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Guest Post: Here's The Setup For The Con Of The Decade
Submitted by Charles Hugh Smith from Of Two Minds
Here's the Setup for the Con of the Decade
The Con of the Decade, which I described last July, is being set up nicely.
I described The Con of the Decade last July (2010). The Con makes me a heretic in the cult religion of Hyperinflation. I consider myself an agnostic about the destruction of the U.S. dollar and hyperinflation (basically the same thing), but my idea that hyperinflation is fundamantally a political process makes me a heretic. I skimmed a few of the dozens of comments posted on Rick's Picks and Zero Hedge after they posted one of my expositions on this dynamic, and didn't see even one comment in favor of this perspective.
The Con is being set up right now, and the outlines are clearly visible. The Con works like this:
1. The Financial Elites/Oligarchy raked in billions in private profit from the orgy of leverage, credit expansion, fraud, embezzlement and misrepresentation of risk that resulted in the Housing Bubble.
2. The losses were transferred to the public (Federal government, i.e. The central State) or its proxy, the Federal Reserve (i.e. the central bank), via bailouts, backstops, guarantees, the Fed's purchase of taxic assets, and an open window for the financiers to borrow billions at zero interest (ZIRP) for further speculations.
3. The Treasury now borrows $1.6 trillion every year, fully 11% of the nation's GDP, as the Central State has replaced private demand and credit expansion with its own borrowing and spending.
4. Non-U.S. central banks have largely ceased to support this unprecedented scale of borrowing, so the Federal Reserve now buys most of the Treasury's issuance of debt via QE2 (quantitative easing, the direct purchase of $600 billion in Treasury bonds).
5. Unlike Japan, the U.S. cannot self-fund its own government borrowing: while U.S. investors, banks and insurance companies do own a significant chunk of Treasuries, the U.S. savings rate (capital accumulation) is still abysmally low, around 4%, which is half the historical average savings rate.
This is the result of the Keynesian Cult's One Big Idea, which is to pull demand forward and encourage borrowing and spending now by any means necessary, and thus sacrifice capital formation/saving.
So the basic outline of the Con is that private losses from the financialization of the U.S. economy were shifted to the public. Now to keep the Status Quo and Financial Plutocracy from imploding, the public is on the hook for $1.6 trillion in additional borrowing every year until Doomsday (around 2021 or so).
Having secured the backing of the Central Bank and Central State, the Plutocracy's only problem now is that it needs a risk-free source of high-yield income. Yes, it has a trillion dollars or so sitting in bank reserves, collecting interest from the Federal Reserve; this is certainly risk-free, but the Fed's Zero Interest Rate Policy (ZIRP) keeps the rate of return absurdly low.
Here's where we see the Con taking shape. The ideal setup for risk-free returns is to own Treasurys that pay a high yield. The way to get higher interest rates is to first make the Treasury market supremely dependent on a central bank or single buyer: Done. That buyer is the Federal Reserve.
Next, have that buyer stop buying. Suddenly, interest rates start moving up. If you don't believe this is possible, or part of a larger project, then please explain why PIMCO sold all its Treasuries. Duh--because interest rates are set to rise, and not by a little bit or for a brief span, but by a lot and for years.
That means holders of long-term Treasuries (and other debt) will be cremated as rates rise. (Holders of TIPS will do OK, unless the government fraudulently sets the rate of inflation well below reality. Hmm, isn't that exactly what's it's already doing?)
Once long-term rates have leaped up, then start accumulating the high-yield bonds. Why would rates jump? Supply and demand: as the demand for low-yield Treasuries dries up, the supply keeps rising: every month, the Treasury has to auction tens of billions of dollars of bonds, or even hundreds of billions of dollars. There is no Plan B, the bonds must be sold, and if there are no buyers, then the yield has to rise.
Once rates have been engineered much higher, the Financial Oligarchy accumulates the high yielding bonds.
Here's where "austerity" comes in. Once rates are so high that they're choking the real economy, then voices arise demanding the Federal government stop borrowing and spending so much. Austerity (forced or otherwise) soon reduces the supply of bonds hitting the market and so rates decline, boosting the value of the high-yield debt.
To service the cost of all this Federal borrowing, taxes are raised on what's left of the productive members of society.
To add insult to injury, it will become "patriotic" to "buy bonds."
OK, let's check the setup:
1. Treasury market now dependent on one buyer: check.
2. That buyer stops buying, pushing rates higher: no QE3. Check.
3. "Austerity" is now seen as inevitable--but not just yet: check.
What the true believers of hyperinflation and the destruction of the dollar cannot accept is that debt is an asset to the owner of that debt. In focusing solely on the advantages of inflation to borrowers, they ignore the critical fact that inflation quickly destroys the value of the asset that debt represents to the owner. And debt is a primary asset to pension funds, insurance companies, banks, and indeed the entire financial sector.
So in claiming high inflation is guaranteed, adherents are claiming that the entire financial sector will accept being wiped out, just so Mr. and Mrs. Taxpayer won't have to pay interest on the ballooning government debt.
That's exactly backward: the entire point is for Mr. and Mrs. Taxpayer to pay high yields on Treasury debt, owned by the Financial sector's Oligarchs. The Con is to stripmine the public coffers, then impose higher rates and "austerity", buy the debt with the cash plundered from the public, and then sit back and enjoy risk-free returns as taxes are raised on the remaining tax donkeys. Inexpensive Bread and Circuses (SNAP food stamps and the political theater of the two parties staging a partisan "fight to the death") will keep the peasantry entertained and complicit.
As I concluded in the first foray into the Con:
In essence, the financial Elites would own the revenue stream of the Federal government and its taxpayers. Neat con, and the marks will never understand how "saving our financial system" led to their servitude to the very interests they bailed out.
The circle is now complete: in "saving our financial system," the public borrowed trillions and transferred the money to private Power Elites, who then buy the public debt with the money swindled out of the taxpayer. Then the taxpayers transfer more wealth every year to the Power Elites/Plutocracy in the form of interest on the Treasury debt. The Power Elites will own the debt that was taken on to bail them out of bad private bets: this is the culmination of privatized gains, socialized risk.
In effect, it's a Third World/colonial scam on a gigantic scale: plunder the public treasury, then buy the debt which was borrowed and transferred to your pockets. You are buying the country with money you borrowed from its taxpayers. No despot could do better.
This is the ultimate endgame of the financialization of the U.S. economy and the concentration of wealth and thus political power in the hands of those who skimmed the immense gains from that financialization.
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Agreed. It takes too much energy to force people to do what they really don't want to do in perpetuity. Call it the EROI of slavery. At some point it takes more energy (in the form of conditioning, coercion, and trickery) than you can extract in return from your subjects. They just won't work for you any more, or they won't give you back enough energy to offset what you've used to get it from them.
Why would that happen?
Assume the debt is 200% GDP, and average yield is 10%. Thats 20% of GDP in interest, not 110%.
The debt load is onerous, but not mathematically impossible, plus induvidual taxpayers arent paying it, its mediated via the complicit government.
CHS, Hiking interest rates is not a slamdunk.
Higher rates will destroy whats left of the housing market, which will destroy bank balance sheets, which will cause another banking/liquidity crisis, 2008 part duex.
Therefore, your dismissal of QE3 is unfounded.
What the true believers of hyperinflation and the destruction of the dollar cannot accept is that debt is an asset to the owner of that debt.
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I don't really understand this part...when the people that OWE the debt can't pay, how is that an asset?
Exactly, and the eCONomy is too heavily weighted in government spending. The higher rates go, the more expensive government spending becomes the less government spends and the more damage occurs to the eCONomy.
This scenario might work if we hadn't offshored our manufacturing base years ago. Sooner or later the world will use something other than the dollar for international trade, then the only thing backing the dollar is real organic growth in the economy. With such a heavy weighting for GDP in government spending this theory induces a deflationary depression with no foundation for real growth. No growth no backing for the dollar.
The scenario might work if Medicare, Medicaid and Social Security are completely eviscerated. Don't know if that's politically possible.
In the end, politics cannot trump financial reality, no matter how much AARP members and overcompensated public employees bitch and moan.
What about how the rich financial people make all this money during the housing bubble. Then the fed bails them out. They are still as wealthy as when the bubble "burst". Then they invest in gold and other hard assets to preotect from inflation (see Soros and Paulson, Einhorn, etc). Then the country goes bankrupt and they have hard assets and not paper currency. The only way to get it away from them is to take it.
you've got the right idea; except backwards. They will take it (au/ag) away from you. Just watch what is going on in Libya with 145t of gold. The hofjuden are performing the royal gold swap - tungsten/fiat/whatever for gold.
With 35% of the economy already coming from transfer payments; what austerity can you place on it?
That is, without crashing the taxing system itself.
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Your argument makes some sense, IF:
1. The US wasnt so damn levered
- Corporate sectors will likely shrivel (bye bye stocks and RE)
- Private individuals are basically credit donkeys (bye bye borrowing)
- Government too is basically overwhelmingly in debt
2. The US economy had some real productive elements
- Health care, defense and higher education are not productive sectors
- Those are the major drivers of the US economy, with nothing to replace them
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Basically, I dont see where they would get the taxes to pay the gargantuan interest expense.
The economy itself relies on the absurdity of the financial system.
Both will crash simultaneously, it seems to me.
Theyre just keeping all this going until 'the event', whatever that is and I think it will be soon.
Hitting the giant R-E-S-E-T button may beget a world currency. Who knows what the exchange rate might be for those holding US Dollars.
Probably far less than .20 cents on the LOLlar.
the IMF's SDRs are sittin' pretty. But i think with the potential for all fiat currencies to fall simultaneously - they will add some commodity weightings too (gold,silver,oil).
So long as there is wealth to be taken by non club members, it stands in the firing line... e.g. 401k on down the line. Further, you can implement austerity from the entitlement side as well...
Obviously these measures only prolong the inevitable, at best.
Depleted 401ks are worthless, hence the ramping up of the asset markets to fatten up those pigs for slaughter. Why else? It's that wealth effect thingy. If the populace and those fat retirement funds feel good about the levels of their assets there is less anguish and crying aloud during the blood-letting.
So if your rapist uses a bit of lube before going to town, then that's supposed to make you feel better? I think any appreciation in the general/dumb market is just an added bonus of filling their own coffers.
"What the true believers of hyperinflation and the destruction of the dollar cannot accept is that debt is an asset to the owner of that debt."
Yes, providing that the few that hold that debt can actually control the extraction of wealth from the many that may already be broke or off the radar so to speak. Are you suggesting that these debt-holders have their bunkers full of everything they need to survive. Are they going to remain in their bunkers and try and collect on this debt. In order for these elites to profit from the debt, they still need to collect it.
You are ignoring 2000+ years of human history, this gets bloody, period. Inflation/deflation is irrelevant. Whether or not you are a business or individual, purchasing power is all that matters and will matter moving forward. This can take many forms, hedge accordingly.
Here's the newest Martin Armstrong on the 25-year cycle:
Nothing is Certain Except Death, Taxes, and the Other Side of Inflation
Armstrong for President
MA for Fed Chair
the only thing that is required for evil to prosper is for good people to do nothing.
agreed alien. time to send mass letters to the elected alleged leaders to uphold the oaths they took to do their f-n jobs! i sent a letter to my state's AG already, more need to do the same and now!
simply state what you know and how you know it is wrong. remind them central banks were not part of our founding father's plan.
we lost control because we failed to keep their feet to the fire. better get on it folks! this is no time to complain to each other. complain to the alleged authorities.
search english freemen in youtube. there are taking back their courts. time for the same in the u.s.
The real con of the century: enjoy..
Paul Ludwig is also the person whose Social Security Number is being used by Barack Hussein Obama.
Identity Theft as a Foundation
Stolen Identity
This stunning information– including name, death location and date–combined with the perfect circumstances of Madelyn Payne Dunham’s access to Hawaii probate records in 1981, reveals the unforgivable, criminal conclusion that the person named “Barack Hussein Obama” has/is committed/ing identity theft and is fraudulently occupying the office of the Presidency.
An entire false identity was created for Obama/Soetoro/Dunham using Mr. Ludwig’s social security number, available to Madelyn Dunham when Ludwig died in Honolulu in June 1981. The T-Room notes that Obama’s use of a stolen social security number
…has been tied to Obama’s State Senate and US Senate offices and his private residences, as well as land line phone numbers since coming stateside to attend Occidental College in California…and further surfaced in his back-dated, fraudulent Selective Service registration.
Obama is using Ludwig’s SSN right now as an occupant of the White House.
The T-Room’s interview with Susan Daniels, approximately one hour, discusses multiple social security fraud and that back-dating of Obama’s Selective Service registration using this number occurred sometime between 2007-2008.
Who is Sitting in the White House?
Since there is certainly no authenticated Hawaiian Long Form Birth Certificate in the name of Barack Hussein Obama II, and no authenticated Kenyan Birth Certificate in the name of Barack Hussein Obama II, America has absolutely no idea who is sitting in the Oval Office. Except…
We do know that based on his life story, Obama is not a natural born citizen and never can meet the eligibility requirements of the U.S. Constitution for the office of the Presidency.
We also now know that Obama has been using stolen social security number–identity– for thirty years.
Now it is clear that the narrative upon which Obama stands as a political character is a house of cards, sand, and mirages…his ‘roots’ in a foreign father– his fatal constitutional flaw. Obama is incapable of meeting our Founders’ most stringent and urgent demand for the Presidency: loyalty to America alone.
To urgently call attention to the problem we face with a usurper, be aware! A Natural Born Citizen would not have gone to war against Libya by himself, using our men and women. A Natural Born Citizen would be aware of the historic reasons why the Founders did not vest that power in the President.
In the meantime, the media buffoons, liars and communists by proxy continue to cover for Obama… as Bill O’Lielly lives up to his name once again.
The Stunning Scale of Operation(s) Deception
Starting with identity theft before “Obama” was 20 years old, an entire ‘career’ was fabricated… some of which we know but most remains as secret as Operation Paperclip. (Yes, the reference was intentional as the parallels are too strong to miss). The deception of birthplace-versus natural born citizenship–through the multiple birth certificates, the failure to verify and vet, the disguise of ‘the parties’…all these combined in 2008 to pull off the greatest crime against the American people since the Federal Reserve Act of 1913. Pure deception. A ‘fairy tale’
The republicans ran the poorest candidate, John McCain and then undermined Sarah Palin…MCain’s best chance to beat Obama. Then House-Speaker and DNC Chairwoman Nancy Pelosi certified to fifty states that Obama was constitutionally eligible for the Presidency. Chief Justice John Roberts illegally and knowingly administered the Oath of Office to a usurper–twice, once outside of public view and without a Bible. Knowingly and with malice aforethought, the planned usurpation of the Presidency was orchestrated by the media and in retrospect, a ‘well known’ secret between the republican-democrat-progressive cabal.
Now, who is Jean Paul Ludwig?
Usurper breaking into the White House.
·
LOL.
not to mention the old news about the SSN's. altho i don't like prez milk dud, or his "politics" i think he is a fabulous freaking pirate! jeeeez! born i Kenya, most likely, an illegal alien, of course he's got SSNs up the ass! plus, he's the fukin prez!!!
hoist the jolly roger and show some fukin respect ya sons and daughters of bilge rats, ya degenerate swine! Grrrrhhhaaahahgggh!
Yeahh.... Let's write some letters! Yeah, that'll fix everything!
/sarcasm
You writing some angry letters wont change a thing. Even if you convince thousands of people not to vote for these clowns, when the next election rolls around you'll see that the options for who to elect will be Clown 1 and Clown 2. People will then pick sides and argue with each other over how much better one clown is than the other clown. End result, we get another clown as an alleged leader that you can write angry letters to.
Sound hopeless?
Fact is, not enough people give a shit. I keep seeing people say that eventually this will all end terribly and I'm sure it will, but when? It wont happen until 'the masses' actually give a flying fuck about what is going on in front of their eyes day in day out. Fraud, corruption, outright lies (not intended as a factual statement) and 'settlements'. You've only got to read a newspaper for 2 minutes to see if EVERYWHERE. But joe the plumber cares more about who's getting kicked off american idol. It's said around here so often now that it's cliche.
The sheeple hordes love being lied to in the bread and circus farce of so-called elections, where the people have the 'freedom' to vote for either of the pre-selected puppet dictators of their choice.
the original post stated evil survives when good people do nothing.
and your solution then is?
i do agree with what you state, most are focused on what matters not. the point is, 20% of a populace united for reform can do it.
"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds." ~ Samuel Adams
I wish I had one.
But I think the answer isn't in sending letters to politicians.
I love the Sam Adams quote by the way, that's kind of what I'm getting at. Sending letters to your politician does nothing. He's part of the system. Part of the broken system. To me the solution is somehow convincing people to actually give a shit. To actually care about how much they're lied to, how much they get screwed over, how much better we're all off if people are just held accountable. How do you do that though when so many are happy with handouts? someone had a comment earlier about a relative that lived off defrauding pell grants and food stamps... How are you ever going to convince that person that the system is broken?
How do you convince 1 in 7 people that the system is broken when the system gives them their food stamps? Some of them are perfectly happy with a system that feeds them. Some should blame the system for the fact they're on food stamps, others should blame themselves, either way if they're happy with it, what do they care?
How do you convince the guy that is on full disability that the system is broken when it pays him to do nothing? Some of them are perfectly happy with the attitude that they can no longer be a contributing member of society, despite the fact that many certainly could.
Maybe get some of the wing nut religious right to focus on some different bible verses?
He who does not work, neither shall he eat
Too many free loaders, too many people perfectly happy getting by on handouts. Too many people have it too easy to give a shit. So long as that is the case, the tireless minority will never be able to set brush fires in peoples minds. You will get no change so long as the majority is blase about the status quo.
I hope there will be a day when people get fed up enough and storm the streets. But I have a feeling that the protests will be somewhat weak - when half the people leave to go watch the newest episode of dancing with the stars. The boob-tube and it's propaganda have created a generation/nation of zombies. But honestly i've had people tell me that they prefer to be ignorant when it comes to politics and economics -because it makes them feel better. :/
“In the End, we will remember not the words of our enemies, but the silence of our friends.” -MLK
i think the con is correct, though I believe that they are going to do by including the private retirement accounts which I have seen estimated in value of 5 to 10 trillion. The idea of government takeover of private retirement accounts has already been published in the Federal Register, now it only being a matter of time before the idea is concealed in some kind of save the republic legislation coming down the road. The mark are the people, they have the hook firmly in their mouth, now all the globalist need to do is carefully find the way to reel them in.
So whats the timing?
Soon after Glencore completes its IPO to the public?
100's of Thumbs Up!!! I read and listen to your essays and argruments with open eyes and open mind. I can't see where you've ever been on the wrong side and I appreciate your "gift" to us Revolutionaries. The only other belief I might add to this is, SOMEONE NEEDS TO DIE before we let this shit wipes us all out and enslaves us, our children and the rest of the world.
There's a problem in this plan, if inflation goes way over the interest rate (in hyperinflation scenario) even with rates up the real rate of return will be negative...so the definition of "risk-free" at least for me is only if you're returning more than the "true" rate of inflation.
And for the government to pay this higher-yielding bonds (the author is assuming the government will issue higher-yielding bonds with longer maturities for the plan to work, I'm assuming) the only way will be to print more money, since raising taxes will probably damage growth even more.
I do think you can make a killing once rates skyrocket, but by then, you will be making much more money buying bonds on countries with better growth prospects and balance sheets, since all rates will probably go up considering US treasuries will still be the benchmark "risk-free" rate, unless of course we have yuan gold-backed bonds by then.
>I do think you can make a killing once rates skyrocket, but by then, you will be making much more money buying bonds on countries with better growth prospects and balance sheets,
Bill Gross alluded to this when he talked about Spain having a better balance sheet than the US.
Buy Spanish bonds (along with the Chinese, smart fella), get the coupon, buy up US Treasuries @ 10+%.
Not a bad deal if you can work it.
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Of course, this doesnt exclude the possibility of COLLAPSE.
Or Total War. Or epidemic. Or famine.
Which is what history is filled with, right?
I read somewhere that if someone put $100 into an low interest bearing account, when Jesus was born.
Then it'll be something like more than all the assets on Earth x10 or something absurd like that.
And it's just meant to prove that most wealth gets totally wiped out by War, Revolutions, Epidemics, etc.
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"History is filled with the sound of silken slippers going downstairs and wooden shoes coming up" - Voltaire
that's what Vatican Inc. did; except it wasnt $100. Vatican Inc. invested their collected "contributions" via hofjuden banks. Search for rothschild vatican banker and see what you find.
So, at some point I'll be able to sell my $2500 Gold and $100 Silver and buy treasuries that pay 10%?
That would be very nice.
Will it still be "nice" when they tax your "windfall" gains at 90%? I don't understand how people think the government will just stand idle as they sell PMs for huge capital gains. Ain't gonna happen -- they will collect their "fair" share, IOW somewhere between half and all of your profits.
You forget that both G and S are the only truly private financial assets left in this world. You can buy and sell them anywhere in the world for cash. Why would you buy with a paper trail, and why would you sell with a paper trail? But also, I should add that we won't be selling metals for "profit" but spending them. You think like a person who can't see the finite nature of the dollar.
black markets = free markets. gold & silver US coins = best barter ammo in the USA = Constitutional, legal, money/currency, too! a judge or two has already said: "hey, asswipe IRS fukheads! this US coin sez $50 right on it. get the hell outa my freaking courtroom, and stop trying to undermine the LAW with yer fascist bullshit!"
of course the IRS immed ran into another courtroom, in CO, now, and is trying to get life sentences for this, there!
tyler! dammit, janet, get to work on this willya! and nomo caffeine til tomorrow! too many freaking butterflies k?
Not if I'm living in Nicaragua
Yeah right. Have you actually looked at what it takes to live in a non-shithole country in SA? The banks all have agreements with Treasury and the IRS, and if you're a U.S. citizen with a bank account, no way can you sell PMs and stay anonymous. Oh wait, you're going to be Rambo and do it all under the table for local currency. Try to do that for a week or two and see how it works for the rich gringo.
Precious metals can still be sold anonymously, for cash, legally in scores of countries. You are either misinformed, or spreading disinformation.
Sure, just walk into a bank in Santiago or Buenos Aires and lay your Maple Leafs on the manager's desk. They will take one look at your gringo ass and demand to see ID. Chances are they won't buy them and will send you away, but even if they did exchange them for cash, the transaction will be recorded. Go to a coin shop in the same cities and lay those shiny coins on the counter. A reputable business will ask for ID because you are extranjero. A shady business may buy them, yes, but their price may not be what you expect. Word will spread quickly that a dumbass gringo is walking around with gold and a pocketful of paper money. Good luck with that, especially if the police stop you and start asking why a gringo on a tourist visa is trying to sell gold coins.
Believe it or not, other countries have laws too. They get rather upset when foreigners come in and try to subvert the laws.
I bought and sold gold for cash at a reputable bullion dealer in downtown london for years. And as I just mentioned below, I have seen about 30 compro oro signs so far in my walks through Asuncion, and I saw less, but still quite a few in montevideo. There has always and will always be a black or grey market in gold when it is made illegal. Heck, I bought gold in a certain state in the US without state sales tax just by paying cash. Gold doesn't come with a reciept, either for buying or selling, unless you want it to. And frankly, I would feel perfectly safe selling some pms in Uruguay or Montevideo. I have no doubt that it will be the same in other countries.
There is still nothing more liquid or private in the world than physical bullion.
*Uruguay or Paraguay
Ive spent the last couple weeks walking around the streets of montevideo and asuncion, and I can't even count how many "compro oro" (I buy gold) signs I have seen.
Or just nationalize PM's like Maxim Waters suggested about oil companies when oil hit 140....
So at some point, when interest rates get so high and the economy gets so bad (millions living in the streets standing in line for their daily bowl of soup), that's when the masses will beg for austerity.
When the going gets tough, the government largesse gets going!
There has been no point in human history where the government has not tried to make things better for the people by simply printing more fiat - I guess it's always possible that this time will be different, but I doubt it.
The printing will continue no matter what... That's the great thing about fiat currency,it keeps going and going until if fall off the cliff.
Sweet! As Mickey D's says, I'm loving it. I think the American people should be turned into slaves. They deserve nothing less for their stupidity and laziness. Most ZH readers don't fall into that group and have second passports, precious metal holdings etc so we're good. The rest of you assholes, bon voyage!
I dont have any sympathy for most americans. Mentally lazy complacent rude assholes.
I almost started liking you, dickwad.
I dont know which americans you are talking about.
Well off tourists are often disliked by the less well off europeans, and ignorance of european customs is not the same as stupidity.
Europe still thinks of themselves as the elite center of the world. It hurts their feelings to realize most americans pay no attention to europe and just want to visit the louve and have a big mac.
You have never met the people of the heartland of america. Those who dont travel, or you wouldnt say that about americans.
Go ahead and feel sorry for the rude, ignorant, haughty, bum americans 80% at least who cant spend a minute seeing whats really going on. You know, the same ones who have been giving me shit for years trying to tell them whats actually going on, whats coming. Go ahead and have sympathy for the neandersheeple all you want.
SDO
neandersheeple
I fear that those folks inhabit every country and every continent. It's just that most countries don't thousands of TV shows to show you what they are like on a day to day basis.
You obviously have the right to your opinion. In a very important way you are right about Americans, who have now become as stupid as most Europeans, et al. The world (industrial/emerging market centers) is now filled with debt slaves and subjects of governments. Each country, including America (espeically the heartland and the south), have a minority who believe in freedom and self-governing. I feel for all on this planet who simply want to be left the fck alone.
Sheepdog, in attempting to tell people in America what is going on and failing, you probably would like this article
Feeling Upset Because the American Population Won't Wake Up As the U.S. Falls Apart?http://ragingdebate.com/browse-articles/government-and-politics/feeling-upset-because-the-american-population-wont-wake-up-as-the-us-falls-apart
I view my Digital Education service realizing I will only reach those with an ear. None of us can save the majority that wish to bury their heads in the sand and those majorities are in all nations. All people are hypocrites, just in different measures of it.
My buddy is from Switzerland. One day, he is riding in my Benz telling me how as an American I needed all that power and how wasteful it was. I told him how the car gets 31 MPG as a 4 cylinder and that I had gotten rid of my gas guzzling Ford 150 (hated family calling me asking them to move EVERY week too).
Then the debate was about a Prious vs. the Benz and if I really cared about waste I would have bought a Prious and I explained the math on fuel vs. cost of purchase, interest on loans etc. and poked some holes in the logic.
Next week, he pulls up to my office in a Ford Expidition! About sums it all up, now doesn't it Sheepdog?
America has been the most benevolent empire in history, but IT IS an empire and all empires are bullies, concentrated power. Everybody loves playing King of the Hill and hate the empire, even if the pro's still outweigh the cons. No worries, the global citizen will all hate the Chinese Empire next and will still be individual hypocrites.
oy
Americans are not rude. They are extroverts and likable compared to others. An American tourist in Paris is much polite than a French tourist in San Francisco.
My ancestors made it thru the civil war. They had to dig up dirt under the smokehouse to get salt, but they survived and prospered.
I am not leaving. I love this country even though i hate its government.
When the sunshine patriots have left it will just make it easier to know who the real americans are.
Then the task of taking our country back begins in earnest.
I am not the anonymous junker on this thread.
So you think it will be the good americans that are left here. I think the good americans are far outnumbered these days by the ignorant and selfish. Dont get me wrong I am as patriotic as the next guy, but if there were enough good americans, we wouldnt have let the gov/banks screw us over so bad. A herd of pathetic sheep we are.
Oh, there will be plenty of "good" and "bad" Americans left here, when the productive who can leave for better treatment and those who can't face the Crunch.
After a short while, though, the mass starvation, self-defense and riots / violence will decimate the remaining productive / prudent.
The remaining parasites, however, will starve to death nearly in total, raising the percentage of decent, hard-working and prudent higher than it's been in a century......
We can only hope.
It will only take an armed and relentlessly determined minority. I'm ready to fight for fck sakes!
My thoughts exactly. I could not have said it better. Hats off to you.
oh, nooo! another 14-word, 3-sentence bummer from my very least favorite troll! hi, dearest!
Thats why I own physical gold/silver and a boatload of corp. debt yielding over 8% (bought ~12-18 months ago) that matures in 2-5 years, principle won't fluctuate due to maturity dates and when it matures I will buy 30 yr' treasuries with a yield of over 10%, we can play too
The scenario is missing one element needed to complete the scam. The elites need to take control of the $10T sitting in pensions, 401Ks, and IRAs and move those assets into Treasuries. Until that happens, there will still be enough private wealth to mount a serious opposition to their scheme.
s.o.b. banksters .... when will a real expose be written that name names .... how about starting with Robert Rubin ! Rubin, Clinton .... i'm not a journalist, but, i know they are an excellent start to a Pulitzer Prize winning, in depth article.
I agree. Charles I always enjoy your articles and the way you think. I am curious on your thoughts on this (my post from another article):
Awesome post. There was a fight between the power brokers back then, I believe Joe tried to subvert the Rockerfeller/Red shield Ideology by planting his boys in their system. Having them infiltrate their schooling, learn their thinking and use it to gain power. Once Kennedy got the presidency he then spoke out against them and disagreed with the Asian policy they were trying to install at the time. http://www.youtube.com/watch?v=DxnpujfanUM This stuff runs deep and intertwines with the mafia and organized religous institutions which by no coincidence label their own by http://dictionary.reference.com/browse/denomination.
taken from this article http://www.zerohedge.com/article/did-goldman-sachs-lie?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29
Try this on for size, Richard Condon's Manchurian Candidate was a mixed up tale of the real Manchurian candidate JFK. The communist party already successfully subverted the US govt and Joe planted his son JFK in the "London" schooling of govt and economics to one day get the presidency back. Richard Condon then wrote another book called Winter Kills, which was loosely based on the JFK conspiracy. I believe Richard knew what really happened or at least was close to the facts. His novel was purposely twisted, JFK was the manchurian candidate designed to kill the "monolithic" oligarchy which is the present day eugenic-keynesian-communism form of economic/geopolitically shit storm otherwise known as the NWO.
I don't agree. I think that if the Fed stops buying bonds and interest rates begin to rise, there will will be no way to pay even the interest on the debt, and therefore the federal government would have to officially declare bankruptcy and default on it's debt. This won't happen. It is much more politically feasible to continue with QE until the masses finally realize the Ponzi scheme. Then they simply create a new currency.
"federal government would have to officially declare bankruptcy and default on it's debt. This won't happen..."
You are under the impression that 'Breaking' America is NOT the plan to begin with. I believe that is a misconception.
Folks, stop thinking in terms of Nations if you want to understand the Multi-National/Banker Elite's mindset.
There are no national borders, they are merely an inconvenience.
The writer has missed the point of the whole hyperinflation/deflation argument. There isn't enough real money (as stored value since or M0) in the world to support higher interest rates.
I guess they are loaded up to the hilt with Greek and portuguese bonds already? -This is the same situation for the "con" that is described. If not, why not? Because they will never get paid back...
That is why the Fed is PRINTING MONEY to buy the bonds that are out there. Who cares what rate of dollars you get back if they are corresponingly devalued to nullify this rate of return.
Interesting points Ty.
CHS's thesis explains everything and therefore nothing.
Instead of his usual "shouting at the rain" essay we are treated to a full blown conspiracy theory.
All he did was trade in his umbrella for a tinfoil hat.
It's just like the conspiracy theory that has been wiping out Argentina.
Goldman Sachs and Bank of America run the economics of most of the nations in the modern world. They are enacting the same policies in the USA that they enacted in Argentina. But in the USA things will work completely differently, because we're special and Jesus loves us more than he does those Argentinan Catholics.
After all, wasn't Jesus born in the USA?
The people running these banks have spacious palaces in other countries, with harems of little children imported from Thailand. They are Kings and Princes. They don't know you and they don't love you. They don't have a patriotic bone in their body. They are only faithful to their only family and their wealth.
You need to undertsand that what you want and want to believe in, doesn't matter.
Great thesis, but it ignores one major, disruptive force -- a full blown tax payer revolt!
This is America, right? Land of the free, home of the brave. We will reach point in the not to distant future when the common man on the street will say enough is enought.
Im not filing, fuck em...what are they gonna do put a lien on my house which wont sell anyway? Its got to start somewhere, TurboTax Timmy can suck it.
So you are an american?
You always sounded so lower middle class british in your anti american rants.
I just assumed you were an out of work dude from birmingham who beats his girlfriend and her kids when he isnt drunk at the pub.
My apologies.
'Anti american rants', youre probably one of the tank toppers I see while driving past Walmart, with your butthurt feelings.
Think what you want with your 'classes', who gives a shit?
Boom. I'm was/am the anonymous junker, Sheep-Dog
Fine with me. Like the lazy reality TV flatliner brained mobs all you like!
This con has worked for thousands of years. A small group figured out the dynamics long ago, so while regular people struggle & strive to survive/get ahead, the chosen merely reap the benefits of knowing the secret of exponents aka usury.
Why do so many @ ZH observe/complain that the sheep don't "get it"? It's because they've been bred to be complacent, to focus on the their day-day needs, and trust "leaders" to do the "right thing". LOL
But what do the chosen do? Why, they focus on raping the people. First they run the herd with easy credit, driving up (leveraged) prices across the board. Then, they contract credit/call loans, crashing the entire system. Third, they print off a bunch of money to liquefy their holdings, and then for the grand finale, withdraw the cash (to the 99% not in the scam) to bring about the final denouement.
End result? They hold all the property re-possessed during phase 1 (um, all those "collatorelized" instruments ie mortgages), then buy up the remaining with their ready reserves built during phase 2.
It has worked like a charm for repeated millenia. It never fails to work - as Denninger says, the math doesn't lie. However, unlike him, the chosen use this iron rule as a guideline to oppress, not as advice to live within ones means.
B9K9, You are correct on the history as you nearly always have been. However, I think we are entering a period that they never had to confront before over the last few hundred years or so.
Take 2 minutes and watch an event that will have uncalculated impacts on anything they might/might not be planning.
http://vimeo.com/15477088
It's a different game this time kids.
Oh, and stop the vid at exactly :20 seconds. Take a good long hard look at the graph. The next 10 years is be a RADICAL change. And there ain't a single Fooking thing they can do about it.
Cute. But they forgot a small little detail between the cliff and the happy people ridding in wind powered cruise ships (HA!). A little thing called hunger, revolutions, wars, starvation, population die off, a new plague due to out of control infectious diseases. Then whomever is left, will live either in a mediavel feudal state or a totalitarian militaristic regime. no happy and sunshine for 100 years folks. Sorry. :-(
Looks like some Polyanna doesn't like what you have to say.
The Laws of Thermodynamics is unfortunately, a bit difficult for most folks to understand. Futher it really isn't taught well in public schools. At least those public schools that still bother to teach some form of science.
Religion is going to be America's big growth industry now.
Thanks. I considered going into a long post explaining my assertions, but figured that those who understand them already do. And those who don't, won't. Oh well...
And yes, religion is usually a growth industry during extreme duress and societal downfall. See... The inquisition, The crusades, etc, etc, etc.
+100
Well put and succinct. Americans never were truly exceptional. They were just on the winning team with plenty of land and resources.
A few exceptional people in the right time and place helped. There are plenty of Americans whose lifestyle, work and happiness are heavily influenced by the ideas of Ben Franklin and Thomas Jefferson. Depending on which Americans you know, your impression can change drastically.
Yep, just a bunch of Euro peasants who somehow managed to get themselves across the pond. Once here, instead of going up against an well-established hierarchy dating back to the Pharaohs, the only competition were stone-age natives. Sweet!
An empty, virgin continent, and no one to hassle you. Shit, for those who were descendants of those who had survived the Black Plague, they were genetically suited to work 12 hour days no sweat. Without a tax load, fealty to the lord, regular military obligations, etc, we developed this whole yeoman mythology of the hard working, upright, prosperous 'American'.
But as you observed, we just got lucky. Surprised that I said "we"? Oh yeah, a brief review of my family's history on either side definitely puts us in the lucky serf category.
The bottom line is this: if you are raised with the expectations of trying to get ahead, you're already on the losing side. The winners have their slots picked out for them before they're even born. It's an insider's game, and because it's so simple & rudimentary, it's never taught to anyone, lest the scam be revealed for what it is.
Great stuff as usual, B9K9, but do you allow for exceptions? Even people like Steve Jobs and Linus Torvalds are just lucky serfs?
Im not complaining that the sheeple dont get it, Im saying I dont have any sympathy for them.
Well, perhaps you should consider having some sympathy for the sheep. I mean, it's not like it's their fault for not understanding what's going on. As I've mentioned before, you're the anomaly, not them.
If you saw a shivering Chihuahua, would laugh at it in scorn, or try and wrap it up to provide some warmth? Is it the Chihuahua's fault that they were bred to be small, short-haired dogs?
The sheep were bred to work outside in the fields for 12-14 hour days, in all kinds of weather, to not get sick, to keep their heads down, not to complain, etc. They were bred to appreciate simple comforts and entertainments, and provided with religion that offered a chance of hope for a better life afterward.
For thousands of years, if you didn't fit this profile, then you were simply killed or died off and your genes were not passed on. We joke about being monitored, but imagine holding these kinds of opinions during some previous eras. You don't think rulers kept a sharp look out for potential troublemakers, those who seemed to be brighter than the others and understood the nature of their game?
Don't blame the sheep - it's why they're sheep in the first place. Rather, focus on understanding events & opportunities, because my friend, what's occurring is a potentially one-in-a-thousand year event. Look to yourself and lead - don't look back and sneer.
s/he's a fukin sheep dog, benign canine! the best, according to his handle, k?
btw, please consider that human sheep do not come from nature, but from nurture. big-time conditioning/family "training"/education/media/&tc; something you may recogniZe, yet, B9K9...
Right, evolutionary principles work great on animals. We've been able to domestic and change the innate personalities of every animals we've tried.
But humans are fundamental different in a religious / ego way, so evolution can't work on us...
???
no person living knows how dogs and cats were domesticated. this knowledge is lost. i don't care how you want to pretend we "try" anything. face the facts, man. quit pretending to know something you don't understand!
i'm not saying conditioning never concers religion or ego, i'm simply pointing out you have no freaking idea what you are talking about, i don't care if you think you are agreeing with me, or not.
{repeat earlier post]
re: insanity
A debate on "How deliberate manipulation of inflation/deflation for personal gain is not insanity" would be interesting.
Likewise, with such topics as "How unfairness, privilege, fraud, omission of vital data, Corporations-are-persons and Royalty lines [Emperors-Kings-Queens] can be justified markers of insanity".
Yikes Denninger. In one of his latest essays he claims that GDP will decline for every dollar in reduced government spending. Is this true? Of course, it is true since Aggregate Demand in economy equals to GDP + change in Debt. Yet Denninger had every one of his readers convinced that for every dollar in debt increase, GDP would decline because of debt saturation. He even displayed charts that showed negative correlation between change in debt and change in GDP.
Right now this "nut" claims that Fukushima situation is all stabilized. What kind of advise is this? Why would anyone listen to that demagogue that did not even finish secondary education institution? " Math does not lie, is not a phrase he coined." He copied it from another poster!
Interesting plan, and not something outside of what the elite might try to execute.
But the authors proposed plan, like so many of our keynesian leaders plans, is completely academic.
The reality of Austerity in the USSA has already been exposed to have no chance of succeeding (reference Wisc.). These were paltry "cuts" and the backlash was weeks of sit-ins and protests.
Any attempt at real austerity will result in violence.
And the reality is this: THERE IS NO PLAN. This is why there is so much confusion, doublespeak, etc. They are stalling BECAUSE they are trying to come up with a plan.
But they can't. It doesn't matter what they do. There will be a reset, whether by design or natural. But after it, there will be no sense of "normalcy" as everyone has grown accustomed to over the past several decades.
I repeat:
THERE IS NO PLAN
There is no plan, other than 'We'll try to pull the wool over their eyes till we ripp off their 401K's one day soon, and cut all their other benefits to nothing, and raise their taxes and interest to the sky'. Obamas speech was the launchpad for it all, code in it was 'tax increases for the wealthy (anyone with a dime) and benefits cuts'.
Brilliant analysis from Charles Hugh Smith and a cautionary note to anyone currently enjoying any gains in the asset classes. Hopefully J6P will wake up before the con is carried out.
What the true believers of hyperinflation and the destruction of the dollar cannot accept is that debt is an asset to the owner of that debt. In focusing solely on the advantages of inflation to borrowers, they ignore the critical fact that inflation quickly destroys the value of the asset that debt represents to the owner. And debt is a primary asset to pension funds, insurance companies, banks, and indeed the entire financial sector.
Agree that Treasury rate will rise. I am not sure, though, that the OP fully appreciates the impact of these increases to the federal budget, which already relies on borrowing to keep the lid on the sheeple. From where will the money come to maintain transfer payments to the now-majority dependency classes? From where will the money come to maintain the empire that both keeps oil prices high and maintains our access to it? Can the OP point to the majority political constituency that will implement the austerity that is required to make the plan work?
When QE3 is not announced as expected (it will happen, but they will let the politicians suffer first), the markets wil crash 15-25%. Then the .gov will confiscate 401Ks with the excuse that they must secure the retirement investments of the middle class. These assets will be transferred to the Federal Reserve as reserve assets to allow the .gov to continue borrowing against them. This, along with all the mortgages now held by Fannie and Freddie, will give control of all productive assets in the US to the Federal Reserve (read TPTB). The Fed then uses these new reserves to ZIRP loan to members and buy up additional hard assets and commodities. At the end, the well connected own all the land, factories, commodities (oil, gold, lumber, etc). The population will work to produce for Umbrella Corp. The .gov will just be a manager of the workers and enforcers of Umbrella decisions.
maybe i'm just a simpleton but let's say that my 401(k) was 100% AAPL. if the treserve confiscates my 401(k) shares of AAPL, then what does that do to the equity market? who could trade shares that are confiscated? wouldn't this lead to the collapse of equities, and if so, what good does it do for the treserve to hold certificates fo AAPL if they're valued at $0 when they can simply print out of thin air?
i believe the trick is to chase those dollars at a reasonable rate into treasuries, too fast and it won't work. i reckon a soft equity collapse over time would do the trick. like the old bull says tothe young bull...no let's walk down and fuck'em all.
Ah, but grasshopper, your error is to think that they want equity (meaning selling the shares in the future) for those AAPL shares. They don't. They want AAPL. As in they want the company, the hard assets, the production profits, the fricking iCraps and all future sales! You and I buy shares in BP hoping to sell them back at a profit in the future. They want the oil, the refineries and the oil based products that come out of the other end. There is no desire to sell those shares afterwards. There is a desire to participate on the profits and control the products made by BP.
double tap
in re above: if you weren't holding yer stocks in a goobermint-partnership 401k, you'd be free of this paranoia, no? the shares would still trade, as would whatever tf you "got" for yer styooopid 401k, too. the goobermint wld probably sell them for green stamps to pay their dead-weight "employees" and their otherwiZe "entitled" citizens & ka-millions of green card holders who are playing along at home, too!
unless you "receive" very nice matching from yer employer, what tf are ya doin, friend? why not just pay the taxes and fees, get out while the "market" can still pay you, and get free and, hopefully, in PM US coins, cash, food, &tc, and just enjoy life and quit worrying about yer "partner" Uncle "Shithead" Sugar, ok? lying to the best of yer abilities and possessing post-tax money, not more paper crap, may seem pretty wild, but what the hell? join the party! and bring yer va-jay-jay too! lol!
Tax his land,
Tax his bed,
Tax the table,
At which he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his work,
Tax his pay,
He works for
peanuts anyway!
Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries
Tax his tears.
Tax his car,
Tax his gas,
Find other ways
To tax his ass.
Tax all he has
Then let him know
That you won't be done
Till he has no dough.
When he screams and hollers;
Then tax him some more,
Tax him till
He's good and sore.
Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...
Put these words
Upon his tomb,
'Taxes drove me
to my doom...'
When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Good work. I nominate you for Poet Laureate of the ZH board.
Good ole Warren Buffett is a strong advocate of the Federal Estate Tax. Many people hate his guts.
All Billionaires are advocates of STEALING OPM.
Just like Left Wing Liberals,and Progressives.
As long as THEIR OX is not gored, it's all Peaches n Cream.
Love it! Couldn't resist a quick reworking just to improve the flow(and couple of lines of my own) Hope you like.
Tax his work,
Tax his pay,
Tax his rest and
Tax his play.
Tax his land,
Tax his bed,
Tax the table
Where he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his cow,
Tax his goat,
Tax his pants and
Tax his coat.
Tax his shirt,
Tax his shoes,
Tax the hole in
Which he poos.
Tax his smokes,
Tax his drink,
Tax him if he
Tries to think.
Tax his car,
Tax his gas,
Find other ways
To tax his ass.
Tax his hopes,
Tax his fears,
If he cries
Tax his tears.
Tax all he has
Then let him know
You won't be done
Till he's got no dough.
If he screams;
Tax him more,
Tax him till
He's good and sore.
Tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...
Put these words
Upon his tomb,
'Taxes drove me
to my doom...'
When he's gone,
Do not relax,
Time to apply
The inheritance tax.
@drag Racer, you should have added ...by Anonymous...
A search didn't bring up the true author, but nonetheless it is a good poem.
excellent points. however, how will austerity be imposed when the media demagogues budget cuts as equivalent to starving children and killing seniors?
It will be imposed from without, not from within.
It will not be voluntary but will result from infinite wants.for services neing crushed by economic reality.
ok. might very well be the case. i guess the confessions of an economic hit man strategy laid out in that book will be visited on the usa.
Excellent reasoning. TPTB think generationally.
This is a good article, and I think the general outline is correct. But don't think for a moment that inflation will be avoided under such a scenario just because of austerity. Given the numbers involved, the only way to avoid inflation is to default, which necessarily entails hyperinflation, and which they are not going to do. Also, don't assume that austerity will result in a smaller deficit. If interest rates rise substantially, and government spending falls, what do you think is going to happen in a country built on debt and welfare? Tax revenues will plunge while the service-cost of the existing debt will explode. I'd call it a wash as far as federal finances are concerned. Personally, I don't see hyperinflation on the order of Weimar, but I do think we will see steadily double digit inflation for a long time, amidst double digit unemployment mind you.
I described The Con of the Decade last July (2010). The Con makes me a heretic in the cult religion of Hyperinflation.....
nobody considers you a heretic chucky. you are blogger with an opinion. get in line pal. get over yourself......
Who cares what the textbook economic definition of it is, when a nations currency collapses?
I don't understand why these bloggers always try to set themselves up in some sort of pretend adversarial position. It's like they are eliminating any potential conversation in advance, in order to score points on their victim card.
The only mildly "heretical" argument I see is the prediction that a rising rate regime can last until 2021. Everything else has been well documented on these pages. While the author may claim that this will prevent hyper-inflation (not Hyperinflation, Mr. Ad Hominem), I don't see why that would necessarily be the case. Rising interest rates in a rapidly depreceating currency (measured in purchasing power) could actually be the trigger for hyper-inflation (defined as a loss of confidence in a currency's ability to hold value).
While I agree fully with the outline of your con, your endgame is far from certain. Especially when it depends upon ten year predictions, which are impossible to assign any real degree of confidence to.
Besides, you left out the biggest future player in the con, the IMF.
its always the financial elites. who the hell are they anyway? do they have names? is it alias smith and jones or what?
hi, HPD! i might know one of them, myself. maybe.
they are extremely rare birds, yet not invisible in our national or global society. they are a percentage of the top 1% and they take down an enormously disproportionate % of everything, on a regular and continous (continual? who knows these things?) basis.
why RU playing dumb here, HPD? lookin 4 an "enriched" target? lol! peace.
why am i playing dumb here? why slewie, i am playing a game of pretend. i am pretending its not "them" who are doing this and I am pretending that this is not happening. Peace out......
The banks that run the IMF are setting up the con...
CHS would not likely have much of an audience at all (like GW's blog) of he wasn't posted to ZH.
Any idiot can have a blog and does.
They are like certain body parts. Everyone thinks their's doesn't stink.
They are so very wrong.
austerity = sending goobermint "employees" home, forever + End The FED.
maybe gross just didn'tike zirp, or realized the gangstas (not the banksters) had counterfeited so many T's that he was holding poo-poo paper. maybe he saw default looming.
it must be wonderful to know everything, including the future. so, two minds = short T's, with everything you've got? hahahaha! no silver/gold US coins? hahahaha! oh, lQQK: bonds @ 120.44, +.75! Dollar index = 74.8, down 0.3 for the week. this is quite strange, considering the enormous tonnage of Z's who knew this wouldn't happen this way, a week ago! because of freaking bill gross, too! Hahahaha!
btw, i'm not saying you are wrong! the transfer of the losses was a huge crime against The People, a few of which aren't sheeple.
the idea that clowns like batmanke and prez milk dud know what they're doing seems pretty absurd. they are puppet "leaders" for MSM propaganda purposes, of our puppet nation. i'll give you a + for cutiing some of the prop-wash, here, two-minds. that's ok by me!
rates may go up .25%, quite soon. flee? flee?
why no international banking cartel? why no international "secret intel" agencies/cabal? why just a totally passive Foggy Bottom? two minds one of their fuking agents? from the pablum he publishes, quite likely.
but this IS so much fun! a con! which actors does the writer like best for the romantic roles? gol-lee! i sure hope he tell us next time he puts out his little cookies!
Careful, now! You're pressing buttons and are going to end up strengthening his resolve to be a heretic.
i am afraid that most zerohedge readers will have to go to the fema camps for a while to get their minds right..........i wonder if chucky can shoot with his one good eye? is he left handed or right handed?
yep. he is so clever isn't he? this is why i quit reading this bozo a long time ago. it never changes. do you remember when chuckie was telling everyone to buy FAZ? ha ha ha ha....
Well Drifter, if you'd read this article, you'd have been happy to hear that he "skimmed a few of the dozens of comments posted on Rick's Picks and Zero Hedge after they posted one of my expositions on this dynamic, and didn't see even one comment in favor of this perspective."
I've always suspected this re: CHS.
I read across a variety of different economic news services, site and blogs. I stopped going to his website some time ago when I noticed his essays and posts lack a certain originality and sounded familiar...to items I'd either read a few days or weeks ago. (Like when he was on his big "kleptocracy" meme and blaming everyone because we were all complicit in the meltdown.)
So, at best, he's simply a regurgitator.
At worst, he's trolling ZH and lifting material.
yeh , plus he can't play gitfiddle worth a spit. if he could, I would give him a pass on that. But Jeff Beck he is not...........
The guy is a paid shill. He spews out the right wing propaganda that comes out of the Peterson Foundation. Nothing else that he writes about matters or has any significance to the TBTB like the myth about Social Security that he promotes.
The ship sets sail around may-june as this has to dovetail with end of QE-2. Also note JCT is now revving up ECB to surge interest rates in Euro zone. Tough shit for periphery. RM's presentation on this is awesome. Its really Charybdis and Scylla time in EU PIIGS, and, I don't know, but probably the term would be : 'clusterbungabang' time in USA. We are in for a grueling sizzling summer!
Oh the dilemma for Benocide ! : to QE or not to QE. Austerity or hyperinflation. Have the Gods changed sides for QE to now end? If so, off with the chairman's head! Need a sacrifice, a headless HEADMAN to carry the can!
I like your logic, it gives me something to consider. However if rates rise quickly it will destroy the stock market and I don't think TPTB will have the stomach for that especially going into another election. I think we're in every man/special interest group is in it for themselves territory.
Considering the options, TPTB will happily allow the markets to tank. Down the line, who better to pin the blame for austerity on than the R party? Divide and conquer is working rather well..
This con is ok. I like the thinking
I think you need to tighten up the difference between yield and interest. The fed discontinuing treasury purchases sends yields higher, not interest on the current bonds outstanding. If the goal is to garner higher interest payments from tax serfs, this is a risky proposition for future rolling debt results. You'd rather begin downgrading US debt and having tax serfs pay a supposed "default" premium. Total bullshit, but you need new debt to roll higher for a justified reason.
So here's the part I don't get. The oligarchs buy all the new treasury bonds at high interest rates, but they only have a trillion$. And as the interest rates go up, the Federal Gov is going to need much more than the paltry $100B/mo or so they have been getting by with from QE2. So where does the extra money come from after about 3-4 months? Increased taxes is not going to produce very much more in tax receipts, so QE starts up again? And what happens to the bond market if the big holders of Treasury debt (China, Japan, ME) panic as rates rise and we get a snowball effect? That trillion$ won't even last a month as it gets pressed to just hold the game together. It just seems to me like another prescription/trigger for hyperinflation.
401K
.
Charles, I always enjoy your posts. The problem I have with this analysis is that you fail to consider the effect higher interest rates will have on the assets financial companies currently hold. It is not possible for banks, pension funds and insurance companies to shed corporate, consumer and mortgage-related assets now, move into cash, wait for the spike in rates, then re-load into Treasuries. Higher interest rates will reduce the value of assets currently held. Financial companies that are nearly insolvent now will only be pushed closer to bankruptcy with higher interest rates.
Higher interest rates will reduce the value of assets currently held.
Not if their waiting offshore in other currency.
http://www.bloomberg.com/news/2011-04-14/singapore-s-policy-tightening-may-prompt-asia-to-step-up-inflation-fight.html
Apr 14, 2011 8:35 PM PT
Singapore’s third monetary policy tightening in a year may prompt Asian central banks to allow further interest-rate and currency gains to prevent surging prices from hurting their economies.
Exactly... Keep in mind that back in 2006, a 6% FED rate was too high for the existing financial leverage ratios. Today the leverage (mostly hidden) is even worse.
Also, the problem with austerity is obvious. If one is asked to "live within their means", then by definition it means that they are unable to issue additional debt to the market. If this event occurs, then what is the incentive of pay existing debts? There is none... In short, just like in the great depression, austerity always eventually leads to either default or high levels of inflation.
Finally, anyone who has ever spent any time in dc knows that plans beyond 2 years never exist. In fact, generally the powers that be look at current polls and current events never planning more than 6 months in advance. Longer planning is generally expected to be done by non-elected agencies.
he has a similar game as denniger. they both preach in similar ways. they both say, that cash is king. i have heard this before and i am not impressed. get in cash. get in cash. protect yourself. such discussion befuddles a metal head. if one so chooses to be in cash, then that is his or her business. one of the problems with denniger and smith is that they still think we are a nation of laws.....if someone wants to be in cash, may the gods be with them. ha ha ha
Most of us at ZH believe the equity market will collapse. Wouldn't it be reasonable to assume that commodity prices will go down with the market? After all, oil was at $140+ a barrel in the summer of 08, only to be trading around $34 in December '08.
I dont see much higher commodities at this point. Costs are going up, and they cant be passed onto the public. Oil industry just said a few days ago demand for gas at $3.80 avg is going down. If people cant afford gas at 3.80, how can the price be raised to 5.00? It cant. Thats why the oil markets are log jammed, they know it will be more scarce, but demand will still drop. What to do?
Exactly. That's why I don't see hyperinflation happening, or even long-term inflation. At some point, everything is going to collapse, and that will take care of these inflation issues. If you look at history's other enormous credit collapses like 1990s Japan, the overall trend was deflationary, albeit with short-term bouts of inflation.
So, hyperinflation can't occur while these assets are decreasing in price? Is this the same logic that inflation can't occur without a rise in wages? In your deflationary environment, how do you propose the treasury funds its obligations? Why must hyperinflation occur as the last step of a long boil of demand pull inflation? What do you propose would happen to the dollar in the event of a failed treasury auction?