But that could never happen here, right?

Turkey’s lira has lost more than half of its value this year alone.

This is hyperinflation. Turkey is a NATO state, hostile to Russia, and right next to Europe. With 80 million people it is a quarter the size of the U.S. Sort of a big deal. It is a “civilized country,” not some third-world backwater.

Most people think this could “never happen” in the United States. But it can, and it eventually will. Social and economic realities are universal, not provincial.

With that in mind, I have a couple of predictions. With near certainty, at least one of these is true. Which scenario do you think is more likely?

Prediction 1

I predict that when this happens in the US (sometime this century, in response to either fiscal shock, military defeat etc.) the flight will not be to another fiat currency, such as China’s. The dollar is the world’s de facto “reserve currency” only because people continue to want to come to the US to live or own property. (Nobody wants to move to China. It’s dirty, crowded, and repressive.) This in turn is because the US is the youngest, most unspoiled continent on the planet, with immense resources. And also because, for the moment, it has a liberal political regime.

But when the dollar collapses, there’s nowhere else to go. And it will collapse: America’s economic policies are not qualitatively different than Turkey’s. From the Mises Institute:

The lessons from other countries become invaluable. In Turkey, the government competes in the marketplace, opening (and possibly closing) stores at will. They also monitor “excessive price increases” in certain industries. The central bank currently holds rates at 18%, continues to offer stimulus, and claims inflation is transitory. After all this manipulation, the Turkish Lira continues to tumble on world markets and prices climb at a pace still incomprehensible to the west.

Putting it all together, Turkey’s national policies and actions of the State do not sound terribly different than what happens in America. Either economics work differently in Turkey and market distortions will never get that bad here. Or, we are being offered a glimpse into the future where the State controls every facet of the market, and the only thing certain becomes capital destruction.

When it happens here, I predict the flight will be to non-fiat assets, such as cryptocurrencies. Efforts to regulate these for e.g. taxation or redistribution are unenforceable, or will become unenforceable. Widespread use of crypto therefore leads directly to crypto-anarchism. (An important part of crypto-anarchism is the de-schmooing of the Internet; conversion to darknet, etc. Yes, I evangelize this, but the real motive force for conversion will be catastrophe, not ideology. It always is. The ideologues build the ark. But the flood is what makes people board it, in droves.)

One major consequence of crypto-anarchism is that it is impossible to have a welfare state. The state can literally fund nothing. A coercive state cannot exist; only a consensual state. It means the sudden, absolute end of the state-mandated egalitarianism that has been the hallmark of the West for 300 years. All social policy will have to be voluntary; as all charity, etc. Just as it was before Christianity and the French Revolution. Political organization looks more like Stephenson’s The Diamond Age. Large, multicultural polities are impossible, as these rely on coercion.

Prediction 2 (alternative, cozy)

Everything stays just like it is now. Forever. Except there’s even more “equality.” Miracles happen. Mankind is perfected. The “brotherhood of man” becomes a reality, although in order not to offend the “persons formerly known as women,” it is called the “brotherhood of persons.” For the first time in human history, the laws of social and economic reality are violated with success.

Which of these predictions is the red pill, and which the blue? And no, you can’t “take both.”