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Albert Edwards: At 500% Net Liabilities To GDP, It Is Too Late To Prevent The Collapse Of The G-7; Greece Is Irrelevant, We Are All Now Insolvent
For Greece, with on and off balance sheet liabilities at over 800%, it's game over. For the Eurozone, with the same ratio at about 500%, it is also game over. For the US, at 500%+, it is, you guessed it (sorry Joseph Stiglitz), game over, but since we have the printers, it will simply take a little longer. Following up on yesterday's popular post on prevailing delusions as captured by Albert Edwards' colleague Dylan Grice, we present Albert's latest outlook. Please don't read this if you want to keep believing there is any hope left for the (developed) world.
But first some aeral photography from Dylan Grice, indicating just how far the US government is willing to go to get the population stoked about owning fixed (shouldn't it be called broken really?) income. With British QE over, and the country still to implement the same criminal annuitizing of 401(k)s that Uncle Sam is contempltating in order to make "Buy Bonds" a "voluntary" option one can't really decline, maybe letters on modern architecture building blocks is all that would works. As Edwards says: "I'm not sure leaving man-sized building blocks around the City of London is really going to make an awful lot of difference, but I suppose when your public sector deficit is around 13% of GDP, every little bit helps!"
So back to Greece, the Eurozone, and policy response in general, Edwards places the causes (and "solutions") of the escalating problem precisely where it belongs: at the core of the Keynesian systemic outlook flaw.
A major divergence of views in the market at the moment concerns what governments should be doing with their outsized fiscal deficits. Economists seem to be polarised between those who think governments should be rapidly cutting fiscal deficits to avoid impending insolvency and/or a surge in bond yields, and those who believe this will be totally counterproductive and that deficits should stay very large. Behind this controversy probably lies the key to the economic outlook.
To Edwards, and to ever more hedge fund investors judging by the jump back in Greece Bund spreads which just broke the most recent technical resistance level of 300 bps, Greece is nothing more than Russia and LTCM (or Bear Stearns as the case may be).
The situation in Greece following hard on the heels of similar solvency issues in Dubai feels to me very much like the Russian default and LTCM blow-up in 1998. For the blow-ups that year were a direct follow-on from the Asian crisis a year earlier a different chapter in the same book. There will be more crises to follow Greece, both inside and outside of the eurozone.
The outcome of broken Keynesian policy (by definition) will be ugly, and will destroy the eurozone. We said it some time ago, and SocGen has now also confirmed this bearish perspective.
My own view of developments, for what it is worth, is that any "help" given to Greece merely delays the inevitable break-up of the eurozone. But, for me, the problem is not the size of the government deficit and the solvency or otherwise of the governments in the PIGS (Portugal, Ireland, Greece and Spain - we deliberately exclude Italy).
The problem for the PIGS is that years of inappropriately low interest rates resulted in overheating and rapid inflation, even though interest rates might well have been appropriate for the eurozone as a whole. Rapid inflation has led to overvalued bilateral real exchange rates (they do still notionally exist) for the PIGS and in most cases yawning double-digit current account deficits. With most trade done with other eurozone countries, the root problem for the PIGS is lack of competitiveness within the eurozone – an inevitable consequence of the one size fits all interest rate policy. Even if the PIGS governments could slash their fiscal deficits, as Ireland is attempting, to maintain credibility with the markets in the short term, the lack of competitiveness within the eurozone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Hence the PIGS public sector deficit will inevitably remain large as a direct consequence of this weak growth outlook.
As noted earlier on Zero Hedge, in Europe the population is a little less brainwashed by the moronic happenings on prime time TV, so while in America the destruction of the economic system, as trillions are transferred to the kleptocracy which knows fully well the end game is nigh, results in some sighs of desperation at best, in Europe the outcome will be somewhat more violent.
In my opinion this will not be tolerated by the electorates in these countries. Unlike Japan or the US, Europe has an unfortunate tendency towards civil unrest when subjected to extreme economic pain. Consigning the PIGS to a prolonged period of deflation is most likely to impose too severe a test on these nations. And the political "consensus" within the PIGS to remain in the eurozone could falter in the face of another of Europe's unfortunate tendencies -the emergence of small extreme parties to take advantage of any unrest. My own view is that there is little "help" that can be offered by the other eurozone nations other than temporary confidence-giving "sticking plasters" before the ultimate denouement: the break-up of the eurozone.
And in case you were wondering why all European leaders are powerless to provide a bailout proposal that actually has a snowball's chance in hell of doing something/anything to help Greece, read on. Alternatively, if you want to find out why any plan suggested on Monday will be thoroughly useless and once digested by the market will cause another major crash, read on as well.
The pressure to tighten fiscal policy from current nose-bleed levels of deficits is not just an issue for crisis hit Greece. It is an issue for virtually all economies. It is a particular issue for the US and UK with structural (cyclically adjusted) general government deficits of almost 10% of GDP (according to the OECD)! There is a ferocious debate ongoing between those who believe there needs to be a rapid reduction in these deficits to avoid some combination of insolvency/default/rapid inflation and those who believe that there should be even more fiscal stimulus. The debate is loud and opinions are tending to be polarised.
My own view on this is that obviously we should never have got into this wholly avoidable mess in the first place. But having got here, there really is no way out that does not trigger a major market-moving upheaval. Ultimately economic prosperity over the past decade has been a sham: a totally unsustainable Ponzi scheme built on a mountain of private sector debt.GDP has simply been brought forward from the future and now it's payback time. The trouble is that, as the private sector debt unwinds, there is no political appetite to allow GDP to decline to its "correct" level as this would involve a depression. So burgeoning public sector deficits and Quantitative Easing are required to maintain the fig-leaf of continued prosperity.
And here is the topic that will dominate over all pundit round table discussions in the next weeks: the entire world is insolvent, although some are more insolvent than others. Greek total net liabilities (on and off balance sheet) to GDP are 800%! EU: at 470%, the US, at over 500%. There is no way out but default.
Edwards' poignant summation.
I am persuaded by my colleague Dylan Grice's analysis that, including unfunded liabilities, most governments are already insolvent with debt to GDP ratios closer to 500% of GDP instead of around 100% for most G7 countries . It is too late.
Nor were Dylan and I persuaded by recent comments from Nobel Prize Winner Joseph Stiglitz that it is absurd to suggest that the US and UK governments might default on their debts as they could just print money. Indeed. But a client pointed out to us that Weimar Germany did not default on its debts during its hyper-inflation. How reassuring!
I am persuaded though by Richard Koo's book about the lessons from Japan's balance sheet recession. The crux of his analysis is that governments have no option but to stimulate aggressively all the while the private sector is de-leveraging. ANY attempt at fiscal cuts simply results in renewed recession and a further loss of confidence, thus making it even harder and more costly to sustain any subsequent recovery - and hence the budget deficit ends up bigger than before (e.g. see chart below). This is exactly the outcome I expect.
The take home is very, very simple: we can delude ourselves that the game can be won (it can't), or we can prepare for the imminent collapse when delusion finally fails.
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Too much debt to pay. Monetization is always the path of least resistance. This time, like the previous 2,000 years will be no different. No coins to shave, just digits to send out to recipient dealers. The result is always the same. Count on it. Greece...pfft, not even a warm up act. Wait until state Govts in the US start declaring bankruptcy. That's the warm up act.
So, what does the S&P 500 do in that context? Go to 20,000?
the direction would definitely be up. How high in direct proportion to the 'vigor' and duration of monetization.
"So, what does the S&P 500 do in that context? Go to 20,000?"
That is a meaningless question in a hyperinflation unless you're 100% long 100% of the time. Anything short of that and you're losing ground. Hell, you may even lose ground at 100% long.
is it safe to hold USD? CAD? or should i move them all in to RE? land? gold? sitting on some cash and can not bring myself to enter stocks or bonds or treasuries. thanks.
Boring. If the sky is falling, as you say, why aren't you guys massively shorting the market?
Please. You Republicans and neo-libertarians (Repubs in drag) have forgotten a key fact:
The stock market lost 50% under George Bush. At the end of Obama's term(s), do you think the market be down 50%? I say no way. So here's a realist's look at the future:
Gold will not double from here, gold nerds.
The G7 will not default. The Eurozone may break up, but so what.
The market will go up to 11,000 (after a correction) then 12,000+ on Obama's watch.
And you Chicken Little Republicans will be blindsided, just like you were when the USA soared under Bill Clinton.
I think my scenario is more likely than your "USA default" scenario.
Anyone care to put money on this bet?
I totally agree with it all, although I am a libertarian, and I hardly go along with the other Repubs in drag, as you say.
I see our world situation very much like your assessment.
The notion that gold is going to double is just poppycock. It's already got all the fears of inflation and rampant speculation priced into it.
Also, the whole world won't default at once. Even if it did, it's not like we're going to have riots in the streets and people shooting at others from their compounds in the mountains.
The market will correct, then it will go up. Still, I have a feeling that technically it needs to go MUCH lower before it can go higher in earnest. I just think that testing where it was already has to happen.
I don't put as much faith in Obama as you do, however. Mostly because it seems like he won't get the chance to help things with the "party of no" obstructing everything he does, but also because I think that Obama doesn't have the economic tailwinds that the economy of the 90s had.
I think that the first Bush did a lot to prepare us for the prosperity of the 90s, but nobody likes taxes even if you need them to run a government...
I agree mostly, I just don't think that Obama's the shit or anything.
"Mostly because it seems like he won't get the chance to help things with the "party of no" obstructing everything he does"
You are not a libertarian.
The sun rose this morning. On my watch.
"the entire world is insolvent"
don't you feel that it is too categorial and flat judgement?
Tyler?
Nothing categorical about it. That's what happens when you run a global pyramid scheme.
What is ponzi jesus going to come back and turn the 7 fishes and 5 loaves into thousands again but first he has to find a good fisherman to be a disciple?
+1 brazillion
But here's the thing... if EVERYBODY is insolvent, can that then make people solvent by default?
Why couldn't we just say "well, screw the banks that everybody owes, and the ledger starts back at zero again!"
I know it's wishful thinking, but money isn't tangible anyway!
That was the raison d'etre of Project Mayhem.
The zeroing is much deeper than that.
http://www.youtube.com/watch?v=JOiZP8FS5Ww
One thing [always] leads to another. It's coming soon:
Oh my goodness....
Actually we were doing fine until Bush and the Republicans came along with their buy and not pay for anything philosophy. They wanted to bankrupt the government so it would be "small enough to drowned in a bathtub".
WHY Bush isn't in JAIL is a mystery.
Ignorance is no excuse for the LAW. This guy allowed the looting of our entire financial system, and was the ultimate puppet for the SQUID--
history will be not kind for the Bushies
"Although Greece is an EC member, its finances and political system have the character of a banana republic. EC membership, though, enabled Greece to borrow far more money than any banana republic, such that the country’s debt-to-GDP ratio is about triple that of Argentina just before the latter’s bankruptcy in 2000. And because Greece is an EC member, the size and adumbrations of a bankruptcy would be much, much larger than that of any Latin American country."
"Corruption in Greece has been systematically cultivated by all governments and parties. Everyone has relatives living off the public sector in cushy, do-nothing jobs. They get paid through various funding sources that successive governments have created so even though the nominal wage is low the actual take home and all benefits are quite high. Another important dimension to the public participation in corruption is that the rich by and large do not pay any taxes. The only people who pay are those who can’t escape the clutches of the state: pensioners and civil servants i.e., sectors where the salaries can be accounted for. According to the President of the National Bank of Greece, 30% of the budget of the last administration was unaccounted for—yes, just disappeared into the coffers of their families and well-wishers, and I would guess the other 70% was never audited."
David Goldman at
http://blog.atimes.net/?p=1357
"Although Greece is an EC member, its finances and political system have the character of a banana republic. EC membership, though, enabled Greece to borrow far more money than any banana republic, such that the country’s debt-to-GDP ratio is about triple that of Argentina just before the latter’s bankruptcy in 2000. And because Greece is an EC member, the size and adumbrations of a bankruptcy would be much, much larger than that of any Latin American country."
"Corruption in Greece has been systematically cultivated by all governments and parties. Everyone has relatives living off the public sector in cushy, do-nothing jobs. They get paid through various funding sources that successive governments have created so even though the nominal wage is low the actual take home and all benefits are quite high. Another important dimension to the public participation in corruption is that the rich by and large do not pay any taxes. The only people who pay are those who can’t escape the clutches of the state: pensioners and civil servants i.e., sectors where the salaries can be accounted for. According to the President of the National Bank of Greece, 30% of the budget of the last administration was unaccounted for—yes, just disappeared into the coffers of their families and well-wishers, and I would guess the other 70% was never audited."
David Goldman at
http://blog.atimes.net/?p=1357
I love George Bush.
wind-up merchant!
Keynes Versus Hayek
"Fresh Outta Compton" for the economics-literate.
http://www.youtube.com/watch?v=ACnKM-sc7ng
I agree that there is so much public sector debt there doesn't seem any mathematical way to pay it off. Indeed, servicing the debt is becoming impossible for some countries like Greece and Spain. The EU will have to bail them out given the exposure the European banking system would have on a default.
All this fits into my thinking that interest rates can't be raised by the US, UK, Japan, EU, because that, mathematically, this will cause servicing the debt to become untenable. So, we're all Japan.
So, inflation deflation or stagnation? Well, as asset prices fall (stocks, real estate) and demand falls, it's clearly deflation. Not enough money servicing too much debt and not enough real demand.
Inflation kicks in when there's extra money sloshing around--say, Ben Bernanke wakes up one day and writes a check to the Chinese for 2 Trillion Dollars to retire out debt. Here you go PBOC, a check for 2 Trillion dollars of newly printed (really just electronic) US dollars. See ya.
That takes care of that. Who's next? So a central bank can totally pay off or service the debt by creating money. The blow back? That money gets dumped into the Forex markets and the value of the currency declines. Inflation. Hyperinflation.
But, if you look at Japan, and I know their debt is held largely by their own high-savings population, you can kind of bleed this whole process along for decades! Low interest rates, a deflating economy, printing money to pay for stuff or service the debt, and a debt that just keeps on increasing. I'm not that smart. Probably something to do with a high savings rate, an export based economy, and they want a weak Yen.
But I ramble. It's a day off for me. What I know now is this: my mortgage is in US Dollars, as is my son's college tuition. So, good currency or bad I need the Benjamin's to pay for expenses. With unemployment high, demand low, and excess capacity high, those Benjamin's go a long way these days in purchasing goods and services. That may not always be so, but it is for now.
Stocks? No way. We're in a cyclical flat market. Ups and downs and going nowhere. However, certain companies will do well, so buy those. Some big winners in a flattish market over time.
Anyway, my recent purchases of gold, silver and platinum bullion coins most certainly marks the top in the precious metals markets, so I would short those, lol. Speaking of precious metals, there is an investment case to be made there. Just on the whole "demographics" angle (Harry Dent) of investing....all the gold commercials on TV are pitching to wealthier, older folks who have lots of money, and don't want to be in paper assets. These are the pre-retirement/retirement age folks who had enough money to create the stock market bubbles of the 90's and 2000's. Now they're hunkering down as they approach retirement, but if they're freaking out, they're buying bonds (which they are), they're not buying stocks (data confirms this), and they're probably buying some gold.
Just a demographics angle thought on why the gray hairs on TV pitching gold to other gray hairs may not be a contrary indicator. Money moves markets. And, the Chinese are doing the same thing to their entire population (they seem to have some concerns about the G7 fiat monetary system). So maybe the game in precious metals is still in the 3rd inning?
sorry you kinda just describe me, but i highlight my hair.
i don't see it that way. i am so aware of those particular dates. experienced a far different scenario. i came from money, my parents bought stocks their whole life, a lot of minerals shit IPO. same thing went on in the 70's and 80's and these stocks were flying like enron. boom 90's they became penny stocks.
i don't buy gold cause i grew up with it, all around the rich bitches necks and fingers, makes me sick. i wear a small dutch coin around my neck, with a queen on it, my mother gave me cause she is dutch. some of us have some meaning in life.
Next shoe to drop?
China's Move to Curb Inflation: Good News for the Mainland, Trouble for U.S., Strategist Says
tophat your obnoxious, stop following me. get your attention somewhere else, your creepy.
unfortunately for the ZH community you must possess slight math skills.
Greece will become dual currency by May 2010. Following the predicted riots in May 2010 it will pay public sector emplyees with Drachma once more. This will fund the shortfall and allow the country to function. The Greek printing presses stand idle. It must be soooo tempting.
just to add the Greeks are a resilient bunch and really have shown independence over since 5bc. They will get to a point that they will not tolerate been told how to run thier country and what to do. All these so called world leaders with their penny worth. There comes a point when you say piss-off and then can you imagine the stupidity on the EU offcials faces and hear the outraged 'holy than thou' total incredulity. It will happen. And maybe that's what people want. The Lisbon treaty will prove to be the EU's undoing.
So Greece will pay its employees in California-style IOUs, and that isn't going to result in riots by state bureaucrat unions that don't want to take a 1% paycut?
At the risk of replying for VFR, what I believe he is implying, but didn't state, is what really happens when nation/states say "fuck off".
To wit, the rule book(s) get thrown out the door. Every country focuses on the particular goods/services value-proposition(s) they deliver best in order to gain competitive advantages and generate actual "wealth".
It's why California is going to legalize pot. And it's why Greece is going back the drachma, devalue to the point of pennies, and once again allow tourists to walk around naked and fornicate at will on their beautiful, sandy beaches.
If you were German, riddle me this: Do you want your banks bailing out Greece, thereby keeping prices high, or do you want to let it crash and then head down south to party like it's 1999?
Indeed. In the 'bailout' scenario, Germany pays all the money and gets nothing from Greece but moral hazard. In the 'crash' scenario, they pay nothing and then 'own' Greece. Seems like a no-brainer to me.
Up thread duplicate.
Well, let's not confuse what France and Germany should do vs what forces will guide their actions. If they punt Greece, a lot of their big banks take massive losses, lighting off a chain reaction of default in the way Lehman did. In other words, all the people that say Greece isn't an issue because of it's tiny economic size is missing the point (not saying that's you, B9K9).
Hence, despite that bailing out Greece puts the world on a road best described by Niall Furgeson in is piece in the FT (linked below), they'll figure out a way to make it happen because the bankers have control, imho, and are simply selecting the best short-term (i.e. "greedy") outcome.
http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html?ncli...
As Niall describes, as smart and crafty as bankers they can be, their actions are shaped as to setup for a collapase that always outdoes the previous one. This one will be global and will make Lehman look like a scale model and there'll be no backstopping this one.
i think that pretty much sums it up. Thanks for the input.
Prime Minister George Papandreou on Friday called the EU response timid. He must be keeping all options on the table.
http://news.bbc.co.uk/2/hi/europe/8513430.stm
"Unlike Japan or the US, Europe has an unfortunate tendency towards civil unrest when subjected to extreme economic pain."
It is not entirely true. America is a nation of immigrants who lately did not assimilate into the "American culture". Good many of these immigrants and their kids still carry a "rebellious virus". I know this for sure. More than 20 years ago, I came to America from Europe but I am still fond of the Great French revolution and a guillotine. The same is true for most European immigrants I met here in America.
The banker's guide to owning it all
Become majority lender in an economy of people with assets you want.
Encourage indebtedness by loaning generously while securing on assets of interest.
Loosen lending standards until the assets you seek to capture are attached.
(this makes the economy debt dependent)
Once debts are significant for the bulk of the population, sharply tighten lending standards. <-- Economic shock - Onset of deflation
Backstop losses with public guarantees if possible. This is gravy if one can get it.
(Fannie and Freddie guarantees, for example)
Permit default 'without risk' on the assets you wish to sieze to maximize wealth transfer.
(stall foreclosure, stay repossession orders etc)
Stall the economy to maximize default positions and deplete private liquidity. <-- We are here
Successively ratchet the economy downhill, while bettering secured positions.
In a series of large actions, sieze all security for default. Target the assets of greatest interest first.
(This deals a heavy economic blow and can help cause the ratcheting required for step 8.)
Transfer asset ownership, but retain prior owners as renters where possible.
(This reduces public lashback and helps maintain the asset for resale)
Once the bulk of assets of transferred, write them down to leverage the public financial backstop.
Buy up as many remaining assets on the cheap as possible. Hide this action.
Hyperinflate to destroy the external claims on wealth. <-- Onset of hyperinflation
(This destroys treasuries, gov't bonds, currency. Ensures free title on new assets. May cause war.)
Stabilize the currency or devise a new one, resume lending at a reasonable pace. Sell the assets back, secured of course, at your chosen price in new currency.
IF you do the crime be prepared to do the time. The central bankers and politician are all criminals obsessed with instant gratification. We’ll be dealing with this for a long, long time.
We’ll be dealing with this for a long, long time. But the sooner we truly face the consequences and take it hard on the chin the sooner the healing will take place even though the developed world standard of living will take a free fall along with the global markets.
the heber creeper ,, instant satisfaction ..
Governments can't run out of money. They can always just print more...no collapse necessary.
Thats what is so criminal here
rather than tkae the pain in a depression
although in the long run defaltion would benefit everyone by houses becoming affordable again, food costs coming down
and life generally becoming much cheaper
sure lots of companies would go bust, high unemplyment but as long as you have some money you should be ok as money goes up in value. After a while things coulkd begin to grow again and the people who both lent and took on way too much debt would be punished a nd learn a valuable lesson
the prudent would then be able to buy up a lot of assets and the currency remains intact
but no we have to bail everypne out, w ecan't have a depression and all of our sweetheart companies who pay all the politicians off all the time would also go bust so far btter to have a few years of keynesian madness and then
let the whole system and currency system explode thereby wiping out everyone apart from the billionaires
Yes thats sounds much better. Utter madness and thats why everyone needs to be put on the street campaiging against and burning Keynes books
HOW MUCH MORE PROOF DO WE NEED THAT THE MAN SPOKE UTTER SHITE
Ron Holland has the answer for America. It’s the same answer as for Germany or France: Secession: A Solution to the Washington Debt Threat. “The states can secede from the Union and the crushing Washington debt load,” holding the country together in a system similar to the Articles of Confederation maybe like “America’s first central government created by our patriot founding fathers.”
For if there is no Federal Reserve and Wall Street “creating excessive bubbles followed by contraction and collapse and then demanding bailouts,” America can rise from the ashes as a vibrant economic miracle once again. The debt load is illegitimate, anyway.
Says Holland: “The Washington Empire is now run for the benefit of New York financial and economic interests who own and control most of Congress. Due to the recent bailouts and added debt which the majority of Americans opposed, the United States is now sadly on the path toward economic, debt and currency destruction.” …
Says Holland: “I believe legal state secession from the Washington Empire just might become the only way for American citizens to escape the disastrous consequences from the coming global run to liquidate holdings of Washington treasury obligations and the dollar. Breaking free of the false chains that threaten our economic future from the likely Washington debt/dollar collapse might be our last chance to safeguard our financial security and liberty from the hyperinflation and crushing new tax increases to be forced on this and future generations from the bailouts and national debt.”
Without secession, Holland fears “the federal government will plunder much of our private wealth, retirement plans and personal savings through hyperinflation, financial controls and confiscatory tax rates all in the name of protecting the public from a future debt crisis…”
Holland, a retirement consultant who works in Zurich, reminds us that “none of the citizens of the individual states or America in general have had the opportunity to vote on the bailout or approve these debts most of which have gone to international corporations, Wall Street and world banking cartels. We, our children and future generations should not have to fund or pay off an illegitimate debt created just to bail out a few global corporations and wealthy special interests.”
Asks Holland: Can you envision a healthy economy, with minimal government debts combined with a rising standard of living and job growth guaranteed by low taxes, minimal regulations and currency competition?
“Frédéric Bastiat must have been looking toward the future of the United States today when he said, When plunder has become a way of life for a group of people living together in society, they create for themselves in the course of time a legal system that authorizes it, and a moral code that glorifies it."
http://www.lewrockwell.com/index-th.html
Lew Rockwell and all the idiots on there are a complete waste of time. We cannot possibly prosper in a system of "minimal regulations" because that minimalism just leaves more room for the utterly corrupt to play. Look at the nothingburger that the SEC is, understand regulatory capture, and you begin to see what we are up against in this.
We have layers of government piled on layers of government far beyond what will ever work and even an idiot can see that this march to serfdom has to be stopped at some point. If you have a solution, I guess I’ve missed it. If only the non-idiots have the solutions we can use, I for one am headed for the hills. I certainly don’t agree with the full tenor of LewRockwell.com, as I don’t agree with the full tenor of most any other website. But I recognize exploratory solutions when I see them.
The problem isn't a lack of regulations - it's that there is not enough enforcement; whistleblowers are going to jail. The rule of law is broken. When the press is no longer elucidating a free people their vigilance and demand for Justice weakens. That is when Tyranny slips in.
When you call the ideals of the Founding Fathers idiocy your judgement is brought into question - best damn system to enforce the rule of law ever.
I am a serial Fed whistleblower. Its a joke.
All whistleblowing does is leave one totally vulnerable
to attack,isolation and dismissal
I completely identify with Markoupolis, watching his
testimony before congress last year brought tears to
my eyes
You are spot on
The weight upon your shoulders is greater than mine. I light a candle for you that you might choose wisely your path.
i'm not familiar with LR, but... "When plunder has become a way of life..."
doesn't seem too idiotic to me... is everything else they write this 'idiotic'? i know you're 'anon', but what do LR critics prefer to read?
that quote seems to pretty-much cover the last 4+ decades
just sayin'
LOL...the delusion that anyone can leave this marriage was quashed in 1865.
That's not entirely correct. In 1861, the stronger, more economically diverse and viable half of the republic fought to preserve the entire union. It would be the exact opposite today. Try to imagine how silly it would have been for the South to try to force the North to do anything...
Yes! Ron Holland quotes Jefferson Davis: "I love the Union and the Constitution, but I would rather leave the Union with the Constitution than remain in the Union without it."
Says Holland: Today the constitutional protections have become just another dead document through the actions of Bush and Obama. A recent, WSJ/NBC poll showed that only 3% of Americans believe the government is doing a good job. Given the margin of error in the poll, the real % could have been zero.
As Ron Holland explained in his article, the dynamics of the Civil War, largely misinterpreted by historians, have nothing to do with the dynamics of a coast-to-coast and border-to-border economic dissatisfaction with a centralized government out-of-control. Gone are the disproportionate rail lines and regional disadvantages for the seceding states in the Civil War, replaced now by the internet and powerful economic reasons to turn against the relatively small group of investment bankers and their core of politicians with a choke hold on the American people.
Here’s Ron:
We need to forget the causes of the earlier War Between the States, regional differences, slavery, tariffs and other related issues. The new secession effort will be state based but a national movement all across the United States ranging from Vermont to Georgia, Texas to Alaska etc. Economic survival and prosperity rather than regional issues will be motivating factor.
The first secession was a product of anti-southern tariff taxes resulting in the Southern states paying the majority of the revenue to fund the distant federal government. A mistaken defense of the dying institution of slavery by slaveholding elites in the South also contributed to the failed secession effort. Third, the advancement of corporate manufacturing profits and railroad expansionism by the Northeastern establishment elites were a major contributor. Finally the promotion of a conflict by the European Rothschild banking interests funding both the Northern abolitionists and the Southern secessionists guaranteed a violent breakup of what should have been a peaceful parting of the states.
Still the right of democratic state-by-state secession did not die at the point of a bayonet at Appomattox Court House in 1865. The belief in peaceful devolution of government powers and services to regions and local jurisdictions to allow citizens to control the power of politicians and government is a positive advancement for the 21st century. In addition, the right of devolution of states, geographic regions and groups around the world promotes competition and freedom.
The south won it all back and then some when reconstruction ended.
Which do you favor? Warn everyone in the state to remove their wealth located in other states, or just replace wealth confiscated by the US with a new state currency?
The secession movement in CA was going strong until 9/11. The conspiracy theorists have not gone far enough. In early 2001 Enron Traders (A Texas Company) precipitated the energy crisis that brough a Republican governor into office. Everything Bush did was preemptive, including the financial crisis, which was meant to leave Obama with burnt offering after Wall Street under Bush had gone on a rampage of gluttony. If not for 9/11, Bush would have been a one term President, the economy would be in reasonably good shape. California stood up to Bush on stem cell Research, gay marriage, and medical marijuana.
Now what I suggest is that despite Californias problems the legislation by initiative is the best way. The nation would have never given endless funds to the war in Iraq, and while the deficit would still be a problem, the voters wouldn't be paying for banker bailouts, they would be getting tangible social and infrastructure programs. Washington is such a sink hole of money which goes to nothing really.
Tired of Bush/Obama and whatelse have you got, the endless Rubber stamp Congress, and lobbyists who write phony bills? Consider the California solution, including the 2/3's vote. Better than secession.
Then explain why Californians voted in the majority for Propostion 187, the 1994 Save Our State ballot initiative, to end California tax money being used for mandatory welfare for illegal aliens and it was over turned by a single Federal judge? The last time I looked, that judge got/gets her power from Washington, DC. So much for the initiative process.
So we get all 50 states to leave the Union.
That leaves all that debt in DC Proper.
Next, we build a berlin type wall around DC,
thus isolating it physically from the 50 un-united states
of America!
Me likes....
Fill the walled city with water and your solution becomes ideal.
make sure you pen the current inhabitants (except the tourists, of course) in before adding the water...
There is far too much emphasis placed on the importance of so called 'off balance sheet liabilities". After all, what are these but promises to pay for goods and services to be delivered in the future to citizens of their own countries. They will in fact not be incurred to the extent they were promised. Why? Because they can't. So in fact these liabilities are smaller than claimed. The penalty will be poverty and poor health.
However ... these claims on future goods and services are so far in the future they are: impossible to price, impossible to quantify regarding absolute levels of supply and demand and impossible to describe. They are based only on projections made with information we know and can guess at. How can anyone begin to project health care costs without knowing what new drugs, procedures or other life saving or cost saving measures might appear. Can anyone tell me what kinds of cars, using what fuel, will sell at what price and quantity 10, 20, 30 years from now. If someone could, should we attribute 100% accuracy to this guess. I think not. A couple of burned out auto makers provide good examples of this folly.
Makes good copy but poor decision making input.
There is far too much emphasis placed on the importance of so called 'off balance sheet liabilities". After all, what are these but promises to pay for goods and services to be delivered in the future to citizens of their own countries. They will in fact not be incurred to the extent they were promised. Why? Because they can't. So in fact these liabilities are smaller than claimed. The penalty will be poverty and poor health.
However ... these claims on future goods and services are so far in the future they are: impossible to price, impossible to quantify regarding absolute levels of supply and demand and impossible to describe. They are based only on projections made with information we know and can guess at. How can anyone begin to project health care costs without knowing what new drugs, procedures or other life saving or cost saving measures might appear. Can anyone tell me what kinds of cars, using what fuel, will sell at what price and quantity 10, 20, 30 years from now. If someone could, should we attribute 100% accuracy to this guess. I think not. A couple of burned out auto makers provide good examples of this folly.
Makes good copy but poor decision making input.
Hmmmm.....why aren't the the social democracies of Norway and Sweden in the same mess? Those countries have tax burdens of over 50%; according to the prevailing economic wisdom here on ZH, their economies should be in the crapper and their people should be poor.
But Norway, Sweden and Denmark are looking pretty good:
http://bit.ly/atxhHa
The kleptocrats were able to fool the rest of the western economies into using the low-wage/low-tax/cheap-debt recipe for "prosperity". The cheap debt wasn't just used for inflating bubbles, it was also used to hide the consequences of low wages and low taxes. Using bubbles, tax cuts and outsourcing, the kleptocrats stole trillions of dollars from the people who actually produce the wealth.
It's no surprise that the EU working class is balking at the idea that they have to pay for the kleptocrats' mess. They only need to look at the high-tax and high-wage economies of Scandinavia to realize that "austerity measures" are just another scam by the kleptocrats.
Since there's "No Free Lunch", then the kleptocrats should clean up their own mess.
i would guess that the mentioned social programs were allocated by reason and math, vs union leverage.
given the few successes out there, i don't believe in most broad social programs, but even if i did, i can assure you that they will fail if driven by political forces vs simple math.
note that this opinion does not implicitly endorse the usual 'anti-social' ideologies...
What do you buy if you believe this scenario to come true where nations all around the world are likely to default?
Do you buy treasuries, as this seems to be a massive deflationary scenario?
or
Do you buy inflation protected securities, as the massive printing of money to prevent a default (print their way out of debt) seems likely?
Is this massive debt load around the world going to be an inflationary or deflationary global event?
That is the ultimate question ... or buy both and expect to make nothing
Buy cheap land and learn to grow your own crops. You are thinking too binary. If not this paper then that. Please wake up and stop being so short sighted.
Laughing, and they say gold is in a bubble. Morons like this guy are asking what type of paper they should be buying.
"I am an oil man"
Ultimately, do you want all your assets and profits in fiat currencies or tangible goods? Then decide what type and how much.
Because we are headed for total social and economic collapse I am long tangibles.
A great article which I agree with completely, but in both the latest Firefox and Chrome browsers, I'm seeing question marks in place of quotes and commas within its text. This is not the first time I've seen this here. Please take the time to do a "find and replace" on this apparently browser incompatible character in the future.
I don't know ... the ? adds a little mystery.
anyone has the full doc?
"STUFF ARE GOING TO HIT THE FAN HARd"
Is that right translation of the article?
Only buy a farm if you know how to farm or are investing in real estate. Farming is a complex difficult task. Try planting a garden first for just one aspect of farming.
Time to hang all central bankers by the nearest lampost
its time for revolution
enough already
by the time of the next crisis. u all already dead guys. :)
No blood, no end.
In another sign of growing cooperation between Israel and the US ahead of a new round of sanctions on Iran, Chairman of the Joint Chiefs of Staff Adm. Michael Mullen will arrive in Israel on Sunday as the guest of IDF Chief of General Staff Lt.-Gen. Gabi Ashkenazi.
From the Jeruselum Post online. Time to restock the bunker.
Another reason to secede from this mess.
Gov't is giving lip-service to the Jews. When push comes to shove, Israel will be standing alone.
The Ghost of Hayek is raging.
Thanks for that post. It mirrors my own thinking. Misery loves company. I wonder if I'll be smart enough to know how to protect my savings, even after knowing all this. Good luck all.
Greece?
France will never let Germany bail out Greece;
for France is standing there in her underwear, very exposed as soon as someone notices.
Which was the better investment - investing in new independent nuclear power stations or massive idle capacity in machines (BMWs MERCs etc) very few people can afford anymore.
Go figure
Wait. If a person earns $100k annually and buys a $500k house, his debt/PDP ("Personal Domestic Product") ratio is also 500%. As long as the debt is not due immediately, but over 30 years, and he keeps earning, things are ok.
I wondered if anyone would ask that. The $100k income is not "PDP", it's income. "PDP" as an equivalent to GDP would be every dollar that passes through the activities of a person. This would vary considerably from one person making $100k (take home) to another, but it would be more than $100k. But, in general, your point is valid: home mortgages, the backbone of American consumer capitalism, are some of the most highly leveraged, weirdest (most are no-recourse loans) debt/income financial instruments on the planet, and they aren't about to disappear (in fact every arm of our government is operating overtime to bailout and subsidize them).
The key is in the "keeps earning" part. Debt service capability is everything (hence the collapse of the leveraged-debt housing bubble once subprime payments began overwhelming).
The reason everyone's freaked out about Greece and not the U.S. (or worst-case debt/GDP Japan), is because Greece - like Dubai - appears to be unable to make "timely and full payment of interest due" at some point in the possibly near future. Nor do the usual bond market suspects want to lend more money to Greece to roll over principle payments coming due. Not making your payments is a default, and no one believes (at the moment) that the U.S. or Japan aren't going to make their interest payments. Less obsession with debt/GDP ratios and more attention to income/debt ratios will provide more useful near-term information.
In the meantime, the market's been so slow, I've been watching this hot girl work out....
http://www.youtube.com/watch?v=EISyv7oGmRw&feature=sub
"Those Ukraine girls really knock me out..."
It is hard to disagree with the notion that "The take home is very, very simple: we can delude ourselves that the game can be won (it can't), or we can prepare for the imminent collapse when delusion finally fails." However, I think a productive use of this site would be to post ideas for said preparation. The point is well-made and proven already that monetary regimes around the world are kaput! Any bright ideas other than gold and debt-free farmland out there?
Sure...small, feudal domains run by alpha males, with bullets used to "settle accounts" in both senses of the word.
Wait. If a person earns $100k annually and buys a $500k house, his debt/PDP ("Personal Domestic Product") ratio is also 500%. As long as the debt is not due immediately, but over 30 years, and he keeps earning, things are ok.
might want to think on that a little further.
This is not news - probably 5% of the people know this already and we often think that the "end" is coming tomorrow but it never does - there are absolute magicians at work kicking the problem down the road.
It is not only necessary to deleverage, we must rid ourselves of the corporate and corporeal parasites who feed off the productive members of society. Eliminate all forms of welfare. Eliminate income taxes and capital gains taxes.
Game over. Fine. So what will they do next? Deflation? No way! Why would they do that? I say they have some fun and continue pretending that there are Green Chutes. How to do this? Inflation...BIG! I predict a down week next week. DJ to press well below 10,000. Then I predict the uptic, sometime in late February or early March. Gold to the moon.
From Nathan Martin’s Morning Update:
Have you noticed that bonds are acting differently? This is what I was forecasting, that during periods where stocks fall, bonds would rise slightly, but when stocks rise bonds would fall significantly, the end result is that bonds have been ratcheting lower. The longer term bonds are now back to their large neckline, a long term support trendline, and that area must hold or it will be signally much higher rates around the corner – deservedly so for a nation that must finance and refinance more than $2.5 Trillion this year. Yesterday’s 20- and 10-year auctions were both very weak. While the Primary Dealers are required to buy our nation’s debt, others are not. What occurred last year is that we stepped in and we used TRILLIONS through quantitative easing and mostly through buying GSE debt to buy down our rate of interest. But that can only go on for so long before you either pile on more debt or outright destroy the value of your money as the quantity spirals out of control.
No, Bernanke and the boys cannot fool Mother Nature, nor can Greece or anyone else. How ‘bout German Chancellor, Angela Merkel? She says, “not so fast.” She understands what bailing out Greece means for Germany…it means poisoning her own country. Where does that stop? Spain, Portugal, Ireland? No, the world is awash in debt, entangled in derivatives and these problems are only going to get worse until the root problem of debt-backed money is taken care of properly.
http://economicedge.blogspot.com/
+11
More likely outcome is further consolidation of the military/financial/government triumvirate and the elimination of all paper financial instruments while instituting a government/banking ATM system. All your chits belong to us whether they be "stocks" "bonds" "CDS" or "cash;" but we will credit your account for such even as we debit it for all the expenses we deem necessary.
Just as foods stamps are replaced with banking issued "link" cards so too your paycheck will not be cash convertible.
Most of these posts are wa-a-a-y off the topic. The world is bankrupt. But many of these posters are wasting time and effort ranting at the wind. I am appalled at the ranting and cursing of these posts.
I am in my 60s, have traveled all over the world as an aviation safety consultant, including the vaunted Baltic countries. I continue to be startled at the numbers of USA citizens who believe how great it is in, for example, Sweden and even Cuba, as compared to the USA. But I do know at least one of these posters. He is sitting at home with no job, reading pundits and writing obscene posts spouting about a "world" that does not exist.
US citizens are way too polite today. Let's bring back the stocks, tarring and feathering, and give our politicians something to worry about.
I'm on board with that. The government should fear the people.
+2
"But, but...you can't just walk in here! Wait, what are you doing!"
When governments are building and buying these the problem isn't the people:
http://www.wired.com/dangerroom/2010/02/tehran-uses-chinas-high-tech-tru...
Saw that truck once. G-20, Luke shouted it down. Then the L-Rad shouted him down. Get ready 'Mericans, you will all see these trucks soon.
To me this waiting period is the worse part. I'll handle the spanking when it comes, I know that. But wating for it sure sucks. "Walking around telling people hey, we're broke, our Cities, our States, our Country, other Countries...all toast. Brace yourself folks." "What and why are you talking about this?" "Nevermind, I'll just say I told you so." This is old. Wish I was in the the flock of sheople standing in the road oblivious to the oncoming bus. Bus speed up please...let's get it over with!!!!!!
true that...get it over with. The waiting is the hardest part.
Yep, the waiting is hell.
Oh, but when they rip the band-aid off.....!
Every "red-blooded" 'merican outfit wants a 20% ROI.
Think about this. How does any country get an aggregate 20% (or whatever) on a population/productivity improvement rate that is LESS than the targeted ROI.
Talk about math. Corporate death minus corporate life equals 20% "growth" of the "economy" (which is a bastard word).
Agitate your own neurons and you may see what is next?
40muleteam borx
Here’s more good ol’ backlash against the bankers' “Banker in Chief,” Barack Obama, issued by Alexander Cockburn this weekend in “The Goat in the Clearing” -- on Counterpunch:
That was quick. It seems only yesterday – in fact it was only yesterday - that we had Barack the Populist flailing away at the banks. He didn’t run for office only to end up "helping out a bunch of fat cat bankers on Wall Street", he told CBS’s 60 Minutes in December. Early, he’d talked hotly of the obscenity of the bankers’ bonuses. In January he was shaking his fist at the mighty powers of Wall St: "If these folks want a fight, it's a fight I'm ready to have." In his State of the Union speech he dealt the bankers another couple of glancing blows.
BUT now it’s Valentine’s Weekend and love is in the air. On Friday Bloomberg Business Week featured Obama telling two Bloomberg reporters he doesn’t begrudge the million-dollar pay-outs made to two of Wall Street’s most powerful men because, after all, “there are some baseball players who are making more than that.”
What about JP Morgan chairman Jamie Dimon ($16.1m plus a $1m salary) and Goldman’s boss Lloyd Blankfein ($9m)? "I know both those guys; they are very savvy businessmen," the President said. "I, like most of the American people, don't begrudge people success or wealth. That is part of the free-market system."
To ask which is the “real” Obama is to drift towards the illusion of thinking there is one – as opposed to an infinitely mutable organism, endlessly adapting to political circumstance, with an eye eternally cocked to the main chance. People who nourished high hopes for Obama pathetically claim that he’s been taken prisoner by malign forces, by the Chicago mafia -- Rahm Emanuel, Valerie Jarrett, David Axelrod and David Plouffe -- and if he could only have other counselors at his side, why then he’d… he’d…
http://www.counterpunch.org/
Everyone just nod your head and go back to sleep - or take your bucks to this credit union today!
http://www.youtube.com/watch?v=RYD6Jej5BFs
New Mexico House Votes 65-0 to Move State’s Money to Credit Unions, Community Banks | The Huffington Post | February 12, 2010
New Mexico's House of Representatives voted Monday to pass a bill that allows the state to move $2 billion - $5 billion of state funds to credit unions and small banks.
The municipal funds bill was approved 65-0 (roll call - PDF), and is subject to a vote by New Mexico's Senate. Governor Bill Richardson told the bill's sponsor that he supports the legislation.
Credit Union Times, spoke to one banker who believes that the bill got a boost from Huffington Post's Move Your Money campaign:
The altered view of New Mexico lawmakers in favoring local control of state funds, officials said, follows national mention of the New Mexico effort in the "Move Your Money" campaign of New York pundit Arianna Huffington in her online Huffington Post columns.
"I think Huffington gave this bill a little traction," said Juan Fernandez, vice president of government affairs for the Credit Union Association of New Mexico
Move Your Money is a project started by Arianna and Rob Johnson that aims to spur financial reform at big banks by encouraging account holders to move their money to smaller credit unions and community banks. New Mexico currently keeps $1.4 billion in accounts at Bank of America.
New Mexico State Representatives Brian Egolf (D-Santa Fe) and Timothy Keller (D-Bernalillo) sponsored the bill, HB 66. Rep. Eglof told the Huffington Post in January that the legislation would "direct the New Mexico Department of Finance and Administration to 'give a preference to a community bank to act as the fiscal agent of the general fund operating cash depository account.'"
http://www.huffingtonpost.com/2010/02/09/new-mexico-house-votes-65_n_456043.html
Nathan Martin says: If they created their own bank, it would have more assets behind it than any other bank and they could fraction their deposit base in support of state projects and in support of other banks. Any such attempt, however, must keep tight controls to the amount of fraction ability they have, thus they would be best off to create the bank with the framework of Freedom’s Vision where State Chartered Banks would replace the functions of the 12 Federal Reserve Banks. The major difference is WHO controls the MONEY, and WHO benefits from any interest generated!
http://economicedge.blogspot.com/
Wow. That's a pretty big FU. 65 - 0. Wow. Now we need to get some of the other "New" states to do the same...
Hmm. I'm putting my CogDis/Rothbard hat on for a moment: cui bono? Hopefully it ends up as more than a symbolic move - the fractioning always scares the hell out of me, tight controls...yeah right.
Moral hazard, anyone?
Great post, JR.
State run banks will be the only thing that saves America.
believe me new mexico is MEXICO!
more on gold
Jim Sinclair’s Commentary
I agree.
Gold price will surge to $5,000 in two years
Published on February 12, 2010 06:55:00 IST
Gold Prices will climb to $5,000 within two years due to US dollar weakness and significant buying by players in the hedge fund industry looking to preserve the value of their funds.
That is the opinion of New Zealand market trading expert Welles Wilder, who has previously been highlighted by publications such as Forbes and Barron’s for his skill in the markets, stuff.co.nz reports.
The reality pains the Left so much they cant bear it. So they create new words like "corporatocracy" , "state capitalism" , "corporatist" , neo feudalism". These are all synonomous with Socialism. There is capitalism and then there is everything else. Make no mistake: we are living in sicialism and moving to a communism. Note: this will not 17bring us endless riches.
Socialism, corporatism, whatever-ism...
The problem isn't the isms. It is the State. The State is the problem. It produces crony capitalism to help the "corporatists". It steals from those who have to give to those who don't to buy "votes", thus "socialism".
Anarchy isn't lawlessness. It isn't bomb-throwing bearded men. It is freedom. It is no State. It is the solution.
States all consist of the same thing. One man, or a few, who control the population, for his or their (no, not the populations') benefit. Sometimes the justification is "god" (kings, 1000-1850 a.d.; mullahs, more recently), sometimes it is "equality" (democracy, 1750-present). Sometimes it is imposed by force (Genghis Khan, Anastasio Somoza), and sometimes by producing a population of stupid sheeple (US, current; Europe, current).
Because all States involve the same thing, namely power of the few over the many for the benefit of the few, they operate as plunderers - thieves on a large scale. Most recently, this has been done by means of "central banking", which is more sophisticated than, but works in the same way as, guns and swords.
The problem is the State. As long as ignorance reigns, it will reemerge in another form, because there are always evil men who find stealing for a living less work than the alternative. When (if) clarity of thought occurs, you see that no one needs a State. For anything, at all.
a chance for the zit crowd to prepare for tomorrow.
buying some gold to protect your financial well being .
as much as possible .
most know diddly about economics
are blovating over spilt milk
but maybe just throw them a slap of meat on the floor .. then they may gobble that up lol
the system is to far gone to change , 2012 will be one for the records . instead of showing ignorence about both economics and many things that only come with
experience take a page learn on the wisdom of the giantsThe powerful in history filter/destroy knowledge to extend their power even as it leads to the loss of whole civilizations. This is a constant battle and a version is playing out now before us in the field of economics.
Martin Armstrong suggests that during the credit derivative implosion, all contracts should have been put on pause. Then a better solution could have been found and tested. Good thought, but too late now.
As a result:
“What we have now is a massive acceleration of public debt that has increased the timetable for sheer economic disaster. The year 2012 will in fact be a year that history will remember.”
In the field of economics and especially its cycle movement, we are in the Dark Ages.
Please let their be a big fat black swan before 2012!
Our Politicians Take Us for idiots!!
iamned is back.
Zh really knows how to rattle the readers, this is all BS guys this topic has been around for a long time.........what do you think people talk about every time theres a recession, this is nothing new. The contrarian views kick in and everyone tries to see the future but at some point it becomes a bandwagon and a far from contrarian view develops. The US govt is like nicholas Cage from "lord of war", he lies and lies and lies and eventually his lies catch up with him and exceed everything he imagined. And then shit hits the fan, guess what he fails, and when he fails he got rewarded with a briefcase full of cash.
Damn this sh8t sounds familiar, where did we see this before..... the point is things keep turning, dont follow the rabbit, follow the money
Ok-dokey,
fully conceivable and seems better than even odds vs. simple inflation or deflation (or the 10% chance everything just works out and we go on our merry way pulling forward the next 30yrs worth of demand). Still, WTF does this mean to me on an actionable level? Deleverage, ok (as much as my wife will allow without putting me in the nutter house). Then what? Seems we better just go have some fun cause seems the day is getting short and "fun" may be in short supply where we're going?
If Hitler won would there be a Federal Reserve?
BNN speaks to Kenneth Matziorinis, president, Hellas Capital:
http://watch.bnn.ca/clip266276#clip266276
"The tendency for groups to blame others for their difficulties is so widespread that at times it seems almost universal." Boy is that an understatement. The Celtic Crosses are burning bright tonight.
One thing this article really illustrates is the stupidity of one-size-fits-all government. Take the federal minimum wage, for instance. Nobody can live on the federal minimum wage in coastal California because it's so insanely expensive to live there. But in central Mississippi, you can practically live like a king because a house will only cost you $40K. It's stupid to have one-size-fits-all policies for a region as big as the US or the EU. One-size-fits-all often doesn't reflect the conditions in the various localities within a region, so it causes problems. Stooopid.
the whole minium wage deal is a farce . why give it any credibility by trying to even justify the dang thing ,,
so you would have cal minium wage at 35 bucks ,, and in CM 8.00 because you can live like a king ,, stuoooppid
Jeez, it's hard to believe that, even after the sainted Milton Friedman went on PBS and patiently explained to everyone's satisfaction how perfect free-market economics are, and how nothing can ever go wrong in a free-market economy, some people still don't seem to understand how it works.
$40k for a house in Mississippi? Pshaw!! There are thousands of houses in certain neighborhoods in Detroit for sale for under $4k. Thanks to the perfection of free-market economics, everyone will now move to Detroit because that is where the lowest prices for housing are found. Once we do so, housing prices there will rebound above $40k and we'll all move to Mississippi, and when prices go up there, we'll move again, and so on and so on, ad infinitum. The differences automatically even out, practically instantaneously! It's that simple!!
You see, as we know, prices always find a perfect and stable equilibrium between aggregate supply and aggregate demand. There are no ineffeciencies in a free-market economy, period. Don't waste your time on abstractions like "localities" and "regions". States and Nations are just lines on a map, only the Market is real, ubiquitous, and eternal.
For some religious reason Prof. Friedman never made entirely clear, it's much, much better for all of society's resources to go directly to the providers of Supply (aka "entrepreneurs", "capitalists", "bankers", etc), because "Supply creates its own Demand", whereas the providers of Demand (those minimum wagers, among other working people) only create ugly problems (you know, collective bargaining, public education, etc).
Or, as Uncle Milty put it, "Minimum, Shminimum! Wages of any kind lower Productivity, which limits Profit, which is the only legitimate human reason for being ever discovered by the inviolable laws of Economics."
Gold is......
Gold's main function is to be looked at. We hang it on ourselves, stand it on our homes, or hide it in vaults and tell ourselves it represents wealth when we look at it. But we don't and can't really use it.
People rob for it, people die for it. Governments overthrow whole institutions for it.
With complex computers, instant communications, and massive data at hand on almost every subject under the sun--that in such a seemingly advanced world a man's word cannot be sufficient backing for his international trading?
How much time and energy are spent, pain and misery are caused, because man is still barbaric. He must use a silent, nearly useless master, a metal, as a way of forcing himself to keep his word when trading with others.
Gold is more a devil than a God. Gold is a monument to man's barbarity, not to his highest self. It is a reminder that without some sort of mutual economic weapon that everyone can use, man's inhumanity to man, man's greed, man's lust for power and fame will cause him to lie, cheat, steal and distort. In gold we trust. In words we mistrust. And, so far, rightly so.
Man may evolve enough in time to escape this dependency. But, in my opinion it will take a thousand years.
And until man has evolved, maybe we should be grateful that we have gold, for it will always work; it can help pull us out of a hole. In a world where we send men off to be killed in the name of patriotism or in the name of somebody else's government, in a world where wars are still being fought because of clashing religious views, in such a world gold doesn't look so terribly barbaric.
It's strange that the politicians who resent the controlling mechanism of gold despairingly refer to gold as a barbaric metal. It is not that they are condemning gold as much as they are pretending that man is elevated above barbarism. He isn't not really. And until he is, then i must reiterate that, much as we may dislike gold for symbolizing our lack of evolution, gold is going to be around-to scorn us silently when we try to remove it from our monetary system. Gold will be there when, out of chaos and misery, we put our monetary systems back together again. Gold is. -------- James Sinclair/Harry Schultz
Please I cannot take the lefty remarks on Cuba as the shining star of socialism and free health care for all!
The real truth for anyone who has actually been to Cuba and not listened to the idiot Hollywood types who are perfect candidates for lefty dictators to impress is this:
Last count Havana, (the capitol for the less informed on Cuba) had ONE pediatrican who works his ass off.
The nice medical facilities and hospitals are only for the party elite. (will happen in the US if not careful)
The Cuban government has staged houses in every neighborhood to show ignorant outsiders so they believe life is wonderful. These houses are loaded with nice items and plenty of food and the occupants are all actors paid a monthly stipend to keep up the pretense. The visitors are always steered to these residences to see how the "average Cuban" lives.
95% of the population has little food (done on purpose for control) and little to no access to health care.
Cuba uses most of there doctors as aid and goodwill to other countries and not at home.
Any outsiders visiting Cuba are put up in fancy hotels which are bugged with cameras in every square inch of the room and they usually get a few photos of the visitors in compromising positions before the trip is over with a little wink, wink on the way out making sure they understand that if they talk badly about the Cuban Government the photos with you and the sheep wearing lingere will be given to the media.
DO NOT listen to the propoganda!
Genesis 3:1-24
Well that was quite a long thread of comments.
AUDIT AND END THE FED!
Oh dear!
how do they get this 500% number from ???
where do they get this 500% number from
Thanks for nothing Tyler
You say it will end by runaway inflation -- (which will then end in deflation)
Or Major deflation
You are saying either or and the choices are exact opposites
Not what it will be --- Or when it will be ---- Or how long will it be ------I got to know what to do NOW
If I buy gold and deflation settles in I am fooked
If I get a suit case of dollars or invest in bonds and inflation moves in --- I am fooked
Thanks for nothing, Tyler
gold and deflation you would be fucked....where did you learn this??......deflation destroy's all paper instruments.
if you have a million dollars, i would like to see you hide with that without gold.
UST you say? try again. think gold.
gold goes up because of a loss of confidence in the government...which includes extreme cases of deflation and inflation.
Correct!
Correct!
Choppy sideways action and chronic mixed signals continued this week, but the buying support I have previously mentioned returned on Friday 12 Feb.
It seems the DOW / SP500 / EURO / COPPER counter trend rally may start this coming week.
Daily charts remain bearish of course.
http://www.zerohedge.com/forum/market-outlook-0
umm can i have some money now?
I'll explain this slowly so even the "socialism is the problem" fucktards can understand it.
The US needs oil. Oil is energy, energy is wealth. The US needs oil to support its unique living standard, to run the cars, heat the homes and grow the food. The US pays for all this with green toilet paper imprinted with pictures of dead presidents.
The only reason the rest of the world accepts this toilet paper in payment is because the US spends so much on its military which spans the globe and occupies or surrounds the oil producing nations.
The message is crystal clear to the rest of the world - "accept our green toilet paper as payment or die". The world also knows that the US is the only country which has demonstrated itself willing to drop nukes in furtherance of its goals.
NOW can you see what the rest of the world sees so clearly?
I'll explain this slowly so even the "socialism is the problem" fucktards can understand it.
The US needs oil. Oil is energy, energy is wealth. The US needs oil to support its unique living standard, to run the cars, heat the homes and grow the food. The US pays for all this with green toilet paper imprinted with pictures of dead presidents.
The only reason the rest of the world accepts this toilet paper in payment is because the US spends so much on its military which spans the globe and occupies or surrounds the oil producing nations.
The message is crystal clear to the rest of the world - "accept our green toilet paper as payment or die". The world also knows that the US is the only country which has demonstrated itself willing to drop nukes in furtherance of its goals.
NOW can you see what the rest of the world sees so clearly?
can someone explain to me how exactly "off-balance sheet" liabilities are defined; and what is more, how can one be sure to get the figures right?
Thanks in advance !
Manni
Following my query of just now, I have done a little research on my own and found that at SocGen they follow the definition of Jagadeesh Gokhale, which means mainly pension & health insurance commitments.
This is something however where I figure a sanity check is called for. Let's take the US as an example. National debt stands at 87%; the TOTAL Debt ratio according to Edwards is 530%. So he argues that annual - off-balance sheet - commitments amount to 443%?!
Extremely hard to believe.
Manni
Most people don't even know what off balance sheet liabilities mean.
Probably a better term would be use the accrual method of accounting, instead of the cash method or accounting, or unfunded liabilities "might" work.
Eventually the cash method of accounting catches up with the accrual method of accounting. When it does, lights out.
#232459
I get your point. But what to think of Eward's argument that - in the case of the US - that 431% of annual GDP is made up of pension and healthcare commitments. Is this possible?