The End of Pax Americana

A text from my son arrived over the weekend: Be safe, Dad. Worried about you overseas. Times are getting scary in the world.

As a dad, that was a heartwarming message. My son thinks about me. Nothing in this world makes me happier.

Then again, the reason behind the message makes me incredibly sad.

Times, indeed, are getting scarier.

History is changing course and we’re watching it live. What comes next is the end of Pax Americana—the end of the era of American Peace.

I say this all the time because it’s true: The American age I grew up in was the best that America ever had to offer—the 1970s, ‘80s, and ‘90s. Sure, there were certain problems with the economy and social matters, and it was then, during the Reagan administration, that the US government determined that debt doesn’t matter, but science marched rapidly forward. So, too, did technology.

America progressed into the Great Moderation which saw bond yields plunge. Stock prices soared. Wealth multiplied. Housing grew increasingly affordable. Political parties bickered but ultimately, they got along and worked together to better America’s future. Uncle Sam’s minions in Congress—on both sides of the aisle—reduced federal spending by such a degree that America actually ran a balanced budget in 1998 and saw four consecutive years of budget surpluses from 1998 to 2001. 

Relative peace reigned globally.

The ‘90s… what a time to be alive in America.

And now here we are—2026, loitering on the cusp of a crisis we cannot stop.

The age of Pax Americana is morphing into Post Americana, and in that polar shift lies unsavory effects on American households, wallets, and investment accounts.

Pax Americana was built atop three once-sturdy pillars: military credibility, economic openness, and democratic values.

All three are under attack today.

Military power: Yes, America has military might, the most well-funded military in history.

Yet as the war against Iran shows, military might doesn’t necessarily mean a quick “W.” Just as it didn’t mean a quick W in Iraq or Afghanistan. Iran is fighting asymmetrically. Persia’s military braintrust correctly calculated that swarms of low-cost drones would deplete the smart-munitions of its adversaries, and that in time the US would run out of high-tech weaponry even as Iran continues to fabricate relatively cheap drones that are causing much havoc and destruction.

Moreover, Iran’s control of the two most important waterways for oil transport—the Strait of Hormuz and the Bab al-Mandab Strait in Yemin—limits military options. Asymmetry, it turns out, might only be surpassed by nuclear strategy—and if that’s the case, the world’s perceptions of America will degrade in the single flutter of a hummingbird’s wings.

Economic openness: America was once the most important consumer market in the world. Now, countries are increasingly bypassing America and selling more of their goods elsewhere because this US administration’s misguided “America First” policy doesn’t understand the fact that free and open trade is not a story of American loss, but a story of American gain. Consumers gain access to a wider variety of lower-cost products, even as America and American businesses integrate themselves deeper into the world. 

Moreover, Americans buying products abroad generates for foreign countries the US dollars that those countries then use to buy American debt… which keeps US interest rates lower than they otherwise would be and helps Uncle Sam afford his extravagant spending.

Democratic values: In the 1990s, America felt like a democratic nation.

Modern America feels like a kleptocratic oligarchy in which politicians (from the White House on down) as well as their family members and the fat-cat donors/business elite profit egregiously while the hoi polloi sink deeper and deeper into debt just to afford life.

Democratic values aren’t just eroding in the US, they’re calving like an iceberg losing a large piece of itself as the climate grows warmer.

Back in 1995, America universally ranked as a “high-performing” democracy, always in the top 20 globally.

Nowadays it’s a flawed democracy at best, most recently ranking 51st (down from 20th in a single year) in a 2026 report from V-Dem Institute, a nonpartisan research organization originally co-founded by the University of Notre Dame. The report accurately cited a “rapid concentration of powers in the presidency” and the troublesome undermining of institutional checks and balances.

I look across the American landscape today and it’s not the country I once knew.

It’s an angry and paranoid country filled with hate and rage—that crazy uncle who spouts wild conspiracy theories at every family gathering, is always blaming someone else for his problems, and refuses to talk to certain siblings because, in his view, they voted the wrong way.

Sadly, of course, there is no going back.

Nostalgia is as close to yesteryear as we’re going to get.

The road forward… that’s going to be a problem for modern America.

More on that soon.

In the meantime, use this moment of global angst to deepen your exposure to gold, Swiss francs, and bitcoin. What’s coming is a no-good, very bad future for the modern US dollar and most Western currencies. The world is going to need a new way to pay for things. What that “new way” is—I have thoughts—but it means the dollar is going to lose a lot of value in the near future.