Category Archive: 5.) Charles Hugh Smith

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A Stock Market Crash Scenario

2019-06-14

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2019-06-14

A Stock Market Crash Scenario
Herds get spooked and run. That's the crash scenario in a nutshell. We have all been trained by a decade of central bank saves to expect any stock market swoon will soon be reversed by central bank sweet talk and/or rate cuts. 

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What Would It Take to Spark a Rural/Small-Town Revival?

2019-06-12

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2019-06-12

Merchandise Exports 2015
Recent research supports the idea that this under-the-radar migration is already under way. The decline of rural regions and small towns is a global phenomenon, and the causes are many but boil down to two primary dynamics: 1. Cities and megalopolises (aggregations of cities, suburbs and exurbs) attract capital, infrastructure, markets and talent, and these are the engines of job creation.

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Is the Tech Bubble Bursting?

2019-06-07

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2019-06-07

Acceleration of Technological Adoption Curves 1867-2017
There are two other trends that don't attract quite the media attention that soaring profits do. Is the decade-long tech bubble finally popping? Tech bulls are overlooking the fundamental reality that the drivers of Big tech's phenomenal growth--financialization and expansion into mobile telephony-- are both losing momentum.

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A Quiet Revolution Is Brewing

2019-06-05

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2019-06-05

Income Inequality and Political Polarization, 1947-2009
Politics as practiced in a bygone era of stability no longer offers any solutions to these profound disruptions. I recently read a fascinating history of the social, political and economic context of the American Revolution: The Radicalism of the American Revolution by Gordon Wood.

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Why Being a Politician Is No Longer Fun

2019-05-31

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2019-05-31

Income Inequality and Political Polarization, 1947-2007
As a society, we are ill-prepared for the end of "politics is the solution." It's fun to be a politician when there's plenty of tax revenues and borrowed money to distribute, and when the goodies get bipartisan support. An economy that's expanding all household incomes more or less equally is fun, fun, fun for politicians because more household income generates more income tax revenues and more spending that generates other taxes.

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Lesson of the S-Curve: Doing More of What’s Failed Will Fail Spectacularly

2019-05-29

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2019-05-29

S-curve of Rapid Expansion, Stagnation and Decline
I often refer to the S-Curve because Nature so often tracks this curve of ignition, rapid expansion, stagnation and decline. One lesson of the S-Curve is that the human bias to keep doing more of what worked so well in the past leads to doing more of what failed even as results turn negative.

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Forget “Money”: What Will Matter Are Water, Energy, Soil and Food–and a Shared National Purpose

2019-05-27

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2019-05-27

World exports corn
If you want to identify tomorrow's superpowers, overlay maps of fresh water, energy, grain/cereal surpluses and arable land. The status quo measures wealth with "money," but "money" is not what's valuable. "Money" (in quotes because the global economy operates on intrinsically valueless fiat currencies being "money") is wealth only if it can purchase what's actually valuable.

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China’s Insurmountable Global Weakness: Its Currency

2019-05-25

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2019-05-25

US Dollar's Share of Global Payments, Loans and Reserves
If China wants superpower status, it will have to issue its currency in size and let the global FX market discover its price. Quick history quiz: in all of recorded history, how many superpowers pegged their currency to the currency of a rival superpower? Put another way: how many superpowers have made their own currency dependent on another superpower's currency?

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Technology Is Not Just Disruptive, It’s Disastrously Deflationary

2019-05-24

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2019-05-24

Technologies by proportion of companies likely to adopt them by 2022
Deflation eats credit-dependent, mass-consumption economies alive from the inside. While AI (artificial intelligence) garners the headlines, the next wave of disruptive technologies extend far beyond AI: as the chart of technologies rapidly being adopted shows, this wave includes new materials and processes as well as the "usual suspects" of machine learning, natural language processing, data mining and so on.

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Charles Hugh Smith on the U.S.-China Trade War

2019-05-24

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Click here for the full transcript: http://financialrepressionauthority.com/2019/05/23/the-roundtable-insight-charles-hugh-smith-on-the-u-s-china-trade-war/

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Two Intertwined Dynamics Are Transforming the Economy: Technology and Financialization

2019-05-22

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2019-05-22

If you want to understand how the economy is being transformed, look at the intersection of Big Tech, financialization and the central state. The two dynamics transforming the economy--technology and financialization--are intertwined yet widely viewed as unrelated. Critics and proponents of each largely ignore the other dynamic: critics of institutionalized fraud and other manifestations of financialization implicitly assume the economy will return...

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The Normalization and Institutionalization of Fraud

2019-05-20

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2019-05-20

% of IPOs with negative earnings, 1980-2018
Normalizing and institutionalizing fraud undermines the foundations of the economy and the financial system. I am indebted to Manoj Samanta (twitter: @flation_debate) for the insightful concept the commoditization of fraud. The first step in the commoditization of fraud is to normalize fraud as Business as Usual (BAU) to the point that it's no longer viewed as "wrong," destructive or an aberration of evil-doers but as an accepted way to maximize...

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Downward Mobility Matters More Than Liberal-Conservative Labels

2019-05-19

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2019-05-19

Workers Share of National Income 1994-2020
The real heresy here is the American economy is now rigged for downward mobility. In the conventional narrative, one's economic class is overshadowed by one's political belief structure: liberal, conservative, libertarian, etc. In terms of economic class, the conventional narrative divides people into their ideological beliefs about economic ideologies: free market capitalism, socialism, etc.

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The Economy Has Fundamentally Changed in the 21st Century–and Not for the Better

2019-05-15

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2019-05-15

Smaller Slice of the Pie
The net result is we have an economy that's supposedly expanding smartly while our well-being and financial security are collapsing. Gross Domestic Product (GDP) and other metrics of economic activity don't measure either broad-based prosperity or well-being. Elites skimming financialization profits by expanding corporate debt and issuing more loans to commoners while spending more on their lifestyles boosts GDP quite nicely while the security and...

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Burnout Nation

2019-05-14

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2019-05-14

U.S. Stress, 2012 - 2017
A number of recent surveys reflect a widespread sense of financial stress and symptoms of poor health in America's workers, particularly the younger generations. There's no real mystery as to the cause of this economic anxiety:

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Unrealistically Great Expectations

2019-05-12

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2019-05-12

Declining Wages, 2008 - 2014
Let's see if we can tie together four social dynamics: the elite college admissions scandal, the decline in social mobility, the rising sense of entitlement and the unrealistically 'great expectations' of many Americans. As many have noted, the nation's financial and status rewards are increasingly flowing to the top 5%, what many call a winner-take-all or winner-take-most economy.

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The Great Unraveling Begins: Distraction, Lies, Infighting, Betrayal

2019-05-11

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2019-05-11

Income Inequality and Political Polarization, 1947 - 2009
There are two basic pathways to systemic collapse: external shocks or internal decay. The two are not mutually exclusive, of course; it can be argued that the most common path is internal decay weakens the empire/state and an external shock pushes the rotted structure off the cliff.

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What Would It Take to Spark a Rural/Small-Town Revival?

2019-05-07

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2019-05-07

Net farm Income, USDA 1970- 2010
There are many historical models in which the spending/investing of wealthy families drives the expansion of local economies. The increase in farm debt while farm income declines is putting unbearable financial pressure on American farmers, who must be differentiated from giant agri-business corporations. This is placing immense pressure on farmers, pressure which manifests in rising suicide rates.

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Charles Hugh Smith on the Loss of Confidence in Institutions

2019-05-06

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Click here for the full transcript: http://financialrepressionauthority.com/2019/05/06/the-roundtable-insight-charles-hugh-smith-on-the-loss-of-confidence-in-institutions/

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Good Riddance to a “Nothing-Burger” Trade Deal

2019-05-06

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2019-05-06

U.S.Dollar's Share of Global Peyments
China has expanded its domestic debt to fund its growth, much of which qualifies as malinvestment, creating financial vulnerabilities its government is anxious to mask. As I noted in Trade Deal Follies: The U.S. Has Embraced the World's Worst Negotiating Tactics (April 8, 2019), the trade deal was a Nothing-Burger for the U.S. Without any consequences for violating trade deals, China violates all trade deals, starting with the WTO.

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