Is the “2030 Depression” really inevitable – or just overhyped?
In this continuation of his three-part series, Darryl Lyons, CEO & Co-Founder of PAX Financial Group, dives deeper into the predictions surrounding a potential economic downturn and examines the four “vehicles” that could collide to create it: government spending, inflation, demographic trends, and the AI bubble.
Building on Part 1’s historical parallels, Darryl unpacks how rising national debt, compounding inflation, shrinking birth rates, and market speculation around artificial intelligence are shaping today’s financial landscape. Using his “traffic light” analogy, he illustrates how these forces might intersect – and what that could mean for investors and everyday Americans alike.
Whether you’re concerned about what’s ahead or simply trying to separate fact from fear, this episode encourages you to question the doomsday narratives, stay informed, and maintain a long-term perspective grounded in wisdom and clarity.
Key Highlights from the Episode
• The “four cars at the intersection” driving economic risk: government spending, inflation, demographics, and AI.
• How compounding inflation is widening the gap between the “haves” and “have nots.”
• Why declining birth rates and aging leadership may create long-term economic pressure.
• The warning signs of an AI-driven market bubble – and lessons from the dot-com era.
• Why fear and greed still dictate market behavior – and how to stay grounded amid uncertainty.
Listen to more episodes: https://PAXFinancialGroup.com/podcasts
If you enjoyed today’s episode, share it with your family and friends!
Transcript:
Hey this is Darryl Lyons, CEO and Co-Founder of PAX Financial Group. Thank you for listening to Retire in Texas. This is a show that’s designed to help you stay grounded, to live generously, and to make wise financial decisions on the journey ahead. I’m your host, Darryl Lyons, and remember, this information is general in nature, it’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information.
So, we’re talking about the 2030 depression that’s supposed to happen. And I want to unpack it in more detail. And I want to get granular here. You’ll see a lot of YouTube videos on this. I want you to just challenge the credibility of this. I’m repeating myself of what I did in the last show.
If you didn’t hear the last show, this is a continuation of this. So, this is part two. But I want to make sure that you, as I recap, that you recognize that the credibility of the speakers that are providing this forecasting, They have to be challenged. Many of them have made one prediction in the past, and they just live off that baby for the rest of their life.
So, just question that. I think it’s good to look at those prognosticators, the prophets, the Chicken Little prophets, whatever you want to call them. And if they manage a portfolio of money, you can actually see if they’re, you know, if they’re blowing smoke or if they’re actually moving money around to account for their predictions.
That’s always good to know. In the last podcast, I talked about how we reference Rome and the Great Depression and the parallels that exist there. But I did mention that history doesn’t repeat itself. It often rhymes, and that rhythm of rhyming is a function of us having greed and fear in our human nature. And so, you see that repeating itself even today.
And so I want to talk about, ultimately, this coming Great Depression as a collision of four automobiles at an intersection. So, the lights are working – green, yellow, red, but the four vehicles at this intersection are government spending, inflation, demographic trends and the AI bubble bursting. And so hopefully this traffic light doesn’t break.
But the analogy here is, we’ve got four vehicles that very well could collide. The first one I talked about in the previous episode was government spending and how out of control that is. Frankly, we’re spending more on interest. On our credit cards than we are on defending our country.
So, if that puts things in perspective, it’s pretty bad. It’s out of control and there’s really no end in sight. Although I’m going to unpack the other side of that coin next episode. So right now, I’m giving you a doom and gloom perspective, but I actually have the other side of the coin that’s worth considering in our next episode.
But just know for now that a lot of the prognosticators will very much anchor to this idea, and rightfully so, that our government spending is out of control. The second thing that I want to talk about, this is kind of kicking off this show is the inflation automobile at the intersection. You know, inflation peaked at about 9%.
So, and that was a 12-month period. It wasn’t like annual. So, if you go and Google annual numbers, you won’t see this 9%. It was like within an overlapping year, within 12 months, a lot of people thought they were waiting. I mean, I can’t tell you how many decades I had talked to people that were waiting for inflation.
They would talk about it. It’s coming. But it was not like it, when I had conversations with these guys in the industry, it’s not like they were saying it was coming. It was like they’re excited that it might come. And I think it’s because they had lived through it in the 1960s. And they just somehow, I don’t know, it, indented in their memory.
And they were just anxiously waiting for inflation to come back. And a lot of people who prognosticate the future talk about inflation. We hit a high note in 2022. That was 8% inflation. But since then, we’ve started to taper off. 23 was 4%. And then we went down to about 3%. And then here we are in 2025 at about 3%, 2.9%.
So, prices went up. Now the problem with this is like you have a percentage, but this is on top of the previous year of almost 5%, and it stacks on top of each other. And that’s where you wake up one day and you’re like, whoa, this is like 50% more than it was five years ago because these inflation numbers stack on each other.
And then there’s pockets where it’s worse than others, like health care. We know that’s killing us. My biggest issue with inflation. And if you go back to Rome, this is a great like parallel is that it created two different worlds – the haves and the have nots. The people that had assets, those assets went up with inflation. Whether it’s real estate, cryptocurrency, gold to a certain degree.
And obviously stocks, and some bonds. Not really. But basically, anybody with assets were winning during this, you know, six-year period where inflation was a problem. But those that didn’t have assets, man they’re hurting because these prices went up. But nobody gave them a pay raise along the way. And the biggest numbers in their lives, like the college and health care, those went up even more.
And so what you’re doing is you’re creating. If you go back to Rome, you’re creating these two classes of people, the serfs and, you know, the Roman elites. And that became a real problem because the serfs, what they would do is they would say, they would have like barbarians, come in to their land or wherever and say, hey, you can stay here.
And they’re basically providing a means for some of these enemies to come into Roman territory. It just really created this divide between the haves and have nots. And that’s the biggest problem right now with inflation. Is inflation may have settled a little bit, but the compounding effect is really problematic. Namely, for those that didn’t have any assets, just creates some social unrest.
I think you see the rhyme here. And again, history doesn’t repeat itself, but there is some rhyming going on and, that’s the byproduct of inflation, not just inflation itself, but what it does to separate groups of people. The third issue, I guess, is the automobile at the intersection is demographic trends. You know, if I could say that there’s a vehicle in the intersection, this is the 18-Wheeler in the intersection, the demographic trends.
Kids are not being born like they used to. And, actually, let me say this. Do you know what states have the highest fertility rates? Any guesses? South Dakota I’ll give you four. South Dakota, North Dakota, Utah and Texas are the highest, interesting, right? Good for Texas. But this idea of birth rates, kids not being born enough is really a problem.
And there’s a degree of nihilistic concern out there that the world’s not going to be better tomorrow, that the climate is destroying the country. But there’s also this, like, economic concern. Hey, I don’t know if I’m going to have enough money. And I guess that, you know, many previous generations were blissfully ignorant and just went with it.
But now we’ve got all this information that, like, it paralyzes people and they just not having kids. And so, these mortality rates are really problematic because people are dying at a greater pace than people are being born. I’m on the board for a school. And if I see more graduates than incoming freshmen, it doesn’t take long to realize that we’re not going to have a school very long, or we’re going to have to make some changes.
So, there’s something in economics called the dependency ratio, which this is when you add like dollar signs to this demographic issue where you have not enough younger people able to support the older people that need, you know, namely health care. And so that’s and I talked about in the previous podcast, 40% of our government spending is on health care or on Social Security and Medicare.
So, like, we’re still going to be paying and continuing to pay for Medicare and health care, namely Medicare, Medicare and other even Medicaid. The two chronic health care systems that we have, but we don’t have enough people paying for it. So, what happens? This is just Math 101. You just put more of the burden on fewer people.
And so that’s what we’re having here is this dependency ratio is getting out of whack. Really problematic. The other issue that I think is not talked about enough, but it’s just the leadership issue is transitioning leadership. You know, at a certain point, we’ve got to stop having 80-year-old presidents. And this is not, this is not an indictment just on that one position.
But if you look across the board, whether it’s head coaches of football teams or CEOs of companies, there is a problem of leadership that needs to get resolved. And the reason I say that is because, well, actually, I’m going to talk about that later because I want to talk about how we can solve this problem and how I think it will be solved.
But right now, I want to tell you from a perspective of the prophets who are Chicken Littles. They see this, 18-Wheeler in the intersection as one of the biggest issues that we’re going to be dealing with. And it really be a problem if it materializes. The fourth and final vehicle in this intersection is the AI bubble, the artificial intelligence bubble.
Let me define bubble for a second. I didn’t define it. I don’t remember who gave this to me, but it’s three things – new innovation, easy money and new investors. New investors that follow the hype and have this FOMO attitude. Fear of missing out. So artificial intelligence. Everyone knows it by now. I’ve done podcasts on it. You can check it out later, but everyone is pretty much saying we’re in a bubble now.
I say everyone, bunch of people. And bubble, I think the first bubble you might be able to look up is the tulip bubble, if you were around back then, just kidding. It was in the 1600s, the price of tulip was equal to a house. And so that’s a bubble that burst. But the one that people reference a lot is the stock market bubble of 1999.
In 1999, you could put a .com behind your name and people would give you money. I’m looking at some things on my desk. I could put a coffeemug.com, people would give me money. I could put piggybank.com, people would give me money. And there was a I remember a website. I don’t even know if it’s up anymore called Boo.com.
People were putting money in that. So, anything, everything, obviously internet wasn’t fake. It was a game changer for society, but people were just putting a ton of money behind it. It was hype. So now we’re at the same place. Artificial intelligence. Many people say, hey, we’re not 1999. It’s not going to burst. But a lot of people say we’re 1996 or 97, meaning that what they’re trying to tell us, people smarter than me, that there’s a lot more runway left to make money here and to do great things.
But, yeah, eventually it’s got to come down to something realistic. And how do you know it’s a bubble? Well, if you look historically, stocks in general trade at fifteen times the earnings. So, I have a company PAX. If I make $1 million a year and I was publicly traded, somebody would give me $15 million for the company.
Small businesses trade typically at five times earnings. But because stocks have more buyers and sellers, it’s usually 15 times earnings. So that’s the number that we think about. Just a general number. Just I know there’s people that might poke holes in it, but just as a general number. But right now, people are paying 54 times Nvidia and 170 times for Tesla.
And so the reality is, that people are paying a lot of money for hope. And the problem is another problem. We talked about easy money. A lot of these artificial intelligence money companies are getting money from these special interest corporations, special purpose corporations, which is, part of that definition of getting easy money. And they’re out there right now.
They’re actually not on the balance sheet. So, there’s a lot of easy money out there. And, the doomsdayers, of course, would suggest that this is a problem and eventually it’s going to burst in some capacity, just like in 1999, causing the Nasdaq, namely that technology sector, to fall 78%. So, it was a big burst. It wasn’t pretty.
So those are the four vehicles at the intersection right now. Government spending, inflation, demographic trends and artificial intelligence. And if those two things, like if that traffic light to overuse this illustration, if that traffic light goes out, then all four of these things are running into each other and it’s a collision course. Now, I will say this and kind of self-reflection here, we do have to think about our age when we think about these issues.
And I don’t look, I’m not disparaging any, but anything. But I do think the older we get it, wouldn’t you agree that the older we get, the more cynical we get? Kind of. I mean, I’m kind of in between young and old. So, I feel like I can speak for both parties, or maybe none for that matter.
But, you know, it just seems like many of the times that most of the people that I get that are really concerned about this, are older, that have seen a lot, that have a lot of wisdom and are very concerned. And I see that as, rightfully so. At the same time, I also recognize that a lot of young people, are not concerned, and they’re grinding it out.
And I think their behavior is being discounted because that group of people are not looking at the sky is falling, they’re just investing for tomorrow. And there’s a lot of small businesses out there that are investing for tomorrow. And it’s out of ignorance. So which parties right? I really don’t know. But I have noticed that most of the concerned individuals are older and again, like I said, rightfully so.
There’s wisdom there. There’s experience, there’s also time to just kind of unpack this a little bit more. There’s also the idea that things are changing and sometimes not for the better. But I do think it’s worthy of just kind of, you know, recognizing that, you know, this is, the concerns that exist are usually a function, I mean, oftentimes found in certain age groups more than others.
I don’t know which ones right or wrong, but I just wanted to acknowledge that. And the other thing I want to acknowledge, I think is healthy, as if it is affecting, if this idea of the next Great Depression is affecting your health, then, and there’s not much you’re going to do about it or can do about it except love on your family, then you know, we just need to turn off the news.
And I’m with you. You know, sometimes I just have to turn off this news because it does get overwhelming. But you’ve got some really interesting, creative, credible people out there. I could mention ITR research. Robert Kiyosaki, I mentioned Glenn Beck because he’s always on the radio talking about this. Meredith Whitney talks about the housing crisis about to crash.
We didn’t even talk about houses, but a lot of credible people out there talking about the 2030 Great Depression, a lot of incredible people. So, in the next podcast, I’m going to tell you why they’re wrong. In the next podcast, I’m going to tell you why they’re wrong. But for now, I’ll let you build a bunker in the backyard and go get some water filtration systems and canned goods and shotguns and you can camp on this idea of a coming Great Depression, but, don’t do anything that you can’t unwind.
Because in the next podcast, I’m going to tell you why they’re wrong. Remember, you think different when you think long term. Have a great day.
Listen on:
