In this week's Off The Cuff podcast, Chris and Charles Hugh Smith discuss:
- The Sins Of Over-Financialization
- We're finally having to pay the price we've been deferring
- The Energy Sector Is A Time-Bomb
- One that has just detonated
- GDP Is Going To Drop Hard From Here
- Not an 'if'; but a 'when'. And a 'how much?'
- A Crash Is In Our Future
- And that good, believe it or not
Delayed a few days by the alert we issued late last week, here's the Off The Cuff discussion recorded last Wednesday between Chris and Charles. This particular one surpasses the usual excellent standard for these weekly conversations.
The developed economies have allowed financial services to metastasize to too great percentage of their GDP. Remember, nothing of true value is created by these industries; they simply move funds from one party to another — and increasingly into their own pockets. Do this for too long and your paper claims start to greatly outnumber the actual physical assets underlying them. At some point, the total amount of debt built up in the system can't be serviced sustainably, and equity-holders fight over multiple claims on the same resources.
When the piper demands payment at times like these, market crashes result. And credit holders take big losses. This is ugly and painful (and certainly will be in this cycle), but it's also necessary and good for our long term futures.
by yoxa 
