Why the Upcoming Economic Collapse is Being Hidden in Plain Sight


This is not a conspiracy theory. This isn’t an alarmist perspective, either. Go to your local economy professor or banking expert to verify that there will be a worldwide economic collapse in the near future. At this point it would take a miracle to keep it from happening in the short term and nothing can stop it from happening in the long term.

We won’t dive into the details too much about how the economic collapse is shaping up, what effects it will have on individuals around the world, or even how it can be prevented. There are plenty of sources that go in-depth on these topics. Here, we’re going to discuss how and more importantly why the powers that be are hiding the upcoming economic collapse. Hopefully, those who have read my posts in the past realize that I’m not an alarmist nor am I one who blames everything on “the man.” In this case, however, there are alarm bells that plenty of people are ringing and it’s my responsibility to chime in with a slightly different perspective, one that doesn’t require a degree in economics to understand.

And yes, this time we truly can look to “the man” when it comes to the upcoming troubles, but only because they really have no other choice (at least from their limited perspective).

First, “hidden” in plain sight is not the right way to put it. There really is very little hidden other than some preparations likely being made by the economic elite in the world. Rather than calling it hidden, the proper way to categorize it is that it’s been made more complex than it really is. To use an appropriate analogy, let’s compare the current and future state of the world economy to an under-powered car going up a steep hill.

Imagine that the “CentralBankCar” driving the economy has already taken on a tremendous amount of weight, more than the engine can handle. This is, of course, representative of the burdens the CentralBankCar took on after the 2008-2009 collapse-avoidance maneuvers. It’s now a car with more weight than the engine can really handle.

To keep things going forward, they’ve put their foot all the way down on the gas. This represents the current state of interest rates. They’ve floored it and they have no way to make it go any lower. Unfortunately, there’s still not enough power to keep it going at a good pace so they’ve actually gotten out of the car and started pushing it as well. This is quantitative easing, producing power that the engine really doesn’t have to keep it running.

So, we have a car with too much burden trying to make it up the steep hill of global economic needs with the passengers now out of the car pushing it up the hill to try to supplement the power that’s coming from a gas peddle pushed all the way to the floor.

Eventually, the car’s going to run out of gas. It will roll back over the people that are currently pushing it and careen back down the hill of the world economic condition. It will crash. We’ve exhausted all possible solutions.

Before the CentralBankCar runs out of gas, the powers that be will have to do something drastic. Or they won’t. The problem that we’re all unwittingly faced with requires a different analogy that I’ll bring up below. First, let’s look at the ugly solution that may or may not occur. To keep the CentralBankCar from rolling backwards to an utter crash, they would have to jettison some of the cargo. They’d have to reduce weight. Unfortunately for the average person who doesn’t realize what’s happening, we’re the weight. Our credit, our properties, even the money in our wallets represent portions of the weight that must be jettisoned. To do this would require drastic actions that most governments will avoid at all costs… at least we’d hope.

The question that governments and bankers, powers and principalities face today is whether to let the crash happen and hope to recover relatively quickly or prevent the crash by taking control of all debt and therefore most property. As insane as it sounds, those are the real options that they have before them. They could dramatically cut expenses to the point that they will likely no longer be able to operate. They could raise taxes to the point that people will no longer be able to operate. They could do both. Even if they do, there’s no guarantee that it would save the world economy because of the repercussions that such actions would have on other parts of our economy.

Trying to explain all of this in a blog post is difficult and that’s the very reason why the coming economic collapse is hidden in plain sight. It’s an extremely complex issue that makes most people glaze over. They have to count on that fact. They realize that a huge component in the success of an economy is perception. If the people believe the economy is collapsing, they’ll unwittingly contribute to making it collapse more quickly. As much as I’d love to say that it’s the evil bankers and politicians who are hiding these things from us, they’re not. It’s all right there for everyone to see as it should be, but it’s veiled in enough confusion and doubletalk to prevent it from becoming a self-fulfilling prophecy.

Economic Collapse

Now, for the unfortunate analogy that represents our reality. The ship is sinking and there aren’t enough lifeboats for everyone. There are millions, even billions of people who will drown in the waters of economic collapse. The question is whether they will start pushing people off the boat or wait until it starts rapidly sinking. Either way, they’re getting on the lifeboats and many of us will not be given that option.

It’s not my intention to scare people to the point of acting inappropriately. Things are simply out of our hands. Personally, I’m not worried because I have faith, not in the economy but in God’s plan. Now is the time to be fully prepared for what’s to come.



Builtin.LA year in review: More deals, more money, and sustainability in sight


LA Map

With New Year’s Eve now just a speck in the rear view mirror, the number-crunchers have had time to reconcile the year that we just put in the books. This morning Pricewaterhouse Coopers and the National Venture Capital Association released their annual MoneyTree report, revealing that VC invested $ 29.4 billion in 3,995 deals in 2013, representing an dollar value increase of 7 percent and a deal volume increase of 4 percent over 2012. It’s a useful 30,000 foot view of the ecosystem, but makes it difficult to see what’s going on at the ground level.

Looking specifically at individual ecosystems can be more helpful. Builtin.LA released its own year-end report which shows reflects a similarly strong year in the LA startup ecosystem. This year was the first in which LA startups attracted more than $ 1 billion in venture capital, with the year’s $ 1.09 billion funding total topping 2012’s total of $ 871 million raised. The region also generated more than $ 1.1 billion in M&A returns across 25 deals. The report shows that 200 new digital companies were started in Los Angeles in the last 12 months.

Before going much further, it’s important to point out that data of this sort is inherently flawed because the details of many private company transactions go unreported. For that reason, similar reports and databases often disagree on the exact figures for investment activity a particular region or industry. (See our December coverage of the CB Insights LA Venture Capital Almanac, for example, which lumps together data over a four year period and also encompasses Orange County.) But, rising above this minutia, studying overall trends and year over year changes in data can still be rather enlightening.

Like most ecosystems, LA was heavily weighted at the top, with 12 companies raising more than $ 25 million and, with $ 489 million raised, representing nearly 45 percent of all capital flowing into the region. In total 133 companies raised more than $ 1 million during the year. The big winners were SnapChat which amassed $ 123 million over two in new funding at eye-popping valuations, JustFab which raised $ 55 million (across two rounds), and EdgeCast which raised $ 54 million just six months before selling to Verizon for $ 350 million. Other big raisers include Marketshare, TrueCar, FullScreen, Science, Maker Studio, Knowledge Adventure, OpenX, Honest, and TopLine Game Labs.

Following national trends, software was the dominant category in LA. Roughly 23 percent of all deals in LA were in the software sector, which collectively attracted $ 304 million in investment. Nationally, that ratio soared to 37 percent, according to MoneyTree, up from 27 percent the year prior. Investors also found plenty of things to like in the consumer Web, ecommerce, and mobile sectors in LA, which attracted $ 273 million, $ 221 million, $ 194 million respectively over that last 12 months. LA may not be known for its enterprise scene, but the fact that companies in this sector attracted $ 100 million validates our earlier report that SoCal has a budding SaaS ecosystem.

On the exit front, EdgeCast was joined by Goodreads (acquired by Amazon for an undisclosed sum, thought to be north of $ 100 million), mFoundry (acquired by Fidelity for $ 120 million), Awesomeness TV (acquired by Dreamworks for $ 117 million, including incentives), Dermstore (acquired by Target for north of $ 100 million), and Kotura (acquired by Mellanox for $ 82 million).

Perhaps more important as any other stat in the Builtin.LA report is that more than 180 different VCs and angels invested in Los Angeles startups in 2013. The biggest knock on SoCal over the last decade has been a lack of capital. And while there is still room to grow in this regard, this data supports the anecdotal trend that capital is more mobile than ever these days, and that the LA is warranting more attention from both out of town investors and those locally who are choosing to be more active in this current market.

Overall, the picture of the LA startup ecosystem is one the is trending in a positive direction. More so than 2012, this last year was a period dominated by activity at the top of the food chain. Large companies seemingly raised high profile funding rounds and struggled to live up to their potential in equal measure. The year prior, by comparison, was the year of the accelerators, and of a new startup raising seed funding seemingly every day.

In the shift from hype to substance, we can watch LA maturing as a startup market. There is still plenty of activity at the early stage, but it is being met with the appropriate balance of excitement and skepticism, something that was sorely lacking just a few years ago. People on the ground and watching from places like Silicon Valley and New York are demanding that these companies deliver on their promise of disrupting markets and delivering value to their business and consumer end-users.

For those with a vested interest in the LA ecosystem, hopefully 2014 will be the year that a few of these large and promising companies take that final leap to multi-generational status. The region has Cornerstone OnDemand, and seemingly SpaceX and Tesla in this camp. For LA to cement its status as an elite startup ecosystem, it needs to add to this list.

Looking over the 2013 data suggests that LA isn’t a pretender. But, getting over the hump to sustainability remains an “if” rather than a “when” proposition.

[Image via ThinkStock]