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The Structural Endgame of the Fiscal Cliff

It's not just a temporary political event
by Charles Hugh Smith
Wednesday, December 26, 2012, 2:51 PM

To understand this endgame, we need to start with the financial and political basics of wealth and power in the U.S.

1.  Wealth and thus political power are highly concentrated.  The dynamics of rising wealth disparity and the increasing concentration of wealth are debatable; the disparity is not.  Roughly 70% of all financial wealth is held by the top 5%; within this top layer of ownership, the top ½ of 1% hold an outsized share. » Read more

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2012 Year in Review

Free markets, rule of law, and other urban legends
by David Collum
Friday, December 21, 2012, 3:34 PM

Background

I was just trying to figure it all out.

~ Michael Burry, hedge fund manager

Every December, I write a Year in Review that has now found a home at Chris Martenson’s website PeakProsperity.com.1,2,3 What started as a simple summary intended for a couple dozen people morphed over time into a much more detailed account that accrued over 25,000 clicks last year.4 'Year in Review' is a bit of a misnomer in that it is both a collage of what happened, plus a smattering of issues that are on my radar right now. As to why people care what an organic chemist thinks about investing, economics, monetary policy, and societal moods I can only offer a few thoughts.

For starters, in 33 years of investing with a decidedly undiversified portfolio, I had only one year in which my total wealth decreased in nominal dollars. For the 13 years beginning 01/01/00—the 13 toughest investing years of the new millennium!—I have been able to compound my personal wealth at an 11% annualized rate. This holds up well against the pros. I am also fairly good at distilling complexity down to simplicity and seem to be a congenital contrarian. I also have been a devout follower of Austrian business cycle theory—i.e., free market economics—since the late 1990s.4

Each review begins with a highly personalized analysis of my efforts to get through another year of investing followed by a more holistic overview of what is now a 33-year quest for a ramen-soup-free retirement. These details may be instructive for those interested in my approach to investing. The bulk of the review, however, describes thoughts and observations—the year’s events told as a narrative. The links are copious, albeit not comprehensive. Some are flagged with enthusiasm. Everything can be found here.5 » Read more

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2012 Year in Review (cont'd)

More musings on what mattered this year
by Adam Taggart
Friday, December 21, 2012, 3:29 PM

Personal Debt

I spent all my money on women and wine, and the rest I wasted.

~ George Best, Irish soccer player

» Read more
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2012 Year in Review - Reference Links

by David Collum
Friday, December 21, 2012, 12:46 PM

Background

(1) http://disgu.st/~jon/books/david_collum-30_years_investing.pdf

(2) http://www.peakprosperity.com/forum/david-b-collums-2010-year-review/50352

(3) http://www.peakprosperity.com/blog/2011-year-review-david-collum/67586

(4) http://en.wikipedia.org/wiki/Austrian_business_cycle_theory

(5) http://lmgtfy.com/?q=How+do+I+google+something%3F

  » Read more

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A Tale of Two Forecasts

Where has our objectivity gone?
by Gregor Macdonald
Wednesday, December 19, 2012, 8:04 PM

It was the best of times; it was the worst of times for the American public over the past month, as it was treated to two high-profile, but deeply conflicting, economic forecasts.

Despite declaring in 2008 that the age of cheap oil was over, the International Energy Agency (IEA) surprisingly announced last week that the United States would become the largest oil producer in the world by 2020. Hooray! This superlative declaration titillated U.S. media organizations, who understand quite well that Americans love to secure a #1 ranking in just about any category (save for prison incarceration, divorce rates, and obesity). As I explained to the Keiser Report, however, the IEA has done little more than produce an attention grabbing headline here. Simply ranking the 'top oil producer' in 2020 may mean much less than the public currently understands. » Read more

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Recent Improvements to Groups

Announcing new enhancements
by Adam Taggart
Tuesday, December 18, 2012, 4:43 PM

When the new PeakProsperity.com site launched back in June, we introduced the 1.0 version of our new Groups functionality.

We knew it wasn't perfect, but we were (and still very much are) excited by the enhanced ability Groups offers our readers to connect around an interest and/or a location.

Over the past month, we've been able to invest in making several improvements to the Groups experience, two of which we want to highlight here: » Read more

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QE 4: Folks, This Ain't Normal

What you need to know about the Fed's latest move
by Chris Martenson
Friday, December 14, 2012, 1:22 PM

Okay, the Fed's recent decision to boost its monetary stimulus (a.k.a. "money printing," "quantitative easing," or simply "QE") by another $45 billion a month to a combined $85 billion per month demonstrates an almost complete departure from what a normal person might consider sensible.

To borrow a phrase from Joel Salatin: Folks, this ain't normal.  To this I will add ...and it will end badly. » Read more

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Giving the Gift of Insight This Holiday Season

PeakProsperity.com gift subscriptions
by Adam Taggart
Wednesday, December 12, 2012, 1:49 AM

A number of you have written to us asking whether we are offering gift certificates to PeakProsperity.com during this holiday season. Yes, we are.

» Read more

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Real Estate: Is the Bottom In, or Is This a Head-Fake?

The housing recovery is no sure bet
by Charles Hugh Smith
Thursday, December 6, 2012, 11:32 AM

Everyone interested in real estate is asking the same question: is the bottom in, or is this just another “green shoots” recovery that will soon wilt?

Let’s start by reviewing the fundamental forces currently affecting real estate valuations. » Read more

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The New Future of Energy Policy

The rise of the powergrid (and new taxes)
by Gregor Macdonald
Monday, November 26, 2012, 3:32 PM

Flood myths are common to human culture. Swollen rivers, tidal storms, and tsunamis make their appearance frequently in literature. But Hurricane Sandy, which has drawn newly etched high-water marks on the buildings of lower Manhattan (and Brooklyn), has shifted the discussion from storytelling to reality.

Volatility in climate has drawn the attention of policy makers for a decade. But as so often is the case, a dramatic event like superstorm Sandy – the largest storm to hit New York since the colonial era – has punctured the psyche of the densely populated East Coast, including the New York-Washington, DC axis where U.S. policy is made.

Not surprisingly, in the weeks since the historical hurricane made landfall, new attention is being paid to the mounting costs that coastal world megacities may face.

Intriguingly, however, this new conversation about climate, energy policy, and America’s reliance on fossil fuels comes after a five-year period in which the U.S. has dramatically lowered its consumption of oil and seen an equally dramatic upturn in the growth of renewable energy. » Read more