The US just celebrated its 250th anniversary of independence. In 1978, British theorist John Glubb proposed that major historical empires average roughly 250 years; the life of empires begin with pioneers and conquests; peak with commerce, affluence, intellect; and end with decadence and decline. Glubb argued that collapse stems from internal moral decay, overemphasis on comfort and entertainment, and loss of public duty rather than external defeat.

The US has been bigger than an empire, it has been a superpower that aimed to rule all over the world. Technology supported this aim and globalisation gave it its epitome. But there have also been severe hiccups in this pursuit; the 1929 Great Depression being one. In WWI, the US and several European countries temporarily abandoned the gold standard so that central banks could print extra money to fund the wars – money was created from thin air. Once the war ended, governments and banks did not restore strict monetary discipline. The expanded supply of money and credit continued into the 1920s. Fiat and fractional-reserve banking system created new money through lending without holding equivalent gold reserves. In fractional-reserve banking, the bank keeps 10% of deposited money and lends away the rest. That same money when put in another account become a deposit that the banks can lend away again. This expanded credit supply pushes financial assets upward. The inflated economy, which was actually based on loans and debt creation, enters a speculative environment wherein assets are bubbled up. The stocks-bubble eventually burst in the 1929 stock-market crash, ensuing........

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