The First Great Depression: Blow By Blow, From The BIS, And How It Mirrors Our Ongoing Second Great Depression

(This is a repost from a year ago. As the events over the past 12 months have progressed very much as the ongoing second great depression would have predicted, we republish this critical history lesson for all readers and remind everyone that history always rhymes. Pay particular attention to the fate of hard assets as the confidence in the entire system evaporated)

After surviving the start of the Second Great Depression, and living
in its first great bear market bounce/short squeeze, where now all the
attention is focused on a collapsing Europe, many could be wondering
how, if at all, it would have been different to have lived through the
first Great Depression. Luckily, courtesy of the recent release of the
BIS's full annual reports, history buffs can now replay, year by year,
the events in world capital markets from 1931 onward. We have put
particular emphasis on the dark days of the 1930s. Below we present the
first several such years as seen from the perspective of the BIS. Note
the endless similarities - in fact one could say the only difference
between then and now is the lack of "liquidity providing" algos (soon,
there will be an iPad app for that) to front run slow and stupid
retail/pension/mutual fund money. Pay particular attention to the role
of gold in the crisis period, the amusing reference to FDR's
confiscation of gold in 1933, and how the mood of insecured optimism
shifts to one of endless gloom, and ends, as everyone knows, with World
War 2.

1932:

The
year under review has been one of dramatic occurrences in the whole
field of international finance, credit, monetary stability and capital
movements, both public and private. The record of this year of
unparalleled world-wide disturbance reflects itself in the progress,
resources and activities of the Bank, which have been intimately
affected by each succeeding episode, in all of which the Bank was
promptly called upon to play a rôle, as was but natural for an
international institution the statutory object of which is "to promote
the cooperation of central banks and to provide additional facilities
for international financial operations, and to act as trustee or agent
in regard to international financial settlements", whose "operations for
its own account shall only be carried out in currencies which satisfy
the practical requirements of the gold or gold exchange standard".

In
the second month of the fiscal year, the collapse of the
Oesterreichische Credit-Anstalt, with its ramifications throughout
Central Europe, called for immediate aid to the National Bank of
Austria. In the third month of the fiscal year, there was announced the
so-called "Hoover moratorium", which materially changed the scope of the
operationsof the Bank and the magnitude of the funds at its disposal in
its capacity as Trustee for international financial settlements between
Governments. In the same month the banking difficulties in Germany,
precipitated by wholesale withdrawals of short-term credit, and the
pressure upon the Hungarian exchange, necessitated the organization of
central bank aid to the Reichsbank and to the National Bank of Hungary.

In
the fourth month of the fiscal year, the London International
Conference declared that "excessive withdrawals of capital from Germany"
had "created an acute financial crisis", and invited the Bank for
International Settlements to set up a Committee to inquire into the
credit needs of Germany. In the fifth month, this Committee
urged "most earnestly upon all Governments concerned that they lose no
time in taking the necessary measures for bringing about such conditions
as will allow financial operations to bring to Germany — and thereby to
the world — sorely-needed assistance".

In the sixth month
of the fiscal year, the world was shocked by the sudden fall of
sterling, which was almost immediately followed by the suspension of the
gold or gold exchange standard by six other nations. These
occurrences still further shattered what was left of confidence and
forthwith caused a strain on the reserves of nearly all central banks of
the world, including the Federal Reserve System. The necessity for the
employment by central banks of their reserves in turn placed a strain
upon the Bank for International Settlements, in its capacity as the
depositary for a substantial portion of the reserves of many European
banks of issue, but the large withdrawals in September were met without
decreasing its high degree of liquidity.

In the ninth month of the
fiscal year, there gathered at Basle the Special Advisory Committee,
convoked by the Bank because of the declaration of the German Government
that it had "come to the conclusion in good faith that Germany's
exchange and economic life may be seriously endangered by the transfer
in part or in full of the postponable part of the annuities". In the
succeeding months of the fiscal year the world financial system
continued to undergo heavier and heavier pressure and the condition of
Central and Eastern Europe and of its central banks, members of the Bank
for International Settlements, failed to ameliorate despite a series of
"standstill" agreements, currency restrictions, rationing of imports
and foreign devisen, and other artificial expedients.

1933:

On
the whole, 1932 may be styled a year of adaptation to changed
conditions prevailing in the economic and monetary situation and one of
some definite constructive effort. The most important constructive
measures were taken or initiated at two periods — the first in February
and the second in the last half of June and beginning of July. It was in
February that the Bank of England, after the repayment of more than
half of the large currency credits taken up in the previous summer,
lowered its discount rate from 6 to 5 per cent, and thereby gave the
signal to the downward movement of interest rates which was continued
all through the year in most parts of the world. In the same month the
German Government put into effect a plan for the thorough reorganisation
of the large German banks, which involved a considerable writing off of
assets and the supply of new capital with the aid of the Treasury and,
indirectly, of the Reichsbank. This reorganisation permitted the
re-opening of the German Stock Exchange, which had been closed for seven
months. In the United States the Glass-Steagall Bill was adopted on
February 27, giving greater freedom to the Federal Reserve Banks and
enabling them to alleviate the pressure exerted by internal currency
hoarding and withdrawals of gold.

On the basis of the provisions
of this new act, the Reserve Banks purchased Government securities in
the open market to an amount which in June reached $ 1,100 million, a
sum then sufficient not only to counterbalance withdrawals and hoarding,
but also to provide member banks with substantial excess reserves. At
about the same time two further events of outstanding importance took
place. The first was the conversion of more than & 2,000 million of
the public debt of Great Britain from a 5 per cent on to a 3% per cent
basis, which was announced in the second half of June and met with
immediate response; such a measure was welcomed not only because it
helped to alleviate the British budget, but also for the downward
influence which it exercised on long-term interest rates. Further, the
successful outcome of the Lausanne Conference in July, the value of
which it is hard to overestimate, revealed willingness by the Reparation
creditors — in the first place France — to make very large concessions
and it meant the elimination of one of the most serious political
hindrances to economic recovery.

These are outstanding measures.
But attention must not be concentrated on them alone. A close
examination of developments would show that the large volume of
international credits was further reduced, that strenuous efforts were
made in many branches of public and private economy to balance revenue
and expenditure, to establish equilibrium between costs and prices, to
render assets more liquid, to reach agreed arrangements for postponing
or scaling down debt payments, to overcome the difficulties resulting
from the liquidity crisis and to maintain control of the currency
position, even when foreign exchange restrictions were, in the interests
of trade, gradually relaxed. One  marked feature of the period was the unparalleled volume of gold movements.

While
the international movement of goods registered an unprecedented decline
in 1932, gold movements reached proportions never before experienced.

During
the year the total gold production of the world attained the high
figure of $ 495 million, or 2,559 million Swiss francs, thereby
establishing a new record by surpassing the production of the previous
peak year, 1915, by 139 million Swiss francs, and that of 1931 by 184
million. While it is to be expected that gold production should rise in a
period of sharply falling prices and plentiful labour supply, the
increase has exceeded even the most optimistic forecasts. It has been
most marked in the Union of South Africa and Canada, by far the largest
percentage increase occurring in the latter country. Production in the
United States, after having declined fairly steadily from 1915 to 1929,
has risen again and at a progressively greater rate during each of the
past three years.

Among
the gold producing countries the influence of the new gold was
particularly helpful in Canada. Since the departure of sterling from the
gold standard, and the simultaneous depreciation of the Canadian
dollar, the gold production of the Dominion has been bought by the
Government at the prevailing market rate. The large production of 1932, $
63 million at par, gave to the producing companies approximately $ 70
million in Canadian currency, and greatly aided the Government in
meeting its maturing obligations punctually and in supporting the
exchange. In the Union of South Africa the production of gold made
possible the maintenance of the gold standard until the last weekof 1932
when, however, the large outflow of funds caused by speculation
depleted the reserves and forced the country to suspend the gold
standard. Under an agreement with the mines the South African Reserve
Bank had up to that time purchased the newly produced gold at par, which
enabled the Bank within a short space of time to recover the losses it
incurred through the depreciation of sterling and to reconstitute its
capital and reserves.

Whereas production has increased, the demand
for gold by the arts has fallen to a very low level and, even more
important, India and China, instead of absorbing a substantial part of
the newly-mined gold, have continued to export gold previously hoarded.
In the three months of October, November and December 1931, gold to the
value of nearly 500 million Swiss francs was exported from India; during
1932, Indian gold exports amounted to a little more than 1,000 million
Swiss francs, a sum not greatly inferior to the value of South African
production, which was 1,238 million Swiss francs. The great volume of
"new" gold which became available during 1932 from the mines and from
India had its effect not only upon those countries in which it
originated but also upon those to which it passed. The entire Canadian
production was exported directly to the United States, but that of South
Africa was, as usual, sold in London. In addition, almost 78 per cent
of the gold exported from India was sold in London (approximately 19 per
cent being shipped directly to the United Statesand about 3 per cent
disposed of in the Netherlands and France). The bulk of the South
African and Indian gold offered in London was sold against gold
currencies, usually dollars or francs, depending on whichever was the
stronger. In the case of the South African sales a large part, and in
the case of the Indian sales practically all, of the proceeds received
in these gold currencies was thereafter sold for sterling.

In the
following table an attempt has been made to indicate for each quarter of
1932 the amount of gold derived from production and from India and
China, the amount of gold used by the arts, as well as the increase or
decrease of gold in the reserves of Central Banks and Governments, in
order to obtain a rough estimate of the amounts hoarded and de-hoarded
in the different periods:

The
total increase in the monetary gold reserves of Central Banks and
Governments for 1932 was 3,125 million Swiss francs. This means that, in
spite of the hoarding which took place, monetary reserves received new
gold during the year in an amount 22 per cent greater than the total
gold production of the record year in the history of the world. And
although European Central Banks during the first half of 1932 converted
more than $ 700 million of their dollar holdings into gold, the gold
reserves of the United States were only $ 6 million smaller at the end
of the year than they had been at the beginning. But in the first
quarter of 1933 the anxiety caused by the banking crisis led to a
reduction in American gold reserves, later, however, to be replenished as a result of a series of anti-hoarding measures. [read: executive order 6102]

1934:

These
twelve months have been striking ones in the financial history of the
modern world. They have witnessed the dramatic episodes in the United
States of America, culminating first in the abandonment of the gold
standard, with its worldwide economic and monetary repercussions, and
then, after a series of novel currency experiments, and a profound
change in the banking and central banking structure, in the devaluation
of the dollar and a qualified return to the standard abandoned. They
have witnessed the high hopes aroused on every continent by the
convocation of the London Monetary and Economic Conference, which was to
find joint solutions for financial ills and economic
difficulties
and to prepare the way for a reconstituted international monetary system
— hopes which were dashed to the ground when this vast assembly met and
promptly discovered that it was either in disaccord on fundamentals
(especially as regards early currency stabilisation) or, if in agreement
on some fundamentals (for example on the economic side), in disharmony
as to the ways and means of reaching the agreed objectives. They
have witnessed, as a consequence, the formation, in the monetary field,
of the "gold bloc", determined to preserve the status quo in their
monetary system based on the classic gold standard, and in the financial
and economic field, a retreat from the direction of internationalism
toward a self-reliant, self-contained but ominous nationalism. In
international financial and monetary relations the twelve months have
seen a series of retrograde developments — more moratoria, more 
transfer impediments, more artificial clearings, more gold hoarding than
during any year on record, more conversion of foreign balances and
their repatriation into the home currency, or in gold, by private and
central banks, an almost complete cessation of new long-term lending
abroad and a further limitation or reduction of the volume of short-term
credits.

1935:

Soon,
four years will have passed since the financial crisis broke out, and
still the world suffers without relief from the unrest and the
uncertainties caused by moving currencies. The consequent
difficulty encountered by the world's trade is reflected everywhere in
the large percentage of unemployment in those branches of national
industry which are largely producing for foreign demand. In many
countries, national endeavor has given an impetus to domestic affairs,
with visible results, but this whole stimulated development threatens to
become top-heavy as long as an expansionist policy at home is limited
by restrictive policies, internationally. The daily conduct of
every business and of every financial transaction which touches more
than one currency area is rendered difficult or impossible by the
varying exchange values of so many of the world's currencies,
particularly of some of the leading ones. An indication of the
surprising extent of these inhibiting variations is contained in Chapter
II. Tariff changes, quotas, clearings, exchange restrictions,
compensation agreements and the like, all of which tend to throttle the
international exchange of goods, of services and of capital, are the
inevitable concomitants of the chaotic monetary conditions which
prevail. During the past twelve months, the disorder has become
intensified through, among other factors, the further fall, measured in
gold, of sterling and the currencies responsive thereto, the devaluation
of the belga, the silver policy of the United States, and the
continuous abnormal attraction of gold to the American market.

1936:

Seven
years have passed since in the course of 1929 the great depression
began which still holds large parts of the world in its grip. It
might have been expected that in the period which has elapsed the
depressive forces would have spent themselves and general prosperity
would have returned. But the depression of these seven lean years has
not been merely a slump of the pre-war order. Its background
was different — it supervened upon an economic and financial situation
still suffering from the dislocation caused by a world war; and, with
the volume of world unemployment above 30 millions, it has grown into
something vaster than any pre-war depression. In the succession of
events it is possible to recognize four major disturbances:

Firstly, there was the ordinary downward trend of business. Conforming
to type, this was characterized by reduced sales, accumulation of
stocks and decline in output, particularly in branches such as the iron
and steel industries which produce capital goods or, in general, provide
industrial, agricultural, trade and transport equipment.

Secondly, there was a widespread fall in prices of primary products —both foodstuffs and industrial raw materials. This
put a particularly heavy strain on the balances of payments of a number
of overseas countries and, within a short time, effectively arrested
the flow of capital in their direction, whether in the form of loans or
of new investments.

Thirdly, in the late spring and summer of 1931 there came the banking crisis in Austria and Germany. Massive
withdrawals of funds were followed by a series of organized attempts to
stem the tide through the granting of emergency credits and, when these
attempts proved unsuccessful, by the introduction of moratoria,
transfer provisions and exchange restrictions, with the result that, not
only did foreign credits remaining in the countries affected become
frozen but ordinary trade was hampered by new and formidable fetters.

Fourthly,
in the autumn of the same year there followed the depreciation of
sterling and of a number of other currencies. New elements of
uncertainty were thus added to the economic and financial situation and
strong downward pressure was exerted on prices quoted on a gold basis in
the world markets. A period of monetary changes had begun which within
two years was also to involve the United States dollar.

1937

In the year which has passed since the last General Meeting great monetary changes have occurred. In
France, a new economic and financial policy was adopted in the spring
of 1936, and in the early autumn a decision was taken to readjust the
value of the French currency. Ori 25th September 1936 simultaneous
declarations were issued by the French, British and United States
Governments in which the three governments declared their intention to
continue to use appropriate available resources so as to avoid as far as
possible any disturbance of the basis of international exchange
resulting from the proposed readjustment. During the same
week-end a decision was taken in Berne to change the value of the Swiss
franc and at The Hague an embargo was placed on the export of gold ;
shortly afterwards the Italian authorities readjusted the lira to a new
gold basis, while the Chechoslovakian crown was further devalued in
relation to gold and the Latvian currency was devalued  and attached to
sterling.

The technical measures taken in the various countries
and the arrangements agreed upon by the different monetary authorities
will be referred to later in this report. Here it may be noted that the
changes in the values of thé currencies concerned were carried out with a
minimum of disturbance to the foreign commodity and capital markets and
that no setback was caused to the upward trend of world affairs.

The
heavy burden of debts both domestic and foreign was also in other ways
an obstacle to economic recovery, especially as the debt structure
inherited from the war was augmented by extensive international
borrowing in the 'twenties both on long and short-term account. In some
countries the main difficulties were caused by an excessive volume of
private indebtedness, e. g. mortgage debts of farming communities, in
other countries by internal government- indebtedness weighing heavily on
the budgets, and again in others mainly by foreign liabilities which
were a charge on balances of payments and "on monetary reserves.

Some
progress has been made during the depression in scaling down the debt
structure. In addition to the effects of currency depreciations, the
burden of domestic debts has been alleviated by conversions, and foreign
indebtedness by repayments, repatriations and arrangements of different
kinds. The volume of international short-term indebtedness has thus
been brought down by about one-third in terms of sterling (a currency in
itself depreciated by almost 40 per cent.) and by still more in terms
of gold. Long-term indebtedness has not been reduced to the same extent,
but there has been a very important movement in the repatriation and
redemption of foreign securities, especially from the United States and
Great Britain.

1939:

It is not difficult to indicate the reasons why business last year passed through periods of great anxiety. In
the opening months of 1938 repercussions of the abrupt decline in
American industrial activity that had begun in the previousautumn were
felt all over the world, particularly in the export trade.
This decline proved the more depressing as it came at a time when there
were high hopes of more sustained prosperity in the United States. The
general weakness in prices of primary products, a consequence of reduced
American demand, and the downward tendency of many other prices called
for reductions in costs and other adjustments, which generally met with
resistance from interested parties. In countries of the sterling area,
which had experienced almost uninterrupted expansion since the autumn of
1932, conditions were ripe for a slackening of internal activity.

To
this situation were added exceptional events of a political character,
which dealt rude shocks to business and left in their wake a level of
armaments and military preparation never before witnessed in times of
peace. Among the most striking signs of the political
uncertainty was the pressure on sterling caused by mass movements of
funds which, with other factors, added $1,500 million to the American
gold stocks in the five months from August to December 1938. More
harmful effects were found in the restraints suffered by ordinary
business, as initiative was cramped and the will to make new investment
weakened. Filling the gap by government orders for armaments and other
purposes for the time being helped to sustain employment but necessarily
diverted productive power from the pursuit of normal trade and
especially tended to impair the export capacity of the countries most
deeply involved.

Under the strain of almost uninterrupted
political tension, bringing with it general uncertainty as to the
business outlook, continuous capital flight from Europe and growing
armament expenditure in all countries, the economic development of the
world does not, however, show the picture of colourless gloom that one
would expect. It lacks, of course, stability and nowhere
inspires confidence in the strength of the more favourable tendencies
that are at work. The state of the world is feverish rather than healthy; and whatever recovery may be seen is anything but steadfast, since it is  dependent on the use of stimulants on the one hand and interrupted by grave disturbances on the other.

Comments

[Hook Line and S...]

rhode island red+marijuana+3.14

[Caviar Emptor]

Look, America's future is bright: there's money to be made in exploiting your social data. As the sun sets on the "empire of shopping" business model for the US economy, there will be a big push to read your thoughts for fun and profit, mostly profit. They'll know how to target your urges, needs and emotions. And when that fails to provide enough monetary juice, it won't be hard to take it to the next level: just tell people what to buy and where to shop. 

[disabledvet]

so what happened to all the women then?  i'm confused.  and bored quite frankly.

[Greeny]

The best Capital preservation is Debt.. If you "poor" and

got nothing (literally), then you have nothing to lose, so

in reality

the Rich people have more worries about how not to

lose everything and it's not easy task to really preserve

the capital..

[Caviar Emptor]

Right. I've know lots of poor people who borrow lots of money from rich people who then begin to worry. It's not easy being rich! Taking that logic one step further, it's not worth trying to better yourself because then you have nowhere to go but down! Of course in that case the rich won't worry because the poor sure as hell won't want their money under those conditions. 

[AmCockerSpaniel]

Land of the free, or ..................

Free, is just another word for.................

[jomama]

wtb better trolls

[bob_dabolina]

Ya know who's funny? Rick Santelli. 

He thinks the bond market is saying all is good in debt ceiling land. 

The FED is the largest player in the bond market. 

He also said that no politician will have the nerve to breach the debt ceiling. This is the point I have been trying to make. Whom is the onus on and who will fold first? Either side could blame a default on the other side. In reality a straight up default would help the entire world.

The fact that the US has defaulted is axiomatic. It is mathematically impossible for the US to pay off it's debt/unfunded liablilites in the next 100 years. 

[Buck Johnson]

It's coming, it's coming.  They can only delay the inevitable but so long.

[topcallingtroll]

There is more craziness and mental illness during hard times and depressions in spite of the bullshit you might hear.

I just had to commit the second best producing real estate agent in my area. She has always been slightly bipolar and a touch of mania is necessary to be a good salesman, doctor, or lawyer, as long as you dont go over the edge. There are a huge number of mildly manic people who can go nuts with the appropriate provocation. Often very successful people that you would have never guessed until they are running naked in the streets or fighting the cops or just blew the family fortune on an ant farm production facility.

Business has been booming for a while. I expect only good times here on out for psychiatrists.

[blunderdog]

Doesn't the state pay for a lot of that stuff?

[centerline]

Sorry to hear about that.  Where I work (one of the highest stress careers these days), a few of us who "get it" (whose families do not) joke about one day "going Mosquito Coast."  (ref. to old Harrison Ford movie).  Some people just can't rationalize it - vent - etc. and simply lose it.  There is going to be alot more of that coming up soon enough.

[Escapeclaws]

I just had to commit the second best producing real estate agent in my area. She has always been slightly bipolar and a touch of mania

Folks, this is the worst abuse of power we have in developed countries today. If you can classify someone as a mental case, they have no civil rights.

This bastard is the worst kind of fascist.

[wtfisgoinon]

[rsnoble]

Let's talk about the progression of an old topic(my how we forget): joining canada,us and mexico.

I live app. 50 miles from the site of the NAFTA superhiway hub, there are currently large numbers of earth moving equipment going full bore on this site.

It was said one of the main hurdles of all this were unions and all the workers civil rights laws: enter Wisconson to get it started.

Would it be of interests to ZH to have pictures of this bullshit going on right under our noses?  I don't expect to be paid for it but one of you fuckers better come bail my ass out of jail if I get arrested for taking pics.  I don't think I have the ability to post pics on here but id be willing to send them to someone that does if your interested.

Do you think things are on track for this?  The way I see it is the european union was going to be one block, we'd be another.  It's failing miserably but yet the elite won't admit defeat and keep pressing forward.  That's my take.

Or........do you think it's all coming together as planned and please explain?  Thanks guys.  Sorry but I am just all sick about this.  I found out about this hub because I worked on the new coleman warehouse when it was being built and noticed other large buildings going up then my dads friend told me a farmer he knew sold a large lot of land to the gov't in that area.  And now there building it.  Seems like it's going in pieces, build all of it except the problem areas and then when those people are destroyed we'll connect it all together.  Jesus fucking christ just start dropping the fucking nukes already im sick of this shit this whole world is going to fucking implode just from the amount of bad vibes in the air.

[SoNH80]

Yes, Noramunion is baked into the cake.  BUT-- Canada is one hell of a booby prize from the death of the Republic.  Being able to move to New Brunswick, along the shores of the beautiful Gulf of St. Lawrence, without any red tape (now, if you have a DWI on your record, they won't even let you across the northern border) without any papers might be the one good thing to come out of our current trainwreck, the only one. (Semi-sarc)

[rsnoble]

I have doubts about that, business will flow freely but I don't really see them wanting us to be able to roam all over the place.  Well not till we all have chips implanted anyhow.  So perhaps it is generational thing, which I pretty much knew but that's not to distract from the subject THEY ARE BUILDING IT RIGHT NOW. 

Anyone with half a brain should realize the current "chip your baby program" is a crock of horseshit.  Everyone will think it's the safe thing to do, and for good reason, but the outcome is that a few years down the road almost EVERYONE will have a chip and anyone thinking they are just shut off after you reach 18 or whatever really doesn't have half a brain.

I can plainly see the plan.  I don't see it working, I honestly think the saying blinded by greed is in play here. 

[Armando Javier ...]

The govenment doesn't need chips implanted.  All these smart phones will pinpoint your location at all times.

[rsnoble]

I disagree.  That's just a start.  Not everyone will have one and they can't be sure you have it with you 100% of the time so that will never be good enough for them.

[UncleFester]

Chipping is their stated plan and the logical conclusion to the end of the great Ponzi that is the $. If you have 2 hrs...

http://video.google.com/videoplay?docid=-1656880303867390173#

The Ponzi would have ended in the 80's (1971 gold window closure) except for the 2X increase in taxes when the US women officially joined the tax rolls 60's-70's. The not-yet eroded manufacturing US base + the increase in productivity from female labor gave Volker the room to bribe the world to stay on the $ standard with 20% rate of return on $ debt.

70% of the world uses $ in global trade and the US women are already working. There is no more room for expansion by increasing its use, except perhaps repealing child-labor laws. When a Ponzi stops expanding it collapses...spectacularly. When it collapsed in 1933 we got SS and Fed income tax. When it collapsed in the 70's we gave future, yet-born US citizens as collateral via the SS system. As it collapses today, what will we get this time?

Chipping the global population is the ultimate end goal. Then the Ponzi can be cemented. It is the ultimate "list". If you tow the line, the banksters will email you credit for purchases, if you don't...Make no mistake, this is not about money it is about control. Once chipped, they can set all prices and extract any amount of your labor and productivity they wish.

Sleep well,
Fester

[SoNH80]

I am really, really afraid of the chipping.  I would rather jump off a bridge than submit to that.  Well, I guess since we are having our 3 months of warm weather up here, I am in a semi-optimistic mood, but come November, I will fall back into despair.  Best-case-scenario, we here in the U.S. will have an E.U.-style scenario where we can retire to Honduras or Prince Edward Island without hassles, but chances are, you're right, we'll have to bend over to do even that.  Jefferson was right on 4,000 levels, but 80% of our fellow citizens don't know anything other than baseball statistics and Dancing With The Stars crap....

[rsnoble]

I hear you bro.  This winter almost killed me off I can't tell you how glad I was when spring got here! I will admit......knowing all that is going on there's days I just don't want to do anything at all because everything just seems pointless.  There's been times I have considered on focusing on a few things......mainly making money under the table which I do often......and not allow myself to read this stuff.  I already know all I need to know, so why torture myself everyday.  It's not running away, I know im still gonna get screwed but this day to day insanity is really working on my nerves.  Enough is enough.  No one can say 100% sure how any of this will turn out or when.....we could spend the next 10 years preaching this shit.  However imo it won't take nearly that long.

[SoNH80]

10-4 dude.  I guess I'm now what they used to call a "functional alcoholic", today, a "binge drinker" in that I like more than 2 drinks an evening... lol....  But luckily, when the sun comes out, I hit the trails, or go deep-sea fishing.  I come here to bang the drum and confirm to people that they aren't alone, but by and large, I don't have any pat answers aside from, defend the Constitution the best you can, if even by arguing in favor of it among friends, and don't believe anything that they say on t.v., unless you can see it live on multiple channels.  At least we have antibiotics, A/C, and bug screens, which 99.99% of our ancestors lacked....

[centerline]

I think human nature just isn't sophisticated enough for a global, unified "plan" of this size to work out (e.g. NWO type stuff).  But, it would not be fair to say that everything is chance and certain individuals and groups of folks are not trying their best to have thier way (win).  Many of the "plays" that are in motion are of much longer timeframes than anything most of us would consider.  Generational plays at minimum.  Whereas the average middle-class person might plan for a decade, and a poor person might not be able to think past the next meal.  Easy to see how the already rich can afford the luxury of long-term planning and make careers of just managing the outcomes.

I think some of what we see and hear about are contingency plans.  Some of it straight up primary objectives for one group or another.  Since we are just pawns in the game, it is nearly impossible to differentiate.  Nonetheless, all of it looks shitty to me.

An alternative outcome, on a simlar track to what you mention above is actually a fracturing of the US into regions.  Just thinking of course...

[CompassionateFascist]

Fracture man: Rick Perry.

[JR]

Here's Kissinger on NAFTA: It "is not a conventional trade agreement but the architecture of a new international system…the vital first step for a new kind of community of nations." 

Says G. Edward Griffin: "The newspaper article that contained this statement was appropriately entitled: ‘With NAFTA, U.S. Finally Creates a New World Order.’ David Rockefeller (CFR) was even more emphatic.  He said that it would be ‘criminal’ not to pass the treaty because: ‘Everything is in place – after 500 years – to build a true “new world” in the Western Hemisphere.’

“By early 1994, the drift toward the New World Order had become a rush.  On April 15, 1994 the government of Morocco placed a full-page ad in the New York Times celebrating the creation of the World Trade Organization which was formed by the signing of the General Agreement on Tariffs and Trade (GATT) which took place in the Moroccan city of Marrakech.  While Americans were still being told that GATT was merely a ‘trade’ agreement, the internationalists were celebrating a much larger concept. The ad spelled it out in unmistakable terms:

1944, Bretton Woods: The IMF and the World Bank

1945, San Francisco: The United Nations

1994, Marrakech: The World Trade Organization

History knows where it is going…. The World Trade Organization,

the third pillar of the New World Order, along with the United

Nations and the International Monetary Fund. *

*New York Times, April 15, 1994, p. A9.

[JR]

The law that couldn’t be stopped: just cleared, the Wisconsin Supreme Court has ruled that a judge holding up legislation that eliminates much of the public employee collective bargaining power had no authority to interfere with the legislative process and that the new law can now go into effect.

[rsnoble]

BTW im not totally 100% against that.  Just for the simple reason it's just plain sick that I pay nearly $300 month property tax.  Public unions are one of the only groups that can refuse to join the depression.  And how can that be?  Simple:  We'll just sell your house if you don't cooperate.  For that reason alone I think they need to go bye bye.

Don't get me wrong, im all for fair wages and benefits but when 90% of the country is getting their collective asses kicked then this obviously isn't fair.

Of course im also torn on this opinion because as mentioned in my above post regarding the nafta crap I think it goes beyond state budgets.  Countries and hiways will come together really fast when no one has a law to stand on.  Of course we've already solved part of that by not upholding the laws.  They're just gonna do what they want to do until either we revolt(highly unlikely in any meaningful way imo) or until it flys apart at the seams(most likely) or option #3 which I hate most they actually suceed and China won't be the only ones with safety nets around the buildings so you can't jump out of the window and kill yourself.  Which reminds me.  Fuck Google.

[oldman]

RSN:

" Of course we've already solved part of that by not upholding the laws.  They're just gonna do what they want to do until either we revolt(highly unlikely in any meaningful way imo) or until it flys apart at the seams(most likely) or option #3 which I hate most they actually suceed and China won't be the only ones with safety nets around the buildings so you can't jump out of the window and kill yourself."

Or how about we never leave the serfdom we have tacitly agreed to by merely whining and not walking out? Do you think any of the so-called 'oligarchy' is going to carry out the trash or pump gas or drive their own car? Do we have enough military to maintain the grid or deliver food and gas to the urban centers? Who's going to walk up to their penthouse or get money from the bankers when the grid is down?

Ah, dude it doesn't have to be a violent resistence----just a two week vacation or sick leave---paid for, of course by the system-----by 20% of the population and the game is over and we return to a real world of living beings........enough for now

[CompassionateFascist]

EXCELLENT. Will further polarize the political situation, leading to system collapse and chaos. And out of chaos, a New Order....minus, of course, a certain nomadic tribe that's been tormenting humanity for 3,500 years.

[oldman]

CF:

There's a new order coming out of this anyway since the old order has become dis-order. Why not help it manifest itself in an non-violent way? The universe created the old order and now it has fallen of it's own weight----something organic will arise that will be interesting until we think we know how to 'manage' the universe again. The film is interesting, it is just the same old dialogue that I find boring----a new script that I do not know, please.

[ebworthen]

Sounds like we are ripe for a good old fashioned WORLD WAR. 

[Hook Line and S...]

Can thermonuclear detonations destroy fiat?

[bid the soldier...]

World War III.

I'll bet M.King Hubbert didn't factor that into the Global Peak Oil equation.

What do you think? Speed up depletion or delay it?

[oldman]

thanks tyler,

495 divided by 2559=.1934 or 5+CHF/$ vs. today's 1.19xxxxxxx

and they think I'm mad when I see a 10 to 1 objective

this is getting pretty interesting for an old man who dreams this shit up

and lives in another world merely visiting the human context via ZH.

thanks, everyone, nice to drop in occasionally; I'm having fun here, also.  

[JR]

Will the circle remain unbroken?  From Versailles reparations to Special Drawing Rights, the unbroken rainbow of the theft of the world’s currency has been directed by the FRB/ IMF/BIS/FSB (Financial Stability Board). These globalists work at night to destroy the peoples of the world, all international good intentions and the progress of humanity …  for their own filthy, greedy global government.

The Bank of International Settlement (BIS) was formed in 1930 and  originally was intended to facilitate reparation payments imposed on Germany by the Treaty of Versailles after the First World War (Wikipedia)  and  “since 2004, the BIS has published its accounts in terms of Special Drawing Rights, or SDRs, replacing the Gold Franc as the bank's unit of account. As of March 2007^[update] (end of month) the bank had total assets of $409.15 billion, given a dollar/SDR exchange rate of 1.51 for March 30, 2007. Included in that total is 150 tons of fine gold.”

The main actors in the establishment of the BIS were the then-Governor of the Rothschild-controlled Bank of England Montagu Norman, a Jewish international financier, and his German counterpart Hjalmar Schacht, later Adolf Hitler's finance minister.

Norman was the most influential central banker in the world at that time and his actions, in league with Wall Street, were crucial.

According to historian G. Edward Griffin in his look into the Fed, "Norman frequently traveled to the U.S. to meet in secret with Benjamin Strong, head of the Federal Reserve.  Strong agreed to use the Federal Reserve System to unofficially help Great Britain meet its financial obligations, and billions of dollars subsequently flowed from the U.S.  It was that outflow that set the stage for America’s great depression of the 1930’s.

“William Wentworth met Norman aboard ship in 1929. Norman told him in confidence that there soon was going to be a ‘shake-out’ in the U.S. financial markets.  The stock-market crashed just a few months later.”

"The Versailles Dictate cannot be an eternal document, because not only its economic, but also its spiritual and moral premises, are wrong." -- Hjalmar Schacht

The BIS’ current board of directors (Wikipedia):

• Christian Noyer, Paris (Chairman of the Board of Directors)
• Hans Tietmeyer, Frankfurt am Main (Vice-Chairman)

• Ben Bernanke, Washington, DC;
• Mark Carney, Ottawa;
• Mario Draghi, Rome;
• William Dudley, New York;
• Stefan Ingves, Stockholm;
• Mervyn King, London;
• Jean-Pierre Landau, Paris;
• Guillermo Ortiz Martínez, Mexico City
• Guy Quaden, Brussels;
• Jean-Pierre Roth, Zürich;
• Masaaki Shirakawa, Tokyo;
• Jean-Claude Trichet, Frankfurt am Main;
• Paul Tucker, London;
• Alfons Vicomte Verplaetse, Brussels;
• Axel A. Weber, Frankfurt am Main;
• Nout Wellink, Amsterdam;

Zhou Xiaochuan, Beijing

[CompassionateFascist]

So RedSchield, via Montagu Norman, financed Third Reich. Purpose: bring about Round Two of the World War and, via a massacre of (non-Zionist) European Jewry, enable a Jew-state in Palestine. Bit expensive for the other 47,000,000 dead. See also: Guido Preparata, Conjuring Hitler - How Britain and America Made the Third Reich.

[Village Idiot]

Soft Patch.  Reminds me of Panty Shield.

[FreeNewEnergy]

We're fucked, I tell ya, until it's open season on bankers.

[data_monkey]

Even after that but I sure will feel better.

[laosuwan]

an interesting history lesson but the past does not repeat itself because there is no such thing as an arbitrary separation of now and then. now is part of the past, The past is never dead. It's not even past, as faulkner once said. what happens next is anyone's guess. Japan has second largest economy to basket case. Iran went from usa client state to untouchable military power psycho relious fanatic antagonist of usa, england went from greatest empire to soon to be majority muslim state within 20 years, everyone went from agrarian to service society, china could not even feed its people now it makes sattelite weapons and does cyberwar on people, in the 30s there were no such things as internet, blogs, twitter now my mobile phone can do video conferncing satellte navigation and tell me where to find parking space for my car. We are not going to go back to the 1930s. Where we are going is unknown but if you do all the probably outcomes it is not good, I will agree. The only thing that matters in my opinon is to be somewhere where war is unlikely. Or less likely. Because you dont ever want to be living in a place that experiences war. To be self sufficient in a place no body covets is a good thing.

[Miles Kendig]

If Ben von Bernankistan is such a student of the great depression I wonder why he is trading US wealth for soon to be worthless sovereign & corporate paper rather than gold?  Makes me wonder, IS Ben getting his pound of flesh, er gold from Europe in the same old way?  Is this how the IMF is getting some of its funding?  Is this why we are hearing so little about Austrian, French, Portuguese, Italian, Spanish & Belgian gold deposits today?  Perhaps the Swiss are doing more with all of the deposits that are fleeing the euro-zone than simply churning them into bunds ....  or, is this one of the ways they have moved some of their excess euro holdings back to the fed?

Highlights at 11

[sasebo]

What does all the similarities between then & now tell me?

See what shit happens when you let a bunch of psychopathic fruit cakes in business suits (aka banksters) run the world.

Of course Ted Bundy & John Wayne Gasey looked & acted very normal too, until - too late.

[I am Jobe]

Turning Japanese: America Will Suffer a ‘Lost Decade’ If We Don’t Change Course, Alpert Says

http://finance.yahoo.com/blogs/daily-ticker/turning-japanese-america-suf...

[Monedas]

Google, George Michael, Discography, Songs From The Last Century, Brother Can You Spare A Dime ! It's better for me to just hear the audio and think about what the Great Depression was like ! It's my "Bourgeoisie" fantasy where I pretend I'm a poor drifter living off my wits ! In reality, most of the SSW (Sick Socialist World) has yet to achieve our standard of living during said depression ! Monedas 2011 Tough Tits World Comedy Tour

[Miles Kendig]

http://youtu.be/0UgMJtn9oj4

[Jasper M]

I notice he did not bold THE most impotant line for PM investors: 

"India and China, instead of absorbing a substantial part of the newly-mined gold, have continued to export gold previously hoarded."

Of course, they won't let themselves notice That part of history; "couldn't Possibly happen Now!" So they will relive it. 

[Yen Cross]

 I see a lot of board people. Lets have some off cuff fun? Any takers?

[Monedas]

Yeah ! Zero Hedge needs it's own discography ! Songs for Hoarders to enjoy the coming depression with ? We already have : Brother can you spare a dime ! Pennies from heaven and that old standby.....  http://trololololololololololo.com/  Monedas 2011 Everything is comin' up roses !!!

[Yen Cross]

 have some fun OR  CIRCUM to J.R.'s endless posts?  

[Monedas]

Party ? "Succumb" to a little fun ? Keep Barney Frankensuck out of this ! Monedas 2011 J.R.'s posts seem better than most ?

[Yen Cross]

 Circum. Endless circles.  The Barney toss across was good. Modenas 2011? i thought it was Maranello. Yes J.R. does post well. It becomes lethargic at times

[bk1037]

Testing Rich-Test Disable as I have been losing some posts when it was enabled.

[bk1037]

OK sorry for the off-topic test post folks, one time only.

[Yen Cross]

 Every one runs during low volumes? Trade smalls and get technical. Sow your oats!

[JohnG]

It's about to collapse folks.

12, 18, maybe 24 months outside.  Proabaly sooner than later.

And it is over.

Prepare.

[css1971]

400 years and counting.

Not to put a downer on the doomers, but we've been here before and will be again. This time is not different, sorry.

[Mec-sick-o]

Japan has been in an economic "depression" for two or three decades now (depending how you measure it).

Yet, it has not changed much.

It will be the same for the rest of developed world.  Slow cooking frogs.

What TPTB may have forgotten is the potential wake up call from the young generations.

[steveo]

Even visiting it "looks normal" but its really not that good.

[chump666]

S&P downgraded china property market to negative, on wires ZH got anymore info?

[steveo]

We are still in great depression 2, part B

GDX does look bad, thinking about closing out some gold miners, BUT

I am not joking here, irreverent is as irreverent does, however, the "Egg bounce" is indeed now a pattern.  Others have used ellipses, but I have documented so many Egg bounces, I trade them now.

If gold rallies, mostly likely, very likely means dollar falls.   Could mean that equities make their run up too, unless the gold rally is a substantial flight for fear, and then maybe most asset classes get sold.   But honestly, even with all the black swans, the chances of that happening are maybe 20%.   

Short Euro....still, after taking a beating last night.   Now nicely green, did get stopped on some of my posistion, 40% of 500k to be exact, but there is still a boatload of air beneath that chart structure.

Gold Egg Bounce.   Note the "Embryo Poke" seems very common as the start of the bounce.
PS this is not the "ideal egg" because it is quite round, the more ellipsy looking eggs seem more bouncy.   There, like Hotchberg, I have pre-made my excuses, nice, learning.....ouch.

http://oahutrading.blogspot.com/

[Yen Cross]

 Is anyone taking advantage of that eur/jpy short I mentioned?

[Yen Cross]

 Hmmmm. Bund-Piig spreads on light volumes? Whimps!

[Yen Cross]

 I forgot to Justify the B.I.S.   aka; Bank of International Settlements.

     Enough said?   No I don't think so.    Huggy Bear with   ECB, WHO, N.A.T.O. , and the best of them all    I.M.F.

[Yen Cross]

  I think you are right! 

[Yen Cross]

Dead thread! Wierd

[Yen Cross]

 China ville?

[Yen Cross]

ok but heads

[Kokulakai]

2020=1941