Category Archive: 5.) Charles Hugh Smith

Droit du Seigneur and the Neofeudal Privileges of Class in America

Want to understand the full scope of neofeudalism in America? Follow the money and the power and privilege it buys. The repugnant reality of class privilege in America is captured by the phrase date rape: the violence of forced, non-consensual sex is abhorrent rape when committed by commoner criminals, but implicitly excusable date rape when committed by a member of America's privileged elite.

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The Four Disastrous Presidential Policies That Are Destroying the Nation

It's admittedly a tough task to select the four most disastrous presidential policies of the past 60 years, given the great multitude to choose from. Here are my top choices and the reasons why I selected these from a wealth of policy disasters.

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When Does This Travesty of a Mockery of a Sham Finally End?

Credit bubbles are not engines of sustainable employment, they are only engines of malinvestment and wealth destruction on a grand scale. We all know the Status Quo's response to the global financial meltdown of 2008 has been a travesty of a mockery of a sham--smoke and mirrors, flimsy facades of "recovery," simulacrum "reforms," serial bubble-blowing and politically expedient can-kicking, all based on borrowing and printing trillions of dollars,...

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Digging into Wealth and Income Inequality

The assets of U.S. households recently topped $100 trillion, yet another sign that everything is going swimmingly in the U.S. economy. Let's take a look at the Federal Reserve's Household Balance Sheet, which lists the assets and liabilities of all U.S. households in very big buckets (real estate: $25 trillion). (For reasons unknown, the Fed lumps non-profit assets and liabilities with households, but these modest sums are easily subtracted.)

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We’re All Speculators Now

When the herd thunders off the cliff, most participants are trapped in the stampede.. One of the most perverse consequences of the central banks "saving the world" (i.e. saving banks and the super-wealthy) is the destruction of low-risk investments: we're all speculators now, whether we know it or acknowledge it.

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Massive Deficit Spending Greenlights Waste, Fraud, Profiteering and Dysfunction

The nice thing about free to me money from any source is the recipients don't have to change anything. Free money is the ultimate free-pass from consequence and adaptation: instead of having to make difficult trade-offs or suffer the consequences of profligacy, the recipients of free money are saved: they can continue on their merry way, ignoring the monumental dysfunction of their lifestyle.

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The Next Financial Crisis Is Right on Schedule (2019)

Neither small business nor the bottom 90% of households can afford this "best economy ever." After 10 years of unprecedented goosing, some of the real economy is finally overheating: costs are heating up, unemployment is at historic lows, small business optimism is high, and so on--all classic indicators that the top of this cycle is in.

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After 10 Years of “Recovery,” What Are Central Banks So Afraid Of?

If the world's economies still need central bank life support to survive, they aren't healthy--they're barely clinging to life. The "recovery"/Bull Market is in its 10th year, and yet central banks are still tiptoeing around as if the tiniest misstep will cause the whole shebang to shatter: what are they so afraid of? 

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The Global Financial System Is Unraveling, And No, the U.S. Is Not immune

Currencies don't melt down randomly. This is only the first stage of a complete re-ordering of the global financial system. Take a look at the Shanghai Stock Market (China) and tell me what you see: A complete meltdown, right? More specifically, a four-month battle to cling to the key technical support of the 200-week moving average (the red line). Once the support finally broke, the index crashed.

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Why Is Productivity Dead in the Water?

As the accompanying chart shows, productivity in the U.S. has been declining since the early 2000s. This trend mystifies economists, as the tremendous investments in software, robotics, networks and mobile computing would be expected to boost productivity, as these tools enable every individual who knows how to use them to produce more value.

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Here’s How We Ended Up with Predatory, Parasitic Elites

Combine financialization, neoliberalism and moral bankruptcy, and you end up with predatory, parasitic elites. How did our financial and political elites become predatory parasites? Some will answer that elites have always been predatory parasites; as tempting as it may be to offer a blanket denunciation of elites, this overlooks the eras in which elites rose to meet existential crises. Following in Ancient Rome's Footsteps: Moral Decay,...

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To Understand America’s Neofeudal Economy, Start with Extortion

Let's spin the time machine back to the late Middle Ages, at the height of feudalism, and imagine we're trying to get a boatload of goods to the nearest city to sell. As we drift down the river, we're constantly being stopped and charged a fee for transiting one small fiefdom after another. When we finally reach the city, there's an entry fee for bringing our goods to market.

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How “Wealthy” Would We Be If We Stopped Borrowing Trillions Every Year?

These charts reflect a linear system that is wobbling into the first stages of non-linear destabilization. The widespread presumption is the U.S. is wealthy beyond words, and will remain so as far as the eye can see: wealthy enough to fund trillion-dollar weapons systems, trillion-dollar endless wars, multi-trillion dollar Medicare for all, multi-trillion dollar Universal Basic Income, and so on, in an endless profusion of endless trillions....

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If You Want to Survive this Election with Your Mental Health Intact, Turn Off the “News” and Social Media Now

If you want to preserve your sanity and avoid unhappy derangement, turn off all corporate and social media from now to Thanksgiving. Since elections are extremely profitable for traditional media / social media corporations, your sanity will gleefully be sacrificed in the upcoming election--if you are gullible enough to watch the "news" and tune into social media.Elections are extremely profitable because candidates spend scads of cash on media...

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Our “Prosperity” Is Now Dependent on Predatory Globalization

Nowadays, trade and "prosperity" are dependent on currencies that are created out of thin air via borrowing or printing. So here's the story explaining why "free" trade and globalization create so much wonderful prosperity for all of us: I find a nation with cheap labor and no environmental laws anxious to give me cheap land and tax credits, so I move my factory from my high-cost, highly regulated nation to the low-cost nation, and keep all the...

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The Fantasy of “Balanced Returns” Funding Retirement

The fantasy that a "balanced portfolio" yielding "balanced returns" will fund a stable retirement for decades to come is widely accepted as a sure thing: inflation will stay near-zero essentially forever, assets such as stocks and bonds will continue yielding hefty income and capital gains, and all the individual or fund needs to do is maintain a "balanced portfolio" of various asset classes that yield "balanced returns," i.e. some safe "value"...

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We’ll Pay All Those Future Obligations by Impoverishing Everyone (How to Destroy Our Currency In One Easy Lesson)

The only way to pay all these future obligations is by creating new money. I've been focusing on inflation, which is more properly understood as the loss of purchasing power of a currency, which when taken to extremes destroys the currency and the wealth/income of everyone forced to use that currency.

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The 21st Century Misery Index: Labor’s Share of the Economy and Real-World Inflation

In the late 1970s and early 1980s, an era of stagflation, the Misery Index was the unemployment rate plus inflation, both of which were running hot. Now those numbers are at 50-year lows: both the unemployment rate and inflation are about as low as they can go, reaching levels not seen since the mid-1960s.

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Here’s What We’ve Lost in the Past Decade

The confidence and hubris of those directing the rest of us to race off the cliff while they watch from a safe distance is off the charts. The past decade of "recovery" and "growth" has actually been a decade of catastrophic losses for our society and nation. Here's a short list of what we've lost: 1. Functioning markets. Free markets discover price and assess risk.

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Here’s How Systems (and Nations) Fail

These embedded processes strip away autonomy, equating compliance with effectiveness even as the processes become increasingly counter-productive and wasteful. Would any sane person choose America's broken healthcare system over a cheaper, more effective alternative?

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