America's Descent into Authoritarianism, and What it Means For You

Hi! How’s everyone? Welcome back old friends, welcome new ones, and here’s a tiny puppy hug from little Snowy.

I’ve been amazed and delighted to meet with so many of you in sessions. We’ve been doing everything from restructuring your financial portfolios, so Trump doesn’t keep melting them down, to thinking through and crafting exit plans, to designing approaches to lives and careers in an age as troubled as this, and more. It’s deeply humbling for me to see our work begin affecting many of your lives. So please reach out if you need a follow-up, now is a good time for a check-in.

Today we’re going to discuss…

The acceleration of American authoritarianism. And what it means.

Over the last week or two, we’ve seen a dramatic series of escalations. America’s now on the brink of overt authoritarianism, and that’s according to Barack Obama. I’d say that it’s a spectrum, and by now, in a situation where the President can sanction individual companies, America’s already…on it.

That series of escalations has shocked and alarmed the world. Here in Europe, in Canada, around the globe, people have been startled to see the events which transpired. Lawmakers manhandled and arrested. The military on the streets. Something that’s beginning to feel very much like a Gestapo snatching people in broad daylight. And that’s scarcely a full recounting.

The point is that this is all getting very, very real. And the consequences of this rapid descent into authoritarianism are already hardening and crystallizing.

What are some of those consequences? Let’s take them one by one, beginning with financial ones.

Capital flight away from America’s accelerating. And so American assets continue to fall in tandem. The dollar’s sinking. US government debt is underperforming, and each Treasury auction is more and more on the edge than the last one, with less international interest. Stocks are barely hanging in there, and that’s only because, really, individual investors are desperately propping them up, but large ones are staying well away. Even property prices are beginning to slide.

All of this is causing most people’s portfolios to slowly bleed already, of course. What people aren’t quite understanding that the bleeding is a symptom of risk. Macro Risk is accumulating in American financial assets across the board—stocks, bonds, currency, property. And such accumulations of risk presage crises and crashes.

The world is walking away from investing in America at this point. If I were to put it on a spectrum, from slowly backing away, to running, then we’d be at a brisk walk, at the moment. This is why American asset prices are falling. The world simply sees too much Macro Risk in them. If Donald Trump and his administration can interfere with, target, eviscerate anything they want—then of course the world is going to exit American investment.

The rate of exit, or the speed of the walk, is only likely to continue. At some point, it’ll break into a run. And that’s when severe events will take place, crashes and crises, etcetera. Already, we’re at Step Two of the Mar-a-Lago Plan, taxing foreign investment in US T-Bills, and that’s likely to cause shockwaves across American markets, especially the bond market.

The takeaway financially is this: you need to get ahead of capital flight away from the US. It is now a long-run Macro Trend. The world’s confidence in America isn’t coming back anytime soon. And the longer that you put off restructuring your portfolio, the more risk you take of being hit by severe events, and the harder the bleed will get.

Please understand that “it’ll be OK” is quickly going to become “now it’s too late,” just as it did politically.

That brings us to sociopolitical consequences. The world, like I said, is aghast at what’s happening in America. In Europe, especially, perhaps because memories are longer, people are shocked and upset. Because they know a certain pattern about authoritarianism.

It goes like this. As it sets in, authoritarians eviscerate democratic institutions. The rule of law, democracy, justice, the press, rights. And they begin to replace all that with shadow institutions, whose purpose is to enforce the iron grip of authoritarianism.

And that is what we’re beginning to see happening. When would-be Gestapos roam the streets, beholden to no one, it seems, that’s a good example of a shadow institution. Shadow in this sense means many things: not democratically accountable, not transparent—see how they literally wear masks?—operating with impunity. Shadow means that such institutions become untouchable, ungovernable, and end up a force unto themselves, only under the purview of the authoritarian. 

These are the lines America’s crossing. And that’s just one example. See how the Department of Health, for example, is being reshaped into…something else. But what, precisely? Something much more like a vehicle set against public health, to enforce crackpot theories—again, coming from the shadows. Then there’s the war on universities, trying to bend them into compliance with the larger agenda, erasing research and scholarship. And there’s even the example of trying to control the Fed, which is already a reason that the world’s losing confidence in America financially.

So what’s the upshot of all that? It’s that American institutions are beginning to malfunction. Authoritarian societies are made of shadow institutions whose purpose is the opposite of their counterparts in democratic societies. And as those authoritarian institutions come online, gather strength, and gain power, life begins to feel very different.

Suddenly, you’re not as free anymore. In the basic ways. Privacy, association, expression. Many of you have wondered about capital controls, crackdowns on where your money can be, and those are on the way, almost certainly, as well. What can be taught, and what can’t, what can be owned, and what can’t, what a life, and what a life isn’t.

It’s for all these reasons that having options counts right now. Everyone should have a plan towards a Haven. When there’s a steep descent into authoritarianism, then structuring your life around Havens is the key. In every aspect: financial, social, cultural, emotional, professional. Havens don’t necessarily mean exit—they can be internal, too, but it’s crucial now to begin orienting yourself towards them.

We’ll discuss all that more in coming days and weeks. (I know I’m super backed up on emails, so apologies—I’m working my way through the backlog.) 

For now, please consider the above carefully. It’s time to reflect on the state of your plans. Financial. Professional. Family. All the above. The trends above aren’t going to stop here—the descent is going to continue. These are crucial moments in the evolution of your life, and the time to take action and control is here now.

This is what sessions are for. So if you need help, or if it’s time to check in,  please reach out.

Lots of love,

Umair (and Snowy!) 

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