Category Archive: 5.) Charles Hugh Smith

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Income Inequality and the Decline of the Middle Class in Two Charts

2019-05-04

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2019-05-04

CBO Income Before, 1980 - 2019
These two charts of average incomes of U.S. households by quintile (bottom 20%, middle 60% (20%+20%+20%) and top 20%) have both good news and bad news. (Charts are from the non-partisan Congressional Budget Office -- CBO).

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The Accelerating Decay of the Middle Class

2019-05-03

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2019-05-03

The Fruit of Financialization
Ironically, their ample compensation allows them to avoid the poor-quality services they've designed for everyone below them. If we define middle class by the security of household income and what that income can buy rather than by an income level, what do we conclude? 

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The Erosion of Everyday Life

2019-05-01

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2019-05-01

Wages aren't keeping up
Working hard and doing what you're told is no longer yielding the promised American Dream of security, agency and liberty. Volume One of Fernand Braudel's oft-recommended (by me) trilogy Civilization & Capitalism, 15th to 18th Century is titled The Structures of Everyday Life. The book describes how life slowly became better and freer as the roots of modern capitalism and liberty spread in western Europe, slowly destabilizing and obsoleting the...

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There Are Two Little Problems with “Taxing the Rich” to Pay for “Free Everything”

2019-04-30

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2019-04-30

Federal government total expenditures, 1960-2010
No super-wealthy individual or household is going to pay billions in additional taxes when $10 to $20 million will purchase political adjustments. The 2020 election cycle has begun, and a popular campaign promise is "free everything" paid for by new taxes on the super-wealthy. Who doesn't like free stuff? Who will vote for whomever offers them free stuff? No wonder it's a popular campaign promise.

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Push Them Hard Enough and the Productive Class Will Opt Out of Servitude

2019-04-27

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2019-04-27

State and Local Spending vs Private GDP, 1950-2010
People love their big paychecks, but they also value their sanity. One of the most astonishing manifestations of disconnected-from-reality hubris is public authorities' sublime confidence that employers and entrepreneurs will continue starting and operating enterprises no matter how difficult and costly it becomes to keep the doors open, much less net a profit.

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The Feedback Loop of Doom: When Mobile Creatives and Capital Abandon Unaffordable, Dysfunctional Cities

2019-04-26

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2019-04-26

State and Local Spending vs. Private GDP Multiples of 1950 Values
When the 4% who generate the jobs and tax revenues have had enough and leave, the effects quickly impact the 64%. At the end of any trend, everyone's a true believer: this trend is so enduring, so broad-based, so based on unchanging fundamentals that it will never ever reverse.

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If “Getting Ahead” Depends on Asset Bubbles, It’s Not “Getting Ahead,” It’s Gambling

2019-04-25

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2019-04-25

Workers share of national income 1994-2020
Given that the economy is now totally and completely dependent on inflating asset bubbles, it makes no sense to invest for the long-term. Beneath the endlessly hyped expansion in gross domestic product (GDP) of the past two decades, the economy has changed dramatically. The American Dream boils down to social and economic mobility, a.k.a. getting ahead through hard work, merit and wise investments in oneself and one's family.

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Charles Hugh Smith – Debt Rising Faster Than Income

2019-04-24

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Can team Trump keep the economy going until after the 2020 election? Journalist and book author Charles Hugh Smith says, “I think you are pushing a little bit on a string to get a 10 year long expansion to stretch out to 12 years. It’s like you are pushing sand uphill at some point. . … Continue reading »

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How Empires Fall: Moral Decay

2019-04-23

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2019-04-23

Income Inequality and Political Polarization 1947-2009
There is a name for this institutionalized, commoditized fraud: moral decay. Moral decay is an interesting phenomenon: we spot it easily in our partisan-politics opponents and BAU (business as usual) government/private-sector dealings (are those $3,000 Pentagon hammers now $5,000 each or $10,000 each? It's hard to keep current...), and we're suitably indignant when non-partisan corruption is discovered in supposed meritocracies such as the college...

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America’s Forced Financial Flight: Fleeing Unaffordable and Dysfunctional Cities

2019-04-22

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2019-04-22

Consumer Price Index for All Urban Consumers 1925-2000
The forced flight from unaffordable and dysfunctional urban regions is as yet a trickle, but watch what happens when a recession causes widespread layoffs in high-wage sectors. For hundreds of years, rural poverty has driven people to urban areas: cities offer paying work and abundant opportunities to get ahead, and these financial incentives have transformed the human populace from largely rural to largely urban in the developed world.

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MACRO ANALYTICS – 04 18 19 – Forced Migration in America w/Charles Hugh Smith

2019-04-19

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VIDEO NOTIFICATION SIGN-UP: http://bit.ly/2y63PvX-Sign-Up VIDEO ABSTRACT: America’s Forced Financial Flight: Fleeing Unaffordable and Dysfunctional Cities April 22, 2019 — https://www.oftwominds.com/blogapr19/forced-flight4-19.html Thank you to all Macro Analytics/Gordon T Long YouTube followers. I will continue to add the following message to each video, which many have already seen to help all of those that haven’t learned of …...

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CHARLES HUGH SMITH – We Are Gonna Destroy The Economy If We Keep Going Like This

2019-04-18

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SUBSCRIBE for Latest on FINANCIAL CRISIS / OIL PRICE / PETROL/ GLOBAL ECONOMIC COLLAPSE / DOLLAR COLLAPSE / GOLD / SILVER / BITCOIN / ETHERIUM / CRYPTOCURRENCY / LITECOIN /FINANCIAL CRASH / GLOBAL RESET / NEW WORLD ORDER / ECONOMIC COLLAPSE / DAVOS 2018

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The Next Financial Crisis Won’t Be Caused by Fraud: This Time Will Be Different

2019-04-18

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2019-04-18

All Sectors, Debt Securities and Loans, Liability, 1960 - 2019
Financial crises come in two flavors: fraud and credit-valuation over-reach.Fraud-based financial crises may differ in particulars, but they share many traits: perverse incentives are institutionalized; the perverse incentives reward figuring out how to evade oversight via fraud, embezzlement, masking risk, etc. which are soon commoditized; regulations are gutted by insider-funded lobbying; regulators fail to do their job in hopes of getting...

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Round Table with Gordon T. Long & Charles Hugh Smith #4299

2019-04-16

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Financial experts Gordon T. Long and Charles Hugh Smith join FSN for a discussion on what went/is going wrong with the American Experiment. Obviously among the culprits, corrupt government, corporatization, financialization and inflation to name just a few. The solution is very straight forward and simple. Go back to localization, bring back the institutions that …

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No Fix for Recession: Without a Financial Crisis, There’s No Central Bank Policy Fix

2019-04-15

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2019-04-15

All Federal Reserve Banks: Total Assets 2004-2018
There are no extreme "fixes" to secular declines in sales, profits, employment, tax revenues and asset prices. The saying "never let a crisis go to waste" embodies several truths worth pondering as the stock market nears new highs. One truth is that extreme policies that would raise objections in typical times can be swept into law in the "we have to do something" panic of a crisis.

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Assange and the Unforgivable Sin of Disemboweling Official Narratives

2019-04-14

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2019-04-14

S-Curve of Expansion, Maturation, Stagnation and Collapse
There is really only one unforgivable sin in the political realm, and that's destroying the official narrative by revealing the facts of the matter. This is why whistleblowers who make public the secret machinery of the elaborately artful lies underpinning all official narratives are hounded to the ends of the Earth.

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Blind Faith vs. the Bottom Line

2019-04-13

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2019-04-13

Dow Jones Industrial Valuation 1984-2016
There is more than a little "let them eat brioche" in the blind faith that the masses' patience for pillage is infinite. We've reached an interesting moment in history where we each have a simple choice: we either go with blind faith or we go with the bottom line, i.e. the facts of the matter. So far, 2019 is the year of Blind Faith, as the charts below illustrate: the bottom line no longer matters.

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Here’s What It’s Like To Be a Bear in a Rigged Market

2019-04-11

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2019-04-11

Central bankers and media handlers must be laughing at how easy it is to slaughter the Bears and doubters with another fake-news round of trade-deal rumors and another Fed parrot being prompted to repeat some dovish mumbo-jumbo. It's not just tough being a Bear in a market rigged by trade deal rumors, Federal Reserve dovishness, a tsunami of Chinese liquidity and $270 billion in stock buy-backs in the first quarter--it's impossible. 

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Trade Deal Follies: The U.S. Has Embraced the World’s Worst Negotiating Tactics

2019-04-10

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2019-04-10

The world's worst negotiating strategy is to make a crazy tulip-bubble stock market rally dependent on a trade deal that harms the interests of the U.S. The world's worst negotiating tactics, the equivalent of handing the other side a loaded gun while waving a squirt gun around, are: 1. Declare a de facto political deadline for a deal. Constantly tweet that a deal is imminent. 

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The Japanification of the World

2019-04-06

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2019-04-06

Japan Government interest payments % of revenue, 1972-2014
Zombification / Japanification is not success; it is only the last desperate defense of a failing, brittle status quo by doing more of what's failed. A recent theme in the financial media is the Japanification of Europe. Japanification refers to a set of economic and financial conditions that have come to characterize Japan's economy over the past 28 years: persistent stagnation and deflation, a low-growth and low-inflation economy, very loose...

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