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The Homeless Next Door – Surprising Secrets of America’s Bankrupt Wealthy

The Homeless Poor

A massive ghost army of service workers from decimated industries is growing exponentially as restaurants, travel & hospitality, retail, office cleaning services, and the type of jobs that many Americans work at two just to stay financially afloat. The inability to pay rent and possibly not being able to move in with friends or family will force many into homelessness as municipalities end the extension of suspending eviction notices.

Many American renters who cannot afford to remain in their apartments are at risk of becoming homeless if they are unable to stay with family elsewhere and will swell the ranks of the present-day homeless population. This irreversible trend will trigger a cascade of serious urban problems particularly crime in which millions will be scrambling for fewer & fewer food resources as food banks become overwhelmed while the citizens’ frustrations and anger mount.

The Homeless Wealthy

The best selling 1996 book entitled “The Millionaire Next Door, the Surprising Secrets of America’s Wealthy” by Thomas J. Stanley discussed how many Americans with modest paying jobs became wealthy through diligent savings, shrewd spending and real estate purchases usually the ones they live in and who stayed in their lower-to-middle class neighborhoods. Furthermore they continued to live well within their means and went without purchasing luxury goods and instead purchasing only the necessities while maintaining and extending capital purchases such as their vehicles. For this reason their net worth grew and eventually far exceeded that of most of their demographic contemporaries.

In a bizarre twist merely a couple of decades latter, the reverse is coming true. In the most unlikely of zip codes throughout the country bankers, lawyers, doctors, and high finance professionals behind gilded gated communities are shaking in their Ferragamos. During the Great Recession when many of these same highly paid professionals encountered were under financial distress they paid their mortgage but skipped the common charge payment. Failure to make mortgage payments one can lose property in short order while refusing to pay the maintenance fee or common charge requires the resident’s management, not the bank, to undertake to the arduous legal process to evict them.

With little to no income the high mortgage(s), luxury car(s) payments, boat, private aircraft, and overall high fixed costs of these high flyers become overwhelming. Many investments are illiquid. The only respite is if they have the right investments in the soaring stock market whose rise is grossly disconnected from reality and vulnerable to suffer an Icarus moment.

In the aftermath some of the wealthy whose net worth has almost vanished still will have enough money, perhaps through their 401K plans, will be compelled to downsize dramatically and move into those neighborhoods and apartments left vacant by the poor who are homeless.

The Aspen’s Institute’s Covid-19 Eviction Defense Project report entitled Up to 40 Million Americans Face Eviction in 2020 and presented by Statista, an online German statistical firm on 4 September 2020 provides the following chart comparing those tenants at risk vs limited or no risk.

In their comprehensive published report 7 August 2020 entitled The Covid-19 Eviction Crisis: An Estimated 30-40 Million People in America Are at Risk, The Aspen Institute articulated several rapidly developing disturbing trends:

· Severe affordable housing crisis in the US – almost 48% of renters “cost burdened” in which they had to pay at least 30% of their income for rent.

· People of color are most adversely impacted

· Job and wage lose will exacerbate housing crisis

· Temporary protections against evictions are expiring

· Risk of eviction could escalate rapidly

· Risk of devastating communities: tenants, small businesses and property owners

The markers of desperation include anecdotally a spike in shoplifting. Furthermore it’s already been documented that lines at food banks have exploded, wrapping around two or more corners in some neighborhoods in urban areas, with the disturbing change in demographics, increasingly younger recently laid off, formerly well-paid professionals.

Trump wins

An immediate unrelenting, endless and furious violence in the streets not just by lifetime thugs rather the ordinary citizen particularly non-white, proof that the system is thoroughly broken and a new era of economic enslavement is underway since Trump will be the most uncommon lame duck president in American history. His malignant narcissism and other dysfunctional traits will grow exponentially as he applies the dictator’s wrath of seeking revenge on everyone who opposed him.

Those on his “hit list” include the Usual Suspects of political opposition and non-Caucasians. The landscape will be so toxic that it wouldn’t be unthinkable if he “suggests” a reverse migration to return “wherever they came from” to lessen social unrest and perhaps even facilitate their renouncing American citizenship and paying for their return.

According to the compiled report form the US Treasury Department, Bainbridge Accounts and Greenback Tax Services in the report Record Numbers Renouncing their US Citizenship provided by Statista 11 August 2020, there has been a sharp increase in Americans renouncing their citizenship in the past decade. The report stated that many of those Americas did it for tax reasons however with the highly volatile political climate and urban violence, many are considering or even preparing to depart for other than tax reasons.

Those with financial means may decamp to Canada or Mexico creating a fascinating Twilight Zone inspired role-reversal scenario in which both countries’ immigration services will begin to track down undocumented “gringos” hiding everywhere from inner cities (competing for jobs with returning Mexicans) to wealthy retirement enclaves.

Biden wins

It’s similar to a Trump victory except his victory merely delays the inevitable ferocity of protests after they realize that the Democrats have not formulated a robust socio-economic plan and are ill-equipped to resolve decades-long issues and social ills. With a bankrupt country their options will be limited while the GOP will snicker and say, “We told you so,” and plot for their revenge rerun in 2024.

The Gray Zone

The equally perilous period between the election and inauguration during the transition of power should Biden win, with a subzone if the election is close and contested serving as a catalyst and accelerant for more violence rolling over into and beyond the inauguration.

It’s a lose-lose scenario regardless of which candidate wins the average American will get the short end of the stick and how the mayhem will play out.

Vaccine – Not A Factor

The delusion that a successful and safe vaccine is the panacea to socio-economic woes, present-day is merely an annoying sideline to growing global societal fissures.


Marauders of Mayhem | Urban Wolfpacks

During earlier crisis Americans from all backgrounds rallied around the flag. Indeed many disparate racial, ethnic and political groups are rallying around the flag – theirs – creating an unenviable Balkanization as justifiable anger has spawned justifiable fear.

Since the earlier protests gangs of thugs have honed their tactical skills for the upcoming surge of mayhem and are mobilizing for a larger and extended urban warfare. The targets? Anything to do with food supplies. Violent gangs under the cover of various political banners are de facto criminals not political protestors. As food insecurity grows dramatically against an over-stretched law enforcement, expect rampaging wolfpacks – waves of well-armed thugs - scoping out and then invading food sources from food banks to humble bodegas to corporate targets such as Whole Foods. Even the trucking industry will be the target of sophisticated hijackings.

The most dangerous person is someone who has nothing to lose and in this case these Americans will have lost everything and a government, regardless of which political party wins, without the resources to assist them. Urban areas will become the cauldrons of chaos as more well-to-do urbanites flee to the suburban sanctuaries.

Meanwhile urban dwellers will encounter expanding encampments and destruction of quality of life, becoming prisoners in their own condos, co-ops and apartments as urban bunkers as violent crime runs rampant.

The New and Illegal Affordable Luxury Housing

With law enforcement stretched to the breaking point handling violent protests, aggressive and highly organized groups of squatters may invade unfinished or unoccupied luxury buildings thanks to over-development a “gift” from real estate moguls to the less fortunate part of the citizenry, unrepentant karmic payback for forcing them out of affordable housing earlier this decade.

Migration and the Transient Terror

The irony of this migration is that residents in smaller cities and towns who couldn’t afford to live in the large cities are now having the large city come to them with respect to an influx of big city residents. For this reason real estate prices – renters and new homeowners – are exponentially creating greater population density and inevitable pressure on public services at the same time whose budgets are being reduced. This trend will erode the quality of life in a smaller city or town for everyone.

In addition to an economic shift, social tensions will rise between the newly arrived and long-time residents as big city residents consciously or unconsciously impose their sophisticated lifestyles on the small city citizenry whose lifestyles are far simpler. Demands for vegetarian/vegan restaurants and exotic coffees does not fit the daily nor aspirational culinary lifestyle of a small city resident. It’s the gentrification of Americana.

Migration is a life-changing decision and it’s not taken lightly wherever it may occur so I project that this trend will continue until next spring or summer.

Because of the large and sometimes violent protests ahead of and probably after a highly contentious presidential election, many big city residents are actively seeking a sanctuary and the sooner they undertake the change, the lower the risk of not being able to find affordable housing outside the big city.

[Originally published 8 September 2020]

Copyright 2020 Cerulean Council LLC

The Cerulean Council is a NYC-based think-tank that provides prescient, beyond-the-horizon, contrarian perspectives and risk assessments on geopolitical dynamics and global urban security.

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