We are pleased to introduce our newly revamped Weathering the Storm website and our founder’s new book, Mortgaging the American Dream: What Were We Thinking? – slated to hit the streets in early June. A few words about each, starting with the book: The COVID-19 Pandemic has demonstrated the awesome power of exponential growth and how it can overwhelm our systems and a society conditioned to think and react in linear terms with linear solutions. Mortgaging the American Dream reveals a toxic mix of escalating threats that will ultimately trigger a perfect storm of unparalleled dimensions. The book shows how this gathering storm has intensified over decades of intergenerational malpractice into a toxic mix of existential threats that are now growing by the day. The growth trajectories of climate change, ecological destruction, unfunded entitlement liabilities, crushing debt, and other pernicious byproducts of our “play now – pay later” culture are of an exponential nature, and they are being turbo-charged by aggressive feedback loops, denial, and our wasteful anthropogenic practices. Our tendency to apply linear thinking to exponential threats and address complex systemic challenges with quick fixes – a sure prescription for disaster – is examined with no attempts to sugarcoat the results. Feeling the storm’s early tremors, we are borrowing heavily on our future to sustain an unsustainable paradigm of living, and mortgaging, in effect, the American Dream for future generations while jeopardizing our own. The escalating tensions between this gathering storm and its claim on the resources that have made the American Dream possible are graphically explored; culminating in a frightful picture of what life will be like after the perfect storm erupts. A plan, Reenergizing the American Dream, is then provided to show how this threat can be used as a catalyst for mitigating the storm’s sharper edges while getting positioned for a more sustainable future. The book, a “multidisciplinary textbook with a personality,” blends the pivotal events of these historic times with boots-on-ground narratives of how the American Dream played out for the author and members of his high school class of 1961. As products of the post- World War II and Cold War eras living through the Atomic Age, Space Age, Digital Age, Age of Connectivity, thirteen different presidential administrations, and now the dawn of the Fourth Industrial Revolution, our stories provide a living glimpse of history in these dramatic times. We will keep you posted on the release date of the book and the activities that will follow the formal book launching event. Now, a few words about our newly revamped website:

We live in a play now - pay later culture that borrows heavily on the future to sustain an increasingly unsustainable way of life. In the process, the toxic IOUs we are leaving for others – in the form of our carbon, ecologic, economic, and other footprints – will impede their ability to achieve the American Dream. This travesty is a central theme in my soon-to-be-released book, “Mortgaging the American Dream: What Were We Thinking?” The “Tax Cuts and Jobs Act of 2017” provides an egregious example of this intergenerational malpractice in action: Tax cuts are usually passed to prop up a sluggish economy with at least a pretense of being revenue neutral by virtue of the economic stimulus they are supposed to generate, but It was different this time. Prior to its passage, the economy in 2017 was already strong. Unemployment was low, and the GDP growth rate stood at 2.4%. (By comparison, it was about 2.3% in 2019). Though unneeded, tax cuts play well with voters, and though this one was front-loaded for corporate America and other sectors, there was a little something for everyone – at least on a temporary basis. It carried a hefty price tag, however, with a trillion-dollar deficit shift baked into it for future generations to pay; a classic play now-pay later maneuver. Concerns about intergenerational fiduciary responsibilities were cast aside; let others worry about it. To be sure, the sudden burst of liquidity and tax windfalls ginned up an already booming economy. Corporate earnings climbed and massive stock buy-backs inflated share prices and turbocharged Wall Street. Consumers were confident and household debt was again on the rise. Like many intoxicating events, this one left a hangover that we are now beginning to feel. Despite the booming economy, our national budget deficit in 2019 was nearly a trillion dollars, and the CBO projects these trillion-dollar deficits will be our new norm for years to come. This year, we will borrow about 22 cents on every federal dollar we spend, and our entitlement liabilities will surge as 10,000 new baby boomers retire daily. The long-term reserves needed to fund them were spent on our budgets of yesteryear; replaced with a stack of IOUs. We will also spend roughly $400 billion this year in interest to fund a gross national debt that exceeds our entire GDP. As interest rates rise to finance this growing debt, the ripple will spark rate hikes on long-term mortgages, credit cards, and auto loans. Debt, by the way, is a global addiction, and the world’s ability to combat the next economic meltdown will be compromised by weakened balance sheets and strained relationships. It is difficult to grasp the enormity of the debt risk as we enjoy a record bull market, but bubbles always burst. We cannot forever borrow our way into prosperity. At some point, it will collapse of its own weight. When it does, look for a spate of reactive measures like raising new tax revenues, cutting entitlement benefits, selling assets, or printing more money. Whatever, it is a cruel legacy to foist on others. Our play now–pay later mentality is perpetuated by tendencies to apply linear thinking to exponential problems. (See: “Linear Lunacy”). Quick fixes will never resolve the broad, systemicproblems we face, and our myopic approach is not just limited to debt. Climate change, protecting the environment, preserving ecosystems, global overpopulation, and more, are all part of the equation. Global problems require global solutions, and the need for collaborative approaches has never been greater, nor more lacking. On the brighter side, we have the resilience and technological capacity to address our debt and other challenges, but it won’t happen until we awaken to the threats and build the political will to confront them in an aggressive and resolute manner. Sugar coating or shifting challenges to others is a blatant form of intergenerational misconduct, and we are better than that. The Millennial Generation now outnumbers the Baby Boomers, and the older Gen Z cohort will be voting for the first time in 2020. As victims of our intergenerational IOUs, they have the voting power to reshape the playing field with policies that fit our changing times. Politicians that ignore their concerns will do so at their own peril.

We are experiencing an “Energy Renaissance” that few would have believed possible even five years ago, and it will present a fantastic array of new opportunities. Take oil, for instance: Until recently, our greatest energy concern was that the world’s supply of oil would soon “peak” and then decline; consigning us to an economic abyss in which affordable oil – the “mother’s milk” of economic growth – would become less accessible and far costlier. The focus is now rapidly shifting from “peak oil” to “peak demand.” What’s the difference? Peak oil, a supply-side issue, is subject to the immutable laws of geology; we have only a finite supply of oil. Once it is gone, it’s gone. Peak demand, however is driven by the marketplace. Major forces – climate change, new technologies, and the marketplace – are reshaping the energy equation in remarkable ways; an energy renaissance is now in the making. The role of oil, the primo fuel for over 90% of our transportation systems, will grudgingly lessen. Our global addiction to oil is powerful, and the withdrawal pains will be long and bumpy. As the oil glut of the past four years dissipates, the supply and demand curve – expected to get “rebalanced” later this year – will create new ripples. Prices will again rise as oil supply tightens and global demand continues to grow by about a million barrels per day, per annum. Now, here’s where things could change; Rising oil prices in the past were often the prelude to a recession. Without a replacement for oil, we had little choice but to pay the going price at the pump. Historically, it often took an economic downturn to reduce demand and lower the prices, but the new Energy Renaissance will gradually change the equation. What’s happened? Among other things, climate change and the recent Paris Accord were catalysts for triggering mandates in China, India and several European nations to curtail, or ban, the production of gasoline and diesel-powered cars on or before 2040. The mandates will spark a growth in the production of electric vehicles (EVs), and other alternatives; automakers will either follow the market or go out of business, and the demand for oil will subside as the market gains traction. In essence, climate change is transforming the market, and exciting new technologies will accelerate that transformation. As technologies and infrastructures improve and price-points fall, a new fleet of cleaner cars will emerge. With less dependence on oil, our transportation sector will become more resilient and robust; no longer held hostage by oil – its Achilles Heel – as the predominant fuel driving it. But, the Energy Renaissance goes well beyond transportation. As we migrate toward electrified power, and as the baseload fuels generating the electrical power shift away from coal toward a larger mix of natural gas and renewable energy – particularly the latter – our energy future will look brighter, cleaner, and certainly more sustainable. As in any renaissance, there will be winners and losers. The shock waves in the geopolitical and global oil markets will be profound, but here’s the real point: Regardless of what occurs first – peak oil or peak demand – the end game will still result in a transition to new energy systems. Peak demand offers a transition based on choice rather than a chaotic collapse in oil supply. Though challenging, the energy renaissance will create new engines of economic growth and jobs galore in the areas of clean energy, demand reduction, and conservation. It will also leave a cleaner carbon footprint for those following us, and that’s a real win-win. Countries like China get it; let’s hope that the folks in Washington awaken to the bonanza this new energy renaissance could create for a tech-savvy country like ours.

My latest book-in-progress – “Mortgaging the American Dream: What Were We Thinking?” – builds on eight megatrends that are reshaping the world. In this sneak preview, the abbreviated megatrends are listed along with a “looking ahead” commentary on potential implications: 1) Climate Change: The rapid build-up of atmospheric greenhouse gases is intensifying and the impacts are becoming more pronounced. Climate-induced droughts, floods, rising sea levels and natural disasters of all types are occurring with greater frequency and severity and becoming ‘threat multipliers’ across a large spectrum of the globe. Looking ahead, without an all-out effort to meaningfully address climate change now, we might soon reach tipping points that render it irreversible. 2) Population: The global population has more than doubled over the past half century, and the demographics are shifting along with an aging population. The increases are straining our planet’s carrying capacity to sustain life as we know it and threatening the social systems that provide for a needier population. Looking ahead, with a growing and aging population, there is little margin left in the system for contingencies; the physical and financial strains on our carrying capacity will become severe, frequent and destabilizing. 3) Ecologic Footprints: The world’s finite supply of fresh water, arable land, and other physical and natural resources is bumping against an insatiable demand curve. Wasteful behaviors and conspicuous consumption patterns exacerbate the threat. Looking ahead, our ability to recalibrate expectations and behaviors toward reducing our ‘ecologic footprint’ may be the only viable alternative left to address this challenge. The outcome is in question. 4) Energy: The endless demand for energy is coinciding with a gradual shift from legacy fossil fuels to renewable and alternative energy systems. Over time, as demand outstrips supply, oil – our primo transportation fuel – could become an Achilles Heel without fuel systems of a scalable size in place to replace it. Looking ahead, we may be in a ‘race against time’ to smoothly transition away from oil without incurring major economic disruptions; transition costs will be daunting, and contentious economic and climate change trade-offs significant. 5) Global Economy: The global economy has evolved into an intertwined network of interdependent systems. With massive debt – devoid of firewalls to insulate the contagious spread of economic woes across international borders – and a build-up of unfunded entitlement liabilities coming due in American and other countries, the threat of a global meltdown is escalating. Looking ahead, bursting economic bubbles, sovereign debt defaults, trade wars, or even an unforeseen “black swan” event could trigger a chain reaction leading to a global economic meltdown that dwarfs the great Recession of 2008. 6) Geopolitical: The global power structures are rapidly changing as we plunge into Cold War II – this one fought over the control of scarce resources and markets; not ideology. With China, the newest superpower, and the spread of nationalistic movements, the playing field has changed. The specter of nuclear proliferation and asymmetric threats in the form of cyber-warfare, currency wars, and terrorism add to the destabilization. Looking ahead, the geopolitical moving parts are taking us into uncharted waters and making the world a more dangerous place in which to live. The threats of miscalculations – with unintended consequences – are escalating. 7) Technology: The digital revolution, quest for connectivity, artificial intelligence, robotics and cyber-everything has changed the way we work, think, play and interact with others. Our inability to adjust to the rapidly changing technologies in a timely manner has created a new set of challenges as we enter an era dubbed the “Fourth Industrial Revolution.” Looking ahead, the challenges of cybersecurity, privacy issues, national security, and technological disruptions – natural or otherwise – are formidable. Worksite mismatches between the new technological skillsets needed and those available will pose a challenge to future economic growth. 8) The American Dream: The American Dream – now a global aspiration – was based on abundant resources, cheap energy, economic opportunities, an optimistic “can-do” spirit and rising expectations. As rising expectations increasingly clash with a diminished capacity to provide, the “dream” we knew is at risk. Looking ahead, the great unknown will be in our resilience and ability to adopt once the “dream enablers” no longer support the “dream” we have always known. Our future hangs in the balance. In Conclusion: While the trends and trajectories are ominous, there is a brighter side: We have an enormous opportunity to turn lemons into lemonade. It starts with an awakening; gains traction with resilience and innovation; flourishes with new economic engines of growth to counter the challenges, and ends, hopefully, with our leaving a better place for those following us. The intergenerational challenges that go with it are focal points in my new “book-in-progress.” For more information, contact us at www.weatheringthestorm.net Mike Conley