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The Social Contract is broken not just by wealth inequality per se but by the illegitimate
process of wealth acquisition

Extremes keep getting more extreme, but for those at the top of the heap, it’s all fine. For everyone else slipping down the ladder, all that FINE adds up to Fragile, Insecure, Nonsensical, Expensive.

Together, these factors generate a self-reinforcing cycle of debt saturation, declining collateral and credit contraction.

Who’s left to buy overvalued houses? Too few to prop up bubble valuations. If as many posit the Federal Reserve has an unstated mandate to generate a “wealth effect” by propping up housing, they’ve managed to create a no-win situation.

And what happens next? Bubble symmetry: valuations fall at the same rate as they rose, declining back to the starting point over a roughly equivalent time duration.

Be careful what you wish for, because currencies are not abstractions we ponder, they are commodities that serve real-world functions that place demands on the currency as a mechanism of trade, trust, value and risk.

Yes, I’m rattling the begging bowl.
Beneath the veneer of normalcy, things are no longer working like they’re supposed to. Am I the only one who senses this? >

In a system maintained by ever-greater extremes, confidence erodes very quickly once the next extreme fails to move the needle.

This is how we’ll end up with severe shortages of truly skilled labor and high unemployment of those who lack the necessary skills.

Imagine the immensity of their disappointment in discovering Earth offers few opportunities for trade or investment.
New research has finally solved the mystery of why UFOs/UAPs (Unidentified Aerial Phenomena) have been visiting Earth since the late 1940s.

The market and the government will continue to promote and support a neofeudal status quo until they are forced by society to restore the common good and opportunity. Of the three primary dynamics of human endeavor–the market, government and society–we focus almost exclusively on the first two.

The resulting erosion of collateral will collapse the global credit bubble, a repricing/reset that will bankrupt the global economy and financial system. Scrape away the complexity and every economic crisis and crash boils down to the precarious asymmetry between collateral and the debt secured by that collateral collapsing.

Everyone wants a trend they can trade for effortless gains. That may no longer be realistic.

What the Warring Elites don’t want us to realize is that a system of transparent competition in which no fiefdom is allowed to become dominant best serves the interests of society at large.

A stagnating zombie economy never recovers. Four decades of rising markets punctuated by crisis-induced crashes seems to have fostered an unspoken belief that no one should ever get hurt in markets or the economy.

We can also predict that the next round of instability will be more severe than the previous bout of instability. Everyone is in favor of “doing whatever it takes” to “restore financial stability” when the house of cards starts swaying, but funny things happen on the way to “Restoring Financial Stability.”

Our faith in the wobbling world of hyper-financialization will soon be tested. It’s interesting, isn’t it, that amidst a tsunami of commentary about banks, nobody mentions the proverbial elephant in the room, which is the overwhelming dominance of finance in the economy and society, a dominance which raises the big question:

The next Bull Market will start when everyone has given up on the stock market as the means to “get rich quick” or even “get rich slowly.” Here’s the chart of the month: a weekly chart of the S&P 500 (SPX) showing the giant wedge going back to January 2022 has broken decisively down.

If AI isn’t self-aware of the fact it is nothing but an exploitive tool of the powerful, then it’s worthless. The latest wave of AI tools is generating predictably giddy exaltations.