Why the inevitable collapse is baked into your money

You don't need to be a crystal ball wielding psychic to see where humanities previous choices are pushing us towards. To figure out how we got to this point all you need is a history lesson. The collapse that's coming for the modern world won't start with a bang or a virus, in fact it has already started far before any of us were born. There's two decisions made in the past that make the inevitable collapse, well, inevitable: 1913, when the United States built a central bank on the European blueprint, and 1971, when money everywhere was cut loose from gold and became pure make-believe currency with a government logo stamped on it. Every dysfunction you see through your crisis rectangle, the wage gap, the debt spiral, the modern slavery in your supply chain, the planet slowly cooking, is downstream of those two dates. And Europe, fair warning, is not an innocent bystander in this story. In fact we invented the whole playbook.

Europe invented the money machine

Here's something that surprises most people who think the Federal Reserve is the biggest monetary villain in history: Europe was printing its way into trouble centuries before America showed up. The world's oldest surviving central bank is Sweden's Riksbank, founded in 1668, and the reason it was founded should sound familiar. It rose from the ashes of Stockholms Banco, a private bank that collapsed because it issued too many notes without anything backing them. The founder, Johan Palmstruch, was condemned to death for it. He got clemency, and Europe got its first lesson in what happens when the money printer goes brrr [1, 2]. The Bank of England followed in 1694. By the time the United States finally joined the party in 1913, Europe had been running central banking experiments, with all the chaos that implies, for nearly 250 years.

Keep that pattern in mind: a bank prints too much, the system collapses, the fix is a bigger, more official printer. It's the same loop we're still stuck in today. It never actually ends the problem, it just makes the next crash bigger and bigger and bigger.

The duck hunt that doomed the world

The American chapter opens with the strangest duck hunt in history. In 1907 the U.S. financial system had one of its regular heart attacks (not uncommon in the U.S. of A. if you catch my drift) and since the country had no central bank, the only thing standing between the economy and total collapse was one elderly financier, J.P. Morgan, personally locking bankers in his library until they agreed to stop the bleeding. That's not a metaphor either, that actually happened, and everyone agreed it was a terrible way to run a country [3].

So in November 1910, a handful of the most powerful bankers in the country, Senator Nelson Aldrich, Paul Warburg, Frank Vanderlip of National City Bank, Henry Davison of J.P. Morgan and friends, sneaked off to a private club on Jekyll Island, Georgia, under the cover story of a duck hunting trip. They used first names only. And over ten days there, they wrote the blueprint for what would become the Federal Reserve. Here's the kicker: this isn't internet conspiracy lore, because Frank Vanderlip admitted the whole thing himself, decades later, in his autobiography. "I do not feel it is any exaggeration to speak of our secret expedition to Jekyl Island as the occasion of the actual conception of what eventually became the Federal Reserve System" [4]. The conspiracy was real. It just wore hunting gear. Their first draft got torpedoed for being too obviously a bankers' club, but after the 1912 elections Congressman Carter Glass and Senator Robert Owen cooked up a friendlier version, President Woodrow Wilson backed it, and on December 23, 1913, two days before Christmas, when nobody was paying attention, Wilson signed the Federal Reserve Act into law [3]. An "elastic" currency. A lender of last resort. From now on, the money machine would have a throttle.

Did Woodrow Wilson regret it? Let's talk about that fake quote

Woodrow Wilson, the start of the decline.

You've seen the quote, usually under a black-and-white photo of a tired old man: "I am a
most unhappy man. I have unwittingly ruined my country."

That quote is fake, pieces of Wilson's 1911 campaign speeches and his 1913 book The New Freedom stitched together with invented melodrama on top. The Woodrow Wilson Presidential Library, the people who own the man's papers, classify it as spurious: the real fragments all predate the Fed [5]. Wilson biographer John M. Cooper put it as bluntly as historians ever do: "I can tell you categorically that this is not a statement of regret for having created the Federal Reserve. Wilson never had any regrets for having done that. It was an accomplishment in which he took great pride" [6].

But here's the uncomfortable part. What Wilson actually said about concentrated money is real, verified, and reads like prophecy now. In 1911 he warned: "The great monopoly in this country is the money monopoly." And in The New Freedom he wrote that America had become "one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world, no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men" [5]. He wasn't confessing. He was prophesying. He just didn't realize he was about to build the exact machine he was warning about, sign it, and call it freedom.

What the money machine actually did

To be fair to 1913: the immediate result was boring and mostly functional. Smoother panics, a lender of last resort, no more begging a geriatric banker in a library. But here's what changed forever: for the first time in American history, one institution could expand the money supply at will, quietly, without mining, melting or minting a single damn thing.

Once money is a policy instrument instead of a physical object, everything downstream changes. Wars run on credit, and immediately did. Every rescue makes the system more dependent on the next rescue. Fast-forward to 2008, and the Fed answered the financial crisis by inventing quantitative easing, conjuring trillions of dollars out of thin air to buy bonds, and then doing it again, even harder, in 2020 [7]. A central bank that was supposed to be the fire brigade is now the arsonist, the fire brigade and the insurance company, and the stock market has a panic attack every time a shareholder sneezes in the wrong direction.

And here's the receipt. A dollar saved in 1913 buys roughly 3 cents' worth of goods today. The dollar has lost about 97 percent of its purchasing power since the Fed's creation [8]. Meanwhile the U.S. national debt, which stood at roughly $400 billion when the gold window closed in 1971, blew past $40 trillion in August 2026 [9, 10]. That's not a stable system. That's a pyramid scheme with an American flag on top.

1931: Europe fell off gold first

Now here's the part that gets skipped in American tellings of this story: when the money finally broke, it broke in Europe first. After World War One, Britain tried to restore its old glory by returning to the gold standard in 1925, at the pre-war exchange rate, a decision pushed by Chancellor Winston Churchill. The pound was badly overvalued, exports collapsed, unemployment soared, and Keynes publicly shredded the decision in a pamphlet titled The Economic Consequences of Mr. Churchill [11]. Britain was defending a parity it could no longer afford.

When the Depression hit, the pressure became unbearable. Foreign investors rushed to pull their gold out of London, the Bank of England's reserves drained, and on September 21, 1931 Britain abandoned the gold standard. Countries all over Europe and beyond followed within months. The lesson everyone actually learned from 1931 wasn't "gold was the problem". It was "whatever we promise about money, we'll break it the moment it hurts" [11]. That is the exact mindset that later built the Euro and the ECB.

After World War Two, the world tried again: Bretton Woods, 1944, with Keynes himself at the table, made the dollar the world's reserve currency at $35 an ounce. Every currency was pegged to the dollar, and the dollar was pegged to gold. Which was a lovely arrangement right up until the United States printed more dollars than it had gold to back them.

1971: the year money stopped being real

The Vietnam War and the spending of the 1960s were run on credit, inflation crept up, and foreign governments, France in particular, modern day pioneers of protest, started showing up at the gold window demanding actual metal for their paper. By 1971 a run on U.S. gold reserves was visibly looming [12].

So on a Sunday evening in August 1971, Richard Nixon went on television and announced the United States would "temporarily" suspend the convertibility of the dollar into gold. Temporarily has now been 55 years. By 1973 every major currency was floating, and money worldwide became fiat: money that's money because a government says so, backed by nothing but policy [13]. The tether between money and physical reality, the thing that had constrained kings and emperors for most of recorded history, was cut in one televised speech. Nobody rioted. People just kept passing pieces of paper around, and everyone agreed not to ask what they were actually worth.

The Cantillon effect: why the rich get richer for free

Under a gold standard, money is scarce, so there's a hard physical limit on how big the financial sector can get compared to the economy that actually makes things. After 1971, that limit was gone. New money doesn't just appear in everyone's bank account simultaneously like manna from heaven. It gets created at the top, at the central banks, at the commercial banks, at the asset markets, and it flows outward from there. Economists call this the Cantillon effect, and it's the closest thing economics has to a law of gravity: whoever stands closest to the money tap feels the benefit first, before prices adjust. Whoever stands at the end of the line, that would be you, with your salary, feels only the higher prices.

The receipts are on both sides of the Atlantic. In the U.S., wages and productivity grew in lockstep until the late 1970s, then split. Since 1979, productivity has grown roughly eight times faster than typical worker pay [14], while CEO pay rose from 21 times the average worker's in 1965 to 290 times in 2023 [15]. In the Euro area, the ECB's own data is even blunter: the richest 10 percent of households hold 56 percent of net wealth, while the bottom half holds 5 percent [16]. That's ultra capitalism: an economy that no longer rewards people for what they produce, but rewards proximity, leverage and already-having-money.

Europe built a bigger money machine

If you think Europe escaped the fiat circus, have I got news for you. On September 16, 1992, a hedge fund manager named George Soros decided the pound's fixed exchange rate in the European Exchange Rate Mechanism was nonsense, bet roughly ten billion dollars against it, and won. The Bank of England raised interest rates twice in one day, from 10 to 12 percent with a promised hike to 15, and still couldn't defend the currency. Britain left the ERM that evening and Soros walked away with about a billion dollars, earning the nickname "the man who broke the Bank of England" [17, 18]. In the floating fiat era, a single trader with enough leverage could beat a 300-year-old central bank over breakfast. The money wasn't just removed from gold now. It was removed from governments.

Europe's answer was to build an even bigger machine: the Euro, launched in 1999, one currency for everyone, managed by the European Central Bank. And when the Eurozone crisis hit, the ECB went full Fed. In July 2012, with the Euro breaking apart under the Greek debt crisis, ECB President Mario Draghi promised: "Within our mandate, the ECB is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough" [19]. Then came the printing: the ECB bought bonds on a colossal scale, roughly €4.3 trillion worth between June 2015 and June 2022, and its balance sheet peaked at nearly €8.8 trillion in mid-2022 [20, 21]. That's a central bank balance sheet bigger than the entire economy of Germany. Whatever it takes, indeed.

And when the machine's logic collided with actual human beings, we got the Greek tragedy: after 2009, Greece was crushed under austerity while staying in the Euro. Unemployment climbed to 27 percent, youth unemployment peaked at 58 percent in 2013, the economy shrank year after year, and the debt was still above 180 percent of GDP at the end of it [22, 23]. A generation was sacrificed to defend a currency. If you want a preview of what collapse looks like inside a rich continent, Greece in 2013 is the trailer.

Ultra capitalism runs on modern slavery

Modern Slavery makes the world go around.

Ultra capitalism isn't a machine that merely underpays the people inside it. It's a machine
that quietly outsources its worst work to people you never have to see, so that the numbers on your pension fund keep compounding. The International Labour Organization, Walk Free and the International Organization for Migration estimate that 50 million people were living in modern slavery in 2021, roughly one in every 150 human beings [24]. And no, this is not a "somewhere else" problem: measured per capita, forced labour is highest in the Arab states, and the region with the second-highest rate is Europe and Central Asia [25]. More than half of all forced labour takes place in upper-middle and high-income countries, feeding the supply chains of the rich [25]. The EU finally banned products made with forced labour from its market in December 2024, with the ban applying from the end of 2027, which is a nice thought, and also an admission [26, 27]. When your empire needs a law to stop itself from selling slave-made goods, you should really start asking yourself how civil your civilisation really is..

The planet is paying your credit card bill

Then there's the atmosphere, which, unlike the Federal Reserve, doesn't do credit. Fossil CO2 emissions hit a record 37.4 billion tonnes in 2024 [28]. The unfairness is almost comically literal: the richest 1 percent of humanity is responsible for about the same share of global carbon emissions as the poorest 66 percent, five billion human beings [29]. In 2026, humanity used a full year's worth of the planet's regeneration by July 30, the equivalent of running the world on 1.73 Earths [30]. And for us specifically: Europe is the fastest-warming continent on the planet, heating at roughly twice the global average [31]. An economy whose money is infinite will treat a planet that's finite as an externality. That's not a bug. That's the operating system.

So what will actually cause the collapse?

First, the debt. Global debt hit a record $348 trillion in 2025, with more than $20 trillion of bonds and loans maturing in mature markets in 2026 alone [32]. Debt like this cannot be repaid, only refinanced, and refinancing requires infinite growth forever. The moment growth stalls, the interest eats the system. It's not a question of whether the math stops working, only when.

Second, the confidence. Fiat money is backed by exactly one thing: the belief that it will still be worth something tomorrow. The dollar's share of global reserves has already slid from 72 percent in 2001 to about 58 percent, and the drift keeps going [33]. Every currency on Earth is now the same kind of promise. When the exit from one starts, there is no floor, no gold vault to catch it, just a race to not be the last one holding paper.

Third, the inequality. The Cantillon machine keeps pumping wealth upward, the richest 10 percent versus the bottom half is 56 versus 5 in the euro area, remember, and economies where most people can't afford to buy anything eventually stop being economies. Historically, this is the soil every revolution grows in.

Fourth, the overshoot. We're running the planet at 1.73 times its regenerative capacity while heating Europe at twice the global rate. Infinite growth on a finite planet isn't a political position; it's a cancer waiting to kill its host.

Each failure makes the others worse, and the only tool anyone in power reaches for, printing more money, deepens the first two failures while doing nothing about the last two. Every rescue is a bigger dose of the disease. That's what will cause the collapse: not an enemy, not an accident, but a system whose only fix for its sickness is more sickness.

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