Apr 15, 2025 11 min read

The Macroeconomic Consequences of Fascism, or How Much of America's Wealth Will be Destroyed

Hi! How’s everyone? Gather ‘round, because today we need to get a little bit serious. Here’s a tiny puppy Snowy hug to prepare you.

Things are moving very fast now. Everything, except, go ahead and chuckle, most people’s money. It’s not moving nearly fast enough. Out of the way of this calamity. It just keeps on getting shredded by the day, because Wall St’s decided for millions that “everything will be 'OK.”

Will it? I want to simplify and cut through the noise, like I've been teaching many of you about in sessions. Today I’m going to teach you about the economics of a situation like this. Fascism.

What are the economics of…fascism…anyways? You see, Wall St’s asking the average American to make a bet. That fascism has no negative financial or economic consequences.

Make any sense to you? Do you want to take that bet? Millions of people are taking it, only they don’t quite understand it that way, but they should.

Wall St is way, way out of its depth here. It doesn’t have many good economists left, so let’s spend a moment learning about the economics of situations like these.

So we can answer the question: how much wealth is America going to lose at the end of all this?

The Microeconomics of Fascism

Let’s imagine a hypothetical country where people can be disappeared to prisons in far-away lands, where they’re brutalized, maybe even killed, for no legal reason, and indeed, for no reason beyond: fascism didn't like them.

What a pity, you say. So what, says Wall St, who cares? Because it imagines there are no economic or financial consequences. To something so small.

But even in such a simple example, there are numerous ones. If people can be disappeared, then how should businesses hire? More to the point, whom should they hire? Only those who are “pure” enough? But what if they can’t do the job as well as others?

So the labor market immediately begins to break down in a very real way. Businesses cannot invest in people at the same rate, because of course now investing in people is risky. But of course people are any business’s most valuable asset.

The first is always its brand. Always. Think of, I don’t know, an historic one, like Ford, or Coke, or Apple. Brand values last centuries, not just microseconds, and they are worth the entire value of “goodwill” on a balance sheet.

So how do you…LOL…manage your brand…in a fascist society? You can’t. Your brand has no value in a fascist society. Fascist societies are run, of course, by dictators, and what they dictate is what is to be valued, and what is not.

So what about ideas? What happens if a business has...an idea...that fascism doesn't like? Whoops, there goes that entire series of future innovations. In fact, fascism is threatened by ideas, period, so there go education, academia, and universities, which are what educate us, and education is what creates economic potential. Wait, what about research that, say, benefits all of society, or even the whole planet? Can't do that either, because fascism really hates that.

This example is part of a larger theme. In a fascist society, financial systems and businesses cannot really invest. In much of anything. In people, in innovations, in brands, in new products, in ideas, in creativity, in research, and so forth. Why would they? They are only really there to do what the dictator wants, not things that benefit people, which is what "economic growth" really is.

Business strategy, not to mention investment, is therefore irrelevant. They cannot really exist in any serious sense.

Please understand the link here. Functioning modern economies exist to benefit people, and thus create growth. Fascism does not want everyone to benefit, just its chosen superhumans, and it wants everyone else to suffer. In no real sense can such an economy grow.

There is a fundamental paradigmatic conflict at work here, which cannot be resolved or reduced. I know this is tough stuff conceptually, but the instant you really understand this, it's sort of Zen: you'll understand everything about the economy at once.

So soon enough, businesses have to either shutter their doors, or find ways to leave.

Do you want to know what really happened this weekend? We were discussing it in recent sessions. Trump gave a “reprieve” for tariffs on computers and smartphones. Why? Did he suddenly grow a soul, or a brain?

Of course not. I predicted this for you in sessions last week, exactly what would happen. Apple would threaten to walk. Over the weekend, there’s a 100% guarantee that it did. And that is why Trump changed his mind.

None of what we are discussing is hypothetical, and you already know that, but perhaps you don’t know it enough. It is now happening before our eyes.

So what happens to the economy of a fascist society in larger senses, then?

The Macroeconomics of Fascism

In such a hypothetical society, the stock market soon enough becomes little more than a casino. I’ve taught you how business strategy becomes meaningless. But understand what that means. The only real point of a stock market is to pick those who the dictator favors.

That’s it. It’s not to reward innovation, or the careful stewardship of capital, or brand value, or anything else. It’s just to sort of hope that you choose which company the dictator will reward, or maybe just post on social media about, that day.

But such a stock market isn’t doing anything economically valuable. It is destroying real value. Could you “invest” in it? Not anymore than you could “invest” at a roulette wheel. Anyone leaving their money there too long is sure to get burned, because the odds are not good.

So what happens to the currency of such an economy, as its stock market becomes a casino, a roulette wheel, not a mechanism for long-term value creation?

The currency begins to depreciate.

I’m now going to teach you how to think about currencies, which people often imagine is a very mysterious subject, but in fact, it’s very simple.

A currency’s value is just a reflection of an economy’s potential for long-term value creation. That’s it. Why is it, that say, Canadian dollars are worth more than Indian rupees? Because of course Canada is wealthier, and is excepted to stay and grow even wealthier. The higher value of the currency reflects that.

See how simple that is? Almost deceptively so.

Now. What is a “stock market”, really? I am going to teach you a very powerful principle, which you should always remember. A stock market is a just an instrument to value an economy. If an economy is small, a stock market’s value will be, too. If an economy is growing, a stock market can rise.

But if an economy is shrinking? A stock market must fall.

Now. What happens as fascism distorts basic decisions of good investment, not just by you, the average person, but by the biggest institutions in the country? When it limits what companies can invest in, right down to people? When it shapes what kinds of loans banks give, making them usually bad ones, to cronies and crooks? When it harms what kinds of decisions otherwise well-run companies might make, about what to make, where, when, why, and for whom?

What happens when a dictator decides that a society can only buy this kind of good or service, from this kind of institution, organization, or country?

The economy shrinks.

Getting the picture yet?

How an Economy Goes into Multiple Organ Failure

Now you should understand why all of America’s three major financial markets are all falling in tandem.

The stock market, the bond market, and the currency.

This situation isn’t just “unusual.” It is like multiple organ failure.

It tells us that something is very, very wrong here.

Many things, in fact.

They go like this. The world does not trust America anymore. It doesn’t have faith in its assets. Because it is not expecting its economy to grow much anymore, and even if it did, would you trust Donald Trump to make good on your debt or stock option in that growth?

Here is another very, very important principle for you to grasp, that your money managers don’t.

When a society’s three major financial markets, stock, bond, and currency, are all falling in tandem, that society’s economy is in the deepest form of trouble there is.

This is the rarest event in the world of economics. So rare, that we almost never see it. We barely see it, so rare is it, even in failing states.

When do we see this state of multiple organ failure?

When a society is making a crucial phase transition, to a lower form of sociopolitical order.

In the wrong direction.

When, for example, it is not operating as a democracy anymore, and starting to resemble something much more like a fascist state.

The Economics Consequences of Fascism

I teach you these lessons for a very simple reason.

Millions of Americans are never going to learn them. Not out of a lack of intelligence, or malice, but because there is nobody teaching them all this.

Figures like me were supposed to be that person. But something went wrong. We were never allowed, really, to tell Americans what awaited them at the end of this dark, long, and winding road. Which is poverty.

Their financial advisors and wealth managers will never understand the lessons I am teaching you. They will go on denying to the bitter end the simplest three principles of all.

Let me now summarize them for you.

Fascism has economic consequences. There is no possible world in which fascism doesn’t have economic consequences.
Those consequences are negative. There is only one possible world in which those consequences are positive, and that’s one in which every other society is fascist. But that’s not our world, is it?
The negative consequences of fascism mean that a society’s major financial markets, stock, bond, and currency, all come undone, and fall in tandem, as macro risk is priced in, and trust and faith are lost. Ultimately, a dramatically lower investment rate—translation, everything’s only done to please the dictator, and little to no investment is possible in real terms—mean that such a society grows poorer, fast.

How Much of America’s Wealth Will be Destroyed?

So how much of America’s wealth will be destroyed? I’d estimate, very roughly, something like the following is a good rule of thumb, and remember, Trump’s already wiped something like $10 trillion from the stock markets, which is half of America’s GDP.

If this goes half-way, and let’s say America has a real election in a few years (go ahead and chuckle at whatever that even means at this point,) then maybe about half it’s wealth will remain.

If this goes all the way, and America becomes something like another Russia, then of course “wealth” is a term that has very little real meaning at all anymore, and its wealth has effectively been destroyed.

If this goes on another few months, even, I’d say we’d be getting pretty close to about 20% wealth destruction, and many people who are getting precisely the bad advice above from their money guys are already getting to that point, fast.

That’s just a way to think about it, not a formal model, but a heuristic. It should serve the purpose though, to guide your thinking in a more formal way.

(By the way, I know some of you send these essays to your money guys, so after they scoff at them, and lose people another 5% or so tomorrow alone, remind them that “capital destruction” isn’t something I made up, it’s a technical term. We model it in economics, precisely because it is a real-world event which you are now living through.)

Why I’m Teaching You What You Already Know

This is something that you already know.

Don’t lie to yourself about this, because this part is what really matters.

You know this, in your gut. Your unconscious knows it. You’ve asked yourself a hundred times in the last few days alone, are these people crazy? Do they really think that an economy can grow when a society’s going fascist? Doesn’t that just mean the world, meaning all the investment in it, is at more risk than ever? And doesn’t that mean that anyone sane would always choose putting their money in a democracy, where it’s safe, from huge corporations, to mega-banks, to massive funds, right down to me?

If it feels like everything they’re trying to tell you right now is wrong, that’s because it is.

All the “it’ll be fines” from all the finance dudes in the world don’t change how this story ends. This story only has one ending. Only one. A society gets much poorer, faster than it can imagine or comprehend. There is no other ending to this story, and there never has been in history. Was the ending any different in Soviet Russia, Maoist China, or modern-day Russia?

All denial does is make you more vulnerable to being part of how this story ends.

You must take responsibility now, and I’ve taught you that for some time now. But I want you to understand it in a deeper way. This is the point where things really come unglued.

There is no coming back from any of this. Do you think if Donald Trump suddenly turned into Mr Rogers tomorrow the world would smile, leap to its feet, and shake America’s hand? Don’t kid yourself. The rupture is permanent, and it is real. As a European friend said to me just the other day, the first time America elected Trump, we shook our heads, and laughed. But this time is different.

This time is different because America has decided, or at least Trump has decided, to attack the world's capital and wealth, even America's. In the many forms of trust, good will, faith, creativity, meaning, purpose, right down to the "financial assets" that are mere fleeting reflections of all those deeper qualities and relationships.

The story only has one ending. And this is the point at which you decide how much you want to be part of it. This moment. Right now. The decisions you make now will affect the rest of your life, your children’s lives, your grandchildren’s lives, in ways that are beyond the outer limits of your most extreme scenarios. Did you really think we’d be here, right now, after all? Not even three months in, and multiple financial crises on the horizon, with millions of people’s life savings wrecked?

What did you think I was warning you about?

It isn’t going to get better from here. It is going to get worse, and the cycles above will interlock and reinforce one another.

Somebody said to me in sessions the other day, what if you’re wrong? I laughed quietly, and said: I always hope I am. Would you like to bet on it? We both laughed. Because it wasn’t a joke at all.

The question isn’t about me, my friends. It never has been. I am just here to teach you and guide you. That is what all my education was for, and I’ve always scorned and looked down on those of my peers who thought the point was to put it to more vulgar purposes of fame and power.

The question is about you.

The economic consequences of fascism are real. And in that way, I want to answer several of your questions, from, is this fascism, to what happens next, to what should I do with my money, to where do we go from here.

As always, if you need advice, just reach out. If you need it urgently, and you're looking at the calendar booked out to infinity, just email me and let me know and I'll see how to squeeze you in.

Lots of love,

Umair (and Snowy!)

PS As I’ve discussed with some of you already in sessions, we’re going to launch a new project soon that’s going to help you keep your wealth safe. Verrrry shortly. So hang in there, it’s almost here.

❤️ Don't forget...