The Unraveling

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.”
— Kenneth Boulding

To understand our winter, we must first understand the seasons that got us here.

While The Fourth Turning and The Fourth Turning Is Here map the pattern, there is another book that looks at this epoch since WWII (and the coming crisis) in detail. The name of the book is the punchline: The End of the World Is Just the Beginning. The good news: Zeihan also sees a beginning beyond the crisis. The bad news: he's very clear-eyed about everything that can break first.

So that we can peer ahead, we have to appreciate how strange and recent the modern world actually is. Almost everything we think of as normal (global supply chains, cheap goods, mass air travel, abundant energy, the dollar in every wallet from Cairo to Caracas, and of course the software economy) was built in roughly seventy-five years. And it was built on a specific scaffolding: American naval dominance, globalization and open trade, favorable demographics, cheap energy, container shipping and dollar-based finance. By understanding the scaffolding, we can see what it takes to keep it all standing.

I want to start with a tiny little cube that is like the atomic unit of the modern world: The shipping container.

Lifeblood

The shipping container was invented in 1956. It sounds trivial. It wasn't. Before containerization, loading a ship was a medieval exercise. Stevedores manually hauled individual crates, barrels, and sacks, a process so slow and labor-intensive that ships spent more time in port than at sea. The container changed everything. Standardized, stackable, transferable between ship, truck, and train without unpacking, it collapsed the cost of moving goods across the planet to almost nothing. Today, the largest container ships carry over 24,000 of these steel boxes at a time. When you divide the cost to ship a single container across the thousands of objects within it, the shipping fee for any single item becomes effectively invisible. It is thanks to this invention that I can buy a plastic kids' toy at a dollar store and everyone in that entire value chain makes money. The same goes for just about every other good and raw material in our entire economy. The modern pencil. The modern automobile. The modern semiconductor. The modern materials supply chain. The modern food supply chain. All of these have the container to thank.

The modern pencil: as Leonard Read showed in his 1958 essay I, Pencil, not a single person on earth knows how to make one from scratch. Cedar from Oregon, graphite from Sri Lanka, rubber from Indonesia, lacquer from castor beans, brass from Chile and Idaho, all coordinated by no one, governed by price. The modern automobile: roughly 30,000 parts, drawn from tens of thousands of suppliers across dozens of countries; when the 2011 tsunami took out a single Japanese factory making a specialty paint pigment called Xirallic, production lines stalled from Detroit to Stuttgart. The modern semiconductor: a single advanced chip can cross more than seventy international borders before it is finished, and the machines that print them are made by exactly one company on earth (ASML, in the Netherlands) at roughly $200 million per unit. The modern materials supply chain: China refines around 90% of the world's rare earths, the Democratic Republic of Congo produces roughly 70% of its cobalt, and a small handful of countries control nearly everything else that goes into a battery or a fighter jet. The modern food supply chain: most grocery stores carry about three days of food on their shelves, the average bite on an American plate has traveled some 1,500 miles to get there, and none of those calories would exist without a steady flow of petroleum-based fertilizer.

All have the potential to unravel if the arteries that make them possible implode.

We almost never see any of this. It runs underneath daily life, the way a circulatory system runs underneath our skin. Hidden. We don't think about it until it fails.

I got to see this first hand recently when the war in Iran started. We were living nearby and got displaced to Singapore. Jet-lagged one night I took my four-year-old son into the warm evening air on the terrace to look at all the ships anchored in the Singapore harbor. The Port of Singapore is the second-busiest port in the world. And it looked like it. A third of the world’s maritime trade flows through that port. So robust. So fragile. My son asked me how many ships there were. I told him we couldn't count the ships. They looked like stars twinkling their light in the dark, glimmering in their infinite abundance. Each was a vessel carrying the oxygen of the global economy: oil and natural gas, wheat and rice, and all of the disassembled components in some state of production that would one day make up the phones and medical devices and plastic toys that have come to make up this modern world.

They move through arteries, like the Strait of Malacca, the Strait of Hormuz, the Suez Canal, the Panama Canal, that are so narrow, so few, and so fragile that a single act of war or nature could stop the circulatory system of civilization itself. We saw a preview of this during COVID. The Ever Given ran aground in the Suez Canal for six days in 2021 and held up an estimated $9 billion of trade per day. Six days. One ship. Then came the war in the Gulf. The war shut the Strait of Hormuz, a tiny chokepoint for oil, sitting tightly between the UAE and Iran. A fifth of the world's oil, stopped. Within a day. The IEA called it the largest energy supply disruption in history.

The fragility of that flow felt palpable to me as I had just arrived from that place where fighter jets and missiles flew overhead, shutting down the Strait of Hormuz. Reading the news each day, I got to read economists describe in detail, live, the implications of shutting down 20% of global oil shipments, while reading The End of the World Is Just the Beginning from atop that terrace, looking at those very ships. It felt like looking at the open beating heart of a patient who was in the middle of a small cardiac arrest. Like realizing that a loved one has more fragile arteries than you ever expected. In awe of the impossible intricacy of our incredible world, but also very clear-eyed about the fragility of that world. What a few gunships could do.

When my grandfather boarded a steamer from fighting on the shores of Okinawa back to America, he did so in the old world order where none of this was possible. He described to me the feelings that he had when he saw the Golden Gate Bridge. As a child, I remember wondering how a bridge could be golden. He was on one of those pre-container era vessels. Now as an adult, understanding what took place on those beaches, I can viscerally feel the waves of relief and joy that he talked about. In reading this book, I can also appreciate the world that has been built since he pulled into the San Francisco marina that I would live in a generation after.

What my grandfather didn't know, as he watched the bridge come into view, was that he was sailing into the first chapter of an experiment unlike anything in human history: the first time the entirety of the global seas would be safe for vessels to sail. Pax Americana.

Safe seas are not a given. For all of history, the oceans were places of treachery. Not because of the storms and sea monsters, but because of pirates and foreign navies. It wasn’t just the container that enabled global shipping. It was the fact that there was the most powerful global navy in history ready to deploy to ensure safe passage.

No empire before America ever tried this. None could afford to. The cost of patrolling every ocean on earth, every hour of every day, for eight decades, has been borne by a single country. We treat it as the way the world works. It is not. It is the way one country, for one stretch of history, has chosen to make the world work. When my grandfather watched the Golden Gate come into view, he was on one of the first voyages on this new safe sea. My children know this world now. They may not remember it.

Our global manufacturing and shipping infrastructure depend upon safe seas. Those safe seas depend upon American naval dominance. And American naval dominance depends on the strength of the dollar, the financial system that pays for the ships. That system, too, was built since the last Fourth Turning. It was drafted, deliberately, by a small group of men gathered at a New Hampshire resort in a town named Bretton Woods in the summer of 1944.

Bretton Woods

For all of recorded history, currencies have been backed by something real. Typically, that thing has been metal. Empires rise and fall upon the supply of metal.

Money is fundamentally a question of trust, and trust requires a constraint. For nearly all of recorded history, that constraint was physical. A king's word can be broken. A treasury's IOU can be repudiated. A printed note can be reprinted. But a coin had value because someone had dug, smelted, and stamped a finite quantity of metal into it. They needed only to trust the metal in their hand. That is what civilizations bound their currencies to gold and silver to achieve a promise that could not be inflated away.

Empire upon empire has been built upon metal. As the Spanish Empire was just getting going, in April 1545, a man named Diego Huallpa was hunting in the Andes, slipped and grabbed a plant to steady himself. Clinging to its roots was a clump of earth shot through with pure silver ore. He had discovered the largest silver mine in the world, the Potosí mine in modern-day Bolivia. At its peak in the 1600s, this single mountain in the Andes produced roughly 60% of all the silver mined in the entire world. By 1600, the mining city of Potosí was bigger than London, Paris, and Madrid. 8 million indigenous people are estimated to have died in the mine. The mine’s famous coins circulated throughout China, India, Europe, the American colonies. They were even legal tender in the United States until 1857. Across the following four centuries, that mine would produce $500 billion in silver. Most importantly, that literal mountain of silver financed Spain's wars, its armadas, and its empire from Manila to Madrid. Without Potosí, there would have been no Spanish Golden Age.

Spain spent the silver fighting Protestants in the Netherlands (the Eighty Years' War, 1568–1648), the Ottomans in the Mediterranean, the French, the English, and eventually everyone. Silver financed the wars that ultimately overextended Spain. The silver came in the front door and went straight out the back to pay foreign mercenaries and bankers, ultimately leading to its weakening of power. The silver fueled wars that the silver itself made unwinnable. Every campaign required more silver, which required more wars to defend the silver fleets, which required more silver. Spain declared bankruptcy six times between 1557 and 1647 despite being the richest country on Earth. It was the Potosí silver that allowed Spain to keep fighting for another 150 years beyond when its underlying economy could have sustained it.

As the British Empire expanded with its frigates and cannons, it outsourced its military and conquests to the East India Company. By the late 1700s it had a private army of around 250,000 soldiers. Its army was roughly twice the size of the British Army itself. This publicly traded corporation with shareholders in London ruled 200 million people in India. It collected taxes, minted coins, fought wars, and signed treaties. This company, the real engine of the Empire, sucked up the world's silver across two centuries of colonial extraction. The more silver the Empire ingested, the more power they had and the more silver they could amass. The crowning peak was when Britain addicted a nation to opium and enforced their right to keep China plied with the drug in the Opium Wars, so that they could keep their balance of trade flowing silver in their direction as they bought Chinese tea.

Here's one of the great trivia facts of monetary history. Isaac Newton (yes, that one) spent the last 30 years of his life as Master of the Royal Mint in London. In 1717, Newton was tasked with setting Britain's official gold-to-silver ratio. He calculated 15.21 ounces of silver per ounce of gold. But the actual market ratio in continental Europe was closer to 14.8. That tiny difference had massive consequences. It meant gold was slightly overvalued in Britain and silver was slightly undervalued, so rational merchants started bringing gold into Britain and taking silver out of Britain. Over the next century, silver quietly drained out of Britain and gold piled up. By the late 1700s, Britain was effectively on a gold standard. It became official in 1821. The result: with far vaster supplies of silver in global circulation than gold, Britain accidentally bought itself a stranglehold on the metal that mattered: gold.

Then came WWI and WWII. Europe, and particularly the UK, bought vast amounts of armaments from the Americans. Knowing that paper payments could be printed and devalued to nothing, the Americans had one condition: it had to be paid in gold. As Britain purchased tanks, airplanes, and naval fleets, gold gushed across the Atlantic into America. When the dust settled after World War II, the United States held somewhere between 60 and 70 percent of the entire planet’s monetary gold, most of it housed in Fort Knox and the New York Fed's vault under Manhattan.

While Europe and Asia lay in shambles, it was clear that the era of United States world order had been established. America got to set the rules. The Bretton Woods system, designed in 1944 in a resort in New Hampshire, codified this reality: every major currency would be pegged to the dollar, and the dollar would be pegged to gold at $35 an ounce. It was an elegant architecture. But it had one flaw: the US had to resist the temptation to print more dollars than it had gold.

It couldn't.

It wasn't just that the US wanted to print money to bolster its own economy. The deeper problem was structural. An economist named Robert Triffin had identified it more than a decade earlier. The world needed dollars: for trade, for reserves, for stability. The only way America could supply those dollars to the world was to send more abroad than came back. But every dollar that left Fort Knox's orbit was a claim that could, in theory, be redeemed for gold. The more successfully the dollar served the planet, the more claims piled up against a finite mountain of metal in Kentucky. By the late 1960s, foreign-held dollars vastly outnumbered America's gold reserves. France began demanding the metal in exchange for the paper. A run was forming.

In 1971, on a Sunday evening, Richard Nixon cut the cord, ending the convertibility of the dollar to gold. The post-War gold-backed Bretton Woods system collapsed. The world's first global experiment in pure fiat currency began: currency backed by nothing other than the promise of the United States government. “We will pay you.”

For 5,000 years, power followed metal. For the first time in history, that changed. The only thing backing the value of the dollar was trust in the US government.

At that moment, the only real constraint on the supply of money became political will. Dollars were no longer anchored to how much gold sat in Fort Knox. They were instead anchored to the willingness of career politicians to choose long-term stability over short-term growth. As constraints go, that is not a robust one.
We tend to discuss Nixon's decision as a technical adjustment. It wasn't. It severed humanity's economic system from a physical anchor that had governed it since Mesopotamia. Every dollar, euro, yen, or yuan in your wallet today is an IOU backed by nothing tangible. We've now lived in this fiat world for 55 years. It feels normal but in the long sweep of monetary history, it's a wild experiment.

The result of this historical first: over the following fifty years, we have seen the greatest expansion of credit in human history. The mechanics are simple. The banking system can lend against deposits. Those loans become deposits elsewhere. Those deposits can then also be lent against. This creates a multiplier effect. In theory, it produces growth, but, in practice, it produces debt.

Credit has expanded across the developed world with startling speed: India's credit supply increased roughly 10x since 2000; Brazil's 6x; Turkey's 12x in just thirteen years. China has generated what analysts describe as the largest credit expansion in human history, in both absolute and relative terms: approximately a 900 percent increase since the year 2000. As one financial historian observed: "No country has survived a credit buildup this large or this fast. Ever."

Beneath all of this, something was happening that almost no one understood because it had never happened before in the history of human civilization. Money stopped being money. Money has simply become a promise.

Upon that promise, the United States, the architect of this system, has taken on $39 trillion in debt (121 percent of its entire annual economic output). The interest on that debt alone ($879 billion in 2024) exceeds what the US spends on Medicare. It exceeds what the US spends on national defense. The country is paying almost a trillion dollars a year just to stay flat. In May 2025, Moody's downgraded the United States from its top credit rating for the first time since 1917. The CBO projects the debt will reach 134 percent of GDP by 2035, and some models suggest it could climb to 183 percent by 2054. Total global government debt has now reached $111 trillion: 95 percent of world GDP.

This isn't money that was spent on nothing. It purchased eighty years of relative peace and prosperity, the greatest the world has ever seen. It built hospitals and highways, funded universities, subsidized the technologies that became the internet. It was, by some measures, worth every penny. But a borrower always needs to pay their debts. And the more you borrow, the more you need to pay back. Someday.

The truth is that there has been a commodity that has underpinned the US dollar. It isn’t metal. It is liquid. In 1974, Kissinger negotiated an arrangement with Saudi Arabia: the Saudis would price all global oil sales exclusively in dollars and recycle the proceeds into US Treasuries; in exchange, the US provided military protection. By 1975, all of OPEC followed. The result was a self-reinforcing loop: every country on earth that wanted to fuel its economy needed dollars, which meant the US could run deficits no other country could survive. The gold standard may have ended in the early 1970s, but something else quietly took its place for the next 50 years: oil.

This is all starting to unravel now. The data is striking: The dollar's share of global FX reserves has fallen from ~72% in 2001 to roughly 57% by late 2024, the lowest in 25 years. Central banks bought 1,045 tonnes of gold in 2024, the third consecutive year above 1,000 tonnes, more than double the 2010–2021 average. When fiat trust frays, central banks quietly turn back to the metal. BRICS is building parallel settlement infrastructure (mBridge, CIPS) that bypasses the US’s SWIFT system. CIPS processed roughly $245 trillion in yuan-denominated transactions in 2025. India is now settling Russian oil purchases in yuan and dirhams. And China buys 90% of Iran's exported oil in yuan. When Iran closed the Strait of Hormuz, it began charging yuan-denominated transit tolls on oil tankers passing through the chokepoint through which roughly 20% of the world's oil normally flows.

Again, the US national debt crossed $39 trillion. The petrodollar system created a perpetual buyer for these US Treasury bonds in the form of oil-exporting nations. Oil exporters accumulated vast dollar surpluses and parked them in US Treasuries. They were doing that in exchange for the US security umbrella. As someone who had to flee the UAE, I can tell you that the US’s promise of security is in question. And if the petrodollar fades, that automatic Treasury buyer fades too, at exactly the moment America needs more buyers than ever. Due to the dollar's status as the world's reserve currency, the federal government has long been able to issue debt at rates lower than investors would otherwise allow. Lose that, and interest costs spiral. The US has now been downgraded by all three major ratings agencies.

The Bible suggests that people should take a day of rest every seven days. That, people know. We live it every week. But fewer people know that the Bible also suggests that people take a Sabbatical every seven years, and that there be a year of Jubilee every 50th year (after seven cycles of seven years). In the Jubilee, land returns to its original families, indentured servants go free, and debts are forgiven. The ancients believed that every fifty years, the accumulated debts of a civilization had to be wiped clean. It was their form of clearing the table. It was the release valve. Without it, they knew, the system would eventually choke on its own obligations.

It has been fifty-five years since Nixon ended Bretton Woods. The credit cycle that began in 1971 has, in the long sweep of history, just reached the moment when our ancestors would have rung the bell. We have not rung it. We have done the opposite. We have built the largest credit expansion in recorded history upon a promise.

The Pillars Of Modernity

This has been a deep look at two of the structural pillars that hold up our society. Shipping and Credit. There are more. It’s worth a quick review, although the reality is that it’s worth a deep dive in Zeihan’s The End of the World Is Just the Beginning.

Energy. The cheap oil and gas that powers every farm, factory, and home depends on a global market that depends on safe seas. That same petroleum is also the raw material for almost everything else. Fertilizer and pesticides. Plastic and synthetic fabric. Asphalt and paint. Medicine and IV bags. Tires, soap, solvents, lubricants. The casing on every phone, the insulation on every wire, the foam in every mattress. Half the people alive today would not be alive without the natural gas that becomes the nitrogen that becomes the wheat. We do not just run on oil. We are made of it.

Industrial materials. Every advanced object on earth is a recipe, made of ingredients that come from places that no longer trust each other. Chile, Australia and China produce three-quarters of the world's lithium. Three-quarters of the world's cobalt comes out of a single country, the Congo. China refines ninety percent of the planet's rare earths. South Africa supplies seventy percent of its platinum. Niobium, the metal that holds jet engines together, comes almost entirely from one mine in Brazil. Russia and Belarus together produce a third of the world's potash, without which the wheat does not grow. The green transition, the digital economy, and the modern military all run on the same short list of mines. None of this gets to a factory without a ship. None of these ships move without safe seas. Your phone, the fertilizer on a farm, the jet in the sky, the steel in a skyscraper. Each is built upon materials that require treaties between countries that have stopped speaking.

Manufacturing. The web that turns those materials into the things on our shelves runs through factories that sit, increasingly, inside one country. In the year 2000, the United States made a quarter of everything manufactured on earth. China made six percent. By 2030, the United Nations projects, China will make almost half. America will make eleven percent. China already leads the United States in fifty-seven of the sixty-four critical technologies of the modern era. It makes eight in ten of the world's solar panels, three-quarters of the world's batteries, nine in ten iPhones, and almost every active ingredient in the medicine in our cabinets. We did not just outsource the work. We outsourced the knowledge of how to do it. One day we looked up and realized we had forgotten how to make things. And the only thing standing between all of that and our shores is a handful of straits.

Agriculture. For four billion years, life on earth was bottlenecked by nitrogen. A century ago we found a way around it. In 1945, when my grandfather sailed home, the earth held two and a half billion people. Today it holds eight. The five billion who arrived in between are alive because of synthetic fertilizer made from natural gas, diesel-powered tractors, and seeds bred in a handful of laboratories. Roughly half the protein in every human body today was synthesized from atmospheric nitrogen by the Haber-Bosch process, which runs on natural gas. Half the nitrogen atoms in your muscles came out of a Russian or Qatari gas field, were turned into ammonia in a factory, were spread on a field as fertilizer, were absorbed by a plant, and were eaten by you or by an animal you ate. Without that chain, four to five billion people on earth would never have been born, or would die within a few growing seasons. The fertilizer is made of gas. The irrigation pumps run on diesel. The tractors harvest. The grain crosses oceans and mountains. Agriculture does not stand alone. It stands on every other pillar. Pull one and the shelves do not refill.

These pillars all lean on each other. Shipping carries the oil. The oil powers the ships. The dollar pays for the oil. The Navy protects the dollar. The manufacturing builds the ships. And the ships carry everything that powers our modern world.

Demographics, meanwhile, is the slow-moving glacier of inevitability underneath all of this. The world that built today's world had young workers, young consumers, young soldiers, young taxpayers. That world is ending. The Boomers are retiring. China is aging faster, and at a larger scale, than any country in human history. Korea, Japan, Italy, Germany, and Spain are already past the point of return. The savings were theirs. The young who would have paid for their retirement were never born.

We have built the most extraordinary house humanity has ever known. We have also, without noticing, made every wall a load-bearing wall. Push on one pillar and we quake. Pull out a few pillars and they all fall. This is the world my grandfather sailed into. Beautiful, intricate, fragile. Built in one lifetime.

Right on Schedule

I have tried, in these brief chapters, to compress thousands of pages across Strauss, Howe, Zeihan and my dad, into a single pivot point. Their three frameworks, with three methodologies, all see the same thing. Behind us, the world that was built. Ahead of us, a world that is more fragile than we realize awaits us.

The global system that we’re living in today was built during the eight decades between the end of one Fourth Turning and the beginning of the next. The system was built during a period of relative peace, backed by American military dominance and dollar hegemony, held together by the shared interest of almost every nation on earth in keeping the system alive. The system is extraordinarily productive. It is also extraordinarily leveraged, extraordinarily concentrated, and extraordinarily dependent on the continued willingness of the world's largest powers to keep playing by the same rules. That willingness is now in question. We see it every day.

The mechanics of the Fourth Turning don’t care how complex and interdependent the system has become. They don’t care that unwinding it would cause suffering on a scale hard to imagine. The Fourth Turning has arrived before on schedule, and it is arriving again, right on schedule, as Strauss and Howe predicted in 1991.

The question is not whether this system will be tested. That test is already underway. The question is what comes next.