by This wholesale transfer of risk from elites to the workers is finally becoming consequential as wealth / income / security inequality is reaching extremes that are destabilizing society and the economy. One of the most consequential financial trends of the past 50 years has been ignored to the point of invisibility. I’m referring to the transfer of risk from the top tier to the middle and working classes. This transfer of risk has been broad-based, covering the entire economic spectrum: 1. Employment has shifted from secure (low risk of uneven / unpredictable incomes for workers) to insecure / precariat (high risk of uneven / unpredictable incomes). Gig workers are classified as contract workers so they receive no benefits. . 2. Healthcare has been shifted
Topics:
Charles Hugh Smith considers the following as important: 5) Global Macro, 5.) Charles Hugh Smith, Featured, newsletter
This could be interesting, too:
Eamonn Sheridan writes CHF traders note – Two Swiss National Bank speakers due Thursday, November 21
Charles Hugh Smith writes How Do We Fix the Collapse of Quality?
Marc Chandler writes Sterling and Gilts Pressed Lower by Firmer CPI
Michael Lebowitz writes Trump Tariffs Are Inflationary Claim The Experts
|
This wholesale transfer of risk from elites to the workers is finally becoming consequential as wealth / income / security inequality is reaching extremes that are destabilizing society and the economy. One of the most consequential financial trends of the past 50 years has been ignored to the point of invisibility. I’m referring to the transfer of risk from the top tier to the middle and working classes. This transfer of risk has been broad-based, covering the entire economic spectrum: 1. Employment has shifted from secure (low risk of uneven / unpredictable incomes for workers) to insecure / precariat (high risk of uneven / unpredictable incomes). Gig workers are classified as contract workers so they receive no benefits. |
 . |
| 2. Healthcare has been shifted to workers / government as corporations game employee hours to avoid paying healthcare; for those with coverage, monthly co-pays paid by workers are soaring as employers shift costs to employees. Healthcare plans have also shifted costs and risks to workers with high deductible plans, i.e. a simulacrum of healthcare insurance.
3. Private-sector pensions have shifted from defined-benefit pensions (costs and risks carried by employers) to 401K matching contributions (costs and risks carried by employees) 4. Federal Reserve policies have destroyed safe yields on savings and money-market accounts, forcing workers to take on the enormous risks of the rigged stock market casino (which is rigged to benefit high-frequency traders, front-running trading houses, and those with asymmetrically distributed information, i.e. insiders). 5. Tax burdens have shifted to the working poor (high Social Security/Medicare taxes), high-income workers (high income taxes), property owners (soaring property taxes) and small business while corporations and billionaires evade taxes with endless loopholes and subsidies. 6. Global corporations have shifted risk to small business via global environmental, regulatory, labor and currency arbitrage. Local governments fall all over themselves to give global corporations tax breaks and generous subsidies while heaping more junk fees and taxes on small business owned by ordinary citizens. |
 . |
| This wholesale transfer of risk from elites to the workers is finally becoming consequential as wealth / income / security inequality is reaching extremes that are destabilizing society and the economy. As Gordon Long and I explain in our new video, The World Just Got a Lot Riskier crony capitalism has transmogrified into predatory capitalism as government, finance and the corporatocracy have allied into a seamless (and seamlessly corrupt) elite class that has offloaded systemic risk onto the unprotected class. As I often note, risk cannot be extinguished, it can only be transferred. Transferring risk to those least able to bear the consequences is in effect transferring risk to the financial system itself, which is magnifying the risks of a systemic breakdown. The herd is slumbering, anesthetized by the narcotic of the Federal Reserve’s infinite moral hazard. Once risk can no longer be suppressed, the herd will awaken and quicken into a stampede in which every individual will thunder off the cliff to catastrophic losses absolutely confident that the Fed has my back. So sorry, but the Fed only protects banking cronies, predatory capitalists, billionaires, front-running financiers and global corporations. Gordon and I discuss these heightened risks in |
 . |
You Might Also Like
SNB Sight Deposits: Inflation Fear Decreasing, SNB Selling Euros
2021-08-04
Sight Deposits have fallen: The change is -0.2 bn. compared to last week, this means the SNB is selling euros and dollars.
Virus Z: A Thought Experiment
2021-07-04
Let’s run a thought experiment on a hypothetical virus we’ll call Virus Z, a run-of-the-mill respiratory variety not much different from other viruses which are 1) very small; 2) mutate rapidly and 3) infect human cells and modify the cellular machinery to produce more viral particles.
Post-Pandemic Metamorphosis: Never Going Back
2021-06-07
People caught on that the returns on the frenzied hamster wheel of “normal” have been diminishing for decades, but everyone was too busy to notice. The superficial “return to normal” narrative focuses solely on first order effects: now that people can dispense with masks and social distancing, they are resuming their pre-pandemic spending orgy with a vengeance, which augurs great profits for Corporate America and higher tax revenues.
Increasingly Chaotic Volatility Ahead–The New Normal Few Think Possible
2021-05-31
The standard debate about the future of the economy is: which will we get, high inflation or a deflationary collapse of defaults and asset bubbles popping? The debate goes round and round in widening circles of complexity as analysts delve into every nuance of the debate.
Systemic Risks Abound
2021-05-27
For the past 22 years, every time the stock market whimpered, wheezed or whined, the Federal Reserve rushed to soothe the spoiled crybaby. There are two consequential results of the Fed as savior: The Fed has perfected moral hazard. Organic (i.e. non-manipulated) market forces have been extinguished.
America’s Fatal Synergies
2021-04-19
America’s financial system and state are themselves the problems, yet neither system is capable of recognizing this or unwinding their fatal synergies. why do some systems/states emerge from crises stronger while similar
systems/states collapse?
Our “Wealth”: Cloud Castles in the Sky
2021-04-04
Buyers know there will always be a greater fool willing to pay more for an over-valued asset because the Fed has promised us it will always be the greater fool. I realize nobody wants to hear that most of their "wealth" is nothing more than wispy Cloud Castles in the Sky that will dissipate in the faintest zephyr, but there it is: that which was conjured out of thin air will return to thin air.
The UFO/Fed Connection
2021-04-02
Perhaps the aliens’ keen interest in Earth’s central bank magic and its potential for destruction results from a wager. You’ve probably noticed the recent uptick in UFO sightings and video recordings from aircraft of the extraordinary flight paths of these unidentified objects.
Tags: Featured,newsletter