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Off the Cuff: The Longer Reality Is Denied, The Bigger The Inevitable Crash

Economics meets Physics
Thursday, January 1, 2015, 2:25 PM

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • Guess The 2nd Best-Performing Currency of 2014
    • Hint: It's yellow. And shiny.
  • China: Due For "A World of Hurt" in 2015
    • Starting the year off with a run on bank deposits
  • Self-Delusion
    • Critical thought is completely absent from western media
  • Oil
    • The further prices go down now, the higher they'll spike later

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Holiday Wishes

Gather around our virtual hearth
Wednesday, December 24, 2014, 8:47 PM

Happy holiday wishes from Peak Prosperity!

Thank you for the gifts of your participation in & support of this site. We're hard at work cobbling up a few new gifts of our own for you -- new content, new site features, and more. These 'presents' will start arriving in the next few weeks...  » Read more


David Collum: We're Now Stuck In A Global Game Of Tetris

And 2015 looks like the year it will all top out
Monday, December 22, 2014, 1:21 AM

Whether or not you've had time yet to plow your way through David Collum's excellent 2014 Year in Review, our annual podcast with Dave always brings additional color to light -- and this year's is no exception. » Read more


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2014 Year in Review: Part 2

Will 2015 be the year it all comes tumbling down?
Friday, December 19, 2014, 12:27 PM

This year has been all about risk—existential risk. Some of it seemed to dissipate and some lingers.  Market valuations remain risky—regression to the mean could easily provide a 50% haircut and more if we observe regression through the mean. This has not come to pass, but the risk is very real.

Those who seek risk in markets will eventually find it. » Read more



2014 Year in Review

The year we piled up risks like a global game of Tetris
Friday, December 19, 2014, 12:27 PM

I have not seen a year in which so many risks—some truly existential—piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. Groping for a metaphor—I love metaphors and similes—I feel like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows. » Read more

Daily Prep

New Laws for the New Year

What’s coming in 2014
Friday, January 3, 2014, 7:07 PM

A list of laws going into effect in various states.  Good to know what is in store for us across the Land of the Free.



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Outcomes to Bet On in 2014

Challenges to central authority will break out
Tuesday, December 31, 2013, 2:10 AM

Executive Summary

  • The productive class will increasingly look for ways to protect its income and wealth from State hands
  • Geographic redistribution of classes will increase, favoring lower-cost locales
  • Expect tax revolts to start breaking out
  • Diminishing returns and increased fragility of the status quo will result in a resurgence of volatility

If you have not yet read Part I of The Trends to Watch For in 2014, available free to all readers, please click here to read it first.

In Part I, I listed eight more trends to watch in 2014, in addition to the eight that are still in play from 2013.  Following last year’s format, here are some of the consequences to look for in 2014-15:


1. Opting out will become increasingly attractive for the productive class.  Since the Status Quo suppresses political resistance (in official eyes, the line between protest and domestic terrorism is awfully thin) while it loads on higher costs of friction, complexity, junk fees, taxes, etc. on the still-productive, opting out—retiring, quitting, cutting back, selling out—becomes a compelling option for those who can afford to do so.

Many have opted out simply because they have no other choice.  Those who are close to retirement age and unable to find employment that pays more than Social Security benefits opt to retire and take the benefits early.  The Social Security Administration has professed surprise that Baby Boomers are retiring early in larger numbers than the SSA projected.  (File under “Duh!”)  Millions of others have managed to qualify for Social Security disability (SSI), another form of opting out.

The Affordable Care Act (Obamacare) is one of many forces incentivizing opting out. The perverse incentives of the ACA make it “smart” to not enroll and not pay the penalty, either, as the IRS has already said that it won’t enforce the penalty for some time.

The ACA also heavily incentivizes managing your income to levels that qualify the household for subsidies. Higher-income households have a big incentive to lower their incomes to avoid paying sky-high premiums.  Those with salaries cannot easily adjust their incomes, but households with self-employed or contract workers can opt to work less and thus earn less... » Read more