Author Archives: Charles Hugh Smith

Have We Reached Peak NFL?

OK, I get it: pro football is so popular because it’s one of the last refuges of modern life that hasn’t been ruined by politics. Oops, scratch that. But we shouldn’t pin the decline of pro football’s popularity (as measured by … Continue reading

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Could Central Banks Dump Gold in Favor of Bitcoin?

Exhibit One: here’s your typical central bank, creating trillions of units of currency every year, backed by nothing but trust in the authority of the government, created at the whim of a handful of people in a room and distributed … Continue reading

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Three Bubbles/Strikes and You’re Out

The conventional investment wisdom holds that central banks will never let markets decline. This is an interesting belief, given that two previous asset bubbles based on central bank “easy money” both imploded, impoverishing believers in central bank omnipotence. So perhaps we … Continue reading

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Marx, Robotics and the Collapse of Profits

Yesterday I discussed how robots only do work that’s profitable, as any enterprise buying, programming and maintaining robots to do unprofitable work will soon be out of business. What few observers seem to grasp is that automation goes through two distinct … Continue reading

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What Is Money? (Yes, We’re Talking About Bitcoin)

What is money? We all assume we know, because money is a commonplace feature of everyday life. Money is what we earn and exchange for goods and services. Everyone thinks the money they’re familiar with is the only possible system of … Continue reading

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A Radical Critique of Universal Basic Income

Readers have been asking me what I thought of Universal Basic Income (UBI) as the solution to the systemic problem of jobs being replaced by automation.To answer this question, I realized I had to start by taking a fresh look … Continue reading

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The Cost Basis of our Economy is Spiraling Out of Control

If we had to choose one “big picture” reason why the vast majority of households are losing ground, it would either be the stagnation of income or the spiraling out of control cost basis of our economy, that is, the essential foundational … Continue reading

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Stock Market 2018: The Tao vs. Central Banks

I will be the first to admit that invoking the woo-woo of the Tao as the reason to expect a reversal of the stock market in 2018 smacks of Bearish desperation. With everything coming up roses in much of the global … Continue reading

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Did Anyone Do Even a Minimal Check on the Sensationalist Bitcoin Electrical Consumption Story?

Let’s start with a primer on how to write a sensationalist story that can be passed off as “journalism:” 1. Locate credible-sounding data that can be de-contextualized, i.e. sensationalized. 2. Present the data as “fact” rather than data that requires … Continue reading

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My Crazy $17,000 Target for Bitcoin Is Looking Less Crazy

I think we can all agree that bitcoin (BTC) is “interesting.” One of the primary reason that bitcoin (and cryptocurrency in general) is interesting is that nobody knows what will happen going forward. Unknowns and big swings up and down are characteristics … Continue reading

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The Problem Isn’t Populism: the Problem Is the Status Quo Has Failed

The corporate/billionaires’ media would have us believe that the crisis we face is populism, a code word for every ugly manifestation of fascism known to humanity. By invoking populism as the cause of our distemper, the mainstream media is implicitly suggesting that the … Continue reading

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Addictions: Social Media & Mobile Phones Fall From Grace

For everyone who remembers the Early Days of social media and mobile phones, it’s been quite a ride from My Space and awkward texting on tiny screens to the current alarm over the addictive nature of social media and mobile telephony. The … Continue reading

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Beware the Marginal Buyer, Borrower and Renter

When times are good, the impact of the marginal buyer, borrower and renter on the market is often overlooked. By “marginal” I mean buyers, borrowers and renters who have to stretch their finances to the maximum to afford the purchase, loan … Continue reading

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Our National Madness

The nation has lost its common sense, its soul and its sanity. Can we summarize the source of this remarkably pervasive madness? Our efforts are now focused not on solving core problems but on covering up core problems, as if covering up … Continue reading

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Want Widespread Prosperity? Radically Lower Costs

It’s easy to go down the wormhole of complexity when it comes to figuring out why our economy is stagnating for the bottom 80% of households. But it’s actually not that complicated: the primary driver of stagnation, decline of small business … Continue reading

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The Demise of Dissent: Why the Web Is Becoming Homogenized

We’ve all heard that the problem with the web is fake news, i.e. unsubstantiated or erroneous content that’s designed to mislead or sow confusion. The problem isn’t just fake news–it’s the homogenization of the web, that is, the elimination or marginalization of independent … Continue reading

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The Superhero Complex: Are We Incapable of Saving Ourselves?

It’s been widely noted that the U.S. film industry ably functions as a pro-global hegemony propaganda machine: even when the plot features evil rogue elements at work in a global-hegemony agency (Pentagon, CIA, NSA, etc.), the competence of the agency is … Continue reading

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Is This Why Productivity Has Tanked and Wealth Inequality Has Soared?

One of the enduring mysteries in conventional economics (along with why wages for the bottom 95% have stagnated) is the recent decline in productivity gains (see chart). Since gains in productivity are the ultimate source of higher wages, these issues are … Continue reading

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Mideast Turmoil: Follow the Oil, Follow the Money

While there are numerous dynamics at work in the turmoil roiling Saudi Arabia and by extension, the Mideast, one way to cut to the chase is to follow the oil, follow the money. Correspondent B.D. recently posited a factor that has been … Continue reading

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Forget the Bogus Republican “Reform”: Here’s What Real Tax Reform Would Look Like

As has been widely noted, the Republicans’ proposed “tax reform” is not only just more BAU (business as usual, i.e. cut taxes for the wealthy), it’s also not real reform. At best, it’s just another iteration of D.C. policy tweaks packaged for PR … Continue reading

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The Fetid Swamp of Tax Reform

To understand the U.S. tax code and the endless charade of tax reform, we have to start with four distasteful realities: 1. Ours is not a representational democracy, it’s a political auction in which wealth casts the votes that count. Those seeking political … Continue reading

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Where are Europe’s Fault Lines?

Correspondent Mark G. and I have long discussed the potential relevancy of old boundaries, alliances and structures in Europe’s future alignments.Examples include the Holy Roman Empire and the Hanseatic League, among others. In the long view, Europe has cycled between periods of consolidation … Continue reading

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Our Culture of Rape

Stripped of pretense, ours is a culture of rape. Apologists for the system that spawned this culture of rape claim that this violence is the work of a few scattered sociopaths. The apologists are wrong: The system generates a culture of rape. … Continue reading

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How Will Bitcoin React in a Financial Crisis Like 2008?

Whenever I raise the topic of bitcoin and cryptocurrencies, I feel like an agnostic in the 30 Years War between Catholics and Protestants. There is precious little neutral ground in the crypto-is-a-bubble battle; one side is absolutely confident that bitcoin and the other … Continue reading

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The Big Reversal: Inflation and Higher Interest Rates Are Coming Our Way

According to the conventional economic forecast, interest rates will stay near-zero essentially forever due to slow growth. And since growth is slow, inflation will also remain neutral. This forecast is little more than an extension of the trends of the past … Continue reading

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Let’s Clear Up One Confusion About Bitcoin

One of the most common comments I hear from bitcoin skeptics goes something like this: Bitcoin isn’t real money until I can buy a cup of coffee with it. In other words, bitcoin fails the first of the two core tests … Continue reading

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What’s Driving Social Discord: Russian Social Media Meddling or Soaring Wealth/Power Inequality?

There are two competing explanatory narratives battling for mind-share in the U.S.: 1. The nation’s social discord is the direct result of Russian social media meddling– what I call the Boris and Natasha Narrative of evil Russian masterminds controlling a vast conspiracy of social … Continue reading

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Why Is Bitcoin a Big Deal?

Why is bitcoin considered such a big deal? Why has it grabbed so much mind-share, and why is it skyrocketing? And why is the cryptocurrency sector going bonkers? The short answer is that cryptocurrency is the first major innovation in money … Continue reading

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Japan Just Killed the “Bitcoin Will Be Banned” Meme

One of the most durable claims of cryptocurrency skeptics is that “governments will ban bitcoin once it threatens their fiat currency or their control.” Ben Bernanke recently gave voice to this claim as if it was received wisdom. Sorry, crypto-skeptics: Japan … Continue reading

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Observations on Wealth-Income Inequality (from Federal Reserve Reports)

To those of us nutty enough to pore over dozens of pages of data on wealth and income in the U.S., the Federal Reserve’s quarterly Z.1 reports and annual Survey of Consumer Finances (SCF) are treasure troves, as are I.R.S. … Continue reading

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Where To Invest When (Almost) Everything’s in a Bubble

Now that almost every asset class is in a bubble, the question of where to invest one’s capital has become particularly vexing. The ashes of wealth consumed by the 2008-09 Global Financial Meltdown are still warm, at least to those who … Continue reading

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Stagnation Nation: Middle Class Wealth Is Locked Up in Housing and Retirement Funds

One of my points in Why Governments Will Not Ban Bitcoin was to highlight how few families had the financial wherewithal to invest in bitcoin or an alternative hedge such as precious metals. The limitation on middle class wealth isn’t just the total … Continue reading

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How Much of our Discord Is the Result of the “Engagement” Advert Revenue Model of Social Media?

Few would deny that social discord is rising. The proposed causes range from wealth/income inequality to the rise of polarizing political ideologies and the Trump presidency. A few commentators are starting to question the role of social media in this dynamic, … Continue reading

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Why Governments Will Not Ban Bitcoin

To really understand an asset, we have to examine not just the asset itself but who owns it, and who can afford to own it. These attributes will illuminate thepolitical and financial power wielded by the owners of the asset class. And … Continue reading

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Which Rotten Fruit Falls First?

To those of us who understand the entire status quo is rotten and corrupt to its core, the confidence of each ideological camp that their side will emerge unscathed by investigation is a source of amusement. The fake-progressives (fake because these … Continue reading

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GDP Is Bogus: Here’s Why

The rot eating away at our society and economy is typically papered over with bogus statistics that “prove” everything’s getting better every day in every way. The prime “proof” of rising prosperity is the Gross Domestic Product (GDP), which never fails … Continue reading

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Fraud, Exploitation and Collusion: America’s Pharmaceutical Industry

America’s Pharmaceutical industry takes pride of place in this week’s theme ofThe Rot Within, as the industry has raised fraud, exploitation and collusion to systemic perfection. What other industry can routinely kill hundreds of thousands of Americans and suffer no … Continue reading

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The United States of Weinstein: Complicity, Greed and Corruption Is the Status Quo

The sordid story of Harvey Weinstein is being presented as an aberration. It is not an aberration; it is merely a high-profile example of how the status quo functions in the USA, a.k.a. The United States of Weinstein, in which complicity, … Continue reading

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The Fading Scent of the American Dream

It’s been 10 years since I devoted a week to the theme of The Rot Within(September 17, 2007). Back in 2007, I listed 16 systemic sources of rot in our society, politics and economy; none have been fixed. Instead, the gaping … Continue reading

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The Endgame of Financialization: Stealth Nationalization

As you no doubt know, central banks don’t actually print money and toss it out of helicopters; they create a digital liability and use this new currency to buy assets such as bonds and stocks. Central banks have found that they … Continue reading

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Are You Better Off Than You Were 17 Years Ago?

If we use gross domestic product (GDP) as a broad measure of prosperity, we are 160% better off than we were in 1980 and 35% better off than we were in 2000. Other common metrics such as per capita (per person) … Continue reading

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About Those “Hedonic Adjustments” to Inflation: Ignoring the Systemic Decline in Quality, Utility, Durability and Service

One of the more mysterious aspects of the official inflation rate is the hedonic quality adjustments that the Bureau of Labor Statistics makes to the components of the Consumer Price Index (CPI). The basic idea is that when innovations improve the utility … Continue reading

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Our Protected, Predatory Oligarchy: Dirty Secrets, Dirty Lies

The revelations coming to light about Hollywood Oligarch Harvey Weinstein perfectly capture the true nature of our status quo: a rotten-to-the-core, predatory, exploitive oligarchy of dirty secrets and dirty lies protected by an army of self-serving sycophants, servile toadies on … Continue reading

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The Consent of the Conned

My theme this week is The Great Unraveling, by which I mean the unraveling of our social-political-economic system of hierarchical, centralized power. Let’s start by looking at how the basis of governance has transmogrified from consent of the governed to consent of the conned. In … Continue reading

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Migration of the Tax Donkeys

A Great Migration of the Tax Donkeys is underway, still very much under the radar of the mainstream media and conventional economists. If you are confident no such migration of those who pay the bulk of the taxes could ever … Continue reading

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Be Careful What You Wish For: Inflation Is Much Higher Than Advertised

It’s not exactly a secret that real-world inflation is a lot higher than the official rates–the Consumer Price Index (CPI) and Personal Consumption Expenditures PCE). As many observers have pointed out, there are two primary flaws in the official measures of … Continue reading

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What Few Expect: Inflation Will Surge, Destabilizing the Status Quo

If there is any economic truism that is accepted by virtually everyone, it’s that inflation is low and will stay low into the foreseeable future. The reasons are numerous: technology is deflationary, globalization is deflationary, central banks will keep interest rates … Continue reading

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What If the Tax Donkeys Rebel?

Since federal income taxes are in the spotlight, let’s ask a question that rarely (if ever) makes it into the public discussion: what if the tax donkeys who pay most of the tax rebel? There are several likely reasons why this question … Continue reading

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Stagnation Is Not Just the New Normal–It’s Official Policy

Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms. In … Continue reading

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This Chart Defines the 21st Century Economy

One chart defines the 21st century economy and thus its socio-political system: the chart of soaring wealth/income inequality. This chart doesn’t show a modest widening in the gap between the super-wealthy (top 1/10th of 1%) and everyone else: there is … Continue reading

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