Gresham’s Law and Bitcoin

Rather suddenly, the state issued fiat currency bolivar lost 99% of its purchasing power. Gresham’s law holds that “bad money drives out good money,” meaning that given a choice of currencies (broadly speaking, “money” that serves as a store of value and a means of exchange), people use depreciating “bad” to […]

Onward to Stock Market Nirvana… Or Not

Rising wedges tend to lead to declines, so ignore them. At long last, we have reached the Nirvana of consensus: the stock market is heading to new all-time highs. Even the perma-Bear camp seems to have accepted the inevitability of new all-time highs ahead: The FANG stocks are hitting new highs, […]

Here We Go Again: Our Double-Bubble Economy

The bubbles in assets are supported by the invisible bubble in greed, euphoria and credulity. Well, folks, here we go again: we have a double-bubble economy in housing and stocks, and a third difficult-to-chart bubble in greed, euphoria and credulity. Feast your eyes on Housing Bubble #2, a.k.a. the Echo Bubble: […]

What’s Wrong with the Economy: 9 Toxic Dynamics

These nine dynamics are mutually reinforcing. Beneath the surface signals of an eternally rising stock market and expanding GDP, we all sense something is deeply, systemically wrong with the U.S. economy. These nine structural dynamics generate secondary dynamics, all of which are toxic to social mobility, sustainable prosperity, accountability and democracy: […]

The Politics of Pretense: The Status Quo Is the Problem, But It Can’t Be Touched

Ultimately, all doomed ruling elites face the same problem: there isn’t enough money to fund their take and fuel the vast machinery of power. The politics of the U.S. boils down to one sustained pretense: politicians win votes by promising to fix problems that are the direct result of our bloated, […]

The Three Crises That Will Synchronize a Global Meltdown by 2025

We’re going to get a synchronized global dynamic, but it won’t be “growth” and stability, it will be DeGrowth and instability. To understand the synchronized global meltdown that is on tap for the 2021-2025 period, we must first stipulate the relationship of “money” to energy:“money” is nothing more than a […]

Does Anyone Else See a Giant Bear Flag in the S&P 500?

We all know the game is rigged, but strange things occasionally upset the “easy money bet.” “Reality” is in the eye of the beholder, especially when it comes to technical analysis and economic tea leaves. It seems most stock market soothsayers are seeing a breakout of the downtrend that erupted in […]

The U.S. Economy In Two Words: Asymmetric Gains

The Status Quo is in trouble if the bottom 95% wake up to the asymmetric gains that are the only possible output of our hyper-financialized economy. The core dynamic of the U.S. economy in this era is asymmetric gains: the gains in income, wealth and power are increasingly concentrated in the […]

Burrito Index Update: Burrito Cost Triples, Official Inflation Up 43% from 2001

Welcome to debt-serfdom, the only possible output of the soaring cost of living. Long-time readers may recall the Burrito Index, my real-world measure of inflation. The Burrito Index: Consumer Prices Have Soared 160% Since 2001 (August 1, 2016). The Burrito Index tracks the cost of a regular burrito since 2001. Since we keep detailed […]

Why the Eurozone and the Euro Are Both Doomed

Papering over the structural imbalances in the Eurozone with endless bailouts will not resolve the fundamental asymmetries. Beneath the permanent whatever it takes “rescue” by the European Central Bank (ECB) lie fundamental asymmetries that doom the euro, the joint currency that has been the centerpiece of European unity since its introduction in 1999. […]

How Systems Collapse

This is how systems collapse: faith in the visible surface of abundance reigns supreme, and the fragility of the buffers goes unnoticed. I often discuss systems and systemic collapse, and I’ve drawn up a little diagram to illustrate a key dynamic in systemic collapse. The key concepts here are stability and buffers. Though […]

America 2018: Dicier by the Day

Scrape all this putrid excrescence off and we’re left with a non-fantasy reality: everything is getting dicier by the day. If we look beneath the cheery chatter of the financial media and the tiresomely repetitive Russian collusion narrative (that’s unraveling as the Ministry of Propaganda’s machinations are exposed), we find that America in […]

The Next Recession Will Be Devastatingly Non-Linear

The acceleration of non-linear consequences will surprise the brainwashed, loving-their-servitude mainstream media. Linear correlations are intuitive: if GDP declines 2% in the next recession, and employment declines 2%, we get it: the scale and size of the decline aligns. In a linear correlation, we’d expect sales to drop by about 2%, […]

Our Economy Is Failing Our Society

If we want to extend the opportunities for positive social roles to everyone, we have to change the way money is created and distributed in our economy. One of the most unrecognized dynamics of our era is the structural dependence of our society on our economy. One set of pundits, politicos and academics wring […]

Sustainability Boils Down to Scale

Only small scale systems can sustainably impose “skin in the game”– consequences, accountability and oversight. Several conversations I had at the recent Peak Prosperity conference in Sonoma, CA sparked an insight into why societies and economies thrive or fail: It All Boils Down to Scale. In a conversation with a Peak Prosperity […]

U.S. Healthcare Isn’t Broken–It’s Fixed

Healthcare/sickcare will bankrupt the nation by itself. If you want to understand why the U.S. healthcare system is bankrupt, financially, morally and politically, then start with this representative anecdote from a U.S. physician. I received this report from correspondent J.F. on the topic of direct advertising of pharmaceutical products to the […]

A Funny Thing Happened on the Way to Market Complacency / Euphoria

Fortunately for Bulls, none of this matters. A relatively reliable measure of complacency/euphoria in the stock market just hit levels last seen in late January, just before stocks reversed in a massive meltdown, surprising all the complacent/euphoric Bulls. The measure is the put-call ratio in equities. Since this time is different, […]

How Safe Are We? Our Blindness to Systemic Dangers

How do we explain our obsession with relatively low risk dangers and our collective blindness to manufactured/marketed scourges that kill tens of thousands of people annually? If you’ve bought a new vehicle recently, you may have noticed some “safety features” that strike many as Nanny State over-reach. You can’t change radio […]

Before You Tell Me What You “Know,” Tell Me Your Sources

We can no longer trust data and conclusions being published as impartial by institutions that were once trustworthy. When someone says they “know” what’s happening on the ground in Syria, how can we assess the validity of their claim to knowledge, i.e. their claim to “know” “facts” or (gasp) “truth”? When […]

Kafka’s Nightmare Emerges: China’s “Social Credit Score”

China is creating Kafka’s nightmare world as the perfection of centralized control of its citizenry. China is rapidly building out a Total Surveillance State on a scale that far surpasses any government surveillance program in the West. The scope of this surveillance is so broad and pervasive that it borders on […]