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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

Our Wile E. Coyote Federal Reserve

3 days ago

Whatever the Fed chooses to do, it’s already failed..
Wile E. Coyote has gotten a bad rap: in all fairness, his schemes are ingenious, if overly complicated, and it’s not his fault that the Acme detonator misfires or the Road Runner doesn’t respond as predicted. Every set-up to nail the Road Runner should work. That it fails and leaves him suspended over the cliff for a woefully brief second to intuit his impending doom really isn’t his fault.
Wile E. Coyote and the Federal Reserve share a lot of similarities. Just as Wile is always trying to catch the Road Runner, the Federal Reserve and other central banks have been trying for 10 years to trigger a self-sustaining economic expansion, i.e. an expansion based on the self-reinforcing dynamics of increasing

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The Internal War in the Deep State Claims Its High Profile Casualty: Jeffrey Epstein

14 days ago

The “traditionalist” Neocons are going to have to decide to fish or cut bait.
I’ve been writing about the fracturing Deep State for the past five years:
The conflict has now reached the hot-war stage where bodies are turning up, explained away by the usual laughable covers: “suicide,” “accident” and “heart attack.” That Jeffrey Epstein’s death in a secure cell is being labeled “suicide” tells us quite a lot about the desperation of the faction trying to protect the self-serving predators that have wormed their way into control of many Deep State nodes of power.
Here’s the basic structure of the Deep State conflict as I see it. For context: The Deep State exploded in size and power during World War II. At the war’s

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The Gulag of the Mind

18 days ago

Befuddled and blind, we wander toward the cliff without even seeing it, focusing on our little screens of entertainment and self-absorption.
There are no physical barriers in the Gulag of the Mind–we imprison ourselves, and love our servitude. Indeed, we fear the world outside our internalized gulag, because we’ve absorbed the narrative that the gulag is secure and permanent.
We’ve also absorbed the understanding that escape will be punished. Dissent will quickly be suppressed or vilified, and the dissenter socially and economically marginalized.
In a peculiarly human pathology, we now believe the exact opposite of reality:our abuser is our savior, we’re getting wealthier when in fact we’re getting poorer, the

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Nothing Is Guaranteed

20 days ago

There are no guarantees, no matter how monumental the hubris and confidence.
The American lifestyle and economy depend on a vast number of implicit guarantees— systemic forms of entitlement that we implicitly feel are our birthright.
Chief among these implicit entitlements is the Federal Reserve can always “save the day”: the Fed has the tools to escape either an inflationary spiral or a deflationary collapse.
But there are no guarantees this is actually true. In either an inflationary spiral or deflationary collapse of self-reinforcing defaults, the Fed’s “save” would destroy the economy, which is now so fragile that any increase in interest rates (to rescue us from an inflationary spiral) would destroy our

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Main Street Small Business on the Precipice

26 days ago

Small businesses on the precipice need only one small shove to go over the edge, and there won’t be replacements filling the fast-multiplying empty storefronts.
As a generality, the average employee (including financial pundits) has no real experience or understanding of what it takes to start and operate a small business in the U.S. Government employees in the agencies that oversee and enforce regulations on small businesses also generally lack any experience in the businesses they regulate.
A third generality is the endlessly promoted ethos of entrepreneurism cultivates the illusion that there is an essentially endless supply of entrepreneurs who are itching to start businesses and throw everything they have into

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Why Is What Was Once Affordable to Many Now Only Affordable to the Wealthy?

28 days ago

With these speculative and risk management skills accessible only to the wealthy, no wonder only the wealthy have gained purchasing power in the 21st century.
Let’s start with an excerpt from a recent personal account by the insightful energy/systems analyst Ugo Bardi, who is Italian but writes his blog Cassandra’s Legacy in English: Becoming Poor in Italy. The Effects of the Twilight of the Age of Oil.
“I am not poor. As a middle class, state employee in Italy, I am probably richer than some 90% of the people living on this planet. But wealth and poverty are mainly relative perceptions and the feeling I have is that I am becoming poorer every year, just like the majority of Italians, nowadays.
I know that the

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It’s Not Just the News That’s Fake–Everything’s Fake

July 26, 2019

That we fall for the fakes and cons is understandable, given that’s all we have left in the public sphere.
What do we mean when we say corporate media is fake? We mean it’s a carefully crafted con, a set of narratives, cherry-picked data and heavily massaged statistics (the unemployment rate, etc.) designed to instill the reader’s confidence in a narrative that serves the interests not of the citizenry but of a select few pillaging the citizenry.
Once upon a time in America, no adult could survive without a finely tuned BS detector. Herman Melville masterfully captured America’s culture of cons and con artists in his 1857 classic The Confidence-Man, which I discussed in The Con in Confidence (October 4, 2006).
An

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Our Ruling Elites Have No Idea How Much We Want to See Them All in Prison Jumpsuits

July 22, 2019

Even the most distracted, fragmented tribe of the peasantry eventually notices that they’re not in the top 1%, or the top 0.1%.
Let’s posit that America will confront a Great Crisis in the next decade. This is the presumption of The Fourth Turning, a 4-generational cycle of 80 years that correlates rather neatly with the Great Crises of the past: 1781 (Revolutionary War, constitutional crisis); 1861 (Civil War) and 1941 (World War II, global war).
What will be the next Great Crisis? Some anticipate another great-power war, others foresee another civil war, still others reckon a military coup is likely, and some view a collapse of the economy and U.S. dollar as inevitable.
While anything’s possible, I propose a novel

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“Alexa, How Do We Subvert Big Tech’s Orwellian Internet-of-Things Surveillance?”

July 12, 2019

Convenience is the sales pitch, but the real goal is control in service of maximizing profits and extending state power.
When every device in your life is connected to the Internet (the Internet of Things), your refrigerator will schedule an oil change for your car–or something like that–and it will be amazingly wunnerful. You’ll be able to lower the temperature of your home office while you’re stuck in a traffic jam, while your fridge orders another jar of pickles delivered to your door.
It’s all in service of convenience, the god all Americans are brainwashed to worship. Imagine the convenience of turning on the light while seated on your sofa! Mind-boggling convenience at your fingertips–and since you’re already

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Predatory “Green Capitalism” Is Monetizing the Air, and It’s Going to Cost You

July 10, 2019

You want to reduce CO2? Then trigger a global depression that reduces global consumption of everything by 50% and destroys 95% of the phantom wealth owned by the global elites trying to monetize the air.
I recently asked What’s Left to Monetize?, and longtime correspondent Mark G. provided the answer: the air we breathe, via carbon taxes and markets for trading carbon credits, i.e. financializing / monetizing Nature to benefit the few at the expense pf the many.
Here’s Mark’s commentary:
You asked, “What’s left to monetize? It appears the answer is ‘very little.’”
I respectfully disagree. The Biggest Enchilada of all is left. Air. Specifically carbon dioxide, CO2. We just have to figure how to get the yokels to agree

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When Everything from Bat Guano to Quatloos Is Soaring, Speculative Euphoria Has Reached an Extreme

July 8, 2019

The more extreme the speculative euphoria, the greater the risks of a reversal.
One sentence sums up the speculative euphoria gripping markets: January and June of this year are the only months in the last 150 which have seen all assets post a positive total return. (Zero Hedge)
When every asset from bat guano to quatloos is soaring, the current speculative frenzy has reached extremes. We all know the quasi-religious faith driving the euphoria: central banks will push all assets higher as they pursue extremes of “easing.”
In other words, asset valuations don’t need to make any sense; just buy now and you’ll be rewarded with guaranteed gains thanks to central banks. This strategy has worked exceedingly well for 10

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Vested Interests in Charge = Guaranteed Failure

July 6, 2019

It boils down to two very simple principles: accredit the student, not the institution and teach every student how to rigorously learn on their own.
Vested interests have every incentive to maintain the status quo: specifically, those who currently own the assets, income streams and power will continue to own the assets, income streams and power.
To accomplish this, vested interests must suppress, undermine or co-opt structural innovation, which threatens to obsolete the status quo. Innovation is bandied about rather freely now, generally as a marketing pitch, but real honest-to-goodness innovation is absolutely toxic to entrenched elites and vested interests, both of whom lose out when their gravy train is thrown

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What’s Left to Monetize?

July 5, 2019

What’s left to monetize? It appears the answer is “very little.”
Advertising has always monetized consumers’ time and attention, what we call engagement today. Newspapers and periodicals publish advertisements, radio/TV networks and stations air adverts, movie theaters run trailers/ads, billboards occupy our mental space while driving and websites and apps post adverts. The more media you consume, the more adverts you see/hear, and the more time you spend consuming media, the greater your exposure to advertising.
Monetizing our time and attention has a long history, as does the monetizing encroachment on what was once private time / attention. Time spent on the telephone escaped monetization until the advent of

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America’s Concealed Crisis: Fifty Years of Economic Decline, 1969 to 2019

July 2, 2019

If we consider the long term, it’s clear America’s economy and society have been declining for the average household for 50 years.
What if the “prosperity” of the past 50 years is mostly a statistical mirage for the bottom 80% of households? What if whatever real gains (adjusted for real-world loss of purchasing power) accrued only to the top of the wealth-power pyramid, those closest to financial and political power? What if the U.S. economy and society shifted from “everybody wins” to “winner takes all” or at best, :winner take most”?
These are not “what if”, they’re reality. The working class, which as I have recently noted, now comprises the entire working populace other than the upper-middle class Misplaced

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Following in Rome’s Footsteps: Moral Decay, Rising Inequality

July 1, 2019

Here is the moral decay of America’s ruling elites boiled down to a single word.
There are many reasons why Imperial Rome declined, but two primary causes that get relatively little attention are moral decay and soaring wealth inequality. The two are of course intimately connected: once the morals of the ruling Elites degrade, what’s mine is mine and what’s yours is mine, too.
I’ve previously covered two other key characteristics of an empire in terminal decline: complacency and intellectual sclerosis, what I have termed a failure of imagination.
Michael Grant described these causes of decline in his excellent account The Fall of the Roman Empire, a short book I have been recommending since 2009:
There was no room at

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Could a Cryptocurrency Become a Global Reserve Currency?

June 30, 2019

Will bitcoin appear on this chart of global reserve currencies in the future?
Could a non-state cryptocurrency like bitcoin become a global reserve currency? I first proposed the idea back in November 2013, long before bitcoin’s rise to $19,000, decline to $3,200, recent ascent to $13,000 and current retrace.
The idea is intriguing on a number of levels. In terms of retaining value though thick and thin, the ultimate reserve currency cannot be printed (and thus devalued) with abandon by a government. Gold and silver have served as the ultimate reserve currency, as precious metals can be traded for commodities and services, provide collateral for debt and serve as reliable stores of value.
While many observers believe

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No, Autos Are Not “Cheaper Now”

June 28, 2019

According to the BLS, inflation in the category of “New Vehicles” has been practically non-existent the past 21 years.
Longtime readers know I’ve long turned a skeptical gaze at official calculations of inflation, offering real-world analyses such as The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016) and Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43% from 2001 (May 31, 2018).
Official claims that grossly understate real-world inflation is a core feature of debt-serfdom and neofeudalism: we’re working harder and longer and getting less for our earnings every year, but this reality is obfuscated by official pronouncements that inflation is 2%–barely above zero.

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Local Government Is an Engine of Inflation

June 27, 2019

Insolvency isn’t restricted to private enterprise; governments go broke, too.
One reason the economy is so much more precarious than advertised is inflation has pushed households and small businesses to the edge–and one engine of that inflation is local government. This is not to dump on local government, which is facing essentially unlimited demands from the public for more services while mandated cost increases in government union employee wages and benefits ratchet higher.
Since personnel costs are 70+% of city and county budgets, those ever-increasing payroll, pension and benefits costs are the key driver of budgets expanding.
But local governments’ ability to increase revenues are also essentially

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The Human Cost of “Recovery”: We’re Burning Out

June 24, 2019

The asymmetries are piling up and we’re cracking under the weight.
Judging by the record-high stock market and the record-low unemployment rate, the “recovery” has reached new heights of prosperity. Academics and think-tankers viewing the global economy from 40,000 feet are brimming with policies to bring the remaining laggards into the booming economy.
You can imagine them rubbing their hands with glee as they quote statistics such as: the 53 metropolitan areas in the U.S. with populations of 1 million or more accounted for two-thirds of the GDP growth and three-quarters of the job growth. A staggering 93% of the population growth in the U.S. in the past decade occurred in these urban centers.
And this asymmetry is

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The Lessons of Rome: Our Neofeudal Oligarchy

June 23, 2019

Our society has a legal structure of self-rule and ownership of capital, but in reality it is a Neofeudal Oligarchy.
The Inheritance of Rome: Illuminating the Dark Ages 400-1000 is not an easy, breezy read; its length and detail are daunting.
The effort is well worth it, as the book helps us understand how the power structures of societies change over time in ways that may be largely invisible to those living through the changes.
The Inheritance of Rome focuses on the lasting influence of Rome’s centralized social and political structures even as centralized economic power and trade routes dissolved.
This legacy of centralized power and loyalty to a central authority manifested 324 years after the end of the Western

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The Fed’s Casino Is Giving Away Free Gambling Chips (But Only to the Super-Rich)

June 21, 2019

The rest of us eat our losses, either all at once or in bitter bites as we trudge through the financial wasteland left after bubbles burst.
The news that the Federal Reserve Casino is giving away free gambling chips triggered a frenzied rush that trampled the bears, including poor Yogi:

There’s just one catch to the giveaway: you have to be rich, and if you want more than a token free gambling chip, you need to be super-rich. Then you get a pile of free chips.
If you’re not rich–none for you, debt-serf! If you’re already super-rich, the Federal Reserve Casino has plenty of free gambling chips for you, which you are free to “invest” (heh) in just about any asset, since they’re all going higher: gold, silver, bitcoin,

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Dear Central Bankers: Prepare to be Swept Away in the Next Wave of Populism

June 20, 2019

The political moment when the “losers” connect their discontent and decline with central bankers is approaching.
The Ruling Elites’ Chattering Classes still haven’t absorbed the key lesson of the 2016 U.S. presidential election: the percentage of the populace that’s becoming wealthier and more financially secure in the bloated, corrupt, self-serving Imperial status quo is declining and the percentage of the populace that’s increasingly insecure and financially precarious is increasing, and candidates that mouth the usual platitudes in support of the bloated, corrupt, self-serving Imperial status quo lose to those who speak of the failing status quo as a travesty of a mockery of a sham, i.e. a “populist” speaking

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How Much of Your “Wealth” Is Hostage to Bubbles and Impossible Promises?

June 18, 2019

All asset “wealth” in credit-asset bubble dependent economies is contingent and ephemeral.
A funny thing happens to “wealth” in a bubble economy: it only remains “wealth” if the owner sells at the top of the bubble and invests the proceeds in an asset which isn’t losing purchasing power.
Transferring “wealth” to another asset bubble that is also deflating doesn’t preserve the “wealth” from evaporation.
All the ironclad promises made in bubble economies ultimately depend on credit-asset bubbles never popping–but sadly, all credit-asset bubbles pop. So all the promises–which are of course politically impossible to revoke–will be broken as all the credit-asset bubbles that created the “wealth” that was to be

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Misplaced Pride: Most of the “Middle Class” Is Actually Working Class

June 17, 2019

If we look at these charts, it looks like only the top 10%, or perhaps the top 20% at best, might qualify as “middle class” by the metrics described below.
The conventional definition of working class is based on income and education:the working class household earns between $30,000 and $69,000 annually, and the highest education credential in the household is a two-year community college degree or trade certification.
The definition of the middle class is also based on on income and education, but adds financial security as a metric: the middle class household earns $80,000 or more, holds 4-year college diplomas or graduate degrees, owns a home, has a 401K retirement account and so on.
(My own definition is much

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A Stock Market Crash Scenario

June 14, 2019

Herds get spooked and run. That’s the crash scenario in a nutshell.
We have all been trained by a decade of central bank saves to expect any stock market swoon will soon be reversed by central bank sweet talk and/or rate cuts. As a result of such ever-present central bank willingness to intervene in the stock market, participants have been trained to believe a stock market crash is no longer possible: should the market drop 10%, or heaven forbid, 20% (i.e. into Bear Territory), the Federal Reserve and the other global central banks will save the day with direct purchases (The Plunge Protection Team), happy talk of future easing or, some unconventional quantitative easing measure or a rate cut–whatever it takes, in

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What Would It Take to Spark a Rural/Small-Town Revival?

June 12, 2019

Recent research supports the idea that this under-the-radar migration is already under way.
The decline of rural regions and small towns is a global phenomenon, and the causes are many but boil down to two primary dynamics:
1. Cities and megalopolises (aggregations of cities, suburbs and exurbs) attract capital, infrastructure, markets and talent, and these are the engines of job creation. People move to cities to find jobs.
The San Francisco Bay Area megalopolis of roughly 8 million people in 9 counties and 101 cities offers an example of this dynamic. The region added over 400,000 new jobs since the 2008-09 Global Financial Crisis and over 1 million additional residents since the early 2000s.
In effect, the region

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Is the Tech Bubble Bursting?

June 7, 2019

There are two other trends that don’t attract quite the media attention that soaring profits do.
Is the decade-long tech bubble finally popping? Tech bulls are overlooking the fundamental reality that the drivers of Big tech’s phenomenal growth–financialization and expansion into mobile telephony– are both losing momentum.
A third dynamic–Big Tech monetizing privately owned assets such as vehicles and homes– has also reached saturation and is now facing regulatory barriers.
Let’s start with market saturation: of the 5.3 billion adults on earth over 15 years of age, 5 billion now have a mobile phone and 4 billion have a smartphone: The end of mobile (Benedict Evans). As for teens between 10 and 15, only the truly

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A Quiet Revolution Is Brewing

June 5, 2019

Politics as practiced in a bygone era of stability no longer offers any solutions to these profound disruptions.
I recently read a fascinating history of the social, political and economic context of the American Revolution: The Radicalism of the American Revolution by Gordon Wood.
What is particularly striking is the critical role played by rapid social changes in the mid-1700s. Conventional histories focus on the political context, but more important were the changes in family and social relations, and the social impact of the economy moving from quasi-feudal forms of patronage that were ultimately personal relationships to impersonal market forces.
It was these social changes that nurtured the revolutionary zeal

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Why Being a Politician Is No Longer Fun

May 31, 2019

As a society, we are ill-prepared for the end of “politics is the solution.”
It’s fun to be a politician when there’s plenty of tax revenues and borrowed money to distribute, and when the goodies get bipartisan support. An economy that’s expanding all household incomes more or less equally is fun, fun, fun for politicians because more household income generates more income tax revenues and more spending that generates other taxes.
Despite the usual ideological squabbles, the general mood is upbeat: the horse-trading is about the relative share of the spoils each constituency will receive. Nobody gets everything they want, but everybody gets a good chunk and after an appropriate period of whining, resentment and

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Lesson of the S-Curve: Doing More of What’s Failed Will Fail Spectacularly

May 29, 2019

That nothing is truly “free” will be another lesson of the S-Curve.
I often refer to the S-Curve because Nature so often tracks this curve of ignition, rapid expansion, stagnation and decline.
One lesson of the S-Curve is that the human bias to keep doing more of what worked so well in the past leads to doing more of what failed even as results turn negative.
The dynamic in play is diminishing returns: the yield on the policy that worked so splendidly at first diminishes with time.
Credit offers a cogent real-world example. When credit becomes available in a credit-starved economy, it generates a rapid, sustained expansion as credit-worthy borrowers borrow and spend on new productive capacity, consumer goods,

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