The Strange Power of Denial

Life in Our Neofeudal World [The Daily Reckoning] September 23, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Strange Power of Denial - We live in a neofeudal system… - The power of denial… - Like Rome before the collapse… [External Advertisement] [$5 Million. 24 Years of Data. Beating the Market 300-to-1]( [Click here for more...]( Adam O’Dell has pulled out all the stops. In his most ambitious project ever, he has finally brought together the powerhouse force of AI … and fused it with his legendary ratings system. The result is a technology with the power to crush the market by 300 to 1 … turning $5,000 into $6.6 million. And Adam wants to put it in your hands. [Click Here For The Full Details]( The Hawaiian Islands Editor’s note: In today’s reckoning, Charles Hugh Smith shows you why he believes we actually live in a neofeudal society, despite everything you see in the media. Moreover, Charles believes we’re living in denial about it all. [Charles Hugh Smith] CHARLES HUGH SMITH Dear Reader, If you listen to conventional economists, everything's rosy: Thanks to the expansion of alt-energy like wind and solar, energy is getting cheaper, batteries will power the new global economy, we're getting smarter. Just look at the rising number of advanced college degrees, wages are finally growing, inflation is trending down, household balance sheets and corporate profits are strong, debt loads are not an issue yet and GDP is rising. All this happy news is backed by statistics, of course, but there's one little problem: All the conventional cheerleaders are living in a bubble of like-minded elites who are insulated from the neofeudal realities of life in the real world. Outside the bubble of wealthy, protected elites that generate the statistics and the "news," the global economy is completely, totally neofeudal — and so is the American economy. What does neofeudal mean? A Two-Tiered Socioeconomic System It refers to a two-tiered socioeconomic system in which an aristocracy owns the vast majority of the wealth and collects the lion's share of the income, and uses this financial dominance to buy political and narrative dominance. In a neofeudal arrangement, the machinery of governance protects and enforces elite dominance. Cartels and monopolies have free rein to price fix and exploit, tax revenues flow freely to cartels, elite organizations such as family trusts get tax breaks and so on. In other words, "the market" is rigged and the government maintains the status quo. Toiling away to enrich the aristocratic owners of capital are the serfs and peasants, who own a tiny shred of income-producing capital. Their primary assets – the family home and vehicles – are actually income streams for the wealthy who collect the mortgage and auto-loan interest paid by the serfs. The core dynamic in neofeudalism is the already-wealthy increase their share of the wealth, and everyone else sees their meager share diminish. The vast majority of financial gains generated by the U.S. economy flow to the top 0.1% of households. The top 1%'s share has risen by 40% while the bottom 50%'s share of the wealth has slipped to 3% — essentially signal noise. But we’re told that everything is just honky-dory. In reality, they’re living in denial. [There’s no time for small talk…]( [Click here for more...]( You only have a few days left to become one of Jim Rickard’s “Gold Partners”. Jim’s never given people the chance to “partner up” alongside him in a gold play before. And after Monday, he may never share an opportunity like this again. That’s why it’s so crucial you get the full story from Jim. [Click Here Now]( Denial Denial is scale-invariant and universal — we've all experienced in some way or another. By scale-invariant, I mean the individual, household, enterprise, city, state and empire all experience denial. Denial has several signature characteristics: 1. The more profound and consequential the issue, the more stubborn our denial. When a minor cut reddens, we don't go into denial that it's infected, we simply treat it with greater care. But when the unmistakable signs of heart disease appear, we find ways to deny the reality because it's too upsetting and frightening. We want very desperately to think it will go away on its own and we'll be fine, and nothing in our life will change. 2. The strength of our denial flows from the tacit understanding that if we let even a tiny bit of doubt break through our dam of denial, the whole foundation will give way. The power of denial originates in the impermeability of the barrier blocking warning signs that all is not well. If the enterprise, relationship, policy, investment, etc. is no longer sustainable or viable, we must shut out all doubt and evidence because even a rivulet of doubt and evidence will quickly erode the dam of our denial and collapse our sense of security, control and predictability. And so we hold fast to the idea that these chest pains are merely indigestion, and inflation is already receding. We fiddle with data ("ex-food, fuel, used cars, shelter, health care, childcare, hospitality and dining out, inflation is trending down!") to conjure up an alternative reality in which everything is fine, under control, progress and growth are still positive and unstoppable and so on. Doubling Down on Denial When challenged, we become defensive and angry, as if our security and identity are under attack. Since we've tied our identity and security to fixed, rigid standards, should those standards erode and decay, we deny the erosion because we feel our own security, identity and sense of control are giving way and might collapse. To avert this disaster, we shore up our dam of denial, making sure no shred of doubt or evidence gets through to threaten us. This strategy is terribly misguided, of course, because denying reality doesn't make the threat go away, it magnifies the risk of collapse. Denial can be summarized as the stubborn inability to tell the truth because our fear of losing control as the foundations of our life crumble beneath us is so great that we're compelled to cling to denial and fantasy: Debt doesn't matter, the government can print as much money as it needs, we'll just renovate all those empty office towers into housing and so on. 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Just as we'd rather risk expiring from a heart attack than face the sacrifices and challenges of revolutionizing our diet and fitness, we'd rather risk societal collapse than face the sacrifices and challenges of revolutionizing our unsustainably neofeudal economy and broken gears of governance. Like Rome Before the Collapse And so all those who've benefited from the Bubble Economy look down on the decaying city center from their comfortable, smartly-appreciating homes and cling to the absurd fantasy that the rot won't reach them — indeed, the rot can't possibly reach us, it will stay safely far away and we'll be safe here in our enclave. This is remarkably reminiscent of the wealthy Romans just before the collapse, complaining to each other in correspondence about the annoyances of decay seeping into their comfortable estates. They too reassured themselves that Rome was eternal, everything would right itself without any sacrifice on their part. Their correspondence ended abruptly when the Imperial courier service ceased to function. The "Barbarians" (i.e., non-Italian residents of the Empire) who assumed power did not have the wherewithal to gather the taxes needed to support the immense Imperial infrastructure that made life comfortable for the landed wealthy, and so it went away. So no worries, our neofeudal system, broken governance and all, is eternal and will fix itself without any sacrifices on our part. Maybe those chest pains are just indigestion. Let's just ignore them, they'll probably go away on their own. Alternatively, we can relinquish fantasies and fear and accept that it's adapt or expire and we'll have to handle the adapting ourselves. This is the path of self-reliance, and if we're willing to take it, the path is wide open. Like what you read? [Go here to check out more.]( Regards, Charles Hugh Smith for The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: Jim Rickards may have never been as optimistic about gold than he is right now. And Jim’s doing something right now that he’s never done before — and may never do again. He’s extending a very important — potentially life-changing — invitation to you and your family… [He’s actually offering you the chance to become his “gold partner.”]( That’s right. This is your official invitation to become part of Jim's inner circle of “gold partners.” To [show you just how lucrative this partnership could be]( Jim just flew an entire film crew out into the desert. [Check it out here.]( But he needs to know real soon if you’re in or not. [Go here for the details.]( Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@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. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. 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