Addison Wiggin: We Can't Afford the Solutions Needed to Reverse Our Decline

"Everything is out of whack. We can’t be the policeman to the world and provide a safety net for all citizens if we don’t have the tax rates or the income to the government that supports all that. It seems like common sense, and it should be common sense. But something happens when you take it from a discussion that you and I might have to the political level, which is often just driven by emotion and public speech. Somehow the desire, the continued promising that the government can solve all problems, meets with jubilation and boasts. And people want to just keep going, and they never want to actually accept that at some point the unsustainable has to end. I mean, that’s the nature of the world.

It gets frustrating to think that we’re at a point where politicians are really going to have to work together to come up with solutions that are going to be unpopular to anyone - and I struggle to think that we’re even capable of putting together a set of solutions that will work. It might be too late."

So states Addison Wiggin, executive publisher of Agora Financial and executive producer of I.O.U.S.A. Strong words from a man who has been writing for over ten years about how our debt-inebriated economy will eventually collapse upon itself but is still shocked and saddened to see his predictions play out in reality. He sees the global economy to be at a point of massive destructive transformation but full of opportunity for informed investors, and, ultimately, for the system that succeeds it.

Click the play button below to listen to Chris' interview with Addison Wiggin (runtime 41m:50s):

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In this podcast, Addison expounds on:

  • His shock, despite releasing numerous works in advance that predicted it, at how quickly our political and financial leadership panicked and abandoned fiscal sanity during the crisis of 2008.
  • Why it may very well be too late to avoid a collapse of our economy. Forget how painful or unpopular the corrective steps we need to take are we simply cannot afford them in our current national condition. 
  • How the bond market will be the battleground upon which the collapse will be waged. The trigger point will be the moment at which the government is forced to raise interest rates above what it can afford to finance continued obligations.
  • Why the Fed is between a rock and hard place trying to stave off this endgame, which Addison sees as inevitable. Recommencement of quantitative easing (or any such QE3 variant) will likely serve as the match to the bond market powder keg.
  • Despite the risks and the growing certainty of the outcome, many average Americans still put substantial blind faith in their leadership. Those who see with a critical lens are at a distinct advantage at this point in the timeline if they take informed action to position themselves against currency debasement. Hard assets and energy are obvious choices.
  • How Addison sees the major thrust of our current trajectory ending the US dollar's position as the center of the world economy likely evolving to a shared structure with the major Asian players. During this transition, living standards to which Americans are accustomed will fall especially as the reality of Peak Oil arrives in full force on the world stage.
  • Why investment opportunities in this next century will be best seized by smaller nimble players vs. the large corporations and institutions of the past. Life sciences and energy innovation are particular areas of promise.

Addison Wiggin is executive publisher of Agora Financial LLC, the independent economic forecasting and financial research firm he runs with Bill Bonner. Agora's wide-ranging operations include the influential econoblog The Daily Reckoning, best-selling publications such as Financial Reckoning Day Fallout and The New Empire of Debt (both of which Addison co-authored with Bill) and the highly-acclaimed documentary I.O.U.S.A (on which Addison was executive producer and co-writer). He kindly wrote the forward to Chris' new book The Crash Course: The Unsustainable Future of Our Economy, Energy and Environment.


Our series of podcast interviews with notable minds includes:

This is a companion discussion topic for the original entry at

Well I did enjoy the conversation. Thanks to both Chris and Addison.

"The size of an empire is dependant on the speed of it's communications." Isaac Asimov.
That and the fact we live in a finite world that is globalised and homogenised means debt has no where else to go. We cannot all be indebted to each other. If all the IOU's in the world were swapped a lot of the illusion of money would evaporate.

And we will be faced with a de facto World Government. Just as the city states were swallowed up into the nation states, Nation states will be swallowed up into a World State.  

"We must accept the unacceptable" Emporor Hirohito, 1945.
I am suprise that the most disruptive  technology recieves no mention. Is it just too big to swallow?

What timing. I just started reading Chris’s book this morning and noticed Addison wrote the foreward and lo and behold, here’s a podcast with Chris and Addison. I look forward to reading The Daily Reckoning everyday. Thanks for the listen.

I really enjoyed Chris’s interview with Addison Wiggin.  There’s something about hearing people with that much insight and knowledge of what’s going on talk to each other like this; I find I often get “more” out of it than what I’d previously picked up in written material.  Maybe because opinions flow more freely in conversation vs more polished articles.  Whatever the case, I enjoyed listening in! 

I dont think that “Nation states will be swallowed up into a World State” anymore than an ecosystem (a forest for example) becomes a single living organism.  The requirement for individual competitive separateness at some point begins to balance out the force towards consolidation.  The Europeans (esp. Germans) have learned this the hard way recently.  I think that Europe will lead the way towards an understanding of how we might balance regional blocks (at most) or perhaps individual countries.  No one with free time or resources wants to see one language, one hamburger food, one currency for one world.  At best that is boring and in practice leads to much lower standard of living for everyone…

Double dip in housing is now official per Clear Capital: prices lower than previous trough that triggered house buy tax credit.  Midwest prices down 8.7%.  Phoenix and Tucson still a blood bath.

My perception is that Europe in general is moving towards the right with a stronger showing of some of the more extreme right parties.  Look at the debates in the Netherlands, look at Belgium’s current political on-goings.  For long periods of history, Europe has been involved in many wars with a few interludes of peace, my fear is that we slip back in that direction as things unravel further.

I saw IOUSA a while back and it was very good.  I also agree that the podcast was insightful.  Deficits do matter and financial unsustainability is a reality. 
On the other hand, this thing about the “safety net” and our military, these things, as expensive as they are, really cannot be dismissed either. 

Few Americans realize the numbers of mentally ill and disabled people there are that cannot function outside of an institutionalized environment.  Plus we have millions of prison inmates - they are expensive too, but do we really want to let them run free?  And the military, well, it is necessary to have some “teeth” to protect our national interests, isn’t it? 

Sure, we can reduce spending in some areas… but I think we’re damned if we do and damned if we don’t.

I feel your pain Marvin. I lost my culture when Rhodesia fell.But it fell never-the-less.
I have found the world outside the busom of my culture to be homogenized, pasteurized and altogether not to my liking. But I have to build a bridge and get over it as my daughter snarkily reminds me.

In the interview both participants seem perplexed by why government officials continue to persue the foreign policy they do as well as the energy policy they do.  The two are linked.  The primary purpose of our military infrastructure is to control the worldwide flow of oil both financially and physically.  If we didn’t use oil for cars then the military infrastructure would not be worth the cost.  The policeman of the World thing is just a thin veil as our abscense from any of the African and other genocides loudly testifies.  We are only interested in maintaining the status quo or controlling the change in energy rich, or geographically strategic  areas. 

The shame about this kind of interview is not only that Martenson completely ignores the self-evident reality that debts in sovereign fiat currency are, by definition, always reliably paid, but that he gives the Peterson shill a complete pass when he ignores conventional economics to decry any stimulus during recession. And where was Peterson when the Bush administration was discarding the Clinton surplus in favor of unpaid-for wars and TARP? … [crickets] …
Far from Wiggins’ threatened “Weimar Germany” inflation, the U.S. has been experiencing deflation. When S&P threatened to downgrade U.S. debt, the markets rejected their advice and bid up the price (down the interest rate) on U.S. bonds.

Meanwhile, rather than take advantage of current low cost borrowing, the likes of Peterson and his billionaire buddies prefer to preserve the value of financial assets and ignore the unemployed and any possible contribution they might make in actual goods and services.

As much as I agree with Martenson’s overall take on peak oil, this kind of heads-you-win-tails-I-lose emphasis on a budget deficit is a bitter disappointment. The mythical “bond vigilantes” that are threatening to take down America with Weimar-inflation are figments of the fevered shills for the oligarchs. They have not materialized.

As for consulting these people about sustainability, or economics generally, far better to consult Herman Daly, or people like L. Randall Wray, Michael Hudson, or Stephanie Kelton. (See for one example)

An interesting interview, thank you. Coming from the UK my ears pricked up to the statement on the UK’s large external debts. While our government is trying hard to reduce the deficit everyone in the government and the UK media stays well away from any mention of a bond market revolt relating our government bonds. We are always seen as very different to Greece, Ireland, Portugal, Spain, etc… I fear this is wishful thinking from the government and all mainstream media and its interesting/scary to see a different perspective from outside. Of course I think the US is even more in denial :slight_smile:
I did feel that many times Chris was pushing Addison to address the darker issues we confront, such as Peak oil, contraction of the economy. Addison seemed to believe there would be some magic bullet new technology that was a wise investment, and Chris couldn’t quite bring himself to say what if there isn’t. I just felt that Chris’s world view was a little darker than Addisons and Chris couldn’t quite speak freely about all the crash course issues.

Of course, Addison needs to find some positives as he runs a Financial investment firm - but what do I know. I’m no expert!

Isn’t hyperinflation just the inevitable end result of defation when your debt to GDP ratio is over 100% and you have exhausted all remaining means of increasing real world economic output, in order to grow your way out of your debt?

Isn’t it the Fed buying those bonds?