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In this lesson we will tell you what to expect when countries reach the end of their default cycles. What will the political, economic and social environment look when countries dissolve.



In the article Poland nationalized private pension funds we mentioned that governments go into default cycles and explained what those cycles look like. However, we did not expand on what the end will look like.

The reason is simple: we don’t know yet.

No country has reached this point, but a few came very close to it.

Many people “out there” will talk about the “Great Default” as if it were some sort of a defining point in history. Rest assured, it won’t happen that way. We are 200% certain of it.

Political Systems are quite resilient. They are so for two reasons:

  • Democracy is not a bad model, just one that has run its cycle
  • Politicians really want to keep their jobs and will do whatever it takes to cling to power

Therefore, when countries dissolve, the world will not experience an economic tsunami nor a set of cataclysmic events but more of a continuous economic grinding down towards oblivion.

As it spirals out of control, each country will experience the same boom and boost cycles over and over again. However, these cycles will be much more frequent and economically severe than regular economic slow-downs. These cycles will typically start with some sort of economic “stabilization” plan (economy booms) and will end with the country defaulting on its external and internal debt.

These cycles will repeat for a number of decades. In the beginning, they will seem to operate on a frequency of roughly 4 to 7 years. This frequency will remain more-or-less constant for quite a number of cycles.

Cycle characteristics are easy to spot. They are always the same and there are no way outs. The government is powerless to do anything. Misery and poverty will become the order of the day. Crime will go up. Hope will follow deep disappointment. People will become cynical but optimistic. Strange, isn’t it?

As the governments get increasingly more desperate, they will sell any and all state properties but even these efforts will be insufficient. Then they will steal every source of private funds they can get their hands on, including your bank account, particularly if it contains foreign funds.

Nothing and anything will be out of their reaches and laws won’t matter. Everything will be done in the middle of the night, mostly in an unconstitutional manner.



We wish there would be single event that could mark the end of these cycles and usher a new Austro-Libertarian era of peace an economic stability. We wish it would be that simple. Alas, reality is far dirtier than that.

Government systems (read bureaucrats) simply won’t allow it. As long as they retain their jobs, they will keep the government up and running… even if only formally.

And here lies the key.

Over time people will realize that governments are powerless to enforce laws. That governments are superfluous and that people can reach agreements amongst themselves far more efficiently and effectively. This will lead to a general disregard for laws. All kinds of laws and regulations. Anything that is an add-on and goes against common sense will simply be ignored:

  • Building codes? Gone!
  • Traffic laws? Gone!
  • Tax payments? Gone!
  • Restricted medicines? Freed!
  • Freedom of speech? Freed!
  • Zoning laws? Gone!
  • Traditional Justice System? Gone!
  • Transactions? Cash!

In a summary: mass civil disobedience. But not the bad one, the good one. Life will go on but freed from government interference. Governments will still exist, of course, but they will be mostly powerless to enforce anything. All government influence (positive and negative) will slowly tapper down into nothing.

This is not to say that the government will be completely powerless, it could still inflict a lot of damage.

Confronted with these situations the government will try to tighten their control over the population by setting-up a Total Awareness System. This system (already in place for a few years in Argentina) attempts to know any economic and financial data there is to know about all citizens. With this information at hand, they can persecute and prosecute people at will to “set examples”.

However, even this system will fail in the end. What happens when people simply ignore prosecution in mass? Who do you send to arrest them? The military? And loose the very last shred of vote confidence you still have left? Assuming the military won’t revolt (which is a rather large assumption)? Don’t think so.

If you believe that this is political science fiction think again. It has happened and it is happening in Argentina. This is day-to-day living in Argentina. It has been so for a few decades now.

So when countries start to approach their dissolution point, what’s being dissolved is not their political identity or boundaries (unfortunately they remain) but the remnants of a useless government. The country begins to walk in two directions: the formal government towards one and the rest of the people towards another. They shall rarely cross paths and when they do, they shall mostly ignore each other.

At this point, governments will still attempt to control countries, mostly through economic changes, but will fail miserably. You simply cannot control what you cannot enforce. In the process, they will damage the economy even further and make disbelievers of the few remaining faithful ones.

Where we go from here is a mystery. It hasn’t happened yet. Nowhere in the planet. But we do have some parallels from history. Take the decay of many empires in antiquity. They did not collapse overnight. They slowly disappeared from history over long periods of time 100 – 200 – 300 years.  If those systems, which were inferior to democracy, took this long to finally disappear, how long will it take for a modern Democracy? Our guess? A very long time.

And what can we expect at the end of the journey? Again, if we can extrapolate from history, a long period of lawlessness… which we hope will be taken over by an Austro-Libertarian System. Not because such a system is theoretically superior (which it is) but because it is rooted on day-to-day human activities and common sense. If left to their own devices, people will naturally drift into an Absolute Austro-Libertarian System now that they know that everything else has failed.

And then reconstruction may begin. We will be freer and wealthier.



You can identify an incompetent historian because this person is always able to find the definitive cause that produced an historical event. Cause “A” unquestionably produced event “B”. Linear thinking.  

Never mind that causes, C, D, E, F, G and their derivatives C1, C2, C3, D4, D7, D18 and F87 were also present and the events Q, X, Y and Z were also involved. Non-linear thinking. True history.

When we said that as the current democracies die they will be replaced by good lawlessness we were thinking linearly. We positively know that there will be a very large number of events that will take place between now and then. Not the least the appearance of The Singularity. In 20 years or so computers will reach the same level of processing power as the human brain. Soon later they will become self-aware. Where we go from there is anybody’s guess. Don’t delude yourself into thinking it won’t happen. It will. This is relentless and set in stone.

How will humanity deal with a new intelligence, a new life if you like? This life capable of reasoning and learning at a much faster rate than any human can. Where do we go from here? Will they show us a better Political System? Will we be friends with them? Pets? Partners? This is anybody’s guess.

All we are saying is that as countries dissolve their population will naturally drift towards an Austro-Libertarian system. How far will  this system progress is still in our future.

And now you know. The end of the world as we knowing is coming. Slowly. As it came many times before in human history. Evolution, not revolution. It’s inevitable.

You could be a passenger on this new adventure and enjoy the ride or you can try to stay behind, fight to maintain the old system and become part of an extinct species.  Your choice.

We? We will be looking at the amazing new panorama with our noses glued to the windows.

Note: please see the Glossary if you are unfamiliar with certain words.



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