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Tag Archives: charles hugh-smith
Sorry, Central Banks: Risk and Volatility Cannot be Extinguished
Sorry, Central Banks: Risk and Volatility Cannot be Extinguished Central bank market intervention doesn’t extinguish risk–it simply transfers it to the system itself. The unspoken claim of central bank policy is that risk can be extinguished by intervention/manipulation: once the Fed has your back, i.e. is supporting the market, risk disappears, and the easy profits flow to […]
When Did Our Elites Become Self-Serving Parasites?
When Did Our Elites Become Self-Serving Parasites? Combine financialization, neoliberalism and moral bankruptcy, and you end up with self-serving parasitic elites. When did our financial and political elites become self-serving parasites? Some will answer that elites have always been self-serving parasites; as tempting as it may be to offer a blanket denunciation of elites, this overlooks […]
The Three Stages of Empire
The Three Stages of Empire I consider it self-evident that we are in the third and final stage of self-serving Imperial decay. Though Edward Luttwak’s The Grand Strategy of the Roman Empire: From the First Century CE to the Third is not specifically on the rise and fall of empires, it does sketch out the three stages […]
Why the Coming Wave of Defaults Will Be Devastating
Why the Coming Wave of Defaults Will Be Devastating Without the stimulus of ever-rising credit, the global economy craters in a self-reinforcing cycle of defaults, deleveraging and collapsing debt-based consumption. In an economy based on borrowing, i.e. credit a.k.a. debt, loan defaults and deleveraging (reducing leverage and debt loads) matter. Consider this chart of total credit […]
If Everything’s Doing So Great, How Come I’m Not?÷
If Everything’s Doing So Great, How Come I’m Not? Are you better off than you were 10 years ago? We’re ceaselessly told/sold that the U.S. economy is doing phenomenally well in our current slow-growth world — generating record corporate profits, record highs in the S&P 500 stock index, and historically low unemployment (4.9% in July […]
Control What You Can
Control What You Can Our society does not make it easy to control what you can control. One of the aphorisms to live by here at Of Two Minds is control what you can.We don’t control the erosion of our money from inflation, the state’s vast criminalization machinery, the nation’s foreign policies or the central bank’s free money for […]
The High Cost of Honesty in a Sea of Low-Cost BS
The High Cost of Honesty in a Sea of Low-Cost BS As the cost of propagating BS drops to near-zero, the value of honestly achieved analyses and conclusions rises proportionately. Longtime correspondent Michael M. recently recommended this long-form article The Market For Lemons, The Market For Bullshit, And The Great Cascading Credence Crash Of 2016. The […]
The Mainstream Has Failed
The Mainstream Has Failed The good news is there is a way to avoid failure and stagnation: avoid the mainstream like the plague. The mainstream became mainstream because it worked: the mainstream advice to “go to college and you’ll get a good job” worked, the mainstream financial plan of buying a house to build equity to […]
“Helicopter Money” Won’t Fix What’s Broken
“Helicopter Money” Won’t Fix What’s Broken Creating “free money” to support bloated bureaucracies and corrupt cartels only makes the underlying problems worse. The mere mention of helicopter money has intoxicated global stock markets, which have soared on the rumor of Japanese helicopter money. But as I explained in Why Helicopter Money Won’t Push Stocks Higher, central banks funding fiscal spending […]
Risk On/Risk Off: What Schizophrenic Markets Are Telling Us
Risk On/Risk Off: What Schizophrenic Markets Are Telling Us These trends cannot be reversed with yet another rate cut or another “whatever it takes” announcement. In the conventional investment perspective, risk-on assets (i.e. investments with higher risks and higher potential returns) such as stocks are on a see-saw with risk-off assets (investments with lower returns and lower risk, such as […]
Governments Change, the Corporatocracy Endures
Governments Change, the Corporatocracy Endures Ultimately, the dominance of global capital (the Corporatocracy) is not financial– it’s political. One little-remarked consequence of the central banks’ policies of near-zero interest rates and quantitative easing is the unrivaled dominance of mobile global capital, i.e. the Corporatocracy. The source of corporate political power is the ability to borrow essentially […]
Brexit and the Crisis of Capitalism
Brexit and the Crisis of Capitalism If you collapse these extractive, debt-dependent crony-capitalist cartels, you collapse the entire status quo. Thousands of commentaries have been issued about Brexit in the past week.I’ve written four myself. Most discuss Brexit as the result of immigration issues, class war, political theater, a reaction against the European Union’s bureaucratic […]
Please Don’t Pop My Bubble!
Please Don’t Pop My Bubble! So ride your bubble of choice up–stocks, bonds, housing, bat guano, take your pick–but it’s best to keep your thumb on the sell button. One person’s bubble is another person’s “fair market value.” What is clearly an outrageously overvalued asset perched at nosebleed levels of central-bank fueled speculative euphoria is to […]
Japan: A Future of Stagnation
Japan: A Future of Stagnation Take a declining population with declining rates of productivity growth and load it up with debt, and you get a triple-whammy recipe for permanent stagnation. One of our longtime friends in Japan just sold the family business. The writing was on the wall, and had been for the past decade: fewer […]
The Structure of Collapse: 2016-2019
The Structure of Collapse: 2016-2019 Leaders face a no-win dilemma: any change of course will crash the system, but maintaining the current course will also crash the system. The end-state of unsustainable systems is collapse. Though collapse may appear to be sudden and chaotic, we can discern key structures that guide the processes of collapse. Though […]
