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Eric Sprott: A Busted Formula
- Bank of England
- BLS
- Budget Deficit
- Bureau of Labor Statistics
- Cash For Clunkers
- Central Banks
- Credit-Default Swaps
- Deficit Spending
- Eric Sprott
- European Central Bank
- European Union
- Federal Reserve
- Financial Management Service
- Germany
- Gross Domestic Product
- Naked Short Selling
- Neil Barofsky
- recovery
- Stimulus Spending
- Swiss National Bank
- Unemployment
- Unemployment Benefits
- White House
A Busted Formula, by Eric Sprott and David Franklin
There’s nothing wrong with throwing a little money at a problem to make it go away. There’s equally nothing wrong with throwing a little borrowed money at a problem to make it disappear, as long as you have the means to pay that borrowed money back.
But what happens if you throw a lot of borrowed money at a problem, and the problem doesn’t go away? If you’ve ever experienced a situation like that you can probably understand how Europe feels right now. It just unleashed a magnificent $1 trillion euro bailout and the market responded with a selloff by the end of the week! So what happened? That money was supposed to make the problem go away, after all. And it was a lot of money. Why did the market respond to it with such disdain?
We believe the market’s reaction is confirming what we have long suspected: that these bailouts provide next to no long-term value. They don’t produce real jobs. They don’t improve productivity. They just prolong the precarious leverage game played by the financial sector, and do so at tremendous cost to taxpayers. "Bailout and Stimulate" has been the rallying call for governments and central banks since the beginning of this financial crisis – and it has certainly had its impact over the last two years, but not the type of impact we need to propel real, sustainable growth. There are three recent, glaring examples of this busted "Bailout and Stimulate" formula in action:
Exhibit A: The United States
From the outset of this financial crisis, the US Government and Federal Reserve have spent prolific amounts of money to save its banks and stimulate its economy. According to Neil Barofsky, special investigator general for the Troubled Asset Relief Program, the United States has now spent approximately $3 trillion on various programs to stem the financial crisis.1 This figure is expected to be updated again in July.
This $3 trillion expenditure includes stimulus programs like ‘cash for clunkers’, the extension of unemployment benefits, infrastructure spending, the "Making Home Affordable" program, as well as the activities of the Federal Reserve. To measure what the fiscal stimulus has actually accomplished we looked to the US Federal budget outlays/receipts to gauge the impact of the stimulus on GDP.
Table A presents current dollar GDP increases year-over-year alongside current dollar budget deficits. Comparing the two in current dollars provides a sense of the hard dollar impact that stimulus spending has had on the economy. As the chart illustrates, the net impact of the stimulus contributions and promises made since 2008 have resulted in a combined budget deficit of close to $2.5 trillion dollars and an incremental net increase in GDP of $200 billion. A $200 billion return for a $2.5 trillion increase in debt represents a terrible return on investment. It implies that the net impact of the stimulus on GDP since 2008 has been a mere 9 cents for every deficit dollar spent. Buying dimes with dollars is bad business, government-funded or not.
Another troubling statistic relates to the cost of job creation for the American Recovery and Reinvestment Act (that’s the $787 billion program designed to produce real jobs in the United States). The White House estimates that it takes approximately $92,000 of government spending to create one job in the US. The White House justifies this exorbitant amount by stating that at the current employment level, each job in the US economy generates $105,000 in GDP, thus resulting in good "bang for the (taxpayer) buck".5 Spending $92,000 to generate $105,000 in GDP seems justifiable on the surface. But further digging reveals that the actual cost to save or create one job in the US was $117,933 per job from February to December 2009.6 That’s well over $92,000, and more than the $105,000 "return" each job is supposed to provide in GDP. If this metric is correct, it means the US government is actually suffering a negative return from its job stimulus.
To further convolute the issue, one must also consider that the supposed $105,000 GDP return for each new job doesn’t incorporate the fact that the $92,000 (or $117,933) spent to create it was BORROWED. Why does this aspect of government expenditure never make it into the analysis? Spending $92,000 for a $105,000 pop in GDP represents bad logic when that $92,000 isn’t yours to spend. If we incorporate the interest costs required to borrow the $92,000, are we really producing value or just digging a deeper hole?
Numerical discrepancies aside, the fact remains that GDP is a terrible metric to measure the return of a job program. GDP is technically the value of all finished goods and services produced in an economy. From a business perspective, GDP is akin to revenue, which isn’t an asset, and is different from ‘earnings’ or ‘profits’. Businesses don’t hire additional workers for their marginal increase to ‘revenue’ – they hire to increase their marginal ‘profit’. The White House approach to job stimulus will maximize spending, not profit. Rather than maximize spending, why not maximize actual employment by finding a way to produce a job for less than $92,000? Surely some of the fifteen million unemployed workers in the US would appreciate some help in that area.7
Exhibit B: The Latest Bailout Failure in Europe
In a show of force designed to impress the world markets, the European Union pieced together an unprecedented loan fund worth almost €1 trillion euros. The fund’s capital was made available to rescue euro zone countries in financial trouble. The European Central Bank announced it was ready to buy euro zone government and private bonds "to ensure depth and liquidity." The US Federal Reserve, the Bank of Canada, the Bank of England, the European Central Bank and the Swiss National Bank announced that temporary US dollar swap facilities would be opened to provide liquidity. Never have so many organizations coordinated and contributed so much to a single bailout effort!
So what was the ultimate effect of this shock and awe campaign? After enjoying a short-lived obligatory rally, the market for stocks, bonds, and the euro (in terms of USD) traded lower by the end of the week. Gold, a barometer of fear, appreciated almost 6% in euro terms over that same week.
Which brings us to the crux of the problem…
Exhibit C: Over-Levered Banks
Banks are at the epicenter of this financial crisis. The reason? Leverage. We outlined our measurement of bank leverage in our article Don’t bank on the Banks in November 2009. As equity investors we worry about the impact a change in assets will have on a banks’ tangible common equity. Readers will note that the German financial regulator recently banned naked credit-default swaps of euro-area government bonds and banned naked short selling in ten German banks and insurers. It shouldn’t surprise you to learn that, according to their most recent filings, German banks are some of the most levered in the world. Table B shows the leverage calculation for each of the four largest banking institutions in Germany as of March 2010.
Commerzbank has the highest leverage of the German banks at 124:1. This means that if their assets drop in value by a mere 0.8%, their tangible shareholders equity is effectively wiped out. How many asset classes do you think have dropped by 0.8% since Commerzbank’s last filing in March? We would guess almost all of them have (except gold of course). Hence the recent ban on naked short selling of German bank shares. They’re too vulnerable to handle the market’s wrath.
The German banks are not alone. Most large banks around the globe are operating with too much leverage. The governments can keep the "Bailout and Stimulate" game going, but it won’t amount to much in the long-term unless the leverage issue is wrung out of the banking system. Until that happens, bailing out the banks is akin to pouring money down a bottomless pit.
The key point to remember with bailouts and stimulus is that it’s ultimately your money that the government is spending – and your children’s money. The numbers strongly suggest that your money isn’t being spent wisely. We need real jobs and real growth, not bigger, more leveraged banks. The market isn’t oblivious – it can see what’s happening. Gold’s recent strength in lieu of seemingly ‘deflationary’ economic data confirms the market’s doubts over government intervention in the financial system.
Needless to say, we remain bearish.
1 Heflin, Jay (April 20, 2010). Government has spent $3 trillion (and counting) on financial crisis. The Hill. Retrieved on May 27, 2010 from:
http://thehill.com/blogs/on-the-money/banking-financial-institutions/93285-government-has-spent-3-trillion-and-counting-on-financial-crisis
2 We used current-dollar GDP numbers provided by the BEA to determine the marginal impact of deficit spending on GDP. There is no separate data set generated by the BEA, however the number is published in their news releases. It is also worth noting the divergence between reported numbers from the BEA. While the current dollar measurement of GDP decreased by $185.1 billion or 1.3% on 2009, real GDP was widely reported as increasing by 0.1%. This divergence is due to seasonality adjustments in real GDP and the percentage change reported is a blended increase over the 4 quarters in 2009.
3 Bureau of Economic Analysis (March 26, 2010) Gross Domestic Product: Fourth Quarter 2009 (Third Estimate) and Corporate Profits, 4th quarter 2009. Retrieved on May 25, 2010 from: http://www.bea.gov/newsreleases/national/gdp/2010/gdp4q09_3rd.htm.
4 Financial Management Service, A Bureau of the United States Departement of the Treasury. Monthly Receipts, Outlays, and Deficit or Surplus, Fiscal Years 1981-2010. Retireved on May 25, 2010 from: http://www.fms.treas.gov/mts/index.html. We adjusted the cash flows to a calendar year period to match GDP reporting.
5 Executive Office of the President Council of Economic Advisers. (May 2009) Estimates of Job Creation from the American Recovery and Reinvestment Act of 2009. Council of Economic Advisers. Retrieved on May 27, 2010 from: http://www.whitehouse.gov/administration/eop/cea/estimate-of-job-creatio...
6 McPheters, Lee (February 3, 2010) What Is the Cost per Stimulus Job? Knowledge @ W.P. Carey. Retrieved on May 27, 2009 from:
http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1857
7 Bureau of Labor Statistics, U.S. Department of Labor. (May 7, 2010) The Employment Situation-April 2010. Retrieved on May 27, 2010 from: http://www.bls.gov/news.release/pdf/empsit.pdf
8 Reported figures for each institution as of Q1 ended March 2010
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We were sold-out before we were even a country; the Articles of Confederation and the Continental used to finance the Revolutionary War had us in hock even as we debated the contents of our Constitution and is the primary reason that said document contains so much verbage as to what the Federal government can and can't do with respect to debts and coinage.
It lives on to this day in the Madison vs Hamilton debate about what Article 1 Section 8 really means.
IMO it started when Britian no longer wanted to fight a war with the America and developed other ways to conquer the new country. There were many American forefathers and wealthy that had close contacts to the elite, bankers, and diplomats in Europe.
Governments have actually socialized the gains and privatized the losses.
That is what socialism is all about. That is the message from The One. That is what the health care bill is all about. That is exactly what the tax system is determined to do when it allows some to pay nothing and requires others to pay 60% of their income.
For every bad loan there is a wanker borrower who either lied about his assets or ability to repay. The wanker got the money and enjoy spending it. That was the wanker's gain and this society is full of them. A large part of the population are lying dishonorable deadbeats with illegitimate children who would have someone else pay their way.
And who was the wanker that approved the wanker's loan without verifying anything? And who was the wanker who securitized 10,000 wanker loans? And which wanker pension fund bought CDS/CDO franken-wanker crap as a wanker retirement strategy?
I get that you're mad about the "welfare queen" phenomenon of unqualified homebuyers, but there is waaay more going on than that.
And what of the ordinary wanker who did the right thing, buying his house with 20% down, only to find himself at -20% (or more) equity now? God help him if he is suddenly in the pool with the 15 million (or more) wankers who don't have a job and can't keep up with the house payment?
Don't forget the wanker banks who tried to cover up the problems with the loans and doubled down with what profits there were in order to make it up later. And wanker politicians who gave the wanker bankers (I love that!) money to cover up their wanker bad bets.
Having said 'wanker' way too many times on a horny Friday, I must excuse myself to go have a shag ('cos wanking just won't do it).
And what about the dumbass politicians and voters that decided these wankers should be backed by the "full faith and credit" of the guberment (really the taxpayers)?
All this talk of wanking and shagging makes me wish my wife weren't 800 mile away. Knock that off, please.
OT
You need a back up plan.
"And who was the wanker that approved the wanker's loan without verifying anything? "
Loan officers, of course.
Initially they did this under duress only, thanks to enforcement of the racist Community Reinvestment Act (Congress passed it, Carter signed it, Clinton started the enforcement of it, with helps from lawsuits by wankers like...Obama, who sued banks for ACORN).
Later, the loan officers began to do this for profit, because a system had developed, with encouragement by Congress, using the government sponsored entities Fannie and Freddie, which removed the downside of making a bad loan, with implicit backing of the taxpayer. With the arrival of Barack and Timmay, and particularly since Christmas Eve last year, the taxpayer backstop for that is both explicit and infinite.
So the government, driven by lefties in Congress, used carrot and stick both to motivate the loan departments of banks to make mountains of these shitty loans. What happened to the loans further down the line, all the securitization and insurance contracts and what not that spread the risk worldwide, started with the bad loans. The bad loans being made out there contributed of course to the rapid increase of real estate pricing, and to the boom in building more real estate.
All that happened in the backdrop of the Fed's probably too low interest rates, granted, but imagine how things would have gone without the government intervention to both force and encourage loan departments to loan money to anybody for any real estate deal with almost no collateral. If the loan officer's hadn't been both forced to do this AND encouraged to do this, they would have stuck to their old school ways, and we would have had a more muted real estate bubble, fueled by significantly higher quality loans.
It's never too late to go back and learn about what Barney Frank, Chriss Dodd, the Black Caucus, the Democrats in Congress generally speaking, ACORN, and Clinton/Reno had to do with setting the stage for this. Its important to have a look at the argument, because those narcissistic idiot fucks are still in the saddle, screwing things up.
+1000
Is that you Glen Beck?
+1001
CountryWide wasn't subject to CRA compliance on any of their non-conforming loans from the secondary mort market of which there were VERY many in the subprime cesspool and many of the GSE loans were made outside areas that would help with CRA compliance.
Stop looking for rope and a scapegoat and try swallowing the fact that securitization and the bankers that enabled same with funds from dark liquid pools and a slutty Fed were the primary cause of this asset bubble.
One should note, however, that some of the greatest expansions in the mortgage industry occurred under Ronald Reagan (FHA expansion) and George W. Bush (nuff said).
You can pick on the lefties for a lot of things, but the righties have been particularly fond of abusing the power of the GSEs, FHA and HUD to consolidate political power.
>TBT or not TBT
Yup (Big time..)
There are VERY few people in this country who pay more than ~15% effective rate, even in the top 1%...stop pulling numbers like 60% out of your ass because you're angry about being foreclosed on or that you could buy the house across the street for half of your current mortgage amount.
And don't forget the 'wankers' that pissed away their equity with HELOCs because they 'felt' wealthy when their house was up.
Greenspan
Bubble, what bubble ?
Without cheap, ZERO interest rates, None of this would have happened.
Why should I get married when the Gov will pay my rent via Section 8 and my baby's daddy can live at the apartment on the sly?
Crab Cake, go easy on yourself. You have compassion burn-out and it's not rare. Sounds like an oxymoron, I know, but here's the deal as I see it: Those who rage against the system are really quite compassionate people. If you were a self-centered person you would be off on your own concentrating on your own endeavors. And there are plenty of those folks. Their ego-centric worlds do include family and close friends, but certainly not the hundreds/thousands of total strangers here on ZH for instance. When you can't do anything about the injustice, when you are helpless in the face of more powerful (and dastardly) forces, when you have to retreat to a sparse verbiage because the words are just not there any longer, then you have compassion burn-out. For one, I am grateful that you are here doing what you can. I also note that you tend to avoid partisan finger-pointing. I think it is because you realize that it is the same demon with different masks. Thanks for all the past comments you have made and the valiant efforts to slay the metaphorical dragon that is the present financial condition.
Thanks 'Coon. I mean it.
we are feeling you CC. Cheers friend.
Excellent, excellent comment Rocky. And Crab Cake, I second her gratitude. Maybe it's wishful thinking but this site reminds me of Assimov's Foundation. It's not just the information, it's my therapy to know that so many bright, diverse people are disgusted and worried as well. We may disagree on a number of subjects but this place is packed with integrity
Rocky
Well said
Crab Cake, relax, take a bong hit. Yes, I call it stress fatigue. You try to remain civil and all, but the reality bites. Don't kill yourself over it, we need people like you around after TSHTF
Harvard Prof Robert Barro's historical research shows that peacetime government expenditures yield only a small fraction of their amount in GDP, much less than discussed here.
Harvard my ass, I'm famous bitch.
http://www.youtube.com/watch?v=o5JV0Fs_GE8
500 internal server error. is that a new youtube video format.
I wonder why it tries to send code.
The government should have suspended individual income tax that would give more people incentive to work and if need be at lower wages. Borrow money to make up the difference. More people working, less unemployment and more consumer spending.
Let the TBTFs fail and when those people that worked for those organizations lose their jobs then we can support them on unemployment checks. See how they like it. If our financial system can't take the shock then maybe we should come up with a better system. IMO the system would bounce right back due to the consumer confidence and spending returning. Its about time in history when the banks pay for their many mistakes including the FED.
It's too late for any of that. Got any ideas for today?
The power is in our hands, people just don't realize it or they are too complacent. If we boycotted and protested enough there would be change.
If for example we boycotted certain banks they would be forced to change their policies. If we stopped paying taxes until our politicians started representing us, things would change. If there were massive protests for days or weeks things would change. The problem is uniting enough people that would sacrifice to make it happen.
rick, peeps can't even be inconvenienced enough to boycott BP, the most egregious corp of the bunch at the moment. rode by 3 stations yesterday, all packed with cars filling up. granted going without gas is a bit too radical for most and all the other oil corps are just as bad, but even a token refusal to give $ to those fucks would send a message.
i'm afraid that when the wake up call finally comes, it won't be coming from the people, and it's going to be a much more of a rather hard bitchslap to the head than a kiss on the cheek for most.
i'm with crabcake and going heavily short optimism.
I can relate to that sentiment as well. Just hate to give up.
"But what happens if you throw a lot of borrowed money at a problem, and the problem doesn’t go away?"
Too late, your married!
Keep paying until the kids are 18!
Jeez OT.
You got them out at 18 ???
It sucks now and it'll suck worse later.
Hoo haa!
" Let the TBTFs fail and when those people that worked for those organizations lose their jobs then we can support them on unemployment checks."
But who will lend the money into existence to pay those U.E. checks?
This is fantastic! He quotes Barofsky.
"Buying dimes with dollars is bad business"...unless they are silver dimes.
"shawk an AWe" is putting it beautifully!
Leverage IS the name of the game folks! Think about leverage, meditate on leverage, marinate concepts of leverage.
When the cash gets ashed out, what will the caterpillar put into his pipe?
Buy CAT! Check!
Cheers,
"what will the caterpillar put into his pipe?"
pure DMT (better to metamorph with)
Cheshire Cat
i like it†
are you a Gemini?
you know, split personalities, or duality,
can't make up your mind if your lennon or hendrix†
or Hills girls, now a cat.
can't remember the original one,
but it was yellow---->orange color.
well, you sure do play the color wheel, quite nicely.
ECRI weekly leading index falls to 39 week low.
Ford may drop Mercury brand, created during Great Depression by Edsel Ford.
Japan deflation rises for 14th consecutive month to 1.5% yoy. Unemployment rises to 5.1%
Tune in next week for the next big episode of "Deflation News".
Ah, my little chickadees, the good uncle wants your 401K and other retirement accounts. Looking after your best interests, I will put them in 'Guaranteed Retirement Accounts' (GRAs) which would provide protection from 'inflation and market risk' and potentially 'guarantee a specified real return above the rate of inflation.' This is because I have nothing but your best interest in mind - Best regards, Uncle Sam...
GDP is one of the slipperiest measures; however, GDP is not, and never has been, revenue. The latter is defined as:
- gross: the entire amount of income before any deductions are made
- tax income: government income due to taxation
- In business, revenue or revenues is income that a company receives from its normal business activities, usually from the sale of goods and ...
- The income returned by an investment; The total income received from a given source; All income generated for some political entity's treasury by taxation and other means; The total sales; turnover; The net revenue, net sales
- Income from taxes, fees, fines, federal grants and other sources.
- The money that a company brings in before subtracting costs to calculate profit. Also known as sales or gross income.
GDP:
gross domestic product: the measure of an economy adopted by the United States in 1991; the total market values of goods and services produced by ...wordnetweb.princeton.edu/perl/webwn
en.wikipedia.org/wiki/Revenue
en.wiktionary.org/wiki/revenue
www.njleg.state.nj.us/legislativepub/glossary.asp
www.cnn.com/2009/LIVING/studentnews/03/15/financial.glossary/index.html
wordnetweb.princeton.edu/perl/webwn
Note the date, and the source, which is the one used typically in this country. Other countries have many other definitions, as do interest groups.
We borrow 1.4 trillion this year, mostly from China, so we can pay 107 billion (so far) in UE to the people who have lost their jobs in the global wage arbitrage, otherwise known as the race to the bottom, with China and Mexico. Meanwhile, a huge pile goes to government employees yet to see a mass layoff or a days hard work, but watch the best porn. Then there are the banks sucking up the rest but not before paying several tens of billions in bonuses to several hundred sociopaths running a fed back stopped casino... Oh, and it being an election year, the lobbyists tithe to their puppets in DC. One fucked system. Bury the banksters and the trade ties with china before it's too late.
We borrow mostly from US Citizens. That is why we cannot (easily) default on the debt.
Don't forget all that money spent blowing stuff/people up all across the globe.
God dammit, I can't read any of your comments without Operation:Mindcrime playing in my head.
The pain of knowing...
Rusty, you are right. Forgetting the billions wasted fighting wars to establish our empire (more Queensryche) in the middle east should nit have been forgotten this Memorial day weekend.
Mind Crime and Empire are very clever efforts for such a young group of guys. If the debt curves hadn't gone parabolic, boom/bust cycles more frequent and China was out of the picture the banksters probably could have kept going for generations. As it stands now, they are enjoying the last flurry of greed and excess before the great collapse of 2012, which CNBS will blame on the Aztecs...
Who do you trust when everyones a crook... Revolution calling you...
Imagine how much we could save by NOT borrowing from China, employing people to make crap for Wal-Mart here, not shipping over the Pacific burning oil to do so, taxing Wal-Mart, taxing the people now working at Wal-Mart, taxing any bonus over a million at the banksters, taxing the capital gains from their prop desk like it was 1950, firing the entire SEC/CFTC/OCC/OTS, and merging the Fed with American Idol in a new TV show where contestants vie for low-interest loans with America democratically choosing the lucky 'winners' to get taxpayer funding for their small business enterprises.
Snowball
You've got the start of a great plan. Now we need to storm the Main Stream Media Outlets and get the Message out....
*sociopaths*... close
http://www.youtube.com/watch?v=0Sz1EhPSRgo
Nikki
Nailed It.
Thank you.
$92,000, huh?
sheesh, i can create a job for them at $51,343, tops.
make cheque payable in pulas*, please.
*The pula is the currency of Botswana. It has the ISO 4217 code BWP and is subdivided into "100 thebe. Pula literally means "rain" in Setswana, becauserain is very scarce in Botswana - home to much of the Kalahari Desert - and therefore valuable. Pula also means "blessing" as rain is considered a blessing. Thebe means "shield"."
from qwiki.
Source of the ghetto vernacular, "Make it rain!"?
it very ironic: rain is snow's worst enemy.
The trillion euros that have been created and given to the banks are being used to prop up the banks' Commercial Real Estate portfolios.
These developments sprawled all over the world and financed by the banks are non- performing loans. They aren't going to let the commercial r.e. interests do to them what the residential market did or at least they are buying a few years time so that the principals can take out enough money to live happily ever after once the properties are marked to zero.
sprott = genius
Eric Sprott: "Gold is a barometer of fear"
Really? I'm looking at a coin right in front of me. Its not doing much...in fact its not doing anything at all. It is an inanimate object.
OK, Captain Sarcasm.
"not the type of impact we need to propel real, sustainable growth"
There is no such thing as real, sustainable growth. This premise violates the laws of thermodynamics, which nothing thus far discovered in our universe can do.
Therefore it changes the whole nature of the game.
The game is not about consuming sustainably but consuming as much as possible before the turning point, to accumulate enough to live on.
To carry out such a plan, debt is instrumental. The deeper you can go into debt, the better it is.
Many people from this site are going to be bailed out of their poor decisions by their group. They are going to live the life not because of their decisions but because they are US citizens. The same decisions made in some other places of the world would lead them to death.
The big bang is disproving your thought.
Interesting EURO chart :
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
THIS IS A "SAVERS BAILOUT"....
The quiet economic debacle is that those who have done things right and acted prudently....and have actually saved money for their own futures are getting wiped out by US Government policies...
That's right....the 75 year old retired mill worker who saved $100,000....receives no interest for their savings ...solely because of government policy...
Ask the Japanese how the story played out...
This is what is happening in the US....
And after this is wiped out....there truly is nothing but paper left....
However remember this...
Everything is relative....
To some degree everyone rises and falls with the tide.
And it does not matter if one uses gold, sea shells, beads , barter, printed paper, electronic digits, or cups of flour for means of transferring wealth...means of commerce is relative.
Which leads to the next conclusion.....although the means of commerce changes...it is inelastic demand that serves as the glue for commerce...and it will happen....
every think is relative
gold will always be a store of value . paper can be zero
Zambian inflation ,
Good Morning ZHer's
As published before, this is all socially engineered using the same playbook.
http://www.youtube.com/watch?v=AMY3aJwhfqg
Europe is quite aware of its failure ahead. Spinning a good charter of success will only be diluted to the apparent failures in the system.
Socially engineered problems are the vehicles to control and change.
Again, reporting their well spelled out program to fail, and control.
http://www.youtube.com/watch?v=bmH-i8JDKPw
SDR's will become the new monopoly money system. Cap & Trade bill and carbon credits are walking down the aisle of matrimony.
"Again, reporting their well spelled out program to fail, and control."
Question is, did the twin towers of banking, Prudence and Integrity, collapse due to controlled demolition? ;>)
Fail
http://jessescrossroadscafe.blogspot.com/2010/05/remember.html
Boy, this thread is all over the place. I thought the topic was Europe.
Eric, the bailouts were not intended to "make the problem go away". The market knew that within seconds. They were an admission that the problems were going to get worse. They were intended to make that process less painful for a small group of people.
Just give me your wallet so I can syphon your wallet.
Please provide your Bank info & rounting number. Hope you can cash in on all the points you have. LOL
Ni Hao (A Gold Farmers Story)
http://www.youtube.com/watch?v=0dkkf5NEIo0
Your a dumb fuck.
This year's Bilderberg conference is taking place just outside Barcelona (interesting choice) from June 3rd to June 6th - http://cryptome.org/0001/bilderberg-2010.htm
For some strange reason, there seems to be a lot more Greeks in attendance this year than there has been during previous years. Is there something currently happening in Greece? I wish I could be a fly on the wall.
"Fuck you Buddy" is the next poker hand in play
Game Theory 101: The Prisoner's Dilemma
http://www.youtube.com/watch?v=IotsMu1J8fA
What is Game Theory?
http://www.youtube.com/watch?v=0GUdYeQzp3U
Another 'No Bell' prize winner explaining how his works are forming global goverance.
Interview with 1994 Laureate in Economics John Nash
http://www.youtube.com/watch?v=olPnTrLSYn4
Don't forget
Father of modern advertising Edward Bernays http://www.youtube.com/watch?v=0KLnaQhC73oEdward Bernays on letterman http://www.youtube.com/watch?v=i6hH3roMe4w
The ability to extract equity at a infinite rate will cause all savings to become neglible, all IRA's and retirement funds to become stolen and massive counterfeiting will be rampent.
So just fap fap fap till the weekend.
http://www.fapturbo.com/
http://www.youtube.com/watch?v=eBAhan8ZNGI
It's not a question of the markets crashing. They will close because it will be the only way to stop the stealing.
It will be done under austerity measures.
Just read an article where Dubai is back in trouble again, and they automatically assume a federal bailout if one of their options. This bailout of entire nations crap that Bernanke has opened the door for, is getting out of hand. Entire nations are now lining up for bailouts and expecting to get them.
A bill needs to be introduced in the Congress to cease and desist any further bailout programs for anyone, country or business, before this plague becomes destruction. Bernanke and Geithner must be reigned in, before we end up as taxpayers paying for every lifestyle across the globe. Don't we have enough problems here at home, than worrying about other nations?
Link?
I don't get it. How can you say the return is $200 billion if you don't know what GDP would have been without $2.5 trillion in spending? He seems to assume GDP would have been unchanged. Possible brain fart on my part - someone please give me a sanity check.
Biggvs
I agree that the baseline could have been significantly lower, however, there is little bang for the buck.
Long term debt for short term consumption is a catastrophe.
Our fearless leaders are tripping over dollars to pick up nickels.
Updated DOW charts :
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
As of Friday, the real return on 5yr gov'ts was -103bp..that is one reason why gold was up IMO, and still bullish.
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