Increasingly Chaotic Volatility Ahead–The New Normal Few Think Possible, by Charles Hugh Smith

The prediction in this article corresponds fairly closely with SLL’s outlook for the future—mind-blowing chaos. From Charles Hugh Smith at oftwominds.com:

That the era of stability has ended and a new era of increasingly chaotic volatility has begun is not on anyone’s radar as a possibility.

The standard debate about the future of the economy is: which will we get, high inflation or a deflationary collapse of defaults and asset bubbles popping?

The debate goes round and round in widening circles of complexity as analysts delve into every nuance of the debate.

A recent conversation with my friend A.T. raised a third possibility few seem to consider: increasingly chaotic volatility will be the new normal, as wild swings between inflation and deflation will increase in amplitude and ferocity as the system destabilizes.

Increasingly chaotic volatility is a classic sign of a system that has lost equilibrium and is attempting to regain its dynamic stability by going into overdrive.

The amplitude and violence of these fluctuations increase as each attempt to restore stability fails.

This loss of stability is not what people expect. The experience of the past 60 years has been that any hiccup in financial stability–a recession or market crash–is temporary, as the system responds with monetary and fiscal stimulus which quickly restores the system’s stability.

That the era of stability has ended and a new era of increasingly chaotic volatility has begun is not on anyone’s radar as a possibility.

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2 responses to “Increasingly Chaotic Volatility Ahead–The New Normal Few Think Possible, by Charles Hugh Smith

  1. The simplistic but likely accurate box I have put the economic collapse explanation in for my own putposes is this:

    The ridiculously over-leveraged system is a ravenous monster looking for capital to eat. It will gobble up capital until it is satiated. It won’t care what capital or whose capital it eats, and it will find it and eat it no matter how carefully you think you have hidden it.

    Like

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