The Macro Doom Loop: How The System Screws You (And What To Do About It)

If it feels like your life is getting harder, that’s probably because it is.

Everything is more expensive.

Quality of life seems to be in decline.

Everywhere you go morale seems to be in the gutter.

You’re working harder than ever before, but not getting ahead.

Why?

This is the most important question you must ask yourself.

And if you understand the answer, which I am about to explain to you, you will save yourself years going down dead end paths that do not help you achieve financial sovereignty.

The reason your life is getting harder is because of the Macro Doom Loop.

It goes like this.

Most Western countries have ageing populations. Ageing populations are expensive, because healthcare for the elderly is expensive. Lots of money is spent keeping old people alive for a bit longer. I’m not judging the social impacts of this, simply telling you the financial reality.

These countries also have social welfare systems designed to provide a safety net for old people, the idea being that they are too old to work and therefore the State needs to provide for them. This is what the pension is.

If you have an ageing population and a social welfare system that is designed to assist them, the reality is it’s very expensive to maintain it.

Over time, as more people age and require State assistance, the budget becomes strained: more and more money has to be allocated to them.

And if you’re allocating money in one area it either has to come at the expense of another area (all else equal), or you need to find new money to fund it.

So what does the government do?

Generally speaking, it either raises taxes, or sells bonds to the central banks to finance the increased expenditure via increased debt.

There are many ways to raise taxes, one of which is actually mass immigration.

Yes, you heard me right.

Mass immigration.

How?

Well if you increase immigration, you indirectly increase the amount of taxes you receive in the economy through consumption.

Basically, more people means more spending on goods and services, which means higher absolute goods and services tax (GST), all else equal.

So one of the reasons the government loves mass immigration is it’s a way to increase the absolute GDP of the economy and increase tax receipts.

These tax receipts help to cover the increased expenditure associated with an ageing population, amongst other things.

Mass immigration also enables the government to pretend they are excellent economic stewards - able to ‘grow’ the economy year on year.

But this is nothing more than a cheap parlour trick.

Because GDP per capita is what we should all care about: how much is the economy actually growing relative to each person that is in that economy?

Politicians never mention GDP per capita because it shows the truth: they are operating a ponzi scheme based on mass immigration and debt.

In terms of other taxes besides mass immigration, there has been a recent movement towards death taxes (an inheritance tax) as well as exit taxes that make it very difficult to move your money out of a country (Norway is one example of this).

This is really all about the same thing I am describing: these countries have too much debt, too many old people, and not enough revenue to fund any of their social welfare programs without either raising taxes or taking on even more debt.

It’s a literal ponzi scheme.

And you know who pays for it?

You.

You pay for it, not just directly through taxes, but through currency debasement and worse quality of life.

Because when you raise taxes too much, something interesting happens - the Laffer Curve.

Rather than getting more tax revenue, past a certain point you actually get less.

And if you stop and think about it, this actually makes perfect sense.

Beyond a certain point, taxpayers get so fed up with the whole thing that they basically say ‘screw it, I’m leaving the country and taking all my money with me’, meaning the intent of the policy (to raise more tax revenue) actually backfires and the opposite happens.

Which is why governments like Norway are now tightening the hatches, with exit taxes, to make it harder to do this.

There are many ways we could describe this ‘system’, but I would like to explicitly call out what is happening:

This is theft, plain and simple.

These governments steal your money, fund it towards causes that are fiscally unsustainable and which you yourself as a current taxpayer will never receive, and then gaslight you into thinking the problem is something else.

They are the problem.

The government is the problem.

And the root cause of this whole thing is the fiat monetary system itself.

Which brings me to my next main point in the Macro Doom Loop.

Remember how I said earlier that you can either raise money through increasing taxes or increasing debt.

Well let’s talk a bit about debt now.

Western Governments around the world are sinking because of it.

Under a fiat monetary system, what ends up happening is the money supply expands.

The money supply expands because the ‘money’ (fiat currency) is not actually backed by anything.

It is in infinite supply.

And because it is in infinite supply, any government that controls its own currency via its central bank has the ability to ‘print’ it out of thin air to finance its expenditure (I know, I know this is technically not what happens, but practically it is the simplest explanation to get my point across).

Well, isn’t that great?

The government absolutely loves this.

Remember, most governments operate on 3 or 4 year terms.

They don’t care what happens 10 or 20 years from now.

They care about gaining and retaining power today.

So what do they do?

Well, they do exactly what they are incentivised to do: they effectively campaign on insane promises of giving their citizens more ‘free’ stuff, and then when they get elected they use the central bank to print fiat currency to fund it.

Magic!

Except it’s not magic.

Because over time the debt builds up.

Until eventually you reach a point where you have to take out more debt to pay off the interest on the old debt.

Which is the current situation of many governments, including the US Government.

They are borrowing to pay off interest from previous amounts they have borrowed.

In other words, a ponzi scheme.

You know what else happens when they use money printing to fund their expenditure?

You accelerate the Doom Loop via currency debasement.

Every extra dollar that gets printed dilutes the value of every existing dollar circulating in the economy.

Which makes sense because that extra money has to go somewhere.

And guess where most of it ends up if you follow it down the chain?

Assets, like houses, stocks, and crypto.

Because, yeah, sure, the money the government spends goes to particular programs (e.g. NDIS in Australia), but that money circulates downstream in the economy - people spend it on goods/services, the recipients of that money also spend it, etc (the multiplier effect).

The reason why it ends up in assets is because people use assets to protect themselves from inflation.

Even people who can’t describe what I am saying to you now intuitively know this (‘stocks only go up’, or the Australian version ‘property only goes up’).

The social consequences of this part of the Doom Loop are horrendous.

Mass immigration drives higher house prices via increased demand for housing, and currency debasement drives higher house prices via increased demand for housing to protect currency from losing its value.

Who loses from this?

Anyone who doesn’t own hard assets loses.

Who loses the most from this?

Young people.

Young people - those just getting started in life, working the first few years of their job, trying to find a partner to have a family with, trying to work out their life - get absolutely screwed.

They are sacrificed for two groups of people: old people, and the government.

And yeah, you can tell me all you like ‘RA, that’s pretty crass, it’s not the old people’s fault’.

Yeah, yeah - I get this.

But I am telling you, as a fact, this is how the Doom Loop works.

You are funding old people who will receive benefits you will never receive, and then the government is gaslighting you into believing otherwise whilst printing money that debases your entire future hopes and dreams out of existence.

You know one of the main reasons why the fertility rate is so low?

If you’re still with me, it should be obvious by now, right?

Men cannot provide for women if their means to provide has been siphoned away by the State to subsidise immigrants and old people.

If most young people can barely even afford to rent their own 1 bedroom apartment these days, let alone buy a place, how do you expect them to be able to have a family? They literally have no where stable to live - why would they bring children into the world with this uncertainty?

Given this environment, it is completely understandable that women don’t want to have as many children as before.

Why would they? They have no financial protection.

They also have no familial protection, because if house prices are so high that you have to live somewhere far away from the Central Business District, neither your friends nor family are going to live there.

Which means you have no one to help you raise children - your parents are not nearby, your friends are not nearby, your grandparents are not nearby.

You and your partner would both be working two jobs, to pay off a fat mortgage or a huge amount of rent, for a derelict dogbox, whilst also paying for your children to be raised by someone else (childcare).

What type of life is that?

It’s slavery.

We have created a society that intentionally screws young people financially, intentionally isolates them, and then blames them for ‘not working harder’.

When really none of this is their fault.

They are operating within the Doom Loop.

Like a snake eating its own tail.

Because you know what else happens when people don’t have kids?

The government argues ‘well, people are not having kids, therefore we need to increase immigration otherwise the economy will not grow’.

Do you get it yet?

If you understand this by now, this argument should make your blood boil.

Because they have it exactly backwards.

The economy is not growing because you are increasing immigration and taking on too much debt, which pushes house prices and other assets to the moon, debases people’s hard earned currency, and disincentives them from having children.

I will repeat what I just said, because it is important.

Immigration does not grow the real economy, it reinforces the Doom Loop that is responsible for all of our problems whilst masquerading as the solution.

And you know what the final piece of irony here is?

All of these immigrants the government is currently importing are soon going to be out of a job, because the Ubers will drive themselves and the white collar workers will be replaced by AI models running on some Amazon server in the cloud (I write about this here).

In other words, once we get AGI, unemployment will start to increase, social welfare (unemployment benefits) will increase as a result, people won’t be able to pay their mortgages, and this entire Doom Loop becomes unsustainable.

The government will be forced to print infinity fiat shitcoins out of thin air to pay for all of this, and the number will be so large that there will likely be a psychological loss of faith in fiat currency itself.

AGI will be the death blow to the Doom Loop.

Okay, so now that we have a clear picture of what’s actually going on across most Western economies right now and how it likely ends, let’s talk about what you should do about it.

How can you use this knowledge to not only survive, but thrive?