The End of the Dollar: Exponential Curves and the Illusion of Safety

Perhaps the most deceiving force in the entire universe is the exponential function. It’s not surprising when people insist that my warnings about the end of the debt-based dollar monetary system are nonsense. Usually they argue that it’s because “the system is still functioning” – despite the endless currency printing, debt accumulation, and quantitative easing (QE).

By the way, I never take offense when people tell me I am being hysterical. I understand that most people who don’t realize that the dollar is in peril are not mathematically inclined. As a result, they’re less likely to understand the insidious nature of exponential curves.

So, without getting into the mathematical details, let’s take a look at a typical exponential curve.

So how does this relate to the eventual end of the dollar? Well … let’s look at the US federal debt between 1966 and 2022. Keep in mind the “official” debt of more than $31 trillion doesn’t include unfunded liabilities of more than $200 trillion.

What’s so diabolical about an exponential function is the curve’s flat section; the part where the rate of change isn’t noticeable. Naturally, that  quiescent period usually leads to a misguided sense of complacency. As a result, a dangerous practice such as unfettered debt accumulation can carry on for many years with little effect. Eventually, however, you get to the “business end” of the curve, where the slope increases at an alarming rate. This is the point where the illusion of stability suddenly ends, and chaos takes over.

There are plenty of signs that indicate our debt-based monetary system is approaching the “business end” of the exponential curve. From this point forward, the crises will be coming at us faster and in increasing size with each passing day until the financial system suddenly breaks. Most people won’t know what hit them — or why their life savings were suddenly annihilated “without warning.”

What most people fail to realize is how fast instability strikes once the exponential curve reaches its “business end.” Here’s a notional example that clearly demonstrates this process:

Economist Chris Martenson likes to use the example of a giant water pipe that feeds a water-tight domed football stadium of typical dimensions. At some point, the pipe springs a leak that grows exponentially worse over time; doubling every second without limit. So one drop of water leaks during the first second, then two drops, then four drops and so on. Now … imagine that you’re sitting at the very top of the domed stadium when the dripping starts. How long do you think it would take before the stadium completely fills with water, drowning you in the process?

The answer is about 50 minutes. Yes, just 50.

And while that’s impressive all by itself, the real takeaway here is that, fully 46 minutes after the leaking starts, just 10% of that domed water-tight stadium will be filled water. At that point, looking down from the relative safety of your nosebleed seat, it would be logical to assume you still have a lot of time before the water reached the top of the stadium. Of course, you’d be very very wrong — since the math shows that the remaining 90% of the stadium fills with water in the final four minutes.

The End of the Dollar

Keep that in mind the next time somebody tells you our ever-increasing debt is fine because, despite all of that red ink, “nothing bad has happened so far.”

The truth is, something bad is happening right now. In fact, it’s been happening for a long long time — it’s just that most people haven’t figured it out yet. And they won’t because, for most people, the “business end” of an exponential function is hard to see until it’s too late.

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