Making Sense Out of the Great Unraveling


In 1999, I began to form a picture in my mind of what I termed "The Great Unraveling" – a period in which the economies of the First World would collapse. I believed that it would not all happen with one great crash, but would occur in fits and starts, with the relevant governments artificially propping up their economies as events unfolded, with a series of band-aid solutions that would delay the inevitable, but ultimately, would worsen the outcome considerably. Hence the choice of the word, "unraveling."

I projected that the first major event in this debacle would be the breaking of the real estate bubble in the US, which I expected to happen in 2006. I was wrong. It occurred in 2007. Since then, whenever projecting a date for an event, I have been fairly consistently premature by a year. (This is why economic forecasters often say, "Never predict a date – you’ll invariably end up looking like an idiot.")

Still, the events have taken place, largely as predicted. I believe that we are now on the cusp of a series of major events; the most significant and most destructive that I will see in my lifetime. These will play out until around 2015 (Chances are I’ll be wrong and the dust will not begin to truly settle until a year or more later. For many years, the esteemed Harry Schulz has said, "Ten years down and ten years up." He will probably turn out to be right, as he almost invariably is.)

One aspect of this period I had not anticipated was that, at this point, the vast majority of people out there are still in complete confusion as to what is happening to them. I had assumed that, once they began to see that their governments had been pulling the wool over their eyes for years, they would do an about-face and pursue a more accurate understanding of their situation. This, by and large, has not happened.

Instead, most people seem to be grimly hanging on to their misconceptions. In addition, many have reaffirmed their loyalties to their political parties and really dug in, not understanding that regardless of party, the members of their government are not their friends and protectors. Quite the opposite, in fact.

The other day, someone said to me, "I should have listened to you years ago and started studying what was on the way. I guess it’s too late to catch up now." That set me to thinking. Is it too late? It is true that what is happening is maddeningly complex, even for those of us who have been following developments closely for years? While some developments are predictable, there is chronic uncertainty as to what the governments will come up with next, since their actions often defy logic.

Still, there must be some basic truths that can assist those who are starting late in the game – basic principles to follow that might make it easier to grasp the true meanings of events as they unfold. Let’s give it a try, bearing in mind that adopting these principles may not be easy.

Abandon any political party loyalty that you now have

Regardless of what country you live in, you probably have a liberal party and a conservative party. (Many countries also have fringe parties, such as the social democrats, communists, etc.) Regardless of what party you favour, you may think of the major opposition party as evil and feel that, right or wrong, you must defend your party to the death. In truth, your party, and, by extension, your elected representatives, most likely have no loyalty to you whatsoever; nor do they see themselves as your representatives. They see themselves as your masters. Regardless of their positions on the issues, this is true, almost to a man.

Additionally, in order to achieve election, they have had to cut deals with those who make large donations to their campaigns. These people are the politicians’ true bosses and they dictate what will happen in the future – not you. You will therefore keep your head at its clearest if you go under the understanding that none of the promises that candidates make are necessarily true; that, regardless of what they claim, they will hang you out to dry, as surely as will the opposition party. While they pay you lip service, they do not take your wishes or needs seriously and, in many cases, hold you in contempt.

Your country and your government are two separate entities

Politicians are fond of speaking about the greatness of their country and praise those who are most loyal to the government, implying that those people are the true patriots. Not so. In most cases in the First World, governments have become so corrupted that what benefits them does not benefit the voting public. In effect, they have hijacked the country over a period of many decades. If you feel loyalty to your country, that’s fine, but do not be fooled into thinking that your government and your country are one and the same. They almost assuredly are not.

Stop thinking in the present

This is a really tough one; however, if you are to come out of this period with your skin still on, it is essential. Most of us tend to say to ourselves, "Okay, things are not as good as they were, but it’s not all that bad. I can live with it." I can’t overemphasise how shortsighted this assumption is.

Consider that millions of Jews took this position in the late 1930’s in Germany. Only a small percentage of them said, "If this is the direction things are going in, within a few years, our lives will be ruined." The latter group left Germany if they were able, often leaving behind their homes and businesses, but saving their future liberty.

Rather than allow your thinking to simply be a snapshot of your situation today, make the effort to examine the direction that events are headed in and picture what you will need to do to keep from becoming a victim of those events. (Of all of these principles, this one is the most important, if you are to fare well in the coming years.)

Seek out those who are most knowledgeable in the field

In every field of endeavor, there are many who are clawing their way to the top, fighting amongst each other for position. This is not true of those experts on economics who are of a libertarian bent. Invariably, those who are at the pinnacle of their field, recognize each other’s abilities, respect them and seek to learn from them. They tend to be known to each other and, if they don’t exactly get together every Thursday to play bridge, they do communicate with each other and meet on occasion if possible.

In the study of economics / politics / investment, I was fortunate to have stumbled upon Sir John Templeton many years ago. He was clearly at the top of his game and his record for being correct in his predictions was extraordinary. Through him, I learned of Harry Schultz. Through Uncle Harry, I learned of Doug Casey and so on down the line. As I learned to respect those who had been "referred", I learned to avoid those who were not. As a result, all those whom I have trusted over the years have been exceptional people, both in their analysis and perceptions, and in their willingness to tell the truth when they shared information.

(Along the way, I also bumped into some very successful, very well-known, but very disreputable people, but they did not come to me with "references" from those I respected. Consequently, I kept their influence over me at arm’s length and time has shown that, had I not done so, I would have paid a price.)

It is unlikely that, if you are coming late to the party, you will have time to become one of the most knowledgeable in the field. However, if you follow this principle, you will have the opportunity to home in on the most knowledgeable and trustworthy people and, more importantly, avoid those who would lead you astray. Stick with those advisors who are at the top of their game.

Avoid mis-information

Go under the assumption that the great majority of information that appears in the media is either not quite correct, or, often completely false. It does not matter whether you watch the liberal network or the conservative network – each has an agenda to follow and the great majority of information on the television and in print only adds confusion. So, where does that leave you?

The best source for truthful information at present is the Internet. Just as in the mainstream media, there is more utter rubbish available than truth. However, if you were to begin with some of the names mentioned above, you will soon branch out to more sites that will be of value.

Be honest with yourself regarding your abilities

I have been lucky in my lifetime to have been quite talented in some areas, while being pathetically incompetent in others. I seem to be a combination of extremes. This led me to build confidence in myself regarding my talents, while admitting my shortcomings.

Most people are less extreme than me, and, as a result, assume that they should be ashamed of themselves if they are not at least "pretty good" at most everything. This thinking is counter-productive. Self-honesty opens up opportunity to learn from others and to respect those who know more than you or are more talented than you on a given subject. While we all would like to think the best about ourselves, we can only improve ourselves if we recognise and admit our shortcomings to ourselves. Then we can actively pursue those who may fill in the holes in our abilities.

I had an embarrassing dream a couple of years ago. In the dream, I was standing at a podium, getting ready to give a talk on the Great Unraveling. Although I don’t think I tend toward smugness, in the dream, I was looking forward to the room filling up with people and thinking, "I’ll be the smartest man in the room tonight." Then people started filing in and sitting down – Harry Schultz, Doug Casey, Lew Rockwell, Jim Sinclair and so on. Thankfully the dream ended there, just as I came to the horrible realisation that I was actually the dumbest man in the room.

The goal should never be to be the smartest man in the room. The goal should be to have as great an understanding of the situation as possible. On rare occasion, I have come up with the odd point that Uncle Harry hadn’t conceived of; however, this does not change the fact that, 99% of the time, he is miles ahead of me. This doesn’t mean I’m going to go and hide in a hole in the ground, but rather that I am going to listen to Uncle Harry each and every time he has something to say, in the hope that some of his light will illuminate my brain. The same is true for the others I respect on the subjects of economics, investment and political events.

Don’t think you need to be an expert

This is similar to the principle above, but with a slight twist. I personally do not believe that I have a talent for either economics or investment, but I have been working on the study of both for decades and have ended up doing well – so much so that, now that so many of my predictions (particularly regarding gold) have come to pass, I am often asked for my opinion on what’s next.

I’m quite happy to offer my views, but, occasionally, I am introduced to someone as an "expert" in the field, which, for my own clarity as well as for others, I quickly correct. I am a student. Maybe I’ve been doing my post-grad for more than a quarter-century, but I am still a student, not an expert. The day I think I’m an expert is the day I’ll stop trying to learn, and I have not the slightest doubt that that would be my undoing.

It does seem to be the case in the western world that people somehow fear that they will be regarded fools if they do not present themselves as experts. All I can say is, don’t fall into this trap. Your future depends on your humility and willingness to learn.


So, in review, abandon any sort of conception that politicians hold an answer to your future. Recognise that your future must be created by you, independently of their machinations. Surround yourself with the best people (this can be done through the Internet) and have the wisdom that, when you don’t understand what they are saying, assume that they are probably right and you are probably wrong. Then seek out further clarification.

Do the best you can to envision the knock-on effects of what the leaders of the world are doing. This, as stated above, is a tough one, especially if it has not been your habit for many years. Either way, develop the new habit of seeking out information from those who are at the top of their game and have the respect of their peers.

Finally, one last principle to consider:

Be prepared for the possibility that your newfound knowledge may alienate your friends.

All of the above is not only difficult, it is also socially embarrassing. As you broaden your understanding, you will almost certainly discover that your peers have not done the same and they will not only think you are incorrect; but they may well see you as a threat to their own beliefs. Be prepared to do a spring cleaning of some of your long-held perceptions and accept that you may need to keep your new understandings largely to yourself.

I don’t often offer biblical quotes, but here is one that has proven true for me: "A prophet is not despised, save in his own country." It essentially means that your friends will not be likely to appreciate your new-found knowledge, in fact they may well think you’re dangerous.

Adopting the above principles will be difficult, time-consuming and, in some ways, disheartening. However, it may mean the difference between whether or not you exit the Great Unraveling with whatever wealth you now have and even with your freedom. It is absolutely worth doing.

Reprinted from International Man with permission.

Jeff Thomas is British and resides in the Caribbean. The son of an economist and historian, he learned early to be distrustful of governments as a general principle. He began his study of economics around 1990, learning initially from Sir John Templeton, then Harry Schulz and Doug Casey and later others of an Austrian persuasion.