymore; you’re in exactly the kind of fork you described:
- State must accept losing serious rent streams or
- state must be re-coded to protect State by force and law.
Demography tells you when stress is maximized: 2030–2040 is the window where Clusters B and C are almost guaranteed to go Amber?Red even if you froze politics today.
What you don’t get is a specific year. You get a risk cone and a set of indicators that give you much more actionable “are we actually sliding in?” than just watching vibes or elections. |
