The destruction of wealth in Britain accelerates

Key Markets report for Wednesday, July 2, 2025

In the long run, history isn’t kind to empires: they all ultimately collapse at great cost to their host societies. Back in August 2021, when the US finally withdrew from Afghanistan, I remember being surprised by the hysterical reactions to this among the British political class. Up until then I thought that Great Britain played the role of junior partner in American imperialist misadventures around the world.

But US withdrawal from Afghanistan made it apparent that the UK’s role was far more assertive. After some research, I came to the conclusion that the British Empire was still a thing: undead and transformed, it continued to act and shape world events through proxies, intelligence agencies, covert diplomacy and an expansive network of non-government organizations and private contractors.

This enabled Britain to continue “punching above our weight in the world,” as Lord Douglas Hurd famously put it back in 1993. Hurd, who was a core asset of the British foreign policy establishment, announced then that Britain intended to continue exercising power “above our weight” in pursuit of British interests around the world.

Collapse of society

Indeed, imperial ambitions die hard and invariably come at a massive cost to society. Fall of the Roman Empire told the story of the ultimate destination along the trajectory of decline. As Salvian chronicled it, the process of decline turned free men into slaves en masse. By the late 6th and 7th centuries, the devastation of the Western Roman Empire was almost total. Houses began to vanish from the archaeological footprint; dirt floors became the norm and the technique of building in mortared stone and brick was lost.

Many basic crafts like wheel-pottery disappeared for a few centuries. The market for low-value functional goods and solid quality common usage items collapsed. Without markets, coinage also disappeared and during its final stages, the Western Empire's economy operated on barter. As a result of the breakdown of public administration and funding for public works, monumental structures begin to turn to ruin. Previously thriving cities emptied out, population levels cratered and Rome itself became desolate with shepherds tending their flocks among its crumbling relics.

If its pursuit of imperialist objectives continues unchecked, this is the kind of collapse the British establishment could bring about. Once we understand the role and ambition of UK’s ruling establishment which, as in Rome, represented the moneylending oligarchy, we can better appreciate Britain’s fate as it slowly unfolds. In my October 2021 article, "The Fall of Global Britain: an Investment Hypothesis," I predicted that,

"The UK will ... suffocate its domestic economic growth by imposing hard austerity at home while at the same time increasing military spending and foreign adventurism. Britain's public debt will continue to outpace its GDP growth and the government's budget deficits will be covered by the Bank of England's monetary inflation. This recipe reliably leads to stagflation and possibly to hyperinflation."

Systemic destruction of wealth

Of course, the decline is a very slow-motion process; it may become obvious in hindsight, but it is much harder to discern by observing day-to-day events. Still, the evidence is mounting that Britain is slowly collapsing. In March of this year, The Guardian published an article titled, "All UK families 'to be worse off' by 2030' as poor bear the brunt, new data warns," citing a study by Joseph Roundtree Foundation. The study found that British families "will be £1,400 worse off by 2030, representing a 3% fall in their disposable incomes. The lowest income families will be £900 a year worse off, amounting to a 6% fall in the amount they have to spend."

But as it turns out, the JRF study may have been a bit too optimistic. As City AM reported two weeks ago, in 2024 alone Britain’s household wealth declined by 3.6% - the second worst fall in wealth of any major economy last year (only Turkey did worse). The figures are based on the UBS annual Wealth Report. Part of the problem stems from the exodus of wealthy individuals from the UK.

In December, a Henley and Partners study estimated that 10,800 dollar millionaires had left Britain in 2024, with departures expedited by the government’s decision to scrap the beneficial ta treatment for non-domiciled foreigners residing in the UK. Government’s impulse to improve its catastrophic fiscal position by squeezing the wealthier segment of the population will push many more of them to leave Britain.

But this deterioration is only an acceleration of a crisis that has been worsening for years now. In February of last year, Last year, former Prime Minister Gordon Brown published an article criticizing the “obscene levels of destitution” in the UK, writing that, "Britain is in the throes of a hidden poverty epidemic, with the worst-affected households living in squalor and going without food, heating and everyday basics such as clean clothes and toothpaste..."

The health toll

The damage from all the austerity and destitution is impacting the people’s physical and mental health:

• More than a fifth (22.6%) of adults aged 16 to 64 have a common mental health condition, up from 18.9% in 2014.

• More than one in four adults (25.2%) reported having had suicidal thoughts, including about a third of 16- 24-year-olds (31.5%) and 25- to 34-year-olds (32.9%).

• Self-harm rates have quadrupled since 2000 and risen from 6.4% in 2014 to 10.3% in 2024, with the highest rates among 16- to 24-year-olds at 24.6%, especially young women at 31.7%.

As things stand today, there’s no glimpse of light at the end of the tunnel for Britain. It’s government appears obsessed with capturing carbon from the atmosphere and other net zero projects, introducing digital ID, pursuing war against Russia in Ukraine, opening the second front in the Balkans by destabilizing Bosnia and Herzegovina, and consolidating control over the Middle East, “east of Suez” through Israel and their new colonial acquisition, Syria and. The suffering of British people and the slow suffocating of their economy doesn’t seem to figure even as an afterthought for the government.

That single-minded pursuit of imperialist goals is probably what paved Rome’s way to perdition. Britain today seems to be accelerating along the same trajectory. Like in Rome, it will almost certainly lead to economic collapse, rising interest rates and a steady erosion of the currency’s purchasing power through inflation and/or hyperinflation. At some point, (we may not be there yet), the collapse of Britain could become one of the most lucrative investable themes in the world and I expect that market trends will tell us when that time comes.

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