Charles Hugh Smith as a writer and financial commentator living in Hawaii. His blog, Of Two Minds.com, is ranked #7 in CNBC’s top alternative financial sites, and is republished on numerous popular sites such as Zero Hedge, Financial Sense, and David Stockman’s Contra Corner. Smith is frequently interviewed by alternative media personalities such as Max Keiser, and is a contributing writer on PeakProsperity.com.
I hope it’s not a great shock to discover all the incentives in our status quo are perverse: those who rig the financial system while creating zero real value, jobs, goods or services reap all the big profits; those who take near-zero responsibility for their own health are subsidized by those who take responsibility for...
As the generational war heats up, we should all remember the source of all the bubbles and all the policies that could only result in generational poverty: the Federal Reserve. Federal Reserve chair Janet Yellen recently treated the nation to an astonishing lecture on the solution to rising wealth inequality–according to Yellen, low-income households should...
What do we do when the bubble economy cannot be reflated? It is generally conceded that we are living in an era of Peak Everything: peak central bank omnipotence, peak powerless of the non-elites, peak wealth inequality, peak media-induced delusion, peak market-rigging, peak bogus official statistics, peak propaganda, peak bread and circuses, peak deception, peak distraction,...
If you want to understand why our economy is stagnating and wealth inequality is rising, look at the rise of rentier skims and the resulting decline in wealth creation. To understand why the real economy is stagnating, we have to understand the critical difference between rentier wealth and wealth creation. Rentier wealth is skimmed by...
Here is the quote that perfectly captures our era: “People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.” (John Kenneth Galbraith) The trick, of course, is to mask the unspoken second half of of that statement: everybody else gets destroyed along with the Elites when the system implodes....
Phantom wealth cannot possibly fund unprecedented retirement and healthcare promises. The narrative that Social Security, Medicare and pension funds invested in stocks and bonds can fund the retirement of 65 million people is a misleading fantasy. The sad reality is we can’t fund the enormous expense of retirement/healthcare for 20% of the populace out of our...
Those who see the current era as the New Normal also have one logical action: sell now at the top and wait for the smoke to clear in 2016. In “The Generational Short, Part One,” I addressed how generational changes in values could affect the stock market. That values change over time is common sense, and...
If Gen-Y cannot afford to buy Boomers’ houses at bubble-level prices, then what will keep housing prices at these elevated levels? Last month the Brookings Institution published a study by scholars Morley Winograd and Dr. Michael Hais on changing generational values: “How Millennials Could Upend Wall Street and Corporate America.” The gist of the report is that Gen-Y...