Monday , December 6 2021
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Charles Hugh Smith

Charles Hugh-Smith

At readers' request, I've prepared a biography. I am not confident this is the right length or has the desired information; the whole project veers uncomfortably close to PR. On the other hand, who wants to read a boring bio? I am reminded of the "Peanuts" comic character Lucy, who once issued this terse biographical summary: "A man was born, he lived, he died." All undoubtedly true, but somewhat lacking in narrative.

Articles by Charles Hugh-Smith

The Long Cycles Have All Turned: Look Out Below

5 days ago

But alas, humans do not possess god-like powers, they only possess hubris, and so all bubbles pop: the more extreme the bubble, the more devastating the pop.
Long cycles operate at such a glacial pace they’re easily dismissed as either figments of fevered imagination or this time it’s different.
But since Nature and human nature remain stubbornly grounded by the same old dynamics, cycles eventually turn and the world changes dramatically. Nobody thinks the cyclical turn is possible until it’s already well underway.
Multiple long cycles are turning in unison:
1. The cycle of interest rates: down for 40+ years (last turn, 1981), now up for an unknown but consequential period of time.
2. The cycle of inflation / deflation: the 40-year period of low real-world inflation and rip-roaring

Read More »

Why Inflation Is a Runaway Freight Train

7 days ago

The value of these
super-abundant follies will trend rapidly to zero once margin calls and other bits of reality drastically reduce demand.
Inflation, deflation, stagflation–they’ve all got proponents. But who’s going to be right?
The difficulty here is that supply and demand are dynamic and so there are always things going up in price that haven’t changed materially (and are therefore not worth the higher cost) and other things dropping in price even though they haven’t changed materially.
So proponents of inflation and deflation can always offer examples supporting their case.
The stagflationist camp is delighted to offer a compromise case: yes, there are both deflationary and inflationary dynamics, and what we have is the worst of both worlds: stagnant growth and declining

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We Don’t Talk About Collapse To Revel In It, We Talk About Collapse to Prevent It

10 days ago

If one possible result of the current system is collapse, realizing the system itself must be changed isn’t doom-and-gloom, it’s problem-solving.
Those of us who discuss collapse are generally dismissed as doom-and-gloomers, the equivalent of people who watch dash-cam videos of vehicle crashes all day, reveling in disaster. Why would we spend so much effort discussing collapse if we didn’t long for it?
Those dismissing us all as doom-and-gloomers hoping for collapse have it backward: yes, some long for collapse as a real-life disaster movie, but those discussing collapse in systems terms are trying to avoid it, not revel in it.
If the system is vulnerable beneath a surface stability, then the only way to avoid negative consequences is to understand those vulnerabilities / fragilities

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Two Things to be Thankful For

11 days ago

Now on to the good things to eat–yowzah!

Giving thanks for bits of beauty and good things to eat. Wishing you a multitude of both.
As you’ll see from this selection of recent photos, I find good things to eat beautiful. But let’s start with a fiery sort of beauty:

And a Pacific sort of beauty:
Now on to the good things to eat–yowzah!
First the sweetbread dough has to rise…
Don’t let the dessert cart on the Titanic go by….
Colors most amazing….
And whatever else happens, if we don’t have Paris, we’ll always have the shady spot behind the beach. (No fee, no crowds, just walk a few klicks over sun-baked fields of lava.)
Thank you, everyone who dropped a hard-earned coin in
my begging bowl this week–you bolster my hope and refuel my spirits.

If you found value in this

Read More »

When Risk and Opportunity Become Personal

12 days ago

The opportunity to lower our exposure to risk is always present in some fashion, but embracing this opportunity becomes critical when precarity and change-points rise like restless seas.

The Chinese characters that comprise the equivalent of "crisis" are famously–and incorrectly–

translated as "danger" and "opportunity."

This mis-translation has reached the peculiar prominence of being repeated often enough to be taken as accurate, but according to Wikipedia and other sources, the more accurate translation is "precarious" plus "change point." (Chinese speakers may be able to shed even more light on the characters’ shades of meaning.)
The American attachment to "crisis" equaling "danger" and "opportunity" is easy to understand: the American "can do" culture is fond of optimistic

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When Everything Is Artifice and PR, Collapse Beckons

14 days ago

The notion that consequence can be as easily managed as PR is the ultimate artifice and the ultimate delusion.

The consequences of the drip-drip-drip of moral decay is difficult to discern in day-to-day life. It’s easy to dismiss the ubiquity of artifice, PR, spin, corruption, racketeering, fraud, collusion and narrative manipulation (a.k.a. propaganda) as nothing more than human nature, but this dismissal of moral decay is nothing more than rationalizing the rot to protect insiders from the sobering reality that the entire system is unraveling and heading for its final reckoning: collapse.
We’ve become so accustomed to the excesses of marketing that we’ve lost the ability to recognize the difference between "science" that’s been carefully designed to reach a pre-planned conclusion

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I’m Looking for Ten Readers Willing to Pony Up $1 for the Crazy-Valuable Content Here

16 days ago

I only rattle the begging bowl once a calendar year, and this is it.

Beneath the Photoshopped complacency, the level of uncertainty about the future
is pegged to 11 (recall that 10 is the conventional max on the guitar amp volume knob).
It’s times like this when the crazy-valuable content on Of Two Minds becomes even more crazy-valuable.
Yes, many people reckon it’s simply crazy, but look how many times what was dismissed
as crazy by the mainstream turns out to be right.
For example,

What If All the Cheap Stuff Goes Away? (March 30, 2018).
I try to turn a pragmatic, independent eye on the world, avoiding conventional or ideological pathways, for example,

Virus Z: A Thought Experiment (July 1, 2021).
I can’t help being frugal (see photos below) in both the tangible world and the

Read More »

The Fed’s Moral Hazard Monster Is About to Lay Waste to “Wealth”

17 days ago

If the Fed set out to destroy the financial system, they’re very close to finishing the job.

If you set out to destroy markets and the financial system, your most important weapon is
moral hazard, the disconnection of risk and consequence. You disconnect risk from consequence by rewarding those making the riskiest bets and bailing out gamblers whose bets went bad.
You reward those making the riskiest bets by pushing markets higher regardless of any other factors. Nothing matters except your support of ever higher markets.
This implicit guarantee that any bet on markets lofting higher will be a winning gamble rewards those making the riskiest bets. The punters who played small with cash made a few bucks, but the punters who borrowed heavily and then leveraged those bets to the hilt

Read More »

Top 1% Gains More Wealth Than the Combined GDPs of Japan, Germany, UK, France, India and Italy, Bottom 50%–You Get Nothing

19 days ago

Given that political power in America is a pay-to-play auction in which the highest bidder wins, how this incomprehensibly lopsided ownership of wealth plays out is an open question.

Wealth inequality easily falls into an abstraction unless we contextualize it in meaningful ways. I’ve annotated two St. Louis Federal Reserve (FRED) charts–the net worth of America’s top 1% and the net worth of America’s bottom 50% of households, roughly 66 million households–to show their net worth and their share of all household net worth, and put this in the context of inflation and GDP (gross domestic product) of the U.S. and other nations.
These charts may look complicated but the idea is actually pretty simple: I’ve noted how each group (the top 1% and the bottom 50%) did at the top and bottom

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Paging Isaac Newton: Time to Buy the Top of This Bubble

21 days ago

Despite Newton’s tremendous intelligence and experience, he fell victim to the bubble along with the vast herd of credulous greedy punters.

One of the most famous examples of smart people being sucked into a bubble and losing a packet as a result is Isaac Newton’s forays in and out of the 1720 South Seas Bubble that is estimated to have sucked in between 80% and 90% of the entire pool of investors in England.
Some have claimed that Newton did not buy early in 1711, sell in April 1720 for a nice profit, then sink the majority of his substantial fortune in the bubble as it peaked in summer, and then suffering heavy losses as the bubble popped in September, but evidence supports this chain of events:

Isaac Newton and the perils of the financial South Sea (Physics Today).
The chart

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Look Out Below: Why a Rug-Pull Flash Crash Makes Perfect Sense

24 days ago

It makes perfect financial sense to crash the market and no sense to reward the retail options marks by pushing it higher.

An extraordinary opportunity to scoop up mega-millions in profits has arisen, and grabbing all this free money makes perfect financial sense. Now the question is: will those who have the means to grab the dough have the guts to do so?
Here’s the opportunity: retail punters have gone wild for call options, churning $2.6 trillion
in mostly short-term calls–bets on gains now, not later. This expansion of retail options exposure is unprecedented not just in its volume but in its concentration in short-term bets (options that expire in a few days) and in mega-cap tech companies that are commanding rich premiums for options.

Goldman Stunned By The Record $2.6

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The Contrarian Trade of the Decade: The Dollar Refuses to Die

26 days ago

Which is more valuable: Wall Street’s debt/asset bubbles or the global empire? You can’t have both, so choose wisely.

The consensus makes sense: the U.S. dollar is doomed because the Federal Reserve and the Treasury will conjure trillions of new dollars out of thin air to prop up the status quo entitlements, monopolies, cartels and debt/asset bubbles, and since little of this issuance actually increases productivity, all it will accomplish is the dilution / devaluation of the currency.
Put simply, the dollar will lose its purchasing power as the inevitable result of the need to print and borrow ever-increasing sums to pay interest on existing debts, fund Bread and Circuses to keep the masses placated and keep inflating the asset bubbles in stocks, housing, bat guano, etc. to

Read More »

The Contrarian Trade of the Decade: The Dollar Refuses to Die

26 days ago

Which is more valuable: Wall Street’s debt/asset bubbles or the global empire? You can’t have both, so choose wisely.

The consensus makes sense: the U.S. dollar is doomed because the Federal Reserve and the Treasury will conjure trillions of new dollars out of thin air to prop up the status quo entitlements, monopolies, cartels and debt/asset bubbles, and since little of this issuance actually increases productivity, all it will accomplish is the dilution / devaluation of the currency.
Put simply, the dollar will lose its purchasing power as the inevitable result of the need to print and borrow ever-increasing sums to pay interest on existing debts, fund Bread and Circuses to keep the masses placated and keep inflating the asset bubbles in stocks, housing, bat guano, etc. to

Read More »

Eight Reasons Scarcities Will Increase Rather Than Evaporate

28 days ago

Who knew it would be so easy? All we have to do is collect urine and we’ll be flying our electric air taxi tomorrow!

While the private-jet crowd is busy selling a future of 1 billion electric vehicles,
1 billion windmills, 1 billion solar arrays, hundreds of thousands of electric aircraft, thousands of new nuclear power plants and trillions
more in "wealth" accumulating in their bloated ledgers, reality is intruding on their technocratic fantasies.
The primary assumption of the private-jet crowd is that the developed world will continue to have a free pass to strip developing-world nations of their mineral wealth at the low, low cost of a bribe to the current kleptocrats in power and low, low wages paid to local workers. The profits will naturally flow to the private-jet crowd–it’s

Read More »

Eight Reasons Scarcities Will Increase Rather Than Evaporate

28 days ago

Who knew it would be so easy? All we have to do is collect urine and we’ll be flying our electric air taxi tomorrow!

While the private-jet crowd is busy selling a future of 1 billion electric vehicles,
1 billion windmills, 1 billion solar arrays, hundreds of thousands of electric aircraft, thousands of new nuclear power plants and trillions
more in "wealth" accumulating in their bloated ledgers, reality is intruding on their technocratic fantasies.
The primary assumption of the private-jet crowd is that the developed world will continue to have a free pass to strip developing-world nations of their mineral wealth at the low, low cost of a bribe to the current kleptocrats in power and low, low wages paid to local workers. The profits will naturally flow to the private-jet crowd–it’s

Read More »

One Solution to Soaring Food Prices: Start Your 2022 Garden Now

November 6, 2021

There is a great deal of joy and satisfaction in gardening; benefits include saving money, eating healthier, sharing the bounty with others and reducing the derealization / derangement of modern life.

There are few reasons to expect food prices to drop and many reasons to expect even higher prices ahead.
Headlines like this are now standard:
Global Food Prices Hit Fresh Decade High In October, and there is little
evidence that the drivers of higher food prices–rising fertilizer costs, supply chain disruptions, poor harvests, California’s water woes, to name a few–will suddenly reverse. Rather, as I have often noted, the world’s run of extraordinarily good luck on weather and harvests may have ended.
One solution–a garden–is within reach of many of us, and with a bit of creative

Read More »

One Solution to Soaring Food Prices: Start Your 2022 Garden Now

November 6, 2021

There is a great deal of joy and satisfaction in gardening; benefits include saving money, eating healthier, sharing the bounty with others and reducing the derealization / derangement of modern life.

There are few reasons to expect food prices to drop and many reasons to expect even higher prices ahead.
Headlines like this are now standard:
Global Food Prices Hit Fresh Decade High In October, and there is little
evidence that the drivers of higher food prices–rising fertilizer costs, supply chain disruptions, poor harvests, California’s water woes, to name a few–will suddenly reverse. Rather, as I have often noted, the world’s run of extraordinarily good luck on weather and harvests may have ended.
One solution–a garden–is within reach of many of us, and with a bit of creative

Read More »

Whistleblowers Torpedo Facebook and Pfizer: Who’s Next?

November 4, 2021

If America’s total dependence on corporate profits and stock market/housing bubbles is
just fine because the bubbles just keep inflating, there’s nothing left but rot.

It’s becoming a routine story: a whistleblower emerges with copious documentation, revealing
the ethical / managerial rot at the very top of Corporate America icons. Recently it was
Facebook that was revealed as devoting far more resources to masking corporate guile than to
actually improving longstanding ethical and quality issues.
Now it’s Pfizer’s fast and loose
treatment of supposedly rigorous protocols that’s been heavily documented. The prestigious
British Medical Journal (BMJ) stated that the whistleblower provided "The BMJ with dozens of internal company documents, photos, audio recordings, and emails."

BMJ

Read More »

Whistleblowers Torpedo Facebook and Pfizer: Who’s Next?

November 4, 2021

If America’s total dependence on corporate profits and stock market/housing bubbles is
just fine because the bubbles just keep inflating, there’s nothing left but rot.

It’s becoming a routine story: a whistleblower emerges with copious documentation, revealing
the ethical / managerial rot at the very top of Corporate America icons. Recently it was
Facebook that was revealed as devoting far more resources to masking corporate guile than to
actually improving longstanding ethical and quality issues.
Now it’s Pfizer’s fast and loose
treatment of supposedly rigorous protocols that’s been heavily documented. The prestigious
British Medical Journal (BMJ) stated that the whistleblower provided "The BMJ with dozens of internal company documents, photos, audio recordings, and emails."

BMJ

Read More »

Revenge of the Real World

November 2, 2021

The status quo response would be amusing if the consequences weren’t so dire.

Rather than stare at empty shelves, you have two options for distraction: you can don a
virtual-reality headset and cavort with dolphins in the metaverse, or you can trade various
forms of phantom wealth that always go up (happy happy!) because the Fed.
Neither distraction actually solves any real-world problems, a reality we can call the
Revenge of the Real World We’ve entered a peculiar phase in American history in
which illusions of wealth and control are the favored distractions from the unraveling of the real world economy and social order.
Printing trillions of currency units can’t restore the global supply chain or social cohesion,
Rather, jacking phantom wealth to the moon is only accelerating the

Read More »

Revenge of the Real World

November 2, 2021

The status quo response would be amusing if the consequences weren’t so dire.

Rather than stare at empty shelves, you have two options for distraction: you can don a
virtual-reality headset and cavort with dolphins in the metaverse, or you can trade various
forms of phantom wealth that always go up (happy happy!) because the Fed.
Neither distraction actually solves any real-world problems, a reality we can call the
Revenge of the Real World We’ve entered a peculiar phase in American history in
which illusions of wealth and control are the favored distractions from the unraveling of the real world economy and social order.
Printing trillions of currency units can’t restore the global supply chain or social cohesion,
Rather, jacking phantom wealth to the moon is only accelerating the

Read More »

Will China Pop the Global Everything Bubble? Yes

October 31, 2021

The line of dominoes that is already toppling extends around the entire global economy and financial system. Plan accordingly.

That China faces structural problems is well-recognized. The list of articles in the August issue of Foreign Affairs dedicated to China reflects this:

Xi’s Gamble: the Race to Consolidate Power and Stave Off Disaster
China’s Economic Reckoning: The Price of Failed Reforms
The Robber Barons of Beijing: Can China Survive its Gilded Age?
Life of the Party: How Secure Is the CCP? (Chinese Communist Party)
These are thorny, difficult issues: a demographic cliff resulting from the one-child policy, soaring wealth-income inequality, pervasive corruption, public health issues (diabesity, etc.), environmental damage and a slowing economy.
What the conventional

Read More »

Will China Pop the Global Everything Bubble? Yes

October 31, 2021

The line of dominoes that is already toppling extends around the entire global economy and financial system. Plan accordingly.

That China faces structural problems is well-recognized. The list of articles in the August issue of Foreign Affairs dedicated to China reflects this:

Xi’s Gamble: the Race to Consolidate Power and Stave Off Disaster
China’s Economic Reckoning: The Price of Failed Reforms
The Robber Barons of Beijing: Can China Survive its Gilded Age?
Life of the Party: How Secure Is the CCP? (Chinese Communist Party)
These are thorny, difficult issues: a demographic cliff resulting from the one-child policy, soaring wealth-income inequality, pervasive corruption, public health issues (diabesity, etc.), environmental damage and a slowing economy.
What the conventional

Read More »

Santa’s Revenge: Everyone Front-Running My Rally, You Get Nothing

October 29, 2021

Santa is generally a jolly fellow, but that doesn’t mean he doesn’t take pleasure in
meting out well-deserved punishment to the greedy.

Nothing is more predictable than a stock market rally starting in early November and running into
mid-January–Santa’s rally. And since it’s so predictable, why not front-run the rally by
loading up on stocks in October?
Here’s the problem: Santa doesn’t take kindly to punters front-running his rally.
It’s like opening your presents in October, and that’s the equivalent of sucker-punching Santa.
Santa’s revenge will be served cold: no rally for you, front-runners. And nothing in your
stocking or under your tree, either.
Rather than give front-runners a lump of coal (that’s been bought up by China), Santa will deliver
trillions of dollars in losses,

Read More »

Santa’s Revenge: Everyone Front-Running My Rally, You Get Nothing

October 29, 2021

Santa is generally a jolly fellow, but that doesn’t mean he doesn’t take pleasure in
meting our well-deserved punishment to the greedy.

Nothing is more predictable than a stock market rally starting in early November and running into
mid-January–Santa’s rally. And since it’s so predictable, why not front-run the rally by
loading up on stocks in October?
Here’s the problem: Santa doesn’t take kindly to punters front-running his rally.
It’s like opening your presents in October, and that’s the equivalent of sucker-punching Santa.
Santa’s revenge will be served cold: no rally for you, front-runners. And nothing in your
stocking or under your tree, either.
Rather than give front-runners a lump of coal (that’s been bought up by China), Santa will deliver
trillions of dollars in losses,

Read More »

Skimpflation, Shrinkflation and the Rising Rebellion of Workers and Consumers

October 27, 2021

While Corporate America is focusing on preserving its precious profits, its customers and
workforce are rebelling by walking away.

We all see shrinkflation on a daily basis: the 16 ounce container is now 13 ounces, the breakfast cereal box is now so narrow it topples over, and so on.
More subtly, the quality of ingredients is also diminishing: sharp-eyed consumers note
that salt, sugar and "artificial flavors" are increasingly used to mask the decline of quality
as producers scrape the bottom of the barrel to eke out a profit.
A recent NPR article proposes another form of untracked inflation: Skimpflation,
the decline of services as prices march higher.

Meet Skimpflation: A Reason Inflation Is Worse Than The Government Says It Is (via C.A.).
The article notes that skimpflation

Read More »

Skimpflation, Shrinkflation and the Rising Rebellion of Workers and Consumers

October 27, 2021

While Corporate America is focusing on preserving its precious profits, its customers and
workforce are rebelling by walking away.

We all see shrinkflation on a daily basis: the 16 ounce container is now 13 ounces, the breakfast cereal box is now so narrow it topples over, and so on.
More subtly, the quality of ingredients is also diminishing: sharp-eyed consumers note
that salt, sugar and "artificial flavors" are increasingly used to mask the decline of quality
as producers scrape the bottom of the barrel to eke out a profit.
A recent NPR article proposes another form of untracked inflation: Skimpflation,
the decline of services as prices march higher.

Meet Skimpflation: A Reason Inflation Is Worse Than The Government Says It Is (via C.A.).
The article notes that skimpflation

Read More »

Doing 90 MPH on Deadman’s Curve: A Few Thoughts on Risk

October 25, 2021

When the wreck is recovered, witnesses will wonder why they took such heedless, foolish
risks.

You’re in the back seat wedged between tipsy revelers, the driver is drunk and heading into
Deadman’s Curve at 90 miles per hour. Nobody’s worried because the driver has never crashed.
Before they slid into euphoric incoherence, the other passengers answered your doubts
with statistics and pretty charts showing that the driver had never had an accident, so there was
nothing to worry about.
They also said that the driver’s Uncle Fed had rigged the vehicle with an anti-accident device,
so a crash was impossible. One passenger blurted out that a fellow named Goldy Sacks said the
driver could easily "melt up" and take Deadman’s Curve at 120 miles per hour without any trouble.
You see the

Read More »

Doing 90 MPH on Deadman’s Curve: A Few Thoughts on Risk

October 25, 2021

When the wreck is recovered, witnesses will wonder why they took such heedless, foolish
risks.

You’re in the back seat wedged between tipsy revelers, the driver is drunk and heading into
Deadman’s Curve at 90 miles per hour. Nobody’s worried because the driver has never crashed.
Before they slid into euphoric incoherence, the other passengers answered your doubts
with statistics and pretty charts showing that the driver had never had an accident, so there was
nothing to worry about.
They also said that the driver’s Uncle Fed had rigged the vehicle with an anti-accident device,
so a crash was impossible. One passenger blurted out that a fellow named Goldy Sacks said the
driver could easily "melt up" and take Deadman’s Curve at 120 miles per hour without any trouble.
You see the

Read More »

A Nation of Imposters

October 22, 2021

That’s how we’ve become a nation of imposters: our imposter stock market hits a new high and
the imposters cheer because it proves the scam is still working.

You’ve read the warnings about the proliferating imposter scams: scammers posing as
"officials", representatives of utilities or "a close friend of a family member" all exploit
the fast-draining reservoir of trust in America to extract financial information out of
the unwary marks.
I’m not sure what’s more remarkable: the depths of scammer perversity or the fact that some people
can still be conned by claims of authority or friendship. Most are seniors, of course,
as the elderly still retain an easy-to-scam trust in institutions and officialdom as a holdover
from an era before trust was unraveled by wholesale self-serving

Read More »