Our Current Financial Crisis is an Amygdala-Driven Crisis

The economy is underpinned by the psychology of those trapped in scarcity mindset.

Whenever I post or write on the topic of the economy collapsing, people act like, “you’re cute and seem kinda smart about some stuff with your unique takes, but leave economics to the real finance wizards”.

Here is the thing though. It is true that I am not a “financial expert”. I am a social scientist. A systems theorist. So what I do know is that the planet is real, our bodies are real, and everything else is constructs. So when I sound the alarm on the economy, here is what I am looking at:

1. The Economy is a story. It is the ultimate social construct, a shared hallucination of value that requires trust to function. I am analyzing the mental and moral health of the storytellers.

2. A stable economy depends on social cohesion. The entire construct of “the economy” is a building, the stability of which relies on a foundation of sand — social cohesion — which is currently being washed away by a storm of authoritarianism and scarcity mindset. Even more overt and aggressive racism, isolationism, nationalism are things that further erode social cohesion that was already tenuous to begin with.

3. The concept of “reserve currency” is a psychological phenomenon, not just a financial one. The U.S. dollar is still the reserve currency of the world, and the U.S. also has the largest debt in the world. The U.S. dollar is not backed by gold, it is backed by the perception of American stability and adherence to rules and international social/political norms. When a large swath of the American people elect an authoritarian who flouts those rules/norms and openly courts chaos, we are quite literally setting our own currency on fire. I don’t need to be an expert in finance or economics to see this. It’s applied mass psychology.

4. The economy is a global network. Because of how intertwined economies are globally, social cohesion is more critical for a sustainable economy than it ever has been in the past. When authoritarians worked to isolate their countries and consolidate power in the past, the world was not as intertwined as it is now. The global economy is now a single, tightly networked organism. In a deeply globalized, interconnected system, a loss of trust (social cohesion) in global heavyweight (the U.S.) cannot be contained; the “old maps” of isolated economies no longer apply.

   
   

Therefore, I see all this, I look around, and my prognosis is that the system’s foundational assumptions are being destroyed by its own psychological drivers. I am not reporting on the health of financial markets. I am reporting on the structural integrity of the economic operating system itself. And that structural integrity is entirely dependent on collective psychological health and cohesion.

Reality Is Not Out There

As I have written in several of my other essays, reality is not “out there”. 

Reality is a feedback loop. It starts in the brain as a story, most often, as a subconscious story. The brain uses that story to build a construct outside of itself. When we collectively buy in to the story and uphold it, it becomes a social construct. A shared construct. We interact in that construct and sustain it as a shared reality. The things we experience in that reality are feedback to our brain that reinforce the story. When the story is running smoothly, we experience cognitive consonance, the state of psychological harmony where our beliefs, values, and behaviors are aligned and consistent with one another. When the story is not running smoothly, we experience cognitive dissonance, which is the opposite state. Cognitive dissonance is the psychological discomfort experienced when reality forces us to confront two or more contradictory beliefs, values, or attitudes, or when our actions conflict with our beliefs.

For example, many people have long lived in the belief that America is a bastion of democracy, the “shining city upon a hill”. I have seen countless posts from people lately watching what is unfolding in the U.S. saying “this is not who we are”. People truly believe this. Even when history shows that Jim Crow was fascism for Black people. Americans are shocked at the backing of genocide in Palestine while ignoring the fact that the U.S. was founded upon the genocide of millions of Native Americans, and that the Declaration of Independence literally refers to them as “merciless savages” to this day. 

Americans believed the collective story that their country was a global defender of democracy, even as the U.S. went around for decades toppling Latin American, Asian, African, and al-Mashriq governments that tried to stabilize into something beyond America’s direct control. A lot of the stress, discomfort, and anxiety Americans feel right now is because most are deep in the middle of experiencing intense cognitive dissonance around these truths.

I started this article talking about the economy, so the above probably feels like a tangent. But it’s not. My point is that the human brain is very bad at two things:

1. Remembering what is actually real (the planet and human beings) and what is just a shared story we invented to make our shared reality run smoothly, and;

2. Implementing the feedback the cognitive dissonance in the story provides, and revising the story of reality accordingly so that it keeps running smoothly.

   
   

The Role of Cognitive Dissonance

Cognitive dissonance is a critical feedback loop in our shared reality. 

It tells us when the story is no longer running smoothly, and when it is at risk of shattering. But the human brain is tricky. The amygdala’s job is to keep you alive. It cannot tell the difference between your body and your ego. When the story of you (ego) feels threatened, it reacts as if your physical life is in danger, shutting down the very feedback (cognitive dissonance) that could keep reality running smoothly. This ironically makes you more comfortable in the short-term, but puts you and our shared reality in more actual danger in the long-term.

The amygdala is smart in its way, and fast. But it is not aware. It’s intelligence is an algorithm. It’s ancient. It is bad at adjusting. It lives in binaries. And unfortunately, it is faster than the prefrontal cortex (PFC), which is the part of the brain that holds higher awareness, which is what you need to really weigh the feedback that cognitive dissonance provides. If this is not something you have practiced, allowing the PFC to wrest the wheel from the amygdala and its survival logic, it is very likely that you are being run by an inherited survival algorithm, and not actually weighing out feedback strategically.

So now, let me apply this to our shared story around the economy and I will show you where I evaluate the battle of cognitive dissonance playing out.

Mistaking the Mirror for the Architect

The fundamental misunderstanding here is that people mistake the economy for a natural law, rather than a social construct.

What they see: A market driven by immutable laws of supply, demand, and GDP. They see the economy as an external, self-regulating machine.

What I see: The economy is a social construct — a collective group hallucination dependent entirely on social cohesion and faith.

Amygdala-Based Economics

The market is an externalized construct of the brain. Our current system is structured to exploit the unintegrated human psyche. The economy is underpinned by the psychology of those trapped in scarcity mindset. Most wealthy people ironically have a scarcity mindset. This is not a mystery.

Root cause: Scarcity mindset is evidence of a brain that is still dominated by the survival algorithms of the amygdala and never feels safe, so enough is never enough, which makes the system inherently extractive.

The inevitable outcome: An extractive system inherently erodes social cohesion, but social cohesion is precisely what economic stability depends on. The system is therefore unstable by design, because its foundation is a self-destructive, trauma-based/fear-based belief.

Lagging vs. Leading Indicators 

(this is the main reason people think I have no idea what I am talking about)

The public’s toolkit (lagging indicators): Most people rely on metrics like GDP, unemployment rates, and the stock market to tell them whether the economy is “healthy”. But these metrics are backward-looking. They measure the past health of the system and only confirm a collapse after it has already happened. The stock market, in particular, is a collective group hallucination speculating on imaginary value.

My toolkit (leading indicators): I am evaluating social cohesion, which is the forward-looking, primary indicator of the economy’s stability. I am also looking at reports on the ground of how every day, working-class people are struggling to meet basic survival needs.

Systems Thinking (global, social & cyclical)

Public approach: Most people still perceive and evaluate the economy based on fragments of their own limited reality, and they look at the systems they can see linearly. But reality is nonlinear. It is cyclical. It is a feedback loop. Most people look at inputs and outputs, but they are not looking at what comes of the interactions between those inputs and outputs, what is driving them, and what the entire machine becomes as a result of those interactions. That is what a system is. It is emergent. It is the result of the nonlinear dynamics of interconnectedness (the feedback loop).

My approach: My analysis is usually dismissed because it requires an interdisciplinary synthesis — a coherence that most minds are trained to resist, because most minds are trained to look at the efficiency of inputs and outputs alone, and not what emerges from the interconnectedness of running the whole machine. This is reinforced by the fact that our current system thrives on expertise. People build their careers, identities, their egos on siloed expertise. The result is that you have a lot of people that are very good at being expert brick makers, but are not so great at looking at how all the bricks interconnect to form the entire architecture, and what outside of their expertise, affects their specific pile of bricks. Even many systems theorists still do this. They gain expertise in subsets of systems, but don’t put it all back together and look at the cyclical nature of the entire architecture.

So then people look at me as an amateur who doesn’t know what I am talking about because I don’t have “expertise”. But my expertise is precisely in zooming all the way out, not in.

This is why I continue to write and post, despite the naysayers and ridiculers. My goal is to make the unseen systemic architecture visible to eyes that have been trained only to watch the stock ticker. 

A Failure of Narrative

Economic collapse won’t be a technical failure of economics. It will be a failure of narrative. A failure of the shared story. The story is breaking. The social cohesion will snap. And all the lagging indicators will plummet after the fact, confirming what I already see: that the system was dead long before the body stopped moving.

I am not focused on material collapse. I am looking at the moral and spiritual decay that precedes material collapse. People want to talk about interest rates while the temple is crumbling from a rot in its foundation. 

I am not doing this from a place of trying to induce fear. I too, am a piece of the system, trying to provide feedback in the loop, so we can see the system for what it is, and change the story in time. And yet, I know most won’t hear me until the situation becomes much more dire, because that is the nature of cognitive dissonance, and where we stay stuck as a species. We mistake the story for reality, and protect it more than ourselves, because the amygdala can’t tell the difference. People usually won’t change until the pain of staying the same becomes greater than the pain of change. This too is amygdala logic. It is a poor long-term strategist.

This isn’t economics as usual. It’s systems psychology at scale. It’s an ancient, primitive survival algorithm running out of road.

So when the last lagging indicator finally flashes red, it won’t be a surprise. It will be an autopsy confirming my diagnosis. But even then, it won’t be too late. We can still build a new story. A better one. But only if we wake up and stop confusing the story for reality.

Because the story is not you.

And your amygdala can’t tell the difference.

But you can.

And that’s where change begins.

For further reading: 

“The amygdala and medial prefrontal cortex: partners in the fear circuit”: https://pmc.ncbi.nlm.nih.gov/articles/PMC3678031/

“Amygdala Hijack: When Emotion Takes Over”: https://www.healthline.com/health/stress/amygdala-hijack