Look out Below

The Long Cycles Have Turned Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] Look out Below - Six long cycles that are turning… for the worse… - Pride goeth before the fall… - Then Charles Hugh Smith shows you why he talks so much about collapse, and how it is not what the optimists think… Recommended Link [Attention! Before You Read Any Further…]( Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on claiming this new upgrade to your Strategic Intelligence subscription, you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Strategic Intelligence to an entirely new level and I’d hate to see you left behind. [Click Here To Claim Your Upgrade]( San Francisco, California December 4, 2021 Editor’s note: There are shorter economic cycles and there are more consequential longer economic cycles. Today, Charles Hugh Smith shows you why he believes that six long-term economic cycles are turning, and not for the better. [Charles Hugh Smith]Dear Reader, Long cycles operate at such a glacial pace they're easily dismissed as either figments of fevered imagination or this time it's different. But since Mother Nature and human nature remain stubbornly grounded by the same old dynamics, cycles eventually turn and the world changes dramatically. Nobody thinks the cyclical turn is possible until it's already well underway. Multiple long cycles are turning in unison: 1. The cycle of interest rates: down for 40-plus years (last turn, 1981) now up for an unknown but consequential period of time. 2. The cycle of inflation/deflation: The 40-year period of low real-world inflation and rip-roaring speculative debt-asset inflation has ended and now an era of scarcity, real-world inflation and speculative debt-asset deflation begins. 3. The cycle of capital-labor balance: Capital has dominated labor for 40-plus years, siphoning $50 trillion from labor. This cycle has now turned and the rebalancing is underway: It's capital's turn to surrender gains and power. 4. The cycle of social order-disorder: As documented by historian Peter Turchin and others, social order (in Turchin's phrase, the integrative phase) holds sway for about 50 years and then it gives way to an era of social disorder (the disintegrative phase). This phase doesn't end with mild reforms nobody even notices. It ends with a rebalancing of social, political and economic power. 5. The cycle of wealth/power inequality: Wealth — and the political power it buys — becomes increasingly concentrated in the hands of the few at the expense of the many. This feeds economic and political dysfunction and exploitation that must be remedied by reducing extremes of wealth-power inequality. 6. The cycle of speculative excess: Those in power protect their wealth and the wealth of their cronies by instituting moral hazard, the disconnect of risk and consequence: The central state and central bank backstop and bail out the most egregious big speculators, who keep all their gains and transfer their losses to the public. The public concludes the only way to get ahead in such a rigged financial system is to belly up to the gaming tables and gamble that the next bubble will never pop because those in power won't ever let it pop. But alas, humans do not possess god-like powers, they only possess hubris, and so all bubbles pop: The more extreme the bubble, the more devastating the pop. The faint cries that fade to silence are: But this time it's different! The Fed will save us! That's not how cycles work: All the god-like powers are revealed as hubris, which arouses the fatal ire of Nemesis. I’m often accused of being a doom-and-gloomer, always talking about collapse. But below, I show you why I talk about collapse. Let’s just say it’s not for the fun of it. Read on. Regards, Charles Hugh Smith for The Daily Reckoning Editor’s note: This [just-released video]( is already causing quite a stir. That’s because [this eccentric millionaire]( just went live on camera and dropped a [BOMBSHELL]( on viewers that no one was expecting. If you do one thing today, we encourage you to take five minutes to see [this explosive video.]( You may be very happy you did. [>> Go Here Now <<]( Recommended Link [A Million Billion Dollar Market Ripe for Disruption]( [Read more here...]( Which of these three cryptos will disrupt a $1 quadrillion industry? Is it... [Click Here For The Answer]( The Daily Reckoning Presents: “Those dismissing us all as doom-and-gloomers hoping for collapse have it backward”… ****************************** I Talk About Collapse to Prevent It By Charles Hugh Smith [Charles Hugh Smith]Those of us who discuss collapse are generally dismissed as doom-and-gloomers, the equivalent of people who watch dash-cam videos of vehicle crashes all day, reveling in disaster. Why would we spend so much effort discussing collapse if we didn't long for it? Those dismissing us all as doom-and-gloomers hoping for collapse have it backward: Yes, some long for collapse as a real-life disaster movie, but those discussing collapse in systems terms are trying to avoid it, not revel in it. If the system is vulnerable beneath a surface stability, then the only way to avoid negative consequences is to understand those vulnerabilities/fragilities and work out systemic changes that reduce those risks. It's not the analysis of vulnerabilities that causes collapse, it's refusing to look at vulnerabilities because to do so is considered negative. Why not be optimistic and just go with the consensus that the status quo is impervious to serious disruption? Can-do optimism is all that's needed to overcome any spot of bother. The problem is humanity's propensity to confuse optimism with magical thinking. This confusion is particularly visible in any discussion of energy. The status quo holds that every problem has a technological solution and doubting this optimism is dismissed as naysaying: "Why can't you be positive?" I consider myself an optimist in the sense that I see solutions that are within reach if we change our definition of the problem so we can enable new solutions. I consider myself a practical, pragmatic optimist because I understand from life experience that systemic solutions generally require arduous transformations that will demand great effort and sacrifice. In many cases, this process is mostly a series of failures and disappointments that are the essential parts of a steep learning curve. But little of this basic awareness is visible in media descriptions of "solutions." Thus every advance in a lab somewhere is immediately touted as the globally scalable solution: algae-based fuel, modular nuclear reactors, new battery designs, etc., in an endless profusion of technologies which are 1) not even to the prototype stage 2) cannot be scaled 3) limited to specific uses 4) require the construction of new infrastructure 5) consume vast resources to be built, including hydrocarbons 6) not renewable as they must be replaced every 10–15 years 7) not cost-effective once externalities are included 8) intrinsically impractical due to complexity, dependency on rare minerals, etc. All this "optimism" is actually 95% magical thinking, as the practical, real-world realities are dismissed or glossed over: "Oh, they'll figure all that out." In other words, throw enough money and talent at a problem ("We went to the moon, so anything is possible!") and it will always be solved in a way that's bigger and better. This is not optimism; this is magical thinking being passed off as optimism. Real optimism is cautious and contingent, hyper-aware that solutions are a dependency chain that only reach cost-effective scalability if an entire chain of circumstances and advances line up just right. There's another source of confusing optimism and magical thinking: being too successful for too long. Former Intel CEO Andy Grove discussed this in his book Only the Paranoid Survive. Once an organization reckons it has succeeded and has everything necessary to continue achieving success without making any systemic changes, then it's doomed to decay and eventual collapse. When success becomes the default then all the hard parts of success — sacrifices made, failures mopped up, gambles that didn't pay off and gambles that did — melt away and all that's left is a sunny confidence that somebody somewhere will work out a solution that scales up to solve the problem for all of us: "We have top people working on it — top people!" Recommended Link [[Proof] Facebook’s Plan to Take Over $14 Trillion Industry]( [Read more here...]( No matter how you feel about it, you can’t deny that Facebook has fundamentally changed the world we live in. Now Mark Zuckerberg is changing Facebook’s name and rebranding completely - and I’ve discovered the key reason behind his SHOCKING decision. It’s all because of a new tech breakthrough that will revolutionize how human beings live, work and interact - just like Facebook did nearly 20 years ago. Now, one legendary tech researcher is giving away his #1 way to play it... long before Zuckerberg’s creation goes mainstream. [Get The Urgent Details Here]( Meanwhile, back in the real world, it takes 20 years to get a new bridge approved and built in the U.S., 20 years for a new subway line approved and built and 20 years to get a new landfill approved. We're supposed to make the leap to a renewable zero-net-carbon future in 20 years and we can't even build one new-design nuclear reactor prototype in 20 years, even as we'd need hundreds of new reactors to replace a significant slice of hydrocarbon consumption. But if you dare to point out this painfully visible discrepancy between the real-world difficulties in getting a single prototype built in less than 20 years and the claim that we're going to transition away from hydrocarbons in 20 years, then you're a doom-and-gloomer, a naysayer who derives some bitter pleasure from shooting down optimists working on painless, sacrifice-free techno-solutions. The essence of magical thinking is the belief that the long dependency chain between the idea/lab experiment and a solution that's cost-effective and scales up to serve everyone will always fall into place because it's always fallen into place in the past, and so there's no reason to doubt that all the pieces will fall into place going forward. This is magical thinking because it has zero interest in the real-world constraints embedded in each link in the long chain. If you bring up any of these constraints, the magical thinking "optimist" is immediately annoyed and accuses you of being a bitter naysayer. The idea that there might be real-world constraints that "top people" can't overcome is rejected as naysaying. The possibility that there might be systemic constraints is rejected out of hand because "anything's possible if we throw enough money and talent at it." There will always be a solution/substitute which will be affordable and sacrifice-free. That all the previous examples of this were enabled by our exploitation of the easiest-to-extract hydrocarbon wealth is overlooked as a footnote. This leaves us all frustrated. Those of us grounded in the real world are frustrated that if we bring up any real-world constraints — for example, those wondrous untapped ore deposits that are going to make all these new techno-wonders cheap and quick and easy are far from paved highways, far from major river or bluewater ports, far from processing plants and far from sources of the millions of liters of diesel fuel that will be needed onsite to extract the ores — then we're bitter naysayers who can't bear optimism and easy success, while the magical thinking "optimists" are frustrated that we're not accepting the technocratic religion that "top people" and a tsunami of money will solve any problem. One thing I've noticed is "top people" (actual experts with long experience) are never the ones hyping some new technology as the pain-free affordable solution unless they're paid shills of special interests. Then they hype nuclear reactors as the solution without mentioning the problem of what to do with the waste, to name one constraint "optimists" inevitably ignore. In the real world, the hard part is getting every link of the long dependency chain to work reliably and at a cost that's sustainable/affordable. Success comes not from blithely dismissing constraints as naysaying but from accepting that most potential solutions will fail due to issues for which there is no cost-effective, practical, scalable fix. On a systemic level, this requires questioning whether the system itself has to change if we want a different result. If one possible result of the current system is collapse, realizing the system itself must be changed isn't doom-and-gloom, it's problem-solving. Regards, Charles Hugh Smith for The Daily Reckoning Ed. note: This [just-released video]( is already causing quite a stir. That’s because [this eccentric millionaire]( just went live on camera and dropped a [BOMBSHELL]( on viewers that no one was expecting. If you do one thing today, we encourage you to take five minutes to see [this explosive video.]( You may be very happy you did. [>> Go Here Now <<]( --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Charles Hugh Smith][Charles Hugh Smith]( is an American writer and blogger, and serves as the chief writer for the blog "Of Two Minds". Started in 2005, this site has been listed No. 7 in CNBC's top alternative financial sites, and his commentary is featured on a number of sites including Zerohedge.com, The American Conservative, and Peak Prosperity. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. To end your Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [unsubscribe here.]( Please read our [Privacy Statement](. For any further comments or concerns please email us at feedback@dailyreckoning.com. 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