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Charles Hugh Smith: What Would A Better System Look Like?

Writer, philosopher and long-time contributor to PeakProsperity.com, Charles Hugh Smith, returns to the podcast to explain the new socio-economic model he has just introduced to the world through his new book A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet.

The main mission behind Peak Prosperity is to focus on new, more regenerative and sustainable models that will better serve humanity than the old models which are currently falling apart. Charles posits a new way of living that is a) achievable with existing resources and technology, and b) much more equitable and resistant to abuse.

We very much need new alternatives like this at this time. Because, once the system breaks in earnest, our ‘leaders’ will be desperate — and as Jared Diamond wisely observed “Nations in crisis borrow and adapt solutions already devised”. So getting good ideas on the table now, so that they’re available to be adopted when needed, is critical.

The principal idea is we need a new system. Now, it doesn’t have to replace the existing system entirely. It just has to be an effective alternative that people can choose if they so desire to.

In my opinion, it needs to be decentralized, anti-fragile, yet connected with other like-minded people. But right now, we’re having to start from scratch, basically reinventing the wheel. We’re fighting a kludgy, broken, unfair, rigged system every step of the way if we want to create a decentralized community-based economy.

So what would a system be like if we designed it from scratch to actually make it easy to join a community economy? Well, we want a system that’s opt-in and voluntary, not like the one we have now.

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

Collapse Is A Process, Not An Event

Look, I’m a systems guy.  I think in systems terms.  You should as well.

Why?

Because we’re entering a period of time when the major systems that have supported humanity are going to fail.

Or, put more accurately: they are already failing.

As just one example, our monetary system delivers outsized gains to the already stupendously-wealthy while piling up massive debts on the backs of we citizens, both born and yet-to-be-born.  The US Federal Reserve is the unelected and unaccountable body that is most responsible for have made America’s billionaires nearly $1 trillion ‘richer’ since the pandemic hit.

These next three Fed-related data points are, in a word, obscene.

The first shows that the US Federal Reserve now “owns” more US federal debt than all foreign central banks. The second shows how billionaires are getting grotesquely wealthier from the Fed’s “rescue’” efforts. And the last shows how the Fed’s record-low interest policy has resulted in an explosion in federal debt:

(Source)

(Source)

This is obscene (and infuriating!) to anyone who cares about the future.  Leaving aside the morality issues for a moment, we can at least conclude that the behaviors and values on display are thoroughly unsustainable.

Eventually spending more money than you have ends in ruin.

Speaking of spending what you don’t have, a similar story can be told about ecological overshoot and humanity’s extractive practices —  it’s akin to spending both the entirety of the interest income as well as some principal each year from our environmental trust fund.

There aren’t many resources that one can point to which aren’t in some serious form of either concerning decline or depletion, or both.  Already thousands, if not millions, of people in the American West are considering relocating because of the ever-present danger of disruptive if not life-threatening fires:

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

Market Update: The Fed’s Big Lie

Market Update: The Fed’s Big Lie

Ignore Powell’s happy talk. The Fed is desperate and merely playing for time.

Insanity is doing the same thing over and over again, but expecting different results.

Federal Reserve Chairman Jerome Powell announced on Thursday that the Fed will now shift its focus from hitting inflation targets and instead prioritize closing “unemployment shortfalls”.

This gives it the aircover to do “whatever it takes” until the unemployment rate is back down into the low single digits. Inflation can now run hotter than 2%, rates can stay at 0% (or go negative) for the next decade+, more QE…. all is fair game now in the pursuit of lower unemployment.

Essentially, the Fed is now tripling-down on the same failed policies that have created today’s zombie economy and the worst economic inequality in our nation’s history.

Rich 5% own 2/3 of the wealth

Perhaps the folks at the Fed are smarter than we think, and there’s actually a grand plan they’re pursuing that’s going to work out to society’s benefit?

Sadly no, reveals this week’s expert guest, Danielle DiMartino-Booth. Danielle knows the Fed inside and out, as she worked as a consultant for nearly a decade to Richard Fischer, President of the Federal Reserve Bank of Dallas, including helping deal with the Great Financial Crisis. She knows how the organization runs, as well as the specific people running it.

And her assessment is that the Fed is trapped in a nightmare of its own making and is merely playing for time at this point. Everything it throws at the situation is designed to hopefully get the system to limp through the next quarter or two without breaking, at which point they’ll scramble to come up with the next short-term “solution”.

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

What Are You Going To Do As Our Money Dies?

What Are You Going To Do As Our Money Dies?

Central banks are killing our currency to protect the already-rich

In our recent article It’s Time To Position For The Endgame, Chris Martenson explained how the US Federal Reserve and its sister central banks around the world have been engaged in the largest and most egregious wealth transfer in all of history — one that has been drastically exacerbated by the covid-19 pandemic.

The official response, tremendous monetary stimulus by the central banks paired with massive fiscal stimulus from national legislatures, has been pitched as “saving the system”.

Yet, in reality, it has merely served to accelerate the transfer of capital from the public into the pockets of the already-rich.

Anyone with eyes can see how the central banks have abandoned all pretense of monetary fiduciary responsibility and have simply cranked their printing presses up to “maximum”:

In concert with this surge of liquidity, national legislatures have added their own emergency measures. In the US alone, the CARES Act pushed nearly $3 trillion in fiscal stimulus into the system, and will highly likely soon be followed by another $1-3 trillion depending on which party’s bill gets passed.

Despite these staggering sums, the amount of money trickling into the average US household has been meager and is drying up.

Instead, these $trillions are mostly finding their way into the coffers and share prices of corporations. We have seen the fastest and most extreme V-shaped recovery in the history of the financial markets since the March swoon. The major indices are now back to record all-time-highs, despite the major carnage covid-19 has wreaked on the global economy.

So who benefits from that? Oh yeah, the people who own those companies. The already-rich.

Remember: 84% of all stocks are owned by the top 10% of households.

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

Is High Inflation Now A Bigger Danger Than A Deflationary Crash?

Is High Inflation Now A Bigger Danger Than A Deflationary Crash?

What’s the more likely event at this point: a deflationary crash or runaway inflation?

For a long time, Peak Prosperity co-founder Adam Taggart and I have hewed to the “Ka-POOM!” theory, which states that a major deflation will scare the central banks so badly that they overreact and pour too much liquidity into the system, thereby destroying it.

To visualize how this will play out, think of what happened in Beirut this week. Customs officials there stored thousands of tons of ammonium nitrate fertilizer at their seaport, for years.  The pile just sat there doing absolutely nothing.

After years of inaction, the port authorities became lulled into the erroneous conclusion that nothing would ever happen.

But then one day a spark came to life, starting a fire, and then all at once — POOM! — the entire thing blew up with devastating effect.

This analogy works pretty well here as we approach the Keynesian endgame facing the global economy.  The pile of $trillions in bad debts issued over the past decades has been the fertilizer.  Covid-19 was the spark. And now we’re simply waiting for the entire economic and financial system to explode.

The same process began in the US and has been unfolding across the world ever since after the gold standard was abandoned in 1971.  Untethered from any restraint, all that was left to staunch the flow of red ink was self-restraint and a concern for the future, both of which were in short supply.

Not only has debt been growing far faster than income (GDP) at the national level, but debts have been growing exponentially (i.e., ‘compounding’) ever since 1971:

That debt growth is a nearly perfect exponential curve upon which the entire systems of politics, banking and the economy have come to rely.

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

Market Update: Overstimulated!

The melt-up discussed last week remains in full force, with the S&P 500 hitting a new intraday all-time high on Wednesday.

Just to make sure we’re all clear on this: stocks are back to their highest prices BEFORE the coronavirus pandemic exploded. Before Q2 GDP plummeted -33% in the US. Before 50+ million Americans lost their jobs.

Thanks to the $trillions shoved into the system by both central banks and national legislatures since April, “investors” now believe the markets are a 1-way ride to forever-increasing wealth.

As the chart below from the National Association of Active Investment Managers shows, financial advisory firms that manage client capital are more fully-invested in the markets than at any other time in the past several years:

NAAIM chart

So everyone in “all-in” on the belief that the markets are both fully backstopped and rising higher from here.

How realistic is this belief?

Michael Pento, this week’s Market Update video expert guest, thinks it’s willful delusion. History is crystal clear that disconnects like we have today between (over-inflated) asset prices and the underlying (contracting) economic reality always result in crisis — either a deflationary repricing, or a destruction of the purchasing power of the currency.

Michael shares the 20 financial and economic metrics on the dashboard of indicators he tracks to determine where we are in this story, and which outcome is looking most likely to happen when. This week’s interview is worth listening to for that list alone.

Not one to mince words, Pento believes this is the most treacherous time ever for investors — which means those blindly long the current melt-up will get slaughtered if indeed the risks he predicts play out. As always, we recommend working in partnership with an independent financial advisor who appreciates these risks, prioritizes preservation of your investment capital, and can help you chart the turbulent waters ahead when the reckoning arrives:

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

 

It’s Time To Position For The Endgame

It’s Time To Position For The Endgame

Are you, like us, sensing that things are poised to fall apart?

Do you sense an approaching endgame?

Like there’s another heavy shoe to drop? Perhaps an entire closet’s worth?

Certainly there’s entirely too much confusion surrounding SARS-CoV-2 and how to deal with it.

Should people wear masks?  Will schools re-open?  Should they?  Why isn’t Covid-19 being treated consistently across medical centers?  Are there things we could and should be doing to minimize the impacts before people catch it?

I believe there are good common-sense answers, even if complicated, to these and many other related questions  But common sense is in short supply these days, especially amongst our “leaders” in the US (who actually act like bad managers).

Our clueless politicians busy themselves either pandering to or hiding from the media cameras when it comes to Covid-19 response. Meanwhile, Big Pharma is doing everything it can to direct the action in ways that funnel any profits into its pockets — public health be damned.

It’s a certified shit show. No question about it.

But It Gets Worse

Beyond the pandemic, the central banks are busy ignoring Plutarch as they embark on the grandest social experiment in all of human history by floating billionaires’ yachts ever higher as more and more average folks drown beneath the rising waterline.

Displaying either a level of tone-deafness exceeding that of Marie Antionette, or a level of psychopathy matching that of Ted Bundy, the US Federal Reserve is — RIGHT NOW — engaged in the largest transfer of wealth in all of US history.

Between March-April 2020, the Fed added a staggering $282 billion to the bottom-line wealth of US billionaires:

But that wasn’t enough.

So the Fed kept printing. And buying, buying, and buying more and more financial assets held – of course – mainly by the already-wealthy.

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

Gold’s (And Silver’s!) Time Has Arrived

Gold’s (And Silver’s!) Time Has Arrived

Are you well-positioned for it?

Peak Prosperity publishes ALERTs very rarely, and only when my co-founder Chris Martenson and I are concerned enough to take personal action.

On May 8, I released an ALERT informing our premium subscribers that, concerned by the ramifications of the global central banks’ response to the coronavirus,  I was moving a material percentage of my portfolio’s cash reserves into precious metals, notably into silver as the gold/silver ratio then of 110:1 remained near a record high.

Since the issuance of that ALERT, gold has broken above it’s previous all-time high price, moving up 14%, from $1,717/oz to $1,950/oz.

And silver has performed strikingly better: rising over 55% from $15.75/oz to $24.50/oz. As anticipated, the gold/silver ratio has fallen nearly 30% to 80:1.

However, much more important than this near-term pop in the precious metals is their outlook going forward.

We’ve been writing for years here at PeakProsperity.com about gold and silver’s extreme undervaluation given the risks we’re facing in our monetary and financial systems. And yet, for years, the metals languished as capital flowed eagerly into “paper wealth”, fueled by central bank liquidity, record low interest rates, and a rampant increase in debt and deficits.

Back in 2017, Grant Williams famously and correctly nailed the neglected state of the precious metals in his prescient work, Nobody Cares.

A year ago, as gold managed to break above it’s longtime ceiling of $1,350/oz, we began loudly alerting our readers that the years of neglect were finally over. That, indeed, investors were beginning to “care” again.

Fast forward to where we are today, a pandemic and +$5 trillion in global central bank liquidity later, and now it’s seeming that suddenly Everybody Cares about the precious metals.

Gold’s — and silver’s — time has arrived. Precious metals are finally back in a secular bull market.

Key questions to address at this moment are:

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

We Are On Our Own In The Post-Covid World

We Are On Our Own In The Post-Covid World

It’s time to be our own heroes, because those in charge sure won’t be

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Even before the coronavirus pandemic hit, things weren’t all that great for the bottom 90% of households.

The median household was barely scraping by with ultra-low financial reserves, meager retirement savings and high levels of debt. All while being relentlessly crushed by cost of living inflation running far higher than the blatantly fraudulent government statistics offered up by the BLS.

Even more infuriating, the economic pie was preferentially handed to the top 10% — well, more specifically, to the top 1%. And even more dramatically to the top 0.1%.  Don’t even get me started on the 0.001%…

(Source)

While often presented in the media as a puzzling thing without any root cause, both the income and wealth gaps are the direct result of Federal Reserve policies and actions Helped, of course, by lobbyists for the elites influencing Congressional tax legislation.

So it’s no accident that over time, tax rates on the rich have been substantially cut:

This chart says that the very highest income earners have a lower effective tax rate than anybody else in the nation.  Billionaire Warren Buffett famously pays a lower rate than his secretary. Goldman Sachs bankers are taxed more favorably than their Uber drivers. Again, this isn’t happening by accident.

And it reveals that, despite the fiction of fairness and freedom, America’s true values and priorities are aimed at funneling more and more of its wealth to in the pockets of an elite few.

Said another way: The final looting operation has begun.

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

A Serious Message From Chris Martenson

A Serious Message From Chris Martenson

Time is running short to brace for impact

Like a windstorm toppling a hollowed-out tree, SARS-CoV-2 didn’t cause the current recession so much as it exposed how rotten things already were.

Even before SARS-CoV-2, households were struggling. Far too many were limping along without any savings at all, one crisis away from financial ruin.

Debts at every level were at record highs before SARS-CoV-2 came along, and the Federal Reserve was already busy bailing out the US financial system before the virus hit.

The shale oil industry had failed to generate any profits for over a decade before anyone ever heard of Covid19.

The worldwide wealth gap was already record levels before we were forced into lockdown.

What the coronavirus pandemic has done, though, is give the ruling authorities aircover to accelerate all of these trends to warp speed.

Billionaires have been, by far, the largest winners in this story so far.  Ditto for mega corporations.  Main Street and small and medium-sized businesses have been utterly crushed.

Where the Great Financial Crisis in 2008 could have been — and should have been — a wake-up call to operate the system more equitably and sustainably, it was used instead as an excuse to make things even worse.

No bank executives were charged or even went to jail for any crimes they played in bringing the financial system to the brink of disaster.  Accounting deceit, wire fraud, and forgery — anybody remember ‘robosigning’?  That was forgery, a felony, and not one charge was ever leveled.  Instead, the Too Big To Fail banks were bailed out and got bigger at the expense of smaller, more responsible firms.

My point here is that SARS-CoV-2 has laid bare our true value systems.  Some countries have done an admirable job of showing they care about their citizens, making public safety and health their top priority.  Other countries, such as mine (the US), have demonstrated the opposite.

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

Market Update: A Titanic Disaster Ahead?

Market Update: A Titanic Disaster Ahead?

Tech stocks now in a classic blow-off top

At this point, as go the leading Tech stocks, so go the markets.

So much capital has crammed into the tech sector this year that it boggles the mind. Tech stocks now make up 40% of the market cap of the S&P 500.

And despite their huge size, they continue to race higher. Nearly. Every. Single. Day.

Here’s a chart of six of the biggest tech companies. Over just the past 7 trading days, they have increased a combined total of half a trillion dollars in market cap. That’s $500 billion, folks — in just a week!

Big tech stocks gain $500 billion in past 7 trading days

(Source)

Looking at Amazon’s (AMZN) stock price, up nearly 20%(!) since the start of July, we see a trajectory that we’re familiar with — a near-vertical blow-off top:

AMZN stock chart

(Source)

This is the classic manic ending to an asset price bubble — as seen when Bitcoin hit 19,000 in late 2017 and when silver hit $49/oz in 2011. For further affirmation, watch this short video chapter from Crash Course on Bubbles.

In a way, this is comforting to see because it gives us confidence this insane, mindless, unjustified market euphoria will end soon. We just need to be prepared for the predictable violent aftermath when it does.

As we do each week, we’ve once again asked the lead partners at New Harbor Financial, Peak Prosperity’s endorsed financial advisor, to share their latest insights on the end of Great Tech Bubble and what comes next.

We spend a fair amount of time in this week’s video asking New Harbor for actionable options to protect recent gains from a potential pull-back, as well as how to position for a larger market melt-down if indeed Tech soon reverses and we experience a crash greater in magnitude than what we suffered in February:

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

D614G: A New, More Serious Covid-19 Mutation To Worry AboutW

D614G: A New, More Serious Covid-19 Mutation To Worry About

We’re not done with the honey badger virus by a long shot.

Continuing its Keystone Cops manner of dealing with covid-19, the US appears to be caught flat-footed by the resurgence of infections happening across many southern and western states right now.

Yes, people are tired of being cooped indoors and wearing masks. Summer is here and they want to get outside, spend time with loved ones, and get back some normalcy of life.

But the Honey Badger virus ‘don’t care’. Covid-19 sees our loosening restrictions as a welcome invitation and is burrowing in with enthusiasm.

Making matters worse for us human hosts, a new strain of the virus — the D614G mutation — has been identified. It appears to be more contagious and serious than most previous strains.

So, for those who do not want to catch covid-19, now is not the time to start letting down your guard. We are not through the woods by a long shot yet:

Making Sense Of An Increasingly Insensible World

Making Sense Of An Increasingly Insensible World

Creating purpose and fulfillment within a failing system

What the heck is going on?

I hear this a lot these days. Developments are happening too quickly to process for many folks, creating a persisting cloud of confusion.

Even focusing down on any particular single event often gets nowhere because so much of what’s going on simply makes so sense

Take for example, the W.H.O. which as recently as two weeks ago recommended that only sick people should wear masks.  What? We’ve known for months that people can spread Covid-19 when they are asymptomatic.  How can a ‘sick person’ wear a mask if they are sick but even they don’t know that? It just makes no sense.  What is even going on?

Or take Jerome Powell, Chair of the Federal Reserve, who defiantly declared that the Federal Reserve “absolutely does not” contribute to the wealth inequality gap:

(Source)

Say what?

The Fed is busy buying distressed financial assets for far more than they are worth from the largest and wealthiest of stock and bondholders.  That absolutely contributes to inequality.

So does juicing the stock market, or ““market”” as I like to term it (because it’s so distorted it needs two sets of quote marks).

So does appointing Blackrock – the world’s largest private asset manager – to select which private assets should be bought with the freshly-invented currency emanating from the Fed’s electronic printing presses.  Should we really be shocked to learn that Blackrock chose their own distressed assets, like the junk bond fund JNK, for the Fed to buy first?

It’s a bald-faced lie for Jay Powell to claim anything other than the Fed is the #1 contributor to inequality.  And that’s by a country mile.

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

Sergey Young: Will Technology Save Us?

Sergey Young: Will Technology Save Us?

Are the pessimists wrong to bet against human ingenuity?

“Technology will save us!”

That’s the most common pushback we receive to Peak Prosperity’s concerns about the dangers of exponential resource depletion, overpopulation, and overindebtedness/overconsumption.

And it’s understandable: technological advancement has achieved wonders for mankind’s standard of living at an accelerating pace over the past several centuries. Billions have been lifted out of poverty. Human health and longevity (covid-19 aside) have been greatly boosted. We have conquered the earth, seas, air and space.

Are the pessimists wrong to bet against human ingenuity?

To explore that question head-on, Chris sits down this week with Sergey Young, founder of the Longevity Vision Fund and “right hand man” to Peter Diamandis of Singularity and XPRIZE fame.

A self-described technology optimist, Sergey has created a $100 million fund to counteract the damaging consequences of aging. He’s set for himself the goal to live to be 200 years old (in the body of a 25 year old) and to find an affordable way for everyone else to do the same.

Interestingly, while Sergey is much more sanguine about society’s future prospects than we are here at Peak Prosperity, he acknowledges that the pragmatic realists are a necessary ‘yin’ to the tech passionistas’ ‘yang’.

For an optimistic futurist, Sergey is surprisingly respectful of and in agreement with our focus on sustainability and on practical models for living within our means. He admits that technology isn’t a cure-all, and goes as far to say that if the future were simply left to the starry-eyed dreamers, we’d take a lot of leaps of faith that wouldn’t end well.

For one of the most balanced conversations on this topic we’ve yet experienced, click the play button below to listen to Chris’ interview with Sven Henrich (44m:45s)

Coronavirus: Something’s Not Right Here…

Coronavirus: Something’s Not Right Here…

It’s hard not to start asking the question: Are we being played?

Following yesterday’s pimping of Gilead Science’s antiviral drug remdesivir on scant and suspect results, it’s hard not to start asking the question: Are we being played?

We’ve argued in several past videos that there is ample enough evidence that hydroxychloroquine shows enough promise in reducing/treating covid-19 that further research is merited. Instead, the drug is being demonized in the media.

That doesn’t make a lot of sense to us. But, hey, maybe there’s a good reason that a cheap widely-available treatment that has been administered hundreds of millions of times over the past 70 years, making it one of the most medically-delivered drugs in history, is suddenly being labelled “unsafe”?

But much more maddening is that remdesivir has suddenly been promoted to “standard of care” status despite its spotty and unproven track record.

Could that have anything to do with the fact that 9 of the 50 doctors on the NIH panel setting its covid-19 treatment guidelines work for Gilead Sciences?

The conflicts of interest and profit motives rampant among our policymakers are extremely concerning. Something is not right here…

Don’t forget to get your free download of Peak Prosperity’s book Prosper!. .

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