Remember when “stocks always go up and interest rates always go down” was economic reality? With a few brief interruptions, that dynamic persisted for almost 40 years – powering through through booms, busts, and all manner of geopolitical events.
This came to be accepted as “normal”, and Retirement Inc. sold the idea that we should funnel all our savings into qualified retirement accounts and leave it there for decades. You only lose money if you sell, became the mantra.
To be fair, that conventional advice has worked out okay for people up to this point. And by that, I mean it hasn’t been a total disaster. I know plenty of people feel good about how many dollars they’ve amassed in their 401k and their IRA accounts.
But from my vantage point, a tectonic shift has quietly remapped the entire landscape of finance and the concept of retirement… and I suspect Retirement Inc.’s model will be rendered obsolete over the next 40 years. We’re now entering into a new economic era.
As for why, we have to rewind to 2022…
A Revolution Everyone Missed
If we think back to the start of 2022, the world was still reeling from the Covid hysteria’s aftershocks: knotted supply chains, skyrocketing grocery prices, and a culture war that was reaching the boil point. What most people missed among the chaos was one of the most consequential changes in financial history…
It happened in an arcane corner of the financial system – deep within the plumbing that underlies everything. In that murky darkness, the few people who were paying attention witnessed the end of LIBOR and the beginning of something called SOFR (pronounced “so-fur”). This set the stage for an entirely new economic era.
LIBOR is an acronym for the London Interbank Offered Rate, and it served as a key interest rate benchmark here in the US for nearly 40 years. Put simply, the interest rate for trillions of dollars’ worth of loans in this country was set based on LIBOR.
If anyone were paying attention, I suspect they would have questioned why we were using a London-based interest rate benchmark to price our loans here in the US.
Seems like an odd thing, doesn’t it? Especially given that the US dollar is the de-facto reserve currency of the world.
Then if anyone had looked at how the LIBOR rate was calculated, it should have raised even more red flags. Because a panel of 16 of the world’s largest banks were permitted to set the LIBOR rate based on their own assessments of what it should be. And it just so happens that 11 of those 16 banks were headquartered in Europe.
For those old enough to remember, interest rates here in the US peaked in 1981… and they proceeded to fall consistently for the next four decades while LIBOR was in place. But in 2022, the Secured Overnight Financing Rate (SOFR) replaced LIBOR… and suddenly interest rates spiked higher.
That’s because SOFR is set daily in the open market based on real transactions, not arbitrary “guesses” from bankers in London. The old system allowed central planners and big banks to manipulate interest rates lower at will… but that jig is up.
With SOFR in place, interest rates are now subject to market forces. And that means the “norms” of the last forty years—where you could bank on refinancing a mortgage at ever-lower rates and you could count on stocks to always surge when the Federal Reserve cut its target rate—they no longer apply.
In short, we’re in an entirely new economic era. Yet, most financial advisors still cling to obsolete models and outdated assumptions, and they are still preaching solutions designed for an era of cheap money and central bank backstops.
A New Playbook for a New Economic Era
Friends, we’re in uncharted waters today… and it’s time to recognize that.
Nobody knows for sure exactly what the future will bring, and that’s okay. The best investors don’t try to predict every twist of the market or the economy—they build systems designed for resilience, adaptability, and steady compounding through any landscape.
Harry Browne taught us this back in the 1970s. His Permanent Portfolio concept demonstrated that investment gains are not reliant on one becoming Nostradamus.
And here’s the thing – we can pair Browne’s investment philosophy with a modern approach to asset allocation to make our money bulletproof and build extra streams of monthly income. It’s all just a matter of following a playbook that’s built for the new economic era we’re entering into… not the one we’re leaving behind.
This is the impetus behind our upcoming Bulletproof Money 3-Day Challenge. Starting next Wednesday, we’re setting aside an hour a day for three consecutive days to lay the playbook bare and walk everyone through exactly how to implement it.
What’s more, we’re going to issue a challenge to attendees each day. The challenge will pertain to a particular item that everyone can begin to take action on immediately.
I know we’re all busy and it’s hard to carve out time to attend a multi-day event like this. But I promise, this will be the most comprehensive financial program ever offered as a free workshop. Each session will be immersive and interactive, and we’ll take questions and engage in discussion as appropriate.
So if you’re ready to implement a financial model that is custom-built for today’s reality, please consider taking me up on the Bulletproof Money 3-Day Challenge. You can register for it right here: https://phoenician-league.lpages.co/3-day-challenge-registration/
-Joe Withrow