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VIDEO: The Fed’s Evil Juggernaut

VIDEO: The Fed’s Evil Juggernaut

Don’t let it crush your future

Juggernaut: (n) massive inexorable force, campaign, movement, or object that crushes whatever is in its path

The US Federal Reserve is once again force-feeding liquidity into the system. At its fastest rate ever.

The result? Record high stock prices whose valuations defy all logic.

What’s wrong with that? Shouldn’t we just enjoy the party and be grateful for our rising 401ks?

What’s wrong is that the Fed’s actions are dooming us. Their poisonous cocktail of endless cheap money and rock-bottom interest rates is hastening a terminal breakdown of the economy, while deliberately enriching a tiny cadre of elites to the ruin of everyone else.

Though most remain blind to this, Fed policy (and the similar ones pursued by the other major world central banks) is directly responsible for, or a major contributor to, many of the biggest challenges society is facing.

Tens of millions of Boomers who can’t afford to retire. Tens of millions of Millennials who can’t afford to purchase a home. History’s largest wealth gap between the 1% and everyone else. Relentless increases in the cost of living while real wages remain stagnant. Depletion and degradation of our key natural resources by zombie companies run without profits. We can thank the Fed for all of these ills, plus many more.

All we’re offered in return is the fake reassurance that “everything is awesome” because stocks are higher today than they were yesterday. As if that really makes a difference when the top 1% owns 50% of all stocks and the top 10% owns over 90%.

And when today’s epicly distorted markets reach their breaking point — which may be imminent given the truly manic action recently — not only will the resulting damage be commensurately epic, but it will injure the 99% FAR more than the 1% who benefitted from it.

Mass layoffs. Bankruptcies. Destroyed retirement portfolios and pensions. State and city budget crises. Higher taxes. More fees. Cancelled social services. Hollowed-out communities.

…click on the above link to read the rest of the article…

Is This “The Top”?

Is This “The Top”?

Parabolic moves end when the confidence that the parabolic move can’t end becomes the consensus.

The consensus seems to be that the stock market is on its way to much higher levels, and soon. The near-term targets for the S&P 500 (SPX, currently around 3,235) range from 3,500 to 4,000, with longer-term targets reaching “the sky’s the limit.”

The consensus reasoning goes like this:— Central banks can print a lot more money– Stocks rise when central banks print more money.

The history of the 2009-2019 era strongly supports this simple cause-effect, and so just about everyone is on the same side of the boat, the “don’t fight the Fed” side of ever-higher stock multiples and ever-higher prices.

Simply put: sales and profits no longer matter, the only thing that matters is whether central banks are printing more money. And since we all know they’ll have to print more money to keep the flying pig (the stock market) aloft, then it follows as night follows day that stocks will rise essentially forever.

As soon as the consensus has settled complacently on one side of the boat, contrarians take notice as history has a perverse habit of foiling any overwhelmingly complacent consensus.

The contrarian asks: what if this is “The Top”? Not just the top of the current rally, but The Top of the Bull Market that ignited in March 2009? Impossible, say the Bulls; there’s cash on the sidelines, Uber/Lyft drivers aren’t yet touting obscure stocks, i.e. “everybody” is not yet in the market, central banks haven’t even warmed up their digital printing presses, corporations are flush with cash/credit to continue their decade-long gorging on stock buy-backs and the global economy is back on track for another decade or three of tepid “growth.”

…click on the above link to read the rest of the article…

Welcome to the Era of Intensifying Chaos and New Weapons of Conflict

Welcome to the Era of Intensifying Chaos and New Weapons of Conflict

Geopolitics has moved from a slow-moving, relatively predictable chess match to rapidly evolving 3-D chess in which the rules keep changing in unpredictable ways.

A declining standard of living in the developed world, declining growth for the developed world and geopolitical jockeying for control of resources make for a highly combustible mix awaiting a spark: welcome to the era of intensifying chaos and the rapid advance of new weapons of conflict as ruling elites attempt to stamp out dissent and global powers pursue supremacy by whatever means are available.

Gordon Long and I discuss these dynamics in a new video The New Weapons of Conflict (28:30) that explores the drivers of increasing global chaos and a permanent state of intensifying conflict in both domestic (internal) and global (external) affairs.

Domestic conflict is erupting and intensifying across the globe: political polarization and populism, driven by soaring wealth/income inequality and the decay of the social contract and the erosion of standards of living, and social disunity and disorder as cooperation has failed to fix what’s broken.

Geopolitical conflicts are now expanding across a vast spectrum from endless wars in contested regions to cyber-meddling in other nation’s domestic affairs, cyber-warfare via theft of intellectual property and targeting essential digital infrastructure, economic sanctions and currency-based warfare, along with a wide array of disruptive military technologies, including “first strike”-enabling hypersonic weaponry, anti-missile technologies and space-based weaponry.

The relative stability of the Cold War has given way to a multi-polar world in which nations are competing with a host of other nations, including erstwhile allies and economic/trade rivals. Geopolitics has moved from a slow-moving, relatively predictable chess match to rapidly evolving 3-D chess in which the rules keep changing in unpredictable ways.

There’s much more in the program; click on either graphic to go to the video:

…click on the above link to read the rest of the article…

Skyrocketing Costs Will Pop All the Bubbles

Skyrocketing Costs Will Pop All the Bubbles

The reckoning is coming, and everyone who counted on “eternal growth of borrowing” to stave off the reckoning is in for a big surprise.

We’ve used a simple trick to keep the status quo from imploding for the past 11 years: borrow whatever it takes to keep paying the skyrocketing costs for housing, healthcare, college, childcare, government, permanent wars and so on.

The trick has worked because central banks pushed interest rates to zero, lowering the costs of borrowing more as costs continued spiraling higher.

But that trick has been used up. The next step–negative interest rates–has failed to spark the “growth” required to pay for insanely overpriced housing, healthcare, college, childcare, government, etc.

We’ve reached the end of the line on lowering interest rates as a way of borrowing more to keep our heads above water. We’ve reached the point where households and enterprises can’t even afford the principle payments, i.e. no interest at all.

How are banks supposed to make money at zero interest rates? By charging outrageous overdraft fees and offering marginally qualified borrowers sky-high credit cards, and getting in on the federally guaranteed mortgage/student loan racket, that’s how.

The point here is the discipline of rising costs has been destroyed by easy money. Take higher education as an example. If there was no federally backed student loan “industry,” universities would have been forced to innovate 20 years ago to lower costs and improve the market value of their “product.”Instead, they left their bloated cost structure untouched as it spiraled ever higher, and simply passed the higher costs onto students, who have had to borrow over $1.5 trillion to feed the bloated higher education cartel.

…click on the above link to read the rest of the article…

A “Market” That Needs $1 Trillion in Panic-Money-Printing by the Fed to Stave Off Implosion Is Not a Market

A “Market” That Needs $1 Trillion in Panic-Money-Printing by the Fed to Stave Off Implosion Is Not a Market

It was all fun and games enriching the super-wealthy but now the karmic cost of the Fed’s manipulation and propaganda is about to come due.

A “market” that needs $1 trillion in panic-money-printing by the Fed to stave off a karmic-overdue implosion is not a market: a legitimate market enables price discovery. What is price discovery? The decisions and actions of buyers and sellers set the price of everything: assets, goods, services, risk and the price of borrowing money, i.e. interest rates and the availability of credit.

The U.S. has not had legitimate market in 12 years. What we call “the market” is a crude simulation that obscures the Federal Reserve’s Socialism for the Super-Wealthy: the vast majority of the income-producing assets are owned by the super-wealthy, and so all the Fed money-printing that’s been needed to inflate asset bubbles to new extremes only serves to further enrich the already-super-wealthy.

The apologists claim the bubbles must be inflated to “help” the average American, but that claim is absurdly specious. The majority of Americans “own” near-zero assets that earn income; at best they own rapidly-depreciating vehicles, a home that doesn’t generate any income and a life insurance policy that pays off only when they pass away.The average American uses the family home for shelter, and so its currently inflated price does nothing to improve the household income: it’s paper wealth, and we’ve already seen how rapidly that paper wealth can vanish when Housing Bubble #1 popped. (Housing Bubble #2 is currently sliding toward the edge of the abyss.)

Were legitimate price discovery allowed, the asset bubbles would pop, and the real-world impact on the average household that owns essentially zero income-producing assets would be minimal.

…click on the above link to read the rest of the article…

Why “This Sucker Is Going Down”

Why “This Sucker Is Going Down”

Once the contagion starts spreading, loose money won’t put the fires out.

As the nation’s political and economic leaders struggled to contain the 2008 financial meltdown, President George W. Bush famously summed the situation up: “If money doesn’t loosen up, this sucker will go down.

Eleven years into the loose money recovery, this sucker is finally going down for reasons that have little to do with tight money and everything to do with the inconvenient fact that none of the structural problems have been addressed, much less actually fixed.

We live in a bizarre world dominated by magical-thinking, a world in which the Federal Reserve creating more dollars out of thin air is supposedly the solution to everything, while all the knotty structural problems–unsupportable pensions and entitlements, unsustainable dependence on debt to fund everything from infrastructure to a new iPhone, a sickcare system that is bankrupting the nation, a higher education system that is looting an entire generation for diplomas with marginal market value, a runaway National Security State that burns trillions on unwinnable wars and lies about it–are left untouched because they’re, well, difficult, and it’s so much easier to say that looser money will solve everything.

Alas, loose money has created a new set of metastasizing problems that will bring this sucker down: widening wealth-income inequality, the only possible result of our system of creating and distributing new money to banks, financiers and corporations; soaring systemic leverage that few see, much less understand; and perhaps most perverse, yet equally unnoticed, loose money has widened the gap between the real economy and the top layer of arcane finance to the point there is literally no connection at all.

The happy story about debt-dependent capitalism is that thriving companies borrow money from our wunnerful banks to invest in new factories, research, software development, etc., hiring millions of top-notch people–top-notch!–at generous salaries to boost productivity and make the entire nation wealthier.

…click on the above link to read the rest of the article…

Costs Are Spiraling Out of Control

Costs Are Spiraling Out of Control

And how do we pay for these spiraling out of control costs? By borrowing more, of course. 

If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would be: the costs of essentials are spiraling out of control. I’ve often covered the dynamics of stagnating income for the bottom 90%, and real-world inflation, i.e. a decline in purchasing power. 

But neither of these dynamics fully describes the relentless upward spiral of the cost basis of our economy, that is, the cost of big-ticket essentials: housing, education and healthcare.

The costs of education are spiraling out of control, stripping households of income as an entire generation is transformed into debt-serfs by student loan debt. The soaring costs of healthcare are a core driver of higher costs in the education complex (and government in general), and to cover these higher costs, counties raise property taxes, which add additional cost burdens to households and enterprises as rents rise. 

Rising rents push the cost structure of almost every enterprise and agency higher.

Then there’s the asset inflation created by central bank ZIRP (zero interest rate policy) which has inflated a second echo-bubble in housing that has pushed home ownership out of reach of many, adding demand for rental housing that has pushed rents into the stratosphere in Left and Right Coast cities.

The increasing dominance of monopolies and cartels has eliminated competition in sector after sector. Monopolies and cartels skim immense profits even as the value, quality and quantity of their products and services decline: The U.S. Only Pretends to Have Free Markets From plane tickets to cellphone bills, monopoly power costs American consumers billions of dollars a year.

Thanks to their political influence, monopolies and cartels have legalized looting, raising prices and evading anti-trust regulations because they can pay whatever it takes in our pay-to-play political system.

…click on the above link to read the rest of the article…

Crunchtime: When Events Outrun Plan B

Crunchtime: When Events Outrun Plan B

Not only will events outrun Plan B, they’ll also outrun Plans C and D. 

We all know what Plan B is: our pre-planned response to the emergence of risk. Plan B is for risks that can be anticipated, regular but unpredictable events such tornadoes, earthquakes, hurricanes, etc. In the human sphere, risks that can be anticipated include temporary loss of a job, stock market down turns, recession, disruption of energy supplies, etc.

Hidden in most Plan B’s are a host of assumptions that all the systems running in the background of the economy will remain stable. Even if electrical and cell-phone service go down, for example, we assume the outage will be temporary. We assume delivery of energy and food will resume shortly, we assume medical care will be available somewhere nearby, roadways will soon be cleared and so on.

In other words, we assume emergencies will be short-lived and that these non-linear events will leave the rest of our social and economic orders as fully intact linear systems, that is, predictable because the outputs (results) will continue to be proportional to the inputs.

If one road crew can clear five roads of debris, then if ten roads are blocked, we reckon adding another crew will generate a proportional result: two crews will clear all ten blocked roads. This is a linear system and response.

But if for some reason the second crew can’t clear even a single road, and adding a third crew also fails to make progress, the situation becomes non-linear: increasing inputs doesn’t generate proportional outputs.

…click on the above link to read the rest of the article…

Political and Social Conflict Is Accelerating: Here’s Why

Political and Social Conflict Is Accelerating: Here’s Why

All the status quo “fixes” only hasten the collapse of the status quo.

That economic, social and political conflict is accelerating is self-evident. What’s open to debate are the core drivers of conflict / disorder /unraveling.

Here’s the core self-reinforcing dynamic in my view:

1. The status quo elites can no longer mask soaring costs of essentials nor soaring wealth / income inequality between the top .01% (Oligarchs), the top 9.99% who enrich the Oligarchs with their discretionary spending and technocratic/managerial labor, and the bottom 90% who are rapidly losing ground on all fronts: economic, social and political.

2. The elites’ “fixes” to the social / political conflicts unleashed by the rigged financial system and winner take most economic order are politically expedient, meaning they don’t actually address the sources of conflict, they merely paper them over with PR as a means of preserving the elites’ wealth and power.

3. The elites’ fundamental financial “fix” is to create trillions in newly issued currency and distribute it to the banks, financiers, super-wealthy families and global corporations– the top .01% Oligarchs.

4. This “fix” accelerates the asymmetric distribution of wealth by enabling the already-wealthy to buy more productive assets, fund stock buybacks, etc., while forcing the bottom 90% to borrow money from the Oligarchs to make ends meet: the rich get richer, the poor get more indebted.

5. The only possible output of these inputs (political expediency to preserve the elites’ wealth and power, the creation and distribution to the Oligarch class of trillions in new currency) is the acceleration of the very erosion that fueled social / political conflicts in the first place. In effect, the elites’ “fixes” are accelerating the conflicts that will ultimately lead to their downfall.

…click on the above link to read the rest of the article…

Political and Social Conflict Is Accelerating: Here’s Why

Political and Social Conflict Is Accelerating: Here’s Why

All the status quo “fixes” only hasten the collapse of the status quo.

That economic, social and political conflict is accelerating is self-evident. What’s open to debate are the core drivers of conflict / disorder /unraveling.

Here’s the core self-reinforcing dynamic in my view:

1. The status quo elites can no longer mask soaring costs of essentials nor soaring wealth / income inequality between the top .01% (Oligarchs), the top 9.99% who enrich the Oligarchs with their discretionary spending and technocratic/managerial labor, and the bottom 90% who are rapidly losing ground on all fronts: economic, social and political.

2. The elites’ “fixes” to the social / political conflicts unleashed by the rigged financial system and winner take most economic order are politically expedient, meaning they don’t actually address the sources of conflict, they merely paper them over with PR as a means of preserving the elites’ wealth and power.

3. The elites’ fundamental financial “fix” is to create trillions in newly issued currency and distribute it to the banks, financiers, super-wealthy families and global corporations– the top .01% Oligarchs.

4. This “fix” accelerates the asymmetric distribution of wealth by enabling the already-wealthy to buy more productive assets, fund stock buybacks, etc., while forcing the bottom 90% to borrow money from the Oligarchs to make ends meet: the rich get richer, the poor get more indebted.

5. The only possible output of these inputs (political expediency to preserve the elites’ wealth and power, the creation and distribution to the Oligarch class of trillions in new currency) is the acceleration of the very erosion that fueled social / political conflicts in the first place.

In effect, the elites’ “fixes” are accelerating the conflicts that will ultimately lead to their downfall.

 …click on the above link to read the rest of the article…

If Not-QE Is QE, then is Not-a-Blowoff-Top a Blowoff Top?

If Not-QE Is QE, then is Not-a-Blowoff-Top a Blowoff Top?

Can $300 billion, or $600 billion, or even $1 trillion continue to prop up an increasingly risk-riddled, fragile $330 trillion global bubble in overvalued assets?

When is “Not-QE” QE? When Federal Reserve Chairperson Jerome Powell declares QE is not QE. We can constructively recall the story that Abraham Lincoln famously recounted in 1862

:‘If I should call a sheep’s tail a leg, how many legs would it have?

”Five.

”No, only four; for my calling the tail a leg would not make it so.’

Calling QE not-QE doesn’t make it different than QE, but it does communicate the Fed’s panicky desire to mask its stupendous injection of financial cocaine into the financial system. The Fed’s level of panic is noteworthy, as is the absurd transparency of its laughable attempt to conceal its panic.

In the same fashion, the financial media is loudly declaring the current blowoff top in stocks is not a blowoff top. The delicious irony here is these denials are reliable markers of blowoff tops: the louder the denials, the greater the odds that this is in fact the blowoff top that many pundits have been expecting for some time, but always in the future.

Garsh darn it, maybe the future has arrived. The financial media denied the Q4 1999 – Q1 2000 blowoff top was a blowoff top, and it repeated its denial of a blowoff top in housing in 2006-2007. The pundits of 1929 also denied the Q3 blowoff top in stocks was a blowoff top.

If you want a reliable signal that the blowoff top has peaked, listen to the screechy adamance of the deniers. The list of reasons why blowoff tops can’t be blowoff tops is practically endless: sentiment isn’t bullish enough, there’s a Wall of Worry for stocks to climb (overlooking the inconvenient reality that there is always a Wall of Worry)…

 …click on the above link to read the rest of the article…

Prying Open the Overton Window

Prying Open the Overton Window

If you’re truly interested in finding solutions to humanity’s pressing problems, then start helping us pry open the Overton Window.

The Overton Window describes the spectrum of concepts, policies and approaches that can be publicly discussed without being ridiculed or marginalized as “too radical,” “unworkable,” “crazy,” etc. The narrower the Overton Window, the greater the impoverishment of public dialog and the fewer the solutions available.

Those holding power in a socio-economic-political system that’s unraveling devote their remaining energy to closing the Overton Window so that only “approved” narratives and policies that support the status quo are “allowed” into the public sphere.

Everything outside this narrow band of status-quo-supportive narratives is immediately disparaged as “fake news,” “Kremlin talking points,” or other highly charged accusations designed to close the Overton Window–a process Noam Chomsky and Edward Herman called manufacturing consent: if no “outside” ideas are allowed, people accept the status quo as “all there is and all there can possibly be.

This narrow Overton Window benefits those in power who are “legally looting” the system.

There is another source of a narrow Overton Window: the cultural, social and political elites have no new ideas and so they cling to doing more of what’s failed, relying on the past successes of now-failing strategies to cement their power.

Michael Grant described how this failure of imagination and devotion to the past leads inevitably to decline and collapse in his excellent account The Fall of the Roman Empire, a short book I have been recommending since 2009:

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.

 …click on the above link to read the rest of the article…

Economic Decay Leads to Social and Political Decay


Economic Decay Leads to Social and Political Decay

If we want to make real progress, we have to properly diagnose the structural sources of the rot that is spreading quickly into every nook and cranny of the society and culture.

It seems my rant yesterday (Let Me Know When It’s Over) upset a lot of people, many of whom felt I trivialized the differences between the parties and all the reforms that people believe will right wrongs and reduce suffering.

OK, I get it, there are differences, but if the “reform” doesn’t change the source of the suffering and injustice, it’s just window-dressing that makes the supporter feel virtuous. Want an example? Let’s take the the “cruel and unusual punishment” for drug-law offenders, many of whom are African-American males whose lives are effectively hobbled by felony convictions and long sentences in America’s Drug War Gulag.

You want a “reform” that actually gets to the root and solves the source of the injustice? It’s simple: decriminalize all drugs and recognize drug use as a medical and social issue rather than a criminal-justice / Gulag issue. But that won’t happen because too many people are making too much money off the Gulag, which is now a public and private-prison Gulag.(Other advanced nations have had success with this structural change. Maybe we could learn something from their examples?)

If you’re not ready to demand the full decriminalization of all drugs, then you’re not really interested in solving the problem; you’re just seeking virtue-signaling “reforms” that don’t upset the power structure. And since any real solution necessarily disrupts the power structure benefiting from the status quo, all the painless “reforms” are ineffective.

 …click on the above link to read the rest of the article…

The Ultimate Heresy: Technology Can’t Fix What’s Broken

The Ultimate Heresy: Technology Can’t Fix What’s Broken

Technology can’t fix what’s broken, because what’s broken is our entire system..

The ultimate heresy in today’s world isn’t religious or political: it’s refusing to believe that technology can not only solve all our problems, it will do so painlessly and without any sacrifice. Anyone who dares to question this orthodoxy is instantly declared an anti-progress (gasp!) Luddite, i.e. a heretic in league with the Devil.

Even worse, if that’s possible, is declaring that technology is making our lives worse rather than better. There’s an entire industry devoted to cherry-picking data to support the One True Faith of Technology: a new miracle drug (never mind the side-effects or the fact that the drug only works on a relative handful of patients), a new energy source that will generate nearly free energy in near-infinite quantities (thorium reactors, though there is not yet a single one that’s operational), and the marketing of convenience: this new marketing gimmick will change your life–you can try on clothing in virtual reality, no need to go to the mall! Wow! Borrow more, buy more, throw more into the landfill–isn’t technology wonderful?

Meanwhile, back in reality, the previous “miracle drug,” statins, turn out to be useless in reducing heart disease and actively reduce health via a vast array of negative side effects: Do statins really work? Who benefits? Who has the power to cover up the side effects? (europeanscientist.com)

Heavily promoted “miracle drugs” make billions of dollars for the corporate owners, whether they actually improve health in the long-term or not. But the tech-will-fix-everything cheerleaders never get around to examining the spectacular failures of Big Pharma, or the catastrophic consequences of smartphone addiction (see chart below), or the impossibility of scaling technology without consuming vast amounts of resources which are already scarce.

 …click on the above link to read the rest of the article…

Democracy Is Now a Hindrance to the Imperial State

Democracy Is Now a Hindrance to the Imperial State

Democracy is the coat of paint applied for PR purposes to the Imperial State.

If we step back from the histrionics of impeachment and indeed, the past four years of political circus, we have to wonder if America’s democracy is little more than an elaborate simulation, a counterfeit democracy that matches our counterfeit capitalism (Matt Stoller’s term).

If we review the mechanics of our “democracy,” we find that swapping which party controls Congress doesn’t really change the policies of The Imperial State, the central state that oversees America’s global commercial and geopolitical empire.Next, consider the high return rate of incumbents. Once in power, politicos can skim the millions of dollars in campaign contributions needed to win re-election.

Then there’s the some are more equal than others nature of the judicial system that serves the interests of financial and political elites: Bernie Madoff was free to continue his Ponzi scheme for years despite whistleblower attempts to instigate a federal investigation, and pedophile /schmoozer / “intelligence agency asset” Jeffrey Epstein was free to exploit underage teens and pile up $200 million after a wrist-slap conviction.

The corporate mass media is the PR machine for the Imperial State. If the state seeks to sell the public a war of choice, the media dutifully pounds the drums of war. If the Imperial State decides to disempower a president or other elected official, the media will hound the elected official until he/she is disgraced or buried, too busy fighting off the ceaseless media propaganda to function. The mass media excels at ruthlessly mocking political targets, reducing their stature in the public eye and undermining their “soft power.”

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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