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Freefall: EURUSD 1.2388 And Plunging, Market Liquidity Disappears Again, Traders Brace For Another Flash Crash

Tyler Durden's picture


Full profit taking in everything. Now even gold is plunging, but it is likely an LBMA "intervention." EURUSD just broke through 1.23 and has no further realistic supports for a long time. The money has no option but to go into gold or money markets. For now it is not going into gold, which means it is a relatively good buying opportunity. Liquidity in stocks is now gone as volume picks up. Two of the desk traders we have spoken to are all wearing fireman's hats, bracing for Flash Crash part 2. Look for much more action out of the ECB/FED/IMF/EU/X-Men/Ghostbusters before Asia opens this Sunday. In the meantime, everyone must sure be grateful that the SEC is contemplating instituting new and improved circuitbreakers some time in 2039.



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Fri, 05/14/2010 - 11:14 | 351772 cbaba
cbaba's picture

It took only 1 week after the last weeks 1 trillion dollar injection.

They can save the day but next week will be ugly.

Fri, 05/14/2010 - 11:18 | 351790 Postal
Postal's picture

As if the last two years haven't been ugly. I know, it's gonna get worse. :/

Fri, 05/14/2010 - 12:35 | 352001 jaybaybaker
jaybaybaker's picture

What does nobody expect right now?

1. A liquidity trap that sucks the stock market dry
2. Lower government bond interest rates
3. A crash in gold due to liquidity constraints and hot money leaving (with all newby goldbugs losing their shirts)
4. A euro rally, maybe up to the 1.35/1.40 handles

Guess what, all of these four things will happen next week.

Enjoy the spectacle and don't be caught on the wrong side.

Fri, 05/14/2010 - 12:44 | 352028 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I expect you to say a bunch of dumb things....

Fri, 05/14/2010 - 13:07 | 352064 jaybaybaker
jaybaybaker's picture

I just want to help you keep thinking. I was in the gold camp since 2005, just like you I suppose, but now it's time to get out.

We have about 99% bulls, extreme optimism, even certainty that gold will continue to go up in a straight line, at it's sitting at $1,230. Watch the momentum die in real time.

Sorry, but that's a top, all the usual bells are ringing. It's very easy to see. Oh wait, this time is different ... this time will be the only time in history that 99% bulls does not mean a top.

Fri, 05/14/2010 - 13:13 | 352116 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You have no idea what you are talking about.

Fri, 05/14/2010 - 13:17 | 352127 jaybaybaker
jaybaybaker's picture

Definition of an Elliott Wave 5 (from Wikipedia):

"Wave five is the final leg in the direction of the dominant trend. The news is almost universally positive and everyone is bullish. Unfortunately, this is when many average investors finally buy in, right before the top. Volume is lower in wave five than in wave three, and many momentum indicators start to show divergences (prices reach a new high, the indicator does not reach a new peak). At the end of a major bull market, bears may very well be ridiculed."

Thanks for ridiculing me, you are making my case.

Fri, 05/14/2010 - 13:26 | 352152 Harbourcity
Harbourcity's picture

Anyone who uses The Elliot Wave "theory" as support of their argument is sorely ignorant.



Fri, 05/14/2010 - 14:19 | 352306 stewie
stewie's picture


Fri, 05/14/2010 - 15:08 | 352414 Missing_Link
Missing_Link's picture

+++ ^2

I'd sooner use tea leaves and pig entrails than Elliott Wave.  Not that there's much difference.

Fri, 05/14/2010 - 17:33 | 352742 tmosley
tmosley's picture

At least you can make sausage from pig entrails.

Fri, 05/14/2010 - 13:45 | 352196 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Everybody owns stocks (401k) and everybody is involved with the FIAT ponzi.  Ask around who owns gold/silver bullion...ask around.  No one owns gold and silver bullion.  No one.  It is not a bubble, and will not be a bubble until it is all that is left.  Right now everybody is getting swindled buying stocks, bonds, and thinking paper is safe.  It is not.  And last night you were saying epic market crash.  I agree, but if it does crash, even in the case of an orderly controlled demolishion via the SEC, gold will have even MORE value, as it will be all that remains.  You talk in circles, and then give me Eliot Wave as a disclaimer.  WARNING:  There is no spoon! 

What did your magical trading theory tell you today?  That if the market pulls back, people turn to gold and silver?  Because that is what happened.  The truth is right in front of you, more pressing day by day, yet you prescribe to some "theory" like litheum, telling yourself, "It will work, it was prescribed by a Dr."  The shaman left the village once the seige started.  He said to his comrades, "This is bad news.  We must leave."  He was told, "We have to stay, it is all we know."  The cave you dwell is run by shadow puppets.  Sorry Jay, reality is much more so than you can imagine.

Fri, 05/14/2010 - 13:48 | 352208 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Jay I am riduculing you because all you do is use "psych" scare tactics.  You are by far the worst poster on this site.  I would happily entertain Yip, Harry, and Master Bates all at once than you.  You said last night "confiscation" now Eliot Wave"  you are using every tactic yet you offer no answer to my theories.  No answers.  I do usually not name call, for yes, it weakens my aruements by distracting my points, but you are SCUM!!!!!!!

Fri, 05/14/2010 - 14:07 | 352269 Primal Reversion
Primal Reversion's picture

Where can I get this indicator of yours that tells when we've reached the 99% bull threshold?

IMO there's no way to tell you've reached the critical level until you've reached it. There's a lot more room to go up and with the fear everywhere else, where else can one flee to safety than gold?

I've learned that calling tops and bottoms in any market is a quick way to look like a fool, or a genius, with a much higher probability of the former. When you're dealing with human emotion, there's simply no way to know.

Fri, 05/14/2010 - 15:15 | 352434 RodneyHampton
RodneyHampton's picture

I think there are at least 4 banks with the software you seek judging from their perfect Q1 results.

Fri, 05/14/2010 - 13:14 | 352120 WaterWings
WaterWings's picture

99% of people paying attention agree the US is bankrupt. Does that mean we're not? Hooray! I'm going to Cancun!

Fri, 05/14/2010 - 15:11 | 352424 Missing_Link
Missing_Link's picture


Fri, 05/14/2010 - 14:49 | 352364 anony
anony's picture

"..We have about 99% bulls.."?????

Not on this board "we" don't.  I can't get my neighbors, friends, here or out of town to even discuss gold. And the last folks I talked to about it, a buncha DINKs couples (though I admit they were all heterosexual) the wimmin were yapping how they just gathered up all there old gold and sold it by sticking it in an envelope and taking whatever they could get for it from some shysters in another state.  They were thrilled to be selling it for 25% of what it was worth.  When I told them if they had gotten together and pooled their gold they could have gotten $1,200 an ounce for it, they immediately moved to defensive mode with such statements "Oh well, I'm just glad to be rid of it, never wore it, just taking up spaced, yada, yada yada".

If 10% of the populace is bullish gold (or bearish or neutral) then chickens have lips.

Fri, 05/14/2010 - 15:46 | 352515 kwvrad
kwvrad's picture

CHICKEN HAS LIPS, havent heard that 1 in a looonng time. I spit my coffee out reading that ...rofl

Fri, 05/14/2010 - 15:00 | 352399 Sucks_to_be_Smart
Sucks_to_be_Smart's picture



For the market to do what you think its going to do next week, many fundamental asset correlations and common sense practices would have to be completely abandoned, spurred by nothing outside the realm of complete debt restructuring of the PIIGS or voluntary leave out of the euro by those countries.  Its a million to one shot and i will sell you calls on that prediction every day for the next five years until i retire because of your premiums.  Quick recap:


Yields on government securities don't just magically plummet.  That is effect of supply and demand and demand rises because of fear and flight to safety. 


Given there is a huge flight to safety so yields plummet, there is practically no way in the real world that stock markets rise and euro rallies 10 points.  Huge flight to safety does not equal everyone buy equities!  WRONG.  also, huge flight to safety because of why?  probably because of bad news coming out of europe or another country, which means there's no way euro rallies. 

Flight to safety = buying gold.  There will be no gold deleveraging. 

the PIIGS will not voluntary leave the EU because of the new funding vehicle (EURO TARP), and its too early to kick them out and kicking them out is something i don't even know if they discussed our outlined procedures for in the EU. 


Debt restructuring in those countries would leave every bank in europe F*UCKED and scrambling to fight off bank runs by tapping the reserve fund which is not yet activated over the 60billion in initial funding.  This translates into a huge equity sell off and flight to safety. 


There's just no way in hell equities, euro rally while bond yields drop and gold drops.  Sucker born every day.

Fri, 05/14/2010 - 15:11 | 352421 Missing_Link
Missing_Link's picture

Jay, you're a damned fool.  I am not a gold bug, but let me just say 2 things:

-The percentage of investors who are gold bulls is far less than the 99% you quote.

-Even if it were, the percentage of bulls is not a reliable contrarian indicator.

Fri, 05/14/2010 - 12:46 | 352035 Bananamerican
Bananamerican's picture

sorry jaybay,

there's too much sulfur in the air....literally

Fri, 05/14/2010 - 13:05 | 352088 jaybaybaker
jaybaybaker's picture

Watch gold get whacked in real time. It will continue next week. The hot money will leave and all the newbys will want to limit their losses while they can.

Remember, I told you before the move.

Unless the bull reading goes to 110%. Oh wait, it can't go over 100%.

I see you at $700.

Fri, 05/14/2010 - 13:13 | 352115 Cistercian
Cistercian's picture

 Who wants to "invest" in gold?Buying all the gold that isn't nailed down is the best way to give the finger to the ponzi.

  When the fiat FAILs, you can discuss ad tedium why gold sucks.And we will still be laughing at you.


Fri, 05/14/2010 - 13:23 | 352144 jaybaybaker
jaybaybaker's picture

In a world with lesser and lesser fiat currency (sorry to say, but you do not seem to understand that fiat money=debt), i.e. debt destruction (aka write-offs), there is no such thing as inflation.

We have had the inflation of this big super-cycle that started in 1946 and peaked in 2008. Deflation is since the name of the game.

They bought some time in Europe WITHOUT actually creating more debt, in order to prepare their banks for the Greece write-off. This write-off and many others will come, destroying all that fiat money.

But anyway, why bother explaining this to someone who has found his religion already ...

Fri, 05/14/2010 - 13:50 | 352212 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

If debt is money, and there are quadrillions of dollars of debt, then I think you are WRONG!!!!!!!!!!!!!!!!!!!!!!!!!!

Fri, 05/14/2010 - 14:05 | 352263 Dr. Acula
Dr. Acula's picture

>there is no such thing as inflation

Except when it's defined as an increasing money supply:

Fri, 05/14/2010 - 14:35 | 352336 stewie
stewie's picture

How can you be so sure that the banks will write off all those bad loans?  It sure didn't happen in the US, they simply changed the accounting rules.  If you are referring to sovereign defaults to reduce the total debt, then do you think people will trust all those Ponzi fiat charades going around in the face of total collapse in the multi-trillion derivative markets?  Hyper-inflation has nothing to do with supply and demand.  It's lost confidence in the currency involved.   Business cycle debt deflation is not what ppl are talking about here.  Now the gvmt can change all the rules under out feet, but this is another story all together.

Fri, 05/14/2010 - 21:46 | 352355 Rusty_Shackleford
Rusty_Shackleford's picture



Nothing, and I mean nothing, would make a real goldbug happier than to see gold at $700.


Don't you get it?  We skipped to the last page of the book.  We know how it will end. 

Fri, 05/14/2010 - 15:44 | 352512 saladbarbeef
saladbarbeef's picture

It seems the wicked premium for PHYS to spot or GLD belies the fast money or the scared money trying to find a home.

Sat, 05/15/2010 - 13:26 | 353697 Hephasteus
Hephasteus's picture

Can I get some butthurt with that $700 gold. How about some tanks rolling over me. I need more fear. I've got a taste for it.

Please guarantee anal pain next time.

Fri, 05/14/2010 - 12:49 | 352052 TheDriver
TheDriver's picture

>> What does nobody expect right now?

The obvious answer, of course, is The Spanish Inquisition.

Fri, 05/14/2010 - 14:44 | 352352 floydian slip
floydian slip's picture

You cant eat Spanish Inquisitions! hehe

Fri, 05/14/2010 - 15:35 | 352488 Cow
Cow's picture

Our chief weapon is surprise. SURPRISE and fear, our 2 weapons are fear and surprise and ruthless efficiency, our 3 weapons? are...

Fri, 05/14/2010 - 12:53 | 352065 AnAnonymous
AnAnonymous's picture

Not bad at all. Nobody indeed expects that. With reasons.

Fri, 05/14/2010 - 13:20 | 352134 halcyon
halcyon's picture


your post has only one problem.

Your posting it on ZH, where >50% population is 15 year olds who get their economic education from prisonplanet and have absolutely no ability to think for themselves or trade.

The rest?

They've already taken their positions. Many aligning with yours.

Good all, although possibly a few days early, imho.


Fri, 05/14/2010 - 13:26 | 352153 jaybaybaker
jaybaybaker's picture

Thanks, I guess I'll stop posting. I thought this was a blog for sophisticated analysts and traders ...

Yes, I also think I am a bit early, my guess is that it'll all play out in the next three weeks though.

Fri, 05/14/2010 - 13:44 | 352192 legerde
legerde's picture

I took some profits in GDX yesterday, with the expectation that the cartel needs a lower price going into expiration next Friday.  So I will be converting my GDX into physical "in-my-hands" bullion the middle of next week.

So, jay, you may be right in the short term, but I still believe that longer term nothing has fundamentally changed.  People are losing faith in fiatscos. From my understanding of Harvey Organ, the June physical delivery is going to be large:

"a total of 3.3 tonnes of gold are standing through options exercised.  This number is absolutely huge and it portends huge stuff coming down the pipe for the large June gold delivery month."


Fri, 05/14/2010 - 14:03 | 352257 Hulk
Hulk's picture

a total of 3.3 tonnes of gold are standing through options exercised.  This number is absolutely huge and it portends huge stuff coming down the pipe for the large June gold delivery month

This is gold's next bull phase, large deliveries. Folks listening to JayJayBoy are going to wish he had  never showed up...

Fri, 05/14/2010 - 14:05 | 352261 jaybaybaker
jaybaybaker's picture

That sounds like a reasonable post. I think our opinions are not very far removed. This is not the end of the gold bull market, but we are just before a very sharp pullback. That's my point. Thanks for responding something thoughtful.

Fri, 05/14/2010 - 13:52 | 352217 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yes please stop posting!!!  Troll quietly if you must!

Fri, 05/14/2010 - 14:04 | 352258 Boxed Merlot
Boxed Merlot's picture

I can track with your "this time it's different" analysis, but on a continuation of the hopefully serious considerations, is there much credence to the 2 tier theory of gold positioning, that of the Au in the "marketplace" and the remaining lion's share held in "soveriegn" states of deposit / usage / societal backing?


My reason for asking is it appears to me Gold production runs so counter to logical methods of supply and demand forces, (when price increases, low grades are exploited), that it makes me wonder if traditional thought patterns re: typical market commodities are misapplied to the babaric relic.  Just wondrin. 



Fri, 05/14/2010 - 13:51 | 352215 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Wow, out in droves today.  If you think that the majority of ZH is adolescent then do yourself a favor and troll quietly.

Fri, 05/14/2010 - 13:58 | 352234 WaterWings
WaterWings's picture

LOL! You're still trading!


Fri, 05/14/2010 - 16:08 | 352563 Chupacabra
Chupacabra's picture

Jay, those are some specific predictions.  Will follow your comments more closely if things pan out as you've called them.  Good luck.

Fri, 05/14/2010 - 11:23 | 351812 tictawk
tictawk's picture

When will these ass hats realize that nobody is bigger than the markets.  There is a fundermental problem of too much debt and trying to solve a debt crisis by creating more debt is INSANITY....  but in an asylum, insanity is normal... welcome to bizarro world.

Fri, 05/14/2010 - 11:43 | 351878 B9K9
B9K9's picture


You appear new here, so I'll give you a heads up:

  • They aren't asshats - they're way ahead of us
  • They know nobody is bigger than the markets - that's what they're counting on
  • They know too much debt will not solve anything - it isn't supposed to
  • They know creating more debt is insanity - it's supposed to

Once you digest this information, you will come to realize that this isn't a bizarro world at all - it's playing out perfectly.

While you, I and the rest of the world wasted our time & energy attempting to be good, productive citizens, a few were told the secret(s) of life: he who controls money controls the world.

The events we're currently experiencing have repeated themselves in nearly identical patterns for 5,000+ years of recorded history - the end results always play out the exact same way.

Right now, some are at the 'austerity' phase, where beholden debtors throw out all remaining ballast in a mad attempt to service ever escalating compounding debt loads. It won't work - it never works, since this is the inflection point on the curve where the principal+interest goes parabolic.

Next comes default and repossession of collateral (foreclosure). After that is a life of debt peonage and a reduced state of living, then finally, a miserable lonely death.

Periodically, the default & repossession state is averted by repudiation & war. In these cases, the money-lenders are either expelled or forced to flee for their lives. Which version do you think we'll see this time around?

Iceland, Greece, ... ? It appears to me they ain't gonna be given up no assets.

Fri, 05/14/2010 - 11:52 | 351909 Mako
Mako's picture


"problem of too much debt and trying to solve a debt crisis by creating more debt"

You were brainwashed by your parents to believe personal finance rules apply to the system.  The system only survives by an expansion of "credit/debt", so your whole statement is kind of incorrect.

The only way the system survives is taking on debt, if not what you going to service the prior debt with?  Hmmm.

Fri, 05/14/2010 - 12:04 | 351946 WaterWings
WaterWings's picture

Tsk tsk. Mako, you're too much of a hardass today.

Fri, 05/14/2010 - 12:10 | 351964 merehuman
merehuman's picture

Mako, BK and many of you who know the reality of the market and post here have an amazing amount of patience.  Here you are fighting against lies and ignorance as well as the more numerous trolls and dummy J6P like me.

Thank you all for your perseverance!

Fri, 05/14/2010 - 12:43 | 352023 B9K9
B9K9's picture

We're all here for a reason. I assume TD is attempting to build a new (honest) reporting platform by which he can then sell out & retire. As for myself, I'm just honing my schtick for when this MOFO finally blows. People are going to be hungry & searching for answers as to why/what happened to "their" USA.

Just knowing what is going to occur doesn't buy jack - you need to do something with it, which dovetails with my observation below:

It appears there are 3 primary strategies emerging by those with some foresight to perhaps become "more" safe ie safer:

  1. Self-sufficient - farming
  2. Guns/gold/food - last 'em out
  3. Handyman/politician - help out

Personally, I'm banking (yes, pun intended) on numero tres. We're gonna get a chance to create a new society when this MOFO blows, and I'd like to be part of it. I'm sort of itching to get back to the days where politics actually gave me any interest.

Once politics again has real meaning, it will be the work of a lifetime to try & make a better place.

Fri, 05/14/2010 - 12:49 | 352051 ExistentialSkeptic
ExistentialSkeptic's picture

Got a reading list for those who want some more of where you get your perspective from?

I just finished "The Creature from Jekyll Island" a few days ago and I'm hungry for some additional long-term perspective.

Fri, 05/14/2010 - 13:03 | 352082 B9K9
B9K9's picture

Jekyll Island attempts to pin the blame on the Fed, but the problem is much more fundamental. For interested readers, I would suggest the following two sources of information.

The first link is a general presentation of exponents:

The second is a recap of how ancient societies recognized the dangers of exponential math when applied to finance & money, the laws they enacted to prevent & forestall these dangers, and the warnings they issued across hundreds of generations to future readers:

Fri, 05/14/2010 - 13:09 | 352102 Mako
Mako's picture

"but the problem is much more fundamental"

Bingo.  Great post.

Eliminating the Fed will not eliminate the balloon payment at the end of the cycle.  

The current system is the same as the last system and the system before that... been doing this since before things call banks or central banks or the Fed even existed.

Fri, 05/14/2010 - 13:26 | 352157 B9K9
B9K9's picture

Money lenders don't really fear the loss of fortune. Take away their gold, but allow them to retain their core ability to lend, and they will once again be in charge.

The power-elite's greatest fear is that mankind finally throws off their shackles & outlaws the practice of usury. We have the ability to create a system that is more logical, that allows capital to efficiently flow where demanded in order to provide sufficient investment for future growth & productivity.

But first we will need to educate our youngest generations. The law of exponential math should be taught from 3rd grade on. Each successive school year should introduce different historical lessons why certain prohibitions are in place, and what happened to governance & liberty when forbearance was abandoned by previous generations.

The coming catastrophe will be indelibly imprinted on their collective consciousness.

Fri, 05/14/2010 - 14:30 | 352319 Dr. Acula
Dr. Acula's picture

"The power-elite's greatest fear is that mankind finally throws off their shackles & outlaws the practice of usury."

What gives you the right to outlaw or nullify a private contract between two voluntary parties? How about, if you don't like usury, then don't agree to such terms?

"We have the ability to create a system... that allows capital to efficiently flow where demanded"

What incentive is their to lend when charging interest is not permitted? What else would motivate a lender to give up real, present goods in exchange for a mere chance of future goods? And how does taking away economic options like lending and borrowing help capital "flow efficiently"?

"The law of exponential math should be taught from 3rd grade on" - Lending funds at interest does not result in exponential increases in the money supply, just as renting out a lawn mower cannot cause linear increases in the money supply. Creation of credit or fiat money by the government increases the money supply. Fractional reserve banks, through bailment fraud and other kinds of government-insured fraud, also increase the money supply.
Fri, 05/14/2010 - 14:47 | 352361 Day_Of_The_Tentacle
Day_Of_The_Tentacle's picture

Bravo! Simply put. Efficient. No-nonsense. To the point. Target The Usury. 

Fri, 05/14/2010 - 14:55 | 352380 faustian bargain
faustian bargain's picture

I still don't get how exponential 'usury' can survive in a free market. I think a reasonable argument can be made that fractional reserve lending is a form of fraud, and therefore should be illegal, but where in history is it demonstrated that with a hard (i.e. deflating) currency in a free market, economic growth is necessarily going to be lower than the average lending interest rate? Or, lacking a historical example, how is it logically necessary?

I can't prove the existence of a central bank that creates fake money out of nothing is a fundamental problem, but it does seem that it amplifies any existing problems way out of proportion.

Fri, 05/14/2010 - 13:08 | 352104 ExistentialSkeptic
ExistentialSkeptic's picture

Thanks for the bookmarks, B9BK -- I mean it.

Fri, 05/14/2010 - 13:18 | 352129 WaterWings
WaterWings's picture

One Second After for 1 and 2 on B9K9's list. Read Amazon recommendations for more on that rabbit hole. Here's a primer if you haven't seen it:

Fri, 05/14/2010 - 13:54 | 352222 ColonelCooper
ColonelCooper's picture

Might I also suggest:  Putting Food By, Gardening When it Counts by Steve Solomon, The Joy of Pickling, Balls Book of Preserving Foods, How to survive the end of the World As We Know It by James Wesley Rawles, Where there is no Doctor, The Encyclopedia of Country Living, All New Square Foot Gardening by Mel Bartholomew, anything by Tom Brown, A Blue Book of Gun Values, and any or all of the fist four FireFox books.

Fri, 05/14/2010 - 14:42 | 352350 ExistentialSkeptic
ExistentialSkeptic's picture

Thanks for the list. :-)  I can borrow Putting Food By from my 68-year-old mother, who just expanded her organic garden again this year.  She's got canning down to a science, but relies on a stove fueled by utility natural gas. 

I guess it's time to rehab the chicken coop.

Fri, 05/14/2010 - 14:53 | 352373 Rusty_Shackleford
Rusty_Shackleford's picture

I'm assuming you're also aware of  It should be part of your balanced daily internet diet as much as ZH is.


Take it from me, I'm a level 6 survivalist.  I'm trained to use guys like Hairy Wanger and JayJayBeaker as food and shelter.

Fri, 05/14/2010 - 15:08 | 352418 Rusty Shorts
Rusty Shorts's picture


 - good link Rusty.


Any tips on how to seperate the shit from the hides of people like you mentioned??

Fri, 05/14/2010 - 16:14 | 352584 ColonelCooper
ColonelCooper's picture

After slaughter, I recommend scalding the entire carcass in boiling water.  This makes the hairs scrape right off, on a thin skinned animal.  Dont oversalt the hide when you stretch it, or it will want to tear when you flesh it.

As far as seperating shit, on animals like that, expect to get it all over. 

Fri, 05/14/2010 - 16:10 | 352574 ColonelCooper
ColonelCooper's picture

I have no clue what level 6 means, but +1 on the survivalblog link.  It is the most no bullshit sight for prepping tips I've ever found.  When you can find a guru that can talk about field stripping AR's AND.. can explain the derivatives market, best to listen. 

That sight in and of itself will provide you with hundreds of hours of reading, but don't expect to sleep any better.

Fri, 05/14/2010 - 19:20 | 352930 Rusty_Shackleford
Rusty_Shackleford's picture

It's just something funny I remember my alter ego from King of the Hill saying.

Given the Avatar, I try and keep it real with occasional Dale-isms.


Thanks to my tutilage he’s a level 6 survivalist.  He’s been trained to use boys like yours as food and shelter.”

Sat, 05/15/2010 - 00:41 | 353283 hedgeless_horseman
hedgeless_horseman's picture


Fri, 05/14/2010 - 14:57 | 352386 RobD
RobD's picture

We pickeled some eggs last Sunday, good cheap(relatively) way to store protein.

Fri, 05/14/2010 - 16:17 | 352592 ColonelCooper
ColonelCooper's picture

GNC Whey Isolate shake is also an excellent way.  Mixes with water in the absence of milk, 300 calories to a scoop, and 28 grams of protein.  Has a pretty much indefinite shelf life.

Sat, 05/15/2010 - 00:44 | 353284 hedgeless_horseman
hedgeless_horseman's picture

Milking short horns are a dual purpose heritage breed that assures no absence of milk, cheese, butter, meat, fertilizer, or leather.

Fri, 05/14/2010 - 14:58 | 352392 faustian bargain
faustian bargain's picture

I am currently reading Gardening When It Counts - it's full of great information, all the stuff traditional small farmers used to know, that is endangered knowledge these days. As an aside, he argues against the whole 'French intensive' farming trend as being ultimately less efficient and using too much water.

Fri, 05/14/2010 - 14:59 | 352398 Ned Zeppelin
Ned Zeppelin's picture

Also The Self Sufficient Life and How to Live it.

Fri, 05/14/2010 - 17:16 | 352721 Mesquite
Mesquite's picture

Also might include works by Harry Browne (from about 40 years ago)..

Also fondly remember Animal Farm.. 

Fri, 05/14/2010 - 13:11 | 352110 cougar_w
cougar_w's picture

"The Long Emergency" but there is a slight risk you'll kill yourself before you get through it.

In which case, it is just like life.

Fri, 05/14/2010 - 12:13 | 351973 jdrose1985
jdrose1985's picture

B9K9, Mako;

You two are hardcore realists and I'm thankful to be able to have access to your balanced historical perspectives. Two lone, clear voices breaking through the static. The impossible dollar rally is here and the inflationists are scratching their heads.

Forget the gold, those with foresight should be going straight for the food and lead..

Fri, 05/14/2010 - 12:21 | 351987 Mako
Mako's picture

Thanks guys.

Of course, people will continue to mark my post as junk because they are running from the Truth and want to continue with the lies.




Fri, 05/14/2010 - 13:56 | 352228 ColonelCooper
ColonelCooper's picture

I may argue with you Mako, but I will never junk.  You are as honest with your opinions as any here.  Maybe a little depressing, but honest.  :l

Fri, 05/14/2010 - 14:37 | 352337 Duuude
Duuude's picture

Thanks for your posts Mako.

Can't disagree with logic.

Fri, 05/14/2010 - 14:40 | 352345 Troublehoff
Troublehoff's picture

If the system was allowed to function 'by the rules' then there would be a deflationary black hole I agree... yes more debt needs to be created to service the existing debt so the system collapses without debt expansion but...

Any time we're in a deflationary/low inflation environment the FED, BOE, ECB have Carte-Blanche to monetize debt without stoking interest rates and tanking the system... this is what they have been doing with ZIRP QE etc and there has not been a greek style rise in bond yields.

It's not a particularly fair system though as monetization (liquidity injections) seem to be taking the form of buying a load of trash at fictional values from people who made bad decisions and got bonuses while diluting the money of people who lived within their means.

It's a shitty system and extremely unfair but hey - who said life was fair?

Fri, 05/14/2010 - 17:07 | 352700 Strider52
Strider52's picture

Life sucks, then you go camping. Really. I am going camping after work today. The dawg is ready...

Fri, 05/14/2010 - 12:38 | 352010 DoChenRollingBearing
DoChenRollingBearing's picture

I'll take the gold WITH the lead and food.

Fri, 05/14/2010 - 13:03 | 352084 AchtungAffen
AchtungAffen's picture

I'll take gold and then GTFO while the gun crazies neutralize themselves with their phallic insecurity transpired into firearms.

"The gun, in all its forms, was the epochal tool of white male supremacy, which is why it continues to have irrational appeal. As much as the jack-booted hate Jews and blacks, that much they love their guns." - James Carrol

Fri, 05/14/2010 - 13:11 | 352112 TBT or not TBT
TBT or not TBT's picture

Hmmm, certain minorities in the US, rumoured to ahhhh not to be lacking in the phallus department, certainly engage in way more actual fatal gunplay amongst themselves than the supposedly insecure crackers imagined by "James Carrol" do.

Fri, 05/14/2010 - 13:25 | 352150 WaterWings
WaterWings's picture


Where are the honky drive-bys? Sure, a lot 'em of are dumb as shit, but the majority is blastin' holes in some rusty heap out back. Leave 'em alone and you won't have any problems.

If there is hope, it lies in those with land to grow food - irrespective of race.

Fri, 05/14/2010 - 13:37 | 352177 TBT or not TBT
TBT or not TBT's picture

Land, and a quality stock of non-hybrid seeds to grow on it.

Fri, 05/14/2010 - 13:51 | 352214 AnAnonymous
AnAnonymous's picture

Is using guns on warzones irrational?

I read that the guy wrote about irrational.

Not rational use. Just mentioning.

Fri, 05/14/2010 - 13:27 | 352155 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Dumbest thing I have heard in about a week. Please, GTFO . After all I'm sure no one with a gun would actually find you anywhere, shoot you and take your gold. I mean, why bother with Bambi, gun crazies only shoot each other. Hint: You're Bambi.


I suggest you take a weapon with you in self-defense, or prepare to bend over and hope for the best. What do you intend to do, quote James Carrol and smile?


So do women who carry also have white male supremacy and phallic issues or are you just a sexist pig?


Get over it that  philosophy or one day perhaps live to regret it.



Fri, 05/14/2010 - 15:04 | 352406 Rusty_Shackleford
Rusty_Shackleford's picture


Good one. 


"If you disagree with me and don't have an irrational fear of an inanimate object, it means you have a small penis." 


You obviously are a titan of deductive logic.


Why don't you ask the Jews how they felt about being disarmed.


Worst post ever.  (in comicbook guy voice)

Fri, 05/14/2010 - 15:40 | 352502 WaterWings
Fri, 05/14/2010 - 15:19 | 352443 Marla And Me
Marla And Me's picture

You've clearly never visited Israel...

Fri, 05/14/2010 - 16:16 | 352589 Chupacabra
Chupacabra's picture

lol  We've heard from the 21-year old liberal arts major.

Fri, 05/14/2010 - 14:53 | 352367 Dr. Acula
Dr. Acula's picture

"The impossible dollar rally is here"

It is not at all impossible for one economic good to rise in objective exchange value against another economic good. Economic valuation is ultimately subjective.

Can you specify precisely what the dollar is rising against and over what time period? For example, try comparing its market exchange value against gold over the last couple of years. Or over the last 97 years since the Fed has existed.

"and the inflationists are scratching their heads."

But, inflation is happening:

According to the Austrian School, inflation is defined as an increasing money supply. But, if you choose the popular definition of inflation as a rise in the price of a "basket" of goods, whatever that means, then we are inflating at about 10% yearly:

Fri, 05/14/2010 - 12:14 | 351974 -1Delta
-1Delta's picture

Printed money of course from helicopter ben

Fri, 05/14/2010 - 13:03 | 352087 FranSix
FranSix's picture

"The money has no option but to go into gold or money markets"

This is exactly right.  Mako has it right too, when he says the only avenue will be the expansion of sovereign debt markets or you can consider the whole game over.  And if Taleb hasn't noticed we have seen a failed sovereign bond market in Greece, and the whole system didn't fail.

The important thing to remember is that everything is based on shorter and shorter term considerations, and that the overwhelming bias in the markets is short term money.  Well, gold can serve as a settlement option for short term money, and if you didn't notice, it has thrived in a declining yield environment.

Very likely we'll see negative yields on the short end, and a flatter yield curve.

This article by John Rubino points out where the concerns are, they're almost all in the short term markets:

This condition is a legacy of an inverted yield curve prior to the onset of financial crisis in 2007.  There is no way out of a liquidity trap unless you expand the bond market on the long end, and resort to negative yields on the short end.  There is huge resistance from the commercial banking sector on negative yields, but all it takes is one country to resort to this policy, and all of them will.

Treasury auctions won't fail here, because the demand for short term paper is astronomical. 

Fri, 05/14/2010 - 12:58 | 352063 Yardfarmer
Yardfarmer's picture

with all due respect for your many insightful and instructive posts, Mr. Good Dog, I think you perhaps paint this rather complicated scenario with too broad of strokes. Your depiction of the proverbial and mysterious "they", I feel, is quite well taken if only somewhat vague. It seems that your contention about the control of money refers to a widely disseminated quote which, if I partially remember it correctly was something like "I care not who controls the government, if I control the money" spoken by one of the many Rothschilds I believe. Or was it Paul Warburg?

At any rate we all get that part of the picture, some filthy rich "money lender" as you properly refer to them. Only I think not that it is they who will be fleeing anywhere soon unless it is to their well fortified compounds or underground complexes constructed especially for those essential to "Continuity of Government", and probably not in a great deal of haste at that. We have already seen evidence of "flight" over the past decades as mass migrations occur across the world due to punitive and restrictive fiscal policies intitiated by the "money masters". Take the recent events in Kyrgyzstan for instance where more than 25% of GDP was in the form of "remittances" from Kyrgyz emigrant labor in Russia and Kazahkstan. A little closer to home look at our own massive invasion of "illegals" due largely to NAFTA and GATT. 

While things do appear to "repeat themselves", I would suggest that they are scarcely in even "nearly identical patterns" or at least not readily identifiable except for the most part in hindsight. In this respect I assume you must be referring to the wave and cycle theories of Kondriateff, W.D. Gann, and Martin Armstrong as well as the fractal geometry of Mandelbrot.

Yes, yes, it is all about cycles and cycles within cycles, yet very hard of apprehension and for the most part inaccessible to our ordinary human linear consciousness suspended as they are on Cartesian coordinates.

We are indeed at a major "inflection point" as you suggest or as Armstrong, with his usual great prescience referred to as a "phase transition" or as Kondriateff, with his agricultural background, referred to particularly as the decline into winter in his ever recurring seasons of cyclic economic activity.

There is some evidence that our present economic malaise has been deepened and intensified by concerted attempts to manipulate and interfere with these cycles by the agencies of Keynesian monetary policies. Just as man can interfere with the natural environment with drastic results (Deepwater Horizon?) so can he create irreparable dislocations in the economic cycles as well with equally dire results.  

Fri, 05/14/2010 - 13:05 | 352094 TBT or not TBT
TBT or not TBT's picture

Wheels within wheels in a spiral array, a pattern so grand and complex, time after time we lose sight of the way, our causes can't see their ill effects.

Quoted from memory from Natural Science, Permanent Waves album, by RUSH

Fri, 05/14/2010 - 14:10 | 352266 B9K9
B9K9's picture


From bacteria to complex lending institutions, all living creatures & systems endlessly repeat themselves in identical fashion:

  • Adaptation & emergence
  • Depletion & degradation
  • Overshoot & extinction

This pattern is repeated due to the law of exponential math - growth & doubling rates/time.

The deeper, underlying meaning of these fundamental, essential laws are not taught to aspiring doctors, scientists, attorneys and other professionals.

But these principles are taught to certain individuals who waste no time applying them towards corrupting & corroding important governing structures. The power-elite know these critical key-stones are the weakest links because they are subject to petty human vices like greed & envy.

Really, it's child's play to them; and here we are today, wrapped up clean & fresh, ready to be delivered to the Devil.

Fri, 05/14/2010 - 13:39 | 352180 sojourner
sojourner's picture

Very succinct and sadly too true.

Fri, 05/14/2010 - 11:26 | 351826 Assetman
Assetman's picture

We need the picture of Frank Durbin leaving the scene again, Tyler.

Fri, 05/14/2010 - 11:29 | 351837 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Ditto. Thats a must see.

Fri, 05/14/2010 - 11:32 | 351845 tictawk
tictawk's picture

anybody positioned long on the spoos has not been challenged all the way up from the floor.  Pull up a weekly chart.  None of the dips were deep enough to challenge the bulls and clean out weak longs before moving higher.  This tells me that when this market goes down, it will have a snowball effect as stops are triggered under each of those lows..... or maybe we lock limit down?

Fri, 05/14/2010 - 11:31 | 351849 Dr. Richard Head
Dr. Richard Head's picture

When I was your age we used to be able to buy the entire stock market for $1 Trillion dollars, wearing my sister's hand-me-downs, walking uphill both ways to school. 

Fri, 05/14/2010 - 13:40 | 352183 RichardENixon
RichardENixon's picture

When I was your age we should be so lucky as to have had "school".

Fri, 05/14/2010 - 15:06 | 352409 faustian bargain
faustian bargain's picture


Fri, 05/14/2010 - 12:42 | 352022 NERVEAGENTVX

"next week will be ugly"? You still haven't spotted the pattern yet? Every monday the "european debt crisis" is solved, by every friday the "european debt crisis" is back in full swing. Every week ends with a big sell off and by monday,guess what, all better! This has been going on for weeks. What makes you think next week will be any different?

Fri, 05/14/2010 - 12:47 | 352041 Dr. Richard Head
Dr. Richard Head's picture

All better?  Not so sure.  The market does tend to rebound as you suggest, but the rebound doesn't seem to surpass its past peak.  Looks like a rough ride down in my ignorant view.

Fri, 05/14/2010 - 13:22 | 352143 cougar_w
cougar_w's picture

Never make the mistake of confusing a positive feedback loop for a stable system.

Feeling lucky, punk? Well are ya?

Fri, 05/14/2010 - 17:02 | 352691 Common_Cents22
Common_Cents22's picture

With irrational governments knee jerk responses who would want hold anything over the weekend?

Fri, 05/14/2010 - 11:16 | 351781 Goods
Goods's picture

Don't worry, I saw Bernanke this morning and he had another bazooka in his pants.

Fri, 05/14/2010 - 11:23 | 351816 Assetman
Assetman's picture

That wasn't a bazooka, Goods.

Fri, 05/14/2010 - 11:24 | 351818 Mitchman
Mitchman's picture

Are you sure it wasn't a pencil?

Fri, 05/14/2010 - 11:25 | 351823 luster
luster's picture

Naw.  He had just been surfing porn at the SEC.

Fri, 05/14/2010 - 11:38 | 351873 tictawk
tictawk's picture

To save the Euro and force a restructuring the CBs will have to raise rates but that would create other problems.  This is not going to happen given the politics.

Fri, 05/14/2010 - 11:43 | 351884 Anton LaVey
Anton LaVey's picture

"Is that a bazooka in your pants, Ben, or are you just really, really happy to see me?" said Jean-Claude Trichet.

(Sorry, could not resist)

Fri, 05/14/2010 - 12:15 | 351979 Cursive
Cursive's picture

Don't worry, I saw Bernanke this morning and he had another bazooka in his pants.

Timmay says that Hank's bazooka was so-so and Benron's is really small.

Fri, 05/14/2010 - 11:18 | 351791 Al Huxley
Al Huxley's picture

I'll wait a couple more days to add to the gold and gold stocks.  Think this wave will run its course mid-next week. 

Fri, 05/14/2010 - 11:19 | 351797 101 years and c...
101 years and counting's picture

Hey Shorts, get your DOW 10K party hats ready.  You may need them in a few minutes.



Fri, 05/14/2010 - 11:20 | 351802 Mongo
Mongo's picture




Fri, 05/14/2010 - 11:47 | 351896 Uncle Remus
Uncle Remus's picture


Fri, 05/14/2010 - 12:51 | 352058 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

EDIT:  CONTROLLED algo demolition.  From now on they will be CONTROLLED.

Fri, 05/14/2010 - 11:20 | 351803 THE DORK OF CORK
THE DORK OF CORK's picture

My Euros my poor poor euros......

Fri, 05/14/2010 - 11:42 | 351880 MsCreant
MsCreant's picture

I'm sorry Dork. We are insensitive as hell to the pain of other's cheering this disaster on. We'll get ours, you can bet on it.

Fri, 05/14/2010 - 11:56 | 351922 Hulk
Hulk's picture

We have been getting a pretty good dose of pain too, for the past couple of years.

Nothing like we are going to see though. 

Have a nice day!

Fri, 05/14/2010 - 12:43 | 352024 DoChenRollingBearing
DoChenRollingBearing's picture

Yeah we will get ours.  Lots and lots of pain coming soon to our country and world.

My wife has a friend coming in from Italy soon.  Bet she says that America is not as cheap as it used to be.

Fri, 05/14/2010 - 13:35 | 352173 THE DORK OF CORK
THE DORK OF CORK's picture

Don't worry about it MsCreant I'm mostly in Gold now - Just some Euros held for daily use and a Government Bond as a hedge.

still I do not want society to crash around me - I would prefer a 20% yearly appreciation of Euro Gold then these more dramatic rises.

Fri, 05/14/2010 - 13:15 | 352103 SlowLoris
SlowLoris's picture

It hurts! It hurts!

What now?

Fri, 05/14/2010 - 13:25 | 352151 cougar_w
cougar_w's picture

Just more hurt.

Fri, 05/14/2010 - 14:07 | 352271 Cognitive Dissonance
Cognitive Dissonance's picture

And in a society conditioned to believe that,

1) Pain is not natural

2) Pain should be avoided at all costs

3) Pain is what the other guy should experience if someone must

.....the way to move the herd is through pain application or removal techniques and procedures.

Fri, 05/14/2010 - 15:02 | 352400 cougar_w
cougar_w's picture

Who knew that Stockholm Syndrome operates just fine at the macro level?

It all ends in tears. But it's okay, because that's also the cure.

Fri, 05/14/2010 - 11:20 | 351806 economicmorphine
economicmorphine's picture

OK, who's the fucker with the fat finger LOL>

Fri, 05/14/2010 - 11:37 | 351868 -1Delta
-1Delta's picture


Fri, 05/14/2010 - 12:44 | 352029 Cognitive Dissonance
Cognitive Dissonance's picture

Not me. I've had mine up my a**.

Fri, 05/14/2010 - 12:49 | 352054 Dr. Richard Head
Dr. Richard Head's picture

Not a bad idea really CD. In fact, it might block the big JP Morgan/Goldman C*ck from being able to enter.  I am going to give it a try. 

He who goes to bed with itchy butt wake up with stinky finger.

Fri, 05/14/2010 - 11:21 | 351807 silvertrain
silvertrain's picture

 DID ANYBODY HEAR RICK SANTELLI IN THE LAST SEGMENT...sorry, jesus, he just told the world on cnbc that the gld is a problem because they dont have the gold..rotflmao on cnbc of all things, he said it was a paper game and was going to cause unreal problems..

Fri, 05/14/2010 - 11:28 | 351831 Mako
Mako's picture

Probably +99% of the gold every mined out of the ground still exists.   The system has just as much if not more gold then it ever has. 

Fri, 05/14/2010 - 11:31 | 351847 SDRII
SDRII's picture

As much gold compared to what?

Fri, 05/14/2010 - 11:33 | 351854 Mako
Mako's picture

Based on 2007 production today they will extract another 6-7 tons of the stuff.

Fri, 05/14/2010 - 11:43 | 351881 SDRII
SDRII's picture

Catch that surely prick Hobbs telling the "gold bug" that gold is no store of value just look at 80s/90s. Simon check the forex charts

Fri, 05/14/2010 - 11:45 | 351890 Mako
Mako's picture

There is no safe.  There might be "safer" but there is no "safe".

Fri, 05/14/2010 - 13:12 | 352114 assembler
assembler's picture


With this exception:

But lay up for yourselves treasures in heaven, where neither moth nor rust doth corrupt, and where thieves do not break through nor steal, for where your treasure is, there will your heart be also.

Fri, 05/14/2010 - 13:22 | 352139 maff
maff's picture

Safe? Can you prove that?

Fri, 05/14/2010 - 13:30 | 352164 WaterWings
WaterWings's picture

It's similar to the excitement experienced by goldbugs watching the price go up, except that it's a burning in your bosom; knowing you've led a good life; given more than taken.

Fri, 05/14/2010 - 15:31 | 352471 maff
maff's picture

I was asking about this "heaven" thingy, with the angels and all. Is that a "safe" bet...

...or a mass delusion?

Fri, 05/14/2010 - 15:42 | 352508 WaterWings
WaterWings's picture

I'm hedging my bets. Ask Mako about certainty. I also have PMs.

Fri, 05/14/2010 - 11:57 | 351925 SilverIsKing
SilverIsKing's picture

So perhaps, as you assert, there is more gold in existence now than ever.  What say you about the supply of FRNs now versus ever before?  Get it?

Fri, 05/14/2010 - 12:40 | 352005 Mako
Mako's picture

Irrelevant, actually the amount of credit is decreasing, but I wouldn't want to pop your bubble.

The amount of gold in the world is irrelevant as it was in the 30s and the prior collapses before that. 

I have no idea what you are getting at... the world feeds and provides by the use of credit... that is what all you guys are doing.  It will collapse, production will collapse... it doesn't matter how many gold coins you have in your pocket.

Fri, 05/14/2010 - 13:49 | 352210 RichardENixon
RichardENixon's picture

I know some Jews who got of Germany in the '40s because the old man had enough sense to stash away a bunch of gold coins. Somehow I don't think paying off the necessary people with some song and dance about the collapse of credit bubbles would have worked as well.

Fri, 05/14/2010 - 14:03 | 352256 AnAnonymous
AnAnonymous's picture

Same story. Did not fully grasp what globalization means.

You simply underlined the capability to relocate given by the universality of gold.

You did not factor in one consequence of globalization.

Romans had a high standard of life but not that higher than Greeks or Germans.

When one society collapses, relocating is only valuable toward life standard equivalent societies.


Start the same game today and see what options you are left with. Measure the gap between the former and new society.

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