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Art Cashin On The Coming Hyperinflation
We present today's thoughts by Art Cashin on the coming hyperinflation (and no, it does not mean very high inflation - it means a complete and total collapse in the monetary system - which is what Ben Bernanke is attempting to achieve), without commentary.
AN ENCORE PRESENTATION
(Today we will revisit one of the most devastating economic events in recorded history.It all began with the efforts of a few, well-intentioned government officials.)
Originally, on this day (-2) in 1922, the German Central Bank and the German Treasury took an inevitable step in a process which had begun with their previous effort to "jump start" a stagnant economy. Many months earlier they had decided that what was needed was easier money. Their initial efforts brought little response. So, using the governmental "more is better" theory they simply created more and more money.
But economic stagnation continued and so did the money growth. They kept making money more available. No reaction. Then, suddenly prices began to explode unbelievably (but, perversely, not business activity).
So, on this day government officials decided to bring figures in line with market realities. They devalued the mark. The new value would be 2 billion marks to a dollar. At the start of World War I the exchange rate had been a mere 4.2 marks to the dollar. In simple terms you needed 4.2 marks in order to get one dollar. Now it was 2 billion marks to get one dollar. And thirteen months from this date (late November 1923) you would need 4.2 trillion marks to get one dollar. In ten years the amount of money had increased a trillion fold.
Numbers like billions and trillions tend to numb the mind. They are too large to grasp in any “real” sense. Thirty years ago an older member of the NYSE (there were some then) gave me a graphic and memorable (at least for me) example. “Young man,” he said, “would you like a million dollars?” “I sure would, sir!”, I replied anxiously. “Then just put aside $500 every week for the next 40 years.” I have never forgotten that a million dollars is enough to pay you $500 per week for 40 years (and that’s without benefit of interest). To get a billion dollars you would have to set aside $500,000 dollars per week for 40 years. And a…..trillion that would require $500 million every week for 40 years. Even with these examples, the enormity is difficult to grasp.
Let’s take a different tack. To understand the incomprehensible scope of the German inflation maybe it’s best to start with something basic….like a loaf of bread. (To keep things simple we’ll substitute dollars and cents in place of marks and pfennigs. You’ll get the picture.) In the middle of 1914, just before the war, a one pound loaf of bread cost 13 cents. Two years later it was 19 cents. Two years more and it sold for 22 cents. By 1919 it was 26 cents. Now the fun begins.
In 1920, a loaf of bread soared to $1.20, and then in 1921 it hit $1.35. By the middle of 1922 it was $3.50. At the start of 1923 it rocketed to $700 a loaf. Five months later a loaf went for $1200. By September it was $2 million. A month later it was $670 million (wide spread rioting broke out). The next month it hit $3 billion. By mid month it was $100 billion. Then it all collapsed.
Let’s go back to “marks”. In 1913, the total currency of Germany was a grand total of 6 billion marks. In November of 1923 that loaf of bread we just talked about cost 428 billion marks. A kilo of fresh butter cost 6000 billion marks (as you will note that kilo of butter cost 1000 times more than the entire money supply of the nations just 10 years earlier).
How Could This All Happen? – In 1913 Germany had a solid, prosperous, advanced culture and population. Like much of Europe it was a monarchy (under the Kaiser). Then, following the assassination of the Archduke Franz Ferdinand in Sarajevo in 1914, the world moved toward war. Each side was convinced the other would not dare go to war. So, in a global game of chicken they stumbled into the Great War.
The German General Staff thought the war would be short and sweet and that they could finance the costs with the post war reparations that they, as victors, would exact. The war was long. The flower of their manhood was killed or injured. They lost and, thus, it was they who had to pay reparations rather than receive them.
Things did not go badly instantly. Yes, the deficit soared but much of it was borne by foreign and domestic bond buyers. As had been noted by scholars…..“The foreign and domestic public willingly purchased new debt issues when it believed that the government could run future surpluses to offset contemporaneous deficits.” In layman’s English that means foreign bond buyers said – “Hey this is a great nation and this is probably just a speed bump in the economy.” (Can you imagine such a thing happening again?)
When things began to disintegrate, no one dared to take away the punchbowl. They feared shutting off the monetary heroin would lead to riots, civil war, and, worst of all communism. So, realizing that what they were doing was destructive, they kept doing it out of fear that stopping would be even more destructive.
Currencies, Culture And Chaos – If it is difficult to grasp the enormity of the numbers in this tale of hyper-inflation, it is far more difficult to grasp how it destroyed a culture, a nation and, almost, the world.
People’s savings were suddenly worthless. Pensions were meaningless. If you had a 400 mark monthly pension, you went from comfortable to penniless in a matter of months. People demanded to be paid daily so they would not have their wages devalued by a few days passing. Ultimately, they demanded their pay twice daily just to cover changes in trolley fare. People heated their homes by burning money instead of coal. (It was more plentiful and cheaper to get.)
The middle class was destroyed. It was an age of renters, not of home ownership, so thousands became homeless.
But the cultural collapse may have had other more pernicious effects.
Some sociologists note that it was still an era of arranged marriages. Families scrimped and saved for years to build a dowry so that their daughter might marry well. Suddenly, the dowry was worthless – wiped out. And with it was gone all hope of marriage. Girls who had stayed prim and proper awaiting some future Prince Charming now had no hope at all. Social morality began to collapse. The roar of the roaring twenties began to rumble.
All hope and belief in systems, governmental or otherwise, collapsed. With its culture and its economy disintegrating, Germany saw a guy named Hitler begin a ten year effort to come to power by trading on the chaos and street rioting. And then came World War II.
We think it’s best to close this review with a statement from a man whom many consider (probably incorrectly) the father of modern inflation with his endorsement of deficit spending. Here’s what John Maynard Keynes said on the topic:
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some…..Those to whom the system brings windfalls….become profiteers.
To convert the business man into a profiteer is to strike a blow at capitalism, because it destroys the psychological equilibrium which permits the perpetuance of unequal rewards.
Lenin was certainly right. There is no subtler, no surer means of over-turning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose….By combining a popular hatred of the class of entrepreneurs with the blow already given to social security by the violent and arbitrary disturbance of contract….governments are fast rendering impossible a continuance of the social and economic order of the nineteenth century.
To celebrate have a jagermeister or two at the Pre Fuhrer Lounge and try to explain that for over half a century America's trauma has been depression-era unemployment and deflation while Germany's trauma has been runaway inflation. But drink fast, prices change radically after happy hour. And, tell Fed Chairman Bernanke that it was the “German Experience” that caused many folks to raise an eyebrow when he alluded to the power of the “printing press” a few years ago. But, rest assured that no one would let it happen again.
Once again, we suggest everyone read The Dying Of Money before it is too late.
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Fortunately, there are other means of payment other than just cash these days... I mean even down here in sub-Saharan Africa we managed:
http://imgur.com/65TzL.jpg
I will lol if I live to see a cheque like that drawn in US dollars :)
In chess you only make a move to which your opponent has no answer. After reading mister Cashin, it seems Bernanke is trying to do an overhand right to a young, focused, undefeated Mike Tyson.
"Everyone has a plan until THEY get hit" -Mike Tyson
Mike Tyson > most lemmings
All the plans will fail, why? Because the Truth will eventually crush any plans based on lies.
Mako knows the truth. Everyone's gonna die next Thursday. No need to make plans of any type. Just sit there and die.
I know you are liar, how do I know that, because I never once said anything you just said.
I know you are scared as well, which is why you are shaking in your boots in your trailer thinking you are going to help humanity avoid the final conclusion with the use of your keyboard. Good luck and all.
You will probably be proven correct Mako ... eventually.
Timing is the bitch, Truth has infinite patience.
All you do is preach doom and offer no solutions, and WORSE, claim that there is no such thing as a solution. You used to harp on "the math" until I definitively proved you wrong. Now you have nothing except empty words and no understanding of how economics works, or how people think and act.
I agree with you wholeheartedly TMosley. Mako is just a one-trick pony who can offer NOTHING but "The End is Nigh!", without any suggestion of what might come after his putative "End", what actions individuals might take to ameliorate that "End", or what we collectively as a society might do at this point to effect the same. Mako cannot argue, cannot debate, cannot reason, from all that I have seen him post (which is a LOT), but merely (and endlessly) make the same dire pronouncments and engage in the same Armageddonist bluster over and over and over.
(For what it's worth, I am probably more in agreement with Mako than one might suspect from what I just wrote; things ARE going to get bad, and things ARE going to fundamentally change in the near future. But like TMosley, I do not envisage an eternal "Mad Max" world as the logical and long-term end result of those changes, as Mako seems to constantly imply.)
It looks to me that we're all pretty much in agreement here: - we face a troubled future. I came here as an investor and what I've read here has turned me into a hyperinflationist / survivalist. I'm not interested in stocks at all now - I couldn't care less - in fact today I just went 100% long physical silver with a very simple investment strategy going foward - ongoing buy and hold accumulation, if possible, for the next 8-10years.
"I do not envisage an eternal "Mad Max" world as the logical and long-term end"
no thing is eternal. Even 'mad max' was over in 93 minutes...
I dont know why folks keep junking Mako, maybe the Hopium thats been driving this whole thing is becoming scarce? I ust see Mako telling the truth, this all is going to come to a violent sudden end, not some gentle all-is-well soft landing. Theres a full economic world war going on.
I have not junked mako, I enjoy his rants for the most part. But the economy and systems supporting it are more resliient and have more personal buy in from the population than mako account for, thats all.
The JIT system will not just crash one day, no trucks, Supervalu mega- warehouses shuttered. It will slow as the credit system slowly folds to a point to which it can be re-constructed. Mako, if he believes as fully as he asserts should be willing to endorse some sort of scenario that his research and insight in human behaviour suggests, if not it is just doomer porn..
Try this site regarding Argentina problems, surviving in argentina blog, I think you will find this scenario more likely.
Ali vs. Foreman.
History repeats, for many, for a few, it is generous! WAR IS COMING, Again! Gold and Silver coins are the best, the black market economy emerging won't take any other payment!
Baloney, the last thing Bernanke wants is the collapse of the USD. He will trash the markets before allowing that to happen. Enjoy the ride, a chill wind is gonna blow starting the first Wednesday in November.
Did you read the article? No one plans to destroy their currency, it just kinda works out that way. Every single time, for every fiat currency.
But hey, this time is different. Heh.
+1
Someone needs to take away Ben's Ink!
It's different because this time it's *us*, and *we're* different.
Right? Right??
/sarcasm
Today is proof that you cannot bet against the house by shorting stocks...
LOL....
Been saying that for weeks. When the Fed is going to do "anything possible" to keep it moving, you never bet against them. When it's the EOY and everyone needs to show gains for their bonuses, you never bet against them. It's pretty simple but for some reason, most here seem upset at that notion and stubborn. They lose money by not participating or by shorting in the worst possible short environment since last Fall.
"Anything possible"? Unfortunately you would need the Fed to do the impossible to keep things moving medium and long-term.
Harry and Robot, you guys need to get a room.
May I suggest that Zero Hedge IS their room. They're currently engaged in a round of very public sex (albeit of the verbal variety) which begs the obvious question.
Are we, the ZH community, accidental witnesses or are we actively engaged in the orgy?
Hmmmm
I'm not into sloppy seconds. Pass.
Robo and Harry always bring back the conversation to their beloved stocks. This wasn't an article about stocks, it was an article about the economy. And while Harry can argue (below) that you can't compare the past to the present, it can at least form the basis for the conversation. I didn't read in the article a prediction that it was going to happen exactly the same way.
Yes, we get that the stock market and the economy are not the same thing. But you two always bring the conversation back to the stock market when other people are talking about the economy. For instance, other people are discussing hyper-inflation/hyper-deflation and then you two bring up shorting stocks. No one else was talking about it but you.
I'd be willing to bet there are as many longs as shorts here, when you add in pensions, 401(k)'s, etc. And even more long PM's as a percentage of discretionary tradable assets.
You guys confuse the complaining on this site with ppl losing money. Perhaps people are lamenting what they perceive to be the increasing capture of the economy by the mega-corporations, politicians, and central bankers, and the belief that this will not end well. Or that even as the market goes up, there is less participation and faith in its integrity.
So you can argue that you'd like a nickel for every "this will not end well" comment, but 3.5 million people protesting in France is not a sign of happiness. It's a sign of frustration, justified in your opinion or not. 44 million Americans don't want to be on food stamps. Posters here don't want to be making money on gold, I'm sure they'd much rather have a sound currency with prudent fiscal management (and a degree of liberty in their private lives) and lose money on their gold.
So, chat all you want about the stock market when everyone else is talking the economy. And claim the economy has 'stabilized'. Fair enough. But we are most certainly discussing AAPL's and oranges.
trader: very well said.
Although, most posts refer back to "how can the market continue this farce?", etc. As always, I try to point out the glaring differences between the market and the economy. That cannot be accomplished without addressing the continual, "what a joke of a market" comment that plasters these pages.
Somebody on these pages a couple of days ago said it perfectly, there are a ton of frustrated shorts who continually get burned that post their frustrations here. I get that. But to suggest that the market is "a joke" when in reality, it's pretty fairly valued for a stable economy, which is where we find ourselves now.
If they are confused, it might be deliberate. Though they might not be very concious of what's going on.
For some people (note I said some people, not Harry or Robo because I don't know them) when they're shocked and dismayed by a situation where they or others they love could very well be hurt or destroyed BUT this very same situation presents the opportunity to profit, they have a choice to make.
How does someone who has a strong sense of moral outrage about a set of circumstances decide to participate in those circumstances to enrich themselves without triggering the Cognitive Dissonance of benefiting from something they strongly disapprove of?
By disassociating themselves from the event. By treating it as if it's being done by a third person, by rationalizing it so they aren't trapped by a Cognitive Dissonance or by berating and yelling at those who are "stupid" about the fact that resistance is futile and thus everyone should pile in. By encouraging other to jump into the pool, they aren't alone swimming in the filth and thus are absolved by the collective swim with the devil. The crowd is never wrong and there is anonymity within the crowd.
Getting back to Robo and Harry, there were most definitely periods of time when they were expressing outrage over what was going on. Harry was full throat in late spring, early summer of this year. Robo spent most of 2009 screaming at the Ponzi. Where are those voices now? While they might argue they haven't stopped, they aren't doing so from the same side of the fence as they were before. Harry seems to have crossed this divide twice, with his current position the same as it was during the first part of this year. Maybe he just back slide during those 4 months in between.
Interesting. Glad that I now understand your handle.
I would argue that the defining characteristic of adulthood is a willing acceptance of shame. The alternatives are fairly bleak: inaction, pure license, or fanaticism.
Shame?
Please explain how "a willing acceptance of shame" has anything to do with what I'm talking about. Maybe we are using different definitions and I simply don't understand yours. Thanks.
I was responding mainly to the larger filth-swimming point you were making. Specifically, you seem to maintain here and in other posts that those who continue to participate in a system you deem corrupt are either insufficiently brave or morally depraved.
My feeling is that we must first and foremost acknowledge that, even in the course of pursuing the good, we not only may but often will do evil--most often without malice, but nonetheless intentionally. I see this as an essential element of the human condition--a consequence of social complexity.
No doubt there are a few who glory in the ill they do; no doubt there are more who try to blind themselves to the consequences of their choices. But it seems to me that the only way one can live ethically is to recognize reality and, as much as possible, choose the evil we do.
The more we repress something the more it will be expressed, either individually or collectively. I see the current round of social and political insanity as the outward expression of our inner insanity. It all begins within.
Define living ethically for me. Once you get beyond the easy and socially understood "Thou shalt not steal, kill or bugger my neighbor" there is a lot of disagreement. What I repeatedly discuss here on ZH is the hypocrisy displayed not only by our leaders but ourselves. Our leaders represent ourselves more than we would ever care to admit.
People demand here on ZH and elsewhere that "someone do something" yet they themselves will never lift a finger. People demand moral cleanliness from others and yet they see no problem with a little dirt from themselves as long as their motives have been properly rationalized.
No, I don't demand black or white views. I just ask that those who ask for others to act morally should consider cleaning their own house first.
Everything you said is true.
But mortgage-gate *is* a very, very big Black Swan.
...far bigger than many yet realize.
Never bet against the House is a good rule of thumb. But in this case, the house is on fire.
Can't wait for your apology to Jim Sinclair. heh.
"Funny" that everyone and his brother now has a gold price target of $1600- $1650.
How many years has Jim Sinclair been saying $1650 by Jan 11,11? A few years ago he wagered $1,000,000 that his prediction would come to fruition, open to anyone in the world who proved they had the ability to pay up.
Not a single taker even though publicly he was much ridiculed
Hyperinflation = Stockmarket @ Dow 50K, Nasdaq 10K, S&P 5K
Agreed. And gold $50 k for a one to one dow/gold ratio
still only halfway to a Woodrow Wilson.
Depends on WHICH stocks you mean, jackass, because a lot of them are down! For instance, JPM and INTC which were supposed to be the drivers for this particular fantasy pump.
Edit:
Today is proof that you cannot bet against the house by shorting [gold]...
There, fixed it for you.
if you believe that the fed will commit hari kari then bet on hyperinflation.
If you believe the fed will become prudent, buy the dollar.
nice!
If you believe, as I do, that the Fed has no choice but to try to reinflate or die, then bet on their pursuing it to the bitter end. Sustained deflation destroys everything by triggering the debt trap. Ben wants to print just enough to keep the banks alive and let the middle class die a slow starvation.
your last sentence nails it. he is trying to pump the last remaining clownbux out of the sheeple by jawboning.
he doesn't know what he's doing. but he "does have a committee that agrees with him." save for one, of course. always remember "there was one dissenter before Kennedy plunged America into Vietnam." His name was George Ball. And history is shining brightly on a banker from Kansas right now.
Yep right now Bernanke's only real plan is 'we're going to keep pumping this market till we create stock panic buy mania again', which of course will never happen.
I'm not so certain we really know what Bernanke's plan really is. We see his actions and hear his words, but who is the sucker sitting at the table? Him or us?
I'm not sure which scares me more, the reaction of the clueless hoopleheads on the streets, or the backlash from my teenagers when they find out its all good because I have a three year supply of peanutbutter for them.
Don't forget the oatmeal. My teenage boys will eat it, if they get hungry enough.
You've been eating the wrong oatmeal. Stay away from that Quaker shit. Buy steel cut.
You'll want at least rolled oats when you're scrounging for fuel to make it with. Shorter cooking time.
It's peanut butter jelly time!
http://www.youtube.com/watch?v=eRBOgtp0Hac
Is it that bad here that we have to bring out "encore" articles to try to explain why the markets continue higher? This is pretty simple. Money managers have to show a strong EOY, whatever the "hot" investment is. Right now, it's pretty much everything so money piles in. It's not really a mystery.
And, no, hyperinflation is not coming. Inflation, no doubt but nothing we can't handle.
There's an interesting aspect to the descent into hyper deflation, that many so called sophisticated investors see how much money they are making on the stock markets and therefore fail to appreciate what's happening in to the currency.
"Money managers, as you call them are losing investment funds and have very little unallocated cash, so how the hell can they be pushing up the markets like this?
How? They all piled into AAPL six weeks ago at 240. That pretty much tells the story. 301 and rising today. They might bring this to 350 by EOY. With every portfolio holding it and its strong weighting in SPX and Naz what do you think will happen to the market? Correct! It will continue upward.
Burned in every bear market, the Permaharry still humping the same leg since he went long the market in 1998. Little off in terms of what he can buy though (the whole Dow oil ratio story)
Wrong. Been long precious metals for a long, long time. Was long the market then went short in May. Covered all my shorts in early August and have only been playing AAPL to the long side since (while still holding all my metals). You probably shouldn't comment on things you don't know. But I guess this whole forum is pretty much predicated on that.
My two favorite sayings regarding that are "assumptions make an ass out of u and me", and "never argue with an idiot, they will only drag you down to their level and beat you over the head with experience".
People do make a lot of assumptions but most of all it comes from the meaning of the words everyone uses, everyone has their own meaning and so assume what a person would do if they believed what they were assumed to believe on the assumed meaning.
Ah well...
What is your target on AAPL? Man, I really want to buy puts but dont have the guts. Its fun to have bragging rights, but could go broke trying to get them. But really, when will AAPl short term top out? I may post on another article since my comment may get lost on this one.
Close to the top now. Watch out if it can't hold 300. But I gotta say, with earnings coming up next week, they'd better absolutely blow it away or you could see a nice haircut. Odds it drops in my book, 75% after earnings.
Thanks for your opinion. Protect your capital and good luck.
I'm with you - it broke 300 and didn't keep going. It faked me out last week with a perfect MACD sell signal but didn't continue below the 10 day EMA. I didn't put it (yet.. :D)
The markets are higher all right. All of them, stocks, bonds, commodities. Better hope that APPL can outrun Ben's printing press or you are toast.
As much as myself and tons of others have made on AAPL, Ben's printing presses would take years to catch up. Now if you were short on the other hand waiting for impending doom, well....
lulz, you have yourself fooled Harry. Did you read the article or did you just check AAPL share price and post? A couple million benbux for a loaf of bread. You better have more shares than Steve Jobs.
It's fun watching you guys gamble in a burning casino.
Yes, I read the article and shook my head as I always do when people try to compare 2010 with 1920's or 1930's. Silly and naive at best.
Again, I'm not interested in "IF this happens, then this COULD happen", etc., etc. I'm interested in what's really happening now. Which is: an economy that has stabilized and rising equity and precious metal prices. That impacts me on both levels.
To compare VASTLY different eras is pretty ridiculous, don't you think?
Why stop at the 1920s? Go back to the South Sea Bubble, the Tulip bubble. It doesn't matter what the era is because people never change, Harry.
There are always Harry Wangers who think this time is different, and they are smarter, and they really CAN make a lot of money gambling in a burning casino. Just like central bankers think they can debase the currency and control inflation. You are sadly, predictably playing out a very common part in history, and you will come to the sad, predictable end that every other Harry Wanger throughout history has come to. Of course you will never believe this, so carry on. What's AAPL up to? lulz.
So, you're saying it's different this time? Should we put that on your tombstone?
You guys don't get it. So what you're saying is the 1940's Philadelphia Warriors would beat the 2010 Lakers?
Yes, it's different because it was 90 years ago. Nothing is remotely the same. Just like the NBA, things evolve and change. To compare today's economy, markets, anything with something 90 years ago is basis for insanity. I say this as I type on a superfast computer connected to the world in milliseconds. You know, just like they did 90 years ago.
False dichotomy, much?
The Titanic is going down and Harry is in the dining room, stuffing his pockets with salmon and lobster.
Harry the depression of the 30's came about because their was too much credit and paper receipts for actual physical gold. Many banks actually had stock as collateral on the money that was loaned out, the whole thing is a parallel for the housing crash because it was the stock market bubble that started the great depression, and the governments reaction to it that made it a great depression. If we had a fiat currency then it would of been hyperinflationary depression instead, it was the fact that gold was still money before and after that made it a deflationary depression.
Everything going down is exactly the same just different instruments of destruction and our currency is no longer gold. Technology hasn't changed anything, its like saying technology has changed sex, or relationships. It changes how we interact but it doesn't change the fundamentals.
Yep. We now get screwed faster, harder, and deeper.
Ain't technology wonderful?
Not at all Harry, we didn't come from apes and cavemen you know.
No, I think you're ridiculous.
Where the fuck is the "ignore" option ZH?
You idiot, I just junked you for your stupid comment. Like you need a "button" to ignore someone. You've watched this troll for 38 weeks. Why give a shit now? Same troll, different tactics. He advertises his posts with a fucking American Flag, for gods' sake. Just skip over those. Grow up and DON'T FEED THE TROLL.
I always find it funny when logical opposing viewpoints are posted and someone inevitably asks for an "ignore" button because they don't agree. The equivalent of hiding your head in the sand.
Harrys just another Hopium tokin blowhard who probably doesnt own any Apple or gold, sounds like someone just needing attention.
Some of us need a little help avoiding fights and raising our blood pressure.
I'm all about contrary opinions. What I am not about is constant repetition of disproven arguments (a la Master Bates), or an assertion that there is no way to preserve wealth, or do anything, for that matter, and that we should all just give up and die (a la Mako).
I would LOVE to be able to ignore those two (though we seem to have run Master Bates off, or he's slinking around to tell us on the next dip that gold is going to "plunge" to $1200 from $1500). It would certainly boost my productivity at work as well.
Harry bates, pumpers. Same crap, grabbing the conversation, directing the trend.
Pretty day here on the w. coast.
+1. Well said. All one needs to do is look quantitatively at the currency devaluation occuring now, and what happened in Weimar Germany. They are orders of magnitude different.
Who is the "we" you are referring to above? For whom do you work? do you actually work or do you simply speculate/trade/gamble? is your time horizon as long as your tight stops on your apple trades? are you getting over, getting by and geting off such that all is well with you? i ask these questions as i worked for a big broker-dealer in NYC for several years and am an attorney at a large law firm in NYC as we speak. you remind me of people i once worked with who measure things based SOLELY on their P&L. If it is up, they are up... They were not much into anything that would not help them make profit that day. they also had zero concern for anyone or anything that did not or could not help them make money that day. they did not care who suffered or lost as long as they got paid. i find you to be quite an interesting person... I think you know how horrible things really are for so many people but i cannot tell if you care? you seem to be informed and intelligent but very focused on your trades and plays. do you live near people suffering or are you in some sort of a gated community away from the masses? you seem to have a singular obsession with your P&L.
At this point, with everything going up, it's about capital preservation. Sitting with dollars in some shit Schwab account isn't gonna cut it. When everything is rising, your money needs to be deployed.
It had better be deployed in the right things. How did the Weimar stock market work out?
Those who moved their money out of country in time did well.
Those who invested in the right companies and had cajones of steel to ride it out made fortunes.
most crashed and burned
since I'm not smart enough to outrun the treadmill, I think I'll sit this one out.
isn't the ball bearing king opening an expat center in Peru-gold bartering only?
Actually - it worked out very well - making many young speculators fabulously wealthy - until it didn't - and then the fabulous wealth of yesterday was enough to get you a loaf of bread today and they starved like the rest of them.
I have a 20 mark gold coin from Prussia with Wilhelm's image on it. It will still buy many many loaves, 90 years later. :)
Good and thanks.
I'm reminded of the scavenging dogs which rush in on the carcass, tear off a chunk of red meat, and then run off to a corner to chew on their prize. Growling at any other dog that approaches they focus on the task at hand. Then go out looking for another victim.
Did this one cut you a little close harry? No comment?
Is this another guy who "doen't know what he is talking about"?
Harrys line is he's made a lot in Apple...so I assume he's sold? Because projecting stock gains out into the future is pure fools folly and how famous bagholders were made. For whatever Apple does today, it can just as easily open -20% tomorrow morning. Gains arent gains until the sale is made. To me, Harry sounds like a fake.
I work for myself. I trade when I feel the odds are in my favor, long or short. I also own a business which sells to retail outlets throughout the country. BTW: totally discretionary business that had its best September in 9 years.
I grew up very poor in inner city Detroit. I've seen lots of pain and suffering. I watched houses burn and military vehicles roll down my street as the city was ravaged by riots. I watched thousands lose their jobs when Japanese vehicles starting replacing domestic as the choice of consumers.
I worked my ass off to get out of their and get away to college with every scholarship/grant/loan I could get. I've owned a few successful businesses and had one big failure. But I worked through it.
I see nothing now on a national level that in my mind comes close to the horror I saw in Detroit all those years. It's even much worse there than ever now. I have a huge family still there, now in the suburbs. None attended college yet all are very successful.
I hate whiners. I understand how some people have been put in terrible financial situations. But many of them are trying to work through that. Sure it's tough but they're not whining about it. They want it to work. I do too.
Oh, cue the violin section for Harry.
Very interesting response on many levels. having seen brutality and hardship and unfairness up close and personal you know it exists but yet you know it ALWAYS has existed as well. this must make you strong/hard and also, having the gumption to get out of detroit as you did and move to higher ground also informs your view as well. i have no doubt you have mixed feelings concerning the many you knew who could not or would not try to flee from detroit as you did. Many on this board see how horrible things are right now and ask why things have to be so bad/unfair/cruel etc. You see things as not nearly as bad as they have been in the past and are grateful they are not worse. In many ways it does come down to life experiences and personal history does it not? the big broker-dealers love recruiting young and hungry dudes as new financial advisors. they love young men who are willing to walk through walls to make money. guys who are impervious to hardship or rejection. guys who will do whatever it takes to NEVER have to go back to where they came from. many a small fortune has been made this way. these guys are never hired on the investment banking side but only on the retail side as they are considered far too unpolished and hard for high-level deal making. Wall street is filled with these guys. the whole system depends on them actually. nobody is more concerned with making bank than a poor person... just give them a little taste and they will sell their souls for another hit. these are the ones the powerful always hire to be front-line enforcers.. nobody is nastier than a dude who just muscled his way into the middle class... that type of a guy will kill for you and will make sure nobody below him gets out of line and passes him. it is a brillaint system they have set up with far more losers than winners.. they can always depend on us to turn on each other as it is in our nature to do so.. they can also always depend on the fact that most people are easily amused and satisfied with basically table scraps.. we all come rather cheap...
You see things as not nearly as bad as they have been in the past and are grateful they are not worse. In many ways it does come down to life experiences and personal history does it not?
Well said.
seriously, thank you for your post.
It took hitler to get out of that mess. Where's today's hitler?
He is in the office now.
It doesn't take an evil dictator to halt hyperinflation or paste together a system that works afterwards. Ron Paul is qualified. I don't agree with him on everything, but he could fix the money system and would limit government.
your statement assumes the "president" has power over anything that is currently happening, or has happened in the past.
TRUE.
I worked in politics for a while, until I finally realised how pointless it was (from my perspective, and agenda).
Even the big dogs are cogs in the machine. If you think you are going to join the system to change the system, then you don't understand the system. It is a vastly interconnected web of obligations and interests that is constructed to maintain the status quo.
The President, or anyone, is not going to, and is not able to "DO" anything. Except maybe fiddle at the edges, where it doesn't really matter. Any changes are just P.R. to look good but without upsetting the establishment. Politics serves power and money. Politics is about doing what it takes to ensure that things DON'T change. That is what the Fed is trying to do (in fact what it is chartered to do), keep the game going, keep the balls in the air and the markets inflated.
And it is not just the 'Powers that Be', society in general is structured into a basically stable configuration. For most people it serves their interests that things stay the same, they are doing OK and making money. Changes would threaten that, and radical reform would instantly run into a coalition of interests that will push back against that threat.
Politics is about stability(of established interests - at all levels), which is why even a president can't and wont change anything.
And why any politician talking about change (Change you can believe in...) is the biggest lie of all.
It boils down to "can someone dare to take the punchbowl away".
indeed "how do you stop it" even if we agree that it is the right thing to do? Can you say "War Games"?
http://en.wikipedia.org/wiki/File:Zimbabwe_$100_trillion_2009_Obverse.jpg
Where can I get one of those? Would just be fun to have.. Then again, I ask myself, What would I pay for it?? Well... still would be cool to have..
You can get them on Ebay. Nice big stacks of fresh, never used ones. They make a nice and instructive novelty gift.
I always thought those rocks looked like a giant turd.
How apropos.
JM Keynes on Weimar period:
"The inflationism of the currency systems of Europe has proceeded to extraordinary lengths. The various belligerent Governments, unable, or too timid or too short-sighted to secure from loans or taxes the resources they required, have printed notes for the balance."
More doom and gloom, so negative.
Careful what you post here. This site may no been what you think.
So why are you posting?
Too much whiskey, not enough running.
Good points, though running does have more than one meaning. It would explain the, uh, splatter left there...
I'm going out to buy more peanut butter...
and so we have currency and economic collapse delivered by the most self serving sociopathic preening, pretentious self righteous assholes in history - taking from the poor to give to the rich...that is the essence of banksterism....
never a borrower be.....
fuck bernanke, the fed, the white house and congress
Also check out "when money dies"
Buy Food not Gold. Food is rising faster than Gold. Just look at Wheat, Corn, Soy, Oats, Sugar, Coffee, etc. Plus, you can eat it. Chuckle.
Im going shopping.
My wife scored $.39 Libby's canned goods yesterday.
w00t!
Hopefully the expiration date was not yesterday.
The food is fine 2 years after the expiration date, and honestly probably fine after that, just not very palatable. My local food pantry takes donations up to 2 years after the expiration date for cans.
I have eaten 5 years after the expiration date with no problems. Certain items, like Kidney beans, loose their form and come out as mush.
so a can of beans is not like an elected official?
But you can't eat food. Oh, wait... You already dispelled that myth.
LOL
I view this in a larger context. I am certain I will get junked for this perspective.
In short, both Germany at the brink of hyper inflation, and the United States today, represent two countries that in the main had and have moral bankruptcy.
The spiritual underpinnings which had created moral order were swept away, in that the Platonic good which was adopted and adapted conceptually by Christianity (Aquinas) in other words the understanding that all people want to work to a greater good and a union with a Godhead, was swept away by the understanding put forward by Nietzche: a will to power. That is, a way of being that suggests a belief in not the greater good, but what is good for me.
That, people is what we have. All the country is awash in disbelief in a greater good (God) and sneers at beliefs. The only belief that counts is the belief in what is good for oneself.
It's quite simply the seven deadlies.
And it is a moral collapse represented materially by an economic and social collapse.
Scholars will (centuries from now) possibly tsk tsk that people, as they crawled from the wreckage, wrapped themselves back up in their God and their guns.
Maybe. Or, perhaps it is a part of the moral order of the universe that we must ever strive to unite ourselves with the Godhead. To do good. To pursue the notions of justice, and truth, and beauty that emanate from revealed truths and an understanding of that God.
I don't think anyone here would disagree: John Templeton was an economic genius. At the end of his life, he funded the Templeton Foundation so that spirituality, the next great movement as he believed, would receive research and funding.
There is no need to drag God into it. The greater good is not God. As soon as you make thatmistake, you start sucking off the Pope and wearing a suicide bomber's vest. The greater good is merely the greater good.
So right and succinct to boot Too bad I can't control myself as well.
Who abuses power more than popes, priests, mullahs, rabbis and fanatics who without a doubt are right because some unknown unseen power speaks through them, or it was said in ancient tomes or passed down via thousands of years of word of mouth, can never be questioned (sounds a little like the Fed huh?), promise they are doing right by you and everyone you know (politicians and corporations), is the only moral source bar none, and even when they commit crimes are not incarcerated but transfered or move along to some other occupation (sounds a little like bankers to politicians to bankers/analysts/consultants/author/academic)?
Religious people tend to not question authority and that is the way "they" like it. More god for you. A spoonful isn't enough? We have television, radio, and print media for you then and you know there is a site for that on the internet god made! We know you have a special purpose but god is the only one that knows what it is and god will take care of your soul in the afterlife and you won't turn into the undead or a ghost. And just like bankers and politicians and general fraudsters when god does something wrong it is just god's way, god's will; sorry millions die for no reason other than human greed but that is the devil and god just having a little ole tussel in the dirt, just a Fight Club of the Superbeings, and God always wins so put your faith in god and us. We are "doing god's work!"
The people that can hurt you most are those in a postion of power over you; those you must be most skeptical of. Those in power are usually seeking power; be even more skeptical of these.
I can see why you would say that. But you are mixing the wheat with the chaff, so to speak.
In fact, Europe and the west would be nothing without the self sacrificing developments promulgated by such as Bernard of Clairvaux and his followers, or Francis of Assisi.
Look, I realize that most have a Protestant historical view of Europe and the Church. I also realize the sins of the Church. But, let's face it the Church and its various step children have in fact done more good than harm.
Without it, hospitals, univerisities, art, music, theater, education, human rights, human development all would have foundered.
The Church represented individual freedom in the service of God. It was an historical movement away from slavery.
Whatever the established religion, yes you will find crackpots, but be it Ghandi, or King, or the peaceful imans of Turkey, or the Tibetan monks, there is much good, there is much movement forward, there is a genuine desire to unite with the Godhead.
Your world and its future has no real basis for a system of ethics other than "me" and the new servitude to self. We will obey science and its new, corruptable priesthood and the result will be a frightening cocktail of the Island of Dr. Moreau, Frankenstein, and A Clockwork Orange. And moral hazard? Without a God there is none.
The Church represented individual freedom in the service of God. It was an historical movement away from slavery.
No one expects the Spanish Inquisition!
Yes, individual freedom is often encountered within a highly bureaucratic, rigidly authoritarian, perniciously autocratic and heirarchical framework. And Feudalism, I imagine, represented the flowering of the Enlightenment, and the so-called Conquest of the New World (in which around 90% of the prior population seems to have disappeared) was merely the benevolent sharing of the aforesaid gift of freedom with the benighted North American savages, yes?
I always appreciate the creative rewriting of an old story.
How do you know what would have happened in the west without a bunch of filthy Europeans running from religious persecution?
And it's hysterical what arrogance religious fanatics have. Of course if you kill heretics everyone stops being a heretic...or so it would seem. How many people have played along over the millenia, in any major religion, just so they wouldn't be persecuted or ostracized? How many great scientists, inventors, philosophers have been killed and how many have hidden their true beliefs fearing the stake or hanging for searching for a real truth not some unprovable mystic truth?
People are free to believe what they want. I believe if God, The Devil, Sasquwatch, Nessie, Yeti, Chupacabras, Gnomes, Sprites, Gremlins, Elves, Trolls, Fairies, Spirits Poltergeists, UFOs and all the armies in fantasy land want me, I'm right fucking here.
Bankers, politicians, military are far more worrying...and close talkers with bad breath.
double post deleted
"popes, priests, mullahs, rabbis and fanatics"
you're talking about the institutional corruption of spirituality....
baby/bathwater etc....
Excellent points, we celebrate the profane and denigrate all things sacred, and then act surprised when events turn ugly. And before all you "free thinkers" and atheists get your panties in a wad, I use the word "sacred" in its secular context.
I am a Catholic, but I certainly am not saying everyone should be Catholic. Certainly Sir John Templeton was not.
But the godless society is one that I am afraid of, much as I adore, for instance, Christopher Hitchens.
Back in the day, all sorts of folks in our great land trusted one another by this: "He is a God fearing man," and no more.
That day is gone. And yet, oh the simplicity of it. A man's word was his bond backed up by a fear of God, and everybody knew it.
That aint it today, kids.
You adore Hitchens? Yikes. One of the most successful propogandists out there. He convinces peaceful minded people that certain wars are "right" by pretending to have been against others. Somehow he's been awarded this reputation as a MSM outsider, or radical/progressive intellectual when he's anything but. He's a total sham.
I didn't say I agreed with him on everything. He is an intellectual, though, just not an intellectual giant.
Marshall Mcluhan was an intellectual giant.
Sorry to snap at you, Hitchens is one my pet peeves.
You might like this then if you haven't seen it. It's educational for people that don't know what it's really like. Also this video is an example of Hitchens willing to be proven wrong and admitting to being wrong which I respect him for.
http://www.youtube.com/watch?v=g7u-Wk1aU-E
Bankers = God
Bankers = Vampire Squid
Sir John Templeton. I don't normally like comments longer than two sentences but yours is my first exception. Love it.
Of course its all about moral bankruptcy. As the moraly bankrupt marvel at what the next lower descent into fraud and evil will be, and how good it will be for stocks.
Excellent post and line of thinking. Keep it up.
appreciate your post, lilimarlene1 - and it's good to see some people engaging with your point of view. . .
while I don't believe in "a" god, I recognise that there are "gods" believed in, and the principles and standards ascribed to one overseer have helped shape cultures, for good or ill. . .
the "me first" culture has been carefully cultivated over time, and the current "product" is stunted and shows much immaturity - it is the mark of a young child to only want for itself and remain incapable of acknowledging the needs of others. . . of course, the culture of "competitiveness" which is constantly measuring itself against others, and adjusting to a perceived one-upmanship is a mark of personal insecurity, despite all the showy bluster.
It's called currency reform and it happens overnight! Forget all asset classes except precious metals held in a vault or hidden elsewhere. This time though it will be worldwide!
Here in Los Angeles, the biggest bank is City National.
They are choking on all kinds of bad loans. Especially loans made to celebrities and movie stars.
When this bank starts taking off, that means "the fix is in" and if you are short it is time to stand aside...
Oil at 84. No gas price chart today?
'The tape don't lie.' --Jessie Livermore
I read Livermore's book a while back and have had a blast reading some of the older financial books. Found quite a treasure trove here:
http://www.fraserpublishing.com/all.html
Marketpump mania wont last long, first week in Nov at most, hope you and Harry the buttboys have your sells planned.