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On The Descent Into A Weimar Reality

Tyler Durden's picture


Thanks to our very own printing-historian hybrid, Ben Bernanke, all people who wish to understand the direction in which the economy is headed are now experts on the Great Depression. Yet more and more pundits claim that the true historical analog to our current tumultuous times are not the days after 1929, but the period between 1919 and 1923 in post WW I Germany, also known as th Weimar Republic. Attached is a summary presentation on the three critical pathways that shaped Germany in the interregnum, and set it off on a course to the Second World War. These three avenues were i)the infamous hyperinflation and associated meltdown, which even now is causing so much consternation for German politicians dealing with a suddenly printer-happy ECB, ii) the French invasion of the Ruhr, and iii) and the failed Munich Beerhall Putsch. As many see QE as a precursor to i) above, and ii) is currently playing out in various parts of the world to a lesser or greater extent, the question remains when will some disgruntled citizen rise out of the disenfranchised masses and replicate the so far missing iii). With recent developments within the tea party movement, and with the administration's plunging popularity rating, it is not a far stretch to see all three core Weimar "factors" replicated in our own back yard with a 90 year delay.



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Tue, 06/01/2010 - 19:19 | 388141 Alcoholic Nativ...
Alcoholic Native American's picture

The government cheese must flow, come on now, been living on a military base my whole life, thought yall knew this.

Tue, 06/01/2010 - 19:22 | 388146 Quinvarius
Quinvarius's picture

Rather simplistic.  If you want some fine detail...

A link to charts is at the bottom.

Tue, 06/01/2010 - 22:43 | 388518 Yardfarmer
Yardfarmer's picture

Thousands of Austrians have been reduced during the last days to beggary. All who were not clever enough to hoard the forbidden stable currencies or gold have, without exception, suffered losses. An old married couple with whom I have been friendly for years had a holding of government stock amounting to 2 million pre-war kronen which brought them in interest 80,000 pre-war kronen a year [more than £3,200]. They were rich people. Today their stock brings them in 8 new schillings a year. Panic has seized the Stock Exchange. My millions have dwindled to about a thousand new schillings. We belong to the new poor.

Wed, 06/02/2010 - 06:36 | 388959 Bendromeda Strain
Bendromeda Strain's picture

Bookmark it Danno


Tue, 06/01/2010 - 19:24 | 388151 Pat Hand
Pat Hand's picture

"It is not a far stretch..."

whew.  yes, in fact, it is.   Each of the three is a significant stretch.  It doesn't look like any of them are present.

I am willing to wager large sums (and in fact, am wagering such) that "Weimar" is not remotely the right analogy.

Tue, 06/01/2010 - 21:19 | 388361 whacked
whacked's picture


Tue, 06/01/2010 - 19:25 | 388152 APC
APC's picture

LOL.  Lets get through the debt deflation first, shall we?

Tue, 06/01/2010 - 19:30 | 388162 APC
APC's picture

Sorry, a little simplistic.  Inflation is not the major threat here.  And I say threat.  We're not really threatened, but are actually in, a deflation.  Mild as it may seem now, its going to get brutal before long.  IT HAS TO.


We'll see what the politicos can pull out their asses after that, but we do have to go through a deflationary period before ANYTHING else can occur.  Hyperinflation?  Perhaps.  Maybe even war.  But DEFLATION first.  Keep that in mind when you're thinking bout bying gold.  May be best to wait on that decision.

Tue, 06/01/2010 - 19:37 | 388174 tmosley
tmosley's picture

We already had deflation in gold.  Remember the big drop down to $700?  That's probably not going to happen again.

Tue, 06/01/2010 - 19:49 | 388193 Spitzer
Spitzer's picture

Gold was up $25 on the day of the flash crash.


Tue, 06/01/2010 - 20:07 | 388234 timhinchliff
timhinchliff's picture

Your thinking of gold as an inflation hedge which it isn't strictly. Its THE safe haven. It is difficult to get more of it. It will maintain some sort of value integrity regardless of what happens. If we descend into deflationary or inflationary chaos someone, somewhere will take your gold either way.

I would be very reluctant to make that comment about any of the fiat currencies.

Tue, 06/01/2010 - 21:24 | 388371 Pat Hand
Pat Hand's picture

Yes.  Gold is not an investment, but it's a good store of wealth.  I.e. it's money.

Tue, 06/01/2010 - 21:43 | 388406 Kimo
Kimo's picture

Unfortunately, ZIRP has morphed Gold's store-of-wealth into a store-of-leverage nightmare. Margin call anyone?

Wed, 06/02/2010 - 00:07 | 388675 Al Huxley
Al Huxley's picture

Gold is simply a static store of wealth, primarily due to its unique characteristics that make it a good form of money - as in a proxy/alternative to bartering for actual goods.  Its done this for thousands of years for a reason.  Deflation or inflation is irrelevant with respect to gold - look at its peformance in previous deflationary periods.

Wed, 06/02/2010 - 00:03 | 388671 Al Huxley
Al Huxley's picture

Hyperinflation is the currency crisis that follows credit deflation.  Without the hyperinflation phase, those who got out of debt and accumulated USD would be disproportionately rewarded simply for hoarding a worthless currency.  The BIG picture is about rebalancing, transferring wealth from the rentiers to the producers.  This is not new, has happened repeatedly over the last 1000 years.

Wed, 06/02/2010 - 00:10 | 388681 Al Huxley
Al Huxley's picture

And by the way, if you don't get it, you don't get it.  That's fine.  You'll figure it out in the fairly near term, one way or the other, based on the way things are going.  I've never understood the implicit altruistic impulse of goldbugs who try to convince others that 'gold is money'.  If what they say is true (and I believe it is), they don't need to convince anybody, just wait for the inevitable to assert itself.  Why try so hard to 'save' the non-believers?

Wed, 06/02/2010 - 02:56 | 388850 Hdawg
Hdawg's picture


Wed, 06/02/2010 - 22:41 | 390987 Mesquite
Mesquite's picture


Wed, 06/02/2010 - 04:10 | 388889 AnAnonymous
AnAnonymous's picture

So your final analysis is: rentiers will get done and producers will be winners?


Wed, 06/02/2010 - 08:57 | 389074 Ted Smoothie
Ted Smoothie's picture

Under normal market forces, you're right about deflation. Inflationary bubble followed by deflationary recession. But the Gov't/Fed, besides creating huge moral hazard, are pumping trillions of dollars, in classic Keynesian fashion,  into the economy in the forms of bailouts, stimuluses, cash for clunkers, home buyer's tax credit, quantitative easing, and near 0% rate at the discount window, in order to bypass the deflationary period.  So whatever deflation has happened by this point (real estate and autos are the only examples i can think of) is about it.  Inflation is coming, and it will hit us like a ton of bricks. Holders of only paper (cash, stocks, bonds, ETFs, etc.) are going to get crushed, IMO.

Tue, 06/01/2010 - 21:59 | 388434 Kimo
Kimo's picture


Deflation is not finished until "extend and pretend" has become "realize and weep". Then take your cash and buy gold if you wish.

Look for inflation when you are rushing out to buy a house again.

Look for hyperinflation when it is easy to job jump to keep up with the Jones.

Tue, 06/01/2010 - 19:29 | 388160 Mitchman
Mitchman's picture

The tea partiers have more in common cause with the posters on ZH than with anyone around:  a) they hate the government as it is being run for the benefit of the elites; b) they hate the MSM; c) they distrust almost any government program instituted for "the good of the people"; and d) they have this notion that people should actually work for a living. 

Tue, 06/01/2010 - 19:50 | 388196 Fred123
Fred123's picture

Typical leftist comment. Ignorance is a common trait of your breed eh?

Tue, 06/01/2010 - 23:15 | 388584 Al Gorerhythm
Al Gorerhythm's picture

That's supposed to be leftist? You must sit to the far right of Jefferson at the dinner table I guess.

Wed, 06/02/2010 - 01:57 | 388803 Fred123
Fred123's picture

The comment I had replied to has been removed.

Tue, 06/01/2010 - 20:09 | 388236 Mitchman
Mitchman's picture

You may be right.  Unfortunately, that is what the great unwashed of America are all about regardless of political stripe.  You have likely seen the various youtube videos where people get asked a simple question (name a country that starts with the letter "u") and can't answer (one answer was "Europe").  The votes of all these very same morons count every bit as much as yours or mine-whether they belong to the Tea Party or not. I don't see many people walking the streets these days claiming superior inteligence for having voted for Obama.  

Tue, 06/01/2010 - 20:52 | 388305 SWRichmond
SWRichmond's picture

APC said: "Oh, and by and large, they're morons too."

Mitchman said: "You may be right.  Unfortunately, that is what the great unwashed of America are all about regardless of political stripe."

You know what?  47% of Americans didn't pay any income taxes last year.  That's not us; we work, and actually support ourselves.  You can call us morons or the great unwashed if that makes you feel superior, but let's be clear: I understand exactly what you mean, and I'll remember it.  I'm really fucking tired of attitudes like yours.  Really, unimaginably tired of it.

Wed, 06/02/2010 - 00:37 | 388717 terrible
terrible's picture

Medically, this is known as moron-fatigue.  

That is, a minor form of fatigue caused by discussion with morons that support tax increases and a more powerful system of wealth redistribution.



Wed, 06/02/2010 - 01:36 | 388788 APC
APC's picture

Hey, you remember it!  Lol.


Vote Sarah!

Wed, 06/02/2010 - 15:04 | 390097 SWRichmond
SWRichmond's picture

Forty-six percent (46%) of U.S. voters say the Tea Party movement is good for the country, according to a new Rasmussen Reports national telephone survey. Thirty-one percent (31%) disagree and say it’s bad for the country. Another 13% say it’s neither.

But just 16% of voters say they are actually members of the so-called Tea Party, a loose knit group of Americans nationwide protesting big government and high taxes. This is down eight points from a month ago  and but little changed from two months ago.  The spike in identification with the Tea Party followed passage of the health care law. Most voters continue to favor repeal of that law.

The Tea Party is definitely not a Political Class phenomenon, though.  Not a single Political Class respondent in the survey said they’re a member of the Tea Party, but five percent (5%) confessed that they have close friends or relatives who are.

Sixty-one percent (61%) of the Political Class say the Tea Party is bad for America. Two-thirds (66%) of Mainstream Americans see it as a good thing for the country. However, it’s important to note that only a little more than half of all Mainstream voters consider themselves to be part of the Tea Party movement.

But the Tea Party movement defies easy description. Rasmussen Reports surveying, however, provides some glimpses into the movement, including the overwhelming beliefs among its members that the federal government is a special interest group and that government and big business work together in ways that hurt consumers and investors.

So, which part of this do you disagree with?

Tue, 06/01/2010 - 23:58 | 388665 Oracle of Kypseli
Oracle of Kypseli's picture

It may be true that good old boys in the South still think that Modigliani and Botticceli are just fancy pizza toppings, but when the government starts messing arround with high taxes and their guns, they have the guts to take their country back.

What are you gonna do about it?

Wed, 06/02/2010 - 22:47 | 390996 Mesquite
Mesquite's picture

> Mitchman #388236

Ha Ha Haa

Tue, 06/01/2010 - 20:10 | 388240 Teaser
Teaser's picture



'Nuff said

Tue, 06/01/2010 - 19:34 | 388171 RottingDollar
RottingDollar's picture

I'll add your version of a Tea Partier to the 100 other different versions.  

2012 will prove interesting as all the splintered groups try to find a common voice.   Both parties in trouble. 




Tue, 06/01/2010 - 20:05 | 388232 Mitchman
Mitchman's picture

As we saw in financial "reform", both parties deserve to be in trouble.

Tue, 06/01/2010 - 20:49 | 388298 Crisismode
Crisismode's picture

I would like to see how much the TeaPartiers would like to get rid of all those government programs that take care of thier elderly parents and relative.


Yes, let us get rid of Social Security.


Yes, let us get rid of Medicare.


And now, let us foist your elderly relatives back on you to care for in their remaining days.

You will have to provide the funds that the evil government used to provide through SS and MC.


Are you up to it?

Tue, 06/01/2010 - 20:59 | 388323 tmosley
tmosley's picture

I already do it for mine.  With no support from any government programs.

The "government" didn't provide shit.  They take money from workers to pay retirees.  Without having to pay those taxes, most people would come out ahead.  In any case, Ron Paul and his cardre aren't for simply repealing those programs.  They would fund them by dismantling the military empire until the program could be dismantled without screwing over anyone who was relying on SS.

Tue, 06/01/2010 - 21:55 | 388425 Dantzler
Dantzler's picture

Why should I support SS when I'll never see a dime back (I'm under 40) ?

Cut me a check for everything I've paid into it and let's call it even.

Wed, 06/02/2010 - 00:25 | 388697 DoChenRollingBearing
DoChenRollingBearing's picture

I'll never see any SS either, and I'm 54.

Not enough years working for "somebody else".

Tue, 06/01/2010 - 22:01 | 388440 masterinchancery
masterinchancery's picture

I am already caring for them, with some help from SS which they paid for while working.  As to the future of Medicare, etc, it doesn't have one in the long run, regardless of your wishful thinking, absent maximum money printing by Banana Ben. 

Tue, 06/01/2010 - 22:43 | 388519 Tapeworm
Tapeworm's picture

My mother-in-law consumes more per year than I make as an an owner of a business that has a capitalization of more than 120k per employee.

 I am 59 and will likely get nothing from your SS, even after paying the max for two decades. The "tea" factions are for the most part writing off your junk, but want to be left alone in exchange. Your type finds it expedient and satisfying to force the plebeians to pony up to maintain your life choices.

 Your most caustic vitriol is directed at those of us that refuse to play your games of servitude. Leave the exit borders open so that we will no longer sully your paradise on earth.

Tue, 06/01/2010 - 23:18 | 388588 Al Gorerhythm
Al Gorerhythm's picture

As it should be. No middleman waste.

Wed, 06/02/2010 - 00:05 | 388673 fearsomepirate
fearsomepirate's picture

I already provide the funds that the government provides through SS and MC.  It's called "FICA taxes."

Wed, 06/02/2010 - 11:04 | 388740 terrible
terrible's picture

Hahaha, when your "evil government" defaults, social security or medicare checks will bounce.  

Both sets of my grandparents support aggressive cuts to the ponzi schemes out of love for their family.  

Wed, 06/02/2010 - 07:47 | 388997 UGrev
UGrev's picture

OMG taking care of you parents? GOD FORBID you should ever want to care for the people who raised you. 

I'm all for getting rid of SS and Medicrutch. It will be a struggle for everyone who hasn't saved enough, but it will usher in new generations that understand that there is no free ride anymore.

Tue, 06/01/2010 - 20:53 | 388309 Zina
Zina's picture

"they hate the government as it is being run for the benefit of the elites"

In fact, tea partiers have no problem with the elites. The same people who now are tea partiers have never said nothing against the elites between 1950 and 2007. That time, the elites were OK for them...

Tue, 06/01/2010 - 21:03 | 388327 tmosley
tmosley's picture

Amazing that you can speak for 1/3rd of all Americans, and tell them exactly what they have been doing for the last 60 years.

FYI, I, and many others have been fighting the expansion of government for years.  We finally managed to plant a seed that has taken root, and is spreading throughout America.  This movement is the result of a LOT of hard work.

Tue, 06/01/2010 - 21:10 | 388345 Zina
Zina's picture

Where you were when Bush started a war on Iraq that has consumed trillions in taxpayer money?

Specifically, where you were on February, 15, 2003?

I doubt you were there:

Wed, 06/02/2010 - 00:00 | 388668 Chupacabra
Chupacabra's picture

Zina, many Americans have been fighting US government expansion and the "welfare/warfare state" since the late 1950s and early 1960s, and ever since.  We've just been so wealthy as a country (living off the backs of those who came before us), and had so much accumulated capital and goodwill, that the "bleeding hearts" and big government types have managed to prevail incrementally.  Many of us complained vociferously to our representatives along the way (including the Patriotic Act), and were not fooled by Bush's rhetoric.  Believe me, many of us have been here for a long time, it's just now that the proverbial shit is hitting the fan that peopel are starting to listen.  Americans are by and large good, hardworking, generous people.  We've been co-opted by our government and banksters.  We're trying, man!  :]

Where are you from, Brazil?

Wed, 06/02/2010 - 01:00 | 388756 Imperial Distrust
Imperial Distrust's picture

Bravo to Chupacabra, come to Texas we need more like minded individuals

Wed, 06/02/2010 - 02:20 | 388822 Chupacabra
Chupacabra's picture

I probably should.  You can imagine how intellectually/philosophically lonely I get out here in . . . California.  Hey, but at least the weather is great.

If you all declare independence, I'm in.  Maybe I'll go to Austin and serve as liason to the hippies there (plus I can catch some UT games).



Wed, 06/02/2010 - 04:12 | 388892 AnAnonymous
AnAnonymous's picture

Fact remains: the tea party movement only materialized under this administration.

After that, you can add the spin you want. Adding spinning is what US citizens do the best. World leaders both in time and space.

Wed, 06/02/2010 - 04:59 | 388919 akak
akak's picture

Actually, you are wrong.

The REAL Tea Party movement crystallized around Ron Paul's campaign for the presidency in late 2007, more than a YEAR before Obama came to office, and was well established and noticed by even the corporate-controlled media by the spring of 2008.

Don't fall for the shallow and divisive partisan rhetoric from the blinkered hacks in the lamestream media .

Wed, 06/02/2010 - 09:18 | 389119 AnAnonymous
AnAnonymous's picture

What shallow and divisive partisan rhetoric? I side with no one.

Helps to keep eyes open, Spinoza's way.


Whatsoever, the division of power is not shallow and it is real.

People saying that left and right are confusing one thing with another: facts that right and left are claimants to power and the reality of power.

What does this gibberish mean? That the division is not reductible.

People saying that the left is same as the right should always add "at least, for me"

What people actually say is that they are out of the power game, that no matter the result, they are on the loser's side.

People must admit that the left being the same as the right would mean for a guy like McCain that no matter who wins the election, the outcome will taste the same for him.

Of course, it is not. McCain's party losing the election means that he is not in power. A big difference. And you can expand the deal for this core. McCain's family, McCain's close friends... down to some  McCain's supporters.

A lot of electors/voters are still in a position of being bribed, of receiving substantial advantages against their participation to the elective system. That is why people vote: to receive advantages over the others. In the US, slavery did not come to an end through a popular vote.

People telling that the left/right is the same simply expresses the fact that the claimants are no longer in need of bribing them for winning an election, that no matter the result, this category of voters wont receive nothing in exchange.

Reversely, another category exists: the category that is on the winner's side, no matter the winner and will receive bribery for their support (members of this category often play both sides)

This category includes big economic agents like corporations, wealthy individuals etc...


Tea bag members are  people trying to mean again in the political game. They want to be desired again, they want to be bribed again. The guys becoming very active under a black president is not a coincidence. With a black president at their heads, they feel the end of the entitlement named racism. They want to push an end to that.

Wed, 06/02/2010 - 00:11 | 388685 fearsomepirate
fearsomepirate's picture

IIRC, all these people who supposedly didn't care about Bush's deficits threw the Republicans out of office in 2006, voting in Democrats who campaigned on promising to instititute a "new era of fiscal responsibility" with "paygo" rules.  Then in 2008, those same voters who supposedly didn't care about Bush's deficits voted in a smooth-talking youngish fellow who insisted that what he was proposing was a "net spending cut."  Of course, what we *got* was TARP, bailouts, and trillion-dollar deficits.

All those voters who supposedly didn't care about Bush's crony capitalism threw out the Republicans in 2006, voting in Democrats who promised a to end "Washington's culture of corruption," who proclaimed themselves the "most ethical Congress in history."  Then in 2008, those same voters voted for a bright young fellow who promised to veto pork-laden bills and close the door of his administration to lobbyists.  Of course, what we got was Charlie Rangel, Chris Dodd, and a revolving door between the WH and the grandpappy squid.

All the Democrats had to do to be wildly popular right now was keep their promises and do what they were elected to do.  Some politician should try not lying through his teeth for a change and see how that works out.

Wed, 06/02/2010 - 01:53 | 388800 bigkahuna
bigkahuna's picture

Bush started TARP. Democriminals or Republicons, two factions of the same party. You either get it or you never will at this point.

Wed, 06/02/2010 - 02:21 | 388823 Chupacabra
Chupacabra's picture


Wed, 06/02/2010 - 08:03 | 389014 UGrev
UGrev's picture

Bush is a "very bad man" and I think the Pat Acts should be burned, but he only "signed" the first TARP. Did you see the look on his face (  when he signed it? It was almost like "Yeah, they really like me.. wtf am I signing?". Liberal congress pushed it... and oh, guess who else supported it? One Barack Hussein Obama. TARP was most definitely a creation of the liberals in congress. Bush was too stupid to "get it". But the one man I really thank for this? Mr. Billay Clinton... bring back Glass-Steagall!

Wed, 06/02/2010 - 09:14 | 389102 fearsomepirate
fearsomepirate's picture

Congress has the power of the purse.  Despite both Clinton and Bush's expansion of the executive branch, the President still doesn't have the power to appropriate money.

The point is that the answer to, "You didn't care when Bush did X" is, "Yes, we did.  That's why we voted for the Democrats in '06 and '08, who loudly and belligerently condemned Bush for doing X, and promised that once in power, they would do the exact opposite."  I guess we're the rubes for believing their lies, and should have realized that all along, they were going to take everything we hated about Bush and multiply it.

Wed, 06/02/2010 - 09:24 | 389125 AnAnonymous
AnAnonymous's picture

Come on. The Bush voters did not vote en masse for Obama. They lost the POTUS  election despite their vote.

My pure irrational belief is that without the limit of terms, Bush would still be a president.

McCain was big on war at a time when the economic crisis kicked in. He never managed to catch up on the economy.

I would have prefer him as a US president as the US would already be at war with Iran. Would have told about the US.

Still, Obama as a president is not bad. He promised change and cant deliver. An evidence that the US cant be changed. That they are on a one track way and should be judged for their actions only, no longer for their supposed intentions.


Tue, 06/01/2010 - 22:02 | 388441 masterinchancery
masterinchancery's picture

+1000 Exactly.

Tue, 06/01/2010 - 21:39 | 388400 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

I am confident that your one junk is from someone who does not like to work.

I could be wrong, but I do not know a single person on Earth who trusts ABC, CBS, NBC, CNN, MSNBC, or FOX news.

Only Michelle and Barry like the government. Without the "gov" neither has any reason to exist. The children could live with those who made them instead of our leftist stepford first family.

Wed, 06/02/2010 - 09:25 | 389132 Inspector Asset
Inspector Asset's picture

If the Tea Party is run by anyone less than Ron Paul, consider the party hijacked. 

Sarah Palin to lead the Tea Party, consider the movement hijacked.

In the end, the party will run into the same problems that Ross Perot did.


Tue, 06/01/2010 - 19:31 | 388163 Cheeky Bastard
Cheeky Bastard's picture

Mefo bills bitches !!!1111 

Also, since it is the 21st Century a normal Mefo bill will not suffice. We need to collateralize the bitch and sell it to CalPers. Then CalPers needs to hire GS as an "advisor" and slice said Mefo CDO and sell the lower tranches to the suckers in Europe in a Moody rubber-stamped AAA CDO2. It can perform credit enhancement on said CDO2 by forcing Puerto Rico to guarantee it. HA HA HA HA HA HA HA HA HA HHHAHAHAHAH

Come on Ben, you pussy, do it. I dare you. Do it. Hell; it can be done via AIG or C or whatever entity's float is majority owned by the US government. Its really really easy.

Tue, 06/01/2010 - 19:35 | 388173 Monkey Craig
Monkey Craig's picture

CB - Great analogy. When I heard last summer that California was issuing scrip to contractors, I immediately thought of Hjalmar Schacht.


My impression of our situation: high inflation in paper terms, deflation in gold terms.



Tue, 06/01/2010 - 19:47 | 388187 Cheeky Bastard
Cheeky Bastard's picture

Yes, ditto. But I'm not sure whether or not a Kalifornistanian IOU can be converted into $s since MEFOs were RM convertible. Also, I, personally, consider what Schacht did with the MEFOs to be one of the greatest economic moves in History. The man single handedly put Germany back into the spotlight. Basically, no Schacht no WWII.

*i do not approve of his actions or the consequences those actions brought onto the World. I am just expressing my admiration to the shear brilliance of Schacht.

Tue, 06/01/2010 - 19:51 | 388199 DirtySouth
DirtySouth's picture

Dietrich Eckart

Tue, 06/01/2010 - 19:58 | 388215 Cheeky Bastard
Cheeky Bastard's picture

Ah, yes, Maya.

DirthySouth; once again you prove your brilliance.

+1000000 Sir.

Tue, 06/01/2010 - 22:57 | 388549 Yardfarmer
Yardfarmer's picture

"Follow Hitler! He will dance, but it is I who have called the tune!

I have initiated him into the "Secret Doctrine", opened his centres in vision and given him the means to communicate with the Powers.

Do not mourn for me: I shall have influenced history more than any other German"


Thus spake Dietrich Eckart as he lay dying from the effects of mustard gas in Munich in December 1923...few guessed that behind the jovial facade of this veteran Army Officer

was hidden a dedicated satanist, the supreme adept of the arts and rituals of Black Magic and the central figure in a powerful and widespread circle of occultists- the Thule Group.

Wed, 06/02/2010 - 01:59 | 388807 bigkahuna
bigkahuna's picture

More people need to understand stuff like this. It is very real and very serious.

Tue, 06/01/2010 - 22:36 | 388503 Snidley Whipsnae
Snidley Whipsnae's picture

'Basically, no Schacht no WWII.'

+1000. 'Rise and Fall of the Third Reich' spotlights the brillance of Schacht.

The day that Germany launched Barbarosa, the invasion of Russia, Russian trains carrying Russian commodities bought on credit by Schacht were still running on schedule, headed east into Germany through raging battlefields.

Stalin went into seclusion for several days, unable to believe that Hitler had attacked Russia. When Stalin saw a group of Russian bureaucrats knocking on his door, he thought they were there to kill him.

You can't make this shit up... 

Tue, 06/01/2010 - 23:05 | 388566 Cheeky Bastard
Cheeky Bastard's picture

Thats probably the best material out there on Hitlers Germany. A beautiful book, read it more than i should have.

Tue, 06/01/2010 - 23:38 | 388622 John Self
John Self's picture

If by "into seclusion for several days," you mean "on an epic bender for the next two weeks," then yes.

Tue, 06/01/2010 - 23:37 | 388620 KevinB
KevinB's picture

I am just expressing my admiration to the shear brilliance of Schacht.

Was it "shear" brilliance because everyone who bought the bills got a haircut?

Tue, 06/01/2010 - 23:56 | 388656 Cheeky Bastard
Cheeky Bastard's picture

Ok, sorry sorry, wrong word.


is you inner grammar Nazi satisfied now.

Tue, 06/01/2010 - 19:38 | 388177 Strider
Strider's picture

Cheeky , Very very clever, you sir could have have been a talent on the dark side but you chose to work in the light or are you a double agent?

 Or as Curley of the 3 stooges would say "Wise guy eh?"

Tue, 06/01/2010 - 20:03 | 388223 Cheeky Bastard
Cheeky Bastard's picture

"Dis guy, eh. Dis fucking guy"

Kidding aside; I was just joking a bit, but its not an impossibility in the long term. As pressure mounts over the rating of the US debt, various mechanism will need to be employed to take some of that pressure off.

This, or something similar to this, could be one of those mechanism. Other countries probably have something similar to the above already in place, but its all hush hush and no one talks about it.

Tue, 06/01/2010 - 20:21 | 388255 Duuude
Duuude's picture


Wed, 06/02/2010 - 08:02 | 389013 Hephasteus
Hephasteus's picture

Stop helping you douche bag. :P

Tue, 06/01/2010 - 19:32 | 388168 Wernerempire
Wernerempire's picture

Goldman as Ruhr Occupation analogy? Hold true for Greece, n'est pas?  ;-)

Tue, 06/01/2010 - 19:37 | 388175 Atomizer
Atomizer's picture

Bernanke: Why are we still listening to this guy?

Chairman Bernanke on the Record

Patted Ben on the head. Just handed a steak bone to him from my dinner table scrapes. He just bolted to the corner near his water bowl.

Tue, 06/01/2010 - 20:17 | 388249 Mitchman
Mitchman's picture

Great Bernanke video on the housing bubble. Thank you. Scary to think that idiot's hands are on the controls.

Tue, 06/01/2010 - 19:46 | 388184 Alcoholic Nativ...
Alcoholic Native American's picture

Get your socialist hands off my recovery!!!! wait you mean to tell me Gov Cheeze is the only thing that is spurring this thing? Oh shit.

Tue, 06/01/2010 - 19:47 | 388186 Atomizer
Atomizer's picture

Oh NO. Ben just began coughing up his bone. Fortunately, I was able to grab a late issue of TIME magazine to catch his soiled mess. That was close.

Tue, 06/01/2010 - 19:48 | 388190 DirtySouth
DirtySouth's picture

I see no hint of inflation.. how people even have the idea of hyper inflation is beyond me.

Tue, 06/01/2010 - 19:55 | 388206 Spitzer
Spitzer's picture

Ben Bernanke doesn't want deflation. That is hyperinflationary.

He will always have interest rates below the rate of inflation because if he doesn't then there will be deflation. A 5% interest rate with inflation at 6% is a negative interest rate.

Wed, 06/02/2010 - 11:09 | 389363 terrible
terrible's picture

Velocity equals Benny's algebra divided by Timmy's throttle.

Tue, 06/01/2010 - 20:10 | 388238 crzyhun
crzyhun's picture

Depends on where and how granualar you 1LB of organic rice used to be 1$ now it is 1.49; 1LB of organic oat meal/rolled oats was .89C today 1.39$. All this happened over the last 5 years. Sure computers are cheaper and the like, but the real numbers=food and energy all higher. And soon to be even higher.....

Tue, 06/01/2010 - 23:00 | 388556 Augustus
Augustus's picture

The suppliers just came to realize what nutty prices the teacuppers would pay for nonsense.  If it makes a teacupper feel ten times superior to eat food with a different label, charge them at least three times as much.

Tue, 06/01/2010 - 22:41 | 388515 Burnbright
Burnbright's picture

I would like to remind everyone here that you do not need an increase in the money supply to create inflation or hyperinflation. All you need is a decrease in the supply of goods and services, like say 20%+ unemployement, 70% of GDP based on consumption etc.

All it would take is all the exporting countries to stop exporting to us, it would be game over within a week of that.

Wed, 06/02/2010 - 00:41 | 388719 Ragnar D
Ragnar D's picture

I think you have that backwards.  Low demand, high unemployment, low consumption means lower prices.


Production will react and fall, but it will be lagging demand so we're talking about deflation.  When they stop making a million ipads because nobody can afford them, that's not a price-increasing shortage, that's a surplus they can't sell for $800 apiece.


Of course, in a credit collapse where people finally quit maxing out credit cards and stretching themselves to the limit just to make minimum payments, ipads and such will suffer, but they still eat and drive to work.  The big question is what the prices of necessities will do.

Wed, 06/02/2010 - 07:49 | 388998 dumpster
dumpster's picture

because its a currency event as in lock step the folks discard the dollar..and lose faith in the government . .

the chickens come home to roost .

inflation now  9% more than a hint  williams shadow statistics

probably many things are way beyoud you ..and i quess the fact every where you look prices are going up.. food , services, medical, utilities , a whole host of underlaying products metals , fabrication, take off the shades of living in a dream ,, .  

Tue, 06/01/2010 - 19:49 | 388191 Alcoholic Nativ...
Alcoholic Native American's picture

Yo the dishonest bitches on government contracts being paid to speak out against government spending should be shot.  Not kidding.

Tue, 06/01/2010 - 22:04 | 388444 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Good things come to those who wait.

Catalyst, catalyst, catalyst.

Tue, 06/01/2010 - 19:49 | 388192 lawton
lawton's picture

We will be like America in the 30's more likely. As long as banks arent lending which they wont be for quite a few years you will not get hyperinflation.

Tue, 06/01/2010 - 19:57 | 388213 Spitzer
Spitzer's picture

was there a lending boom in Iceland recently ? Is that why Mcdonalds left the country ?

Tue, 06/01/2010 - 19:50 | 388195 aurum
aurum's picture

what is this crap? i made better presentations in 8th grade...TD very disappointing.

Tue, 06/01/2010 - 19:55 | 388208 Crab Cake
Crab Cake's picture

Alright, you opened the door. 

Let's see it.  I want to see your 8th grade report, right now please.

Thanks.  STFU.

Tue, 06/01/2010 - 20:11 | 388243 aurum
aurum's picture

if i had a copy of the video i would. made it to state finals for the national history day project.. i swear on my grandfathers you take my word or not.....i call a spade a spade and this "report" is dogshit considering the wealth of knowledge and insight TD and zerohedge in general provide on consisten day to day basis...if you believe otherwise then your an idiot. plain and simple. on second thought, you have already demonstrated that..

Tue, 06/01/2010 - 20:27 | 388261 Crab Cake
Crab Cake's picture

If I had it... I swear on my grandfather's grave.... You can take my word....


I have your goat over here in my backyard, let me know when you want him back.  I'll trade it for your superduper 8th grade report. 

I never said this was the best presentation ever on ZH, I just want to see your efforts.  You seem quick to criticize, and when asked for something better, which you said you had, you.... lost it, or the dog ate it, or whatever.  Right.  Maybe you should help produce content, if you are as good as you say you are, instead of throwing vegtables from the stands?

Tue, 06/01/2010 - 20:32 | 388276 Crab Cake
Crab Cake's picture

Oh look, I contributed...

The Weimar Republic and the Third Reich: Timeline

Tue, 06/01/2010 - 20:38 | 388285 aurum
aurum's picture

i never claimed it was readily available.? i dont care if you believe me or point is not about an 8th grade report you fuckhead. the point is this weimar report is lackluster at best. perhaps thats why you see the rating of 3 . ...and i didnt vote on it..maybe you should not throw vegetables at things you dont know about. you know nothing about me...your rhetoric speaks volumes of your character...and for the record, at the moment, i personally do not have time to produce content.

Tue, 06/01/2010 - 23:15 | 388583 Tapeworm
Tapeworm's picture

..........weimar report is lackluster at best.

It is poor at most. The bullet points have little connection to what really happened.

 Try this for a better overview. It needs editing to make it conform to the original book that I have, but it is a not-so-long read on the great German inflation that isn't how it it playing out in this world today. It might proceed into the described situation soon enough, but not now at all. has Adam Fergusson's "When Money Dies" on free PDF. I'll sell you a first edition for USD500 if you are interested.

 That book is as good as anything out there for readability and historical accuracy. Far less expensive and better in explaining the intertwining of German debt and the losses incurred from same by US creditors (widows and orphans for real) is Garet Garrett's "The Bubble That Broke the World".

 Other than the historical account at that time it is valuable for getting a glimpse of the audience that it was aimed at. The thin book is a compilation of essays written for "The Saturday Evening Post", the largest circulation magazine of that time. Does that tell you all that you need to know on the complete crash of the intellect of the slightly above average reader of 1932 and 2010?

 What floors me nowadays is that we are ruled by a government class that hasn't a third of the intellectual capacity to wade through essays that were written for a mass circulation magazine of that era.

 Free link to the book

Wed, 06/02/2010 - 07:52 | 389003 dumpster
dumpster's picture

and "fuck head "in yur remark shows class? ... go swallow a pint of wine , and eat your crumpets and tea

Tue, 06/01/2010 - 19:55 | 388207 Alcoholic Nativ...
Alcoholic Native American's picture

The teaparty types are too retarded to figure out they have been infiltrated by the stat quo.  Not too much hope for them, but I suggest they tune into FOX news to get the unbiased fair and balanced shit though.  Fuckers make me sick.

Tue, 06/01/2010 - 21:05 | 388331 Nikki
Nikki's picture

Please tell me why this post was junked. I too am convinced that the tea party has been infiltrated with Republicans and AIPAC zionists. With Sarah Palin as keynote speaker at events, you cannot accuse them of being deep philosophical thinkers, can you ?.

Tue, 06/01/2010 - 22:11 | 388461 koaj
koaj's picture

not all tea parties endorse palin. in fact most dont.  most dont like romney either

most are simple people who are sick of government wasting their money and leaving nothing for their kids and grandkids. they dont know a ton about constitutionality, the federal reserve, the rotschilds and the like

they just dont trust their government anymore. for me it took a long time to open my eyes, others the same. i have taken the red pill though and for the rest of my life, i know my kids will have an increasing debt load to the banksters and leeches because i didnt do anything. many have felt the same way for a while and now we are active

Tue, 06/01/2010 - 22:48 | 388530 Nikki
Nikki's picture

I think the pill is working for you. You get it.

Wed, 06/02/2010 - 00:54 | 388744 ColonelCooper
ColonelCooper's picture

I belonged to a group which was a spin-off of our tea party.  In the beginning there were good intelligent conversations amongst truly concerned people who were really starting to get it. 

The problem is, it morphed into the biggest bunch of stupid fucks I've ever met.  (This coming from a gun toting, tattooed, HD riding, 4x4 driving, construction working coonass).  At first I tried really hard not to be priggish.  I thought that regardless of how uninformed these people might be, they were against the snowballing role of government, and for empowering people at a local level and returning our Federal government to a constitutional role. 

Eventually it turned into a anti-left, Obama bashing at any cost, (regardless of how much credibility it destroyed) bunch of dumbasses; thoroughly earning the monniker, "Teabaggers".  Intelligent debade fled, replaced by "Birther" e-mails and utterly embarassing blog posts.  Any attempt I made to clean things up, verify facts, suggest some restraint in public postings was met with accusations of censorship or excessive control.

I had a fair amount invested into this group early on, both in time and money.  I was pretty bummed out, but I walked away from it.  It is people like these, a minority but vocal, that the MSM searches out to demonstrate as the common denominator.  Too bad. 

Wed, 06/02/2010 - 01:00 | 388755 ColonelCooper
ColonelCooper's picture

Oh, BTW: Palin is a perfectly good mother of sixty three kids who probably did fine as a small town mayor.  Beyond that, she is out of her element.  I guarantee you that if she looked like Angela Merkel, her political career would have ended at Wasilla School Board.  I have nothing against her specifically, just don't understand the draw.  There are a million people of average intelligence who want a smaller government.  Most just don't end up being jerk off material for half of America along the way.

Romney is a fucking douchebag. I wouldn't piss on him if his hair was on fire.

Wed, 06/02/2010 - 04:20 | 388898 AnAnonymous
AnAnonymous's picture

I dont understand your story.

Did you start the group as a one member group, you, only to see it stolen from you by the man you depicted? I mean how large your group was...

If this guy had such an influence in a country like the US where people are much less pressured by daily life than in many other places in the world, that may be because this guy reflects more what your former group expects than you reflects.

Therefore, I am not sure about that minority stuff.

The other members could have backed you up in your cautiousness or even exclude that rowdy member by themselves without you intervening to bring them on the 'right' path.

Imo, the guy revealed more about this group real way of thinking than you did.

Wed, 06/02/2010 - 07:00 | 388973 Screwball
Screwball's picture

Not sure where you are located, but I had the very same experience in the Midwest.

What I thought were good intentions and a good business plan to make a difference, turned into a liberal/democrat/Obama/Pelosi/Reid hatefest.  The birth certificate took more time at meetings than anything productive, and whatever Glenn Beck's rant of the day was became the latest target.

When I resisted the Glenn Beck crap and refused to rally while carrying a swasticka sign I was thrown out.

Too many just didn't get it.  They were mad, had every right to be, but if your going to go fight, at least have the facts on your side.  They ended up looking like fools and people laughed at them.  Too bad really.

Tue, 06/01/2010 - 23:41 | 388632 John Self
John Self's picture

"... infiltrated with Republicans..."

Maybe you'd better take this information to Woodward and Bernstein, Nikki.  This is some heavy shit.

Wed, 06/02/2010 - 00:20 | 388695 fearsomepirate
fearsomepirate's picture

You've got to understand tea partiers are just average people.  The tea parties represent a great seething mass of distrust and anger, the kind that happens when a big red "$1.6 trillion" appears in the news, and everything stops making sense.

They're the same people that, a few years ago, trusted the government to provide them with money and medicine in their old age.  Forgive them for not having a coherent philosophy.

Tue, 06/01/2010 - 22:56 | 388547 Augustus
Augustus's picture

What made you mad?

One of them tell you to get a job and support those children?  Or did they chide you for not honoring your mortgage debt?

Wed, 06/02/2010 - 00:23 | 388684 jdrose1985
jdrose1985's picture

Or did they chide you for not honoring your mortgage debt?

I live debt free thankfully, but I can say that this attitude among the tea party is why I don't endorse them.

Fight fire with fire, not by "honoring" your mortgage debt while your house burns down around you (in value). Tea partiers are most likely the "responsible" ones who have the most to lose because they sold themselves into debt peonage so they could surround themselves with things which ...come to find out...weren't worth what they paid. And the pain is about to get much, much worse.

Edit: tea partiers are incapable of getting what they wish for without tearing the whole house of cards down to the ground. Those people sure are nice but the only way they will accomplish what they wish is to dismantle the system which means most Americans will be blind-sided by the effects of reality crashing down upon them.

This ain't gonna be pretty.


Wed, 06/02/2010 - 01:05 | 388760 Ragnar D
Ragnar D's picture

Let me get this straight:

Continuing to forfeit half our earnings to pretend to fund bankrupt pyramid schemes and vote-buying dependency programs as we bleed a trillion plus every year to eternity and government grabs every remaining aspect of our lives will NOT "blind-side" us by "the effects of reality crashing down"...

But suggesting that the control freaks and central planners get off our backs, stop robbing the ones pulling the cart to reward the ones riding in it, and leave us the hell alone to try to earn a living without trying to run our lives, THAT is the extreme, chaotic route?

Surely we've reached 1984.

Wed, 06/02/2010 - 21:45 | 390898 jdrose1985
jdrose1985's picture

leave us the hell alone to try to earn a living without trying to run our lives

The living we earn could be significantly less than we are comfortable with. Are you ready to deal with that?

I do not endorse the current system and will be able to get by without it. Those who do not own the things they surround themselves with...not so much.


Tue, 06/01/2010 - 19:55 | 388210 Cheeky Bastard
Cheeky Bastard's picture

Munich Beerhall Putsch was not relevant at all in 1923. Not at all. History gave it some significance due to the participants and the subsequent developments. Then it was considered nothing more than one among 10000 similar attempts to disrupt political structure. And, FYI, Vienna and the rest of former Austro-Hungary was far more volatile than Bavaria or Germany. The Ruins of the Last Continental Empire did not want to just sink into the deep sea of history and disappear. Look what happened post January 1st 1919 in the former Austro-Hungarian Empire.

Tue, 06/01/2010 - 20:29 | 388274 Comrade de Chaos
Comrade de Chaos's picture

ever read?


(I bet you did)

His books are amazing description of life in Germany post WWI as well as description on the impact of high inflation on your daily life.


There was a moment where he described the high suicide numbers among mid & upper class senior citizens. They would use their lifesavings to make a nice dinner, turn on gas and slip away into the great beyond. 

Tue, 06/01/2010 - 20:39 | 388287 Caviar Emptor
Caviar Emptor's picture

Exactly. The Kapp Putsch in 1920 was a successful attempt by far right-wing ultra-nationalists to overthrow the Weimar government. They in turn were overthrown. The Nationalist movement simply morphed into Hitler's National Socialist Party of which Germany's former supreme commander Erich von Ludendorff was the most prominent member.

Tue, 06/01/2010 - 22:49 | 388533 Snidley Whipsnae
Snidley Whipsnae's picture

What was significant about it was Hitler being jailed and writing Mein Kamph while in the crossbar hotel, gaining a growing martyr status all the while. After Hitler's rise to power he rewrote history to lionize those that had perticipated in the Putsch and even ordered yearly reencatments of the event, with much hoopla and fanfare...and consumption of vast quantities of good beer...

Tue, 06/01/2010 - 23:27 | 388600 Tapeworm
Tapeworm's picture

Yes, what you mention at 18:55 is far more relevant than this fluff powerpoint junk. Bela Kun (Cohen) was far more important to that time than Herr Hitler's rantings. The anti-jewish oriental fervor that developed didn't exactly come from some innate Germanic fault as we were taught in the US schools of the 1960-present. There really was such a monstrously murderous wave that swept Europe post WW1.

Tue, 06/01/2010 - 20:16 | 388214 Bob
Bob's picture

What a wonderful tradition, particular historical references nothwithstanding:

Imagine people getting together at the brewery and having at it regarding the collective and very public political life of their society. 

Under the influence. 

Somehow I can't see American Democracy ever leading to a society like that.  Disinhibition does not seem to be the standard. 

Time for another brewski. 

Tue, 06/01/2010 - 19:59 | 388217 Atomizer
Atomizer's picture

Who created the Middle East shit storm by shaking the hornets nest?

Department of Public Information • News and Media Division • New York

PRESS CONFERENCE on world financial crisis conference
Tue, 06/01/2010 - 20:00 | 388218 tao400
tao400's picture

When it happens, it will be very, very quick. Only a fool would not have some physical  gold just in case. Who cares what the value of the gold ends up being and whether it is needed or not. Worst case, you pass it on to your kid. In my case that is a daughter. Just before I die, if it looks like her husband is itching to get his hands on the inheritance, I will take him down so that my daughter's kids have a chance of getting it.

Tue, 06/01/2010 - 20:04 | 388229 Mako
Mako's picture

No, a fool would be one that can't harvest his own food. 

Tue, 06/01/2010 - 20:20 | 388253 Bob
Bob's picture

Or find peace with his fellow man.  And woman. 

Tue, 06/01/2010 - 20:54 | 388311 Uncle Remus
Uncle Remus's picture

There is that. And make his own electricity. But I can't help but think that some bullion, a small selection of firearms and associated ammo and cooperative efforts with ones neighbors in addition to food production capability can't be a bad thing.

Renaissance Man redefined for a resource constrained time.

Tue, 06/01/2010 - 21:06 | 388335 Crisismode
Crisismode's picture

Amen Brother!

More truth than possible to believe.

You MUST become food self-sufficient; Gold alone is not enough.



Wed, 06/02/2010 - 07:57 | 389006 dumpster
dumpster's picture

some will till the soil , others will fund the work ..

both are needed .. the farmer will take gold as payment he needs seed , equipment , and clothes .

called division of labor .. the foot can not say it has no need of the leg.

Tue, 06/01/2010 - 20:06 | 388224 Mako
Mako's picture

There is no out!

I love all these guys that come out of the wood work looking for an out, unless you have unlimited power the system will peak, collapse and liquidate. 

There is nothing the Fed can do, there is nothing the government can do, crying about it on a blog is not going to do anything.   The only thing you can do is pass on the true reason why this occurred, or you are doomed to repeat after the liquidation process.

Tue, 06/01/2010 - 20:25 | 388262 Duuude
Duuude's picture



What is your plan?

Wed, 06/02/2010 - 04:33 | 388904 AnAnonymous
AnAnonymous's picture

What is your plan to escape death?


You dont need an alternative plan to assess a situation. If a guy has terminal cancer, he can ask as much as he wants what the physician's plan, wont change the fact he has terminal cancer.

Tue, 06/01/2010 - 21:05 | 388332 Spitzer
Spitzer's picture

There is no out of you have no gold. You are so Denninger.

I can lend out my gold at interest.

Tue, 06/01/2010 - 21:46 | 388408 akak
akak's picture

"There is no out if you have no gold. You are so Denninger."

That's pure gold!

Or, in Denninger's case, pure depressionary fiat.

+1000 bannings either way.

Tue, 06/01/2010 - 23:36 | 388614 jdrose1985
jdrose1985's picture

Your gold is not going to save you if there is nothing to buy with it. However, I will have food items for sale when you get hungry enough.

There are many other ways to "profit" such as being able to help others around you, first of all.


Wed, 06/02/2010 - 05:08 | 388923 akak
akak's picture

How do you know I don't have just as much food as you do already, or even more?

In any case, you presume that the world is going to enter the roaming cannibalistic zombie stage, which I do not, and even if it did, any gold I might have would still be useful in carrying my savings through the bad times and into the recovery afterward.  THAT is the true value of gold ---- not as a barter good in some hypothetical and highly unlikely Mad Max world, but as a tool to safely transfer personal wealth through a financial and monetary crisis.

Wed, 06/02/2010 - 09:56 | 389197 jdrose1985
jdrose1985's picture

We are running out of cheap energy solutions which is the elephant in the room. Let's not forget that a 5% decline in the supply of oil caused prices to rise by 400% back in the 70's. The peak is likely behind us. The only hope we have now is for demand to be destroyed during the liquidation phase, which it will. But just because oil is headed back for $40, or $30, or god forbid $20 or $10, doesn't mean it will be cheap. When you look at the sheer magnitude of the role oil plays in the things we take for granted, you begin to see what things will look like when it's no longer affordable to do ANY of the things we do now. Economies will be forced to become extremely localized at best, and local economies will become cannabalistic at worst. The planet has resources to sustain 2 billion people tops without oil. Understand that oil will not just "run out" all at once but we have to find and consume more oil than we've ever consumed in all of history just to make it through the next decade FLAT. All the kings horses and all the kings men won't be able to put global growth back together again. Not until an unthinkable number of lives disappear from the face of the planet, unfortunately. Hopefully I'm not one of the ones who goes before my time and I'm taking every precaution I can to give myself, my family and those around me the greatest chance of making it to the other side where some type of renewable energy source infrastructure is put together to resume growth.

We have quite possibly arrived in a permanent recession. I'm not against owning gold, I prefer silver and I prefer to own them at prices much lower than today. The mechanisms for hyperinflation are not present today but I am watching closely for signs that we could be headed in this direction.

Mad Max was based on a scenario where oil was not abundant. 

Keep in mind that cheap oil enabled us to grow our way out of the last deflationary depression. We no longer have that option.

Wed, 06/02/2010 - 10:00 | 389214 jdrose1985
jdrose1985's picture

We are running out of cheap energy solutions which is the elephant in the room. Let's not forget that a 5% decline in the supply of oil caused prices to rise by 400% back in the 70's. The peak is likely behind us. The only hope we have now is for demand to be destroyed during the liquidation phase, which it will. But just because oil is headed back for $40, or $30, or god forbid $20 or $10, doesn't mean it will be cheap. When you look at the sheer magnitude of the role oil plays in the things we take for granted, you begin to see what things will look like when it's no longer affordable to do ANY of the things we do now. Economies will be forced to become extremely localized at best, and local economies will become cannabalistic at worst. The planet has resources to sustain 2 billion people tops without oil. Understand that oil will not just "run out" all at once but small decreases in supply without decreases in demand will kill growth in it's tracks. All the kings horses and all the kings men won't be able to put global growth back together again. Not until an unthinkable number of lives disappear from the face of the planet, unfortunately. Hopefully I'm not one of the ones who goes before my time and I'm taking every precaution I can to give myself, my family and those around me the greatest chance of making it to the other side where some type of renewable energy source infrastructure is put together to resume growth.

We have quite possibly arrived in a permanent recession. I'm not against owning gold, I prefer silver and I prefer to own them at prices much lower than today. The mechanisms for hyperinflation are not present today but I am watching closely for signs that we could be headed in this direction.

Mad Max was based on a scenario where oil was not abundant. 

Keep in mind that cheap oil enabled us to grow our way out of the last deflationary depression. We no longer have that option.

Wed, 06/02/2010 - 07:59 | 389009 dumpster
dumpster's picture

i need to take a denninger .. fart

Tue, 06/01/2010 - 23:42 | 388633 jdrose1985
jdrose1985's picture

I can lend out my gold at interest.


You're my first creditor

I ain't payin, ' the fuck you gonna do now, slick?


Wed, 06/02/2010 - 00:27 | 388701 Calculated_Risk
Calculated_Risk's picture

It's called "collateral".

Wed, 06/02/2010 - 09:43 | 389164 jdrose1985
jdrose1985's picture

Of course, collateral. How ignorant of me. I guess I missed the part where government will no longer exist to confiscate your gold when times get tough.

Wed, 06/02/2010 - 08:01 | 389012 dumpster
dumpster's picture

bypass you and see the other ten million in need

Tue, 06/01/2010 - 20:04 | 388227 Atomizer
Atomizer's picture

Latin America managed global crisis well

Tue, 06/01/2010 - 20:10 | 388242 ozziindaus
ozziindaus's picture

Yeh I don't even see hints of hyper inflation at all (hate even using that misused word). Who does the US owe reparation to? BTW, my interpretation of Weimar was more conspiratorial on behalf of GB and France. They saw Germany's industrial rise at the turn of the century too great to bare. Without the US's involvement in WW1, in which they were duped into, then Germany would have had GB licking their balls. 

Some say China will demand debt repayment. That was not the deal. US issues T bills/bonds, China happily bought. No backs. Same goes to Japan, UK and the rest.
Others say the government will "print" their asses off. No, the bond market will fix that. 

Again I just don't see it happening.

Tue, 06/01/2010 - 20:50 | 388303 Brett in Manhattan
Brett in Manhattan's picture


As I've said in other threads on this subject, the signature image of the Weimar is of a guy bringing a wheelbarrow full of cash to the market. In the USA, circa 2010, that same guys brings a credit card to Dunkin' Donuts.

Of course, some may argue that hyperinflation will happen in a blink of an eye. So, if that's the case, both the stock market and real estate bubbles will reinflate following the biggest busts ever. Is that realistic?

As far as Ben's printing, all he's done is make the banks whole vis a vis the lost value of their real estate holdings.

None of the Benny bucks have made their way to the general population.

Tue, 06/01/2010 - 21:13 | 388351 ozziindaus
ozziindaus's picture

Exactly and that's where the securitization comes in. Not thin air. Besides the liquidity injections were parked in UST's earning safe yields to bolster the balance sheets. They are not in your neighbors hands and must be returned via reverse repos.

When we start seeing misallocation of capital into non productive/performing ventures such as bridges to dead end roads by the FR, then I'll start panicking. Until then, I believe the FR insists on every dime having some sort of US backing which is not inflationary in terms of free money. 

Wed, 06/02/2010 - 01:52 | 388799 Tapeworm
Tapeworm's picture

You might want to consider that the after tax profits of all productive sectors, that being manufacturing, agriculture and mining came to 112 billion in 2008. The amount shoveled to a single bank, C, is several times what the real economy produced beyond it's costs.

 Even though C and all other TBTF have not used their trillions, they still have that as an overhang on the real economy. I do acknowledge that the TBTF have little interest in the productive economy, yet their stuffed balance sheets could be used to buy up the vestiges of the real economy.

 When the deflation gets boring for them and their force fed three trillion or more cannot get exciting returns they will use that notional money to outbid the paltry amounts that have been saved over decades by the private economy. Of course they will never be able to run the asset that they bought with FED fluff, but they will take the real economy out and destroy their parasitic meal ticket.

 I am not at all fond of the maggots that have been stuffed with FED notional munney. If C has a trillion in real assets as they claim they should be making 30 billion on the interest spread. They cannot even gather a tenth of that. Therefore they are hideously busted without the continuous feed from the taxcow that they gleefully undermine.

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