Checking in with Charles Hugh Smith, Ep #54

Can we find an answer to the world’s ills? Is a return to a gold standard feasible? Can we keep our current system from imploding? Do we even want to? In this conversation, Charles Hugh Smith gets into the weeds on the socioeconomic issues we’re facing. We talk about whether or not a new economic system is the answer or if a focus on relocalization and self-reliance may be key to inciting change.

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LISTEN IF YOU ARE INTERESTED IN…

[2:34] Why the gold standard isn’t sustainable
[8:47] Can we keep our current system from imploding?
[14:50] What could a new economic system look like?
[21:32] What about a universal basic income?
[27:23] Increasing rates of hopelessness and depression
[37:34] Relocalization: Self-reliance in the 21st century
[42:43] The next generation was born for this time
[44:12] The systems we rely on are failing, so what’s next?
[49:29] Why we’re positive about the future of humanity

Why the gold standard isn’t sustainable

Many people are calling for a return to the gold standard or something equivalent that’s real-world and tangible. But the idea that we can live in a world without credit has become unrealistic. Globalized developed economies moved off the gold standard because of its limitations. When there’s a shortage of silver and gold, there isn’t enough money to trade.

The wealthy people will end up with all of the gold, silver, and bitcoin and then trade will stagnate. Credit is how you get around that. Fiat currencies allowed for flexibility. If the government didn’t have gold or silver, they borrowed the money into existence.
Is a new economic system the answer?

The vast majority of global consumption is based on credit. What would we have without credit? Far less consumption. If credit becomes too expensive or scarce, consumption will decrease.

The other source of growth is affordable energy. Once energy gets too expensive, we won’t have money left to borrow and consume (or save or invest). If these systems go away, we won’t be able to grow.

So maybe we shouldn’t measure growth as the one thing that matters. Maybe we should look at human well-being. A famous economist, Joseph Stiglitz, said we should throw away GDP and have an index of human well-being. Nevermind economic growth.

Why not make it impossible for someone to make a profit by making a good or service that is designed to fail so you must repeatedly buy another? We need to make things durable again. It will do away with a lot of inflation and boost the purchasing power of people’s money. If something lasts 20 years instead of two, it’s good for the planet, too.
Relocalization: Self-reliance in the 21st century

What can we do in our own little world to take control of our health, income, and investments? Why not become more self-reliant? What are you depending on? Where is it coming from? Can you reduce your exposure to the risks of globalization?

Can you support people providing essentials locally (supporting a farmers market or local cafe)? When we keep the money in our community, it feeds solutions. If we take care of local ranchers and farmers, we won’t be disrupted when the supply chain that’s 5,000 miles long breaks.

That’s what the pandemic lockdown showed us. Global supply chains are long and fragile. When a link breaks, the supply chain crumbles.

The systems we rely on are failing. Wishful thinking isn’t a solution. We have to adjust and evolve. But Charles believes that we won’t change until the pain is so great that we have no choice. The system will have to break before we adapt. There will be pain but it will be net positive.

Charles Hugh Smith is not affiliated with or endorsed by LPL Financial or Capital Investment Advisers.

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RESOURCES MENTIONED

The Myth of Capitalism: https://www.amazon.com/Myth-Capitalism-Monopolies-Death-Competition/dp/1119548195

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CONNECT WITH CHARLES HUGH SMITH

Charles’ blog, Of Two Minds: https://www.oftwominds.com/blog.html
Charles’ Patreon: https://www.patreon.com/charleshughsmith
Self-Reliance in the 21st Century: https://www.amazon.com/Self-Reliance-21st-Century-Charles-Smith/dp/B0BFV9HJ5V
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