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Off The Cuff: Colliding Crises

Energy, debt & resource shocks are in our near future
Friday, July 7, 2017, 8:17 AM

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

  • The Approaching Energy Crisis
    • It's not a matter of if, but when
  • The Approaching Debt Crisis
    • There's no escaping it
  • The Unfolding Resource Crisis
    • Scarcity is growing in nearly every system
  • The Inevitability of DeGrowth
    • We're going to have to transition, whether we want to or not

This week's podcast is a particularly sobering one. Chris and Charles discuss the inevitable arrival of several approaching crises: declining net energy, too much debt, and depleting key natural resources.

What this mean is that "DeGrowth" in our near-term future. As a global population, we are simply going to have to learn to do more with less: either on our terms or Mother Nature's. 

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.
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How To Register For 'The Health Effect' Webinar

FREE to PP.com's premium subscribers
Sunday, July 2, 2017, 9:08 PM

As a valued enrolled member of PeakProsperity.com, we're pleased to be able to make our upcoming webinar The Health Effect, featuring functional health legends Robb Wolf and Chris Kresser, available to you for free.

Robb and Chris will share their latest insights on the key, actionable behaviors that drive physical and mental health (both have recently released new books on the topic), and given the interactive nature of our webinar platform, will take ample time to answer questions from the audience.

The webinar takes place on Wednesday, August 23 at noon EST/9am PST. It will last approximately an hour and a half.

To register for the event, just... » Read more

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Preparing For The Coming Shock

The economy -- and EVERTHING -- will get smaller
Friday, June 30, 2017, 10:11 PM

Executive Summary

  • The importance of understanding the difference between depleting vs declining
  • Why the shale "miracle" can't rescue us from this predicament
  • Why 2019 will be a seminal year
  • How high will oil prices go when the shock arrives?
  • Why the next oil shock will force the economy -- and EVERYTHING we depend on -- to diminish

If you have not yet read Part 1: The Looming Energy Shock available free to all readers, please click here to read it first.

There are two words that are related but important to understand the distinction between. One is depletion, which refers to the amount of oil that is removed from a reservoir. The other is decline, which refers to the amount of oil flowing from a given well or field.

Depletion is a relatively straightforward process. If there are 100 units of removable oil in a field and you pump out 3 of them, the field has depleted by 3%.

But you might be able to hold the rate of pumping constant for a long time by injecting water or performing other stunts to force more oil out of a given well. If in our example we kept removing those same 3 units year after year, our decline rate would be zero. But the depletion rate would be increasing, because 3/100 = 3% but 3/97 = 3.1%. And after ten years the rate would be 3/70 = 4.3%.

That is, all efforts to keep oil flowing out of the wells at a maximum rate results in increasing rates of depletion. But we should also point out here that fighting decline rates is an expensive proposition. And that funding, too, has dried up of late.

The bottom line is that depletion is what really matters. Because once the oil gone, baby, it’s gone. All of the MSM headlines will keep you focused firmly on rates of extraction but only rarely on the rates of depletion.

So where is the world in the story of depletion? This is where our various sphincters should be involuntarily tightening. Rates of depletion are increasing, and they are substantial as seen here in... » Read more

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Off The Cuff: No More Financial Crises "In Our Lifetime"

Did Janet Yellen really just say that???
Friday, June 30, 2017, 2:04 PM

In this week's Off The Cuff podcast, Chris discusses:

  • Market Jitters
    • What will happen if the central banks turn off the money?
  • No More Financial Crises "In Our Lifetime"
    • Did Janet Yellen really just say that???
  • Our States Are Falling Into Bankruptcy...
    • Illinois, Connecticut, Maine & more
  • While The Banks Get Even Fatter
    • Income from excess reserves to rise to $50 Trillion by 2019

This week, Chris takes a moment to share his thoughts in depth on where we are in the global debt saga. The overhang is getting worse, growth is not riding to the rescue as hoped, and the central banks are running out of both smoke and mirrors to keep the game continuing. Should the $200 billion monthly bonanza of central bank liquidity start decreasing -- as is now being increasingly discussed -- expect markets to go south quickly.

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.
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How To Register For The 'Dangerous Markets' Webinar

FREE to PP.com's premium subscribers
Thursday, June 29, 2017, 1:36 PM

As a valued enrolled member of PeakProsperity.com, we're pleased to be able to make our upcoming webinar Dangerous Markets, featuring expert financial analysts Grant Williams and Lance Roberts, available to you for free.

Grant and Lance will share their latest intelligence and forecasts on today's unstable and grossly-overvalued financial markets, and given the interactive nature of our webinar platform, will take ample time to answer questions from the audience.

The webinar takes place on Wednesday, September 13 at noon EST/9am PST. It will last approximately an hour and a half.

To register for the event, just click the blue button below and follow the simple instructions... » Read more

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Pre-ALERT: Trump Risks War With Russia

The Syria powderkeg threatens to explode
Tuesday, June 27, 2017, 6:44 PM

Trump has now backed his administration into a corner.  If there’s another suspected poison gas attack in Syria, he’s promised to escalate the situation by beginning bombings.

It appears that what I feared might happen under a Clinton presidency (and I still think probably would have, anyways) is now happening under the Trump administration.

Let me be perfectly clear: bombing Syria risks a direct confrontation with Russia.  If that happens, all bets are off. Anything could happen next, up to and including a nuclear exchange.  » Read more

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The Value Drivers Of Cryptocurrency

These factors will determine which coin(s) will win out
Friday, June 23, 2017, 9:27 PM

Executive Summary

  • The critical value of scarcity
  • Understanding the utility of the blockchain
  • Will (can?) governments ban cryptocurrencies?
  • A coming geometric explosion in the price of cryptocurrency?

If you have not yet read Part 1: Understanding The Cryptocurrency Boom available free to all readers, please click here to read it first.

In Part 1, we surveyed the exciting but confusing speculative boom phase of cryptocurrencies. Here in Part 2, we will contextualize this mad swirl by running it through two filters: scarcity and utility.

What’s Scarce? Scarcity Creates Value

Regardless of one’s economic ideology or system, scarcity creates value and abundance destroys value.  When we say supply and demand, we’re really talking about scarcity and abundance and the rise or fall of demand for the commodity, good or service.

In classical economic theory, scarcity is met with substitution: ground beef too expensive due to relative scarcity? Buy ground turkey instead.

But this model has weaknesses.  There aren’t always substitutes, or the substitutes are more expensive or problematic than what is now scarce. 

As a general rule, profits flow to any scarcity of goods and services with high utility value.  We value what’s scarce and useful, and place little value on what’s abundant and of limited utility.

Currency has three basic functions: a store of value (it will retain its purchasing power over time), means of exchange (we can use it to trade goods and services, pay debts, etc.) and as an accounting mechanism to track assets, debts, income, expenses and exchanges/trades.

We assume all currency has this function, but only currency that is easily divisible and easily tradable enables easy accounting.  If a notched stick is a unit of currency, and one stick buys a pig, what do I use for purchases smaller than a pig?

In today’s world, a currency must be.... » Read more

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Off The Cuff: The Approaching Minsky Moment

The world is unprepared for the reset heading our way
Wednesday, June 21, 2017, 9:00 PM

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

  • A Study In Failure Of The State
    • Chris shares his on-the-ground observations from So. America
  • It Can Happen Here
    • Mish shares his on-the-ground observations from Illinois
  • Virtually All The Macroeconomic Data Is Miserable
    • Yet the Fed & the markets are acting like everything's great
  • The Approaching Minsky Moment
    • It's a matter of if, not when

This week's Off The Cuff discussion is an interesting one. Both Chris and Mish have front-row seats to two failing governments -- Chris in Argentina, and Mish in Illinois. It feels to them like they are getting a preview of the economic pain soon to come to the rest of the world.

Both are *very* concerned that citizens and investors across the globe are being duped by the (lack of) signals and messages today's ""markets"" are providing. Looking at the steady drumbeat of bad & worsening macroeconomic data, as well as the immense gap between fundamentals and asset prices, Chris and Mish are as confident as they have ever been that a massive painful reset is nigh. But too many of our leaders, and too much of the public, remain complacent/ignorant (willfully or not) regarding this risk. 

Their conclusion? The world is woefully unprepared for the Minsky moment headed its way.

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. » Read more

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Everything You Need To Know About The Credit Impulse

And why it's signalling a coming recession, likely this year
Friday, June 16, 2017, 7:23 PM

Executive Summary

  • The case of the missing credit impulse
  • The credit impulse is the worst its been in recent history
  • How the situation is deteriorating fast
  • Why a credit impulse-driven recession is nigh

If you have not yet read Part 1: The Pin To Pop This Mother Of All Bubbles? available free to all readers, please click here to read it first.

The Case Of The Missing Credit Impulse

An enormous oversight of nearly every major economist is the role of debt in both fostering current growth but also stealing from future growth. 

It seems like such a simple concept, and it’s one I covered in great detail back in 2008 in the original Crash Course, but it remains a mysterious oversight of most here in 2017.  The concept is easy enough; if I borrow money to increase my spending here today, it probably makes sense to take note of that if you're an economist responsible for tracking spending.

My debt-funded spending today is my lack of spending in the future when I pay down the debt. 

Professor Steve Keen has this topic nailed beautifully. In it, he explains how even simply keeping a massive pile of previously accumulated debt at the same level as last year is a net negative on economic growth. A very simple and a very profound concept that still is not a part of conventional thinking.

Now here where things get interesting. And frightening. If we look at... » Read more

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Off The Cuff: What Today's Rate Hike Means

Another increase, plus a reduction of the balance sheet
Wednesday, June 14, 2017, 8:30 PM

In this week's Off The Cuff podcast, Chris and John Rubino discuss:

  • Unpacking Today's Rate Hike
    • What will the impact be?
  • When Is A Rate Hike Not A Rate Hike?
    • The Fed's hikes aren't really pulling liquidity out of the market
  • Every time The Fed Talks Gold Goes Down
    • Manipulation (for optics) is alive & well
  • Can The Fed Engineer A Soft Exit?
    • Hardly likely

Chris and John break down today's Fed announcement of a 0.25% rate hike, plus its presented schedule for starting to reduce it's $4.2 trillion balance sheet. 

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. » Read more