Category Archive: 5.) Charles Hugh Smith

The Moment Wall Street Has Been Waiting For: Retail Is All In

The ideal bagholder is one who adds more on every downturn (buy the dip) and who refuses to sell (diamond hands), holding on for the inevitable Fed-fueled rally to new highs. Old hands on Wall Street have been wary of being bearish for one reason, and no, it's not the Federal Reserve: the old hands have been waiting for retail--the individual investor-- to go all-in stocks. After 13 long years, this moment has finally arrived: retail is...

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America Is a Moral Cesspool, and Student Loans Prove It

If America somehow managed to educate millions of college students without burdening them with $2 trillion in debt in 1993, why is it now "impossible" to do so, even as America's wealth and gross national product (GDP) have both rocketed higher over the past 27 years?

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Have We Reached “Peak Self-Glorifying Billionaire”?

Perhaps we should update Marie Antoinette's famous quip of cluelessness to: "Let them eat space tourism." As billionaires squander immense resources on self-glorifying space flights, the corporate media is nothing short of worshipful. Millions of average citizens, on the other hand, wish the self-glorifying billionaires had taken themselves and all the other parasitic, tax-avoiding, predatory billionaires with them on a one-way trip into space.

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Big Tech: “Our Terms Have Changed”

So go ahead and say whatever you want around all your networked devices, but don't be surprised if bad things start happening. I received another "Our Terms Have Changed" email from a Big Tech quasi-monopoly, and for a change I actually read this one. It was a revelation on multiple fronts. I'm reprinting it here for your reading pleasure: We wanted to let you know that we recently updated our Conditions of Use.

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How Breakdown Cascades Into Collapse

Maintaining the illusion of confidence, permanence and stability serves the interests of those benefiting from the bubbles and those who prefer the safety of the herd, even as the herd thunders toward the precipice.

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Here’s Why America’s Labor-Shortage Will Drive Inflation Higher

America's labor shortage is complex and doesn't lend itself to the simplistic expectations favored by media talking heads. The Wall Street cheerleaders extol the virtues of "getting America back to work" which is Wall-Street-speak for getting back to exploiting workers to maximize corporate profits.

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The $50 Trillion Plundered from Workers by America’s Aristocracy Is Trickling Back

The depth of America's indoctrination can be measured by the unquestioned assumption that Capital should earn 15% every year, rain or shine, while workers are fated to lose ground every year, rain or shine. And if wages should ever start ticking upward even slightly, then the Billionaires' Apologists are unleashed to shout that higher wages means higher inflation, which will kill the economic "recovery."

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Housing Bubble #2: Ready to Pop?

The expansion of Housing Bubble #2 is clearly visible in these two charts of house valuations, courtesy of the St. Louis Federal Reserve database (FRED). The first is the Case-Shiller Index, which as you recall tracks the price of homes on an "apples to apples" basis, i.e. it tracks price movements for the same house over time. Note that this is an index chart where the index is set at 100 as of January 2000. It is not a chart of median housing...

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A Few Things About Reinforced Concrete High-Rise Condos

The second most remarkable thing about the sudden collapse of the Florida condo building was the rush to assure everyone that this was a one-off catastrophe: all the factors fingered as causes were unique to this building, the implication being all other high-rise reinforced concrete condos without the exact same mix of causal factors were not in danger.

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Virus Z: A Thought Experiment

Let's run a thought experiment on a hypothetical virus we'll call Virus Z, a run-of-the-mill respiratory variety not much different from other viruses which are 1) very small; 2) mutate rapidly and 3) infect human cells and modify the cellular machinery to produce more viral particles.

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The Systemic Risk No One Sees

My recent posts have focused on the systemic financial risks created by Federal Reserve policies that have elevated moral hazard (risks can be taken without consequence) and speculation to levels so extreme that they threaten the stability of the entire financial system.

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When Expedient “Saves” Become Permanent, Ruin Is Assured

The belief that the Federal Reserve possesses god-like powers and wisdom would be comical if it wasn't so deeply tragic, for the Fed doesn't even have a plan, much less wisdom. All the Fed has is an incoherent jumble of expedient, panic-driven "saves" it cobbled together in the 2008-2009 Global Financial Meltdown that it had made inevitable.

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America’s Social Order is Unraveling

What kind of nation boasts a record-high stock market and an unraveling social order? Answer: a failed nation, a nation that has substituted artifice for realism for far too long, a nation that now depends on illusory phantoms of capital, prosperity and democracy to prop up a crumbling facade of "wealth" that the populace now understands is largely in the hands of a few families and corporations, most of which pay little to support the citizenry...

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It Always Ends The Same Way: Crisis, Crash, Collapse

One of the most under-appreciated investment insights is courtesy of Mike Tyson: "Everybody has a plan until they get punched in the mouth." At this moment in history, the plan of most market participants is to place their full faith and trust in the status quo's ability to keep asset prices lofting ever higher, essentially forever.

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Front-Running the Crash

We have a fine-sounding word for running with the herd: momentum. When the herd is running, those who buy what the herd is buying and sell what the herd is selling are trading momentum, which sounds so much more professional and high-brow than the noisy, dusty image of large mammals (and their trading machines) mindlessly running with the herd.

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Seven Things Nobody Talks About that Will Eventually Matter–A Lot

Perhaps it shouldn't surprise us that everything that will eventually matter is ignored until it does matter--but by then it's too late. Here's a short list to start the discussion: 1. The Federal Reserve has transformed the American populace into a nation of dismayingly over-confident gamblers.

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The Sources of Rip-Your-Face-Off Inflation Few Dare Discuss

Inflation will be transitory, blah-blah-blah--I beg to differ, for these reasons. There are numerous structural sources of inflation, which I define as prices rise while the quality and quantity of goods and services remain the same or diminish.

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Post-Pandemic Metamorphosis: Never Going Back

People caught on that the returns on the frenzied hamster wheel of "normal" have been diminishing for decades, but everyone was too busy to notice. The superficial "return to normal" narrative focuses solely on first order effects: now that people can dispense with masks and social distancing, they are resuming their pre-pandemic spending orgy with a vengeance, which augurs great profits for Corporate America and higher tax revenues.

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(Not) Living Large on Social Security

How many retired workers are getting less than $1,000 per month in Social Security benefits? The question came up and I was curious enough to find the answer, and download the data into an Excel spreadsheet which I saved as a

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Increasingly Chaotic Volatility Ahead–The New Normal Few Think Possible

The standard debate about the future of the economy is: which will we get, high inflation or a deflationary collapse of defaults and asset bubbles popping? The debate goes round and round in widening circles of complexity as analysts delve into every nuance of the debate.

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