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The Keys To Prosperity

How to work the macro trends to your favor
Friday, September 9, 2016, 7:26 PM

Executive Summary

  • What are the big systemic trends that will impact our personal prosperity?
  • Realizing why the future will have less of everything
  • Strategies for thriving with less
  • The importance of owning & managing capital

If you have not yet read Part 1: If Everything's Doing So Great, How Come I’m Not? available free to all readers, please click here to read it first.

In Part 1, we asked 30 questions as a means of assessing whether individuals and households are doing better or worse than they were 10 years ago (2007) and 16 years ago (in 2000)—before the dot-com meltdown recession and the Global Financial Meltdown recession of 2008-09.

Identifying Systemic Trends

These questions attempt to sort out generalized decay that affects everyone—declines in purchasing power, quality of goods and services, etc.—from declines in individual/household health, well-being and financial security.

The questions also attempt to sharpen our awareness of systemic trends: are our prospects brightening or dimming? Are government services improving or declining as our taxes increase?

General trends manifest in different ways in each community/region.  For example, the city and county of San Francisco is booming, with strong growth of population (866,000 residents), jobs, rents, housing valuations and tax revenues. Yet even as the city and county of San Francisco’s annual budget swells to an incomprehensible $9.6 billion—larger than the budgets of many U.S. state governments, and four times the annual budget of the city and county of Honolulu, with 998,000 residents—the homeless problem in San Francisco becomes ever more intractable, intrusive and disruptive, despite tens of millions of dollars devoted specifically to improving the options available to the homeless.

This is an example of larger trends that manifest in one way or another in the majority of communities: increasing costs and complexity, diminishing returns on money spent, frustration by taxpayers receiving unsatisfactory services as tax revenues increase, and problems that continue to worsen regardless of how much money is thrown at them.

There are many causal factors driving these trends of decay, rising costs and diminishing returns: a state-cartel system of regulatory capture that enforces cartels and limits competition; rising complexity of regulations that result in reduced productivity and higher costs; a “vetocracy” (Francis Fukuyama’s term) in which special interests can veto any measure with their political clout that impinges on their wealth and power; central bank monetary policies that enrich the wealthy and strip interest income from everyone else; and government manipulation of statistics and markets to manage perceptions—in effect, ignore your lying eyes and believe us: everything’s going great!

Then there's the shadowy monster in the room... » Read more

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Off The Cuff: Paradox!

There's a crazy mismatch between reality & what we're told
Friday, September 9, 2016, 2:10 PM

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

  • We Increasingly Live In A Paradox World
    • What we're told increasingly doesn't match what we see
  • The Politicized Fed
    • The evidence is clear the Fed definitely follows a political agenda
  • The War On Cash Intensifies
    • Ken Rogoff's "less-cash" proposal
  • The Peril Of Underfunded Pensions
    • A time bomb ticking loudly...

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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This Is How Sentiment Shifts And Markets Crash

Once faith in the Fed is lost, things will get ugly fast
Friday, September 2, 2016, 3:47 PM

Executive Summary

  • The Facebook legions rip the Fed to pieces
  • The WSJ joins in the attack??
  • The 'smoking gun' showing how the Fed's only priority is to serve its banking masters
  • Why a revolt against the Fed is necessary, inevitable and just

If you have not yet read Part 1: Sorry Losers!, available free to all readers, please click here to read it first.

Facebook Fed Farce

The Fed, surprisingly, has a Facebook page.  While it’s not surprising that they have one because every organization is aware that they need a ‘social media presence’ it is surprising that the Fed seems to be completely unaware that Facebook is a social networking site, not a policy regurgitation platform.

Well, the Fed put up its policy aims and the responses from the public were consistently brutal or delightfully snarky. 

But I did not find a single one, out of hundreds, that was complimentary of the Fed or in any way demonstrating that the Fed has any sort of credibility left with the public.

These are priceless: » Read more

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Off The Cuff: Should The Central Banks Just Buy Everything?

That's what they're on their way to doing
Thursday, September 1, 2016, 6:19 PM

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

  • Should The Central Banks Just Buy Everything?
    • Is that the plan? What would happen?
  • Turning Japanese
    • Japan is leading the way by monetizing all its assets
  • Putting The Fed On Trial
    • Chris fantasizes about holding up the mirror of truth to power
  • The Next Interest Rate Move
    • Up or down?

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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The Pension Time Bomb

Devastating shortfalls are manifesting everywhere
Monday, August 29, 2016, 6:39 PM

Among the many losers picked by the Fed (in favor of rewarding a very tiny and wealthy minority), perhaps the greatest victims are pensions.

Pensions have to make a couple of key assumptions.  One is how long you expect your cohort of pensioners to live. The second is the rate of return on the funds.  On both counts, pensions have been wrong, and wrong again.

People keep living longer and pension fund returns keep underperforming.  » Read more

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Off The Cuff: There Is No 'Market' Anymore, Only Manipulation

The big players push prices around at will
Saturday, August 27, 2016, 5:19 PM

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

  • There Is No 'Market' Anymore
    • Prices are fully manipulated these days
  • Missing Alpha
    • Since it's only liquidity that matters, portfolio managers are feeling the pressure
  • Malinvestment
    • What you get with too much cheap money
  • The Feds Facebook Fiasco
    • The public is waking up to the ills of central banking

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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Off The Cuff: The Limits Of Financial Gimmickry

When it comes to real world problems, it solves nothing
Tuesday, August 23, 2016, 12:49 PM

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

  • From Flowers To Floods
    • How climate variability is impacting all of us
  • Not All Crises Are Equal
    • Some have fixes, some don't
  • Resilience Is Key To National Security
    • Regenerative regimes will win out over extractive ones
  • Incentives Matter
    • Without the right incentives, failure is inevitable

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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Off The Cuff: The World's Banking System Is On The Precipice

It's as vulnerable (or more) as during 2008
Thursday, August 11, 2016, 6:02 PM

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

  • The World's Baking System Is On The Precipice
    • It's as vulnerable (or more) as during 2008
  • Stocks & Bonds Hit All-Time Highs
    • We're in a chimera market right now
  • Central Control Is Tightening
    • Dissent is being squashed wherever possible
  • Real Wages Are Declining
    • Good luck squashing that dissent when folks can't feed their families...

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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Off The Cuff: Yes, Central Banks Are Injecting $180 Billion Per Month

What will the repurcussions be? And how long can this last?
Friday, August 5, 2016, 2:28 PM

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

  • $180 Billion Per Month In Global Stimulus
    • The world is awash in free money
  • Is Helicopter Money For The Public Coming Soon?
    • Quite possibly
  • Rage Against The Status Quo Is Building
    • It explains Trump, Brexit, Le Pen, and the rise of the anti-establishment
  • Prepare For The Return Of Global Conflict
    • Fracture lines are widening all across the world

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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How To Beat Inflation

Protecting the purchasing power of your wealth
Friday, July 29, 2016, 2:31 PM

Executive Summary

  • Taking Advantage of Subsidies
  • The Importance of Adding New Income Streams
  • Income-Producing Assets
  • Hedges, Cost-Controls & Other Strategies

If you have not yet read Part 1: The Burrito Index: Consumer Prices Have Soared 160% Since 2001, available free to all readers, please click here to read it first.

In Part 1, we compared official rates of inflation with hard data from the real world, and found that it’s not just the cost of burritos that has soared over 100% while inflation has supposedly been trundling along at 1% or 2% per year. The real killer is the soaring cost of big-ticket essentials such as rent, higher education and healthcare.

So what can we do about it? There are only a few strategies that can make a real difference: either qualify for subsidies (i.e. lower household income), own assets and income streams that keep up with real-world inflation, or radically reduce the cost structure of big-ticket household expenses.

Qualify for Subsidies

Though it runs counter to our philosophy of self-reliance, we have to address incentives offered by the system we inhabit. One powerful set of incentives is entitlement subsidies for lower income households: rent subsidies (Section 8), healthcare subsidies (Medicaid and ACA/Obamacare), college tuition waivers, food subsidies (food stamps), free school lunches, and so on.

These programs were designed to aid households that cannot earn more income, but for households on the borderline between paying full freight (no subsidies) and receiving some subsidies, it makes sense to work less, earn less and qualify for substantial subsidies.

I am not recommending gaming the system, I am simply noting that subsidies exist and those who earn just above qualifying incomes are in effect punished for earning a bit too much.

In many cases, we assume subsidies are reserved for “poor people” and we don’t qualify. For entitlements such as food stamps (SNAP), this is generally the case. But other programs offer some subsidies to households with incomes that are substantial... » Read more