This page has been archived and commenting is disabled.

Everything Is Now Correlated Exclusively To The Fed's Balance Sheet

Tyler Durden's picture




 

The chart which we presented a few weeks ago courtesy of Sean Corrigan sees a few additional components added to it. Whereas before the chart focused on the Adjusted Austrian money supply and commodity prices, it now sees the addition of the S&P and Junk spreads. In a word: every single asset class correlates 1:1 with the Fed's balance sheet. If the Fed is really planning on ending QE2 on June 30, the market collapse will be epic. And, yes, this should not come as a surprise to anyone.

Courtesy of Sean Corrigan of Diapason.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 03/04/2011 - 17:50 | 1020511 akak
akak's picture

Between MethMan's piles of silver to be had for the taking, and Jon Nadler's mountains of scrap gold just littering the landscape for literally years now, I'm starting to wonder how I ever manage to drive into town without hitting any of it!

Fri, 03/04/2011 - 16:10 | 1019997 6 String
6 String's picture

Does anyone know how I can get permission to use this chart?

Fri, 03/04/2011 - 17:38 | 1020451 Al Gorerhythm
Al Gorerhythm's picture

You have my permission to use this chart. 

Sat, 03/05/2011 - 05:47 | 1021673 Rodent Freikorps
Rodent Freikorps's picture

heh.

Sat, 03/05/2011 - 11:21 | 1021839 New_Meat
New_Meat's picture

Ask DP-he's got the plaigiarism thing down to a science. - Ned

Fri, 03/04/2011 - 16:30 | 1020027 Pure Evil
Pure Evil's picture

Not to worry, when Uncle Benster stops blowing dollars out of his ass.

He'll hold the market up with bags of Obama's hopium by filling the bags with gas he blows out his ass; their lighter than air, yet more noxious than a burrito fart.

Fri, 03/04/2011 - 16:19 | 1020035 mberry8870
mberry8870's picture

So you're not going with the "commodities as asset class" argument?

Fri, 03/04/2011 - 16:20 | 1020041 bgilliam83
bgilliam83's picture

It makes perfect sense with the double speak going on that word would leak out they are ending QE.  Yeah right, hearing that makes me think now is finally time time to baton down the hatchets if you havent already.  What this means is QE is about to exponentially increase.

Fri, 03/04/2011 - 16:23 | 1020054 papaswamp
papaswamp's picture

Anyone know why silver went vertical?

Fri, 03/04/2011 - 16:25 | 1020064 lieutenantjohnchard
lieutenantjohnchard's picture

my hunch is shorts don't wanna be short over the weekend. monday might be a doozy.

Fri, 03/04/2011 - 16:42 | 1020130 MrBoompi
MrBoompi's picture

The question is what stopped the climb? Especially since demand is through the roof? Did BM sell that silver dildo that was stuck up her ass?

Fri, 03/04/2011 - 17:40 | 1020457 Al Gorerhythm
Al Gorerhythm's picture

No, Meth Boy advised the Comex on where to pick up the piles of silver he stacked on the side of the road for them.

Fri, 03/04/2011 - 18:08 | 1020560 akak
akak's picture

Yeah, I hear that people are constantly chucking them out of their car and pickup windows because, you know, you can't eat them.  Useless rocks, every one.

Why, I just drove by a man on the freeway today who pitched a big 'ol COMEX silver bar out into the median while cursing "Earn no interest or dividend for ME, will ya?!"

Fri, 03/04/2011 - 16:25 | 1020061 buzzsaw99
buzzsaw99's picture

Oil stays above $100/bbl and they'll throw bernank under the bus.

Fri, 03/04/2011 - 16:25 | 1020066 lbrecken
lbrecken's picture

So then why rant & rave if you think QE3 is coming and be a perma bear on mkt?

Fri, 03/04/2011 - 16:39 | 1020116 hambone
hambone's picture

Fed can't stop as their printing is the only mechanism to soak up the now annual $5T in T's (w/out a massive interest rate spike).  However, Fed can't kickoff QE3 now w/ oil above $100, ags, PM's all screaming.  Political suicide for BB to do it now.

So there must be an interim market drubbing and uptick in unemployment (BLS just reports the truth for a couple months)...and then when Merican's are getting scared again and asking the politicians to do something, voila - QE3.

There is no long term fix...just make it from one politico term to the next.

Fri, 03/04/2011 - 16:28 | 1020072 John McCloy
John McCloy's picture

This is clear evidence that they cannot halt QE. Not until the dollars have been diluted for over a decade more. I expect another QE lite and this will continue only until it is halted politically which will mean the end of the fed. Bernanke knows he can do whatever he wants now with immunity. The elected officials pretend he does not exist but he is the most important cog to the American illusion.
It will take revolution via food prices and oil.

Fri, 03/04/2011 - 16:35 | 1020098 reader2010
reader2010's picture

The Fed will survive. Food and oil won't rock the boat.

Fri, 03/04/2011 - 17:59 | 1020550 Cruel Aid
Cruel Aid's picture

@John, Probably right.

There will be no market collapse (S&P 666) nor end to QEII. This is the orderly decline of the Dollar as reserve currency.

As long as we understand this, there will be no panic. Institutional players probably got the memo.

Get used to inflation and buy PMs and yes the market (BTFD). Robot is no fool, look at the charts.

Go cash in a tin can in the yard and lose.

Risk is a bitch.

Fri, 03/04/2011 - 16:37 | 1020100 whatz that smell
whatz that smell's picture

where's frozen pizza prices on that chart?... a jump from $5.99 to $7.49 over two months!

god bless the bernank! may he destroy the frozen pizza business forever!

Fri, 03/04/2011 - 16:49 | 1020159 AboutAverage
AboutAverage's picture

Market collapse???????   What are these people going to collaspe?  It is only their money left on the table, pumped up fed money, and they control the bid/ask prices with robotrader.   Not saying it is or isn't going to happen but rather I am sure none of us will have any idea when they do such a thing.   This market is rigged up and rigged down at this point.  only a fool would invest.  

Fri, 03/04/2011 - 16:57 | 1020192 TideFighter
TideFighter's picture

dey bangied da close (just like I said). woo hoo not surprised

I'm making my balance sheet look like the Fed's.

big weekend now. brass, bullets, beer, bullion, babes, and, uh, uh

can't say it

 

Fri, 03/04/2011 - 21:29 | 1021137 slewie the pi-rat
slewie the pi-rat's picture

bicycles?

Sat, 03/05/2011 - 10:07 | 1021790 scatterbrains
scatterbrains's picture

buds

Fri, 03/04/2011 - 17:06 | 1020253 revolutionnot
revolutionnot's picture

Is it me or is the VXX starting to correlate too?

Fri, 03/04/2011 - 17:20 | 1020344 Robslob
Robslob's picture

They are simply waiting for 2 things:
1) 401K contributions & match to end
2) Congress to demand that ALL pension funds must go into a 401k's instead of how they are managed today.

Then they will crash this fucker like never seen before.

Fri, 03/04/2011 - 17:30 | 1020404 RobotTrader
RobotTrader's picture

Still no short signal.

Close, but no cigar.

As Quint Tatro has been saying "Bears have been getting their faces ripped off".

http://www.tickerville.com/2011/03/04/bull-run/

Pretty much hanging by a thread, could go either way Monday.

 

 

 

Fri, 03/04/2011 - 17:32 | 1020418 huggy_in_london
huggy_in_london's picture

Looks like a topping pattern, and interestingly the volatility of the last 9 days far outweighs anything of the last 6 months or so.... usually a decent signal that we might, just might be set to reverse.... that is of course, if the fed allow stocks to ever go down....

Fri, 03/04/2011 - 18:35 | 1020683 d00daa
d00daa's picture

haha, even Kaltbaum is calling it a rigged market now.  we're surely topping.

Sat, 03/05/2011 - 08:51 | 1021749 ZeroPower
ZeroPower's picture

Still no short signal.

What, no "is THIS the top??!" post this weekend?

SUCH a shame i tell you, really.

Fri, 03/04/2011 - 17:33 | 1020420 wgpitts
wgpitts's picture

America needs an Egyptian Style Redress of Grievances rally from the New York Fed at 33 Liberty Street New York, NY the Chase Bank to Wall Street and the NYSE for looting this country, theft and corruption....We need every unemployed American and American disgusted at the bankers looting to make their way to New York City to demand justice! Give them a summer to remember

Fri, 03/04/2011 - 17:35 | 1020437 TruthInSunshine
TruthInSunshine's picture

Did someone say 33 Liberty?

If there's an angry mob, gasoline, gun powder and all the rest of those wonderful sites and aromas, please let me know,  because I wouldn't miss it for the world.

Fri, 03/04/2011 - 17:41 | 1020421 TruthInSunshine
TruthInSunshine's picture

From the Oh, Really? Files:

 

From the Top

If new S.E.C. charges are true, insider trading may be rampant.

Morgan Stanley Vice Chairman to Leave
Fri, 03/04/2011 - 17:45 | 1020490 D-Falt
D-Falt's picture

never mind the people who actually work; we need to make sure that the market pays off for the huge mass of Americans who are about to retire.  They sit around bored and do crazy things like vote.

Fri, 03/04/2011 - 20:57 | 1021076 dexter_morgan
dexter_morgan's picture

you may be on to something

Sat, 03/05/2011 - 10:39 | 1021810 High Plains Drifter
High Plains Drifter's picture

Voting doesn't matter. Never has.

Fri, 03/04/2011 - 18:15 | 1020606 thedrickster
thedrickster's picture

Countdown until More Critical Thinking the fuckhead chimes in with something about a global economic recovery and drought.

Fri, 03/04/2011 - 18:18 | 1020616 Burticus
Burticus's picture

Like George Ure of Urban Survival always says, "Act surprised!"

Sat, 03/05/2011 - 10:44 | 1021813 High Plains Drifter
High Plains Drifter's picture

I quit reading over there after that situation that happened a few years ago with the half past human scam they were running.  Somebody outed them about it and they got pissed off about it and that is when I saw old George as a liar, and as being someone who is attempting to profit from the sheep.  I don't mind someone trying to profit from something but don't push something if it does not really work that well and then try and charge money for it. They thought they were going to make a killing on that half past human project but not so much now.....

Fri, 03/04/2011 - 18:33 | 1020679 buzzard
buzzard's picture

I'm just a spectator here, but I made the office manager at my doctor's office cry last week. Does that mean that I'm doing it right?

Sat, 03/05/2011 - 06:06 | 1021680 Rodent Freikorps
Rodent Freikorps's picture

Depends on why you made her cry.

Fri, 03/04/2011 - 18:46 | 1020714 JonTurk
JonTurk's picture

no rate hike ever. usd collapses -- bye bye to modern roman empire. period

Fri, 03/04/2011 - 18:58 | 1020737 MarcusAurelius
MarcusAurelius's picture

Prechter has a similar chart that he uses to build a case for deflationary pressures versus runaway inflation. It is relevant as it points unequivably to the massive swing of credit as it expands and contracts. If one were to extrapolate further we might see that the years of FED M3 expansion and large institution expansion of leverage (mostly located in the US) accounts for this ridiculous peg. Look at how many leveraged derivitives the BOA controls by itself? I believe the numver is a staggering 79 Trillion. Funny money to make more funny money, to make more funny money, forever and ever amen. I simply cannot fathom why these morons don't get it. You can't create something from nothing.....it is simply not possible?

Fri, 03/04/2011 - 19:27 | 1020819 honestann
honestann's picture

You are absolutely correct to say that overall "you can't get something from nothing".  They know that perfectly well.

However, the slime are pure, unadulterated, vile, evil, drooling predators you're talking about here (the government of the USSA and their international gangster bankster financial terrorist co-conspirators).  And they know just as well as you do, that the fiat, fake, fraud, fiction, fantasy digital electronic money bits they create and leverage in unlimited quantities can buy real physical goods... because they cannot be distinguished from the digital electronic money bits that are deposited into the accounts of producers of real, honest, valuable, physical goods.

Oh, they understand this 100.0000000% clearly, you can bet your butt on that.  And, in fact, they are betting our lives on that... which they intend to utterly destroy.  They will not give up until every last productive being is destroyed... unless those productive beings start shooting down the predators en masse.  That is the only solution.  Neither virus or predator stops until it is stopped by external forces.  And in this case, the only external forces that can stop them are their victims.  Every honest, ethical, productive being better damn well wake up soon, or the will find themselves living in a wasteland... the few that remain.

The predator-class is running the world.  Do not help them, do not sanction them, do not play their fiat games.  Stop them.

Fri, 03/04/2011 - 22:11 | 1021202 Savyindallas
Savyindallas's picture

Great tirade! Do you mind if i copy it and plagiazize some or all of it for other blogs or other purposes? You really know what's going on   -You sound like  Kyle Reese telling Sarah Conner about the terminators. 

 

You have correctly assessed the predicament we face  - they will continue to destroy all prouctive beings until we stop them  -we can't stop them until the masses realize they are being destroyed - right now we are the frog in the pot being slowly boiled.   

Sat, 03/05/2011 - 00:41 | 1021457 honestann
honestann's picture

On one condition: you correct my typos & spelling errors!

Sat, 03/05/2011 - 08:16 | 1021728 Al Gorerhythm
Al Gorerhythm's picture

And it is soooooo easy. Excess money out of bank. Excess money into PMs. I'll keep doing it till they fold, ounce by ounce. Join in. It's fun.

Sat, 03/05/2011 - 01:09 | 1021511 narnia
narnia's picture

Robert Blumen addressed the Prechter hypothesis recently:

http://mises.org/daily/5052/media.aspx?action=author&ID=280

Sat, 03/05/2011 - 10:39 | 1021808 High Plains Drifter
High Plains Drifter's picture

Speaking of Prechter, how is that $600 gold call working?

Fri, 03/04/2011 - 19:09 | 1020770 baby_BLYTHE
baby_BLYTHE's picture

Marc Faber

"Bernanke puut= Greenspan puut"

WITH A MUCH MUCH MUCH MUCH higher STRIKING PRICE!

May, 2010 (When all the doomers were screaming about HINDENBERG!)

http://www.youtube.com/watch?v=H0sS6a9RW2E

Fri, 03/04/2011 - 19:23 | 1020811 Ludwig Van
Ludwig Van's picture

 

The Flash Crash, May 6, 2010, occurred on the 73rd anniversary of the Hindenburg Disaster. Also, May 6 is Gordon Gecco's birthday in *Wall Street.*

 

Fri, 03/04/2011 - 21:39 | 1021151 slewie the pi-rat
slewie the pi-rat's picture

and...it is only one day after cinco de mayo...

Fri, 03/04/2011 - 22:12 | 1021200 Rusty Shorts
Rusty Shorts's picture

and...it is only one day before the sinking of the RMS Lusitania...

Fri, 03/04/2011 - 19:55 | 1020911 hampsterwheel
hampsterwheel's picture

Take the red pill - and watch this seminal work by a Harvard Economist and Wall Street guy... things are not what they appear - or are they for those that know..

 

http://www.youtube.com/watch?v=l37RhdFGVsM

Fri, 03/04/2011 - 20:42 | 1021049 vxpatel
vxpatel's picture

For the next 3 days DO NOT BUY ANYTHING, nothing, live off of what you have in your closets, no new anything.

PROBLEM SOLVED, this scheme collapses....

Fri, 03/04/2011 - 21:15 | 1021108 S.P.Q.R.
S.P.Q.R.'s picture

Effect of money supply on the markets is just a byproduct of larger forces at play. First, the US is in a currency war with China.  The US is pursuing a weak dollar policy (devalue the debt), China a strong dollar policy (boost exports to the US) - since Bernanke controls the printing press and is willing to use it there is no question who will win this round. Second, debt monetization (aka QE) is how the US government has chosen to fund itself. Its a brilliant move, why tax your own citizens or cut spending when you can tax any creditor holding USD. Takes alot of balls, this sort of move is usually the real reason most countries go to war but China doesn't have a hope of challenging the US military (yet) so its an acceptable risk. China will probably retaliate by exporting inflation back to the US, thereby wiping out much of the US middle class.  So the insanity continues - there will be more rounds of QE, markets/commodities will march higher, currencies will continue to get more unstable. Those who pulled out of markets in '09 and have sat on sidelines since, sorry you missed the ride but if its any consolation the ride isn't over yet.  Markets aren't moving higher, value of fiat currencies used to price markets are simply moving lower. Don't hope for an epic market collapse, its not in the cards. For many this is going to be the last taste of middle america before being trampled down into the inflationary mud thanks to their own government.

Fri, 03/04/2011 - 21:45 | 1021160 slewie the pi-rat
slewie the pi-rat's picture

well, publius pubicus, i really don't feel too bad at all about "missing the ride since '09."

and, i think you are right:  it is not over, yet!

Fri, 03/04/2011 - 21:47 | 1021167 thedrickster
thedrickster's picture

Straight.

Though I would charecterize the Yuan peg as a race to the bottom instead of a "strong" currency policy.

Fri, 03/04/2011 - 23:26 | 1021333 reader2010
reader2010's picture

China doesn't give a shit about strong dollar or weak dollar. What their ruling elite really care about is to hold on to the power so that they can continuously enjoy their privileges by fucking their peasantry. So far, China has been very accommodative to the Corporate America and Wall Street. If Uncle Sam really rocks their boat, those commies will bet their farm and be fucking militarily confrontational. But, in the end, that's not in Amerika's best interest. 

Fri, 03/04/2011 - 22:27 | 1021217 reader2010
reader2010's picture

Housing market hasn't shown any positive correlation yet.

Fri, 03/04/2011 - 23:07 | 1021288 Misean
Misean's picture

People are only so stupid...ummmm...maybe...Besides, it isn't like the Feral is off loading house flips like bond flips. Does tend to make a difference.

Fri, 03/04/2011 - 23:20 | 1021318 reader2010
reader2010's picture

To the average Amerikans, housing is the ATM. Now what? 

Fri, 03/04/2011 - 23:32 | 1021342 Misean
Misean's picture

They're actively dumping the debt payments on your shoulders.

Sat, 03/05/2011 - 12:28 | 1021886 cosmictrainwreck
cosmictrainwreck's picture

nuanced revision: "....was the ATM"

Sat, 03/05/2011 - 01:29 | 1021530 headless blogger
headless blogger's picture

I'm not a religious person. But something about this short but right-to-the-point article made me snap.

These fuckers...some people call them "elites", but I like the term parasite better....these fuckers think they are God. They think they are going to control the outcomes of everything....even basing all they do on mounds of analyzing the outcomes before they act. So they already know what is going to happen (so they think). They make the mistake of thinking that they will always maintain the controls and levers of power and the rights to the power switches that turn on or turn off economies. It is, like many have stated, complete economic warfare.

What we should be doing here on planet earth is working with the potential of humanity instead of always ruining everyone. Keeping everyone always in the constant state of stress just to survive due to the economic policies that these fuckers are doing.

Like I said I'm not religious. But if these fuckers would stop tampering with everything all the time, humanity might have the chance to actually green the globe instead of trashing the planet. We might all have the time to sit and contemplate the universe, the gods or lack of gods, what goes on in all those hidden and mysterious parts of our brains, and whether there is an afterlife or not. 30 years ago they were talking about the need to get alternative energies, but we've wasted all those years, and trillions and quadrillions of money on useless paths that are leading to nowhere very fast.

This is the tragedy of humanity. To have such outstanding potential and have it wasted by a small percentage of the population that considers themselves like gods.

Instead of pulling up the 3rd world nations to 1st world standards they want to take the masses of our mainstreet and push them down to 3rd world status. this will only end badly for humanity (and even the parasitic fuckers on top) unless something is quickly done. I think we are running out of time.

 

 

 

 

Sat, 03/05/2011 - 06:08 | 1021681 StychoKiller
StychoKiller's picture

Read "The Singularity is Near" by Ray Kurzweil

http://www.kurzweilai.net/

6+Billion minds are a terrible thing to waste!

 

Sat, 03/05/2011 - 10:00 | 1021784 overmedicatedun...
overmedicatedundersexed's picture

Headless:"This is the tragedy of humanity"

you must have eyes to see and ears to hear.

blinded by mammon, drugged, bedazzled by entertainment, ruled by sociopaths posing as progressive bleeding hearts. what's not to like?

this is our world..follow the path that leads to enlightenment ,"that" world falls away.

you are in paradise right now. enjoy.

Sat, 03/05/2011 - 10:36 | 1021804 High Plains Drifter
High Plains Drifter's picture

You may not be religious but they are, make no mistake about it.

Sat, 03/05/2011 - 02:34 | 1021574 Xkwisetly Paneful
Xkwisetly Paneful's picture

Mean like the academic theoretical neo marxist social scientists that think they can engineer a better human race?

 

I don't see the line for number of paranoid delusional self loathing entries at ZH but it should be peaking as well.

Sat, 03/05/2011 - 07:10 | 1021684 Rodent Freikorps
Rodent Freikorps's picture

The first thing we do is kill all the Ivy Leaguers. All we need are some yearbooks.

Dear Eugenicists,

Turnabout is fair play. Blue blood inbreeding is a bad thing. Darwin hates you. If y'all are planning a Darwinian die-off, you are right only the strongest will survive. However, the survivors will hate you with the passion of a thousand suns.

Sincerely,

Rodent Six.

Sat, 03/05/2011 - 08:57 | 1021750 ZeroPower
ZeroPower's picture

Your first line is out of left field.

What would we be left with? Blue collar hicks? The world needs both. 

 

Sat, 03/05/2011 - 10:45 | 1021806 Rodent Freikorps
Rodent Freikorps's picture

Blue collar hicks actually make and grow things. They man the armies and navies.

Idiot philosophers who owe their existence to the work of others would not be missed.

99% of them are nothing more than parasites who feed off the labors of better men.

And I tend to admire folks who graduated from Texas A&M, or CalTech.

Sat, 03/05/2011 - 11:35 | 1021847 overmedicatedun...
overmedicatedundersexed's picture

 mr rodent: blue collar philosophers is not an oxymoron,

try wendel berry a poet and farmer,

to eat you must work, no work, no food. as basic as it gets and as true as it gets,,'

to do otherwise is the way of parasites.

Sat, 03/19/2011 - 10:02 | 1022414 Clapham Junction
Clapham Junction's picture

(d)

Sat, 03/05/2011 - 11:32 | 1021846 New_Meat
New_Meat's picture

0 P--

"What would we be left with? Blue collar hicks? The world needs both. "

So if you are not a grad from the Worlds Most Perfect University and its cousins then you are a "Blue Collar Hick?"

Rodent 6 might be closer to the necessity than even he realizes.

- Ned

Sat, 03/05/2011 - 05:57 | 1021661 Bringin It
Bringin It's picture

... this -->

http://www.independent.co.uk/news/world/middle-east/saudis-mobilise-thou...

I have to say TD has a great crystal ball.

Sat, 03/05/2011 - 06:14 | 1021683 StychoKiller
StychoKiller's picture

From your link:

Saudi Arabia was yesterday drafting up to 10,000 security personnel into its north-eastern Shia Muslim provinces, clogging the highways into Dammam and other cities with busloads of troops in fear of next week's "day of rage" by what is now called the "Hunayn Revolution".

What, are they gonna bash in heads BEFORE they know which head to bash in??  How is this gonna nip anything in the bud??

Sat, 03/05/2011 - 05:40 | 1021663 BenLightYear
BenLightYear's picture

by BenLightYear
on Sat, 03/05/2011 - 03:04
#1021624

What would happen if we stopped printing? What i mean is what would happen if we set interest rates at a reasonable average rate of say 3.25% and left them there? What would happen if we changed the budget to where we broke even? If we lowered the budget and raised taxes? Aren't we in a perpetual state of holy shit? Is this not going to end badly? Is this not going to be a bumpier than shit ride no matter what we do? Why don't we stop the monetary and fiscal bull shit fiasco? Why don't we stand up and say "OK in the last 100 years some people fucked some stuff up and the 99% of the rest plead too dumb to have any clue what was happening;?

Can't we see that most economic models are flawed? Can't we see the correct parts and the incorrect parts of each clearly? Who the fuck is bernanke to sit in that chair and at best either show complete ignorance or corrupt mentality towards the very people who allow him to sit in that chair?

(bernanke i pick on only cause unlike most of our elected representatives he actually understands his god damn job...the number of our politicians who have no clue about the very things they vote on and how they work is 2nd only to the fact the majority of the country is unable or unwilling to see their complete lack of qualifications to make the laws and rules and create money/debt in our names)

Do we really need our lives to go through such a great trauma to wake up and at the very least pay attention? Do we not vote these people into office? Are we not the ones who choose the ones to coordinate our society?

Are they our leaders or are they the men and women we choose how to govern a nation with the sole intent and purpose of making every single citizens lives better and the future for our children brighter?

Their has to be a better way to make a country and economy function right? Are the ignorant majority and the crooked minority really so great that with our current level of knowledge we are honestly unable to provide a functioning and benefiting society?

edit reply flag as junk (0)

by BenLightYear
on Sat, 03/05/2011 - 03:49
#1021635

What if instead of the very small minority of us rewrote our fiscal and monetary policy? How about a group people who understand how it works ( i don't have a degree however in the last year i have read every single piece of econ theory, looked over every graph, chart, model, read every single argument against such that i could get my hands on) I by no means can fix this by myself. By no means am i capable of writing an economic play book by myself. To do so would require time and ability that i myself am unable to supply solely. If a group of 10 or so new school ( meaning we understand whats wrong and have ideas on how to fix it ) theorists got together and built, dissected and then reassembled an economic model that would actually work.

If we set basic fundamentals in regards to bank ratio, money creation, spending/taxation, regulated from corruption while not impeding business past oversight, regulated the risk associated with lending by institutions who should hold safe money, adopted a fair taxation rate which would be more fair based on cost of living compared to earnings ( I feel the amount of taxes people pay should skew from low to higher based on the fact that those who live grandly can afford it without it affecting their actual lifestyle...i am not proposing a 5%-95% range...i don't think it would need to be anywhere near as drastic) fix all the loopholes, money you earn is taxed a that the rising ratio based on the amount of money the govt spends the previous year...every years budget will include the tax rate ratio ( a constant ratio in reference to each other but vary from say 10%-50% one year to 12%-52% the following year thus for our govt to spend a dollar they must tax for that dollar) what if we wrote a true economic model...what if we took everything that we know base it off of where we are at ( people hate change however i think people would get more behind a change that was more fluid than abrupt) and wrote a govt fiscal and monetary playbook that worked and could not be disputed? If written and followed business would adapt, public and private wealth would adapt, and i believe both would strive knowing exactly what to expect and keeping the institutions that are meant to be solid aka banks, investments, insurance, under regulation that makes them the properly regulated environment they should be. Banks have no need to make large margins of profit. Naturally some bank policies would be regulated as needed to provide a low risk, highly solvent institution that can expand a small amount of money to provide growth but a more acceptable rate of growth ie natural growth or maybe .25% over natural.

If we write it we can fix it. If it was written so it worked and if we voted people into office who understand it, agree with it, and believe in it then they could put it into affect. As outlandish as this may sound it truly does not sound impossible or even impractical. By the time we finished it things will be at the point where more are willing to listen and look for a way to make things right.

We don't have too decide how much government or how little. We don't have to decide what the govt spends money on just he fact whatever they spend is taken back in with tax receipts the following year. Just simple economic ratio's that coordinate how to keep things in a steady environment with natural growth in a properly regulated environment. We stop our politicians from spending more than they pay for, a fed res that can not keep their hands off of monetary policy. ( i swear it's like a kid with a new toy especially now...each chairman believes he is so much smarter than the last chairman or the 100 years of economic thought he has been taught). We set the economic model and elect representatives who will keep the ratio's intact.

edit reply flag as junk (0)

by BenLightYear
on Sat, 03/05/2011 - 04:35
#1021658

I have been reading this website for over 6 months now. Tyler I thank you for providing a place where I learn in one paragraph and laugh my ass off in the next. I praise you for supplying a viewpoint contrary to what most are led to believe. I am grateful to my friend who directed me hear. Like I said I have spend the better part of the last year reading everything i could get my hands on. I sometimes found I ran into the problem of being able to actually visualize what it was that I was reading and the commentary/debate on this site has helped. More often than not I find myself being more able to argue against what i see and hear not because i remember someone else told me it was wrong but because i can actually see and understand why it is wrong.

Tyler

I would like a response to the post I made right before this one. I would like you to answer me as too why a group of 10 or so people can not sit down and write a fiscal and monetary policy that in effect would work.

From what I have learned I truly believe their is an equation, a formula, a treatise that if followed would lead to a stable pro growth ( albeit it natural) dependable economy that although it would start off in a less than desired state if it was stuck too would lead to a stable and productive govt and economy over a short to long period of time.

I would like you to respond. I would like you too tell me that I clearly don't understand enough and that what i propose is beyond man's means.

If it is not beyond our means than I would like you too tell my why you would be against doing such.

If it is not beyond our means and if you are not against it then maybe its time we sit down and write a play book.

Maybe its time we gather a small # of capable and intelligent people and we create an economy that actually works. That actually functions. That actually has a future.

By no means am I the most capable man to do this. By no means do I think I myself am able to accomplish this. In no way do i think this is something a single person could sit down and do without 9 other people correcting his flaws, dissecting his flaws, and recreating the solution.

I see once in awhile you interject here and their. I noticed you dissect news ( alot of which is news that actually pertains to this countries and the global economies juggling act of incompetence, misunderstanding, misuse, and corruption that we would otherwise not come across through normal news channels) and then leave it up to us to further dissect and debate on. I have noticed that you don't jump into the arguments after your posting. I am aware there are im sure numerous reasons why this could be. I give you the benefit of the doubt as to your reasons and intentions.

However I am calling you out. I have sat here for quite awhile now wondering why if there are people smart enough out there to say why others are wrong then of that bunch some must be smart enough to actually fix it.

I would like a response. I would like an answer. If I am crazy or delusional than plz say just that and I will bother you no more. I will go back to reading and keeping to myself. However if I am not, if what i propose is doable then maybe its time we get to work

We now realize beyond any doubt that corruption and ignorance if allowed to continue unabated will eventually ruin even the strongest nation.

Is today the day we stop what started as arguably the greatest nation in history from the death spiral it is in?

I ASK YOU TYLER IS TODAY THAT DAY?

Sat, 03/05/2011 - 06:18 | 1021685 StychoKiller
StychoKiller's picture

Ever apply too much braking power on an icy road because the light up ahead just turned red?  Ya feel pretty helpless as the vehicle starts doing donuts in the road, don't you?  WE. ARE. THERE!

Sat, 03/05/2011 - 08:16 | 1021721 Winisk
Winisk's picture

Seeking an equation that will lead to a stable pro growth economy is a lost cause.  Where in the equation do our esteemed economists expect our growth to stop?  That's a serious question I ask.  Infinite growth on a finite planet?  Peak oil?  Nature will define our economy, not a learned group of individuals.  Growth is built into Nature's systems.  It always produces a surplus but it also operates with the expectation that the growth will be constrained.  Has that day come?

Sat, 03/19/2011 - 10:01 | 1022409 Clapham Junction
Clapham Junction's picture

(d)

Sat, 03/05/2011 - 07:50 | 1021714 Scorpio69er
Scorpio69er's picture

In a bizarre related story, tens of millions of American women's menstrual cycles have become synchronized with the issuance of The Fed's 'Monthly Report on Credit and Liquidity Programs and the Balance Sheet'.

Sat, 03/05/2011 - 12:07 | 1021872 Occams Aftershave
Occams Aftershave's picture

As criminal as it all may be, from an investment perspective, this chart says to me "don't fight the Fed."

Sat, 03/05/2011 - 12:18 | 1021876 Highrev
Highrev's picture

It’s really quite simple. The next Lehman is the U.S. Federal Reserve.

No, there will be no bailout for the Fed (too big to be bailed out).

They WILL GO TO WAR

      to crash risk assets

            in an attempt to create a flight to safety

                   to liquidate into.

Then we'll see.

Next question?

Sat, 03/05/2011 - 12:59 | 1021905 A tumor named Marla
A tumor named Marla's picture

Of COURSE it's the top -- I put some play money into SPY 135 Mar Calls.....fellow bears, you are welcome....

Sat, 03/05/2011 - 13:02 | 1021912 Highrev
Highrev's picture

Nobody said tomorrow.

But then again, it might be.

Good luck in any event.

Sat, 03/05/2011 - 13:43 | 1021978 Fearless Rick
Fearless Rick's picture

Very simple. Buy gold and silver.

In 1950, M3 was $135 Billion. In 2012, M3 will be approximately (the government stopped publishing the figure because they don't like pornography) $15 trillion.

That's a ratio of 111.11~ to 1.

In 1950, a dime was a dime, worth roughly what the 90% silver content was worth, 10 cents.

Using our 111.11-1 ratio, we find pre-1965 coins, including dimes, to be grossly undervalued. The are, according to conflation.com, worth $2.58, nearly 26x their face value.

This is with silver at $35.67 per ounce.

Using our 111.11-1 ratio again, and 2012 M3 at $15 trillion, in 2012, a pre-1965 dime should be worth $11.11, and an ounce of silver should be $153.60.

I don't know that much about gold, but the silver calculations are pure.

Of course, nothing's perfect, but I've been trying to find a reasonable way to calculate the true value of silver, though in this current ponzified regime of constant money printing, manipulation of markets and obfuscation of monetary reality, this is the best formula I've yet to devise.

Silver is grossly undervalued, and most of the people who have been accumulating it are doing so because they know it will almost certainly rise in value in the face of our current debt/finance structure and that the end of the fiat money regime is also near.

Buy silver, as much as you can reasonably afford, quietly, without attracting the attention of too many, and in future years, you'll be happy you read this comment.

Sat, 03/05/2011 - 17:25 | 1022403 Fuckin Floyd
Fuckin Floyd's picture

POP goes the weasle.

Sun, 03/06/2011 - 13:22 | 1023638 Nate H
Nate H's picture

I wonder what the correlation is between FED balance sheet and VIX

Mon, 03/07/2011 - 20:38 | 1028049 lsjcma
lsjcma's picture

To wear the mermaid wedding dresses could be called the dream of every woman. I think whoever you are, to get married with the man your love is a holy thing. And we all firmly believe that marriage will not kill your love, on the contrary, wedding dress is just the beginning. So the bridesmaid Dresses chooses the wedding dresses carefully. Naturally, they want to become the most beautiful bridesmaid dresses and the unique sheath wedding dresses. The dresses in our online column wedding dresses store are their best choices.

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