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Guest Post: The 0% BLT Economy

Tyler Durden's picture




 

Submitted by Mike Krieger of KAM LP

The 0% BLT Economy

 

When God desires to destroy a thing, he entrusts its destruction to the thing itself.  Every bad institution of this world ends by suicide.

All the forces in the world are not so powerful as an idea whose time has come.

Adversity makes men, and prosperity makes monsters.

A creditor is worse than a slave-owner; for the master owns only your person, but a creditor owns your dignity, and can command it.

Common sense is in spite of, not as the result of education.

The omnipotence of evil has never resulted in anything but fruitless efforts. Our thoughts always escape from whoever tries to smother them.

- All quotes by Victor Hugo

We're trying to figure out what the future of search is. One idea is that more and more searches are done on your behalf without you needing to type.  I actually think most people don't want Google to answer their questions. They want Google to tell them what they should be doing next.

- Eric Schmidt CEO of Google

Welcome to Reality

Two years ago when I told everyone I knew that the United States was bankrupt and would ultimately default of its debt one way or the other (by inflation or restructuring) I was called crazy and dismissed by 95%+ of the people I met.  These days many of the same people still think I am crazy when I say that a political, financial and intelligence elite which has now teamed up with large corporations is attempting to create a global currency and world government (with them at the helm of course), but the notion that the U.S. is bankrupt is now more or less mainstream.  Even the corporatist/socialists in power are now unable to merely dismiss questions about the deficit.  The public has woken up from its slumber of consciousness and is now starting to see things as they are.  This is an extremely positive development and is why as I have said before I think the elite are in their last days as the freight train of consciousness runs them and their twisted illusions of grandeur into the sea.  The weakest link in this sick and corrupt financial system that was forced upon many of us before we were even born with its mechanics purposely hidden in the shadows so that we remained ignorant of its preposterousness, is the commodity market.  However, within the commodity market the weakest link is gold.  This is why any true attempt to force reform should revolve around a movement to dump compromised fiat paper in exchange for gold.  It is the weakest link of the controllers of humanity for many reasons but the primary reason is that increases in the price of all other commodities can be explained away by the media and financial pundits in other ways.  For example, if oil surges many can say it is global growth.  With gold this explanation doesn’t hold water because in theory most of the 160,000 tons that are estimated to be above ground since mankind started mining gold is potentially “for sale.”  This is because gold is mainly hoarded and not consumed.  Thus, it becomes impossible to say gold rising and hitting new highs is anything less than growing distrust in governments and their counterfeit money.  If it was anything else a large percentage of the hoarded gold would be mobilized and sold.  Many bears make their argument by using this fact.  They opine that since 160,000 is theoretically for sale in a market where annual production is closer to 2,500 tons that there will be a collapse.  The truth is that this is the most bullish argument of all.  The fact that smart money and central banks are unwilling to part with their gold at records is a function of the reality that the Western world is completely bankrupt and there is no way out of this without a hyperinflation event or a deflationary collapse that ends in restructuring. 

Gold vs. Treasury Bonds

Both gold and treasury bonds have performed very well this year.  I stand where I have stood for a long time on treasury bonds.  I believe it is complete financial suicide to own long-term treasuries.  The reason I want to address this issue again is because they have done so well this year and because some people that I have a tremendous amount of respect for are very bullish on them.  The one strategist whom I respect as much as any other is David Rosenberg.  I read his notes whenever I can and I agree with him on virtually every macroeconomic point.  We both agree there was no recovery and that we remain in a depression.  We both agree that what most market observers miss is that we are essentially in what Neil Howe refers to as the  “Fourth Turning” where social mores and psychology completely change from where they were in the prior epoch.  We agree that the governments fudge the data to make things look good.  We agree on gold and on equities.  The only place we really disagree in a major way is on long-term treasuries.  I will make my case below. 

First of all when it comes to treasuries in 2010 the bulls have been right and I have been wrong.  Let’s just get that out of the way.  Now let’s look at this market from a historical perspective.  The secular bull has been going on since 1981 so at 29 years this thing is getting long in the tooth.  This would certainly not be a reason to be negative in itself but it should be seen as a warning sign because when these trends reverse they reverse hard and don’t look back.  In contrast the gold secular bull has been going on since 1999 so close to11 years.  It is not a coincidence in my view that the gold bull started just when the tech bubble was about to crash.  The gold bull was born out of the ashes of the secular bull market in equities.  The end of this bull was so terrifying to the Fed and the government that they did what governments have done since the beginning of time.  They started to devalue the currency and create inflation.  This was done primarily through artificially low interest rates and rampant crooked deals in the housing market and on Wall Street.  However, the key point is none of this would have happened to the extent it did without the Fed’s ultralow rates.

Toward the beginning of the decade Banana Ben Bernanke made his now infamous “helicopter” speech and thus everyone knew what the Fed would do.  Thus was born a period of major inflation (underreported by the government the whole way of course) and a credit and housing bubble of catastrophic proportions.  Then the inevitable collapse that EVERY Austrian-school economist (yet not one of Obama’s economic advisors is an Austrian) predicted occurred and then government in plain view decided to use the crisis to expand its power and dole out favors to its allies.  Notice how under both Bush and Obama the banks and Wall Street were put before everyone else.  “If Wall Street does well Main Street does well” they told us.  I worked on Wall Street for 10 years.  This is the biggest bunch of crap I have ever heard in my life.    

Whereas maybe 1% of the population knew what a dollar was and how they are created before the crisis this may be above 10% now.  This is huge.  People were asleep to the system and now they are awake.  It’s extremely simple really.  There is no greater power than the power to create money and credit.  Since power corrupts and absolute power corrupts absolutely then the absolute control over the world’s money (possessed by the U.S. Federal Reserve) represents the ultimate power and thus will ultimately be completely abused by human beings within any system.  This is precisely why a small group of men or women should never, ever in a free society have this power.  We now see how they use it.  They have destroyed the Western world but make sure to bail out their friends in the end.  

So what does this have to do with treasuries you ask?  Treasuries are payments in the world’s reserve currency (the U.S. dollar) and are backed by the Federal government.  The U.S. dollar in turn has been backed by two things since we defaulted in 1971, the relative strength of the U.S. economy to the rest of the world and the power of our military.  We have completely lost the former and everyone knows it so all we have is the latter.  Why do you think we are so obsessed that no Middle Eastern nation possesses a nuke?  Is it terrorism?  Not really, this is a secondary concern used to sell military action to the citizenry.  The primary reason is that we must not allow any country in this oil rich region to be able to defend itself against us moving in to defend the dollar.  The dollar is all we have left right now as far as keeping our ponzi scheme economy alive, and key to keeping the dollar as a legitimate means of exchange despite the obvious reality that it is not means having a significant presence in the Middle East to make sure oil is traded in dollars.      
 
To assume that the dollar will not be devalued in a major way versus real everyday assets such as commodities (especially real money that is no government’s liability such as gold) is in my opinion counter to all common sense and is logic that a ten year old can understand but escapes the quants on Wall Street.  I guess the only real difference between my view and someone like Rosenberg’s is the timing of it all.  I have made it very clear that I think this will all be a relatively near-term event (the entire monetary and financial system will be dead within two years and something new where gold plays a major role is created).  I think the food, oil and precious metal price surge that is coming has already started and will accelerate since those in political power will print and print and do everything possible to avoid deflationary collapse.  This is not to say that I think they can avoid deflationary collapse, what it means is that in a fiat money system deflationary collapse can mean hyperinflation.  The entire inflation/deflation debate is in my view asinine.  If the debate is between 4% inflation and deflation then I agree, deflation it is.  The larger point is that deflation and hyperinflation are not mutually exclusive they are two sides of the same coin.

So let’s say I am correct and the dollar is being devalued already in a major way as we speak versus the real everyday goods people are forced to buy and that this will accelerate rapidly from here.  With a 2.57% yield on a 10 year treasury if the basket of goods purchased in a given year starts to accelerate beyond 3% there is a huge problem for the owner of treasuries.  You will need to rely on continued appreciation in principal just to keep up.  Of course this can happen but the higher the bonds go the tougher the math becomes.  Furthermore, why not just buy gold?  One asset is being manipulated higher by the Fed through its purchases (treasuries) and one is feared by central banks the world over that are constantly attempting to arrest its rise (gold).  As more and more people and investors grow distrustful of their own governments, more and more people will want to bet on its ultimate default one way or the other.  This means of the buying of gold not treasuries.  

The 0% BLT Economy

This all brings me to the 0% BLT economy.  This is actually a phrase a friend said to me the other day and I thought it summed it up perfectly. He said pretty soon a BLT sandwich will cost $12 but at least interest rates will be 0%.  Maybe Geithner will provide 0% financing on trips to McDonalds with loans that can then be securitized by Wall Street and sold to some pension fund manager that uses leverage to enhance its yield all with a government guarantee!  In a similar vein, I would like to point out the charts for October Cattle and October Lean Hogs.  They are soaring.  Is anyone talking about this?  How about this tidbit:

Wal-Mart Stores (WMT), which for years has touted its prowess at lowering prices, has been doing the opposite as it tries to bolster its bottom line amid stagnating sales.

A JPMorgan Chase (JPM) study of a Walmart Supercenter in Virginia found that the world's largest retailer has raised prices by nearly 6% on average over the past six weeks, according to the New York Post. Reuters says it was the biggest sequential increase since JPMorgan started the study in January 2009.

Some Prices Hiked Over 60%

Some of the price hikes were considerably larger. For instance, the price of a 32-ounce bottle of Windex household cleaner jumped 50%, a 12-ounce box of Quaker Oats instant grits climbed 65% and a 50-ounce container of Tide detergent rose by more than 50%. A spokesperson for the Bentonville, Ark., company could not immediately be reached for comment.

Or how about this one from Bloomberg this morning:

Aug. 19 (Bloomberg) -- The one-dollar dinner from ConAgra Foods Inc., a staple for Americans throughout the recession, is under threat from rising commodity costs.
     ConAgra, which gets almost 3 percent of sales from products such as Zesty Smothered Meat Patty Banquet dinners, will have to raise prices or skimp on ingredients to maintain margins, said James Amoroso, a food industry consultant. That will provide an opportunity for Nestle SA, which has lost share to the Omaha, Nebraska-based company, analysts said.
     “It becomes a straightjacket because a $1 meal can’t be sold for $1.20,” said Amoroso, who is based in Walchwil, Switzerland. “The only way that manufacturers can cope with that is to significantly cheapen the offering. But if you say it’s spaghetti bolognaise and you’re just selling red spaghetti, consumers will notice.”

Eric Schmidt of GOOG Makes the Most Foolish Statement of the Year for a CEO

Someone sent me the quote from the top of this email earlier today and I almost fell out of my chair.  If I was a GOOG shareholder I would be up in arms (I have no position long or short by the way as of this writing).  He is quoted as saying:  

We're trying to figure out what the future of search is. One idea is that more and more searches are done on your behalf without you needing to type.  I actually think most people don't want Google to answer their questions. They want Google to tell them what they should be doing next.

Listen buddy, I don’t know what the future of search is but I am certain that you have just proven how completely disconnected you are from the Zeitgeist sweeping the United States at the moment.  What Americans today want more than anything else is for the Federal government to STOP telling them what to do.  You think they want GOOG to tell them what to do?  Ridiculous.  And just last month it came out that “The investment arms of the CIA and Google are both backing a company that monitors the web in real time — and says it uses that information to predict the future.”  Google is partnering with the CIA to predict the future and now they want to tell us what to do.  I am really getting sick of this company.  Full article on GOOG and the CIA is in the attached Wired article.  http://www.wired.com/dangerroom/2010/07/exclusive-google-cia/

And this company’s motto is “Don’t be Evil.”  Double speak if I have ever seen it.

Mike

 

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Thu, 08/19/2010 - 12:41 | 530692 CashCowEquity
CashCowEquity's picture

lol fock google

Thu, 08/19/2010 - 14:18 | 530937 Yardfarmer
Yardfarmer's picture

as to Google, Yahoo, Facebook, Wikipedia and the rest http://www.fourwinds10.com/siterun_data/media/internet/news.php?q=126202...

Thu, 08/19/2010 - 15:18 | 531069 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

As soon as Mussslims are not declared US citizens without a Certificate of Live Birth then we can worry about the Jews. Anti semtic BS at your link bubble head.

Thu, 08/19/2010 - 16:11 | 531222 Dburn
Dburn's picture

+100

Thanks for punching his lights. It seems like  someone always  shows up to give us the reason why no is at fault for anything but the Jews.

 

Thu, 09/09/2010 - 03:11 | 571254 qrs521
qrs521's picture

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Thu, 08/19/2010 - 14:52 | 531009 BGO
BGO's picture

there's a song about train of consciousness --> http://www.youtube.com/watch?v=8Hb0sRSVjFs&feature=av2e

Thu, 08/19/2010 - 16:02 | 531196 BobWatNorCal
BobWatNorCal's picture

"Don't be evil".

It's an anagram.

Thu, 08/19/2010 - 16:35 | 531299 Dionysus
Dionysus's picture

Bedevil not?

Thu, 08/19/2010 - 20:52 | 531807 poopyjim
poopyjim's picture

Debt Evil On!!!

Thu, 08/19/2010 - 16:16 | 531240 Cathartes Aura
Cathartes Aura's picture

google boys are bilderbergers.  wake up to how they think, of YOU.

where's ATILLA when y'need him. . .

Thu, 08/19/2010 - 12:44 | 530697 Tarheel
Tarheel's picture

"I was called crazy and dismissed by 95%+ of the people I met." well we know at least 52% of this country was in full retard mode in 2008...

Thu, 08/19/2010 - 12:54 | 530722 Marla And Me
Marla And Me's picture

Everybody knows you never go full retard...

Thu, 08/19/2010 - 13:26 | 530801 akak
akak's picture

Professional wrestling spectators, and those snapping up US treasuries in the face of the largest financial bubble in history, would tend to invalidate your premise.

Thu, 08/19/2010 - 12:46 | 530701 Conrad Murray
Conrad Murray's picture

I don't know what to think.  I read the headline and thought, "Fuck me, what's happening to pork bellies?" (http://bit.ly/98OYwH).  I read the article, and was relieved to see it was not about dire consequences for the bacon makin industry.  However, CIA/Google partnership?...I'm back to, "Fuck me". 

Completely agree that the nation is shifting away from wanting to be told what to do.  Or, at the very least, the gap between those who want to be controlled and those that don't is being brought to the forefront of everyday life.  Lines are being drawn and sides taken.  There is an individualist revival in the works.

Thu, 08/19/2010 - 12:49 | 530710 ghostfaceinvestah
ghostfaceinvestah's picture

Ever look into the links between AIG and the CIA?  You will understand why they were bailed out.

Thu, 08/19/2010 - 13:36 | 530834 Trundle
Trundle's picture

Ever look into the links between AIG and 911?

You might begin to understand whodunnit?

Thu, 08/19/2010 - 15:21 | 531076 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

The actual and clear link between reading the Koran and 9-11 is the only link needed. No intolerant , racist, violent, hated filled, women raping Muslims and 9-11 would never have happened. The Koran is terrorist training manual.

Thu, 08/19/2010 - 15:40 | 531120 DaveyJones
DaveyJones's picture

is it Islam, Muslims or just people who look, pray and act different than you that have a monopoly on "intolerance, racis[m], violen[ce], & hatred?"  I guess the first amendment is "highly overrated."

Thu, 08/19/2010 - 15:41 | 531126 stollcri
stollcri's picture

Intolerant Muslims, indeed.

You read Arabic?

Thu, 08/19/2010 - 21:36 | 531875 GeoffreyT
GeoffreyT's picture

'freedom', you're right... but it's no worse than the cock-mutilation cult's theological opus or that of the Jeebus death-cult (which itself was born out of the political manouevrings of a disaffected group of cock-slashers).

Frankly, I think it speaks ill of our species fact that some of us still think that we ought to bow and scrape to some primitive tribalist Stone Age fairy tale in which a mystery Sky Wizard tells some shepherd to slice the end off his wang (in exchange for which he will father the Master Race)... it wouldn't pass muster as a plot for Family Guy (with Peter Griffin as Avram - the sister-fucking wellspring of cock-mutilation everywhere).

So y'know - be careful when you sling shit at religions from within the asylum: if you subscribe to any of them yourself, you're asking for trouble. ALL of them are insane, and devotees of ALL of them should be mocked mercilessly until they are ashamed to mention it in front of the non-mentally-ill. And if any of them claim special insight (or land ownership based on a deed granted by a shrub during a hallucination by some escaped slave 3000 years ago), shake your head, laugh at them and walk away.

Let's have no more Master Race/Gott Mit Uns talk by ANYBODY... it never ends well: hubris begets nemesis (and the world is still waiting for the metanoia).

 

Cheerio

 

 

GT

Thu, 08/19/2010 - 13:14 | 530774 fuu
fuu's picture

Actually the whole country is about to have a "fuck me" moment about bacon. Pork bellies re indeed in dire straights and most of the industry is raising prices on bacon across the board. When your input is at $150/CWT vs anr average of $92/CWT things are not good.

 

Hormel Foods is loosing $0.60/lb on bacon right now. Shutting down production lines is cheaper than actually selling product right now.

Thu, 08/19/2010 - 14:22 | 530948 augmister
augmister's picture

So THAT's why I stopped buying bacon three weeks ago.  And I was afraid the industry was about to launch a new product, The Kosher Pig.

Thu, 08/19/2010 - 14:35 | 530980 papaswamp
papaswamp's picture

Buy spam or any of their canned products...they have an indefinite shelf life...seriously.

Thu, 08/19/2010 - 14:49 | 531005 fuu
fuu's picture

Zero nutrition though. There are many better alternatives.

Thu, 08/19/2010 - 14:55 | 531026 Conrad Murray
Conrad Murray's picture

I'll give up the scotch, I'll cancel the cable, I'll throw the cell phone into the lake, but I WILL NOT give up bacon. Ever.  The government better start bailin this shit out.  Then again, maybe this is part of the Terrorist-in-Chief's plan to rile the infidels up into civil war.  Hmmmmm.

Thu, 08/19/2010 - 15:15 | 531066 aerojet
aerojet's picture

You should raise your own hogs.  You can then produce all the tender bacon you can stand to eat.  And you can feed  bankers, politicians, and other authority-type figures to the hogs to dispose of their otherwise-worthless bodies!  It's win-win.

Thu, 08/19/2010 - 22:31 | 532006 StychoKiller
StychoKiller's picture

You are what you eat, by extension, your are what they eat.

Thu, 08/19/2010 - 15:30 | 531108 Agent P
Agent P's picture

I also loves me the bacon, but give up the scotch...that's just crazy talk!

 

Thu, 08/19/2010 - 16:17 | 531245 Dburn
Dburn's picture

Anyone remember Denny's a 2:00am and two orders of Bacon, pancakes, a pot of  coffee and a full pack of smokes before we were told everything is bad for our health? That was before deadly STDs too.  That was just a little slice of heaven there.

 

 

 

Thu, 08/19/2010 - 17:55 | 531501 Rainman
Rainman's picture

Ah, yes. And never drive too far without proper planning. Pre-chill the 6-pack and roll the joints. Seat belts...??? fuck 'em. What was considered normal routine...at least to some.....is now viewed as criminal deviant behavior of the highest order. Just take a belt to your deserving little Johnny and get locked up as a child abuser. Instead you now must submit him to counseling and a government approved drugging program to get his ass away from the video games. And we wonder why little Johnny got so fat, stupid, lazy and fucked up....??

The Mommy State has always failed to protect us from ourselves. They've just gradually increased the number of laws and rules for you to break as a means of stealing more out of your wallet in fines and taxes and keeping the lawyers busy.......and building more power over the individual in the name of greater civic good. It's a hoax.

Thu, 08/19/2010 - 22:33 | 532010 StychoKiller
StychoKiller's picture

So, I gather that you're NOT in favor of a "Progressive" Nanny State?

Thu, 08/19/2010 - 15:31 | 531110 sweaty7
sweaty7's picture

you are a man's man conrad. agree with your stance on Bacon. Bacon revolution, anyone?

Thu, 08/19/2010 - 16:06 | 531205 spekulatn
spekulatn's picture

I WILL NOT give up bacon. Ever.

http://baconunwrapped.com/


Thu, 08/19/2010 - 17:54 | 531503 Conrad Murray
Conrad Murray's picture

Wow, just wow.  Thank you.

Thu, 08/19/2010 - 13:32 | 530819 Votewithabullet
Votewithabullet's picture

Quoting eminem..."u goddamn right". If you are an american you are in a partnership with the cia. Is this news? Would you prefer kgb? Their working to protect the interests of our country. Just be greatful they're on your side.

Thu, 08/19/2010 - 13:38 | 530837 Trundle
Trundle's picture

Absolutely. Except when you're on their "greatest hit list."

Thu, 08/19/2010 - 14:50 | 531002 PhotonJohn
PhotonJohn's picture

I prefer that they just respect my privacy and the Constitution.

Thu, 08/19/2010 - 15:42 | 531130 Jerome Lester H...
Jerome Lester Horwitz's picture

Eminem? Wow, I didn't know he was an authority on the history of the CIA! Since the CIA is on our side then maybe you can explain how their drug running operations benefit us. I'm sure Cele Castillo would love to hear your explanation.

Thu, 08/19/2010 - 22:30 | 532003 bigkahuna
bigkahuna's picture

they're not gonna address that--it would fuck up their propaganda...

Thu, 08/19/2010 - 15:48 | 531152 sgt_doom
sgt_doom's picture

Seriously, Votewithabullet, are you being facetious, or are you truly that abysmally ignorant?

You seriously aren't aware that the multinationals run America?  You are unaware that the US military is protecting the the Chinese companies in Afghanistan which are mining copper there?

You truly are unaware that the oil and gas pipelines going across Afghanistan will end in India, to supply the multinationals' production facilties there?

You truly don't kow that USAID builds infrastructure in foreign countries which is then utilized by the multinationals (or transnationals if you prefer) to offshore their jobs there, and to create the new jobs there?

You truly are unaware of the financial-intelligence complex which runs America?

You truly don't know that the nonissue the corporate nonnews media keeps spewing at us -- the supposed "mosque" in New York City, seveal blocks from the old WTC -- is to misdirect attention, as usual, from the real story: 

the SIGIR report mentioning the unaccounted for $8.7 billion, while so far they have audited the "accounted for" $400 million, and found approximately one-quarter of it ripped off?

And how that "Army of One" now appears to be an army of embezzlers; and how the Marines are looking for a "few good men" because they've got too many embezzlers?

http://www.sigir.mil/publications/quarterlyreports/July2010.html

You are being facetious and really just goofing on us, huh?

Thu, 08/19/2010 - 16:22 | 531258 Cathartes Aura
Cathartes Aura's picture

everyone, take a deep breath, then READ^THIS^POSt^AGAIN.

+++some serious truth here, thanks sgt_doom.

Thu, 08/19/2010 - 16:10 | 531223 Panafrican Funk...
Panafrican Funktron Robot's picture

"Their working to protect the interests of our country."

How do you know this?  What is our country?  What/whose boundries are they really protecting? 

Thu, 08/19/2010 - 14:06 | 530907 deadparrot
deadparrot's picture

I hate to read too much into some of the commodities spikes in the last couple months. Couldn't it just be a result of some big players making big bets in small markets in order to make up for losses in the first half of the year?

Thu, 08/19/2010 - 14:53 | 531022 ATM
ATM's picture

No it's the first drops of rain hitting the ground before the big storm unleashes the deluge. Think of each little spike as a drop of rain. They're going to start coming harder and faster until it's nothing but water pouring out of the sky only it won't be water but money chasing ecvery available hard asset it can get.

Thu, 08/19/2010 - 14:48 | 530998 DosZap
DosZap's picture

CM,

Ponder this,,,,,,,,,,

Why is there a major mil inst in tejas, South, and WHY, was a Northern Command Central put into place, just in the past 2yrs?.

40-50k troopies at the ready..w/ all the hdwre.

This is a set up, been a set up.........for a fk up.

And guess who the recips are.

1st one no countie.

Google, is like 1984, it tries to garner info, and force you to use them at every turn, they have lawsuits, and soverigns investigating them globally.

A BIG dog in the USA  on Drudge the other day, advised young folks to get a frkin name change, if they wanted their lives back, esp later on.

Thu, 08/19/2010 - 15:57 | 531185 grunion
grunion's picture

There is a old saying (might be jewish) goes "You take my money, you take my advice..."

Watch for an inverse relationship between volume of the dole and the volume of the vitriol.

Thu, 08/19/2010 - 12:47 | 530708 litoralkey
litoralkey's picture

I've been joking about the $40 Happy Meal for the last 9 years.

As in the punchline "We'll finally break even on our speculative condo investments when a McD Happy Meal costs $40."  (thoughts along the line of a deflationary period with some small spike in hyperinflation at some point)

That always went over well at the condo board meetings' coffee machine.  I stopped attending those... macabre.

Madhedgefundtrader posted a thread about the Economist magazine's Big Mac index... I remember that index because I travelled extensively the year I took my first macro econ course.  I was amazed at the price of Big macs abroad.  More amazed there were lines out the door at lunch hour to eat that crap.

Think about it this way... you could have bought a US$1000000 whole life insurance policy in 1990, and thought it would have covered the expenses for your spouse and kids in event of your untimely death.  For 90% of the life insurance sales agents in the United States in 1990, selling a big whale $1MM policy covered your nut for a month.

You can now buy US$500000 whole life policies over TV ads that have almost no underwriting as long as you are not a smoker , obese or a diabetic.  The remaining poor sap life insurance sales agents today have to sell one big whale US$4MM a month to cover their nut.  And there are almost 75% less life insurance agents in the USA today than in the year 2000.

Thu, 08/19/2010 - 15:25 | 531089 Dreamwalker420
Dreamwalker420's picture

$40 Happy Meal ... hyperinflation

I follow the Big Mac index as well.  Big Mac's lack fungability, perhaps the most important word in wealth preservation.

But the life insurance thing ... are you saying that there is a significant decrease in economic activity?  And that when economic activity occurs, the value of the transactions are severely decreased making it more difficult to earn money?

Thu, 08/19/2010 - 15:45 | 531143 DaveyJones
DaveyJones's picture

maybe if they were food, they'd be more fungable

Thu, 08/19/2010 - 15:53 | 531172 Dr. Sandi
Dr. Sandi's picture

there are almost 75% less life insurance agents in the USA today than in the year 2000.

At last, a positive benefit from total economic collapse.

Thu, 08/19/2010 - 16:06 | 531208 grunion
grunion's picture

I guess that means no more Chez Eddy's...pity...only McDonalds now.

 

...And of whose past grandeur among the rubble only the cats remain...  g. marquez

 

 

Thu, 08/19/2010 - 12:54 | 530718 Amsterdammer
Amsterdammer's picture

As for Google, given the intention of the EU

to enforce 'opt-out' for cookies, and the waves

of protest in Europe against Streetview, welcome

to reality

 

Thu, 08/19/2010 - 13:00 | 530736 1100-TACTICAL-12
1100-TACTICAL-12's picture

The NWO is for real. I used to feel like a weird'o to say that.

http://www.youtube.com/watch?v=zYSV4T2jNKc

"Let me issue and control a nation's money, and I care not who writes its laws" --- Mayer Rothschild (1743-1812)

Thu, 08/19/2010 - 13:33 | 530828 Gully Foyle
Gully Foyle's picture

1100-TACTICAL-12

If you are quoting a guy from the 1700's wouldn't that make it the Old World Order?

I get so confused by which conspiracy is pushing in what direction today.

Thu, 08/19/2010 - 14:16 | 530930 Temporalist
Temporalist's picture

Gully is it a consipiracy to believe that people with power and wealth, who can give power and wealth, and transfer power and wealth to their families, want to maintain power and wealth?

Is it a conspiracy to believe in human greed and selfishness?

Thu, 08/19/2010 - 14:34 | 530976 Gully Foyle
Gully Foyle's picture

Temporalist

Why does an Old Money conspiracy get renamed as New World Order?

Why would there be one single conspiracy?

Wouldn't there be factions rising and falling, gaining ground and losing ground, dying out and new blood coming in.

Which Conspiracy is in charge today?

Thu, 08/19/2010 - 15:11 | 531055 Commander Cody
Commander Cody's picture

Look it over.  Kick the tires.  Take it for a drive.  Report back.

Hint: BODs for CBs, WB, IMF, BIS.

Thu, 08/19/2010 - 14:53 | 531023 DosZap
DosZap's picture

Gully,

A Conspiracy, is as simple as two people agreeing to do something together,and keeping it to themselves.

Thu, 08/19/2010 - 15:00 | 531034 Gully Foyle
Gully Foyle's picture

DosZap

I think you missed my point.

Everyone fears a single conspiracy. The fact is there are multiple conspiracies that are mostly at odds with each other.

Nearly seven billion people all colluding and plotting, takes ones breath away.

Thu, 08/19/2010 - 15:30 | 531103 DosZap
DosZap's picture

Gully,

Sorry, yes I did,

Thu, 08/19/2010 - 15:57 | 531182 DoChenRollingBearing
DoChenRollingBearing's picture

Gully, DosZap,

That is what I think as well.  Various factions, ever shifting, in the Elites all trying to gain advantage of events at the expense of the rest humanity.

Does not matter to me.  Nor does the price of gold on any day.

When I get some money, I buy gold.

Thu, 08/19/2010 - 15:55 | 531178 sgt_doom
sgt_doom's picture

Please allow me to set you straight, Gully.

It's about the One World Corporation.  (They really don't give a rat's ass about any form of government....)

Thu, 08/19/2010 - 22:39 | 532030 StychoKiller
StychoKiller's picture

That name would be:  "BuyN'Large!"

Thu, 08/19/2010 - 13:02 | 530738 hedgeless_horseman
hedgeless_horseman's picture

http://noir.bloomberg.com/apps/news?pid=20601087&sid=aZwSm2tgLbIY&pos=8

“Small businesses and community banks that loan to small businesses have been lagging behind,” Obama said at the White House before he and his family leave for a holiday on Martha’s Vineyard in Massachusetts “If we want this economy to create more job more quickly, we need to help them.”

Is this fool a set-up man for Reaganomics?  Or just a spokesperson for the banks?  Our small business is paying off our LOC this week. 

Credit?  Credit?  We don't need no stinkin' credit!

Thu, 08/19/2010 - 15:35 | 531119 Agent P
Agent P's picture

"Hi, I'm Barry.  I'm from the government, and I'm here to help."

Thu, 08/19/2010 - 13:02 | 530743 99er
99er's picture

Do 0% yields mean infinite value for the Long Bond?

http://www.screencast.com/t/ZjNhYjIwOW

Maybe.

Thu, 08/19/2010 - 13:02 | 530744 NOTW777
NOTW777's picture

2 years ago he was getting ready to vote for obama.

Thu, 08/19/2010 - 13:06 | 530747 Nihilarian
Nihilarian's picture

If I go to Google and it fills in (automatically/on my behalf) "Why is Eric Shmidt a moron?" in the query, and then generates a comprehensive response, then I will step back and reconsider Eric's delusions of grandeur.

Thu, 08/19/2010 - 13:09 | 530757 oogookiz
oogookiz's picture

 

When God desires to destroy a thing bla bla bla. Puts me off.

A creditor owns your dignity, and can command it. How is that then??

 

 

Thu, 08/19/2010 - 14:25 | 530956 Votewithabullet
Votewithabullet's picture

It may have been true when hugo said it.

Thu, 08/19/2010 - 13:10 | 530760 Wyndtunnel
Wyndtunnel's picture

Young people don't know what privacy is. They quite literally think that it is rude for a stranger or parent to read, say, a Facebook page that isn't targeted to them.   Today's youth were raised to be consumers, to respond to advertising that informs them of the latest gizmo or fad that will bring them status.   The big difference in the past 20 years or so has been the rise of embedded advertising and branding where corporations seek out local taste makers and enlist them to ply their wares (and most often wears).  Throw in the still nascent social media experiment and we are cruising for a fascist bruising.  I am very concerned that digital natives, for all their gizmo and computer wizardry will be hopelessly cast adrift in a world where potentially the web becomes tightly controlled and Big Brother Corps like Google and Facebook are taken over à la GM in the name of political/economic security.   It was clear to me the moment I read back in the early naughts that Google stored and scanned gmail traffic and stored backups of as many websites as googally possible for future "use" that a less than bright future was ahead.  

Google and Facebook bother the hell out of me.  For all I know they were both developped with a little covert help from the American national security industry and as always with things they create, it's only a matter of time before the blowback begins in earnest.

Thu, 08/19/2010 - 13:30 | 530813 Gully Foyle
Gully Foyle's picture

Wyndtunnel

Don't limit it to the young. Many older types are trying to recapture their youth. People don't understand if your shit is dull Twitter or Facebook doesn't make it more exciting.

About a month, month and a half ago, some Boomer women left her nude cruise pics open in Facebook. Those were quickly shared on Reddit.

Even after she removed them they were still available because some kind soul chose to back them up for posterity.

It's like the world is suddenly filled with the dumbest Hippies ever. They don't care what they do, what they share, or how they look.

They don't seem to understand the world is filled with conmen and predators just salivating over your goddamned outpouring of angst. The worst part is they read and comment when someone just like them moves from being a target to a statistic.

In case you missed it most young people think Beethoven is a fucking Dog!

Thu, 08/19/2010 - 15:50 | 531164 DaveyJones
DaveyJones's picture

everyone knows Beethoven was neutered

I think the world is filled with the most hypocritical hippies ever 

Thu, 08/19/2010 - 13:33 | 530824 hellboy
hellboy's picture

I have to correct on "Young people don't know what privacy is.". I am 23 and had a debate with some 45-50yr old guys in my company trying to explain to them why I am against CCTV, that Facebook might not be the holy grail and that complete survaliance of private individuals in not a good thing for us. Their answer was simply: "If you have nothing to hide why are you against it..." etc... Kinda shocked me...

Thu, 08/19/2010 - 13:40 | 530839 Gully Foyle
Gully Foyle's picture

hellboy

I always find it funny that when you watch certain tv shows they admit that cells can be tracked unless the battery is removed. But other ones totally deny this and only get excited when someone makes a call.

The Brits do an excellent job with the whole CCTV farce, seeing as it has not prevented crime. But they promote the shit out of it on all their police shows.

Now enjoy this test run.

http://gizmodo.com/5615901/the-end-of-privacy-has-started-in-the-city-of...

The End of Privacy: Entire City to Track People With Public Eye Scanners

 

Thu, 08/19/2010 - 14:04 | 530902 hellboy
hellboy's picture

read that one today too! So my plan is to either constantly wear sunglasses when I leave secure areas (eg. my house) and/or contact lenses to hide my iris? Would that work?

Thu, 08/19/2010 - 14:00 | 530891 Wyndtunnel
Wyndtunnel's picture

Hellboy,

My apologies for the generalization as the people who annoy me the most these days are from my own cohort (35 +) who tweet several times a day to simply inform the world how great social networking and iConform gadgets are.  All I think when I read that shit is "get off your iDevice and take a look around, the world is falling apart you morons and all you can do is blow your load over stupid gadgets and how great the latest crApp is that you found that catalogues your bowel movements by weight and color?". Furthermore most of these folks work in some Internet-related capacity or another and will either be unemployed when the Web is turned off or will be co-opted by the Google-Facial Complex as a reward for their loyalty to the cause.   As social media and its future evolution into Fascitnet is, in my estimation, mostly the perview of the young and hopelessly infantile mid-lifers who thought High School was the best time of their lives, I'm afraid my comment has to stand.  Of course there will always be outliers such as yourself.  If you could convince me that there are in fact enough people your age to defend the values of the Enlightenment moving forward, than I might just sleep a little bit better at night.

Thu, 08/19/2010 - 14:18 | 530934 hellboy
hellboy's picture

Sorry to say but most young-ish people I know do not give a shi* about whats on a world wide network of them, in fact most of them will upload pictures of themselves performing in a Donkey Show (got that one off TD a few days ago see http://en.wikipedia.org/wiki/Donkey_show) and then say they are so embarrassed that its online blablabla...

I grew up in the countryside in Germany and never really lived in a large city until I was 21, so maybe thats what made me personally notice all the freedom being sucked away from oneself in the interest of security. Thinking about my generation makes me feel incredibly bad: theres no jobs for 90% of my friends, so many are growing up in poverty, once we start earning money its too little to really save anything for their personal pension (because the state one sure ain't gonna be there once we're 93 and ready to retire), we are bombarded with crap and too much noise, where are the days when you could do something normal? Everything is become so extreme, binge drink, work hard, speak 18 languages and do as many things to make your CV look great, oh yea and don't forget to start wearing lipstick if your a girl above the age of 11...

Then again I could just ignore it all and let someone else think and solve those problems... but life would be too boring wouldn't it?

Thu, 08/19/2010 - 14:31 | 530973 brodix
brodix's picture

Next time the ask what you have to hide, ask why they wear clothes.

Thu, 08/19/2010 - 14:49 | 531001 Gully Foyle
Gully Foyle's picture

hellboy

Dude, things change.

Today the majority of people are still better off than at any other time in History.

Will that be different tomorrow? Who knows. Everyone is just guessing.

The only way to have true security is run around naked in the woods. Nothing to have stolen from you, live off the land.

The problem I see is everyone wants to protect their crust. They fear that someone will nibble a bit here and a bit there. It makes them fucking paranoid.

But at the same time they cry about being happy and secure.

You can't have possessions and be secure and happy.

Happiness and security are mindsets.

Free your head.

Alan Watts wrote a book the Wisdom of Insecurity.

http://www.amazon.com/Wisdom-Insecurity-Alan-W-Watts/dp/0394704681

Watts says we all want concrete unchanging life, security. But the world is in continual change. We can't deal with that all that well.  We get paranoid and neurotic.

The only thing we ever know is right now. The only time we can ever be happy is right now. Be here now, as they say.

The world will always take care of itself, things will die, things will be born. Ideologies will rise, ideaologies will fall, yesterdays hipness is todays big yawn.

But who the fuck cares. Right now there is a Hummingbird floating around my Glads. I can either enjoy that right the fuck now, or worry about the illusion of tomorrow.

 

Thu, 08/19/2010 - 15:02 | 531033 akak
akak's picture

Today the majority of people are still better off than at any other time in History.

Define "better off".

Perhaps in a narrow, shallow, materialistic sense you are correct --- but are they, on the whole, any more happier?  Any more satisfied with their lives?  At least in the USA, I would conclusively say "NO!".  I have lived long enough now to realize that I am living in a degenerating and decaying society, and I hate most social trends that I see --- especially the shallow and materialistic OBSESSION with trivial electronic gadgets, and the neurotic need of so many to always "be in touch" with each other.  It seems that almost everybody has to constantly be in touch with everyone they know, at every moment, nowadays, and yet the more they "are in touch", the less and less meaningful they have to say.

Thu, 08/19/2010 - 15:03 | 531044 Gully Foyle
Gully Foyle's picture

akak

Tell you what why not time travel back to the late 1800's, then you will understand what better off means.

You really don't grasp how good you have it? How much better off than your Grandparents you are? How much better off than your parenst at your age you are?

Fuck dude you can live through Cancer, or a cold or the Flu. You have virtually any type of food you want any time you want. Tv, Radio, the internet, access to information.

It is the goddamned golden age!

 

But you don't see that?

Jesus.

Thu, 08/19/2010 - 17:15 | 531405 DollarMenu
DollarMenu's picture

Gully- I think you are looking for folks to experience gratitude.

Something guaranteed to bring a measure of peace, if not happiness.

Yes, it is a 'golden age' for those who can be grateful.

Fri, 08/20/2010 - 02:57 | 532243 lost in the usa
lost in the usa's picture

You hit the nail on the head we have it easy and if we wanted to live a simple life we would not have to work that hard, productivity has brought us up, one of the reasons that so many people are unhappy is not the toys we have but that as life has gotten easier we have gotten stolen from harder so to keep up with the rat race and the welfare state and pay the financial sector the producers are still working 40 or 80 hr weeks.

But if you wanted to John Galt it you could live easy with the knowledge we have.

Thu, 08/19/2010 - 15:27 | 531099 Turd Ferguson
Turd Ferguson's picture

better off = heavily in debt

Thu, 08/19/2010 - 16:24 | 531221 Agent P
Agent P's picture

I think while disagreeing with each other, you are actually both correct. 

To Gully's point, the standard of living has risen exponentially...that's damn hard to argue against.

But to akak's point, are we any happier for it?  I think you're correct the answer is no.  But we should be, so why is it we're not content with the luxuries available to us?  I think it's because we (as a society) have come to automatically expect increasing standards, and have lost sight of the fact that honest hard work is a necessary input to achieve it.  We've spent too much time enjoying the harvest and not enough time planting the next crop. 

We've extended ourselves with debt (tip of the big yellow hat to Turd) to acquire the standard of living we all think we're entitled to, yet it's never enough.  Shiny new cars, ENORMOUS houses, 50+ inch flat screen TVs, iThis, iThat...you name it, we want it...and then we want more.

For some perspective, my wife recently got back from a mission trip to a "developing" country.  It was her first time out of the country.  We were talking about her trip and the conditions on the ground.  She said to me, "You wouldn't believe it.  These people had NOTHING, yet they were all so happy."  She paused for a bit then said, "We have everything, and we're so mean."  I thought this was an amazing perspective...until she went shopping two days later.

Thu, 08/19/2010 - 16:32 | 531287 Cathartes Aura
Cathartes Aura's picture

with respect, please stop spreading "god" to people who are happy.

Thu, 08/19/2010 - 16:42 | 531321 Agent P
Agent P's picture

She was not there in a religious capacity; she was merely providing free dental care to those in need.  It was a collaborative effort between her school and a church, hence the term "mission trip". 

Thu, 08/19/2010 - 15:27 | 531094 Lndmvr
Lndmvr's picture

Back in the day "deals" were done off the SW coast of Florida on a little island in the nude. It ended with a long time in the pokey. Found out you just couldn't have everyone in the supply chain deal that way.

Thu, 08/19/2010 - 16:29 | 531275 grunion
grunion's picture

I would really like to meet the person who junked that.

Thu, 08/19/2010 - 15:27 | 531096 rapidsingleflux
rapidsingleflux's picture

Well said.

Thu, 08/19/2010 - 16:30 | 531281 Dburn
Dburn's picture

+1 Good rant.

Thu, 08/19/2010 - 16:13 | 531235 grunion
grunion's picture

His response does not reflect the age demographic attitude. Frankly, I think the guy must be some kind of nazi. No one, no matter the age group, enjoys being the subject of surveillance.

I date that fellow and I can assure you my peers are anti-intrusion of any sort.

Thu, 08/19/2010 - 14:53 | 531020 Screwball
Screwball's picture

Interesting conversation guys.  Not sure where this will land in the thread though, but directed at all of you.

The "what do you have to hide" question just sends chills down my spine.  I heard it a lot over the bill passed after 9/11, can't remember the name right now.  Anytime "they" can legally snoop on us, for whatever bullshit reason, I have a problem.  As written, the laws might be fine, but who plays the game "as written"?  Surely not the government.

As far as the kids, Facebook, and all that shit, I have 4 kids, all over the age of 21, but they are all into that crap.  Drives me nuts.  They are good kids for the most part, and don't get into trouble, have jobs, all that stuff, but ask them about finance, crooks on Wall Street, who the Treasury Secretary is, or Fed Chairman, and they don't have a clue.  But did I see what they posted on Facebook, and have I seen the igadget.  Pisses me off.

For you younger guys, as you get older, you will only get more pissed off.  I hope you can fix what my generation fucked up.

Thu, 08/19/2010 - 15:07 | 531049 Gully Foyle
Gully Foyle's picture

Screwball

"They" have been legally spying on people forever. Look at the FBI files which have been released. Even before that The Pinkertons spied, Mata Hari spied.

The only thing which has changed is the technology is better.

Creating reasons to arrest someone is not a new fad.

Or to destroy whole neighborhoods like the MOVE fiasco.

Jose: Well, all's well that ends well. Though that's easy for Shakespeare to say... he'll be around for another millennium. But what of our own millennium? Will it all end well? No one can know, but that of course doesn't stop anyone from guessing. And the nature of those predictions always revolve around the usual suspects: salvation and/or self-satisfaction. With that in mind, I humbly add my own prophecy of what the dawn of the new millennium shall bring forth: one thousand more years of the same, old crap.

Thu, 08/19/2010 - 15:29 | 531101 Screwball
Screwball's picture

Gully

I understand that, and I agree the technology is better, much better.  To damn easy now and we make it even easier for them, shame on us.  They probably know more about us than we do.

But it makes me even madder people don't seem to care, nor even think about the little slices of information, freedom, and liberty they give up in the process.  Like that "what do you have to hide bullshit".  I have nothing to hide but that doesn't mean you have the right to snoop over my phone records, Internet use, library card, and bank accounts.  Where does it end?  I also sure don't have to like it.

I'm just a cynical old poop I guess.

Thu, 08/19/2010 - 17:22 | 531385 Jerome Lester H...
Jerome Lester Horwitz's picture

Reading this thread and chuckling over something that happened to me yesterday. Busy working and cell phone rings:
Caller: Hello, Mr So and so?
Me: Yes?
Caller: This is Ms Blah Blah from XYZ hospital calling about a past due medical bill. Would you care to verify your SS number for security purposes?
Me: Umm...no!
Caller: Then would you care to verify your address?
Me: Umm...no!
Caller: (exasperated) Well then sir would you like take down our phone number and call our billing department?
Me: Umm..no. I don't know who you are.
Caller: Sir, I just told you who I am.
Me: Yeah, but I could find your phone number and call you and say that I am anyone too. And if I did would you give me your SS number and address?
Caller: (silence)
Me: I will have my wife look into it.
(Click...end call)
Turns out we do owe money to the hospital where my wife works but our insurance paid the wrong amount. Also the billing dept only contacts people by mail, any phone contact would be from a collection agency. This person clearly stated that they were with the billing department from the hospital.
I wonder how many people in this situation would just give out their personal information?

Thu, 08/19/2010 - 16:53 | 531348 Dburn
Dburn's picture

I sort of notice that people think they now have the right to lecture  people they don't know if they are doing or not doing something that is not on the generally accepted list of rules for their particular world.  It isn't anything that would be considered disturbing in terms of the law or even mildly annoying, it 's just not approved.

Then they get upset when I tell them I  wasn't asking for their advice or guidance as it was none of their business in the first place  and I would appreciate it if they  didn't invade my privacy. Why would they get upset and say things like "You scare me".

The strangest encounter of that kind was a next door neighbor I recognized at a Tea Party Convention  on C-span at the DC mall. I was at a store and saw it and had to do a double-take as they were interviewing her.

When not only faceless organizations feel like they have the right to know everything about you, but people you don't know, not only agree with that pursuit of everything you are, but act on it , I start to get the feeling the foot soldiers are out. They just aren't wearing uniforms yet.

The concept of "You have nothing to worry about if You haven't done anything wrong" is definitely not alright because then it comes down to who has power and decides what is right or wrong.   I think that's where we are headed. I don't find myself , at this age, getting too excited about it, but I do find it strange when I see people wearing T-shirts and flags that says "don't tread on me" and then they do precisely that.

That goes for all groups but as one who hates hypocrisy more than cauliflower, I especially don't like the "Do as I say, not as I do" crowd".  

 

 

Thu, 08/19/2010 - 17:26 | 531433 Screwball
Screwball's picture

Understand completely.  I am totally disgusted with the entire thing right now.  I have lived long enough, seen enough changes in people, the media, the government, and the moral and verbal discourse in this country to make me sick.  They speak of moral decay, but we all all kinds of decay, moral, physical, mental, leadership, honesty, and even the dam pot sucks.

Yea, I'm sort of an old hippie.  If I could sell everything I have, find a little joint on the beach, have a bar close by to drink in, a Chinamart to buy necessities and food and Internet access so I can trade - I'd be one happy camper - and piss on the rest of the world.  What a f**ked up mess.

Thu, 08/19/2010 - 16:59 | 531368 hellboy
hellboy's picture

I hope you can fix what my generation fucked up.

It feels surreal reading that, no one "older" I know would say that to me, but its good to hear... And believe me, I am trying my best to do my part in this whole process...

Thu, 08/19/2010 - 17:29 | 531444 Screwball
Screwball's picture

Best of luck young man - I wish you the best - for the sake of my kids and grandkids.

I don't know where it went wrong, but I don't think it was the drugs. :-)

Thu, 08/19/2010 - 18:56 | 531635 Wyndtunnel
Wyndtunnel's picture

All I can say is that you will likely have to compromise your values now and again but you'll learn what your limits are.  I have botched a number of career options by refusing to lower myself intellectually to superiors.  I have a knack for honing in on peoples' insecurities and dillusions about the world and hammering away at them.  The funny part is that these people generally like my forthrightness at first and it opens doors until they realize that I don't relent.  It's all fun and games until my questions and observations start threatening their station in life.   I've challenged many a superior on how they can do what they do in the name of work.   Mostly I've just been explaining to people since the Asian crisis in '97 that the system was unsustainable and that it was all going to end badly.   Now that it seems to be happening for real I'm calmer than I've ever been while those that are beginning to see the light are confused and terrified.  I like what Gully wrote above...life goes on..Empires rise and fall... rich or poor we are all equal in death.   If you really feel that the people around you are blind to their fate I guess you can make it your mission to inform them otherwise. We all have our way of doing it.  What's universal is that many good people don't care to acknowledge any of it until it's too late.  But then again that's where all the great stories come from.  Sides are being drawn and the ongoing war between good and evil is gearing up for another major conflagration.  At the end of the day we'll all do what we have to do to survive and whether we have to repent about it down the road or not will depend on who gets to write the history of what's about to go down.  And Gully, we have hummingbirds feeding off our bees' balms everyday. What more can one ask for?

Thu, 08/19/2010 - 13:11 | 530761 RockyRacoon
RockyRacoon's picture

The fact that smart money and central banks are unwilling to part with their gold at records is a function of the reality that the Western world is completely bankrupt and there is no way out of this without a hyperinflation event or a deflationary collapse that ends in restructuring.

Gold does not flow from the holders = high demand.

Gold holds its unique position because it is pretty much used for nothing else. It has an extremely high stock to flow ratio. "Stock" means those who are sitting tight on their physical gold, letting it lie still for the future, and "flow" means those who are presently trading their gold.

http://fofoa.blogspot.com/2010/06/how-can-we-possibly-calculate-future.html

Wheeee!  This investing stuff is easy.   (Apology to Mogambo)

Thu, 08/19/2010 - 16:06 | 531211 DoChenRollingBearing
DoChenRollingBearing's picture

+ $1230 Rocky re gold.

fofoa.blogspot.com for what looks like the best case to be made for gold.  Buy more physical while it is still available.  Gold, to me, is a bargain at under $1500.

Waiting for JPM Sr. VPs Nadler and Bravo to nail me on that!  But, if they get their bonuses in getting gold to $900, well, I will just buy more and faster.

Thu, 08/19/2010 - 13:14 | 530768 fuu
fuu's picture

edited away

Thu, 08/19/2010 - 13:13 | 530769 akak
akak's picture

I will derive great satisfaction, even if only schadenfreud, a year or two from now in mocking all the lemmings who are currently rushing into the mother AND father of all financial bubbles, US Treasuries and government debt in general. 

After the NASDAQ and housing bubbles, I am reminded of the old saying "Fool me once, shame on you; fool me twice, shame on me."  What comes after "Fool me thrice"?

Thu, 08/19/2010 - 13:18 | 530786 Temporalist
Temporalist's picture

"Fool me thrice; I'm fucked."

Thu, 08/19/2010 - 17:27 | 531431 Strider52
Strider52's picture

Don't know if everyone read this one yesterday, but I've been using it since I read it, best quote so far:

 "We're so far beyond fucked we can't even get a bus back to fucked"

 Good stuff here on ZH...

Thu, 08/19/2010 - 13:43 | 530848 Trundle
Trundle's picture

What comes after "Fool me thrice"?

Precious metals.

Thu, 08/19/2010 - 13:55 | 530878 Max Hunter
Max Hunter's picture

'What comes after "Fool me thrice"?'

Doesn't matter.. They will have bigger problems by then.. ;)

Thu, 08/19/2010 - 14:52 | 531013 -Michelle-
-Michelle-'s picture

"Just shoot me."

Thu, 08/19/2010 - 16:23 | 531260 DosZap
DosZap's picture

akak,

You had better not have living Parents,or Grand parents............

Because most likely their ASS deep into the US Treasuries.

When this bubble bursts, guess who will be taking care of the one's who have been living life like it's 1990.

Even old farts like me, I have to worry about my kids,they live very well, make damn good money, drive the finest, and live in very good neighborhoods.

I cannot talk to them their too busy, and working for that carrrot..........and I am a semi old paranoid fool.

Couldn't get them to read, or watch a news report of any kind........

Would interfere w/work, life, and T.V..........and Sports.

IOW, I am up on this, have been for years, and NOT one swinging weiner would listen.

This is not just a Greed issue, it's a Spiritual War.

 

Thu, 08/19/2010 - 16:33 | 531290 grunion
grunion's picture

It's a crapshoot...My grown kids squeak they are so conservative...Go figure

Thu, 08/19/2010 - 17:25 | 531425 DollarMenu
DollarMenu's picture

DosZap-

"This is not just a Greed issue, it's a Spiritual War."

I think your arrow hits the mark.

Good call.

Thu, 08/19/2010 - 13:13 | 530770 litoralkey
litoralkey's picture

Between google, adsense, facebook, gowalla, cbs advertising, XM/Sirius and clear channel, not only will they have predictive information delivery, they will have geolocation information to pump adverts to you specifically when you pass by certain billboards and interactive kiosks.

 

And ZeroHedge is not better, with 5 to 7 tracking cookies per webpage delivered.

 

Doubleclick    Blocked Here

Quantcast Blocked Here

StatCounter Blocked Here

Google Analytics Blocked Here

 

Dedicated Networks

Quantcast

 

 

Thu, 08/19/2010 - 16:28 | 531272 DosZap
DosZap's picture

Hey, it advertisers,you left off ON STAR.

And tracking you on your cell,if the battery is in it....

Not only tracked,but your convo's can be listened to, IF IT"S OFF, and the battery is in it.

Tell people that, and they think your nuts.

Just yesterday, if you said Keyloggers...folks looked at you like you were insane.

Thu, 08/19/2010 - 13:13 | 530773 lieutenantjohnchard
lieutenantjohnchard's picture

since bankruptcy of the usa (old hat for many of us) is now mainstream have we reached the "acceptance" stage?

Thu, 08/19/2010 - 13:18 | 530783 Gwynplaine (not verified)
Gwynplaine's picture

Love the Victor Hugo quotes.   He wrote a great a novel called "The Man Who Laughs".  It was initially titled Aristocracy because its main theme was the abuse of power.

Thu, 08/19/2010 - 13:26 | 530802 Dr Emilio Lizardo
Dr Emilio Lizardo's picture

Egon says "DOOM!" ....

Fräulein Sylvia-rrr  says "The HELL you say!"....

http://www.cnbc.com/id/38767004

 

Sealed with a curse as sharp as a knife. Doomed is your soul and damned is your life.

Thu, 08/19/2010 - 13:28 | 530809 hellboy
hellboy's picture

I found the quote from Eris Schimdt so disturbing that I did some research on that before actually reading your article, for anyone who is interested:

http://googlesystem.blogspot.com/2010/08/eric-schmidt-on-future-of-search.html

and the interview from WSJ:

http://online.wsj.com/article/SB10001424052748704901104575423294099527212.html

Thu, 08/19/2010 - 15:19 | 531072 DonnieD
DonnieD's picture

After reading this article, I'm not sure why anyone would ever buy an Android phone. He's telling you they are already tracking everything you put into that device for later "use", whatever that might be.

I wouldn't ever joke about doing something illegal on that thing because your message will probably end up with law enforcement at some point.

 

Thu, 08/19/2010 - 17:31 | 531455 Dburn
Dburn's picture

It's real scary when one considers the applications that are being developed for that phone and iPhone too. I saw a vertical app for Doctors that brings up patient records, and alerts them when certain vital signs goes out of preset parameters and drills right down to the EKG or other test device graph that is on the patient.

As we get beyond games, books, and other time passers, and into to do lists, scheduling,  list of associates and Friends with contact information to medical applications and other vertical areas like the law, medicine et al that all is being developed at a record pace right now, those smart phones may just be the one thing we really need to do without or set firm rules with criminal laws that are actually enforced on the use of them by the issuing parties.

You can take measures on a computer but people have opened themselves up with a smart phone that carries more personal data than a computer does. It also carries personal data on a circle of Friends. It contains their smart phone number which allows just about anybody to develop a web of contacts and track conversations between them all with complete information dossiers on each person.

It is starting to appear that computers were the side show and this is the main event. I don't own one. I don't need one. But as I see the user count grow I begin to wonder if it will become something like a email address or a fax machine in the old days. "What do you mean you don't have one?"

If Droid is activating 6 million users a month and Apple is activating 5 million users a month on top of their 60 million strong user base, how long does it take to reach that level where having one is a base requirement  to participate in today's business world and social environment. Will they become  "have to have" equipment?

I try not to be paranoid, but the temptation here for people to do their worst has never been easier. Why would anyone trust all this to private companies who can be rolled by a govt agency with a mere IRS threat.  Do we really have to travel this road?

Thu, 08/19/2010 - 13:28 | 530810 Zero Debt
Zero Debt's picture

Velocity of money (V) also matters, not just the size of the monetary base (M). Ben knows the difference between bank reserves sitting idle and being lent out. Although M may grow, V is slowing down. High V in the 1990s coincided with widely changing behaviors among the general public in the use if currency and hence the creation of a bubble in practically everything. As V falls, more and more capital will park on the sidelines. V cannot be centrally controlled. The economy itself decides whether it wishes to put the reserves into circulation, and how fast. Each individual and business decides how quickly to part with its money as soon as it receives it. The only thing that is saving the currency from losing purchasing power is that V remains slow. M is then hoarded and not spent as quickly as before. M is also highly concentrated in few people's hands which amplifies the slowdown effect. Thus it is more likely that any hyperinflationary event would be triggered by reserve holders dispersing holdings into the general economy, as the general economy can find more marginal utility of spending the same M. There is no need for more QE to drive prices, it is enough if existing M starts circulating at a higher V, i.e. more currency chasing the same amount of reduced economic activity. What the government will thus attempt to do when additional M is useless is to attempt to increase V by promoting confidence metrics as leading indicators of V to incite systemic herd behavior. Sooner or later the public will call the bluff as confidence works better sideways, between equals, not by top-down spending and V must hence remain low even as M remains inflated. Lower V trumps higher M and causes deflation more broadly, with exceptions in genuine demand-supply shifts. Waiting for the trigger of hyperinflation is equal to waiting for an explosion in V, which requires an broad shift in sentiment and perceptions. Crystallizing what could change sentiment in this direction, if any, could provide a valuable glimpse into the future.

Thu, 08/19/2010 - 13:45 | 530853 Apostate
Apostate's picture

Yes, V can be controlled.

All the Fed has to do is charge a fee for reserves. Bang. Off to the races.

Thu, 08/19/2010 - 13:59 | 530886 realtick
realtick's picture

Speaking of V - long and strong Sep 27 VXX calls as of right now.

http://i35.tinypic.com/a1kl.jpg

Thu, 08/19/2010 - 14:07 | 530909 Wyndtunnel
Wyndtunnel's picture

Ok. But do these M holders shop at WalMart?  Could hyperinflation stay mostly restricted to asset markets and high-priced real estate markets since the poor and middling classes are likely never to see one red penny of stiMulous and aren't about to start borrowing anytime soon?

Thu, 08/19/2010 - 14:11 | 530912 Apostate
Apostate's picture

It always spills over eventually.  

Thu, 08/19/2010 - 14:11 | 530913 fiddler_on_the_roof
fiddler_on_the_roof's picture

Yes a negative interest rate or a nudge in commodity/assett prices will do, just enough to cause a herd stampede. But again, if there is a negative demography population(like Japan) this cannot work  and V remains idle. USA is not Japan - in my view.

Thu, 08/19/2010 - 15:08 | 531053 augmister
augmister's picture

Fine with that... Bank of Sealy, Bank of Amana, Bank of Whirlpool....FDIC insurance?   We don't need no stinking FDIC insurance!

Thu, 08/19/2010 - 14:24 | 530955 Nonconformist
Nonconformist's picture

Have to agree.  it seems that the only way to increase velocity would be for the Federal government to crank up a new stimulus in the $500B - $1T a year range and commit to it for several years.  Even with this much stimulus a lot of money will just go to reducing debt so the inflationary effect would probably be limited. 

 

The author of the article makes a good point in that the dollar, at this point, is only propped up by the lack of an alternative and a large blue water navy.  At some point in this process of continual QE and dollar debasement, the reach of the navy will be demonstrated for all to see at the expense of some hapless head of state who dares to question the existing order.

Thu, 08/19/2010 - 15:13 | 531057 augmister
augmister's picture

Yeah, watch out for that new Chinese Aircraft Carrier Killer Missile they just rolled out of their warhead plant.....  This could get real fugly, fast.

http://www.foxnews.com/scitech/2010/08/06/chinese-carrier-killer-missile-game-changer-expert-says/

Thu, 08/19/2010 - 16:41 | 531314 grunion
grunion's picture

OH MY GOD!!! A TIGER TANK??!! What will we do? <sarcasm off>

Thu, 08/19/2010 - 14:26 | 530957 1100-TACTICAL-12
1100-TACTICAL-12's picture

FICO controls V

Thu, 08/19/2010 - 14:35 | 530978 Apostate
Apostate's picture

That's a good point. This may be one of the reasons that, as mentioned earlier in these comments, Obama is talking up business lending.

There's no reason as to why the Fed can't collude with the government to spark a bubble in SBA loans, startups, and so on. They just need to adjust a few taxes here, start some special lending programs there, and then we're into a new bubble period.

Thu, 08/19/2010 - 14:51 | 531008 SheepDog-One
SheepDog-One's picture

'Sub-prime contained, just trust us, really it is'.

Thu, 08/19/2010 - 13:50 | 530863 proLiberty
proLiberty's picture

"I think the food, oil and precious metal price surge that is coming has already started and will accelerate since those in political power will print and print and do everything possible to avoid deflationary collapse. This is not to say that I think they can avoid deflationary collapse, what it means is that in a fiat money system deflationary collapse can mean hyperinflation."

 

I have been fascinated at how those who support big and Bigger government are so utterly fearful of deflation.   Being an Austrian, I know that inflation benefits the borrower at the expense of the lender and deflation the reverse.  The biggest borrower of all, government, knows full well the cost of deflation.  More than the money, it brings its power grabs to an end.  It is the end of life as the beast knows and loves it.  The Beast trembles at the mere thought.  I cannot but help notice who trembles.

 

People have proposed all manner of ways to fix our Leviathan government.  The very first fix must be to put it on a very short leash by eliminating every authority it has assumed for itself to create money and expand credit for its own benefit at the expense of its citizens and anyone who chooses to hold the Dollar.

 

I also find it interesting that the Liberation Theology that UhBama didn't hear as he sat in Jeremiah Wright's church for some 20 years, focuses on the meme that the US has stolen from the rest of the world and now we must make amends by spreading the wealth around to poor nations.  Yet, the very mechanism of paying for this aid is by borrowing and inflating the currency, policies that steal wealth from everyone who holds dollars, and that includes a lot of people, companies and governments outside the US.

 

Thu, 08/19/2010 - 14:01 | 530889 John McCloy
John McCloy's picture

  They are fearful of deflation because it permits the wise and prudent savers to climb the financial ladder. They will use every tool in their disposal and powers to keep the gap as wide as possible. Deflation is not a dirty word. I always wondered when in elemntary school I was taught to fear deflation..now I know why.

Thu, 08/19/2010 - 14:25 | 530918 akak
akak's picture

While there are literally hundreds of examples of life savings being wiped out by inflation and hyperinflation, and whole societies being impoverished by the same, there is not ONE historical example of any society being impoverished by deflation (mostly because actual deflation is vanishingly rare --- and modern Japan is NOT an example of one!).  Mull over that.

Thu, 08/19/2010 - 14:51 | 531010 Milestones
Milestones's picture

akak-you raise an interesting point here that caught my attention also. Somehow something is not being factored into the equasion but I don't know what that is. Thanks for the post.

Milestones

Thu, 08/19/2010 - 16:01 | 531194 lost in the usa
lost in the usa's picture

What is not being factored in is the people printing the money do not get a free ride if we get deflation, but it will not go on long the money winners always win until they do not.

Thu, 08/19/2010 - 15:01 | 531039 brodix
brodix's picture

There is a way to do this. There is no viable Federal budgeting process for a very obvious reason. Government debt is necessary to make this debt based monetary system function, so the spending process is designed to overspend, by compiling enormous bills which are passed by buying the votes of enough legislators with enough pork. It's like negotiating with a kid on how many candy bars he can have for eating an apple.

 Budgeting is to prioritize and then limit spending to what can be afforded, as any child on an allowance should know. 

A way for the government to do this would be to break the bills into their various items and have each legislator assign a percentage value to each item. Then reassemble the bill in order of preference and have the president draw the line at what could be afforded. Since those items around the cutoff line would have a much smaller constituency than the broad range of the population being asked to pay for them, there would be minimal political pressure to overspend. Obviously this would mean many local projects would lose Federal funding, but that would make communities necessarily more self sufficient. A very good solution to this would be local public banks, which used profits as local public funds, rather than sending them off to Wall Street.

 It seems the choice will soon be to go down with the Titanic, get on a lifeboat, or start swimming on your own. 

Thu, 08/19/2010 - 13:50 | 530865 Caviar Emptor
Caviar Emptor's picture

0% BLT = Double Whammy Economy. We're saying one and the same thing.

Interest rates at 0 is a response to deflation. A rising BLT price can still happen in this context, and it has. 

I've been posting all day about the fresh evidence in today's data that in fact confirm that we're no longer in the earliest stages of simultaneous deflation and inflation. It's in fact accelerating. IN BOTH DIRECTIONS!

To just cite one of many supportive examples, housing inventory has just exceeded 12 months supply this week! Further pressuring deflation in housing. Unemployment claims have spiked further pressuring jobs, work hours and incomes. But Philly Fed data shows prices paid by businesses soared 13%!

-Copper up 13%, Wheat up 17%, Coffee up 7.5%, Lumber up 7% in 1 month. 

-Average consumer credit card rate 8/15/2010: 16.79%, cost of financial services up.

-WSJ: "Big employers Estimate Healthcare costs to rise 8.9% in 2011"

http://blogs.wsj.com/health/2010/08/19/big-employers-estimate-health-car...

-Google this : Tuition Rises

-Taxes anyone?  Check your wireless bill lately?

 

Thu, 08/19/2010 - 15:29 | 531104 Turd Ferguson
Turd Ferguson's picture

But don't worry, there's no inflation.

Remember, the "core number excludes the volatile food and energy components".

Whata fucking joke.

Thu, 08/19/2010 - 19:25 | 531676 sgt_doom
sgt_doom's picture

Caviar Emptor's comment is truly brilliant and most germane!

Perhaps this situation might be similar to what occurred -- for different reasons -- in Hong Kong after the Chinese government took it over from the Brits.

Regardless, this happens in a completely artificial, criminal enterprise.  (Which is why all those pseudo-economists' predictions can be ignored!)

No surprises there.

Thu, 08/19/2010 - 13:55 | 530871 DiverCity
DiverCity's picture

"And this company’s motto is 'Don’t be Evil.' "

Ah, but its conception of "evil" is very likely to include many of the thoughts of a free-thinker, much like the conception of its, ahem, partner in the endeavor to predict (writ, create?) the future.  In other words, if your thoughts and behaviors aren't in some meaningful way guided by Google, well then you're a criminal.

Thu, 08/19/2010 - 14:45 | 530992 American Dreams
American Dreams's picture

Premise and perspective reside within the man - good post

Thu, 08/19/2010 - 14:53 | 531024 Gully Foyle
Gully Foyle's picture

DiverCity

Frank: Do you mind my asking: you're writing a book, yet you don't believe any of the prophecies?
Jose: At the start of the nineties, they predicted major breakthroughs for the neurosciences: the 'Decade of the
Brain'. Instead, it was the decade of ... body-piercing. Now why should the millennium predictions be more accurate?"
Frank: "The religious component. Do you not believe in God either?
Jose: Oh, there are times when I've been a devout believer. And there are some times I have been a staunch atheist, and there've been times when I've been both ... during the same course of the same sexual act.
Frank: Don't be dark. Personally, I think this is a very significant time in mankind's history.
Jose: But that's what every man throughout history has said about his time.

Thu, 08/19/2010 - 14:11 | 530917 SheepDog-One
SheepDog-One's picture

Bullets, ponchos, and canned food, bitchez!

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