How Many Households Qualify as Middle Class?

By the standards of previous generations, the middle class has been stripmined of income, assets and purchasing power. What does it take to be middle class nowadays? Defining the middle class is a parlor game, with most of the punditry referring to income brackets as the defining factor. People tend to […]

Here’s Why the Next Recession Will Spiral Into a Depression

Here’s the difference between a recession and a depression: you can’t get blood from a stone, or make an insolvent entity solvent with more debt. There are two basic differences between a recession and a depression: 1. Duration: a recession typically lasts between 6 and 18 months, while a depression […]

The Distortions of Doom Part 2: The Fatal Flaws of Reserve Currencies

The way forward is to replace the entire system of reserve currencies with a transparent free-for-all of all kinds of currencies. Over the years, I’ve endeavored to illuminate the arcane dynamics of global currencies by discussing Triffin’s Paradox, which explains the conflicting dual roles of national currencies that also act as global […]

The Global Distortions of Doom Part 1: Hyper-Indebted Zombie Corporations

The defaults and currency crises in the periphery will then move into the core. It’s funny how unintended consequences so rarely turn out to be good. The intended consequences of central banks’ unprecedented tsunami of stimulus (quantitative easing, super-low interest rates and easy credit / abundant liquidity) over the past decade were: 1. […]

The Dynamics of Decadence

In the present era of decadence, Universal Basic Income (UBI) is the modern equivalent of Bread and Circuses. The dynamics of decadence are easy to understand: as affluence becomes the norm that is widely assumed to be permanent, shared purpose and sacrifice for the common good is replaced by self-absorbed decadence and […]

Pensions Now Depend on Bubbles Never Popping (But All Bubbles Pop)

We’re living in a fantasy, folks. Bubbles pop, period. The nice thing about the “wealth” generated by bubbles is it’s so easy: no need to earn wealth the hard way, by scrimping and saving capital and investing it wisely. Just sit back and let central bank stimulus push assets higher. The […]

The Labor Shortage Is Real

Few conventional-media commentators are willing or able to discuss these factors in the labor shortage / declining participation trends. Is there a labor shortage in the U.S.? Employers are shouting “yes.” Economists keep looking for wage increases as evidence of a labor shortage, and since wage increases are still relatively modest, […]

How Do We Change Our Lives in a System That’s Broken?

Rather than fight a system designed to thwart us, we need a model for our own lives that bypasses the perverse tides and obsoletes the impediments in our path. Everyone wants to change their lives for the better (or preserve what’s positive), and this is relatively straightforward in a healthy system […]

Fixing Infrastructure Isn’t as Simple as Spending Another Trillion Dollars

It isn’t easy to add new subway lines or new highways, and so “solutions” don’t really exist. If there’s one thing Americans can still agree on, it’s that America needs to spend more on infrastructure which is visibly falling apart in many places. This capital investment creates jobs and satisfies everyone’s ideological requirements: […]

Droit du Seigneur and the Neofeudal Privileges of Class in America

Want to understand the full scope of neofeudalism in America? Follow the money and the power and privilege it buys. The repugnant reality of class privilege in America is captured by the phrase date rape: the violence of forced, non-consensual sex is abhorrent rape when committed by commoner criminals, but implicitly […]

The Four Disastrous Presidential Policies That Are Destroying the Nation

The nation is failing as a direct consequence of these four catastrophic policies. It’s admittedly a tough task to select the four most disastrous presidential policies of the past 60 years, given the great multitude to choose from. Here are my top choices and the reasons why I selected these from […]

On Turning 60

“My biggest fear is a health crisis that will degrade my life, or that of a member of my family.” In response to my recent post on the brevity of life and the difficulty in making changes, I received an insightful response from long-time correspondent, Kevin M. who writes the Out […]

When Does This Travesty of a Mockery of a Sham Finally End?

Credit bubbles are not engines of sustainable employment, they are only engines of malinvestment and wealth destruction on a grand scale. We all know the Status Quo’s response to the global financial meltdown of 2008 has been a travesty of a mockery of a sham–smoke and mirrors, flimsy facades of […]

Digging into Wealth and Income Inequality

That changes our perspective on the wonderfulness of ever-expanding household wealth. The assets of U.S. households recently topped $100 trillion, yet another sign that everything is going swimmingly in the U.S. economy. Let’s take a look at the Federal Reserve’s Household Balance Sheet, which lists the assets and liabilities of all U.S. […]

We’re All Speculators Now

When the herd thunders off the cliff, most participants are trapped in the stampede.. One of the most perverse consequences of the central banks “saving the world” (i.e. saving banks and the super-wealthy) is the destruction of low-risk investments: we’re all speculators now, whether we know it or acknowledge it. The […]

Massive Deficit Spending Greenlights Waste, Fraud, Profiteering and Dysfunction

America’s problem isn’t a lack of deficit spending/consumption. America’s problems are profoundly structural. The nice thing about free to me money from any source is the recipients don’t have to change anything. Free money is the ultimate free-pass from consequence and adaptation: instead of having to make difficult trade-offs or suffer the consequences […]

The Next Financial Crisis Is Right on Schedule (2019)

Neither small business nor the bottom 90% of households can afford this “best economy ever.” After 10 years of unprecedented goosing, some of the real economy is finally overheating: costs are heating up, unemployment is at historic lows, small business optimism is high, and so on–all classic indicators that the top […]

How Things Fall Apart: Extremes Aren’t Stable

A funny thing happens on the way to stabilizing things by doing more of what’s failed: the system becomes even more unstable, brittle and fragile. A peculiar faith in pushing extremes to new heights has taken hold in official circles over the past decade: when past extremes push the system to the […]

The Brevity of Life and Making Changes Before It’s Too Late

We sense it’s now or never, and this can manifest as a mid-life/mid-career crisis. At a reader’s request, I’m excerpting an essay from last week’s Musings Report: My friend GFB recently sent me a quote from Paul Bowles novel “The Sheltering Sky” (1949). If you are under the age of 30, […]

After 10 Years of “Recovery,” What Are Central Banks So Afraid Of?

If the world’s economies still need central bank life support to survive, they aren’t healthy–they’re barely clinging to life. The “recovery”/Bull Market is in its 10th year, and yet central banks are still tiptoeing around as if the tiniest misstep will cause the whole shebang to shatter: what are they […]