#1143 Dave Collum | 2022 Was A Disaster Year

— The Federal Reserve enabled COVID lockdowns by signaling it would provide unlimited liquidity and monetary support, removing economic constraints that might have prevented government-mandated shutdowns.

— Inflation is now structurally embedded in consumer and employer psychology after years of Fed money printing, making it resistant to traditional monetary policy tools.

— The US has conducted approximately 292 military interventions since the mid-1990s; statistically, America has been far more militarily aggressive than Russia over the past 20 years.

— NATO's eastward expansion violated written agreements made after the Cold War and directly provoked Russia; Putin's invasion of Ukraine was partly a response to NATO encroachment and the presence of Ukrainian Nazi battalions like Azov.

— The US blew up the Russian Nord Stream pipeline to prevent Germany-Russia economic alignment and to keep European allies dependent on US energy supplies.

— Markets have been overvalued for nearly 30 years (since ~1994) and a generational bear market is probable, potentially lasting 15–20+ years with the S&P 500 falling to triple-digit levels in real terms.

— The S&P 500 has had zero real returns when corrected for M2 money supply growth over the past 100 years; nominal gains have masked currency debasement.

— All 25+ valuation metrics diverged from fair value around 1994 when the Fed began systematic rate-cutting and index investing accelerated; markets have been in a bubble ever since.

— Interest rates have doubled (10-year yield) yet equities have not halved, suggesting the correction is far from complete and downside risk remains severe.

— A generational bear market similar to Japan's Nikkei (1989–2007, 18-year decline) is probable; inflation-adjusted S&P targets are in the "triple digits" (vs. ~4,500 nominally today).

— CalPERS and state pension funds are taking on leverage to chase returns, a warning sign of systemic fragility.

— Expect a multi-decade bear market: Do not assume two-year corrections are sufficient; historical precedent (1929–1981, 1906–1926) shows real recoveries take 20+ years. Portfolios should reflect extreme caution or full defensive positioning.

— Inflation is sticky; deflation is the unknown risk: Prices will not return to pre-2021 levels. Plan personal finances and business models around permanently higher input costs and wage pressure.

— Geopolitical escalation risk is real: NATO expansion, pipeline destruction, and US military encirclement of Russia increase the probability of kinetic conflict or accidental nuclear exchange; diversify away from US-centric exposure.