Bob Janjuah On Brewing Popular Anger At The Failure Of Keynesianism

Tyler Durden's picture

If you are like us, you just can't get enough of Bob. The only economist from RBS whose opinions are worth reading, who will never make any financial pundit lists (especially not ones that have Jim Cramer on them), due to his unpleasant habit of being too "truthy", shares 17 minutes of his latest perspectives in this CNBC Europe interview. Not surprisingly, Bob blasts the lunatic response of resolving debt problems with more debt. This time he also shares some additional political perspectives: “Having elected people who said everything would be all right, ultimately the US and UK had to elect Reagan and Thatcher to get us back on track” and eventually angry voters in the developed world will shift to the far right. Some more US-centric perspectives: “The US mid-terms will be crucial. We will see a shift to the right as the Tea Party movement demands change. "There are 220 million people in middle America who are angry and believe stimulus spending has been wasted on vested interest and the banks that they believe got us into this mess. For all the talk of positive growth in America, those outside of LA and New York are hurting and want cuts in government spending, not more borrowing and spending.”

And just like all other skeptics, Bob sees deflation in the near term...

“Over the next 6 months we will see private sector deflation pushing 10-year yields down to 2 percent. This will see the policymakers mistakenly attempt to kick-start the economy and market with a global quantitative easing program worth between $10 and $15 trillion dollars."

... followed by inflation: his advice is to buy gold, safe, boring megacaps with no debt, and have more Asia-centric exposure.

His conclusion: “We are seeing a repeat of 2007 and 2008 with the inter-bank market in trouble, people are ignoring this."




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John McCloy's picture

   Anyone dressed all in black must be a chaotician. My kinda guy.

pooplagrande's picture

Not sure about you guys, but a SCIENTOLOGY ad appeared on the right hand side when I was viewing this article.

As a long time ZHer, I am now wondering if we are being targeted as prey for freaky deaky religions (ad manager thinking: these are doom/gloomers, the kind of guys that buy guns and gold...sounds like they could use some 'higher power meets sci-fi" kinda thing).


Popo's picture

Google ads aren't the same for everyone.  So, it's not that ZH'ers as a whole are being targeted by Scientology:   You are.  


I get ads for FX trading and Viagra.  What does that say about me?



Clayton Bigsby's picture

awesome!  those guys are a fucking cult -

BGO's picture

Janjuah apparently likes the cocaine, too.

jswede's picture

like Hugh hendry, but with patience and manners....  not sure who I like better.

GFORCE's picture

Probably Janjuah. No hint of arrogance. More than can be said for Hendry.

Spaceman Spiff's picture

He wears the black for the investor that is beaten down,
Livin' in the hopeless, hungry side of town,
He wears it for the tax payer who pays for someone else's crime,
But pays because they're a victim of the times.

etrader's picture

Note how he's never on the US output....

Speaking of which,

Trish full-cups Regan is also trying the Moto GP biker look after Ms Drury lead the way last Friday..... :-)


Ripped Chunk's picture

Too funny!

Somene should put her on a moto GP bike about 200 yards from a steep drop off. "Just twist the grip on the right bar sweetie"

snowball777's picture

Trish looks like a Tiffani-Amber Thiessen clone that spoiled in the Petri dish.

lynnybee's picture

...really enjoyed listening to him.   it's time to just let it all fall.  

Divided States of America's picture

Yup...its sad that we are back to letting a few connected wealthy people win at present now at the expense of the entire society in the future. Obviously, the action of the last 20 days (where the dow had intraday swings of over 200 pts each day) used to take weeks to play out. Things are going to be bleak for sure and everything is speeding up faster and faster to that conclusion. We never had bubbles that frequently but now we get that every 2 years, thx to Benny and Timmy.

Coldcall's picture

His employers must hate him as his vitriol over the bank bailouts would logically include RBS, the biggest of the UK bailouts, now owned 75% by the taxpayer.

Still i guess they keep him around as their novelty uber-bear.


sumo's picture

Bet his clients love him, though.

If RBS was to boot him out, what's the bet his clients and his team would go with him?

New_Meat's picture

You mean like Rosie and Meredith?  Yep, any clients he would want would want to go with him.  - Ned

lynnybee's picture

...he's cool / a truth-teller ..........

Judge's picture

Oh HEYULL yeah...

Mr Lennon Hendrix's picture

Plan B:  A Controlled Demolition

There are two plans.  A and B.  A is inflation big time with a side of Hollywood Futures Index with a slab of facebook ipo.  B is somewhat different.  In B they try to collapse the EUro, Yen, and Pound before the doelarr fails.  One reason B is looking likely is the fact that Cameron was placed in 10 Downing and Kan might take over as PM in Japan; both are fiscally conservative.  Yes This is a dog and pony show, however long they are able to play the game.  Question; who knows what they are doing?  Wait, more importantly, 'Who thinks they know what they are doing?'

Summers for sure sakes thinks he knows what he is doing.  He did the math a few decades back in his Ivy league days that "proved" he knew what he was doing.  For another example we have Ben Bernanke.  BS went through the system, he did well, and now he is at the top of the pops, dictating the scripture as he goes.  Larry Summers was thought capable of winning a Nobel, and the fact he didn't always upset him, as he expected to.  BS wrote the gospel on micro-economics; a simplistic message through awkward assumptions; what is a "rational consumer"?

So what is important with these guys?  Well that we let them be important in the first place!  Right- because they do not know what they are doing means it is up to us to tell them off.  Once we all understand BS' economica is off kilter, then we can move to oust him and his Keynsian Nightmare he rode in on.  Summers' data must be equally as flawed, as it includes a cornicopia of unicorns and a ready supply of cheap, migrant oomploompas!

So now that we know that we know that they don't know what they are doing, let us conclude that whatever they are trying to accomplish (their plans) will not happen.  Lowering unemployment by having low interest rates will not happen when all the jobs have been shipped over seas, and many of the ones in the other secters were not only unnessarary, but unsustainable from the start.  Stimulating growth with low interest rates will not happen when cheap energy has peaked, as interest rates have no affecton the production rate of oil.  What will thesemeasures the Fed has taken do then?

First thing, the measures the Fed and Treasurie have taken will destroy the currentseas.  Never minddepreiciating currentseas to "better imports" - (economic professors everywhere!) - we are talking FIAT value at zero!  How will this happen?  Well now, that is the question!

Plan B- Kill the Euro now, alongside the Yen and the Pound, thus putting all the weight on the doelarr.  Then once the doelarrs status as only FIAT is seen as unfair and unstable, the IMF and World Bank will issue new loans of credit for new world currentseas.  The loans for the "credits" will be based off of gold reserves, resources, and "skilled" labor.  The contracts will also account for debt, so that debtor states like the US have to pay the loans, and reciever states like China get paid back; this in part, most likely at the same clip as current assets/deficite ratio.  America for example may recieve a rather large loan, but still would pay China back a large amount as well.  This would be fine for China, but the US gets the upper hand; China may have wished to increase their REAL level of Treasury holdings after all.  These new currentseas will pale in the face of gold; numbers are of no merit.  Silver/oz will give their supplier one month of necessities; rent, food, clothing, etc.  Gold/oz will give a year of comfortable living.  Have the numbers be what you will.  Equities will get crushed to a level that gold is.  It is very possible that we see these Wango-Fandango Dow 11-10k dance until gold is up at $10,000/oz.  It is also possible that the Dow moves to 5000, or even 2500.  It all depends on which plan they choose, and that all depends on the Hollywood Futures Index.

Call it what you will but what else will the next bubble be?  We live in a bubble economy, so we need a bubble, and barring zero point energy contracts, the only one I see is precious metals- hello girls ;)  "Hi Lennon!" - Platinum, Gold, and SIlver.  Note the Fed open swaps to liquidate holdings on the day of the HFI's 1st Congressional hearing.  Watching the outcomes of these deals will give insight into which way the gator will go; Plan A or B that is.  Watching them will be like looking through the keyhole.

Economics in large part deals with numbers.  I do not think of it as a science, so I like to question philosophy's role in markets as well.  Numbers, unlike the mind, deal with limits, and consumption/production possibilities provies a limit based on price; but who dictates price?  The guys running the Treasurie and Fed, thats who!  And by the way, what is a price predicated on?  While we are at it, what is a number?  Thus an arbitrary placeholder from the thoughts of a "rational consumer" generates the market.  Great.  Now let us consider the fact that the rational consumer is living with no conception of peak oil.  How can one make a rational choice in this case, when finite resources is not considered?  Finally remember how the complexity of the price structures affect all the other price structures; think butterfly effect if you will.

America hath dwelt in Samsara with the utmost of complacentcy, never questioning its easy access to energy and entertainment; thank you doelarr!  In a matter of years we will be on the backside of oil production, and even in the case of a strong economy the price of the US military would be too much for the taxpayer to bear.  The cost of energy not only affects the cost of transportation, but for lead and iron and other materials.  Peak oil will be nature's VAT tax if you will.  Very soon the reality will set in on the world; nothing is static, everything is falling apart.

Americans are then sandwhiched between delusions of FIAT wealth and the cold reality of peak oil, yet they have no idea what the magnitude of cost will be!  Even worse, when the pins come out of the FIAT printing press, spilling ink all over the floor of the "temple", the situation becomes only more dire, as the supply of real money in gold, silver, and platinum will crush the debt.  Then when commodities are considered, especially food- unless food is organic, it used petro-chems and petro-fertilizers to grow, the costs go through the roof.  This will harm the advantage of technology, so we will not be saved by AI; pray for zero-point, or get ready for the ride of your life.  PS, this market collapse has everything to do with oil.  This is why Plan B looks like a winner at this point; but now let us dissect what that means as to what stage we are at for peak oil.

My guess is that if we are about to experience an oil shock, the CBs are planning on mitigating this with a "strong" petro-doelarr.  Collapse everything except the doelarr, thus meaning the US war machine can get a party started somwhere, or at the very least, there can be one more summer driving season.  As WW pointed out, $4/gal would be quite the predicament during what is the Greatest Depression.

Economics is the half assed science dressed up as the real thing so it can be spun to further growth.  It relegates logic to be derived from fallacious assumptions like the rational consumer but also on growth expectations.  Peak oil is real, and we are on its platue.  This means we are currently experiencing zero growth, and have since '05.  Was it a coincidence that real estate crashed the first year that oil production peaked?  Equities followed; was it ironic that oil production still had not gone higher?  It is not a coincidence; in ordxer to achieve growth, we need cheap energy.  This and the money supply production peaked in the early '90's.  Yes I am talking about gold/silver/platinum.  These metals are stored in bank vaults for a reason; they make great collateral.  Peak iron happened a few months back, and this should also be a major concern.  The golden investment oppurtunity lies in the fact that oil is still not on its backside of production, it is at its peak.  This is the last time to use them big rigs to get the money out of the ground with oil prices remaining like the numbers we have come to know. 

So gold should see a rise in price, as economy professors everywhere say, "Why would a price increase in gold matter?"  They of course are not drawing the corallary that gold is being the banksasset on reserve is its first loan of recourse.  Gold's price has more to do with the whole system than anything else; it is the center of the arch, the fulcrum.  Gold is the fundamental soiurce of all money; it is what the Ark was built for.  So going forth in this Keynsian Nightmare gold will hold the weight of the economy, however much.  This is what it has to do.  This has always been its destiny.

Plan B, USTs are bought in the name of the system, and the dumb money goes along for the irde.  Smart money of course will go to gold.  If the Hollywood Futures is asked to manifest a Hollywood bubble, doelarrs alongside every currentsea find their weigh to the bottom at the same rate.  PAper FIAT isonly servicable to fund the ponzi.

Right now the banksters are in a corner.  They have a large supply of money on reserve from the bailouts of TARP ONE and TARP TWO (STIMULOUS), and the jobs program for this summer.  Depending on the level of fractional reserve lending you want to use, they have inbetween $13 trillion and $26 trillion to work with.  Europe and Asia have a similar amount combined.  This but they have a low velocity of exchange.  This is not ideal, as they want to maximize doelarr production.  This means increasing demand, but how to do that?  Well either the Hollywood Futures takes care of it, or eopic collapses in the other currentseas do.  Once again, Plan A and Plan B.  The HFI will give the new money something to chase and thus increase velocity.  Of course FIAT is rotten at its core, so this only gives the appearance to work.

One must not forget, there is a huge swath of people who believe (and have sfor awhile) that this Kensyian Nightmare brought a false paradigm of infinite growth into consideration.  Rest assured, if considered rightly, the infinite growth paradigm is ridiculous.  In order for this nightmare to end, we must sit and think about where we are in our epic journey, and where we want to go.

fiddler_on_the_roof's picture

Good Commentry. Politics will decide Plan A or Plan B.

anarchitect's picture

You're flagged as junk because you're repeatedly pasting this post. No one wants to read your tome, even if it is well-considered, which I don't have the time for once I spot numerous typos. STFU already.

centerline's picture

edit - marginally considered.  Lots of good points and thoughts, not alot of process to tie together.  Read this yesterday and found it too convoluted in some areas to dissect for comment or compliment other than the obvious compliment for the effort that went in putting it together.

Mr Lennon Hendrix's picture

Tied together then-

Fucknutz have labeled "economics" a "science" and thus said it is absolute.  They then manipulate it as they see fit, and they fit not.  They purposely chose to ignore peak oil, and installed FIAT ponzi scheme.  Now they have boxed themselves in a corner, and they have limited their unlimited potential as human spirits by having plan A and B.  I am trying to not only figure out what they are thinking, but I am trying to look outside the box.  Thank you for your constructive criticism.



centerline's picture

Always appreciate those who are willing to "put it out there" - especially in a cynical and smart environment like this group here at ZH.  Not saying at all you are wrong in any area per se.  My initial reaction though to Plan B is that is seems a recipe for war for sure.  Unfortunately, I still have "war" high on my list of potential outcomes.  Keep trying to look into the box LH.

Mr Lennon Hendrix's picture

Junking does not bother me; there, I junked it too.  I posted it at midnight the other night on Cheekys open forum, and on a video for kindergardeners; I do not believe I took up valuable face time then, nor do I now.  I also told myself, 'ok LH, you get one prime time post, make it a good one.'  When I saw that Bob was ripping Keynes, I thought 'bingo.'

I did not post this because I think, 'hey, maybe people want to read this.'  No, I post because we are at a live or die moment, and I think we should all speak our minds.  Thanks for your criticism.



Clayton Bigsby's picture

I'm interested in the thoughts, but it would be great if you could re-post in "Dum-Dum Language" so I could understand what they all mean & the implications - does Google have  a translator for that?

Mr Lennon Hendrix's picture

Economics is not a science; it is better studied as a philosophy.  Resources, other than the mind, are finite; limitations are useful when considered.

Mr Lennon Hendrix's picture


I did not post it on Bruce's, or Reggie's, or any contributers article because I think that would be pointless.  Those articles are for them to shine, and they do; I need no credit, thus why I post on ZH, as my concern is for us, not me.  No disrespect to Tyler; this is an interview.  You did not need to log into ZH to watch this interview.  This is not Tyler telling us his mind.  I would not have posted on something like that.  Also, this is 15 paragraphs, so if you were stressed from scrolling down through it I would suggest anger management.

Bananamerican's picture

Junked for run on sentence, Anarchitect.

(god, i hate spelling police)

Clayton Bigsby's picture

Spellers of the world UNTIE!!!!

economicmorphine's picture

I agree, particularly with your last paragraph, but it isn't going to happen.  As Janjuah says, somebody's sitting with his finger on the $5TUSD QE trigger. I have absolutely zero doubt that he will pull the trigger.  

Mr Lennon Hendrix's picture

Plan A then.  We find out this month.

Green Leader's picture

There's a lot of information to think about here.

I would like to point out that a major global food crisis is being set up for this fall.

Stratospheric aerosol geoengineering (AKA chemtrails) is, IMO, playing a major part. Whether it's Plan A or Plan B the food crisis has been set in motion and is unstoppable. How will this play with players at the top that "don't know what they're doing"?

I consider myself pretty capable at highly organic farming techniques: compost making, raising worms (vermiculture) and other tricks of the trade. Chemtrails have wiped out my plantains & bananas; hens virtually stop laying eggs; pumpkins, beans & most tubers collapse. Most bees die, so do dogs. It sucks.

There's a lot of talk about gold here. As a natural resources major  and environmental activist, I say stock up on food, fertilizer and agricultural lime for at least two years. Get some Haifa 13-2-44 granular fertilizer and stash it.

DosZap's picture

I do not see Gold/Slvr dropping this time,( as in '08).

DoChenRollingBearing's picture

"those outside of LA and New York are hurting and want cuts in government spending, not more borrowing and spending.”

Yes, that's right.  Cut the spending stupid .gov.  Time for us to vote out the reckless & feckless politicians who will not lead.  Who are only destroying our country.

Yes, the bankers have committed great frauds.  But, it is WE who put these guys in Congress and Obama in the White House.  We have poxxed ourselves.

chet's picture

I agree with you, but I think it's dangerous to assume that all "those outside of LA and New York" diagnose the problem the same way, blame the same people, and want to prescribe the same medicine.

Those who think the Tea Party ideas are going to take over the nation will be disappointed.  There are many who will still be calling out for the government to save us all with whatever it takes.

economicmorphine's picture

Those of us out here in the middle all think the same way, even though in my little rural neighborhood in Texas I have neighbors from Mexico, Canada, Ireland, Wales, India and Germany.   I don't want to fuck with anyone's stereotype though.

chet's picture

"Those of us out here in the middle all think the same way"

No, they really don't.  The population of this country is more urban than rural at this point anyway.  Don't be disappointed when the revolution doesn't happen, that's all I'm saying.

Gordon_Gekko's picture

It is clear that that’s NOT what always happens. Sometimes Gold is positively correlated with USD, other times inversely, and sometimes not at all. What should be clear to everybody though is the fact that a rising Gold price ITSELF represents “the drop” in USD (if you mean the purchasing power i.e. – the DXY really means NOTHING if that is what you are measuring). Gold is not volatile, the value of the dollar in which it is denominated is. In fact, as this crisis deepens and capital accelerates its flow down Exter’s liquidity pyramid, I expect more and more occurrences of USD/DXY (since USD is still the reserve currency of the world) moving higher together with Gold.



It is only and only a bull market in real money i.e. Gold – the correlations with equities or USD – real or imagined - will keep changing, reversing or completely falling by the wayside according to whatever favors Gold at the moment as this bull fully expresses itself in due course of time.

Spitzer's picture

 somebody should invite Denninger to draw the inverted pyramid. I wonder what it would look like

LeBalance's picture

it would be Karl as Elvis unable to eliminate just as the King failed.

LeBalance's picture

Thanks GG.

I am going to print that like 100x and keep them in my car.

Miles Kendig's picture

Thanks for the Project Mayhem reminder Gordon...

FASB 666's picture

Dow 10,000 hats ???

Citizen of an IKEA World's picture

I'd swear I heard Art Cashin on CNBC this morning mentioning Dow 10,000 helmets.

Too funny.

The Rogue Trader's picture

Thanks Bob for the truth your back Bob...truth is dangerous to one's health it seems...