Creative Destruction vs. Destructive Creation
Posted September 15, 2022
Beer bellies… bad memories… bad reputations… addictions… garbage…
And… face tattoos.
All examples of “destructive creation”; in most cases, they take much longer to destroy than they do to create.
Of course, there are also things that take longer to create than they do to destroy, like…
Supply chains… private businesses… infrastructure… civil liberties…
You know, the politically expendable… or, wait, no… “non-essential” things.
These life-improvers were created through a process of “creative destruction,” a term coined by economist Joseph Schumpeter. He used it to mean the “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
Schumpeter saw the market as a cycle of evolution, not unlike the evolution biological organisms go through after repeated life-cycles: “The essential point to grasp,” Schumpeter wrote, “is that in dealing with capitalism we are dealing with an evolutionary process. … Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary.”
Schumpeterians believe that over the past few hundred years, technology and innovation have reshaped society in a consistent recurring pattern. So consistent in fact we can use these cycles to get a pretty good idea of what the future holds. (But that’s a topic for a different day.)
At the end of each cycle, the existing institutions, structured around the old economy and society, no longer work for the new one beginning to sprout.
Social unrest swells. People feel dislocated, confused. Old institutions try to train a dog with tricks meant for a cat; or they use old methods to fix new, more complex, problems. (Nothing against cats.) Social systems that once worked strain under their own weight.
Eventually — after fighting the change tooth and nail — we reform and build new institutions that better match and shape the new economy. And, ideally, in ways that benefit the most people possible.
The Wall of Bloatocracy
The good news…
It’s still possible to improve people’s lives through market innovation.
Times of crises can be times of enlightened and efficient productivity. (Necessity is the mother of invention and all that.)
The bad news…
In those areas where individuals around the world experience the greatest costs and frustrations: housing, homelessness, education, social mobility, healthcare, criminal justice, and on…
We run into a brick wall of institutional bloatocracy (bloated bureaucracy).
But the news gets worse…
Institutions like the Fed attempt to alter the natural and evolutionary process of markets by brute force (“intervention”).
Their motto: Come hell or high water, we’ll save the economy… even if we have to destroy it first.
This is the inversion of creative destruction; destructive creation.
Recall, it’s where the thing (or its aftermath) is much harder to get rid of than the thing is to create.
Kind of like a beer belly.
How Bad Could it Get? Let’s See…
For reasons of this wanton destructive creation, Jim Rickards has been warning us since March that a massive crash was coming.
And the signs are becoming pretty clear…
The Dow has dropped 1,300 points in just the last few days…
Dow books near 1,300-point drop as stocks record worst day since June 2020
Inflation is spiraling out of control (but, says Jim, watch out for what’s next: deflation)…
U.S Inflation Report was ‘worst case scenario’
And even people like Michael Burry — the Big Short guy — are starting to agree that this massive crash is underway…
Michael Burry declared that the epic market crash he'd predicted is underway
Worse, according to Rickards, we’re running out of time here.
The time to decide if you’re going to act is now.
On Sunday, September 18th at 7 pm ET Rickards is going live with an update and a prediction.
If he’s right about what’s to come, it could send the Dow plummeting by 80% or more virtually overnight.
Some will ignore this message, hoping that he’s wrong… and that everything will turn around.
(Sure, we’re optimistic in the long run. But, as we’ve said many times, we’re not above preparing for the worst in the short-term.)
It’s up to you.
Even if you’re a skeptic…
Based on Jim’s past predictions, I can tell you this event is pretty shocking.
In fact, due to the controversial nature of this event...
Our publishers are requesting you sign a waiver acknowledgement in order to attend.
If you’re interested in attending you need to click here now to review and sign (you’ll see a prompt on the second page).
It’s free and Jim will even be giving away a play that could 10X or more during a market crash.