Charles Hugh Smith's Contributions

Counterfeit Money, Counterfeit Policy

What is the difference between printing money and counterfeiting? There is none. Counterfeiting is illegal because it is the false creation of value. The counterfeiter takes low-value paper and turns it into high-value money, which is fundamentally a claim on the real productive value of the economy that issues the currency and recognizes it as a proxy means of exchanging that productive value.

Between Various Rocks and Various Hard Places

Having stipulated that "Forecasting Is Not Humanity's Strength," I will not make any foolish forecasts that will assuredly be proven wrong, but it is undoubtedly true that the U.S. and Europe are both entering a "crunch time" politically and financially.

Searching for the Bottom in Home Prices

A substantial percentage of many households' net worth is comprised of the equity in their home. With the beating home prices have taken since 2007, existing and soon-to-be homeowners are keen to know: Are prices stabilizing? Will they begin to recover from here? Or is the "knife" still falling?

The Substitution of Debt for Productivity

What has kept the Status Quo from falling off the debt cliff over the past four years is the substitution of exploding Federal/public debt for no-longer-rising private debt. If Federal borrowing were to return to 2006 levels, the economy would immediately experience a severe contraction.

Dear U.S.A.: Your Accout Is Overdrawn

Dear United States of America: We regret to inform you that your withdrawals exceeded your deposits last year by $1,600,000,000,000 ($1.6 trillion), including your "supplemental appropriations" spending.

Why Bernanke has Failed, and Will Continue to Fail

Ben Bernanke's zero-interest rate policy (ZIRP) and command-economy efforts to maintain mispricing of risk, debt and assets are destroying capital and capitalism. No wonder his policies have failed so miserably.

Why “Tax the Rich” Won't Solve our Deficit/Spending Crisis

If we look at tax revenues and income in a practical way, we find "tax the rich" will not close the widening $1.5 trillion gap between Federal revenues and spending.

Risk Is Necessary for Adaptation, Innovation and Success

Ironically, perhaps, building a new sustainable future requires being fully exposed to what is considered "the source of our problems": risk, threat and failure.

Do We Get a Year-End Rally Or Not?

Santa Dukes It Out With Mr. VIX

Santa's willing, but he's going to have to get past Mr. VIX. The VIX volatility index is a remarkably accurate indicator of market highs and lows. You can see how well extremes in the VIX line up with highs and lows in the S&P 500 in the charts below. I've marked the "Highs/Sells" in red lines and the "Lows/Buys" in black lines.

Housing Prices Have Further to Fall

It’s no secret that housing and employment are correlated, and the causation is intuitive. If more people have jobs, then more people have incomes that support the purchase of a home. In the other direction, the more houses that are built to meet rising demand, the more jobs will be created in construction and real estate.

Ben Bernanke: The Saint of Economic Hubris

After four years of disastrously wrong policies, let's declare stubborn, hubris-soaked wrongheadedness a virtue and saint Ben Bernanke and his Federal Reserve mates. If we had to distill down the Fed Chairman and the Federal Reserve's policies since the wheels came off the Fed's "shadow banking" system of fraud, collusion, embezzlement and free-floating leverage, we'd have to start with a systems-analysis perspective.

Jobs-Market Correlation Doesn’t Look Good for 2012

The Federal Reserve would have you believe that Monday morning ramp-and-camp and rumor-mill rallies in the last five minutes of trading are signs of a healthy Bull market. Or you can consider the reality of these charts. Not unsurprisingly, employment is correlated to the stock market.

The Future of Jobs

What Skills Will Be In Demand In the Coming Economy?

An exploration into what jobs and skills will be in demand in the decelerating, re-localizing economy that excessive credit and peak oil will force upon us. That the American and global economies are being transformed by the forces of globalization, demographics, and over-indebtedness is self-evident.

Unleashing the Future

Advancing Prosperity Through Debt Forgiveness - Part 1

Given accelerating conditions and trends in Europe, the U.S. and Asia, debt will be renounced, forgiven or written down, and how that process unfolds is now of paramount importance. Will private entities who dined so gloriously on their profits now eat their losses?

The Future of Work

What Jobs Will Exist In The Post-"Cheap Energy" Era?

A growing number of workers are becoming increasingly concerned about the future viability of their jobs (if they have them) and, in many cases, that of their professions. Looking at a future increasingly defined by slower economic growth and higher energy costs, many are asking: "What is the future of work?"

Why Isn't Anyone Talking About Writing Off 3 Trillion Euros of Bad Debt?

The only solution to bad debt is to write it off--renounce it all. Why aren't those who took the risks for their own private gain being forced to absorb the losses?

The World Is Drowning in Debt, and Europe Laces On Concrete Boots

The world's major economies are drowning in debt--Europe, the U.S., Japan, China. We all know the U.S. has tried to save its drowning economy by bailing out the parasite which is dragging it to Davy Jones Locker--the banking/financial sector-- and by borrowing and squandering $6 trillion in new Federal debt and buying toxic debt with $2 trillion whisked into existance on the Federal Reserve's balance sheet.

Could the Euro Trigger A 2008-Like Crash? Si, Oui, Yes.

If we scrape away the ever-hopeful headlines predicting a new figurehead lackey or another vote will magically fix Greece, Italy, the euro, Europe's crumbling banks, etc., the global stock markets can be distilled down to one chart. And here it is: a see-saw with the U.S. dollar on one end and the euro and equities on the other.

Some Things You Should Know About China

I know it's tough to think about anything but the fast-melting ice cream cone that is Europe, but there are some things you should know about China. All the reassurances you've been reading about China's "soft landing" and its "they know what they're doing" central government are probably false.

Next In Line for Implosion: Pension Plans

I'm afraid it's time for an intervention. I don't enjoy being the bearer of difficult news, but now that Europe has stumbled drunkenly into the pool and been "rescued," it's once again tearfully blubbering that this time it's all going to change, and a new prime minister in each dysfunctional, insolvent EU nation is going to make the pain and the addiction all go away.

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