This page has been archived and commenting is disabled.

Is Ben Bernanke The Second Coming Of Rudolf von Havenstein, The Central Banker Responsible For Germany's Hyperinflationary Collapse (And Ostensibly WWII)?

Tyler Durden's picture


SocGen's Dylan Grice provides a gripping account of Germany's hyperinflationary episode, in which he charts the extended parallels between not just the precursor economy that lead to a 16,579,999% inflation in 1923 Weimar Germany, and modern day developed (and highly leveraged) countries, but between Germany's then central banker Rudolf von Havenstein, and the Greenspan-Bernanke duo. And while we know how "der Geld Marschall's" Weimar experiment ended, the future before the U.S., as a result of the Maestro's (both Senior and Junior) almost identical policy response is still open-ended. As the future of America is now exclusively in the hands of insidious economists, the following insight from Grice into the utility of economic models and decision-making should be sufficient to dash the hopes of any optimist for a favorable outcome.

"Is anything more dangerous than a nonsensical idea taken seriously? The esteem of economists has been dented by the financial crisis, though not so severely that the financial community treat economists? views with anything approaching the derision they deserve. The macroeconomic meme is resilient indeed! Sadly, the situation isn?t new. Macroeconomic theory has a long and
distinguished history of seducing policymakers into thinking utopia is
just around the corner, a trick brought about by untested hypotheses
masquerading as empirical knowledge. Believe it or not, a school of
economic thought that was prominent in Weimar Germany during the
hyperinflation ? and particularly at the Reichsbank as it was
aggressively monetising the government deficit ? held that the
escalating money supply had nothing to do with the exploding rate of
inflation! More on that later. For now, in this new world of policymaking experimentation, it?s worth recalling the British Ambassador to Germany?s observation on the hyperinflation that ?'no one could anticipate such an ingenious revelation of extreme folly to which ignorance and false theory could lead.'"

Hopefully, once the true span of the Great Depression v2 is grasped, once all extend and pretend measures are exhausted, modern society will do away with economists once and for all.

For those unfamiliar with the greatest failed experiment in developed world monetary policy, here is a brief primer.

For all the ink spilled analysing two of the 20th century’s greatest economic tragedies - the Great Depression and Japan’s lost decade(s) - little has been spent on arguably the greatest of them all: Germany’s hyperinflation. It may be because we’re confident we understand it. Everyone knows that unfettered money printing eventually leads to explosive inflation, don’t they? The thing is, economists knew that then! So what was going through the mind of the central bank head who presided over history’s most pathological currency debasement?

It is often said that the Great Depression so thoroughly destroyed the social fabric of the industrialised world in the 1930s that WW2 became inevitable. But this overlooks the role of Germany'?s hyperinflation, the horror of which seems underappreciated in the Anglo-Saxon world. At the height of the crisis in 1923, for example, industrial production fell by the staggering annual rate of 37%. In roughly the same single year, the unionised unemployment rate rose from under 1% in late 1922 to nearly 30%! (and according to Frank Graham, almost half of the total workforce became unemployed at this time). This, remember, is at a time when the rest of the world economy was booming.

As far as economic pain goes, this probably surpasses the Great Depression yet to come. But it only tells a part of the story: the nation?s wealth, held largely in German government bonds was completely wiped out. We can only imagine the nationwide psychological devastation of a proud Germany already feeling victimised and humiliated in the aftermath of WW1. In his ?'Ascent of Money’, Niall Ferguson quotes Elias Canetti?s recounting of his hyperinflation experience as a young man in Frankfurt, “It is a witches’ sabbath of devaluation, where men and the units of their money have the strongest effects on each other. The one stands for the other, men feeling themselves as ‘bad’ as their money; and this becomes worse and worse. Together they are all at its mercy and all feel equally worthless”. Such was the condition of Germany before the Great Depression had even begun.

Indeed, it is a tantalising counterfactual: would Germany have fallen under the Nazi spell which would ultimately lead the world to a second World War had she not borne the grave burdens of the Great Depression already exhausted, despairing and with ruptured social cohesion? We?ll never know, of course, and anyway such events are never so simplistically mono-causal. Nevertheless, it is possible that German hyperinflation played a decisive role in the build-up to WW2 and therefore logical to conjecture that the central banker who presided over that hyperinflation is the most influential figure in history you?'ve never heard of.

Next - presenting Ben Bernanke ideological father: Rudolf von Havenstein, after whom came the flood.

That central banker was a certain Rudolf von Havenstein. Born in 1857 into an aristocratic Prussian family, he trained as a lawyer and rose to become a county court judge before joining the Prussian Finance Ministry in 1890 and being appointed president of the Reichsbank in 1908. Steeped in the Wilhelmine tradition of devotion to his Kaiser and a passionate believer in the virtue of public duty, he seems to have been liked by all ? a true gentleman of the old school. Montagu Norman - then governor of the BoE - found him to be a “quiet, modest, convincing, and a very attractive man.?" [For more on the treasonous actions undertaken by Norman as head of the BOE in the 1930's click here]

Just how could such a decent, hard-working, intelligent and well-intentioned pubic servant have given birth to the uncontrollable monster of hyperinflation? How could such a paragon of public integrity preside over the largest currency debasement in financial history, quite possibly sowing the seeds for the most destructive war in the history of civilization?

He first seems to have developed the habit of monetizing government debt during WW1. With a complacency arguably similar to today?s policymakers in justifying their variously creative schemes for monetary and fiscal experimentation, the monetary expansion was justified as merely a stop-gap measure. The war was expected to be short and in any case the losers would be made to foot the bill. No one really anticipated the long and protracted conflict which occurred, or the financial burden it would impose. So by the end of the War - only 10% of which was financed by taxes - the money supply had ballooned and prices had quadrupled. Nevertheless, Von Havenstein was lauded as a public hero, decorated with honours and even nicknamed "der Geld Marschall", which sounds a bit like the ?the Maestro? but in fact translates as the ?Money General?.

Once embarked upon this path though, it became difficult to stop, especially since the early stages of inflation didn?t seem too bad. Although inflation rose by 60% in 1921, real industrial production rose by 26% and unemployment stood at only 1% of the unionized workforce. The following chart shows that at one point during this period, real share prices rose by over 100%. But then the inflation intensified. In 1922 it reached 5,300% and on the eve of currency  reform in late 1923, the annual rate was 16,579,999%. How did this happen?

To call the political climate of the time merely difficult would be a gross understatement. The country was on the brink of civil war: on the far right was the vast and humiliated ex-military which, having been forcibly demobilized by the victorious Allies, had become a seething and vengeful nationalist militia; on the far left were the anti-war workers and communists, the latter inspired by the 1917 Bolshevik Revolution and aiming to achieve the same end in Germany. Meanwhile, with revolution in the air and violent street battles between these polar political opposites playing out nightly, deep-felt resentment towards the foreign powers was fermented by the issue of war time reparations, whereby Germany was required to hand over 4-7% of GDP each year until full compensation for the war-time devastation had been paid.

It?s worth noting that there has been much debate over the extent to which reparations were in fact a primary cause of the hyperinflation. Some have argued that the 4-7% budgetary burden was bearable and that the hyperinflation was actually a bluff gone wrong. The German authorities were actually trying to demonstrate just how desperate their situation was as a way to lower their reparation payments. I?m no expert, but I?m not completely convinced by this argument. In passing, it?s worth noting that we?re about to see how politically feasible such a budgetary burden is since the 4-7% of GDP range is roughly what Cecchetti et al at the BIS calculate is required to stabilise debt levels at 2007 levels (see chart below).

I personally think the 4-7% reparations was the last straw for the German authorities facing capital flight in response to the tax measures they?d introduced to shore up the government?s budget position (as we?re seeing in Greece today), with the monetization habit now very firmly entrenched and fearful of what might happen should painful deflationist policies be pursued. As Liaquat Ahamed writes in his masterful book on the Great Depression “Were he to refuse to print the money necessary to finance the deficit, he risked causing a sharp rise in interest rates as the government scrambled to borrow from every source. The mass unemployment that would ensue, he believed, would bring on a domestic economic and political crisis, which in Germany’s [then] fragile state might precipitate a real political convulsion.” Facing a dilemma orders of magnitude higher but nevertheless familiar to observers of today?s situation, faced with the terrifying prospect of even more economic pain should he slam on the brakes, he opted to press his foot further on the accelerator.

Another lesson: blaming speculators for economists' endless blunders and flawed outlook on everything, is nothing new. Somehow, CDS traders did not exist the last time countries were going bankrupt: but how is that possible?

Less well known though is that, as always, economic theory was on hand to furnish Von Havenstein with a ?scientific? justification for his playing for time. The consensus in Germany was actually that the cause of inflation was external because both the Reichsmark and import prices had moved disproportionately more than the rise in the money supply. Since the external value was caused by the balance of payments, which was largely caused by the reparations, it was foreigners and not budget deficits which caused the inflation. Indeed, Von Havenstein was so enamoured with this theory that he blocked attempts at monetary reform arguing that any measures would be pointless without settlement of the reparations issue. According to Ludvig von Mises, “Herr Havenstein honestly believed that the continued issue of new notes had nothing to do with the rise of commodity prices, wages and foreign exchanges. This rise he attributed to the machinations of speculators …” Speculators always get the blame don?t they?

But 1922 is so long ago. There is no way out "advanced" economy can in any way compare, is there? Read on:

I don?t want to overplay the parallels. In fact, there is one very clear difference between the hand Von Havenstein had to play then and those today?s central bankers have to play now, namely the stability of today?s political climate. Clearly this can change, but the class warfare, nationalistic xenophobia and revolutionary spirit poisoning the political atmosphere of 1920s Germany is at the very least dormant today, and certainly not meaningfully visible across the political landscape. But let’s not ignore the parallels either: as is the case for today’s central bankers, Von Havenstein was faced with horrible fiscal problems; as is the case for today’s central bankers, the distinction between fiscal and monetary policy had blurred; as is the case for today’s central bankers, the political difficulty of deflating was daunting; and as is the case for today’s QE-enthralled central bankers, apparently respectable economic theory reassured him that he was doing the right thing.

Let's not forget that without much fanfare, the Greeks and Germans are doing all they can to bring xenophobia back to the core.

One might think that the big difference is that today we have a greater expertise. Surely we understand what happens when deficits are financed with printed money, and that it is only backward and corrupt states that don?t know any better, like Bolivia and Zimbabwe? But just a few years ago didn?t we think that it was only backward and corrupt states that suffered banking crises too?

And anyway, how could Von Havenstein not have known that the continued and escalating printing of money to fund government deficits would cause inflation? The United States experience of unrestrained money printing during the Civil War had been well documented, as had the hyperinflation of revolutionary France in the late 18th century. Isn?t it possible that, like today, he was overconfident in his ability to control his creation and in the economic theory which told him such control was possible? Certainly, in an article in the New York Times on the eve of the First World War, again from Liaquat Ahamed?s book, there seems to have been evidence of the general optimism that there would be no "?unlimited issue of paper money and its steady depreciation … since monetary science is better understood at the present time than in those days.?"

The fact is we do understand the economics of inflation. Despite what economists everywhere say about being in ?uncharted territory? with QE, we know that if you keep monetizing deficits eventually you get inflation, and we know that once you'?re on that path it can be extremely difficult to get off it. But we knew that then. The real problem is that inflation is an inherently political variable and that concern over debt sustainability and unfunded welfare obligations leaves us more dependent on politicians than we have been in many decades. Frank Graham concluded his 1930 study of the Weimar hyperinflation with the following observation, which I think is as ominous as it is apt today:

"?The mills of international finance grind slowly but their capacity is great. It is also flexible. The one condition is that the hoppers be not unduly loaded in the effort to get the whole grist from a single grinding. So much for the economics of the question. What politics has in store is, however, an inscrutable mystery. It can only be said that such financial difficulties as may occur will almost certainly arise from political rather than from economic sources.?"

How many more parallels do we need: escalating geopolitical tensions across the world, an Eastern European powder keg, Quantitave Easing masking as just economic doctrine, and, on top of it all, a deranged money printer. Just as von Havenstein set the foundations for the most destructive war in world history, is his modern reincarnation currently doing the same, as yet another, much more destructive military conflict possibly approaches?



- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/26/2010 - 15:27 | 247062 truont
truont's picture
Is Ben Bernanke The Second Coming Of Rudolf von Havenstein?

Da. Da. Da.

Fri, 02/26/2010 - 17:47 | 247361 tpberg7
tpberg7's picture

Is Ben Bernanke The Second Coming Of Rudolf von Havenstein?

Indeed he is, Uncle Ben is Rudolf von Havenstein on steroids.  More money must be printed to feed the ravenous appetite of the vampire squid and his minions.  What will it take to keep this thing going?  What is the tipping point for the silent majority?

Fri, 02/26/2010 - 18:16 | 247415 Noah Vail
Noah Vail's picture

A major factor of the Weimar inflation was left out of this article. Half the nation as unionized and a quarter were govt employed. Workers were not paid with paychecks, they were paid in cash. It was a cash economy. Because of the rising prices, the general perception was that nobody had enough cash, particularly the corporations had trouble raising cash to make payrolls. Because of this, the perception arose that the problem was not too much money but rather too little. So, a huge part of the motivation to print resulted in the desire to avoid riots that would occur when there wasn't enough cash to pay them. Of course, by then they were caught in the classic wage/price spiral that motivated them to print evermore.


The literature of the time is full of references to "not enough money." People actually believed that a lack of money was the source of the problem. No doubt that was the result of propaganda, but it effectively initiated the call for ever more cash. I suspect that if checking accounts were in use at the time, that inflation would not have reached the levels it did.

Fri, 02/26/2010 - 19:05 | 247473 walküre
walküre's picture

Good points.

I would add that seeing a total collapse of our entire financial system is unlikely given the fact that financial transactions are largely electronic and not in cash.

Some here seem to want to predict that.


Fri, 02/26/2010 - 19:26 | 247491 Anonymous
Anonymous's picture

True. Yet if confidence is lost in the currency, many people will want to change their electronic currency into cold hard tanglible goods.

Then, what is the difference if the currency is paper or electronic. Too much currency chasing too few goods.

Fri, 02/26/2010 - 20:32 | 247552 Anonymous
Anonymous's picture

Well then logically, just like when certain paper currencies were discounted, so will electronic bits and bytes. Why would/should they be any different? Pay bills on time, and your credit will be better. Electronic payment helps this at times.

Fri, 02/26/2010 - 19:56 | 247525 Anonymous
Anonymous's picture

However Citi has claimed the right to hold funds for 7 days, without clear reason given.

Last I knew Citi cleared international transactions.

If Citi started refusing to clear checks or allow withdrawels is anybody really going to want to run an international transaction through them? International commerces ends at that moment.

Seems to me both cash and "electronic" can both be pinchpoints to commerce, it keeps comming down to perception.

Fri, 02/26/2010 - 20:30 | 247550 Anonymous
Anonymous's picture

Don't see how the article can freeze-frame a point in time and say that's where the problem was. For starters, Americans look at when FDR nationalized the banks, but it was a couple years earlier that Britain that went off gold, in 1931. What happened, the punishing loans that Germany had to pay off as a result of World War I, were underwritten by the US, so when Germany couldn't pay back France and Great Britain, they couldn't pay back the US, or something like that, who could no longer make loans to Germany, etc etc. Hm.

Fri, 02/26/2010 - 22:29 | 247639 Kayman
Kayman's picture

I don't see how your position makes any sense. In the fall of 2008 Hank committed the daylight robbery of the American people, by demanding $700 billion (NOW, RIGHT NOW DAMMIT, OR I PLUG THAT KID YOU'RE HOLDING) from Congress (purportedly the representatives of the People).

That episode alone, is proof enough that electronic "money" cannot be considered de facto "more stable".

If the powers that be, wanted to, Mini-Greenspan could have electronically transferred $700 billion to his buddies (or as it later turned out, to anyplace and anyone that met his fancy).

Covering payrolls with electronic "magic" is no less inflationary, when the recipient uses their Visa/Debit card to buy goods before the goods double in price.

I wouldn't bet that the house of cards will collapse, but I also wouldn't bet against it, either. 

Sat, 02/27/2010 - 00:10 | 247714 Anonymous
Anonymous's picture

Just to add fuel to your fire, when you add the additional 9 to 25% interest rate to the card holders monthly bill that they can no longer cover in one payment the Hyperinflation looks like a drop in the "exponential bucket". You also make make mention of the Electronic "magic" money. Which again I add how many people are not subject to the direct deposite controlled by the banks when it may or may not post?.

Sat, 02/27/2010 - 14:37 | 248001 Anonymous
Anonymous's picture is under new management.

ALl funny........Not Serious ...........Somewhat Truthful.

Sun, 02/28/2010 - 07:38 | 248615 Nout Wellink
Nout Wellink's picture

Argentina did have bank accounts. So did many other countries. Didn't prevent them from defaulting, did it?

Fri, 02/26/2010 - 23:40 | 247689 Anonymous
Anonymous's picture

Although, currently, the size of the workforce in the public sector in the US is small compared to the total size of the workforce, one has to account for the fact that many of the outsourced work that private industry is performing for the government can hardly count on their employees as being in "private sector".

Also, most of the workers belonging to unions are part of the public sector.

So at the moment the government is the economy! With the advent of Direct Deposit and PayCards, the people looking at their digital money being devalued on a computer screen wish they had chosen ( is that even possible in most cases now a days ) to be paid in cash, at least for a while ...

I guess HeliBen also thinks there is "not enough money today", so he is just adding his contribution to the solution of this "scarcity" problem.

Sat, 02/27/2010 - 05:27 | 247787 Anonymous
Anonymous's picture

From my UK perspective the importance of this issue is understated, because Unions own the politicans at municipal level, just as Wall St. and big business owns the federal politicos.

The US has never cut Union power down to size as the UK did in the Thatcher revolution of the '80s. Can the US halt it's transition into financial and organised labour oligarchy?. Go long on pitchforks.

Sat, 02/27/2010 - 02:28 | 247752 Eally Ucked
Eally Ucked's picture

Hey Ben, do you want to manage perceptions? We know that's the only goal you want to achieve. Submerged in shit and feeling like in the heaven?

Noah, Ben, Moshe, David, Aaron they all try to make you feel better!

Sat, 02/27/2010 - 15:56 | 248069 Andrew_Miller
Andrew_Miller's picture

By the way, why all those guys tend to be the same mordehai nationality?

Sat, 02/27/2010 - 15:45 | 248054 delacroix
delacroix's picture

I read somewhere, that currency speculators, had a significant impact, on the accelleration, of the decline, in value. and someone referring to the cash, as jew confetti

Sun, 02/28/2010 - 02:18 | 248567 Anonymous
Anonymous's picture

In Noah Vail's first comment, replace the words "cash" and "money" with the words "credit" and "liquidity" and see how it reads.

What will happen when, after enough bailing out by creating new "liquidity", banks again feel confident in extending credit, and consumers again feel like borrowing? Won't the resulting spending spree ignite a "classic wage price spiral"?

During the 1970s we were no more of a "cash" economy than we are today, yet inflation raged as a result of the same monetary and fiscal policies we are pursuing today.

When confidence returns, so will inflation. Given the magnitude of the "quantitative easing" now in process and the amount of new "liquidity" required to restore that confidence, it is likely to be much worse than the 1970s.

As in 1920s Germany, the political struggles we are witnessing are fights over who gets to be first in line to receive the newly created money. So far the big banks and other well connected financial institutions are winning this fight.

Electronic or paper, the form of the currency does not matter, as long as it can be created at will and handed out to the politically well connected. Which is why the common man has only one way to protect himself: buy gold and silver.

Sun, 02/28/2010 - 08:11 | 248623 hired goon
hired goon's picture


The Occupation of the Ruhr took place when Germany defaulted on reparations payments to France.


France occupied the Ruhr area in order to seize payments, but the German Government urged its citizens to adhere to its policy of "Passive Resistance", where economic activity slowed to a crawl because, for lack of a better description, people just stopped working. The Government, in their wisdom, encouraged adherence to passive resistence by continuing to pay every striking employee to sit at home and do squat.


So the real huge motivation to print was that the German government needed to pay a whole of people who were sitting down at home instead of working in factories, mines and timber mills.

Fri, 02/26/2010 - 19:29 | 247496 Anonymous
Anonymous's picture

Despite obvious debasement parralells, I don't think we're living in an era where the US is having to pay war reparations and living under a foreign occupation.

Maybe the thought of paying what was thought to be the unjust debt led to the debasement (e.g. more of a nothing to lose mentality than the US today). The US is still the only world super power and the dollar the reserve currency, not quite a comparable situation.

Fri, 02/26/2010 - 20:31 | 247551 Jesse
Jesse's picture


The war reparations were an enormous, if not decisive, factor.  I was surprised that they received no mention.


Fri, 02/26/2010 - 21:25 | 247591 Anonymous
Anonymous's picture

Reparations were mentioned, but only briefly in order to toss them out on the assertion that they simply weren't causal.

This article has some major flaws - I'm surprised, Tyler, that you buy into them. Do you know what the word "ostensible" means?

1921-1923 was not a time of global growth everywhere but Germany. Are you aware of the U.S. depression that started in 1921?

The reparations were a significant part of the outfow of capital from Germany starting in 1919. Equally significant were the debts incurred by both the government and private industry after the war, during the attempt at economic recovery. European, and especially American, bankers and speculators bought every bond issue the Germans brought forth to "re-capitalize" from war-induced bankruptcy. The result was a steady flow of mooney (in dollars, francs, and pounds) out of the country to meet interest payments on this debt. Any failure (as in a wave of defaults) on this debt would have produced financial crisis in Europe and America - which we made clear was unnacceptable. So, money was printed, payments were made (in dollars, francs, and pounds), the Reichsmark sank in value both at home and abroad. The German citizens were screwed, but the gov't and businesses with all the loans were happy (for a while), and the foreign "speculators" were happy, too, because they were getting paid in their own currency. After the hyperinflation went nuclear, the German gov't calmly issued new currency and went forth as if nothing bad had happened. With a stable currency, they soon found themselves again unable to make reparation payments, so the U.S. gov't started loaning Germany money (which was never repaid - a sort of prequel to the Marshall Plan) with which to make pay France et al (not directly, of course, but it ended up there). The whole story is much more complex than this article suggests.

We do not "know that if you keep monetizing deficits eventually you get inflation". That is one possible effect; another is that you don't get inflation (e.g., Japan). There are many factors in inflation, and an equal number of theories (Monetary, Wage-Push, Commodity Supply), that go into explanations of any specific historical episode of inflation, and there are many examples of predicted hyperinflation in the U.S between 1984 and the present - based on one or another theory - that never happened.

I could go on, but why bother?

Sat, 02/27/2010 - 14:57 | 248015 pivot
pivot's picture

ahhh, all good points! but then you must have thought ZH still presents informational pieces and lets the community discuss.  this article is just another in a line of ridiculous, straw-man argument/ opinion pieces.  oh how i miss the old days, with informed commentary on market infrastructure, basis trades, and other things you couldn't find elsewhere in the financial press.

if it werent for the fact that coming to ZH is a bit of a habit if/when bored,  i would probably stop navigating here.

couple good posters still on this site, but few and far between.

Sat, 02/27/2010 - 21:17 | 248285 WaterWings
WaterWings's picture


Instead of actually adding your take ON THE ARTICLE we only have a long, empty waste of time. We'd love to hear your real thoughts except that it's pretty obvious we don't have real markets anymore. You never liked gold, so we already don't care about your views.

Anything else, or glorious one?

Fri, 02/26/2010 - 21:50 | 247606 Noah Vail
Noah Vail's picture

You have to understand the whole situation of Weimar. Way too many people take facts out of context. Germany became a dysfunctional nation right after the war with an incompetent government. The behavior of France, which essentially wanted to destroy Germany economically, was also a major factor. They seized the Ruhr valley and cut off a huge amount of their production. If anybody caused WWII it was France by destroying Germany. Neither does anybody ever mention that the inflation was worse in the other axis powers like Austria and Hungary. So what caused it in all three, mere coincidence? i'd say the proximate cause was loosing the war plus the treaty, not just reparations.

Sat, 02/27/2010 - 00:29 | 247721 Kayman
Kayman's picture

It is not war reparations, per se, but the quantum of war reparations.

We do indeed have a parallel, by spending more than we earn as a country in "good times" and doubling up on the bet in "bad times".

It is our children and grandchildren that will pay for our squandering and our debt.

We have been spending more than the net growth of our economy for more than a decade and (not so) Great Britain once held the world's reserve currency, so the USD is not "ordained by God herself"

Fri, 02/26/2010 - 23:49 | 247695 Anonymous
Anonymous's picture

This is one of my most frequently visited sites... Me and the guys in the chat have been reading up on your blog before the market analyzing everything before the day begins in a small lil chat we made.

thanks for keeping us informed.

Fri, 02/26/2010 - 15:28 | 247064 Ripped Chunk
Ripped Chunk's picture

Does history tend to repeat itself???

Fri, 02/26/2010 - 15:46 | 247107 msorense
msorense's picture

No - as long as you just print secretly everything will be OK.  That's what the Fed is for.  What is good for the banker is good for the nation.

Sat, 02/27/2010 - 15:17 | 248033 dumpster
dumpster's picture

your one taco short of a complete mexican meal


just keep printing ,, we will be okay,,


the level of stupid is apparent \\


why not start your self a business ,, pay every one with electronic digits

Fri, 02/26/2010 - 15:54 | 247120 Chopshop
Chopshop's picture

depends: if you know your history, yup; if you retro-fit history to fit what you think is occuring today, then, um, just wait n see how "inflation" 'works' out over the new few years (before it actually occurs).

Fri, 02/26/2010 - 16:04 | 247144 Ripped Chunk
Ripped Chunk's picture

What the fuck does that mean?

I should have qualified my question" Does history while central banks have existed repeat itself?

Yes it does.

The entity described as "inflation fighter" is in fact the biggest stimulus for inflation. Don't worry. No one will notice.

Who does inflation serve most?

Whe does inflation serve least? 


Fri, 02/26/2010 - 16:13 | 247161 Howard_Beale
Howard_Beale's picture

What he means is that you can retrofit history to parallel today but that it doesn't necessarily mean it will happen. Deflation is still a huge possibility before inflation. And the truth is, we just don't know--and won't know until it happens. Deflation could become such a problem that Ben will go ahead and print us into hyperland in 2 or 3 years. It's all a wait and see situation.  

Fri, 02/26/2010 - 16:29 | 247197 Unscarred
Unscarred's picture

(I THINK) what he means to say is:



...that is, after you've whittled down the equation, of course.

Fri, 02/26/2010 - 23:51 | 247698 Howard_Beale
Howard_Beale's picture

I think not.

Sat, 02/27/2010 - 11:16 | 247866 Anonymous
Anonymous's picture

I think you're wrong.


Sat, 02/27/2010 - 00:05 | 247708 dogbreath
dogbreath's picture



Bernanke = Destruction of Society

Sat, 02/27/2010 - 22:42 | 248378 Anonymous
Anonymous's picture

by Inspector Asset

Tim Geithner announces the new and improved monetary policy for U.S. that was hammered out over the weekend with Lawerence Summers and received a two-thumbs up from the Obama administration. The new policy comes as a result of the new tough reforms coming out of DC against Wall Street due to the crisis in 2008. Tim Geithner, speaks excitedly about the new policy and states "unlike the past, this new reform package, and new monetary has plenty of transparency and oversight."

In fact the new policy is so simple that oversight may not be needed at all, as pointed out by Congress member Maxine Walters. It is better known on the hill as "The 3 rule system."

Rule # 1. If the investment is worthless (toxic) the Treasury shall buy it and pay full price. If a price is not known, then we shall make up a price.

Rule # 2. If the investment has any value at all, or has the potential to show value in the future than the Federal Reserve shall buy it.

Rule #3. If you not sure, call Goldman Sachs and let them decide. Give them a little time so they can make their investments, as needed, before the herds stampede in looking for a deal.

Geithner admits the plan may seem to simple, but argues "that sometimes complex problems require simple solutions, and oversight." "This plan being so simple, allows for that oversight that was lacking before."

When asked what happens when the FED balance sheet gets so big, would it pose a risk of being "To Big To Fail?" Geithner sniped back,

"Don't you worry about the FED, they will take care of themselves." "Long after America is bankrupted, just an example of course, the FED will still be here standing. Get it? They are a separate entity! "

Geithner closed out the interview saying "we should be more concerned about the actions of our own government, than snooping around the FEDS business."

When asked, by Congress Maxine Walters, "which government, do you work for?: Geithner lit up like an alien, seemed confused, and then left the room. He was unable to answer the question.

Fri, 02/26/2010 - 17:17 | 247315 Ripped Chunk
Ripped Chunk's picture

Please answer the 2 questions. Then think about the deflation argument.

Fri, 02/26/2010 - 17:26 | 247329 Anonymous
Anonymous's picture

Inflation HELPS debtors, asset owners, equity owners and generally risk takers.

Inflation HURTS cash savers, fixed income investors, and generally the "risk averse".

IF you think there is going to be inflation... you should be looking to borrow as much money as possible at low fixed rates. This money will be very easy to pay back at the new inflated prices, especially if you've invested it in any cash-flow producing assets.

ZH -- Where is the bond auction failure? Ha!

Fri, 02/26/2010 - 22:54 | 247661 Kayman
Kayman's picture

To Anon 247329

There will never be a bond "failure" so long as Ben gets Indirects, Households, and can strongarm the New York Mafia, to buy Timmy's paper; and of course Ben can buy it himself through the many "conduits" available to someone that insists on stiffarming the public.

 After all, anyone that will lend you short term at zero and allow you to buy long at a profit, and will guarantee both sides of the transaction to boot, well, that person is a little hard to say no to.

But time is fleeting and the question is how many times can you twist the devil's tail.

And yes, you can have inflation and deflation at the same time.  Hyperinflation can ruin the value of assets that cannot keep up with pricing power.

Sat, 02/27/2010 - 05:47 | 247789 Anonymous
Anonymous's picture

Where is the bond auction failure?

A better question is: How can we *ever* have a bond auction failure with the primary dealer system in place?

Fri, 10/22/2010 - 17:21 | 670530 Nels
Nels's picture

Inflation HELPS debtors, asset owners, equity owners and generally risk takers.

Inflation helps debtors, and they are the only ones who get a clear pass.  equity owners and risk takers can get burnt by taxes on profits that really don't exist ex-inflation.

Inflation really helps the tax collector the most, especially with a graduated income tax

Fri, 02/26/2010 - 17:49 | 247365 AnonymousMonetarist
AnonymousMonetarist's picture

The deflationary episode in 1920 led to the initial money printing, which then fed upon itself as seen above.

More accurately a blast of inflation in 1919 didn't do the trick and led to a deflationary whiff which freaked 'em out causing 'the flood'..

Much like deflation freaks out today's Federales.

Deflation is the midwife of hyperinflation.


Fri, 02/26/2010 - 19:42 | 247510 Gussiefink-nottle
Gussiefink-nottle's picture

Absolutely spot on. Deflation makes debt more expensive, including sovereign debt, which therefore encourages debt monetization which in turn leads to inflation and ultimately hyperinflation. Because the initial stages of money printing seem benign, this encourages the authorities to believe that they have found the alchemist's stone - money without effort, which leads inevitably to disaster.

Because we are more sophisticated does not mean we are wiser. The bankers of the early twentieth century believed that they too were knowledgeable enough to understand the forces that they were playing with.


Fri, 02/26/2010 - 20:53 | 247566 Howard_Beale
Howard_Beale's picture

Deflation is the midwife of hyperinflation.

Now that is spot on.

Sat, 02/27/2010 - 01:29 | 247741 Anonymous
Anonymous's picture


Fri, 02/26/2010 - 18:50 | 247457 merehuman
merehuman's picture

But the money has to flow. The dollar is sitting more than moving from hand to hand.

No job, no income no spending is my life.

To me that spells deflation , especially when i see more businesses closing .

My mainstreet is now a dead end, a cul de sac

of poverty .

I would like the government and states give a small piece of land to each citizen free and clear. That would restart a new boom.

In fact the fed ought to just give away all those properties .

This would equalize the discrepancy between rich and poor, make them look like saviors and allow the ponci to continiou with the same thieven assholes still in charge. Oh forget!

Am looking for a way out, wishing we all wont have to suffer so.

Sat, 02/27/2010 - 07:25 | 247805 Anonymous
Anonymous's picture

"I would like the government and states give a small piece of land to each citizen free and clear. That would restart a new boom."

Let's not ruin more small pieces of land. I'd prefer a tax-free/Federal Gov't free Detroit. Call it an experiment in FREE ENTERPRISE.

Sat, 02/27/2010 - 13:45 | 247966 boiow
boiow's picture


Sat, 02/27/2010 - 16:02 | 248075 Andrew_Miller
Andrew_Miller's picture

By the way, small plots of land given to russian citizens for free during late soviet union days helped many of them survive 60% loss in GDP in 1991-1996.

Fri, 02/26/2010 - 19:03 | 247466 merehuman
merehuman's picture


Fri, 02/26/2010 - 21:52 | 247609 Noah Vail
Noah Vail's picture

After two years of trying to figure it out, that is the very same conclusion I came to.

Fri, 02/26/2010 - 20:40 | 247560 Anonymous
Anonymous's picture

Actually, read the book before you stop standing by as Austrians talk out their ass.

Inflation ALSO has always occurred throughout history. In the years that central banks and floating exchange rates, the free market is proving to be pretty goddamn accurate.

OMG *tears* but the republic might be done tomorrow.

Good thing the supposed 'sheople' you despise keep this country innovating.

Fri, 02/26/2010 - 16:09 | 247149 Howard_Beale
Howard_Beale's picture


Fri, 02/26/2010 - 17:56 | 247376 AnonymousMonetarist
AnonymousMonetarist's picture

By the way HB did you look up the term Potemkin yet?

As in ...your money Mr. Federales has no velocity here for the Band of The Hand can only conjure a Potemkin demand. Organic wage growth, absent for the last decade, comes from ... wait for it ... the productive allocation of capital when a free market pins winners and chooses losers. 

What has been will be again, what has been done will be done again; there is nothing new under the sun.



Fri, 02/26/2010 - 21:26 | 247569 Howard_Beale
Howard_Beale's picture

I do agree there is nothing new under the sun AM. I just believe there are different orders in which nothing new can happen. And thank you for the Potemkin definition because I had not looked it up.

Fri, 02/26/2010 - 23:53 | 247701 Howard_Beale
Howard_Beale's picture

Thanks AM--very nice.

Sat, 02/27/2010 - 00:12 | 247716 dogbreath
dogbreath's picture


Fri, 02/26/2010 - 16:25 | 247186 WaterWings
WaterWings's picture

(stock up while everything is still on the shelves)

Fri, 02/26/2010 - 23:03 | 247672 Kayman
Kayman's picture

But don't buy crap Made In China.

My girl bought some "made in China" flypaper last week, instead of the "made in Germany" stuff she usually gets.

One (1) fly in a week, vs. uncountable on the German stuff.

This country does not take into account the cost of (and lost productivity) involved in redoing and replacing this shit.

Sat, 02/27/2010 - 17:52 | 248152 Brindle702
Brindle702's picture


Fri, 02/26/2010 - 15:29 | 247066 ghostfaceinvestah
ghostfaceinvestah's picture
Is Ben Bernanke The Second Coming Of Rudolf von Havenstein, The Central Banker Responsible For Germany's Hyperinflationary Collapse (And Ostensibly WWII)?


Yes, or Gideon Gono, take your pick.

Fri, 02/26/2010 - 15:45 | 247102 Shameful
Shameful's picture

I still want a picture of Gideon Gono and Bernanke shaking hands.  I would blow it up and frame it in my house!  Those two titans of economic theory in one room, think of all that they could accomplish together!

Fri, 02/26/2010 - 16:48 | 247254 Sancho Ponzi
Sancho Ponzi's picture

Shameful: I whipped this up for you - hope it's good for a laugh.

Fri, 02/26/2010 - 16:57 | 247279 Shameful
Shameful's picture

That is excellent sir! Thank you! I think I may have a new desktop image :)

Fri, 02/26/2010 - 21:44 | 247605 Sancho Ponzi
Sancho Ponzi's picture

I got home and created a larger, hopefully better pic. See if you can guess who is lurking behind Gono.




Fri, 02/26/2010 - 22:53 | 247658 Anonymous
Anonymous's picture

His Holiness the 14th Dalai Lama?

Sat, 02/27/2010 - 23:30 | 248433 Anonymous
Anonymous's picture

You are correct, sir

Sat, 02/27/2010 - 23:33 | 248439 Sancho Ponzi
Sancho Ponzi's picture

You are correct, sir

Fri, 02/26/2010 - 23:45 | 247692 ghostfaceinvestah
ghostfaceinvestah's picture

LMAO, that is awesome!!!

Fri, 02/26/2010 - 23:54 | 247702 Anonymous
Anonymous's picture

His Holiness the 14th Dalai Lama?

Fri, 02/26/2010 - 18:25 | 247422 Anonymous
Anonymous's picture

Can you do a series of Bernanke photos...from young college professor to current Fed Chairman? Something's bothering him, he's aged almost as much as me in 5 years.

Fri, 02/26/2010 - 23:14 | 247668 caconhma
caconhma's picture

The WWII has nothing to do with the German hyperinflation and Hitler rise to power specifically.

You people are brainwashed by a combination of the WWII winners (the USA, Gr. Britain and USSR) and Zionist propaganda.

The real sources of the WWII were

The predatory post WWI Treaty of Versailles that intentionally or not drove Germany to an economic slavery. This Treaty was rightfully hated by both Hitler and Stalin as well as by many other countries. It could not stay for ever.

- The Stalin Soviet Union. Following slaughter of 40+ millions Soviet people and an enslavement of the rest 200 millions people, the USSR was transformed into a Murder Inc. aggressively looking for wars, to at least, restore the old Russian empire . Remember that

-- Hitler and Stalin almost simulteniously invaded Poland

-- Soviet invasion to & partial occupation of Finland and Romania, capture of Latvia, Estonia, Lithuania  in 1939-1940 

-- Nazi planes were dropping Soviet-made bombs on French and British cities

-- FDR was actively looking for wars since all his "New Deals" were failures. It was FDR who prohibited England to do any negotiations with Germany. In 1939, FDR demanded "a regime change in Germany" (sounds familiar?). From this moment, the WWII became inevitable.

-- Jews started financial & economic wars against Germany in 1933 as soon as Hitler came to power. From 1933 through 1940, Hitler was only Jews out of Germany. In 1941, Hitler blames Jew for initiating the war against Germany and initiated his "Final Solution of Jewish Problem".

-- Hitler intentions to restore Germany from a colonial status imposed on it by the Treaty of Versailles.

-- The Japanese Empire desire to get some Asian colonies from Gr. Britain to sustain its economic development/growth.



As in 1930s, the post-WW1 world was due to the major changes. The WWII became absolutely inevitable. The similar situation happens now: the post-WWII world is about to be changed in a big way. With Obama and the present Congress, the future of the USA is not looking too good.


Fri, 02/26/2010 - 23:41 | 247690 Kayman
Kayman's picture

Well for sure now, I got to burn my WWII comic books, since we now have caconhma for entertainment.

What the hell does Stalin have to do with the Treaty of Versaille ????  Stalin was still sitting on Lenin's knee, helping to consolidate Communist control of Mother Russia, by murdering White Russians and as many foreigners as possible.

It was France that insisted on Reparations; Britain acquiesced and the U.S. led by Woodrow Wilson were annoyed by its terms, such that the U.S. never ratified the Treaty.  The stupidity of this Treaty led to the Marshall Plan at the end of WWII to rebuild Germany and other European countries.

If, as you say, "the Jews" opposed Herr Hitler financially and economically, then that has to make the understatement of this century.  While Nazis confiscated their homes and property, rounded them up, murdered children and women,  I suppose not contributing to the Nazi party could be construed as some form of "symbolic" opposition.

I am an agnostic Celt, with Catholic and Protestants on every side of my forebears but I do not assign WWII to Jews (and Zionists) being financially unfriendly to Adolf.


P.S. Jews fought along side with their brother Germans during WWI. Look it up. You can see if you take off the dark sunglasses


Sat, 02/27/2010 - 00:06 | 247710 caconhma
caconhma's picture

- "While Nazis ... murdered (Jewish) children and women". 

Nazi did not do it prior to 1941.

- As for Stalin, he has liquidated almost all Lenin's Bolsheviks and their families by 1940. Stalin was a "Russian National socialist" (even his nationality was a Georgian). He considered the enemy of the Soviet State. This is why he decided to exterminate all 3 millions of Soviet Jews in 1953. Only sudden Stalin's death saved Soviet Jews from Soviet Holocaust. 

Sat, 02/27/2010 - 00:56 | 247731 Kayman
Kayman's picture

I beg to differ.  Nazis murdered fellow Nazis when they became inconvenient. Nazis murdered Jews, Gypsies and intellectuals in Germany and throughout Europe prior to 1941.  Around and after 1941 they murdered Jews, and all opposition on an industrial scale.

And Stalin murdered, amongst millions of others, anyone he feared, including many loyal to the deceased Lenin. But he did not murder all Bolsheviks, for many, if not all those he surrounded himself with, were Bolsheviks.  This includes his fellow Georgian Beria, a Bolshevik.

I don't know where you obtain your "facts" but the historical record says otherwise.


Sat, 02/27/2010 - 16:12 | 248087 delacroix
delacroix's picture

don't confuse jews, with khazars

Sat, 02/27/2010 - 02:39 | 247756 Eally Ucked
Eally Ucked's picture

You better burn your comic books, too much info you get from them and then you think it's science.

Sun, 02/28/2010 - 08:21 | 248626 hired goon
hired goon's picture

Why would Stalin hate the Treaty of Versailles if it did not even address the issue of Russian surrender to the Germans, which was the subject of the Treaty of Brest-Litovsk? Furthermore, that treaty was worthless within a year or two, formally nullified a few years later.


"-- Hitler intentions to restore Germany from a colonial status imposed on it by the Treaty of Versailles."


This sentence doesn't even make sense.

Fri, 02/26/2010 - 15:35 | 247080 Wynn
Wynn's picture

This time is different.


Fri, 02/26/2010 - 15:38 | 247085 RowdyRoddyPiper
RowdyRoddyPiper's picture

Not quite buying the WWII tie-in Tyler. There were a few other reasons than German hyperinflation in the '30s for WWII.

Fri, 02/26/2010 - 15:39 | 247091 RowdyRoddyPiper
RowdyRoddyPiper's picture

oops, not the '30s, the '20s.

Fri, 02/26/2010 - 16:30 | 247200 WaterWings
WaterWings's picture

Ya hear that, Mr. Grice? Roddy has something to say.

Fri, 02/26/2010 - 15:38 | 247088 BrianOFlanagan
BrianOFlanagan's picture

no worries here.  The DXY is in an uptrend, supported by a double inverted triangle, a B minus wave, 1.3 fib support level and the placement of a "strength" tarot.  Don't understand why all you ZH knuckleheads would own that extremely overvalued barbarous relic called gold.  Paper is where it's at, man.

Fri, 02/26/2010 - 16:40 | 247223 SWRichmond
SWRichmond's picture

Loved it!  But it also depends on the RSI, whether we see an inverted H&S on the weekly, and if STO becomes embedded.

Fri, 02/26/2010 - 20:51 | 247565 Crime of the Century
Crime of the Century's picture

And whether my bunions are inflamed...

Fri, 02/26/2010 - 16:46 | 247246 Anonymous
Anonymous's picture


Sat, 02/27/2010 - 21:25 | 248298 Rusty Shorts
Fri, 02/26/2010 - 15:43 | 247098 Shameful
Shameful's picture

The worst part is people will scream "We didn't see it coming" or "Know one could have seen it coming!  No one knew that printing money to fund government deficits caused inflation!"

Fri, 02/26/2010 - 16:27 | 247177 Cognitive Dissonance
Cognitive Dissonance's picture

Ah yes, the "No one could have seen it coming" public lie. When we participate in self and group (publicly shared) deception to satisfy all kinds of egoic fantasies, the first thing we must protect when it all goes wrong is the egoic mind. Thus the public charade of declaring that it was a bolt out of the blue and thus no one can be held responsible for foresight and prevention. How convenient.

Most of what's going on now (aside from the thieving and corruption) is preparation, laying the ground work so to speak, for when the masters of the universe and their various minions declare they didn't eat the canary, all the while hurriedly pulling feathers from between teeth and out of beards.

If we really wish to be honest here, we're all reluctant to point fingers at others for something we're also guilty of. This is why the publicly honest man who lives among the thieves is so hated by a dishonest society. While showered by public accolades of gratitude, every publicly honest man suffers beatings and back stabbing in private when alone among the thieves. You just can't trust an honest man to cheat, lie and steal, now can you?

The question is not who is honest and who is not. The question is one of degree, not absolute. We're all whores, it's just a matter of price. The honest man admits this and works to resist, the dishonest man rejects this and proclaims righteousness and public fidelity.

The games people play.

Fri, 02/26/2010 - 16:42 | 247233 SWRichmond
SWRichmond's picture

Ron Paul, as the most visible of the Austrian economists, will be able to point out his decades-long record of saying so.  We must use the Austrian record to deny the banksters and policy wonks their "plausible deniability".

Fri, 02/26/2010 - 17:00 | 247285 Cognitive Dissonance
Cognitive Dissonance's picture


I've expended considerable time and precious hair follicles wondering about the aberration called Ron Paul. Part of that time has been spent reading his speeches, policy statements and so on. The man has a long and sterling record and has fought the long and lonely battle for decades.

Wait for it.....wait......just a little more. BUT!

Something doesn't feel right, there are little inconsistencies here and there, the man seems to be able to withstand political and political attacks no other person of his caliber has ever been able to withstand, year after year, election after election, while also precariously perched so far out on the limb, isolated from his party.

I am more than willing to give Ron Paul huge helpings of the benefit of the doubt and I have (and will again) vote for him in a New York Blizzard minute. But every time I push my admiration aside and look carefully, something doesn't feel right and I've learned over the years not to ignore that feeling.

I'm sure this post will draw the ire of a few ZH readers. Ron Paul does serve a valuable public purpose. My only fear is that he is being used and manipulated (not saying he is participating in his own manipulation) to enable people to hope that he (or someone like him) will save the day. I'm actually going to talk about this a bit (in general terms) in my next article.

OK, fire away folks.

Fri, 02/26/2010 - 17:11 | 247301 Shameful
Shameful's picture

I don't think that anyone would have put himself in that position if he didn't have a deep belief in what he was saying and a hell of a lot of courage.  And he's not perfect, he's a small, soft spoken, old man, sadly he is not going to appeal to a lot of people just on that.  I cannot for a moment believe that he is acting with an ulterior motive because lord knows how many times he could have sold out and did not.  After all he could have sold out long ago and be sunning himself in the Bahamas right now.  The man is the closest thing to a saint I have seen with my own eyes, I know I couldn't stand up to that kind of pressure and temptation.

Now I understand your point about pinning hopes on him.  That somehow Ron Paul will save us like he was Flash Gordon.  I can sorta see that because I know people that are hopeful that Ron Paul or some one like him will ride to the rescue in 2012 and bring America into a golden age.  Now I for one don't believe that to be the case, I think the red party would explode if he was was selected as their candidate in 2012 and that the red party establishment would provide him no support whatsoever because he doesn't fit into the stereotype. Hell I don't think that even if Ron Paul got elected he could solve the problem, the whole system is rotten to the core, no one president could fix that.  But I'm intrested to hear what you have to say about why you have that feeling.

Fri, 02/26/2010 - 17:28 | 247331 WaterWings
WaterWings's picture

The man is the closest thing to a saint I have seen with my own eyes, I know I couldn't stand up to that kind of pressure and temptation.


And so CD reminds us that we do have to remember that he is only a man - although the most consistent man I have ever seen! Let him stand next to faulty Jefferson, Henry, and Franklin - Dr. Paul's message is in lock-step.

Dr. Paul must be fully aware the system will collapse long before and true reform is brought about. But instead of just disappearing from the scene to practice traditional skills, store up more canned food, precious metals, and firearms he has the moral courage to continue the fight for truth. What a legacy for all of us.

In contrast, I imagine Barney Frank has only a refrigerator full of condiments - how embarrassing.


CD, ever spend any time over at RP says he reads it every day.

Fri, 02/26/2010 - 17:44 | 247356 Cognitive Dissonance
Cognitive Dissonance's picture

"CD, ever spend any time over at RP says he reads it every day."

Lew Rockwell was one of the first contrary and independent thinkers I found when I strayed off the beaten path many many years (20) ago. In fact, my discovery of him predates his web site, which means I own most of his books. I'm not throwing sticks and stones at Ron Paul, just following the discipline of questioning everything, including everything I think (or know) I know. 

I have a saying that's been with me for 20 years. "The more I know, the more I know that I don't know." And that dovetails nicely with the following saying of mine. "The more certain I am of something, the higher the probability that I'm wrong about that something." This makes sense when you understand that the more certain you are of something, the less likely you will be to examine it carefully over time (things change over time but most opinions do not) and the less likely you will be to even entertain contrary information. Why would you? After all, you're certain you're correct, right?

Fri, 02/26/2010 - 17:55 | 247375 Ned Zeppelin
Ned Zeppelin's picture

agree that the journey to truth is not a straight line, not even close

Fri, 02/26/2010 - 17:59 | 247383 AnonymousMonetarist
AnonymousMonetarist's picture

Truth that..

It's circular and a process of unlearning..

Dynamic versus linear.

Sat, 02/27/2010 - 02:25 | 247751 Crab Cake
Crab Cake's picture

What truth?

Sun, 02/28/2010 - 19:35 | 249011 geopol
geopol's picture

This truth....


On Tuesday Feb. 23, Iran announced the capture of Abdulmalek Rigi, the boss of the terror organization Jundullah, which works for NATO. The capture of Rigi represents a serious setback for the US-UK strategy of using false flag state-sponsored terrorism against Iran and Pakistan, and ultimately to sabotage China’s geopolitics of oil. The Iranians claim to have captured Rigi all by themselves, but the Pakistani ambassador to Teheran is quoted in The Dawn as claiming an important role for Pakistan. The Iranians say that Rigi was attempting to fly from Dubai to Kyrgystan, and that his plane was forced to land in Iran by Iranian interceptors. This exploit recalls Oliver North’s 1985 intercept of the accused Achille Lauro perpetrators, including Abu Abbas, forcing their Egyptian plane to land at Sigonella, Sicily. But other and perhaps more realistic versions suggest that Iran was tipped off by the Pakistanis, or even that Rigi was captured by Pakistan and delivered to the Iranians.

Jundullah, otherwise known as the Rigi organization, is a clan-based Mafia organization that has long infested the Iran-Pakistan border. The Rigis are traditionally smugglers and drug pushers of royalist persuasion, and now they have branched out into terrorism. Jundullah is mounting a Sunni rebellion against the Shiite Iranian regime in Iranian Baluchistan. They have blown up a Shiite mosque, killing 25, and managed to kill 50 in a bombing in Pishin last October, where their victims included some top commanders of Iran’s Revolutionary Guard, against which Mrs. Clinton has now declared war. There is no doubt that Jundullah is on the US payroll. This fact has been confirmed by Brian Ross of ABC News, the London Daily Telegraph, and by Seymour Hersh in the New Yorker. Hersh noted that Jundullah has received some of the $400 million appropriated by the US Congress in the most recent Bush-era regime change legislation targeting Iran.

Jundullah is a key part of the US-UK strategy of fomenting ethnic and religious civil war in both Iran and Pakistan. Jundullah is a twofer in this context, since it can help destabilize both sides of the Iran-Pakistan border. Baluchistan has special importance because any oil pipeline linking Iran with China must go straight across Baluchistan. Jundullah’s false flag jihad is a means to make sure that strategic pipeline, which would help solve China’s energy problem, is never built.

There is also no doubt that Jundullah functions as an arm of NATO, a kind of irregular warfare asset similar in some ways to the KLA of Kosovo. Rigi is reported by the Iranians to have met with Jop de Hoop Scheffer when he was NATO Secretary General. Rigi has also met with various NATO generals operating in Afghanistan. Who knows — he may have met with McChrystal himself, a covert ops veteran from Iraq.

This capture comes at a moment when Baluchistan is the object of intense US-UK exertions. The current US-NATO offensive in southern Afghanistan targets Marjah and the rest of Helmand province, which directly faces Baluchistan. Many observers were puzzled when the US and NATO publicized the Marjah offensive in advance. Militarist talking heads like General Barry McCaffrey responded that the main goal of the Marjah offensive was not to destroy the Taliban, but to drive them out of the province. It was thus clear from the beginning that the real goal was to drive the Helmand Taliban fighters into Pakistani Baluchistan. Why?

A statement from the Afghan Taliban covered on the RIA Novosti web site suggests that the real goal of the US-NATO offensive in Marjah-Helmand is to attack Chinese economic interests in Pakistani Baluchistan, and especially the port of Gwadar, one of China’s largest overseas projects. If the US can push the Taliban into Pakistani Baluchistan and into the area around Gwadar, they will have a pretext for militarization – perhaps through Blackwater mercenaries, who are already operating massively in Pakistan, or perhaps through direct US military involvement in the zone. US jackboots on the ground in Baluchistan would interfere mightily with Chinese economic development plans. They would also allow the US to commandeer Gwadar as the home port of a new NATO supply line into southern Afghanistan, allowing the avoidance of the Khyber Pass bottleneck. The US could also use Baluchistan as a springboard for bigger and better terror ops into Iran, electronic surveillance of Iranian activities, and so forth.

The US and NATO had evidently planned a double envelopment of Baluchistan, with Taliban fighters from Helmand arriving from the north, while the Jundullah escalated their own activity on the ground. Now that Rigi has joined his brother in Iranian jails, Jundullah has been decapitated, and the NATO strategy has consequently been undermined. Iran has bagged a dangerous terrorist foe. Another winner is Pakistan, where The Dawn celebrated the capture of Rigi as “a godsend” and “a lucky break” for Pakistan. By helping Rigi to fall into Iranian hands, Pakistan may have finally found an effective way to counter the US-UK strategy, which notoriously aims at the breakup and partition of Pakistan. The coming Iranian trial of Rigi may go far towards exposing the real mechanism of terrorism in today’s world, with the CIA sitting in the dock next to Rigi.


And Ben Bernanke

Fri, 02/26/2010 - 18:10 | 247403 Daedal
Daedal's picture

"I know that most men, including those at ease with problems of the greatest complexity, can seldom accept the simplest and most obvious truth if it be such as would oblige them to admit the falsity of conclusions which they have proudly taught to others, and which they have woven, thread by thread, into the fabrics of their life." - Leo Tolstoy 

Sun, 02/28/2010 - 06:56 | 248606 Anonymous
Anonymous's picture

“Humankind cannot take too much reality.”


Fri, 02/26/2010 - 18:50 | 247456 Anonymous
Anonymous's picture

+1 It all contrasts nicely with my favorite axioms.

"We can do it my way, or we can do it wrong." and...
"We can agree to disagree till you agree that I am right."

OK, perhaps more delusional, than axiomatic.

How about, "The more we learn the less we know"?


Sun, 02/28/2010 - 06:52 | 248604 Anonymous
Anonymous's picture

"The more I know, the more I know that I don't know."

There are various stages to awareness and healing.

(a) Pure, innocent and free.
(b) Traumatised. Repression kicks in.
(c) Unaware that I am unaware.
(d) Aware that I am unaware.
(e) Aware that I am aware.
(f) Healing. Reintegration. Study. Reinvention of self.
(g) Mindfulness.

Beyond the Statue of Liberty in the last scene in Planet of the Apes is another beach...

Fri, 02/26/2010 - 20:25 | 247545 Anonymous
Anonymous's picture

Ron Paul is certainly not willing to fight for the truth about 911- everything else that comes out of his mouth is suspect, IMO.

Sat, 02/27/2010 - 12:37 | 247910 Cognitive Dissonance
Cognitive Dissonance's picture

I suspect it's a strategic decision for he realizes that pushing the envelope too far too fast will bring the hand of power down on his head. He is allowed to exist by the powers that be (who could crush him quickly) as an outspoken irritant because he serves a polticial purpose beyond his own. Please see my long response to SWRichmond on this thread.

That doesn't mean he is serving two masters, just that he understands certain political realities. Dennis Kucinich has the same dynamic to deal with. How do you reform a corrupt system from within by using the system against itself. It's a delicate balancing act at best.

Sat, 02/27/2010 - 16:31 | 248104 Anonymous
Anonymous's picture

So true CD, perhaps it is sometimes better to just keep our yaps shut and work on our own shit. I suppose the only thing we really can change is ourselves- I guess that's why I can't really take any of this circus seriously (although it is endlessly fascinating). BTW, I loved your article, keep it up, and don't be afraid to get metaphysical on us!

After I had come to grips with what I now consider many ugly little truths, I am finding some bigger, beautiful truths are there for the exploration. An unintended consequence for the bad boys I would think.

Sat, 02/27/2010 - 21:24 | 248297 WaterWings
WaterWings's picture

Reset, anyone? I hate it when people pipe-dream about solutions using the existing system. Talk nicely to the boa constrictor, or she might get really angry.

Sat, 02/27/2010 - 20:58 | 248281 mouser98
mouser98's picture

One has to choose one's battles.  RP has made no bones about his antagonism towards the CIA.  given the effectiveness of Glenn Becks character assassination of Debra Medina over the truther issue, I certainly don't expect RP to reveal his private beliefs about 9/11.

Sat, 02/27/2010 - 21:21 | 248294 WaterWings
WaterWings's picture


Fri, 02/26/2010 - 18:40 | 247444 Anonymous
Anonymous's picture

Regardless of who appears to be our savior, the harsh reality is that nobody is going to fix our problems for us....if they can be fixed at all.

If you want something done right....

Fri, 02/26/2010 - 19:08 | 247476 merehuman
merehuman's picture

Eilabeth Warren strikes me the same way.

Here are two obviously good folks amongst so many rats.

But have learned to have no trust, especially in APPEARANCES.

Charts, media and politicians have created the appearance of an economy where there is none.

Fri, 02/26/2010 - 19:32 | 247500 Cognitive Dissonance
Cognitive Dissonance's picture

"But have learned to have no trust, especially in APPEARANCES."

This is part of the control system and it's deliberate. It's one of the reasons the captured media conduct nonsensical and malicious hatchet jobs on people such as Ron Paul and Warren. While we might not believe it, it leaves an impression on our conciousness that comes back to haunt you.

You and I have been conditioned to be distrustful of the very people we should trust, simply because they are surrounded by garbage and are smeared by association. Like a child who has been burn too many times and now won't go within 20 feet of the stove, the average person seeking answers and solutions is being trained to trust no one. Ergo, the situation is hopeless, we are helpless and powerless, why fight it when you're all alone etc.

Sat, 02/27/2010 - 11:43 | 247880 mouser98
mouser98's picture

CD, all very good points, but i have a different take on it.  first i don't think Ron Paul is trying to position himself as being the guy that comes in and "fixes" things.  He's stated many times that he is not really interested in continuing in politics, plus he is 74 years old, and I imagine he probably doesn't feel like he has the energy to not only win a Presidential campaign, but also serve as the President for eight years.  No, I think RP's true purpose and goal is to educate.  To get the word out that government does not solve problems, it only creates them or makes them worse.  This is something we once knew as a people, but over 100 years of extremely successful Marxist infiltration into our society (not talking about the Communist Party here) has caused even the most intelligent and educated to accept and believe in government intervention.  One person cannot fix this mess, it requires a complete overhaul of our society, and a major paradigm shift for 98% of the population.  I believe RP's mission is to do what he can to help bring about that paradigm shift.  And as far as having been "untouchable" for 30 years, I think its because he has never become political.  His positions have always followed his principles which have never wavered.  

Libertarian principles are unique in that they are the only principles which are not self contradictory.  Any political ideology that believes in the necessity of government is inherently anti-liberty at its core, this is true even for minarchist Libertarianism.  But the Republicans and Democrats take this one step further.  Not only do the Republicans believe in the necessity of government, they also believe in the mandate of government to enforce a given morality, theirs.  While they might profess a belief in the free market, even that position is inconsistent when it comes to the drug market, or the sex market.  

Democrats are more inconsistent.  They oppose the Republican legislation of morality, except when it comes to dealing with minorities, there they want to legislate a national appreciation of people regardless of skin color.  They claim the label of "liberal" yet believe in universal government interference in the market.  These inconsistencies lead to wobbly platforms for both parties and expose their candidates.  This is why people say they vote for the "lessor of two evils."

Ron Paul is a true libertarian, not a minarchist, and therefore stands on a rock solid platform that will never leave him off balance.  We libertarians do not go on too much in public about the complete abolition of government, we generally just advocate the return of the principles of the US Constitution.  But the guiding principle is this:  

"No government can improve upon the results of human action achieved through the voluntary interaction of free peoples." ~Lew Rockwell.  

Or to put it another way: 


"If one rejects laissez faire on account of man's fallibility and moral weakness, one must for the same reason also reject every kind of government action." - Ludwig von Mises


Sat, 02/27/2010 - 13:33 | 247955 velobabe
velobabe's picture

your a hoot†

While they might profess a belief in the free market, even that position is inconsistent when it comes to the drug market, or the sex market.

Sun, 02/28/2010 - 04:22 | 248595 delacroix
delacroix's picture

I remember telling my wife, that it felt like love and trust, were being undermined, by tptb. my 6 year old daughter, said unh ah. I asked her what, and she said, their trying to hide the truth, from god. I was kinda surprised, since she was only 6, at the time, but in her way, she was right.

Fri, 02/26/2010 - 19:46 | 247514 Get_to_the_choppa
Get_to_the_choppa's picture

Oops wrong thread...moved.

Fri, 02/26/2010 - 19:47 | 247516 Get_to_the_choppa
Get_to_the_choppa's picture

I agree with you and know what you mean about not ignoring that feeling.  At the end of the day with Paul, I think it's more us than him.  He's just one man, and he's been 'staring into the abyss' of Congress for quite a long time so it may have colored him a bit.  I believe he is honest though, and that he believes in what he says.  BUT he's not our economic messiah, and many of his supporters (and yes, I voted for him as well) are intentionally/unintentionally setting him up for just that kind of role.  He's simply not 'that guy'.  Frankly no one is.  The solution to our problems isn't going to be a leader, it's going to be all of us taking personal responsibility *away* from the 'leader' paradigms we live in and restoring a sense of personal responsibility, economic and otherwise. 

Just my rambling take.

Fri, 02/26/2010 - 22:19 | 247621 Howard_Beale
Howard_Beale's picture

I am thinking of the many times I have written something here at ZH (when I was much more active many months ago) and ended it with, bring it on--I'm ready, or ok, let me have it. For that CD, you are doing what this blog is really for--saying what you are thinking and feeling with a who gives a fuck attitude because somewhere inside you know it was important to do it. Every time I did it I found an audience that supported my statements. I know yours is a bit different here--based on a gut feeling--but that is as valid as most of our thoughts.

Sadly, ZH has much less of us screamers and more cheerleaders as of late and I would encourage all my buds--DH, Miles, MsCreant, Chopshop, and you to keep making waves. How I miss Cheeky Bastard, from his distant viewpoint, and the waves he used to make. Maybe he is still here but I have not seen him much.

This is not an "atta boy" site for Tyler to put up a post and everyone to chime in "You rule!". It's for thinkers, concerned humans, and those with the ability to discern or even imagine different outcomes to those posted. I treasure this site for that alone. It's what makes a market and what makes a community.

It is also a site that I think many of us that have been here for some time find depressing. I am guilty of that and during my recent travels I didn't post for over a month. It doesn't mean I wasn't checking in every day--but getting into the dialogue was too much for me as I am physically in terrible shape and sometimes it's best to turn it all off.

But in the end, we are a community and I feel great support here from those I have chatted with the longest. I just want all those newer to the site to realize that when you post something that disagrees with the premise of a particular subject, it's fine. And for all of you that are anonymous and continue to be so, you are doing yourself and us a disservice because if you say something brilliant one time--we may actually pay attention if you have a handle.

So thanks, CD, for firing away. It brightens my day to see anyone take a stand that might not be popular here. And of course, you are welcome to use my "reverse Alzheimers" any time you wish, without attribution. Let's keep the dialogue going and for the good of those who created ZH, keep it a spirited debate and not let it become a site of idiotic cheerleaders hoping to seek the approval of it's creators. They don't want that.  They'll make more money by having brilliant, creative minds submitting intelligent comments or even hunches that create a discourse.

And in closing, I think Ron Paul is a great guy. I have no feeling for him either way in terms of creepiness but he was a doctor and these days, in my book, that puts him in the same camp as lawyers. I am still grateful that he exists and makes serious noise.

Fri, 02/26/2010 - 22:23 | 247634 Anonymous
Anonymous's picture

Still waiting for a username. New to site and visit daily. Sorry that you put doctors and lawyers in same camp, but I'd still help you out.

Fri, 02/26/2010 - 22:23 | 247635 Gromit
Gromit's picture

+1  Sometimes I walk down the corridor looking for Room 101.

      What is the point of knowledge if I can't use it in a meaningful and    useful way"?

Sat, 02/27/2010 - 08:30 | 247816 saulysw
saulysw's picture

I will materialize briefly to say - great post!

Sat, 02/27/2010 - 11:48 | 247882 WaterWings
WaterWings's picture

I thank all of you veteran posters that keep coming back.

Concerning Dr. Paul, he delivered over 1,000 babies. He's a family man for families - not someone looking to make money off of drugging people up and altering their bodies to make them feel better about themselves when their problem is actually a spiritual/self-worth one.

On that note, I feel that my depression from over-reading the news and crossing my fingers for collapse has allowed me to slide in vigilance for upcoming changes. I think I just need to get out more and enjoy what we have while it is all still so accessible - but I also have a hard time "enjoying" anything in view of the filth and corruption that has floated to the top ranks of gov't. The only thing holding this house of cards together is welfare/unemployment payments - no slowdown of the increase of "entitlement" on the horizon. We have been dehumanized.

Sat, 02/27/2010 - 14:37 | 248000 Cognitive Dissonance
Cognitive Dissonance's picture

"On that note, I feel that my depression from over-reading the news and crossing my fingers for collapse has allowed me to slide in vigilance for upcoming changes."

Your admission touches my heart for I've been there and revisit frequently. In fact, this very realization has compelled me on this journey inward, for only there will I find the peace and happiness I seek. And which compels me to write, if for no other reason than to help me pull things together in a coherent manner. I must say that I always gain from my own writings, the ultimate form of masturbation.

I have found one thing helps. I no longer take on the feeling of personal responsibility for others inaction. At first, as I woke to the insanity, I felt that since I was in the advance team, one of the early adopters, that I was responsible for laying the ground work for the next wave. Unfortunately, this is an unfair self imposed burden and I have finally let it go.

Sat, 02/27/2010 - 16:28 | 248101 delacroix
delacroix's picture

you're not responsible, but your contribution, is appreciated.

Sat, 02/27/2010 - 21:52 | 248323 Anonymous
Anonymous's picture

Equanimity is key for me to allow myself to go about daily life in the face of what's going on around us. It can be very hard to deal with people living in such blatant states of denial without trying to pop their bubble (educate them)occasionally- which rarely works and often backfires (but can be fun).

As far as upcoming changes- I suggest making them in your own life preemptively. Learning and living the practices of permaculture have had a remarkable positive impact on my mental and physical being. The transition movement is gaining steam really quickly, and you might be amazed by the level of awareness- at least at the gut level, if not in the details- of your neighbors.

Sun, 02/28/2010 - 10:29 | 248657 Cognitive Dissonance
Cognitive Dissonance's picture

"...and you might be amazed by the level of awareness- at least at the gut level, if not in the details- of your neighbors."

No, I wouldn't be surprised because we are all aware at some level. The question is never knowing as much as denial of what we know. When we talk to friends and neighbors about what's going on and they don't react or they reject what you're saying, they are not just fighting with you but with themselves. It's always a battle with our self. Every time I boil down why we do (or don't do) what we do, it always comes down to dishonesty with ourselves. I've talked about this before, both in posts and in my articles. No one likes the person speaking truth in public, let alone in small groups.

We've all either seen this dynamic played out, we just don't talk about it. I regularly go to meetings at all levels of government. I remember one in particularly where one of the commissioners, a long standing member of the community, was not very well liked because he was a bit brusque and heavy handed. It was common knowledge that he was not a very honest man and he had recently been brought up on corruption charges by the state.

But even though something is common knowledge doesn't mean it is talked about, at least not about a whisper. At the meeting, one person confronted the commissioner, saying that he should recuse himself from further commission business until this "other matter" was settled. In the various conversations I'd had privately, this was the consensus, but unspoken, view. Yet when it was said publicly, the person saying this was shouted down by the very same people who had previously said the commissioner should recuse himself.

What was going on here? It was almost as if the private conversations, when made public, had exposed everyone who had talked about the subject in private. Because they didn't wish to talk about it publicly, the person doing so was vilified even though that person was doing exactly what everyone said they wanted done. Or more importantly, they didn't want it public, they just wanted the commissioner to quietly remove himself so no on would need to discuss this public embarrassment. "God I hope no one makes a scene" or "Why doesn't he just go away and save everyone else the embarrassment." Where is this embarrassment coming from if the others are not feeling guilt themselves.

Another dynamic going on here was that people don't like to put other people in positions they wouldn't like to be in themselves. This is why you hear excuses from people all the time, such as "He's a nice guy" or "He didn't mean to do that" and so on. Many people do illegal or immoral things but have never been caught. They still carry around a sense of guilt, though not enough for them to confess. When others are in a difficult position and we can identify with them, we have a tendency to avoid confrontation because it would almost be like we are confronting ourselves.

These psychological defects and the denial that covers it all up is well know to the powers that be and it's used against us. The thing is that the powers that be, by being honest about their dishonesty, are now free to use our dishonesty against us. By accepting the things others wish to hide, they are freer emotionally to abuse and use us, turning our own denial against us.

Sun, 02/28/2010 - 12:34 | 248719 Anonymous
Anonymous's picture

"It's always a battle with our self. Every time I boil down why we down why we do (or don't do) what we do it always comes down to dishonesty with ourselves."

That sir, in my opinion, is the crux of the matter. There is no way to break the mental/social bonds that have been constructed over hundreds- some would say thousands- of years with out each and every person doing some personal spelunking.

Not something most people are interested in doing you might say? Maybe- maybe we will have no choice. Personally, I believe evolution (not just physical) happens in quantum leaps, and we are likely at the leading edge of an evolutionary leap in human consciousness. TPTB know this, and they are preparing to do everything they can to shut it down or derail it. I highly recommend "The Purposeful Universe" by Carl Calleman- some great concepts in this book. I have faith that higher powers are at work.

Sat, 02/27/2010 - 13:37 | 247958 velobabe
velobabe's picture

i am chumbawamba

i'm thinking maybe he was joe stack  cpa.

Sat, 02/27/2010 - 22:51 | 248389 feeb
feeb's picture

Howard - long time lurker here (been here on the ZH site since day 1 and found the blog a couple of months before the big move). I was inspired to jump forward with a comment following your impassioned post ;)

The dialogue here is this thread has been really thought provoking - namely the concept of challenging one another as opposed to taking on the form of the Tyler and Marla fanboy club; yet balanced with the paradox of distrusting absolutely everything we see, to include the few righteous public figures such as Paul and Warren.

I will now offer some personal observations along with some analysis:

I live in the DC area and work in the city at a 3 letter government agency (hence the moniker)…I’ll leave the fun personal info at that J Every day, I come into contact with a bunch of generally lethargic, self-entitled, overpaid government employees and contractors. To further complicate (and to provide further disheartening reasons) I currently work as a finance professional in procurement – basically, I help mid-level managers spend their admittedly fat budgets on equipment they may or may not need, and hire private contractors at an average payout of $250K/yr per FTE (an average, it may be higher, and this is what the company sees, not the employee…they’re typically about ½ that). Over the past year or so, I have engaged in an impromptu study – trying to identify whether my coworkers “get it”. Seriously. The prevailing sense of entitlement and general sense of status quo is positively overwhelming. Money shows up every year on October 1st as though it was dropped off personally from Uncle Ben’s helicopter.

Until I can do what I know I need to do – pursuing or aiding in the pursuit of financial crimes – I have decided to honor the taxpayers by personally cutting out as much government $ waste as possible….it’s just a drop in the bucket, but probably on the order of $1M this year, in the small piece in which I am able to affect change.  

I am of the opinion that the only thing that can really change the beast that is government is a hard stop. I believe that this will come, but it may take some time. Until then, I will do what I believe to be right. Fuck orders and fuck the status quo. I seek out efficiency, I seek out righteousness, and I adhere to a quasi-Randian philosophy of selfishly-rooted altruism. I will gladly do things to benefit those around me that I care for, to include the tax-paying American public s a whole, where I choose to do so and when it is in keeping with my personal code of ethics. This probably makes me a bad little government employee – but fuck the status-quo, corrupt, self-dealing system. Thanks, but I’ll do what I know to be right.

Make no mistake – I love this nation and many of the people in it – but the timid acceptance of the ongoing corruption and the utter complacency of the people of this nation is rather frustrating. On another note, I am glad that I picked up a few more ounces of gold yesterday :o)

Cheers HB and fellow ZHers.

"We have no government armed with power capable of contending with human passions unbridled by morality and religion. Avarice, ambition, revenge or gallantry would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution is designed only for a moral and religious people. It is wholly inadequate for any other."

-John Adams


Sun, 02/28/2010 - 11:25 | 248677 Anonymous
Anonymous's picture

Good post and for what it's worth, it's a comfort knowing that there are shining stars still in the government ranks.

Sat, 02/27/2010 - 01:21 | 247737 SWRichmond
SWRichmond's picture


Cointel?  I've been trying to make sense of your post, and even in the context that you ascribe to it, I am suspicious.  It is decidedely negative, in a very underhanded sort of way, and I've been seeing a lot of this lately wrt anyone prominently in the libertarian camp.  And it's never decidedly negative, it's underhandedly so.  It's attacks below the waterline.  It's casting doubt that anything can be for real, that anything can be taken at face value.  It's undermining from beneath with suspicion ("the man seems to be able to withstand political and political attacks no other person of his caliber has ever been able to withstand, year after year, election after election"; "something doesn't feel right and I've learned over the years not to ignore that feeling.") with an implied "and after all, I'm a deep thinker so you should take my word for it."  Sometimes there are strong words sprinkled in for effect: "aberration".  You can't trust anyone, everyone is under suspicion, blah blah blah. 

The trouble with your kind of doubt directed everywhere, even if it is sincere, is that it is taken too far and quickly turns into nonsensical existentialism of the type fostered by that idiot Sartre and his buffoon slut DeBeauvoir. 

Having listened to Ron Paul a lot, I am having trouble finding where he offers any false hope for salvation.  He continually says we're in for a very hard time.  Not only that; more importantly, I agree with his ideas and the philosophy that he espouses, having arrived there independently many years ago. 

Now, let's get back to the original point of my post, which you ignored: We must use the Austrian record to deny the banksters and policy wonks their "plausible deniability".  There is an entire school of thought, not merely one man, that has refuted Keynesianism, central banking, and the goddamned almighty central state for the past many decades.  That school is the Austrian School of Economics.  It is that school of thought that I agree with, and Ron Paul is its most visible advocate.  So undermine Ron Paul if you will, but can we talk about the correctness of the Austrians?

Sat, 02/27/2010 - 09:38 | 247819 Cognitive Dissonance
Cognitive Dissonance's picture


First an apology. After reading my post again, I recognized that I had cast unintended aspirations towards Dr. Paul when what I was trying to do was show that a control mechanism is at play here. I should have been more careful with my words. In particular I should have re-read my post for content before hitting the save button. I thought I made it clear that I don't think Dr. Paul is insincere in my last paragraph but the damage had been done. I see that now. My apologies.

Let me start a more complete explanation by quoting my last paragraph.

"My only fear is that he is being used and manipulated (not saying he is participating in his own manipulation) to enable people to hope that he (or someone like him) will save the day. I'm actually going to talk about this a bit (in general terms) in my next article."

This is the entire basis for my comment about Dr. Paul. And I'll be happy to expand. I'm talking about control mechanisms here, of the type that are usually unseen and unrecognized. This is a complex and involved subject and I should have not mentioned Dr. Paul or even written the post at all unless I was ready to expand. I was intending to do so in my next article and still will.

There has been a concerted effort for decades (centuries on a worldwide basis) to narrow the focus of Americans and the rest of the developed world using multiple techniques. The end result is a population that is demoralized, disenfranchised, isolated and stressed financially, physically and emotionally. We (Americans) have been progressively moved down Maslow's hierarchy of needs pyramid over the past 40 years (since Nixon took the dollar completely off the international Gold standard) until today, where many people are now firmly in the "Safety" area, with a growing segment struggling in the lowest "Physiological" level. The higher functions, of Love/Belonging, Esteem and Self-actualization have been abandoned in the rush to take care of self and family.

This is a well understood process for social engineering and re-distribution of wealth. The powers behind this process need to strip the population of nearly everything while still maintaining control. In society religion is often used to pacify and control. And to some extent this is being done in America, witness the emergence of the religious right as a political force during the Bush years. There are other examples as well. But other methods are also employed, the most obvious being political. Election cycle after election cycle, each party puts forward candidates that are not marketed as the most capable but the most perfect, both from a physical appearance and oratory point of view. They are presented as "The One" the savior, the person who will make things right.

This process, in order to be more effective, needs a seemingly effective and energized underground opposition with it's own personality and following. I say underground because the main circus rings already contains the two main parties, where power is shared, not divided. In my opinion, Dr. Paul and many other leaders are allowed to exist, even prosper to a certain degree, in order to convince their followers that there is a chance they could win.

As long as people have hope that they can control their destiny they will not pick up the pitch fork and torch and revolt. Thus Dr. Paul and others are encouraged and even quietly supported (up to a point) to get there message out while at the same time being sabotaged. I've often talked about false hopes binding us to impossible situations. In these cases, our (false) hopes are deliberately fired up to distract and contain us.

If the powers that be wanted to destroy Dr. Paul, they could have done so decades ago. No Representative lasts more than a few terms without allaying him or herself with either political party. Dr. Paul is a Republican in name only. They climb the ladder of committee appointments, building their power and thus their invincibility within their own party. They wheel and deal to make alliances. Or they remain quite and don't make waves, going with the flow, doing just enough deals to stay alive but quite. Dr. Paul has done neither. And yet he survives and even thrives. I believe this is because he is allowed to survive simply because Dr. Paul serves the purpose of the powers that be. Dr. Paul could be crushed easily but he is not. Thus he serves an unwitting purpose for the powers that be.

As I said, I don't think Dr. Paul participates in this manipulation, thought I do see evidence of Dr. Paul doing typical "political" things on occasion (usually during the months leading up to the 2 year re-election) such as saying things for "domestic consumption" in order to placate portions of his electorate to maintain his office. This is normal and understandable but they sometimes stand out among his main speeches. But Dr. Paul is a brillant man and he must recognize this reality and yet he says nothing about it. I suspect he recognizes that if he where to illuminate this dynamic, his usefulness would end and he would be pushed out. There is nothing wrong with recognizing a political reality and working within it's confines. But because this political reality is not discussed yet it's still there, for me it sticks out like a sore thumb. This is what I was referring to when I said something wasn't right, there were little inconsistencies. Again, I should have explained instead of leaving it at that. That was wrong on my part.

I did not say Dr. Paul offers false hope or an easy way. Dr. Paul has done neither. I said he is being used to offer false hope. There is a big difference between those two statements. In fact and to be exact, hope is not offered to the follower as much as it is created by the follower. Dr. Paul can say all he wants to discourage false beliefs, to be realistic and up front, but if his followers think he is their only hope, it is not Dr. Paul who is creating that sense of hope but his followers. 

This is an important part of the control mechanism and an integral part of physiological warfare. We are all used by larger entities and more powerful people on a daily basis, often without our knowledge or understanding. That doesn't mean we are participating with it nor in agreement. Often we surrender our power willingly to these very entities because we have allowed ourselves to participate in denial and unrealistic hope to satisfy our egoic mind and to allay our fears. This is understood by the powers that be and it's used against us.

You said...."Now, let's get back to the original point of my post, which you ignored: We must use the Austrian record to deny the banksters and policy wonks their "plausible deniability". "  I constantly talk about plausible deniability in my posts. It is a constant theme. My purpose is to illustrate the control techniques and mechanisms. But the fact is that I can point to these things all the time and it's worthless unless people decide to reject the technique. Plausible deniability only works when you have a population who wishes to remain uninvolved and unengaged.

As long as we don't wish to take back our own power, we will buy into their plausible deniability because it allows them to maintain the power we don't wish to take back or control. It's not them, it's us. It doesn't matter what financial ideology you put forth to combat the status quo if the people will continue to support the status quo. I'm not saying you're wrong. In fact, I fully agree with most of the ideology. But while I can bring a horse to water, I can't make it drink.

Unfortunately most of "us", meaning people who are waking up and becoming more fully aware, still believe that if only we could inform and educate the population, they too would wake up and make changes. But it must be crystal clear by now that the vast majority of people don't want to wake up and are fighting you and I more than they are fighting the status quo. And the further down Maslow's hierarchy of needs pyramid the general population falls, the more infantile they become, which is exactly what the powers that be are trying for. The more "we" fight with their tools, the more damage we do to ourselves.

Sat, 02/27/2010 - 10:54 | 247859 Shameful
Shameful's picture

Again we hit on hope as a weapon. It's a natural human trait to hope things will improve even when it is clear they will not. Sometimes people need to be told that things will not get better and to enjoy the now. I know when I was a toddler my parents fought as all couples do and my mother was unhappy. My dad did something I consider genius, he told her the truth "Look, things as good as they are ever going to get. We are young, employed, and have our health. This is the best I can offer you, if it's not good enough you need to leave because things will only get worse". More then 20 years later they are still together. A friend of mine did the exact same thing to his wife after hearing the story and it strengthened their relationship. Deep down we are all hoping for something better, even when reality tells us something different.

You might not have room here, but I would like your idea how a group could modify a people over a time span, and how that group could either not be changed by the new culture or inoculate themselves to it, or how they could even hold themselves together over the decades or centuries. While I do see us sliding down the Maslow scale, I also must ask did not our ancestors also live much closer to death and much further down on the scale? Without cheap energy we would be in darkened rooms after our day on the farm.

While I agree that most people will resist waking up to the world they live in what do you propose? I do what I do because of conscience, I don't want friends and family to claim that they were never warned and it was my fault. What would can we expect to live in? I see a massive upheaval coming, whether planned or not and my crystal ball does not extend past years of pain and chaos.

Sat, 02/27/2010 - 11:24 | 247867 Cognitive Dissonance
Cognitive Dissonance's picture

"You might not have room here, but I would like your idea how a group could modify a people over a time span, and how that group could either not be changed by the new culture or inoculate themselves to it, or how they could even hold themselves together over the decades or centuries."


When Tyler and Marla invited me to become a contributor, after some thought I decided that I would try to tackle exactly that question. How do we change given the control systems and "natural" human tendencies. BTW, I suspect some of these "natural tendencies" are a product of nurture and not nature, meaning introduced and reinforced by the control system.

Regardless, I recognized that to simply lay out my ideas without some background (some would say preconditioning of my audience and I would not disagree) most of what I said would be summarily dismissed by most, even those with more open minds. New concepts must be absorbed slowly, digested in small pieces. You don't introduce sweeping worldview changes in 3 paragraphs or even 10. The difficulty lay not in the new information but in letting go of the old. Or as someone else said in this thread, the unlearning.

So what I'm saying is, please stay tuned to my articles because I'm getting there. But only after I feel I have presented the groundwork for my thesis. I also suggest that readers go back and re-read my articles. There is simply too much there to be absorbed the first or even second time. Worse, whenever we read anything, our ego is usually front and center and we misinterpret many things, even miss entire concepts and ideas. As I said in my last article, the ego shields us from ourselves.

This is why I always read everything twice. It's a habit that has served me well. I often tell people that the first reading is for the ego. The second reading is for the consciousness. And the third reading is for sheer joy and pleasure.

Sat, 02/27/2010 - 11:27 | 247869 SWRichmond
SWRichmond's picture

Let's be very careful as to how we use the word "hope".  Different people hope for different things.  "Hoping" that "things get better" means something very different to me than to many others.  And for me, it isn't confined to "hope".  I intend to reclaim, for myself and especially for my children, the liberty that is our birthright.  There will never in my lifetime be a better opportunity than right now for me to do so.  Many others are merely hoping for a return to easy-money-driven consumerist hedonism.  I guarantee their disappointment; that day is past.

The power structure is completely committed to keeping the revolution confined to within the walls of the prison; granted.  But the American middle class intuitively knows that it has been targeted for termination, so the stage is set for a confrontation.  I am absolutely counting on the government to continue to tighten the screws as things get worse and worse; they will do our recruiting for us.  Thus far, they have not disappointed me.  Personally, I can't wait for them to close the banks, and they're working up to it as we speak.

Sat, 02/27/2010 - 12:07 | 247886 WaterWings
WaterWings's picture

They are creating the neo-buffer class over at Same tricks that Howard Zinn pointed out, as well as others, of course. The dividing line being whether or not you "own" land, as history hath shewn us. You can't own land on unemployment/welfare these days.

I have a close acquaintance (she watches a lot of TeeVee and our mutual friends "tolerate" our diametric viewpoints) that is headed for a Master's accounting program and fully expects to work for the IRS. I have absolutely held my tongue for I fear to attack her goal would be the straw/camel scenario.

So in reality, to maintain a friendly relationship, I joked that she would be hunting down income tax deadbeats. She actually felt ennobled by it. Try bringing up any Amendment beyond the first 10 and its blank stares all around. Even the Bill of Rights makes you look like a smart, serious, wise person as long as you don't mention they have been essentially suspended.

Sat, 02/27/2010 - 12:20 | 247899 Cognitive Dissonance
Cognitive Dissonance's picture

"Let's be very careful as to how we use the word "hope".  Different people hope for different things." 

SWR, I made an obvious error when talking about Dr. Paul and I was profuse in my apology in my expanded explanation. I was careful to explain what I meant by hope and I wasn't inferring you were doing anything. I wasn't directing my comments towards you. It wasn't personal. It was a general view and opinion. If you included yourself, it wasn't my intention. I was speaking in general terms, particularly with my expanded explanation. I don't know you so I can't assume anything about your views or hopes. I agree that the greatest friction is derived from dueling definitions and interpretations of words and ideas. In fact, I am incorporating actual definitions in my next article to try to avoid obvious problems.

Speaking only about myself, I must not take personally words I read or hear, a tendency I fight on a daily basis. As I open up even more on ZH and elsewhere and explore areas many people wish to hide from, I'm taking increasing flack and it hurts. If after reading a comment, I find my dander is up, I've learned to go back and read the comment again and again. Often I find that my ego shielded me from an important nuance or even whole words. This is my biggest weakness and one of the reasons why my last article was about ego and consciousness.

You are one in a thousand SWRichmond because you have decided to take a stand. There are others on this site that are doing the same, something I'm doing myself, particularly on the local level. I have no intention of disparaging you or anyone else for that matter. Please remember that I write for a general audience and some, such as you, are more aware and secure than others. For myself, I find that I must resist the tendency to be too deeply sensitized when all around me I see nothing but slings and arrows, reinforced by constant attack, particularly by trolls and psyops operatives. When I'm standing alone, everyone appears to be the enemy, even my friends when they aren't by my side. This is a byproduct of resisting the control system and I must remind myself that this is good, that it means I'm breaking free of the mind games, that the pain I'm feeling is a sign of growth, not disease and destruction.

Regarding your second paragraph, there is an old saying (if I remember correctly it comes from the bible) that echos off what you are saying. It is also a theme of mine. When evil comes knocking, step aside and let it destroy itself. The government and its masters want resistance in order to justify turning the screws even tighter. They are using the "problem-reaction-solution" paradigm, the so-called Hegelian Dialectic, to engineer general popular permission to create our own prison. I also expect tremendous confrontation and as I noted on another comment, my biggest fear is that instead of fighting our enemies, we will succumb to the psychological warfare and fight among ourselves.

Sat, 02/27/2010 - 17:58 | 248155 SWRichmond
SWRichmond's picture

CD, I made the above reply in response to Shameful's "Again we hit on hope as a weapon."

When I'm standing alone, everyone appears to be the enemy, even my friends when they aren't by my side.  Don't do that to yourself.  For myself, I meet people all the time who think much the same way I do, they are merely uncertain as to what to do next.  I meet still more who think the same way as I, and also know what to do.  Alone?  Never.  I have a host of friends, all leaderless, all pointing the same direction.

Sun, 02/28/2010 - 12:14 | 248704 mouser98
mouser98's picture

I am getting so tired of petty government bureaucrats interfering in people's lives and businesses.  Every week I read about another instance where the government blocks a voluntary business interaction and threatens the property and bodies of honest people just trying to participate in the economy.  And I am not even including drug dealers in this (which is only a lucrative business because of prohibition anyway).  For instance, dairy farmers in the Midwest are finding that there is a market for raw milk, but they better be careful who they sell it to, and in what state because in some states the pasteurized milk monopoly is protected by the government.  In New Zealand, a travel agent found that there was a market for women-only travel packages, seems some women don't want to be constantly hit-on as they try to enjoy their vacations, but the Down under Equal Opportunity stormtroopers stepped in to "protect" the rights of males and declared this business to be discriminatory.  Not only is our ability to earn income is impacted, but so to our standard of living.  Consider the 1.6 gallon per flush toilet.  So now we have to keep a plunger and toilet brush by the toilet for those times when flushing it five or six times still doesn't clean the basin or relieve the clog.  

Multiply these instances time several tens of thousands (at least) to appreciate the lost income due to government intervention.  Then throw on top an ever increasing tax burden.  Is it any wonder the economy is nearly comatose?  The fact that there is any economy at all is a testament to the resilience of what free market there is.

There will be much suffering in the next ten to twenty years, and my family and myself are nearly just as exposed as any other common person, so I do not look forward with glee to whats coming.  But, the silver lining is that we can expect the constant government bullying of free people just trying to live their lives to diminish considerably, at least for a little while.

Sat, 02/27/2010 - 12:11 | 247891 WaterWings
WaterWings's picture

More then 20 years later they are still together.

Thank you for sharing that. As a 30-year-old boy that is a campfire in the distance on a cold prairie. Something warm to hope for, and strive for.

Sat, 02/27/2010 - 11:14 | 247865 AnonymousMonetarist
AnonymousMonetarist's picture


A synthesis of your post would be similar to what I call AM Rule #1

After World War 2, our blessed leaders, impressed by German 'organizational' skills crafted a policy of manufacture of consent.Over time these techniques moved to the economic realm in an attempt to manufacture content.Federales now risk the manufacture of contempt, for it is only a Great Depression if they say it is.

The other 9...

Sat, 02/27/2010 - 11:34 | 247876 Cognitive Dissonance
Cognitive Dissonance's picture


I clicked your link and had a ball. Great fun. Since I've noticed your postings on ZH, I've been visiting your site. You are unique in this world and I give you credit for tackling very difficult subjects so bravely.

Sometimes humor is so much more effective at disseminating truth because it's disarming and can sneak up stealthily. Bravo.

On the other hand, because that same truth comes hidden within humor, it can also be easily dismissed by those who don't wish to self reflect.

Sat, 02/27/2010 - 12:16 | 247896 AnonymousMonetarist
AnonymousMonetarist's picture

Thanks... and agree.

Sat, 02/27/2010 - 13:41 | 247964 Reven
Reven's picture


Paranoia for paranoia's sake is fruitless. 

It looks like Rand Paul is going to be the Republican nominee for US Senate in Kentucky.  Am I to believe the CIA planted Rand in this race so the plebs feel like they have some small about of representation that in the end will be inconsequential to ruling elites?  Give me a break.

Fri, 02/26/2010 - 17:02 | 247287 Shameful
Shameful's picture

Yep, he has been singing the same tune for years.  Glad to see a few more people coming around to it.  The funny thing is when people used to bust on me for talking about him I would challenge them about which of his policies they didn't agree with and most couldn't come up with except the hard money.  Though talking about inflation and in a few minutes they would end up agreeing that money should hold it's value.  Part of the problem is people don't understand what inflation is or why it is caused, even engineers I know were clueless about it, and these are smart educated people.

Fri, 02/26/2010 - 17:27 | 247323 Cognitive Dissonance
Cognitive Dissonance's picture

The average person thinks it's normal and natural for prices to go up over time. The magician has been very effective obscuring what inflation is and who/what causes it. The conditioning continues. And as long as the pay increases keep pace to some degree, it's a conditioning that's reinforced through a strange positive feedback loop. Look, I'm getting a cost of living raise because of inflation. This is good.

While we can point to all kinds of reasons for this ignorance, ultimately personal responsibility should be at the top of the list. But as long as Daddy politician (and other assorted masters of the universe) says don't worry, be happy and they can shield people from their own personal (ir)responsibility and consequences, the Ponzi will continue.

Fri, 02/26/2010 - 18:12 | 247405 Shameful
Shameful's picture

Exactly, most of what we believe is an outright lie.  If we are to look at even their economic theory then prices should be falling.  Because of capital, training, and specialization productivity should rise and the cost of goods and services should go down.  But they are forever marching upward and few ever ask why.  Few ever ask why they must always meet higher and higher production quotas and yet their wages are mostly stagnant.

My father often comments that when he was a kid he thought that if we was making the money he is making right now he would be driving a Porsche not a 19 year old GM truck.  But part of the problem is even if one realizes the flaw in the system they are still living inside of the system.  To my knowledge not one nation on earth has stable sound money.  Doubtlessly any nation that tried would have the weight of all the world's central banks against them.  So I don't think it would be possible to free ourselves, unless the system collapses.

Fri, 02/26/2010 - 17:51 | 247369 Anonymous
Anonymous's picture

Ron Paul doesn't have the best record either... He of "the will probably see widespread civil disorder in the 1980s".

That was pretty goddamn incorrect. But shocker, a period of prosperity catches an Austrian off guard? Unheard of...

Do NOT follow this link or you will be banned from the site!