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Guest Post: Dangerous Economic Misconceptions

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Submitted by Giordano Bruno of Neithercorp Press

Dangerous Economic Misconceptions


By Giordano Bruno

Neithercorp Press – 09/07/2010

For many years, economics in the U.S. has been approached with a
‘game show’ mentality. Wild and backwards speculations on financial
growth have become the norm. The daily ‘Wall Street Journal’ and
‘Washington Post’ musings of international bankers and their servile
lackeys are treated as divination, rather than the bamboozle they
actually signify. If you play along and contribute to the mechanics of
the great casino, then you are treated as a “serious” economist or
analyst, regardless of how many times your advice has been completely
off the mark, or how many middle-class nest eggs you destroyed in the
process. If you question the conclusions of the pundits and talking
heads, or, God forbid, question the validity of the system itself, you
are immediately marginalized as a “kook” or “conspiracy theorist”. The
workings of the mainstream financial world are more inbred than
Hollywood and Washington D.C. combined.

Cable news providers like MSNBC and CNN have set the American people
up for fall after fall; sometimes because they were blinded by their own
bells and whistles, sometimes because they deliberately and blatantly
lied in order to create engineered market sentiment. In the wake of the
initial credit market collapse of 2008, these people, who didn’t see it
coming and denied it was happening, still have their jobs, still have
their TV shows and news columns, and, are still generally blowing smoke
up our posteriors.

It’s not that the inhabitants of this country continue to trust the
MSM (some do; seniors on prescription medication, yuppies on
prescription medication, ignorant day traders who are often
self-medicated, etc.), it’s just that the well established opposing
views and arguments we in the Liberty Movement are exposed to by honest
alternative news sources have not been properly presented in a forum
that is widely visible to the average citizen. When was the last time
you saw a Ron Paul, a Peter Schiff, a Gerald Celente, or a Max Keiser,
etc. on a MSM financial program for any longer than ten minutes? When
have we ever seen the opposing view given respectful consideration in a
fairly moderated debate? Would any high level ghoul from Goldman Sachs,
JP Morgan, or the private Federal Reserve, submit to an unbiased hour
long televised discussion with any analyst from our side of the line?

On the few occasions in which Ben Bernanke was cornered in the highly
controlled environment of Congressional hearings, he was either
completely unable or unwilling to give a coherent response of any
substance to the questions of Ron Paul. Anytime these men are taken out
of the protective element of the worshipful MSM shell and actually
challenged, their arguments fall apart.

In some fields of research, dishonesty and misconceptions can cost
lives. In economics, dishonesty and misconceptions can cost MILLIONS of
lives. Mainstream financial analysts (and the MSM in general) have
lost all sense of responsibility for what they do, and thus, continue to
put our society at risk and continue to lose vaster portions of their
audience year after year. The problem is that the vacuum left behind by
this mass exodus from the MSM has not yet been correctly filled with
principled alternative news providers. We are growing everyday, but the
information void is still ever present, and the memory hole continues
to be exploited by global bankers. Some people don’t know where to
turn, and have instead given up on looking for the truth altogether.

My only option has been to continue drilling away at the root points
of disinformation, along with many other uncompromised researchers, and
hope that consistency and perseverance win the day by accumulation and
attrition.

With that strategy in mind, we will now examine the instabilities
behind our current recession/depression. We will then follow by
deconstructing the most prominent economic misconceptions surrounding
them (often perpetuated by the MSM), along with those misconceptions you
will probably hear in the near future…

Did Someone Say “Recovery”?

There are a handful of exceptions in history, but those aside, one of
the safest generalizations one can make, is that governments lie. Why
do they lie? Simple; because they are afraid of how the public might
react if they knew the truth. Governments are often composed of men
with a strong sense of self-interest, and an even stronger sense of self
preservation. This drives them to put their own agendas over the
wellbeing of the people they are supposed to serve. And, if it’s safe
to bet that governments lie, it’s an even safer bet that international
bankers, who have no principled ties to any country, lie more!

During the Great Depression, government officials, mainstream
financial analysts, and global bankers, released press notices and
interviews every year for over a decade, all claiming that “recovery”
was just around the corner, that good times were back again. Then, we
witnessed a world war. A third of the planet was leveled, but America
(unlike most countries) came out with its industrial base still intact,
and so, we called it a recovery (actually just a reallocation of world
assets into one of the few un-scorched nations left) and happily skipped
on our way towards the comparably decadent 1950’s.

Today, we face a far more dangerous scenario than the Great
Depression ever was, but the strategy of skewed statistics and denial by
the elites has remained pretty much unchanged. Unsupported talk of
recovery fumes from every word and every pore of the establishment
media, and the investment community to some extent has even been
convinced that if they “wish” for recovery hard enough, if they think
happy thoughts, it will materialize, all without any effort, any
sacrifice, any suffering, like magic. Unfortunately, fairy dust and
fiat alone are not going to undo the slowly accumulated damage that our
economy has sustained for the past several decades. Below, are the
reasons why…

Employment Near Great Depression Levels

In the past week, the Obama Administration has preemptively claimed
victory on two fronts; a military pullout in Iraq, and the American
economy (and conveniently right in time for Labor Day I might add). Of
course, he “exaggerated” the pullout in Iraq. There are still 50,000
troops on the ground, and the troops he did pull out are merely being
replaced with private mercenary contractors like those from Blackwater.
So, in Iraq, nothing has changed. The administration’s proclamation
that they have “stopped the bleeding” in terms of the economy is a
similar misrepresentation of the facts. Its not that they have stopped
the bleeding, America has almost bled out!

Counting U-6 measurements of those not considered by the Labor
Department as unemployed because they are either off jobless benefits or
are working part time, the jobless rate of the U.S. has hovered near
20% for over a year at least. During the Great Depression at its peak,
unemployment reached 25%, but even this comparison is misleading. The
population of the U.S. during the 1930’s was around 122 million, meaning
far less working age adults than there are today in our population of
310 million people. In fact, the actual number, not percentage, of
unemployed and underemployed today far exceeds that of the Great
Depression. The number of desperate people, the critical mass of poor
in a country, can have a far more insidious effect on its social
environment than the abstract historical “percentage”, at least in my
view.

Given the real state of unemployment, why has there been such
euphoria over the economy in the past few days? Well, August private
employment numbers from the Labor Department of 67,000 jobs created
“beat Wall Street estimates”, that’s why. Set aside the fact that
121,000 temporary government jobs were cut equaling an actual net loss
of 54,000 jobs. At least the privet sector is alive, right? Wrong.
Here’s the rub…

Mainstream analyst estimates have become an incredibly pervasive
delusion among investors and the public lately, a delusion that now has
the financial sector dancing to whatever tune the government and the
central banks wish to play.

Analysts forecast monthly unemployment reductions or increases based
on….? Certainly weekly unemployment benefits filings are a part of the
prediction process, and perhaps a few other statistics which are
questionable themselves, but at bottom, these estimates are a blind
guess involving very little concrete math. A guess completely subject
to the whims of the analysts themselves. This “guess” is then for some
reason treated as a legitimate reference point by the entire market for
determining the health of the economy. It becomes a purely fabricated
psychological indicator with no basis in reality. Want to pump up the
stock market for a couple weeks? Why not guess lower job creation than
is liable to occur. Or, if you are the Labor Department, tweak the
numbers up a little above estimates and then “revise” them down in
another month or two after everyone has forgotten. Bankers and
economists projected 40,000 new private sector jobs created in August.
Labor Department numbers were 27,000 above that. Result: stock market
jubilee and a declaration that the recovery is in full swing.

The market has become so addicted to the use of arbitrary monthly
analyst estimates that they have forgotten to look at the bigger
picture, the real and fundamental reference points compiled over decades
and used for gauging the actual state of the economy. Below is a graph
from Clusterstock which very clearly and concisely illustrates EXACTLY
how our jobs market is doing by comparing the percent of job losses to
peak employment today, along side the same statistics from every
recession after WWII:

http://www.businessinsider.com/chart-of-the-day-percent-job-losses-in-post-wwii-recessions-2010-9?utm_source=Triggermail&utm_medium=email&utm_term=Clusterstock+Chart+Of+The+Day&utm_campaign=Clusterstock_COTD_090310

When one looks at the broader comparisons of our financial situation, he
discovers that a 67,000 job boost isn’t even a drop in the bucket. In
our current state, 300,000 to 400,000 jobs a month would have to be
generated for at least three years straight in order to reach employment
levels similar to those of 2006-2007, before the collapse was fully
triggered.

Even if significant job loss has stopped (which is unlikely), no
economy can recover without first reducing its static 20% unemployment
rate. The longer this portion of the populace remains out of work, the
harder it will be for the government to continue welfare and
unemployment programs (modern day soup kitchens). Once these programs
falter, the rampant poverty they obscured will become highly visible.

Housing Market Is Never Coming Back

Some might consider this statement to be rather brash. I disagree.
According to the data, it is highly unlikely that we will see the
housing market return to even a semblance of its former glory in our
lifetimes. I often hear MSM analysts claim on a monthly basis that
housing has bottomed, only to have home prices fall yet again, or
mortgage rates hit record low after record low:

http://www.reuters.com/article/idUSTRE67P30X20100902

The establishment often tries to turn these numbers on their ear, as
if they are a good thing. Record low mortgage rates are touted as
investment candy. “Surely”, they say, ”such low rates will lure
homebuyers out in droves.” However, as of the closing of August 2010,
and the end of the homebuyer tax credit, there has been no real estate
frenzy, and sales have fallen to the slowest pace on record, all during
summer months when home buying is traditionally supposed to increase:

http://www.foxnews.com/us/2010/08/25/new-home-sales-fall-slowest-pace-record-july/

http://www.huffingtonpost.com/2010/08/24/existing-homes-sales-plun_n_692437.html

This long last gasp of the real estate sector is not just limited to
residential property. Commercial property is also plunging in value and
retail spaces are emptying at a substantial rate. The overall property
value of American malls and shopping centers fell 11% in the second
quarter of this year alone:

http://www.bloomberg.com/news/2010-08-19/retail-spaces-lead-biggest-drop-in-u-s-commercial-property-prices-in-year.html

This has caused some to suggest even more government capitalization of banks to protect them from further property declines:

http://www.bloomberg.com/news/2010-08-27/banks-will-need-new-capital-to-withstand-renewed-housing-dip-whitney-says.html

So, no recovery in employment, and no recovery in real estate; the
two most important factors necessary for a legitimate revitalization of
the U.S economy. Is there some golden bit of good financial news Obama
knows that we don’t. I doubt it. But let’s continue…

FDIC Blackhole Bailout

Anyone who says the stimulus measures ever stopped doesn’t know what
they are talking about. We actually have several “blackhole bailouts”;
bailouts with undefined limits or no limits at all, draining money from
the American taxpayer continuously. One would be the endless bailout of
Fannie Mae and Freddie Mac, which will require more and more stimulus
every quarter as the housing market continues to disintegrate. Another,
would be the rarely spoken of bailout of the FDIC, which has been in
the red for quite some time now. Just as Fannie and Freddie’s bailout
is dependent on the constant default of mortgage loans, the FDIC’s
bailout is predicated on the constant default of banks.

Last year, analysts estimated that we would see approximately 140
bank closures in 2010. It is now the beginning of September and already
118 banks have been shuttered, well on our way to surpassing the 140
bank estimate:

http://www.huffingtonpost.com/2010/08/21/shorebank-among-8-fdic-ba_n_689910.html

Keep in mind that all of these banks are closing while the FDIC is
broke! Meaning, every penny the FDIC pays out to insured account
holders is supplied by the Treasury, which is also broke! Where do they
get the money? Where else? The Federal Reserve issues the money out
of thin air. Where is this leading? One of two scenarios: either the
Fed ends its printing and the FDIC goes bankrupt, causing a run on the
banks, or, the Fed continues to print more fiat until the dollar is
rendered absolutely worthless on the world market.

For those who think healthier banking is just around the corner, the
FDIC expanded its “secret” list of troubled banks this year to over 800!

http://www.investorplace.com/news-opinion/bank-failures-plague-financial-sector.html

This has some of the smarter investors questioning if the bailouts
will EVER end. The answer is ‘no’. At least, not until the government
defaults, or our currency implodes, which we will discuss in a moment.

Stock Market Hanging By A Thread

The stock market is perhaps the worst possible indicator of the true
health of the economy. No system is more prone to manipulation and
engineered equity floods. Some Americans rarely if ever question why or
how stocks increase or decrease in overall strength, all they know is,
green means “good”, and red means “bad”. As long as they see green once
or twice a week, they are content.

In a market not under duress by central banks, the Dow is supposed to
reflect the profit health and viability of the companies that make up
its index. However, in our current market, this is rarely the case. In
fact, stock values for the past several months are far above what they
should be when considering the low profits and massive debts of our
corporate infrastructure. Some estimate using the P/E Ratio (price to
earnings ratio), that stocks are at least 30% overvalued. I think that
if we take into account the fact that most banks and funds hold toxic
equities worth nothing and count them as AAA rated assets, it is more
likely that stocks are 50% to 60% overvalued, and the Dow could easily
lose this much in the near future.

The number of investors actively trading in the Dow also affects its
“moods”. The lower the market volume, the more wild stocks tend to
swing. This is because more and more market value is being determined
by fewer and fewer people. The volume of this August was approximately
30% lower than the volume of August, 2009:

http://www.cnbc.com/id/38932472/August_Ends_With_Miserable_Volume

What this means is, many average investors are pulling out of stocks
completely, leaving the big boys even greater dominance of the playing
field, and greater ability to drive values up or down at will.

Larger corporations also use subversive tactics to drive up their
short term stock value at the expense of long term stability. One such
tactic is to forcefully expand through acquisitions of smaller companies
in other fields that they cannot really afford. A good example is HP
and Dell’s crazed bidding war for 3Par, or BHP’s bid for Potash:

http://www.dailyfinance.com/story/company-news/heads-in-the-cloud-why-hp-and-dell-are-crazy-about-3par/19615943/

http://www.nytimes.com/2010/08/19/business/global/19potash.html?_r=1

These companies could easily develop along the same guidelines as the
companies they are spending incredible sums to purchase, IF they had the
long term capital to do so. They don’t. And so, we will see top
corporations drive harder and harder to devour smaller companies in
order to drive up their own share values all while knowing they cannot
continue to sustain themselves in the long run. Google alone has
already announced 18 acquisitions so far this year:

http://www.businessweek.com/news/2010-08-11/google-steps-up-acquisitions-as-some-projects-falter.html

As for average investors, where is all their money going if not into
stocks? Investors are snapping up bonds of all types (except municipals
which are a death trap), and of course, gold, which is holding near
record highs despite all the predictions made against it by the MSM:

http://www.bloomberg.com/news/2010-08-26/investors-redeem-7-1-billion-from-global-equity-funds-in-week-epfr-says.html

This trend has been developing for many months now, and it should
come as no surprise that stocks have lost investor trust. It should
also come as no surprise that due to this trend the dreaded “Hindenburg
Omen” recently reared its ugly head not once, but twice within the span
of 30 days!

http://www.thestreet.com/story/10835851/hindenburg-omen-is-a-stock-market-crash-imminent.html

The indicator has a 92% success rate in predicting a considerable
stock market decline, and the probability of a major stock market crash
after a single Omen is around 24%. Establishment analysts have
attempted to shrug off the indicator, or apply a “modern take” to the
definition of an actual Hindenburg Omen, so as to dilute its meaning and
the warning. But this is what they have always done from the Great
Depression to today; plant the seeds of false hope in an economy clearly
on the verge of failure.

Asia Will Not Pick Up U.S. Slack

The prevailing argument in the MSM is the globalist one; that the
fall of the U.S. consumer is a natural part of global “harmonization”,
and that devaluation of the U.S. dollar is a “good thing” because it
will “force” the east to begin purchasing more U.S. goods, driving up
our exports and manufacturing leading to an “industrial rebirth” in
America. There is absolutely no logical basis for this argument.

Essentially, establishment economists want us to believe that Asia is
going to pick up where the American citizen left off as the new
super-consumers, and we will jump right back into our post WWII role as
manufacturing giants, all in time to head off any major crisis in the
world economy. This is a fantasy.

While it is true that America must eventually return to its
industrial roots if we are to survive, our manufacturing capability is
almost non-existent compared to what is required to make such a
transition in the short term. MSM talking heads argue that the U.S. has
the greatest manufacturing capability on Earth, but what they fail to
mention is that the vast majority of our factories are on foreign soil,
not here in the U.S.! After outsourcing all our manufacturing
capability to the third world, it could take a couple decades to rebuild
our home industry to effective levels, and this is a conservative
estimate considering our country has no savings and is drowning in debt.

China has shown it has no intention of turning to the U.S. for goods
they could easily make themselves or import through the new ASEAN
trading bloc, which is really just the foundation for an Asian Union,
eventually relying on the Yuan as its reserve currency. Chinese trade
has increased almost 50% this year with ASEAN, not the U.S.

http://english.peopledaily.com.cn/90001/90776/90883/7119280.html

While China’s non-bond investments in the U.S. have dropped 47%:

http://www.bloomberg.com/news/2010-08-26/china-reducing-risk-by-cutting-u-s-investments-heritage-foundation-says.html

If the Obama Administration is so interesting in building a better
trade relationship with China and convincing them to purchase our
exports, as they have claimed in the past, you would think they would
try to involve themselves further in the activities of ASEAN. Instead,
Obama failed to name any ambassadors to the major ASEAN trade conference
last month in Vietnam. This only caused China and other Eastern
nations to feel slighted and ignored by the U.S; always a good idea to
thumb your nose at someone before asking them to buy your stuff:

http://www.bloomberg.com/news/2010-08-26/u-s-absence-at-southeast-asia-trade-meeting-draws-criticism-from-senator.html

The financial and political moves by China show not a reversal of
roles as exporter nation and importer nation, but a complete separation
of the two economies, an ending of substantial economic interaction or
reliance. The developments in Treasury bonds and the Chinese currency
only reinforce this fact.

Japan, China, ASEAN, And The Dollar

The U.S. Dollar continues to exist for one reason and one reason
only; habit. As the World Reserve Currency, the dollar has been
entrenched across the globe as the primary trade mechanism. It holds
psychological significance among investors not because it is stable but
simply because it has played this role for so long. The common
assumption is that this role will not change anytime soon. What most
Americans don’t know though, and what the MSM rarely talks about, is
that the dollar’s role has already changed. In light of endless
quantitative easing measures, mushrooming U.S. debt, and Obama’s
harebrained new plan for FDR-like public works programs which we cannot
afford, the time has come to pay the piper.

Investors are abandoning the dollar as a safe haven and are now
treating it as a “funding currency”, a middle-man investment for the
purchase of higher yield assets, much like the Japanese Yen or the Swiss
Franc. It was only a matter of time:

http://www.reuters.com/article/idUSTRE67J4M920100820

The Chinese Government has now publicly warned that they will be
diversifying out of U.S. Treasuries (they already have been for months)
and that this will result in “some” devaluation in the dollar:

http://www.reuters.com/article/idUSTRE6820G520100903

China has ramped up cross-border Yuan transactions with other
countries making their currency more viable as a trade mechanism, and
making the dollar less necessary:

http://english.people.com.cn/90001/90778/90859/7126304.html

Both the U.S. and EU governments are practically begging China to
allow a fast appreciation in the Yuan, which could only be precipitated
by a dump of their Treasury reserves and a considerable devaluation of
the dollar:

http://www.reuters.com/article/idUSTRE67R1H220100828

And most startling (but not all that unexpected), is the incredible
amount of PR the Yuan is getting as a reserve currency from
international banks and corporations. Global banks, including Citigroup
and JP Morgan, are launching “roadshows” promoting trade using the Yuan
or “Renminbi” instead of the U.S. dollar! That’s right! Global
bankers are now openly pushing for the dollar to be replaced by the Yuan
in international trade:

http://www.gata.org/node/8961/print

(Special Note: The article above was also published on CNN.com in full, but has since been removed)

Even McDonalds is now selling Yuan denominated bonds:

http://www.bloomberg.com/news/2010-08-19/mcdonald-s-yuan-bonds-set-standard-as-china-promotes-debt-credit-markets.html

There is absolutely no doubt, China is spreading the Yuan everywhere.
Inflationary effects are already occurring because of this move:

http://www.bloomberg.com/news/2010-08-25/china-s-official-inflation-data-mask-surge-in-food-prices-medical-costs.html

The only way to avoid severe negative effects on the average Chinese
citizen is to allow an unprecedented surge in the Yuan’s value in order
to increase consumer buying power in line with inflation. Again, the
best and most efficient way for China to make this happen is to dump
their U.S. Treasury Bond holdings.

It seems that Japan, the second largest holder of U.S. debt, may not
be far behind China in this respect. The Yen has recently risen to a 15
year high against the dollar, causing the Japanese Government to
discuss the possibility of a currency intervention. However, Japan is
well aware that if the U.S. is so adamant about Chinese currency
manipulation, it will be just as disruptive over Japanese currency
manipulation:

http://www.bloomberg.com/news/2010-08-27/japan-yen-intervention-may-fail-without-u-s-european-union-coordination.html

Without help from the U.S. and the EU, a currency intervention in Japan
would surely fail. Japan, unlike China, has not re-engineered its
economy for greater consumption and has maintained its traditional
export relationship with the U.S. This has resulted in dismal revenues
and a continuous deflationary spiral in the Japanese economy. So what
is Japan to do? Every move by international banks to pump up China,
along with the U.S. Government’s demand that China allow a quick
appreciation in the Yuan despite the obvious negative effect it will
have on the dollar suggests to me that there is a deliberate strategy by
global bankers to end our currency’s world reserve status and debase
our financial system, but, it also looks as though the Japanese people
are being prepared at the same time to accept full membership in ASEAN.

This has been discussed by the Japanese for some time, but the
cultural divide between China and Japan is still very strong. Making
the Japanese populace highly dependent on China for economic stability
may not go over well without prompting:

http://www.reuters.com/article/idUSTRE6810LQ20100902

It appears that Japan, just like the U.S., is being positioned
between the proverbial “rock and a hard place”. If they continue to
rely on poor U.S. consumption, if investors continue to pour into the
Yen as a safer hedge than the dollar, Japan will face dire deflationary
consequences, especially if the EU and the U.S. do not support a Yen
intervention. The only option left to them (rather conveniently) is to
conform to the ASEAN trading bloc. Why is this bad for the U.S.? The
side effect of this move would probably entail the Japanese dumping of
U.S. Treasuries, right on top of China’s. This means the end of the
dollar.

The World Hurts More Without The Truth

My favorite propaganda trend in the mainstream media today is one
directed at researchers like myself who expose the darker side of our
economic and political environment. The term “Apocalypse Porn”, or
“Doomer Porn”, is rising as the preferred Ad hominem attack on Liberty
Movement writers, in place of “conspiracy theorist” which doesn’t seem
to be working for them anymore. The MSM apparently spends more time
trying to develop ‘memes’ like this than they do actually researching
the so called news they propagate. The insinuation is that we either
embellish data to make it seem more frightening than it actually is, or,
that by reporting on valid but terrible news, we are a “danger” to
society, because we perpetuate fear. Basically, it is the beginnings of
an argument for suppression of 1st Amendment rights.

The reason the information we report on is disturbing is not because
it is “bad”, but because it is TRUE. There are children who could make
the distinction, but some full grown men and women seem to have
difficulty with the concept. When the establishment says that we as
researchers and alternative media do not have a right to spread facts
that might upset you, what they are also saying is that you as an
American cannot be trusted to act responsibly and constructively with
the facts you are given. They are saying that they need to protect you
from yourself. Who ever gave them permission to take on that job?

The Doomer Porn argument rings hollow because what I state here in
these articles is entirely subject to your verification. If I
embellish, or lie, I will be caught, and thus, my writing becomes
meaningless. If I tell the truth, the hard truth, it is not up to me or
the MSM or anyone else accept yourself to decide what you will do with
it.

Perhaps the greatest misconception of all, especially in economics,
is that bad news encourages bad events. That the truth is hazardous,
and for the economy to remain healthy, the establishment must continue
to lie. The presumption that our financial system is so dependent on
our mass psychology is complete nonsense. The dollar is being
fundamentally debased whether or not we blindly “believe” the dollar is
fine. Our country is facing unserviceable national debts whether or not
we force ourselves to think positive thoughts. The stock market is
exceedingly overpriced and primed for collapse even if you and I ignore
all the warning signs and drink margaritas on white sandy beaches all
day with big dumb smiles on our faces. Two plus two equals four no
matter what the psychological state of our society is. The facts are
not subject to my “good vibes” or “bad vibes”, and if this is the best
argument MSM pundits can make against legitimate alternative financial
analysts, then I think they need to pack it up and leave the thinking to
more adequate men.

Without confronting the stark reality of our situation, be it
economic, political, or social, we will never be able change things for
the better. Ignorance is not bliss. The ignorant always end up paying a
steep price. The U.S. economy is going to experience some rather
horrifying repercussions, for the actions of the elites who seek to
derail our culture and replace it with another, and for the publics’
continued lack of vigilance to those actions. In my next article, I
will be discussing possible solutions to all of the dilemmas I describe
above, but first and foremost on the list is developing the ability to
accept the nature of the situation as it stands, and not as we would
like it to be. Life has never worked that way, and finance is no
different.

You can contact Giordano Bruno at: giordano@neithercorp.us

 

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Tue, 09/07/2010 - 11:11 | 567241 Widowmaker
Widowmaker's picture

Excellent post.

Rememeber, wrecked lives (and war deaths) = record bonuses on Fraud Street, to hell with the future and common good when systemic failure of a few is rewarded by the theft from many.

Also don't forget, nobody saw it coming and that makes breaking the law okay.

Banks vaults are only full of lies, not money.

Tue, 09/07/2010 - 16:15 | 567843 Turd Ferguson
Turd Ferguson's picture

The latest from A E-P. I'm surprised this hasn't been discussed today regarding the "inevitability" of QE2+

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/798280...

Tue, 09/07/2010 - 11:04 | 567250 SWRichmond
SWRichmond's picture

I wish I was possessed with talents, or possessed of any thing that might enable me to elucidate this great subject. I am not free from suspicion: I am apt to entertain doubts. I rose yesterday to ask a question which arose in my own mind. When I asked that question, I thought the meaning of my interrogation was obvious. The fate of this question and of America may depend on this.

There are sufficient guards placed against sedition and licentiousness; for, when power is given to this government to suppress these, or for any other purpose, the language it assumes is clear, express, and unequivocal; but when this Constitution speaks of privileges, there is an ambiguity, sir, a fatal ambiguity — an ambiguity which is very astonishing.

But we are told that we need not fear; because those in power, being our representatives, will not abuse the powers we put in their hands. I am not well versed in history, but I will submit to your recollection, whether liberty has been destroyed most often by the licentiousness of the people, or by the tyranny of rulers. I imagine, sir, you will find the balance on the side of tyranny. Happy will you be if you miss the fate of those nations, who, omitting to resist their oppressors, or negligently suffering their liberty to be wrested from them, have groaned under intolerable despotism! Most of the human race are now in this deplorable condition; and those nations who have gone in search of grandeur, power, and splendor, have also fallen a sacrifice, and been the victims of their own folly. While they acquired those visionary blessings, they lost their freedom.

                                -Patrick Henry, 5 June 1788


Tue, 09/07/2010 - 13:27 | 567525 cougar_w
cougar_w's picture

Thank you for reminding us of what was/is at stake.

Nothing is a given. Nothing can be assumed. Everything is in play. Those who know this will take sides and fight to push the pendulum this way or that, towards less or more concentration of power, while the rest watch in dumb incomprehension.

Always it is this way. The battle never ceases. It is only won or lost for an instant and then it begins again.

Tue, 09/07/2010 - 14:25 | 567638 i.knoknot
i.knoknot's picture

great quote and responses.

lately, i'm starting to believe that most people who read what you (and others like you) have written, *don't* actually understand what you/we mean by "Nothing".

when you indicate that 'nothing' is out-of-bounds, somehow they think you mean "well, nothing, within the bounds of reasonable behavior" or sum-such.

i'm comfortable that you *really* mean that *anything* can happen with these morons who lead us, and that absolutely no horror is beyond their consideration if they believe it will protect their image of their current or future world view. fake a religious attack, sure. nuke a *real* city? why not? anything to get those sheeple back in line...

nothing is out of bounds, folks. nothing.

 

Tue, 09/07/2010 - 17:36 | 567804 DaveyJones
DaveyJones's picture

I'll second that. Ironic that it's comforting to know that others, at least others whose intellect and honesty you've come to respect, think it's all going to hell as well. In times like this when everything is literally insane, you need this more than anything just to keep from doubting your own.

The article is incredibly well written capturing all the psychology, propaganda, and constitutional subversion that is now our inside out / Nazi meets Patrick Henry reality. Thank you for posting it Tyler.     

Tue, 09/07/2010 - 23:41 | 568781 RockyRacoon
RockyRacoon's picture

I agree.  There was a cut-to-the-chase feeling about the article that is not commonly found in economic reporting.  The lack of waffling was refreshing.  Now if we could get that kind of candor out of our "leaders" we just might have a chance.

Wed, 09/08/2010 - 19:23 | 570690 iota
iota's picture

The lack of waffling was refreshing.

 

+Much.

Tue, 09/07/2010 - 13:43 | 567555 spekulatn
spekulatn's picture

OUTFRIGGINSTANDING post SWRichmond. Thanks for sharing.

Tue, 09/07/2010 - 11:06 | 567253 williambanzai7
williambanzai7's picture

This is a gold mine of reading!

THE ECONOMIST

http://williambanzai7.blogspot.com/2010/09/economist.html

Tue, 09/07/2010 - 11:08 | 567256 Sudden Debt
Tue, 09/07/2010 - 11:12 | 567264 andyupnorth
andyupnorth's picture

"In economics, bad news encourages bad events, whereas the truth is hazardous.  For the economy to remain healthy, the establishment must continue to lie."

Brilliant!

 

Tue, 09/07/2010 - 15:20 | 567760 doolittlegeorge
doolittlegeorge's picture

is it bad that they lie?  they can and do do far worse yes, yes?

Tue, 09/07/2010 - 11:13 | 567267 NOTW777
NOTW777's picture

liberals always attack the person because they cannot defend or justify their positions on the merits.

we live in an era where the fruits of the excused clintonesque lie bears its fruit.  more lying produces more lying and with each lie that is allowed uncontested, the course is set for more lying.

the media is generally a cancer on america

Tue, 09/07/2010 - 11:28 | 567279 Widowmaker
Widowmaker's picture

Don't be silly.   The cesspool of lies in the US goes back to LBJ and the Kennedy assassination (at least!).

It is during this time that the US government ceased telling truth (at all) -- lies became official policy.

Tue, 09/07/2010 - 12:34 | 567379 tmosley
tmosley's picture

Woodrow Wilson's administration is closer to the root.

Though the seed was planted with Lincoln's crusade.  The seed was formed in the hypocritical practice of slavery.  If we had never had slavery, it is likely we never would have trod this path.  Where would we be now if the founders had had the courage to smash slavery with the founding of this nation?

Tue, 09/07/2010 - 12:43 | 567424 aerojet
aerojet's picture

I love these exercises in trying to figure out when it all went  bad.  Folks, it wasn't Wilson, go back to the 1790s and then you have your answer.  I think the Founding Fathers were banksters out for a score, too.  Everything we believe about America and democracy is a complete lie. 

Tue, 09/07/2010 - 13:11 | 567480 tmosley
tmosley's picture

No, it is not a complete lie.  It's just that the lie has overtaken and consumed the truth, like the strangler fig, it has killed the host (freedom/democracy/America), and left only the lie.  There was once a real and vital free market in America, even if it was tainted from the beginning.  That does not mean that the principles they espoused were wrong.  It's just that they failed to consistently adhere to their ideology.

And it has left us, like the strangler fig that has killed its host, vulnerable to collapse.

http://en.wikipedia.org/wiki/Strangler_fig

Tue, 09/07/2010 - 15:10 | 567734 ZackLo
ZackLo's picture

If our founding fathers were as he suggests, we would have had a king and never would have a republic.

Tue, 09/07/2010 - 16:07 | 567829 tmosley
tmosley's picture

It's not that they were corrupt, it's that they weren't perfect.  If they had been perfect (by abolishing slavery immediately), the US would likely still be free.

As good as they were, they bought us less than two hundred years of liberty with their blood.  Hopefully next time around we can make it last a little longer, or, in a perfect world, create a system based around the individual, which can last for as long as there are free men.

Wed, 09/08/2010 - 00:12 | 568824 JethroBodien
JethroBodien's picture

Human nature will always pervert any ideology. 

Tue, 09/07/2010 - 13:40 | 567548 SWRichmond
SWRichmond's picture

Sorry, you are confusing "Founding Fathers" with "Hamilton".

Tue, 09/07/2010 - 14:45 | 567674 Bendromeda Strain
Bendromeda Strain's picture

Where Jefferson and Adams were esteemed opponents, both had major problems with the machinations of Hamilton, the ideological father of the bankster and the MI complex.

Tue, 09/07/2010 - 12:50 | 567434 Goldilikes permabear
Goldilikes permabear's picture

Where would we be now if the founders had had the courage to smash slavery with the founding of this nation?

 

Look at the top picture.  picture of white family cruising around in car all happy. notice the color of every single person waiting in line to get food.  i couldnt create a better picture of irony.  i hate to generalize but we need to take a closer look at the groups who contribute little to nothing yet suck the lifeblood from this country through UI, food stamps, fed programs, etc. and contribute the most to crime, hatred, murder 

Tue, 09/07/2010 - 13:14 | 567488 tmosley
tmosley's picture

Collectivism such as yours has helped steer America toward it's terminal decline.

Think about the differences in groups all you like, but continuing to think in such terms will eventually bring you or your family grief beyond bearing.

Judge individuals by the content of their character, not groups by the color of their skin.

Tue, 09/07/2010 - 13:36 | 567539 spekulatn
spekulatn's picture

Well said, tmosley.

Tue, 09/07/2010 - 13:58 | 567588 hidingfromhelis
hidingfromhelis's picture

Well said x2!

Tue, 09/07/2010 - 14:34 | 567652 grunion
grunion's picture

Gross, now you're pandering.

Tue, 09/07/2010 - 14:43 | 567669 Goldilikes permabear
Goldilikes permabear's picture

 

Judge individuals by the content of their character, not groups by the color of their skin

   ok MLK i'll get right on that, just let me finish off with these 2 white hookers and get to a good stopping point in marx's novel.  as far as grief beyond bearing, i have no idea what the fuck that means or how it has anything to do with observing which groups in this country are actually net producers.  all i am saying is that when shtf, you will see which members of society lose all control and resort to the most primitive human actions of violence and theft.

 

http://www.martinlutherking.org/thebeast.html

 

Tue, 09/07/2010 - 15:00 | 567707 tmosley
tmosley's picture

If you have ever read anything that I have posted on this or any other website, you would have seen that I am as far from a marxist as it is possible to be.

You seem to think that an individual's character has no meaning, but rather that a person's impact on society is dictated by the color of their skin.  This is collectivism, and it is a deadly disease.  This is not to say that others are not under the spell of collectivism.  Many in the black community are firmly under it's grasp, but there are many who are not.  Witness the 37% support that Rand Paul has among blacks.

You will also notice that I did not attribute the phrase to MLK.  I formed the words on my own, and you will notice that it does not match his famous quote in anything but content.

Tue, 09/07/2010 - 14:45 | 567673 i.knoknot
i.knoknot's picture

goldi,

while it *is* ironic, this image is a well-known icon for a reason... appears everywhere, doesn't it... why?

if the country during the depression was 80% white, and the unemployment rate was 20% (of the entire country!), then one can assume that most of those friggin lines were ... (here it comes...) WHITE! (sure, maybe disproportionately minorities, but... you can't just discount a few zillion whites anymore. can you? nevermind. and weren't the irish, polish, ... the minorities of the day?)

read the article again and you might actually catch the irony within your perspective.

baaaaah baaaah meeehhh

BTW, the founders (esp. Geo Washington) knew for certain, that to take on the southern slave states at the country's outset, would have resulted in no effective union of states to fight England, and therefore no USA. conscious decision on the part of the founders. fact.

speculation: everything below virginia would probably have been far more substantially french and/or spanish speaking/ruled, until a much later date. north would have remained far more british.

"bygones..." (alli mcbeal, circa 1990s)

Tue, 09/07/2010 - 14:58 | 567704 Goldilikes permabear
Goldilikes permabear's picture

read the article again and you might actually catch the irony within your perspective

 

i did, so maybe you could help me out here?  my perspective/conclusion was that for hundreds of years new groups and races have come to this country and flourished through hard work, intelligence, etc. just look at the indians, asians, mexicans here.  they didnt have shit and yet were able to migrate to this country and prosper in a fraction of the time other groups have been here. and yet we're still somehow bringing his ass down and still owe reparations for his great great great uncle.  WTF?  in my opinion, that is why this country is fucked.  we have millions of thugs and worthless mouths who have no intention of working or contributing to society.  the sad part is that this type of environment in which they can survive only exists because of our govt. created it.  the reset button will strike a great blow to these unprepared slaves  

Tue, 09/07/2010 - 15:18 | 567741 i.knoknot
i.knoknot's picture

perhaps we're in agreement

i look at those racial minorities around me that ... have made it. and there are plenty. and i hope to be like them 'when i grow up'. the guy who serves my burger is a minority. the woman doing my refi ... is a minority... hmmm.

those that lead our council meetings, teach our kids, mow the lawns of their own (solvent) homes. those that get up early, work hard, save, educate their kids, support their spouses, etc. all ... minorities? in food lines? i think not.

to read some, one would think there are no such minorities in america. hell, "look at the picture... see?" no whites! all victims of "the man".

i see that this victim-infested place (amerika) you think is such a mess, is actually still a place where people who produce can succeed, and those that have been taught (intentionally) to look outside themselves for their support, dont do so well. funny. it's always been that way, suddenly it's an american problem?

let me invert this logic for a second:

there are a whole bunch of lazy-ass white folk victims out there too, and they aren't doing so well.

lastly, does it really surprise anyone that a new influx of resource poor immigrants would be the hardest hit by a downturn? WTF? do folks expect that they will cross the border and suddenly have as much as the third generation irish mine-worker's grand-kids who have as much smarts and a three-generation social and physical baseline?

we've got to get over this race/victim game. it's already whithered.

Tue, 09/07/2010 - 13:16 | 567493 fiftybagger
fiftybagger's picture

If the founders would have "smashed" slavery as you say, they never would have formed the union.  For an essential element of the separation of powers was state sovereignty.  Rather than forming a union, they would have formed a federal tyranny like we have now.

Tue, 09/07/2010 - 14:47 | 567682 i.knoknot
i.knoknot's picture

++

i hadn't much thought of what would have probably been formed. nicely put.

Tue, 09/07/2010 - 15:07 | 567727 tmosley
tmosley's picture

One can go as deep down the rabbit hole as they wish.  The answer that lies at the bottom scares most people.

The only real way to have freedom is to have a stateless society.  Some call this anarchy, though that definition has long been co-opted by those who fail to recognize natural rights (life, liberty, property, specifically property).  Ultimately it must come down to the individual, and the right of free association.  All the benefits that the state claims to provide can flow from that type of interaction.  

Writers on mises.org have outlined how such a socity could work.  There is a functioning prototype in Somalia which has survived decades of invasion, though it suffers from the severe flaw that social insurance is provided by clans rather than by companies, but that is a conversation for another day.

Tue, 09/07/2010 - 12:31 | 567394 Maniac Researcher
Maniac Researcher's picture

[deleted - correct location of response below]

Tue, 09/07/2010 - 13:12 | 567485 NOTW777
NOTW777's picture

i agree that lying is not new but in our modern age when celebrities and politicans do it so blatantly that it becomes fashionable and acceptable, it spreads like a disease.  even when they superficially apologize, they do not accept responsibility. they call is a "mistake" or "misstatement" or blame someone or something. 

Tue, 09/07/2010 - 11:16 | 567273 cossack55
cossack55's picture

I have been an actor in various historical events over the last 45 years, this time I think I will just be a spectator and enjoy the show.  Seeking the truth is analogous to panning for gold... a lot of work and watch out for the fools, but a possible large payoff at the end.  Please pass the popcorn.

Tue, 09/07/2010 - 14:50 | 567685 Bendromeda Strain
Bendromeda Strain's picture

The lost verse from Sympathy for the Devil?

Tue, 09/07/2010 - 11:26 | 567296 tony bonn
tony bonn's picture

ye shall know the truth and the truth shall set you free.....i feel very free after reading this article....

Tue, 09/07/2010 - 11:30 | 567299 bruiserND
bruiserND's picture

"In economics, dishonesty and misconceptions can cost MILLIONS of lives."

Tyler, Giordano Bruno is awesome , keep bringing him back.

http://en.wikipedia.org/wiki/Holodomor

The Holodomor (Ukrainian: translation: death by hunger) was a famine in the Ukrainian SSR from 1932–1933, during which millions of inhabitants died of starvation in a peacetime catastrophe unprecedented in the history of Ukraine.[1][2][3][4] Estimates on the total number of casualties within Soviet Ukraine range mostly from 2.6 million[5][6] to 10 million.[7] Primarily as a result of the economic and trade policies instituted by Joseph Stalin, millions of Ukrainians starved to death over the course of a single year.

Tue, 09/07/2010 - 12:10 | 567363 Saxxon
Saxxon's picture

Indeed; and remember the Great Leap Forward which cost tens of millions of lives in China because everyone was busy trying to melt their rice bowls in backyard foundries while the crops went untenanted.

Death By Government.

Tue, 09/07/2010 - 12:29 | 567398 Maniac Researcher
Maniac Researcher's picture

Equally if not more tragic was the "telling everyone what they want to hear" mentality at the Party level in China during that period. As Mao reorginized small farms into huge state run cooperatives, party bosses gave glowing reports back to Mao - which were often untrue - even if they desperately wanted to believe them. Mao, in turn, believed his bosses - because he desperately wanted to listen to an opinion he agreed with.

The tragedy of living your life in an echo chamber only being surrounded by opinions you agree with is a good lesson for everyone, me'thinks.

Tue, 09/07/2010 - 13:43 | 567554 merehuman
merehuman's picture

Asd Mao reorganized small farms into state run co-ops" well now we have agripacs and our small farmers are going under.

Obamao?! I know damn well he is just a puppet

Tue, 09/07/2010 - 23:52 | 568795 Maniac Researcher
Maniac Researcher's picture

Comparing Obama to Mao is historically disingenuous. Yes, there are significant economic problems facing the US and the world - and a real vacuum of leadership. But the facts are that The Great Leap Forward led to as many as 20 million deaths. Sorry, but that is not the same scale as any of Obama's failings.

I'm sure you'll take this as a defence of Obama, so feel free to junk away -- but the only purpose of this post is to argue that your comparison of Obama to Mao offers little justice for the millions who suffered and died in China during the late 1950s and early 1960s.

Tue, 09/07/2010 - 11:34 | 567310 SheepDog-One
SheepDog-One's picture

Dang, what we need today is a couple of Leo's Chinese solar stock 'boner' charts that went up a few cents.

Tue, 09/07/2010 - 11:38 | 567315 barnaby33
barnaby33's picture

The narrative you paint is interesting and yet it seems to lack a certain thoroughness on the macro outlook from Asia. The Chinese particularly short circuited the hard work of a century of nation building by becomming a cheap labor export nation. Now you think that they will de-couple and build a consumer class (maybe not American in scope). I find this hard to believe. I haven't been to China yet, but many friends co-workers and my sister have. Someday the Chinese will want to buy the Nike's made in Vietnam, but for now they are far to poor to do so. So the Chinese are stuck subsidizing our currency, to keep selling us shit. In return for those goods we give them IOUs. When the hammer comes down, they have the paper, we have had 20+ years of their goods. They will have more production capacity, true; I just strongly doubt they will have a market to sell those goods too. At least in the short term, which to me is the next decade or so.  

 

 

Tue, 09/07/2010 - 12:11 | 567364 Eally Ucked
Eally Ucked's picture

Maybe Chinese will start to give those goods to it's citizens and take IOU's from them instead you? They are too poor, Americans are rich that's why there is 40 millions of food stamps recipients and the rest racked up trillions in debt.

Tue, 09/07/2010 - 12:48 | 567430 barnaby33
barnaby33's picture

Sadly I raise a valid point and you make an ad hominem attack. The point is that China subsidizes exports at the expense of imports. Yes there are lots of people in China. It has long term potential to develop a huge consumer market, but then so do India and lots of other places. My point is that for the forseeable future, we are stuck with this pyrrhic scenario. China can no more change directions quickly than can the US. Or rather they can but that risks war, both civil and international. 

Its not that the Chinese give two shits about us, any more than any dealer does with his junkie. Its that he knows the junky is armed, heavily. In the words of HST: "America... just a nation of two hundred million used car salesmen with all the money we need to buy guns and no qualms about killing anybody else in the world who tries to make us uncomfortable."

 

 

Tue, 09/07/2010 - 13:29 | 567520 fiftybagger
fiftybagger's picture

Wow, you really don't get it do you?  Fine.  Let me break it down for you and talk real slow so you don't get lost:

 

***  China has all the factories

***  China has all the money

***  China lends us the money to buy the goods from their factories

***  China decides to lend the money to someone else to buy their goods instead of us

 

Get it?

Tue, 09/07/2010 - 13:39 | 567545 spekulatn
spekulatn's picture

......china does NOT have the US Airforce. 

 

Tue, 09/07/2010 - 13:51 | 567565 pan-the-ist
pan-the-ist's picture

Won't be long before the US no longer has the US Airforce.

Tue, 09/07/2010 - 14:25 | 567637 Almost Solvent
Almost Solvent's picture

Perhaps, but it seems that the military would not voluntarily disband.

If you are suggesting that hyperinflation or some similar event would affect the military's ability to procure oil, it seems that the military would have to act to secure its own lifeblood or cease to exist.

Again, the military would have to voluntarily not act out to preserve its own existence.

If you are suggesting there will be no sufficient quantities of oil to power the military, then I would agree, but not for another 20-30 years before Peak Oil is in terminal decline.

Tue, 09/07/2010 - 15:48 | 567799 Millennial
Millennial's picture

The military is subservient to the civilian authority. The civilian authority is bankrupt. That said so is in effect the military. Remember it's not the military that raises taxes via coercion. It's the police. But both entities are (police/military) are reliant on the civilian authority to pay them. 

What I believe is likely to unfold in the US is large masses of young people will move into towards military jobs as the private employment weakens. This will fuel the government to spend more on military until it becomes unsustainable. Through inflation the government will maintain the military.

At some point the government will have to cut the military budget probably by 2/3. If they don't inflation will be the only way to satisfy the military pay, but only to an extent.

However in the event of hyperinflation the military will either disband or coup d'etate. In the event of hyperinflation I feel that the Union at large will be at risk of fracturing which the central government will use the military to maintain the union. This kind of civil war/rebellion I don't think will be long lived or really that big, by this time the military will be rather weak and have little incentive to listen to its civilian masters who are paying them crap. Further I have a hard time believing the modern soldier would attack its own brethren. Most military folk I meet are honest people who just want to make a living and they know their function is not that of being a national police force, but that of defense. Cops on the other hand from what I can tell have major ego trips with their authority to arrest civilian outbursts.

I would hope though that if there were a coup de'tate that the military install our constitution to the original order of things. As far as voting, there simply is not enough inertia to change direction much less time has run out on our experiment in central banking, fiat money, and Keynesian policy. I'm expecting economic collapse any day now. Voting for Ron Paul will not do anything to help. Frankly the Democrats have too much of stay in Congress but the Republicans aren't much better. The issue fundamentally is the a harsh return to principles rather than trying to fix the acconmie or guvament. 

There are laws of gravity much like the laws of economics you can't break them, you can defy them for periods of time, but you can't ever escape them. The harder our faces hit the concrete the better off we collectively are. Why?

Because that's all it takes for the collective to remember concrete hurts and gravity is a bitch so it's best not to "go chasing waterfalls."

 

Mark if you read this: Aim for the Bushes!!111

Wed, 09/08/2010 - 00:04 | 568806 RockyRacoon
RockyRacoon's picture

A fine comment.  Good to see you active in some good debate.

Thanks for your contribution... in more ways than one.

Wed, 09/08/2010 - 00:44 | 568857 Millennial
Millennial's picture

People think I'm crazy. I'm not just I live within reality. Reality says to me go find something that is secure and not likely to break down as quickly as the economy (the military). I don't have the resources nor the talent to flee to another country, much less I like it here in large part. Besides when we begin to inflate the military will be the first recipients of the inflated currency so they still maintain stronger purchasing power in the initial stages. 

less than 50 days. 

I know if they were to deploy me to Michigan or any state to stop an uprising I'd probably bail and say I'm gonna join them. 

Tue, 09/07/2010 - 15:49 | 567800 1100-TACTICAL-12
1100-TACTICAL-12's picture

My brother in-law is in Afganastan, Told him to start saving up cause he might have to split the gas bill with his uncle Sam to get home.

Tue, 09/07/2010 - 13:26 | 567522 pan-the-ist
pan-the-ist's picture

It bothers me that you failed to use Ad Hominem correctly.

Tue, 09/07/2010 - 16:00 | 567816 hbjork1
hbjork1's picture

He has done that at least once before.

Tue, 09/07/2010 - 15:12 | 567737 tmosley
tmosley's picture

He did not make an ad hominem attack.

http://en.wikipedia.org/wiki/Ad_hominem

He refuted your argument with a logical argument of his own.  Why can't they accept hteir own paper?  Why can't they change directions quickly?  The US turned on a dime at the end of WWII, switching from military production to a consumer economy in less than five years, without a major depression.  This is hardly any different.

Tue, 09/07/2010 - 14:15 | 567396 GoinFawr
GoinFawr's picture

As pointed out in the above article the YUAN can revalue on the whim of the PRC. 

Barnaby333, what you say is unlikely to occur is happening already. The Chinese domestic market alone is potentially 5 times (count 'em) the US, a simple appreciation of the YUAN will provide a whole lot of people "to sell those goods too (sic)".

 

Quaecumque Vera, indeed. Outstanding post GB, congratz.

Regards

Tue, 09/07/2010 - 20:13 | 568446 barnaby33
barnaby33's picture

I suppose I don't see how, not that I haven't looked. the Yuan can be re-valued, it always could. Its no more a commodity based currency than is the USD. If your economy is based on exporting, you have to have a customer. If not external then internal. So if the Chinese revalue the Yuan and make imports cheaper, exports are made that much more expensive. Now Chinese industry is less competitive. At a certain point the competitiveness turns to a loss as your input costs have gone down but your unemployment goes up. My supposition is that it is that unemployment going up that is the huge problem that China faces. 

 

 

Tue, 09/07/2010 - 11:46 | 567324 Cistercian
Cistercian's picture

 More Epicness from ZH....great article!

Tue, 09/07/2010 - 11:48 | 567330 chrisina
chrisina's picture

Good post.

 

I'd add to the list of economic myths :

 

"That a central bank, by printing enough can always reverse a deflation."

 

This myth stems from M. Friedman and his admirer B.Bernanke, and shows that these two gentlemen have never understood that in a financial sytem dominated by credit money, and not fractional reserve fiat money system, the credit money supply preceeds the fiat money supply. Credit is created first, the corresponding money deposits are added simultaneosuly, the reserves are found later. This allows the total amount of credit to be orders of magnitude larger than the fiat money supply (52 trillion vs 8.5 trillion), which in a fractional reserve money multiplier model should be impossible as the money supply should be more or less equal to the cash in reserve plus the credit money.

 

Whatever amounts Mr Bernanke can print, he cannot force private individuals and businesses to take on more debt against their will. If they have decided to deleverage, all his printing will not create more credit money but go into reserves instead. If he printed $20 trillion and spread it with a helicopter, individuals and businesses would use a portion to pay down debt and a portion would be spent. Total Credit money would go down and we'd have an immediate Dollar collapse to go with it. Deflation would not be reversed, but halted, and the credit system and the dollar irremediably terminated.

 

The same myth is associated with the myth that the growth of the fiat money supply causes price inflation. It is actually exactly the reverse : the expectations by economic agents of future price inflation causes them to take on more loans which causes the growth of the credit money supply which causes the growth of the fiat money stock.

Tue, 09/07/2010 - 16:11 | 567823 PragmaticIdealist
PragmaticIdealist's picture

Actually, there's no reason to believe that there isn't a specific quantity of (non-credit) money that could be printed that would be sufficient to reduce debts to manageable levels and initiate price inflation.

Also, (rational) price inflation expectations of economic agents can not cause price inflation, since aggregate price inflation shouldn't occur without Fed manipulation or excess money being created through irrational investment. Of course, during periods of investor euphoria and easy Fed money, irrational price inflation expectations can end up causing price inflation in the ensuing periods.

Tue, 09/07/2010 - 11:51 | 567337 obewon
obewon's picture

Thanks, ZH and Girodano!

That was nothing short of excellent!!!

Tue, 09/07/2010 - 11:57 | 567347 pachanguero
pachanguero's picture

Thank you for a well written look at the true story.  

The MSM and the banksters (New World Order) are throwing punches into the air but can't land a blow on The depression.   The champ, GOLD has weathered their Rope-a-dope strategy and has come back to life with a few rounds of belly shots.  This fight will be finished when the GOLD is shown as the only true store of wealth.  Fiat currencies always end up destroyed.

Tue, 09/07/2010 - 12:02 | 567355 JW n FL
JW n FL's picture

If the Global Trade Model is based on a $70 bbl. Oil Prices... and the cost of Oil averaged from all around the World is really $200+ bbl or more... then every economic model is incorrect.

 

Peak Oil is NOT! about the World running out of Oil... Peak Affordable Oil, Peak Lite Sweet Crude... drill 500 feet down in the middle of the desert, where infrastrucure already exists... verse floating in the middle of the ocean, dodging hurricanes dropping down 1 mile to the sea floor to then drill down another 10,000 feet thru rock that has been melted together... to then pump it to transport ships to then refine...

 

Sweet Lite Crude... is pumped and even refined on site where it is pumped up from... on site.

 

Any way... there are piles of money! EVERYWHERE!! if You dont have money then You where broke before hand. Trillions everywhere... doesnt change the fact that Energy is 100's of % more expensive than priced in... Iraq has how many decades more of oil production than Saudi Arabi?

 

It always has been and it will always be about energy.. the fact that like 4 people in total on this site can add 1 + 1 and then figure out that the answer is NOT 31,987.78.

 

It is not that complicated, it never has been. Good luck with blaming the piles of money sitting on the side lines.

Tue, 09/07/2010 - 13:24 | 567518 pan-the-ist
pan-the-ist's picture

Hi Kids - that's JW.  He's a peak oiler.  Peak oil was in vogue in 2007 when the oil companies were pumping the price of oil... JW doesn't understand that he's been duped.

Tue, 09/07/2010 - 14:35 | 567648 Rusty Shorts
Rusty Shorts's picture

Answers To Correspondents

 

"ARITHMETICUS." Virginia, Nevada.--"I am an enthusiastic student of mathematics, and it is so vexatious to me to find my progress constantly impeded by these mysterious arithmetical technicalities. Now do tell me what the difference is between geometry and conchology?"

Here you come again with your arithmetical conundrums, when I am suffering death with a cold in the head. If you could have seen the expression of scorn that darkened my countenance a moment ago, and was instantly split from the center in every direction like a fractured looking-glass by my last sneeze, you never would have written that disgraceful question. Conchology is a science which has nothing to do with mathematics; it relates only to shells. At the same time, however, a man who opens oysters for a hotel, or shells a fortified town, or sucks eggs, is not, strictly speaking, a conchologist-a fine stroke of sarcasm that, but it will be lost on such an unintellectual clam as you. Now compare conchology and geometry together, and you will see what the difference is, and your question will be answered. But don't torture me with any more arithmetical horrors until you know I am rid of my cold. I feel the bitterest animosity toward you at this moment-bothering me in this way, when I can do nothing but sneeze and rage and snort pocket- handkerchiefs to atoms. If I had you in range of my nose now I would blow your brains out.

-THE END-
 

Mark Twain

Tue, 09/07/2010 - 16:19 | 567846 Hephasteus
Hephasteus's picture

The worst kind of explanation is one that's reasonable and unverfiable.

Tue, 09/07/2010 - 12:07 | 567360 Henry Chinaski
Henry Chinaski's picture

Doomer Porn. Good stuff!

Yet the criterion of truth is that it works even if nobody is prepared to acknowledge it.
Ludwig von Mises

Tue, 09/07/2010 - 12:12 | 567367 contrabandista13
contrabandista13's picture

Ahhhhh....  Sugahhhhh.....  The Ag currency making new highs on the move....

 

Lovely.....

 

Best regards,

 

Econolicious

Tue, 09/07/2010 - 12:20 | 567378 Don Levit
Don Levit's picture

Great column.

It reminds me of the excellent story written recently by cognitive dissonance.

Two sayings reflect my sentiments:

Talk is cheap, because supply exceeds the demand.

And not to compete with a prior commenter. The truth will set you free, but first it will make you miserable.

Don Levit

Tue, 09/07/2010 - 12:20 | 567380 william the bastard
william the bastard's picture

Giordano Bruno (1548 – February 17, 1600), born Filippo Bruno, was an Italian Dominican friar, philosopher, mathematician and astronomer, who is best known as a proponent of the infinity of the universe

 

More recent assessments, beginning with the pioneering work of Frances Yates, suggest that Bruno was deeply influenced by the Astronomical facts of the universe inherited from Arab astrology, Neoplatonism and Renaissance Hermeticism.[3] Other recent studies of Bruno have focused on his qualitative approach to mathematics and his application of the spatial paradigms of geometry to language.[4]

He was quickly turned over to the secular authorities and, on February 17, 1600 in the Campo de' Fiori, a central Roman market square, "his tongue imprisoned because of his wicked words" he was burned at the stake.[17] His ashes were dumped into the Tiber river. All Bruno's works were placed on the Index Librorum Prohibitorum in 1603.

Tue, 09/07/2010 - 12:32 | 567401 giddy
giddy's picture

...indeed

Tue, 09/07/2010 - 13:25 | 567521 Vergeltung
Vergeltung's picture

wow, that sucks...

Tue, 09/07/2010 - 14:50 | 567687 i.knoknot
i.knoknot's picture

danke for that tidbit. adds to the context.

cheers

Tue, 09/07/2010 - 12:37 | 567409 aerojet
aerojet's picture

The bottom line is that the MSM would not  be able to lie so blatantly all the time if Americans were the least little  bit intelligent.  There are two problems:  One is that Amreicans are on average, incredibly ignorant.  And the second problem is apathy: Even when the truth is found out, like the revelations that came out of Wikileaks recently, the public reaction is "ho-hum" back to whatever distraction I was engaged in before. 

 

Failure is the only option.  Millions will die.  That is the only way truth will reign supreme again.

 

Tue, 09/07/2010 - 12:55 | 567452 Seer
Seer's picture

Why bother paying ANY attention to the MSM?  Just ignore them, I pretty much do, and have done.

Also, don't confuse apathy with conservation of energy.  I suspect that given so many people are consumed raising children and doing all the other things that they don't have the energy to do battle with the system; they see groups of valiant people rising up only to be crushed; there's got to be a sense of "what will happen to my children if I were to get crushed?"  Granted, there ARE a lot of overly-self-absorbed people (that's the general programming, thanks to the likes of Edward Bernays), but I really think that for the most part it's a conservation of energy thing.

What can be done?  Well, I've come to the conclusion that one cannot fight the system, that, as Bukminster Fuller stated, kill the existing by creating an alternate.  In essence: remove your power from the existing: how many times have you heard that it's all about a people's lack of confidence, that That's why things aren't doing well?  Take that "lack of confidence" and stretch it and pretty soon all these corrupt bastards dry up, along with their corrupt system.

I highly recommend people read this article*:

http://dissidentvoice.org/Nov05/Carpenter1102.htm

* NOTE: It's the first hit that comes up on google when you search "we don't need them," which should give a hint that this thing is likely read by far more people than we can imagine.  Not a good sign for TPTB...

Tue, 09/07/2010 - 13:28 | 567528 pan-the-ist
pan-the-ist's picture

It is difficult to convince people that you possess the correct version of reality unless you understand their reality, the only way to do this is to expose yourself to the MSM.  If you don't keep one foot in their reality then you risk being marginalized in the main stream.

Tue, 09/07/2010 - 16:33 | 567865 Pining for the ...
Pining for the Fjords's picture

"Also, don't confuse apathy with conservation of energy."  Great observation, Seer-  I spoke to a woman in my area (rural, semi-suburban) last week who noted that when they first bought their house 7 years ago they had one of only two gardens on the street.  This year she counted 19 of 24 houses with gardens- people are planting, canning, etc.  Every weekend I hear distant sounds of folks in my area target shooting on their farms- often w/ semi-autos, and I NEVER used to hear this.  Bottom line, many people sense what is coming and are responding in their own, quiet ways.  Nothing to make headlines, just average folks without the connections or power or media to fight the larceny, so instead they are responding quietly and personally to the gathering storm clouds. Conserving their energy, indeed.

Tue, 09/07/2010 - 12:42 | 567421 Seer
Seer's picture

The title is "Dangerouse Economic Misconceptions" and you don't include the most damaging one of all, that there can be "sustained growth" on a finite planet?

This is no more than a cheerleading exercise to overthrow the existing elites and replace them with your favorite powerbrokers (yeah, sure, they're some good folks in that they are critical of the existing folks in power, but NONE of them talk about the core failings of the System [see my reference above]).  That's how the game is played, you churn through a new batch of folks, make all kinds of money/headway until its discovered that they too are corrupt and by that time you're retired and off living the high life.  Rinse and repeat...

The fact that you can identify all of this suggests that you're no dummy.  But not being able to identify the most critical piece of this puzzle?  And you're calling others delusional?

Tue, 09/07/2010 - 13:55 | 567577 PierreLegrand
PierreLegrand's picture

hehe...Love you Malthusians y'all are so cute with your running around screaming the sky is falling.

We can think our way out of any corner we find ourselves in. We just need the sorts of leaders who understand that freedom is the answer.

Tue, 09/07/2010 - 14:53 | 567693 i.knoknot
i.knoknot's picture

where ya been lately!?

my gut response to your post ("we just need") was:

  "but, who will put the bell on the cat?" (how do we get rid of the current administration(s))

welcome back PL.

Tue, 09/07/2010 - 16:06 | 567826 Glaucus
Glaucus's picture

Malthusian, indeed.  We're heading into a nano-powered world...

"We are awash in energy (10,000 times more than required to meet all our needs falls on Earth), but we are not very good at capturing it. That will change with the full nanotechnology-based assembly of macro objects at the nano scale, controlled by massively parallel information processes, which will be feasible within twenty years. Even though our energy needs are projected to triple within that time, we'll capture that .0003 of the sunlight needed to meet our energy needs with no use of fossil fuels, using extremely inexpensive, highly efficient, lightweight, nano-engineered solar panels, and we'll store the energy in highly distributed (and therefore safe) nanotechnology-based fuel cells. Solar power is now providing 1 part in 1,000 of our needs, but that percentage is doubling every two years, which means multiplying by 1,000 in twenty years. Almost all the discussions I've seen about energy and its consequences, such as global warming, fail to consider the ability of future nanotechnology-based solutions to solve this problem." -- http://www.kurzweilai.net/meme/frame.html?main=/articles/art0692.html

...that will have us leaving our birth planet to its own devises not too long from now...

"An analysis of the history of technology shows that technological change is exponential, contrary to the commonsense ‘intuitive linear’ view.  So we won't experience 100 years of progress in the 21st century—it will be more like 20,000 years of progress (at today's rate). … Within a few decades, machine intelligence will surpass human intelligence, leading to … technological change so rapid and profound that it represents a rupture in the fabric of human history.  The implications include the merger of biological and nonbiological intelligence, immortal software-based humans, and ultra-high levels of intelligence that expand outward in the universe at the speed of light." -- http://www.kurzweilai.net/articles/art0134.html?printable=1

 


 

Tue, 09/07/2010 - 12:45 | 567427 proLiberty
proLiberty's picture

When someone believes "[w]hile it is true that America must eventually return to its industrial roots if we are to survive", they are confusing making things with creating value.

<!-- @page { margin: 0.79in } P { margin-bottom: 0.08in } -->

In terms of profits, at an estimated $1.6 billion, the movie Titanic made more money than most of the Fortune 500 companies especially those involved in mining, manufacturing or agriculture. For example, Peabody Energy (coal) had a profit of $953.5 million in 2007. Newmont Mining has14,450 employees and is one of the largest gold mining companies in the world. In 2007, it had $853.0 million in profit. The largest processor of agriculture products in the country, Archer Daniels Midland had $1.802 billion in profits. It also has 28,200 employees, compared to the few thousand who worked on Titanic.

 

In terms of intangibles, probably the most valuable single piece of paper in the world is the one on which the formula for Coca-Cola is written. This recipe is the basis, according to Business Week magazine, of the number one brand in the world, a brand they appraised as being worth $66.7 billion. When you buy a Coke, a beverage that has only a few pennies worth of ingredients in each serving, what are you willingly paying for that you could get for much less with some other brand?

 

It turns out that approximately 25% of US exports are in the form of intangibles, that is things that customers paid money for, and sometimes a lot of money for, and yet nothing tangible was exchanged for the payment. If wealth only comes from the ground or from making things, then how did places like Singapore and Hong Kong become so prosperous? How did author J.K. Rowling, whose first of several Harry Potter books were written on a notebook computer in the cafes of Edinburgh. ultimately earn her nearly $1billion? In all these cases, by creating something that was of value to others, even though that value was not in something you needed an assembly line to produce or a railroad car to ship.

 

Not only do we need to do everything possible to foster new business formation, but we need to recognize the role of super producers, like Steve Jobs in our society.  Instead of specficially targeting the rich for punishing taxation, we need to encourage them.   While lots of Chinese are employed assembling Job's products, Jobs creates far more wealth in the US than he does in China.

 

Tue, 09/07/2010 - 13:06 | 567469 Seer
Seer's picture

"America must eventually return to its industrial roots"

WHAT?

Oh, yeah, I seem to recall Thomas Jefferson busily working on that automotive assembly line...

Farming!  Wake up!  Quit with the denial! People can't afford shit, all the hopium about returning to an age that can never happen again is going to make things worse!  People will be needing food, shelter and water!  Fantasies are dead, the "American Dream/Way of Life" is dead.  Time to get back to the fundamentals.  Oh, yes, maybe a book or two isn't a bad idea, I think that most people recognize Rowlings books as fantasy, but... how many authors do you really think that we can sustain, and, can we all live by selling each other books (or widgets)?

Tue, 09/07/2010 - 15:20 | 567754 tmosley
tmosley's picture

I guess you never heard of the 1800's, or would prefer the 1700's?  That's fine, but don't pretend that the US wasn't built by industrialism.  It might not have been founded that way, but that is certainly what built it.

And yes, we can all get by quite well with increased division of labor, thank you very much.  If you want to farm, be my guest, but I would rather continue in my trade of developing antimicrobial materials and drugs.  Maybe you'll appreciate that when you need a new spine after thirty years of backbreaking labor on the farm, or when you get a nasty wound and need a bandage that won't allow the wound bed to become infected.  There are a lot of other people like me, making and developing things that you will want or need on your farm, which will make you more efficient, or straight up save your life.

Tue, 09/07/2010 - 16:29 | 567858 1100-TACTICAL-12
1100-TACTICAL-12's picture

I would suggest The Ball Blue Book of Canning & Food Preservation. And a shitload of seeds.

Tue, 09/07/2010 - 13:11 | 567482 macholatte
macholatte's picture

Although well intentioned, your premise is mixed up.

People pay a lot for entertainment but bitch about the price of food, clothing, etc. People borrow money to go on vacation and pay $10 for a bowl of oatmeal or $15 for a bowl of spaghetti while waiting in line to save 2 cents on a gallon of gas.

Of course "we need to do everything possible to foster new business formation" but who is the "we" you talk about? What's the difference between a "super producer" and a "super thief" ?

Nike spends $2 to make a pair of sneakers, pays millions to a basketball player to endorse them and charges $150 to the children they market to.

Capitalism will always prevail when it is left to its own devices. The job of government is to regulate and control the lying, cheating and stealing. When the government is the chief architect of the lying, cheating and stealing all semblance of rationality and trust is lost. Everyone joins the free-for-all grabbing much to much for fear of getting nothing at all. Then the lying, cheating and stealing becomes admirable. The problem with Madoff was not that he did anything "wrong" and got caught but that he didn't have a cleaver exit strategy.

How many people here actually admire Goldman Sachs for its abillty to break the law, manipulate markets and control government? A "super producer" indeed.

 

 

 

 

Tue, 09/07/2010 - 14:23 | 567631 docj
docj's picture

The problem with Madoff was not that he did anything "wrong" and got caught but that he didn't have a cleaver exit strategy.

I can think of more than a few people who would love to have a cleaver exit strategy for Old Bernie!  As in using a cleaver to help Bernie exit this mortal sphere.

Sorry man, just being a jerk.  Spot-on comment.  Cheers -

Tue, 09/07/2010 - 16:59 | 567952 overmedicatedun...
overmedicatedundersexed's picture

"Jobs creates far more wealth in the US than he does in China."

>>>>>>>>>....

how is this wealth distributed? who benefits?

Jobs never sent me a check (not that I want or expect one).

talking up those who ramped up H1B 's and off sourced production is very ignorant or just plain continuing the CFR elite lies of NWO

fascists. 

 

Tue, 09/07/2010 - 12:49 | 567431 macholatte
macholatte's picture

 

 The term you are looking for is this:

                       PROPAGANDA

 

Ron Paul Speech 9/4/10

http://www.youtube.com/watch?v=FobnAnrFG3c&feature=sub

Tue, 09/07/2010 - 12:51 | 567436 americanspirit
americanspirit's picture

OK, so now the readers of ZH have moved a notch higher in our understanding of the dynamics of chaos that surround us. Thank you GB - your writing and your thinking are both powerful and helpful.

However - this means that maybe .001% of Americans has now been incrementally enlightened. The problem is that no matter how many intelligent, aware people come to understand the sources of this chaos, and are even motivated to seek solutions, the vast, vast majority of Americans are simply intellectually incapable of grasping what is happening to them. People graduating from our educational system over the past 30 years or so have not been given the mental tools to enable them to formulate a coherent sentence, much less a world-view.

This is why the bad guys are going to win - they control the on/off switches that have been systematically implanted into now whole generations of people under the guise of education, and they can spook the herd in any direction they want, any time they want, with the flick of a switch. I'm with Mogambo - we are indeed doomed.

 

Tue, 09/07/2010 - 14:57 | 567699 i.knoknot
i.knoknot's picture

we need more like you. simple, concise, correct, and... you like the mogambo...

i, for the life of me, can't get any of my peers to even consider the reality of the mess we're in.

and my credibility on professional issues is sound, but somehow i'm not NBC, so my hints that the sky actually *is* falling seem to fall on deaf ears... glassy eyes. etc.

"we're friggin doomed"

Tue, 09/07/2010 - 15:54 | 567808 ColonelCooper
ColonelCooper's picture

I agree wholeheartedly with both of you.  "we're friggin doomed".  There quite possibly is nothing we can do about it.  Yet.

I don't even try to get my peers to "consider the reality of the mess we're in" anymore.  I tried, they don't listen, so Fuck Em.  For now.

We are passed the point of saving/fixing what we had.  TPTB are too entrenched, and the hole we have dug for ourselves is too deep.  The peers who wouldn't listen will be forced to acknowledge reality when it all comes crashing down around them.  That is when you need to stand up and help to put it back together.

IMO, we have one imperative: Keep as much of our constitutionally protected freedom intact, so that when it all topples we will still have the RIGHT to fix it.  This is the only reason to stay involved at this point.  I would rather save my energy for the tasks ahead, but TPTB will suck the lifeblood out of each and every one of us if we let them.  Don't let them.

 

Tue, 09/07/2010 - 16:03 | 567822 i.knoknot
i.knoknot's picture

that's a great perspective. i will adopt much of it, if you don't mind.

very much of a 'pick you battles wisely' approach, enhanced with 'there is a time and a place'.

i don't want to give up on my peers, but my forhead is bruised... maybe i'll back-off for now, and ... wait.

(it is going to be hard as hell not to take the smug 'i told you so' position down the line, but i'm guessing it'll be such a mess that it won't even occur to us...)

i like the "pray we have enough rights to 'fix' it" concept. there's an entire political movement buried in that ideology alone.

 

Tue, 09/07/2010 - 16:08 | 567832 ColonelCooper
ColonelCooper's picture

I adopted much of it as the result of a similar bruised forehead.  The flat scarred spots on our collective foreheads will make it easy to find one another when the internet goes down.

Wed, 09/08/2010 - 06:22 | 569027 Andrew G
Andrew G's picture

Just ignore them - they won't be able to help you or hurt you much, so just focus on taking care of yourself and your close family and friends.

Don't believe them, don't fear them, don't ask anything of them.- Alexander Solzhenitsyn

Tue, 09/07/2010 - 12:52 | 567438 D-Falt
D-Falt's picture

Yeah, some days I wish all the smart people at CNBC would be more serious as well....Oh well, it's only money...

Tue, 09/07/2010 - 12:52 | 567439 Everyman
Everyman's picture

SEND THIS TO EVERY email address on every MSM site you can. Editors at CNN, CNBS, FNC, Fox Business, WSJ, Barron's, IBD.  ALL editors, managers, everywhere.

 

THIAS IS THE TIME to CALL BS on the MSM, otherwise known as the "Lamestream Media", or more appropriately "Liars".

Tue, 09/07/2010 - 14:59 | 567706 Rusty Shorts
Rusty Shorts's picture

#1 - The first rule of Fight Club is, you do not talk about Fight Club.

#2 - The second rule of Fight Club is, you DO NOT talk about Fight Club.

Tue, 09/07/2010 - 12:55 | 567449 Augustus
Augustus's picture

Most excellent article.

I look foreward to the next one.

Thanks.

Tue, 09/07/2010 - 13:05 | 567467 tempo
tempo's picture

Tax credit for capital good investments will not create jobs because the capital goods will be mfg overseas.   Tax credits only for goods mfg in USA makes sense.   Tax credits for solar panels and wind turbines made overseas is insane.   Why allow for tax credits to employ foreigners?    Its criminal to borrow money to give tax credits for US Cos. to make capital goods overseas.  Mandated domestic content will piss off China/India but there is no alternative and no painless answer.   % of poplulation employed is now 58% and declining.  NEVER even during the worse recessions over the past 50 years has the % of population employed declined below 62%.   This time we will not recover because the tax credits and stimulus are going for goods mfg overseas which does nothing for domestic job creation.  NO ONE talks about domestic content mandates.  IT makes sense.

Tue, 09/07/2010 - 16:43 | 567896 overmedicatedun...
overmedicatedundersexed's picture

duplicate

Tue, 09/07/2010 - 16:42 | 567897 overmedicatedun...
overmedicatedundersexed's picture

please refrain from mentioning the words  tax credits for "overseas manufacturing" or "outsource" or god forbid" tariff"..thank you!

these words are now forbidden.

the NWO.

Tue, 09/07/2010 - 13:17 | 567494 Vergeltung
Vergeltung's picture

nice quote!

Tue, 09/07/2010 - 13:23 | 567516 glenlloyd
glenlloyd's picture

Smells a lot like Kunstler, which I read every week btw. Very well written.

Tue, 09/07/2010 - 13:33 | 567530 web bot
web bot's picture

You know, when I see some of the ghouls of wisdom (Krugman and the like) on cnbc saying that we need further deficit spending, I have to ask myself - did these high priests of wisdom attend special schools their whole lives that didn't require math or finger counting? Did they even take a basic course in economics?

Even a chimp can tell when there are no more coconuts left on a tree. It doesn't continue to shake it. Why can't these great thinkers at least acknowledge that 25% of every tax tollar being collected is being paid out in interest... and it is only going to continue to rise.

When this party ends.. and it will... we are looking at robots moving not millions, not billions, but trillions of dollars over the course of minutes... and if you doubt me, think how much money was moved in the flash crash over the course of minutes.

Good article by the way.

Tue, 09/07/2010 - 13:42 | 567553 docj
docj's picture

Nicely done.

Added "neithercorp.us" to my bookmark list.

Tue, 09/07/2010 - 13:56 | 567578 Max Hunter
Max Hunter's picture

When the government is the chief architect of the lying, cheating and stealing all semblance of rationality and trust is lost. Everyone joins the free-for-all grabbing much to much for fear of getting nothing at all. Then the lying, cheating and stealing becomes admirable. The problem with Madoff was not that he did anything "wrong" and got caught but that he didn't have a cleaver exit strategy.

I really wish more people understood this.. The world would be a better place..

Tue, 09/07/2010 - 14:00 | 567593 RobotTrader
RobotTrader's picture

Here comes the afternoon hockey stick:

Tue, 09/07/2010 - 14:03 | 567596 william the bastard
william the bastard's picture

Not in any game I know of.

Tue, 09/07/2010 - 15:37 | 567785 grunion
grunion's picture

But provided for much belly laughing over here!

Tue, 09/07/2010 - 14:17 | 567616 Plissken47
Plissken47's picture

It's nice to have a sane person with me in this planet full of crazy people.  I thought for ahwile that I was the crazy one.

Tue, 09/07/2010 - 14:27 | 567621 nedwardkelly
nedwardkelly's picture

In comparison to the image shown at the top of the article:

Things sure are bad, but there's still a long way to go before they're terribad.

edit: hmmm... doesn't have quite the same effect when I can't post images. Picture of clowns lining up to buy ipods:

 

http://www.ipadinsider.com/wp-content/uploads/2010/04/iPad-Line-Launch.jpg

Tue, 09/07/2010 - 14:46 | 567675 DarkAgeAhead
DarkAgeAhead's picture

The likely cause of our rot as a society is economists making decisions about stuff that economists should not be making decisions about.

Worse yet, we seem to be turning to the engineers.  From frying pan, to fire.  We're f@cked.

Wed, 09/08/2010 - 00:49 | 568860 Hephasteus
Hephasteus's picture

If you put me in charge of society it would be weird. I'd make a do it yourself society. Public machine shops, chip foundries, etc. Everything you needed you have to do it yourself.

Tue, 09/07/2010 - 14:54 | 567692 BlingBlingBen
BlingBlingBen's picture

Mike Pento just got bitch slapped by Erin Burnett on her show. It's real funny.

Tue, 09/07/2010 - 15:21 | 567762 Cognitive Dissonance
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I saw that and I thought Burnett was out of line. I've seen where she's been talked over and interrupted plenty of times. But in each case, the person doing the interrupting was a favored person, meaning someone who was talking up the Ponzi.

The times in the past where she's gotten upset were when she was dealing with disrespectful people, meaning contrary people who would not accpet her premise. And Pento was objecting to Burnett's premise, including that since she was the "moderator" she establishes the basis for the discussion. Meaning her version of reality. Pento basically said Erin is entitled to her opinion but not her own set of facts.

When Pento challenged it, that's when she went off the reservation and called Pento rude and disrespectful. You don't question "B" cups' basis for her questions. She spent all morning learning her lines and you can't expect her to ad-lib, which would have been required if Pento was able to inject some reality into the "debate".

I will say that Pento must have been at the end of a long string of TV interviews because at one point he just looked down in disgust. Micheal, time to stopping fighting the good fight because you aren't going to be given the "respect" you deserve. You're not talking up the Ponzi so you won't even be given the right to discuss the Ponzi in realtion to reality.

Tue, 09/07/2010 - 15:01 | 567711 Sands8oo
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Tyler:

 

You may want to find/watch/post the priceless CNBC clip from moments ago ( about1450 EST) of Erin's US Govt Bull vs US Govt Bear debate (can't remember the contributor she lost it on - but it was priceless - ending with Erin Saying "if you ever want to be on this show again you'll refrain from interrupting me and wait your turn to speak, thank you!")  - and you can guess which point of view she lost it on...

Tue, 09/07/2010 - 15:15 | 567743 BlingBlingBen
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Mike Pento had his usual rude attitude and she lost it. I've never seen her that angry.

Tue, 09/07/2010 - 15:18 | 567752 economicmorphine
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I have noticed a disturbing trend on this and other sites that I feel are a cut above over the last two years or so.  That trend is to obsess over what CNBC, government, economists, et al are saying, rather than worrying about reality on the ground.  It seems that too many of us worry about the message.  Denninger is a classic example.  Anything of value he had to say is lost in the mindless ranting demanding that others tell the truth.  I hope that ZH does not become another such place.

It seems to me, based on my knowledge of history, that the good old days in financialmarketland where never all that good.  Lies?  Nothing new there.  Cheating?  Ditto.  Pumping?  Seriously?  Manipulation? C'mon.   

It's all happening, but it has been happening all along.  If the rules are changing, they are changing consistent with the rules governing the rest of society, where presidents who leave stains on dresses can wag fingers and lecture us, while  other presidents can land on carriers and proclaim mission accomplished while knowing damn well that the mission has years ahead of itself.  IT's not just leaders either.  Your neighbor walked on his mortgage or credit card bill and justified it because everybody else is doing it.

So the news media entertains and attempts to shape the news.  Big fucking deal.  They've been doing nothing less for decades now.  Is it more brazen?  Maybe.  Is it all that different than what anyone else is doing?  No.

If you don't like it, it seems to me the solution is relatively easy.  Simply pull your capital and let them implode.  Then you can get back in, because nothing is permanent.  What's happening now will soon pass and then a new morality will take its place.  Ask Barry Bonds or Roger Clemmons how that works.  It seems sort of obvious.  Wall Street isn't an island.  This too shall pass.

Tue, 09/07/2010 - 15:25 | 567768 DarkAgeAhead
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Nice post. 

But things do feel qualitatively different.  Maybe it's the unholy application of technology crossbred with eliminating constitutional rights.

Same with the noneconomic reality surrounding us, that is, the natural world.  Shit's changing, key variables are aligning, with collapse most likely creating a global pulse, of change.

CS Holling describes it well, in an interview by T. Homer Dixon.

There may be nothing new under the sun, including a myopic focus on message only.  In ecology, it's a religious rant about complex models rather than field observations and feedback.  Same in economics.  Trends such as these...signal something novel on the horizon.  And most would agree, that visible edge of the future at best does not inspire optimism (or even preserve hope), but at worst...well, my vote is zombie apocalypse.

Tue, 09/07/2010 - 16:06 | 567827 Rusty Shorts
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"Maybe it's the unholy application of technology crossbred with eliminating constitutional rights."

 

 - couldn't have said it better myself.

 

"In ecology, it's a religious rant about complex models rather than field observations and feedback."

 

 - yes, I can relate to this, back in the day, I was excited to be enrolled in Ecology 321, it turned out to be the most disappointing course I have ever endured, the entire semester consisted of mathematical matrix's, and of course, the Professor's rants.

 

Good post.

 

 

Tue, 09/07/2010 - 15:31 | 567777 Cognitive Dissonance
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I get your point and I agree that many are jousting at windmills. However, it appears (we really won't know until after the fact) that the stakes have never been this high, at least among the living. And while the robbery was always in progress, the extent, duration, magnitude and effects are becoming obvious even for those who played in the game and were able to remain somewhat in denial as to the effects and outcome.

Many "in da bidness" are now seeing, some for the first time, how they are part of the insanity and it's weighting on them. And many on the outside are waking up not only to the Ponzi but to many other political and governmental machinations.

Simply pull your capital and let them implode.

You're assuming your pulled capital with be worth something after the implosion. Which is what I'm talking about above when I say "the effects". It hard to escape global thermonuclear war.

Tue, 09/07/2010 - 15:44 | 567793 i.knoknot
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+++ CD - "It's hard to escape global thermonuclear war."

similarly, my favorite adage:

  "well i bailed out *my* part of the Titanic"

i would go so far as to argue that it *is* actively imploding, and everyone is looking for their own "investment lifeboat" right now, in slow-motion.

so, in the current context, "pulling capital" is an interesting concept. pull it to where?

Tue, 09/07/2010 - 16:39 | 567889 Cognitive Dissonance
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One of the underlying themes in my posts and articles, or should I say bias, is that many expect things to get silly, but then to get better and sort of go back to "normal".

If one is to believe this, then one must only shelter from the storm. But with a world that's straining to feed and shelter 7 billion souls and the entire "civilized world" dependent upon "just in time" delivery of nearly everything, most especially food stuffs, there is no way to let off the gas and cruise while repairs are made.

To cruise assumes there is some basic system stability remaining and that the system can sustain itself at a lower RPM or speed. It can't, at least no longer, without a large population die off. What would destabilize like nothing else? A currency crisis. It would drive everyone into their storm shelters resulting in massive shortages very quickly.

Tue, 09/07/2010 - 17:59 | 568145 DaveyJones
DaveyJones's picture

So true. Trav's early comment on the recent peak oil article with the link to the exponential numbers lecture is a cold naked reminder. The truth is a lot more dramatic than our imagination. Unfortunatately the logic makes total human / historical sense doesn't it? It was probably inevitable that nature would compress millions of years of organic material and out of that would come some of the most compressed energy source ever seen. We would literally build our entire society around it including our entire food system. It's magic would explode our population and increase our addiction and we would churn through the millions of years of compression in only a hundred and its utility would peak exactly at the time when our population was the most vulnerable. Of course, wise, honest people would come and warn us but they would be ignored out of ignorance and greed.

Like you said, the entire underlying "system stability" is at risk     

Tue, 09/07/2010 - 22:41 | 568704 Hulk
Hulk's picture

Well, Well put Davey. 

"It was probably inevitable that nature would compress millions of years of organic material and out of that would come some of the most compressed energy source ever seen"

And that is precisely why the forthcoming energy crisis will be the greatest problem mankind has ever faced. One whichwe  are presently ignoring. Millions will die minus a miracle of miracles...

Tue, 09/07/2010 - 15:31 | 567779 i.knoknot
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+++ econo. pragmatic.

as you suggest, "more brazen"? methinks yes. and that in itself is most unsettling. what desperation lies beneath their games at this point in history? rats on the titanic, or just a awareness that the SEC is useless (foxes guarding the hen-house, etc.)

new game? i agree, not at all. since primates have existed.

will pass? probably, but with more upheaval than we're accustomed to/ready for.

one key difference, regardless how small our (ZH-like) numbers, there are far more folks that are aware of the distortions than have been paying attention in the past. this in itself is notable. a sort of awakening. interesting to see how it pans out.

FWIW, i like KD. he substantiates his stuff and likes math. hard to argue the essence of most of his points, and his intentions are most honorable, even if not likely to result in much change. perhaps if enough of us listen, we can help nudge things when the opportunities arise.

cheers

Tue, 09/07/2010 - 15:47 | 567795 doolittlegeorge
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You can't go live and lie, but you do have to be careful what you say.  The implication of this piece that "they're toadies" is simply incorrect.  These folks are scared to death because they know what really goes on.  Does the so called "MSM toe the party line"?  What line is it to which you speak?  The beginning?  The middle?  The End?  My fear of the media (and it is real in my view) is "what are these folks doing with all that free time?  They come on the air for 20 minutes and....then what?   Whether or not the money never stops the ENTERTAINMENT doesn't.  The ENTERTAINMENT of course is you and me.  What could possibly sell better than REAL real life?  In my view that includes REAL suicide and REAL murder.  In REAL time.  Whether it be true or not needless to say "they are not limited by technologly but indeed have been enhanced by it."  Every wonder why that internet thing is so cheap?  And where is the government in all this?  DIGGING DEEPER of course.  There are no privacy constraints in the Health Care bill.  AND THERE WAS NO INTENTION OF CREATING ONE BECAUSE THE MEDIA sees value in this information too.  "You" as information is what the so called "MSM" really wants.  It's for sale and it's illegal so "you have to pay for that and it's expensive."  Go live in one of those NYCity Co-op's--true you "might not be on candid camera"--but with the tech availible today it makes "Sliver" look just like that...a sliver.  Now you can "know the whole thing" all collated, sorted and index as though a librarian was in charge.  Now needless to say if this theory is true OF COURSE the government is watching as well.  The term was "Total Information Awareness."  SCARY!  And needless to say it attacks the very central premise of having a Constitution or rule of law in the first place.  True "there is no right to privacy" in the Constitution.  But there is a right to assemble and speak--upon which being able to "conspire" with your neighbors by having a beer and some BBQ can only exist "in private."  In short:  here's the violation in my book--monetizing the asset known as "mayhem" and "standing by and watching it all unfold."  And needless to say "the guy's name is Bloomberg" and "he's the mayor some city somewhere" and "he wants to be President." Not saying it's "true" but boy do I feel the proverbial "smoke of this fire."  LITERALLY.  Of course it's an interesting concept "how does one have commerce without privacy?"  The fact that "no one cares about it" is the primary reason i have dimmed my view on "money being welcome here in the USA."  These are your modern day "tank treads."  God knows it was not always this way and "no one says it leaves mark."

Tue, 09/07/2010 - 17:55 | 568130 Raging Debate
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Your quite a thinker Doolittle. You cannot put new wine into old wineskins. The asymmetric 5D circular information age has arrived. Why is this important? Because mankind's management paradigm has been that of a pyramid. Even well intentioned leaders that set up a decent government of checks and balances fails. ALWAYS. But why? Because the information doesn't flow from the top to the bottom. Why were voters asleep in their debt nap? Same reason. Mark Zuckerman of Facebook gets it, note their new logo. I got in the late 1990's when the intellectual elite were going gaga over fractals. What the formation of fractals (which are mathematical equations reflecting a train of thought) represent in the completion is a circle. Information will flow freely in a circular management paradigm. A lot of bright folks here found the information to improve society or personal lots in life but it takes far more effort than it should.

The Rockefellers of the world now have come to realize that the advantage of information ahead of the pack and purposely not allowing it to trickle down or skewing it before it heads down the base of the pyramid is coming to a close. Can't say I blame them for hating that reality in the short-term, but man will continue to evolve and increase the supply chain participation and let's face it, such will still have stockpiles that will keep the 7th generation wealthy. Competition brings out the best in mankind and yes, a little bit of our worst.   

Tue, 09/07/2010 - 15:49 | 567801 Sudden Debt
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I bought liberty's from this site yesterday:

http://www.bullionuk.com/products/silver/coins/usa

I now order all my coins internationally and not domestic. You never know is they start confiscating :)

Tue, 09/07/2010 - 16:25 | 567851 LooseLee
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Until the American public sees many from Wall St. to Washington going to jail for the crimes they have committed, no real recovery will be possible....

Tue, 09/07/2010 - 17:19 | 568020 Grand Supercycle
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DOW/S&P500/FTSE/EURO short signal continues :

http://stockmarket618.wordpress.com

Tue, 09/07/2010 - 17:58 | 568112 Raging Debate
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Why no competing new media? Well, the ones that truly want it and are trying to help the public are solid researchers and authors. But they are not proficient in digital technology. Google and Wordpress are clunky and few authors are not happy with the tech or the revenue stream. Lastly, being anonymous doesn't get you funded. It may get some donations but not enough to scale the business as needed.

The "Talking Head" format is lame. It puts me to sleep. So does skewed moderated news. One hand clapping gets boring too, so a network should have a central hub and satellite sites with each authors theme. The content gets voted best of and inserted into the hub. 

Max Kaiser has come the closest thus far of leveraging VOIP video technology which is cool but what is really needed is group participation or citizen's powered news. What, do I have to look like Tom Cruise to actually get a shot at being on the news? Hey, someone may have already started building this network!

To fund it, expect most of the big boys to shy away, the political risk is to high. Even gents you think would be willing to put up some dough for a market opportunity do not want their own competing network. So angels are the way to go and good authors like Durden and others have a tough time raising funds and maintaining content. Collaboration is needed. Ego gets in the way, it what makes building this tough so the one that attempts it has to consider themselves merely a publisher. Form an economic blogger council, distribute the equity and raise the funds. A couple of known authors are required and the ones I know do not like the repeated "let's all just hang the bankers" meme.  

How many of us here are aware of how the Constitution and Articles of Confederation happened? Historically, you meet the capital in the middle. Form an objective behind the media outlet outside of mayhem and marry the capital solutions with the dough. Most of the people here realize this global system is collapsing. You are correct. But what replaces it is where we have say. An evolved banking system using peer-to-peer lending would provide democracy to banking through competition, increase the supply chain by 25% and decrease of net profit 5%. Got the gold bitches for that? No, I didn't think so. But the CB's will need that solution and yes, they will kick and scream until they realize keeping the aggregate revenue stream while allowing compeitition and transparency is better than nothing at all.

That is how reform happens, it is called political compromise. And don't be so afraid of using real names. Here is my real name, it is Jason C. Rines. I live on 1 Bennett Court in Sanford, Maine. My cell is 603-953-3388. No, I don't work for bankers but nor am I afraid of cement shoes. Besides, it is not like government can't get a hold of me if it wants to.

Tue, 09/07/2010 - 18:53 | 568286 Horst Wessel
Horst Wessel's picture

I like the links in the article, great touch. Reading about the "decades" it will take to get US Manufacturing back on track is sobering. I can remember the college text books (nevermind books from the biz section @ BN) telling students creative destruction is good for the economy... Better jobs will be created they told us and we were tested on it. The powers that be have MOST Americans duped, it is going to take a massive "re-education" process to get American even thinking right again

Tue, 09/07/2010 - 19:24 | 568347 twotraps
twotraps's picture

great comment, great perspective

Tue, 09/07/2010 - 21:13 | 568554 Bear
Bear's picture

".. self-interest, ( and may I say self importance), and an even stronger sense of self preservation .. This drives them to put their own agendas over the wellbeing of the people they are supposed to serve. And, if it’s safe to bet that governments lie, it’s an even safer bet that international bankers, who have no principled ties to any country, lie more!"

Thank you for these words ... I will quote you forever.

Tue, 09/28/2010 - 04:14 | 609419 Herry12
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