As I am writing this we are now day 51 into the Iran War. And it is time we talk about the economic fallout that has begun to hit the United States.
If you didn’t know already, you should be informed that the United States is facing the most dire debt crisis in its entire history. And if the US government can’t make good on this, Day X has effectively come. The day of reckoning. The day the U.S. defaults on their debt and kisses goodbye to it being the center of the universe in economic affairs. It will lose the USD as the world reserve currency, which will cause the House of Cards that is the U.S. economy, to come tumbling down.
This is the soft underbelly of the American Empire and everything that it has done at a desperately accelerating rate since 2025 is to delay Day X’s reckoning.
Scott Bessent has been tasked with steering the ship away from the upcoming iceberg, however, this plan does not have a hope without some very real and major sacrifices. I will go over what these sacrifices will entail in this new series.
Let’s first begin with how the economic fallout has hit the average American and the country’s manufacturing base.
First off, to be clear, the American consumer, business and manufacturing base paid 94% of the brunt of the 2025 tariffs, with only 6% being passed onto the foreign exporter.
Recall Bessent’s repeated claim last year that it would be the foreign countries, notably China, who would be “eating the tariffs.”
In an interview with Tucker Carlson, Scott Bessent said:
“And this is the first step towards realigning that a lot of our trading partners, including some of our allies, have not been good partners. If tariffs are so bad, why do they have them? Or, if the American consumer is going to pay all the tariff then why do they care about tariffs [referring to foreign exporters]. Right, because they are going to eat them.
…
So this is a national security issue that we’re seeing here but it’s also an economic security issue and it’s to, I don’t want to say redistribute, but it is to give working Americans real wage gains and enhance their lives…Wall Street’s done great, it can continue doing well, [but] it’s Main Street’s turn…”
Yet clearly the 2025 tariffs did not work out that way. As was feared by many analysts, the American base, that is the American consumer, manufacture and business base paid almost all of the tariff fees, which functioned for all intent and purposes as a revenue tax.
Thus, the 2025 tariffs were most certainly not Main Street’s turn.
In fact, U.S. exports fell during 2025. This had a lot to do with trade with China. Scott Bessent claimed he was confident China would have no choice but to “eat the tariffs.” In his interview with Tucker Carlson, he described China’s economy as weak, that it was in a recession/depression, words he also used during his Senate hearing.
“Well, I don’t know if they [China] can retaliate for a couple of reasons. If you look at the history, and I used to teach economic history, and when you look at the history, we are the debtor nation, we have the trade deficits. The surplus nation is in the weaker position because the Chinese business model and the economy are the most unbalanced, imbalanced in the history of the modern world. We’ve never seen anything like this in terms of their export level relative to their GDP, relative to their population. They’re in a deflationary recession/depression right now. They’re trying to export their way out of it and we can’t let them do that.”
Using an odd form of “logic”, Bessent claimed that being the debtor nation was the superior position in a trade war. That the trade surplus nation, that is China, was in the weaker position. Realise that this only makes sense if you are focused on propping up a financialized debtor economy not an industrial based economy.
In the past this sort of upside-down logic has functioned because America’s hyper-financialized debtor economy was uncontested in its USD holding world reserve currency status. The global financial system was rigged into propping up the “American Dream.” And American debt was being used as something that so-called “wealth” could be generated from, what the Wall Street speculators made a “killing” on.
Contrary to what Bessent claims, the collapse of America’s manufacturing base was done as a result of the U.S. becoming a hyper-financialized debtor economy ruled by Wall Street. The banks were further and further deregulated thanks to the era of Alan Greenspan and Paul Volcker and towards a ‘controlled disintegration” a la Trilateral Commission, free to prey upon America’s real wealth that had been generated by its industrial base.
Thus, when Wall Street’s man Bessent is discussing his vision for restoring “balance” in opposition to China’s “unbalance” note that it has always been in the context, within the framework, of a hyper-financialized debtor economy that rules over the global economy, the very thing that sucked the life out of America’s real wealth industrial base.
Bessent was effectively stating in his interview with Tucker that he was confident that China would not be able to escape the stranglehold of the global financial mafia so to speak. Yet clearly, there is a very real fear that China might be able to do this very thing and is why Bessent has been attempting to rally the world to support a restoring of “balance” to China.
Despite Bessent being confident that China could be reigned in, that they would have no choice but to bend the knee and “eat the tariffs,” China simply walked away. This is the main reason why U.S. exports fell.
Very significantly, this included China walking away from purchasing American energy in 2025 as a result of Bessent’s attempt to impose “rebalancing” tariffs on China.
By June 2025, Chinese imports on American energy fell to ZERO. A foreshadowing of America’s agenda towards Venezuela and Iran in 2026, and yes, it was always about America’s attempt to control global energy supply chains.
Before we get further into this, let us first return to the state of affairs within the U.S. economy.
The 2025 tariffs were a failure in their attempt to “contain” China, however, as already mentioned revenue was indeed collected, nonetheless.
The U.S. government made a profit of $264 billion off of the tariffs, effectively a tax on the American consumer and manufacturing base. Most of these funds are going into military industrial projects, including the AI bubble and rather ominous pharmaceutical and bioengineering projects (see below graphic on foreign investments).
This was the amount paid to just “defense” spending alone for the fiscal year of 2022. The amount is assuredly much higher today.
It is true that the Trump Administration managed to get an array of countries and companies pledging Roman tributes, here is a graphic showcasing what sort of projects the U.S. government is focusing these pledges towards.
The top investments the U.S. government would like to focus on are pharmaceuticals and bioengineering endeavours and coming at a close second are AI and semiconductors. These are aimed at primarily military industrial projects. That amounts to $300 billion of pledged foreign investment for these projects. The total pledge shown here is $379 billion, so 79.1% of these pledges are intended to be spent on pharmaceutical, bioengineering, AI, and chips. 0.02% of the pledges were allocated to future investment in the actual manufacturing base.
The automotive sector comes in third place at 11.9% of the pledges, however, Trump has announced that he intends the automotive industrial base to also be incorporated into the military industrial complex…
This military spending is occurring while U.S. job numbers are plummeting.
The Kobeissi Letter reports that U.S. job numbers were revised down by over one million in 2025, the largest annual revision in at least 20 years. Since 2019, 2.5 million jobs have been erased from the official data. This is compared to 1.2 million downward revision in jobs from 2009-2010 as a result of the 2008 financial crisis. In other words, 2025 performed worse than the years 2009 and 2010 (almost combined) in terms of jobs lost.
The Kobeissi Letter reports in just the first six months of 2025, 371 large U.S. companies went bankrupt. That is the highest number of bankruptcies in 15 years.
Out of the 371 bankruptcies, 58 were large industrial companies, 49 large consumer companies, and 27 large healthcare companies.
The reason why there is a reporting of “growth” in the U.S. economy is because of the AI bubble.
In other words, AI is the only part of the economy that has been “growing,” though again this is not manifesting as “real wealth” but speculation on a market bubble that is ready to pop. The reality is that 80% of the U.S. population has been living in a recession.
Hence why we are seeing graphs like this.
On that note, this sort of thing (see below graph) has been happening as a consequence of Trump’s bipolar tweets that have been wreaking havoc on the stock and bond markets, with a notable few making large fortunes…
And on the note of a looming AI bubble ready to pop, there is something else you should know about Scott Bessent’s “good” intentions towards the American people. And it has to do with private credit giving out risky loans to tech industries culminating in what appears to be a tsunami of defaults headed their way.
U.S. private credit looks like it may be the first to collapse as the U.S. economy teeters on the brink. The contagion is spreading… Corporate private credit is less than 10% of the $25 trillion market that asset managers like BlackRock operate in, responsible for about $3.5 trillion in assets. But U.S. private credit are the canary in the coal mine. If they collapse, it will signal that the entire credit market, the $25 trillion time-bomb, is also ready to blow. Hence the term that private credit is acting like a “contagion” in the financial system.
As a consequence of the 2008 financial crisis, there were some added regulations in terms of what were deemed appropriate circumstances for banks to give out loans. That should not be a bad thing, though according to Scott Bessent it is.
In a White House press conference, Scott Bessent said “The big tax on consumers that goes unnoticed is deregulation or [I mean] regulation. And we are deregulating and bringing that down. So, you know, from a household income point of view, we would expect real purchasing increases.”
So according to U.S. Treasury Secretary Scott Bessent, deregulation is in fact the friend of the average American despite the 2008 financial crisis being the result of extreme deregulation of banks, where “Too Big To Fail Banks” were bailed out with average Americans’ hard earn savings.
And as we will soon see, Bessent is repeating history with the oncoming 2026 financial crisis where average Americans are expected yet again to bail out Wall Street’s predatory antics.
In reality, nothing has changed since 2008. Banks continued to give out loans like candy by going through private credit firms such as Blackstone and Apollo. Essentially these private creditors function as loan sharks. In fact, these very private credit firms made a killing off of the 2008 financial crisis.
With the window dressing that regulation would increase around U.S. banks after 2008, the reality was that they continued to give out risky loans to unregulated private credit firms such as Blackstone and Apollo. Much of the information on these private credit firms lending practices are not publicly available. However, we do know that many of these risky loans were given to emerging tech companies.
Below is a useful graphic to gives us an idea of how the “AI Boom” is in truth just another bubble ready to pop, and has managed to bankrupt the software sector in the process. Bravo.
A lot of money has gone into the “AI Boom” with hardly anything to really show for it in terms of tangible results. The amount of money going into this is very much unsustainable. And a great deal of these loans are coming out of the private credit sector.
By late 2025 to early 2026, there were some major bankruptcies involving private credit. Much of this domino effect is occurring in reaction to the increase in interest rates. In a world of higher interest rates, the riskiest loans are hit first. The weakest link in the financial structure is impacted first, and that is private credit. Those who have a high probability of defaulting are turned away from bank loans and can only get loans for their businesses through loan sharks, i.e. private credit, that charge exorbitant interest rates. As the basic interest rates fly up, the higher the probability that people are going to default on their loans. That is why private credit is tanking.
In the first three months of 2026, Blue Owl Capital’s stock fell by over 40%. Blue Owl is a major financial firm that is deeply involved in private credit.
Even the massive private credit firm Blackstone saw its stock fall by nearly 30% since the beginning of this year.
It is also impacting some of the largest asset managers on earth. BlackRock and many other Wall Street giants have actually been forced to limit withdrawals from their credit funds in response to the panic around private credit tanking.
[Note to reader: Also keep in mind here that BlackRock is working for the U.S. government in buying up infrastructure worldwide to facilitate a massive global centralisation. This is very much relevant, as we will see, to Bessent’s vision for a new global order.]
The drop in stocks for Blue Owl and Blackstone is symbolic of a bank run that is occurring right now. Investors of private credit are freaking out and demanding all of their money, which is leading to many of these companies trying to sell their holdings, but the problem is that many of these holdings are not liquid. They cannot be quickly converted to cash. Hence, when BlackRock and other major Wall Street firms put limits on withdrawals, this only creates further panic.
It looks like 2026 is due for the next tier in a U.S. financial crash.
Scott Bessent is taking this seriously. But not how you are probably thinking. Recall, Wall Street made a killing from the 2008 financial crisis because the policy-makers work for Wall Street not the American people. The 2008 financial crisis worked to effectively centralise the U.S. economy into fewer hands, in terms of its finances, its banking, its business etc. etc. Big business became bigger, small business shrinked. Big banks became bigger, small banks disappeared. You get the gist.
In other words, if you are a “big fish” you see another looming financial crisis as “chow time.”
These are the rules of a hyper-financialized debtor economy that has been feeding off of what is increasingly looking like the corpse of America’s former industrial empire.
However, this time around there is a very big caveat to Wall Street’s “feast.” And that is the challenge to the USD’s world reserve currency status. The Wall Street parasite has grown, and America’s decayed economy is not enough for it to feed on, it needs to feed off of the world economy. The world needs to quite literally buy into America’s debt, its U.S. stocks but even more importantly its U.S. Treasury bonds, to not only prevent it from defaulting but to actually prop up its status as the world’s largest financial system, such that the U.S. can dictate the rules and conditions of global trade.
Thus, the challenge of navigating the U.S. economy through this storm for Bessent is how to allow Wall Street to have its “chow time” while upholding the USD as the world reserve currency. However, it appears that many global investors are not only catching on that they are in fact on the menu, but that there is now increasingly an alternative financial system that is being brought on line that would allow all these little fish an escape route.
Thus, Bessent’s job is to hide the trail of fishbones long enough for a massive global centralisation to occur and be brought on line. The “Too Big To Fail” apology will be used again along with the convenient launch of a new global order. The rules of this new global order will be dictated by the “big fish” that will find themselves at the center of this global centralisation endeavour. However, as we will see, this fantasy is a long shot and does not have a hope in hell without first going through a lot of bodies first. In other words, the level of carnage required to make this new global order happen is going to be epic, that is, if they get their way.
Since private credit in turn took out loans from U.S. banks, these large U.S. banks are also extremely exposed to private credit firms going under.
Moody’s estimated that U.S. banks are exposed to nearly $300 billion of private credit loans. If these companies start defaulting on their private credit loans, which we are already seeing happen, then many of the private credit firms could go bankrupt which means they will not be able to pay back the loans they in turn had received from the major Wall Street banks.
In response to this crisis that could be seen on the horizon in 2025, the Trump Administration, which has been supporting the private credit industry, put out an executive order in August 2025 titled “Democratizing Access to Alternative Assets for 401(K) Investors”.
In other words, Scott Bessent and White House co. were being lobbied by some of their major supporters and donors from Wall Street to find new investors to hold the bag for these bad investments in private credit. These more seasoned investors on Wall Street could see there was a crisis brewing in the private credit sector in advance and successfully lobbied the White House to encourage the average American to put their life savings from their 401(K), their pension funds etc., into these bad investments in private credit so that Wall Street investors could sell their holdings, so that they could sell off these bad loans to the average American before the stocks started to tank.
And Scott Bessent is complicit in this, make no mistake. We now have the White House attempting to con the American people out of their savings to bail out Wall Street! So much for Main Street’s turn. For those who thought Bessent somehow had a Road to Damascus conversion from his Wall Street, Soros days, this should be a major wake-up call.
It should also be noted here that Blackstone was among the largest funders to Trump’s most recent presidential campaign.
Unfortunately, this economic fallout on the average American and the industrial base was a predictable outcome. Something I was writing about back in May 2025.
And I can tell you with certainty, Scott Bessent also knew it was going to play out this way.
On a Manhattan Institute panel in 2024, Bessent stated:
“I think we are also at a unique moment geopolitically. And I could see in the next few years that we are going to have to have some kind of a grand global economic reordering. Something on the equivalent of a new Bretton Woods, or if you want to go back like something back to the Steel Agreements or the Treaty of Versailles. You know, there’s a very good chance that we are going to have to have that over the next four years and I’d like to be a part of it.”
As Bessent likes to remind people, he used to teach economic history at Yale as an adjunct professor from 2006 to 2011. So, it is safe to say he has a very clear reason for referencing the Treaty of Versailles as the model for the “grand global economic reordering” that he would “like to be a part of.”
The Treaty of Versailles was one of the major blueprints for establishing the New World Order after the First World War. Influential players in this included the circles around Herbert Hoover, Secretary of State Frank Kellogg, Owen D. Young, Bernard Baruch, Walter Lippmann, Colonel Edward Mandell House, General Tasker Bliss, Hamilton Fish Armstrong, Thomas Lamont, and Justice Hughes.
The Paris Peace Conference of 1919 was also heavily promoted by this same grouping. Col. Edward Mandell House was an especially important figure in all of this.
The reader should be aware that the Treaty of Versailles is recognised as what created the political and economic tension that led to WWII. More specifically, what led to the National Socialism of Mussolini and Hitler.
And what was the ultimate goal in creating such tension? A global reordering a la “League of Nations.”
Count Richard Coudenhove-Kalergi was an instrumental player in attempting to bring about the League of Nations and was closely linked to the above circles mentioned. He was also the father of Pan-Europe and created the first version of what would become the official flag of the European Union. The original flag being the Apollo Sun with the Crusader Cross.
In his 1954 autobiography “An Idea Conquers the World,” Kalergi wrote:
“The use of mass hypnotism for propaganda purposes is most successful at times of crisis. When National Socialism made its bid for power, millions of Germans had been thrown completely off their balance: middle-class families had sunk to the level of the proletariat, whilst working-class families were without work. The Third Reich became the last hope for the stranded, of those who had lost their social status, and of those rootless beings who were seeking a new basis for an existence that had become meaningless…
The economic background of the Hitler movement becomes apparent when one recalls that Hitler’s two revolutions coincided with Germany’s two great economic crises: the inflation of 1923 and the recession of the early 1930s, with its wave of unemployment. During the six intervening years, which were relatively prosperous for Germany, the Hitler movement was virtually non-existent.”
The father of Pan-Europeanism and spiritual father of the European Union, Count Richard Coudenhove-Kalergi, often spoke well of Austrian and Italian fascism and even Catholic fascism, and thus the above quote by him takes on another layer of eeriness. Kalergi acknowledges that Hitler’s rise would not have been possible if there had not been two periods of extreme economic crisis for Germany. The question is, were these crises organic in their occurrence or rather engineered?
Kalergi further writes in his autobiography, “there is not doubt that Hitler’s popularity rested mainly on the fanatical struggle which he waged against the Versailles Treaty.”
In other words, the Versailles Treaty was purposefully engineered to unleash an economic crisis that would allow for the restructuring of entire nations a la League of Nations.
If we look at the political ecosystem Kalergi was navigating in we get some further hints, which included such men as Max Warburg, Baron Louis Rothschild, Herbert Hoover, Secretary of State Frank Kellogg, Owen D. Young, Bernard Baruch, Walter Lippmann, Colonel House, General Tasker Bliss, Hamilton Fish Armstrong, Thomas Lamont, Justice Hughes. All of these men are named by Kalergi directly as his support base in the United States in his autobiography. They were adamantly supportive of Kalergi’s Pan-Europeanism, aka a “United States of Europe,” were staunch supporters of a League of Nations vision and were architects within the Paris Peace Conference (1919-1920) which was responsible for the Treaty of Versailles which launched Germany into its first wave of extreme economic crisis.
For more on this story refer to Chapter 2 of my book “The Empire on Which the Black Sun Never Set.”
This is also why the father of neo-conservatism and head of the CIA’s Psychological Strategy Board’ (PSB) division of the Office of Policy Coordination (OPC), James Burnham had this to say in his book The Managerial Revolution:
“We cannot understand the revolution by restricting our analysis to the war [WWII]; we must understand the war as a phase in the development of the revolution.”
In Burnham’s The Managerial Revolution (1941), he makes the case that the formation of a new organizational structure made up of an elite managerial class was in the process of being created, the type of society he believed was in the process of replacing capitalism on a world scale.
The Managerial Revolution was about how a new elite of “managers” (the planners and administrators, organizers and technicians who controlled industry) obeying the “historical law” that “all social or economic groups of any size strive to improve their relative position with respect to power and privilege in society” was replacing the hitherto dominant capitalists as the ruling class. This supplanting of capitalism by managerialism would bring a radical transformation of the economy. Collectivism and central planning would replace private ownership and the free market.
But the managers would go beyond the economic realm to transform political, social, and cultural life as well. An “unlimited” state, “a fused political apparatus” of corporate managers, government bureaucrats, and the military, would come into being, supported by ideologies placing authority and discipline above freedom and private initiative. Probably, this totalitarian system would prove temporary, a phase of the transition to mature managerial rule. But it would be a long, long time before real democracy appeared again, and “drastic convulsions” would occur before it did.
Burnham reasons that just as we observed the transition from a feudal to a capitalist state being inevitable, so too will the transition from a capitalist to managerial state occur. Within this framework, Burnham predicts that ownership rights of production capabilities will no longer be owned by individuals but rather the state or institutions. He writes:
“Effective class domination and privilege does, it is true, require control over the instruments of production; but this need not be exercised through individual private property rights. It can be done through what might be called corporate rights, possessed not by individuals as such but by institutions: as was the case conspicuously with many societies in which a priestly class was dominant…”
Burnham proceeds to write: “If, in a managerial society, no individuals are to hold comparable property rights, how can any group of individuals constitute a ruling class?
The answer is comparatively simple and, as already noted, not without historical analogues. The managers will exercise their control over the instruments of production and gain preference in the distribution of the products, not directly, through property rights vested in them as individuals, but indirectly, through their control of the state which in turn will own and control the instruments of production. The state – that is, the institutions which comprise the state – will, if we wish to put it that way, be the ‘property’ of the managers. And that will be quite enough to place them in the position of the ruling class.”
This has been the policy outlook of the Trilateral Commission (though is not limited to this institution). It is in fact the League of Nations’ vision that has been on the wish list of those who began WWI in hopes that the world would accept a one world government of regionalisations in service to an empire. It is what orchestrated the Great Depression to again attempt an implementation of a League of Nations outlook through the rise of a “National Socialist” brand of fascism seen in Italy and Germany (which would not have been possible without an engineered economic crisis).
On Nov 9th, 1978, Trilateral Commission member Paul Volcker (Federal Reserve Chairman from 1979-1987) would affirm at a lecture delivered at Warwick University in England: “A controlled disintegration in the world economy is a legitimate object for the 1980s.” However, it would no longer be called by such a name, but rather as a “managed integration.”[1] This is also the ideology that has shaped Milton Friedman’s “Shock Therapy”. By the time of Jimmy Carter’s Administration, the majority of the government was being run by members of the Trilateral Commission.
Today we are seeing the final stages of this “controlled disintegration,” however, there is one very big problem to this over century long plan (that was set back with the “wrong side” winning WWII as per these architects), and that is the rapid rise of an alternative financial system…
More on this in Part II of this series.
Cynthia Chung is the President of the Rising Tide Foundation and author of the books “The Shaping of a World Religion” & “The Empire on Which the Black Sun Never Set,” consider supporting her work by making a donation and subscribing to her substack page Through A Glass Darkly.
Watch our other RTF and CP films and documentaries here.
Footnote:
[1] Although Volcker would shy away from the continued use of “controlled disintegration” in this speech, encouraging rather to call it “managed integration” the two are effectively the same and lead to the same goal, that is to a League of Nations (more on this here.) In his speech Volcker stated: “To me, the charge to find a crisis-free system could not be satisfied. The passage of time has not altered the judgment. In an open-system, the external constraint is there. If ignored for long, a crisis will develop. But a crisis can also be therapeutic - it forces a response....The problems in reaching that limited agreement provided ample warning of the inherent difficulty of reconciling the varied objectives of different countries when no single participant felt itself strong enough to, in effect, take the risks of underwriting the system. In retrospect, it still seems a remarkable achievement for the industrialized countries to have agreed together on a new grid of exchange rates...Moreover, there was no urge to settle unresolved disputes about the form and nature of convertibility obligations in a new monetary system in the heat of crisis. So, when the new rates came under attack in the market, the alternative of permitting the dollar to float for an indefinite period no longer seemed so unthinkable a step. The industrial countries were tired of trying to make a fixed exchange rate system work, at least without reaching fundamental agreement about the manner in which such a system would work.“ Hmmm, sounds a lot like a “controlled disintegration” theory after all. He goes on to say “I do not depart from the strong consensus that we have, on a worldwide scale, no other practical choice than to work ahead within the broad framework of a floating system - and that system offers the most promising framework for ‘managing integration’ as far ahead as we can now see.” The floating system effectively removed the economic sovereignty of nation states which is precisely the goal of the League of Nations. So there you have it, Volcker acknowledges that there needed to be a crisis (he does not call it a manufactured crisis of course because that would be rightfully regarded as criminal), that there needed to be a crisis in order for them to push through the floating system on a world-scale, as Volcker said, that because they were in the heat of a crisis no-one was going to debate what was effectively the launching of a new monetary system, and with the floating system they now would have the tool they required for “managed integration.” A “managed integration” towards what? A League of Nations.
Impeccably written essay Cynthia!
when is part II coming out? I am wondering if you are referring to crypto/bitcoin currency when you wrote:
"Today we are seeing the final stages of this “controlled disintegration,” however, there is one very big problem to this over century long plan (that was set back with the “wrong side” winning WWII as per these architects), and that is the rapid rise of an alternative financial system... More on this in Part II of this series."
I'm concerned that AI combined with digital ID (or effective digital ID through control of the entire internet) will allow for technocracy/authoritarianism even if we have bitcoin or similar.