Charles Hugh Smith

Insider

John Tenniel

Off The Cuff: Tax Donkeys & Debt Serfs

The many are increasingly in servitude to the few
Friday, July 27, 2018, 12:15 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • Broken Signals
    • We're focusing on the wrong priorities, in the wrong order
  • Dangerous Hubris
    • We've removed critical buffers to risk
  • Tax Donkeys & Debt Serfs
    • The many are in servitude to the few
  • Late-Stage Empire Decline
    • Signs of it are everywhere in our economy & society

Charles breaks down for Chris how the masses are trapped by today's economy, forced to work harder and harder for a system that rewards them less and less, while the elites and unneccessary bureaucracy syphon off what profits remain.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio as well as all of PeakProsperity.com's other premium content. » Read more

Podcast

Charles Hugh Smith: We Desperately Need Shared Values, Connection & Positive Social Roles

Our culture is becoming a "social desert"
Tuesday, July 3, 2018, 12:51 PM

We've recently published a series of commentary on PeakProsperity.com addressing the epidemic of disconnection, dissatisfaction and demoralization that society is increasingly suffering from today.

Together, these articles beg the question: In an age of more "prosperity" than the human species has ever experienced, why are so many of us feeling so empty? And what solutions exist out there to offer us more meaning, connection and purpose in our lives?

Joining us this week is Charles Hugh Smith, who gives a detailed account of the root causes of what's ailing society, as well as the essential ingredients for repairing it. » Read more

Blog

A Hard Rain's a-Gonna Fall

The prospects for the rest of the year are awful
Friday, June 15, 2018, 6:55 PM

As the Federal Reserve kicked off its second round of quantitative easing in aftermath of the Great Financial Crisis, hedge fund manager David Tepper predicted that nearly all assets would rise tremendously in response. 

History proved Tepper right: financial and other risk assets have shot the moon. Equities have long since rocketed past their pre-crisis highs, bonds continued rising as interest rates stayed at historic lows, and many real estate markets are now back in bubble territory. 

And everyone learned to love the 'Fed put' and stop worrying.

But as King Louis XV and Bob Dylan both warned us, what's coming next will change everything. » Read more

Insider

Off The Cuff: The Whole System Is Insane Now

The Market & the State now both incentivize our destruction
Monday, May 14, 2018, 12:36 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • Seminar Summary
    • CHS shares his key takeaways from speaking at the PP seminar
  • Energy Is Everything
    • And the situation is much more dire than most realize
  • The Whole System Is Insane Now
    • The Market & the State now incentivize our destruction
  • An Invitation To Live Regeneratively
    • We have the models. But do we have the will?

Fresh from speak at Peak Prosperity's annual seminar, Charles Hugh Smith reflects on his key takeways from the event, plus focuses our attention on the mal-incentives our economic models offer us these days. They are literally rewarding us to hasten our own destruction.

As Charles frankly puts it...

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
Insider

Shutterstock

6 Essential Strategies For Prospering Through The Next Crisis

Be one of the few positioned to prosper when crisis hits
Friday, April 6, 2018, 11:32 PM

Executive Summary

  • The trends that have driven the past 10 years are now ending/over. Ride their reversal wisely.
  • Crisis can destroy or magnify your prospects. Your decisions today will control which outcome you experience.
  • In many cases, you need to do the opposite of what the 'herd' is doing
  • The 6 essential strategies for prospering through the next crisis

If you have not yet read Part 1: This Is The Turning Point, available free to all readers, please click here to read it first.

Strategies For Prospering Through The Next Crisis

Those with the open-mindedness, courage and optimism to adapt in time will be far less impacted -- and indeed, will have much better odds of coming through this transition the better for it. Amazing opportunities will arise during this time to increase all aspects of your wealth (yes, money -- but also in all the other important Forms Of Capital, too).

Don’t count on currency “money” retaining its purchasing power. 

States (governments) always follow the same pathway: when financial promises can’t be kept, states debauch/devalue their currencies as a politically expedient short-term solution.

But alas, just like central bank stimulus, the short-term expediency becomes the permanent policy, and the unintended consequences start piling up, for example, a loss of trust in the state’s currency.

I see Venezuela’s destruction of its currency as the canary in the coalmine. The first canaries to drop lifeless from their perch will be non-reserve currencies.  Then the weakest of the reserve currencies will be over-issued (via credit rather than actual money-printing) and then even the mightiest will collapse.

Many people reckon the US dollar (USD) is the weakest, and perhaps they’ll be right, but I think the Chinese yuan (RMB), Japanese yen and EU euro will lose purchasing power first.

The RMB isn’t actually a “real currency,” it’s simply a derivative of the USD via the official peg. As for becoming gold-backed, please examine any chart of Chinese debt issuance (all of which is currency) and then compare that to... » Read more

Insider

Off The Cuff: The High Cost Of 'Free' Trade

Corporate cartels win, the public gets shafted
Thursday, March 15, 2018, 10:55 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • Funky Market Movement
    • A "bear pendant" in the making?
  • The False Claim Of Free Trade
    • Corporate cartels win, the public gets shafted
  • Media Mendacity
    • Google/Facebook increasingly censoring the content we see
  • Money Velocity Is Slowing
    • And tarrffs will only make things worse

Charles explains how the benefits of "free trade" that we've been sold over the past decades have been lopsided in the extreme.

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
Insider

Shutterstock

Off The Cuff: How Much Farther Is The Market Likely To Fall From Here?

Spoiler alert: A lot
Friday, February 9, 2018, 12:07 PM

In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:

  • What The Heck Happened This Week?
    • The volatility trade blew up
  • How Much Farther Might The Market Fall?
    • It was so overbought, that there's a looong way to fall
  • Where Can Money Find Safety Right Now?
    • Only in a very few places, as nearly everything is still at an overvaluation extreme
  • What Should We Be Watching For Next?
    • Look for the key longstanding correlations begin to break down. That's when the big crash will happen.

This week's Off The Cuff is a must-listen podcast.

In it, Chris and Charles deconstruct the price action of the markets this week -- both agree that it (finally!) marks an end to the 7+ year "extend and pretend" unbroken rally in both stocks and bonds.

More importantly, they warn of the paucity of "safe" places for investment capital right now; as almost every asset class remains dangerously overvalued, and bank risk is on the rise. But they do identify the few areas where money is likely to flee -- it will be very important to be positioned in these *before* everyone else tries to enter.

As for how much farther the markets may drop -- whether or not there's another short-term rescue happens, both see prices ultimately falling much, much lower. As Charles observes:

I'm looking at a weekly chart of the Dow Industrial Average and I'm seeing we've hardly started a decline.

I mean, the MACD has just barely touched the first part of a negative cross. The Stochastic is only down from 100 to 86 -- oversold' on Stochastic would be 20. The RSI (the Relative Strength Index)has fallen 60 -- and again, oversold would be something like 30.

So the people who are thinking they're going to buy the dip and it's going to run up another couple thousand points... maybe. But the technical chart says this is ugly, and it's going to take a long time—at least a matter of weeks, if not a couple of months—to actually bottom out.

It's looking to be a really treacherous year for investors, because the trend has been broken. 

Click to listen to a sample of this Off the Cuff Podcast or Enroll today to access the full audio and other premium content today.
Blog

Melissa E Dockstader/Shutterstock

The Pie Is Shrinking So Much The 99% Are Beginning To Starve

How much longer until the pitchforks come out?
Friday, January 26, 2018, 11:04 PM

Despite the endless media rah-rah about “growth” and “recovery,” it is self-evident to anyone who bothers to look beneath the surface of this facile PR that the pie is now shrinking. 

This dynamic is increasing inequality rather than reducing it. » Read more

Insider

Rangizzz | Dreamstime.com

So What Comes Next & How Can We Prepare For It?

Prices and incomes are headed (much) lower
Friday, December 29, 2017, 8:14 PM

Executive Summary

  • The dangerous unintended risks and consequences of central bank policies
  • Returns diminish as you move along the expansion S-curve
  • Why the current practice of moderating extremes will fail
  • What comes next & how to prepare for it

If you have not yet read Part 1: The Inescapable Reason Why the Financial System Will Fail, available free to all readers, please click here to read it first.

In Part 1, we covered the financial system’s dependence on credit, and the central bank’s conundrum: they can’t raise rates without stifling the credit-binge-dependent “recovery” and asset bubbles, but they also can’t keep pushing asset bubbles higher without increasing systemic risks, as valuations are already stretched to historic extremes.

So what happens next?  Can central banks raise rates without popping the bubbles the system needs to remain solvent? Or can they keep yields near zero and keep pushing asset valuations higher for years or decades to come?

I hate to spoil the ending, but the short answer is: these are incompatible goals.  The central banks cannot raise yields (i.e. normalize rates to historically average levels) and push asset valuations higher, nor can they eliminate the systemic risk generated by extreme valuations and leverage.

Unintended Risks and Consequences

Extreme financial policies generate unintended consequences as a result of being extreme: a moderate policy wouldn’t have the “whatever it takes” impact, but it also wouldn’t jam all the levers to maximum.

Once the levers are on maximum, the extremes generate instability and blowback, as those who benefit from the extremes are incentivized to go even deeper into speculative gambles in the mistaken belief that “the central banks have my back” while those who did not benefit express their dissatisfaction in the political arena, a dynamic that is often dismissed or derided as “populism.”

Central banks have suppressed measures of volatility in an effort to mask the rising risk that their policy extremes will trigger...   [enroll now to continue reading] » Read more

Blog

girardatlarge.com

The Inescapable Reason Why the Financial System Will Fail

Credit cannot expand faster than fundamentals forever
Friday, December 29, 2017, 8:13 PM

Central banks are now trapped.

If they raise rates to provide low-risk, high-yield returns to institutional owners, they will stifle the “recovery” and the asset bubbles that are dependent on unlimited liquidity and super-low interest rates. But if they keep yields low, the only way institutional investors can earn the gains they need to survive is to pile into risk assets and hope the current bubbles will loft higher.

This conundrum has pushed the central banks into yet another policy extreme: to mask the rising systemic risk created by asset bubbles, central banks have taken to suppressing measures of volatility—measures than in previous eras would reflect the rising risks of extreme asset bubbles deflating.