Guest Post: The Road To Perdition - Interview With Terry Coxon

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Wed, 07/13/2011 - 18:54 | 1454007 Chris88
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"The purpose of a politician examining a problem is not to solve the problem but to find a way for someone else to get blamed for it." So true! It flies in the face of every idiot who believes we just need to "elect the right people" and are incapable of realizing that the government is a parasite no matter who is in it.

Wed, 07/13/2011 - 18:56 | 1454014 Mactheknife
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Two words: Term Limits

Wed, 07/13/2011 - 18:59 | 1454025 Rational Psycho
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one word: anarchy

Wed, 07/13/2011 - 19:22 | 1454094 JW n FL
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No.. No.

two words.

Got! Rope!!

Hang those Fuckers for Treason!

Wed, 07/13/2011 - 19:56 | 1454243 Marco
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Their controllers have enough money to buy them off even with a fear of death ... hanging the puppets will do fuck all.

Wed, 07/13/2011 - 21:37 | 1454597 max2205
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Keep it simple. Stay long over the 4 wk ema. Short below it. Don't be greedy. It WILL be a wild ride. Enjoy

Wed, 07/13/2011 - 19:46 | 1454208 Marco
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What's the solution though? The present system put into place a set of dynastic families owning almost everything ... with the wealth inequality in place the difference between the 0.1% owning us through a state they control and owning us by simply owning everything we depend on to live is getting very slim indeed.

One might suspect that when they feel the democratic state has served it's purpose they will readily embrace anarcho capitalism ... because ultimately anarcho capitalism and feudalism are highly compatible, it's just a question of boundary conditions at inception.

Wed, 07/13/2011 - 23:18 | 1454894 FreedomGuy
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Chris, you are soooo correct. My hope is in a few hundred more years we will wake up to the fact that the biggest lie in human history is that we need government or rulers of any sort. The beast that is government is untameable. It will always deteriorate because of its very nature.

Thu, 07/14/2011 - 04:29 | 1455243 dolly madison
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My hope is that in a few months we will wake up to the fact that we never needed elite rulers. When the few rule the many, there will always be corruption.

Wed, 07/13/2011 - 19:02 | 1454022 DoChenRollingBearing
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Well if this guy is right in having over a year until the CRUNCH, then we all still have time to buy some golden protection.

And the means to secure it.

Wed, 07/13/2011 - 19:04 | 1454035 Quinvarius
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He is only wrong about interest rates.  There is zero historical correlation between interest rates rising and gold dropping under any scenerio as the one we are in or in any country.  Not even when Volcker was doing it.  Gold rises until it balances out the money supply and the debt as a financial asset.

Wed, 07/13/2011 - 19:05 | 1454042 Peter_Griffin
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TC: If by some miracle the people who run the government decided that Big Government was a bad idea and small government was a much better idea, and so they set about ending government programs and pushing the level of federal spending way down, along with the level of regulation over the economy, then there would be a way out.



If an unemployment rate of 50%+ is the way out, why not just tell people to quit their jobs?  No, I don't think there is a way out, no matter what.

Wed, 07/13/2011 - 19:08 | 1454052 janus
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Mr. Durden,

Forgive the annoyance if you're already aware; but I thought I should let you know that I (and so I'm assuming others) cannot pull up the first two articles -- the Moody's AAA thing and the next one, I think it was about bonds. 

your icon and the keywords beneath it show, but not the text nor the comments.

Wed, 07/13/2011 - 19:15 | 1454076 janus
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all good now

Wed, 07/13/2011 - 19:41 | 1454174 slewie the pi-rat
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tyler's drinking.

i took care of it for you.  you're fuking welcome. 

Thu, 07/14/2011 - 00:20 | 1455031 Yen Cross
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 Lol... Have you met Juice Box? Good kid. learning curve though... try it out.

Fri, 07/15/2011 - 19:35 | 1461216 janus
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he (everyone) deserves it...we're playing beer pong later

Wed, 07/13/2011 - 20:21 | 1454319 centerline
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Let me see, regardless of what is best for the nation, if we don't "give" the banks free money they will unleash inflationary hell upon us in order to make that money.  Or is that stagflationary hell?  Gee - I wonder where this is going to lead...

Wed, 07/13/2011 - 20:30 | 1454354 Vint Slugs
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"TC: If a bank has excess reserves and the Federal Reserve stops paying interest on them, if the bank can't think of anything else, it will buy Treasury bills, even if the yields on those Treasury bills are only 0.5% a year. Then the seller of the Treasury bills has the cash.....and that's how the excess reserves would move from the banks to the general economy."

Wait a minute.  The seller of the T-bills is the gov.  That takes money out of the system; it does not add money.


Wed, 07/13/2011 - 21:13 | 1454507 anarchitect
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The T-bills might be bought from private holders. Or, if from the Treasury, then the government will get money to spend, something that they are very good at doing indeed.

Thu, 07/14/2011 - 00:03 | 1454994 Vint Slugs
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Your response is 100% off-base.

Ninety-nine percent of T-bills are issued at primary auctions that occur weekly.  Buyers generally hold their purchases till maturity.  When you talk about private holders, you are talking about the secondary market, which is comparatively speaking, meaningless.  Your comment re "if from the Treasury" reveals just how little you understand this subject.  The Treasury is the issuer of U.S. debt; Treasury selling T-bills does not result in "the government will get money to spend". 

I'm  not prone to ad hominem attacks which appear to be de rigueur when posting on this blog,  however, I'd respectfully suggest that you get a little understanding of Econ 101 which deals with the mechanics of how "money" supply changes before you post on a subject that you have no grasp.

Fri, 07/15/2011 - 19:37 | 1461190 BigJim
BigJim's picture

US debt is bought by the primary dealers, who then sell it on. If the banks are stepping in and spending their newly-created money at that point, and out-bidding people using circulating money, then that increases the money supply, doesn't it?

As for the secondary market being 'meaningless' - what are you talking about? US treasuries are an incredibly liquid market. ie, they're heavily traded.

Pompous, aren't you?

Thu, 07/14/2011 - 00:21 | 1455034 Yen Cross
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  AKA: Secondary markets...

Wed, 07/13/2011 - 21:18 | 1454527 centerline
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If it is used to pay debt obligations, then yes.  If it used to buy more hookers and speedballs, then no.  Based on past performance, most of the money would reach circulation in this example.  Really, the notion of going to T-bills for 0.5% is bullshit.  Rather, the banks would certainly find more diabolical ways to extract yield from the masses.

Wed, 07/13/2011 - 20:38 | 1454388 Diogenes
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I miss Harry Browne. I liked calling his fans the Harry Browne people. It made them sound like a bunch of Rastafarians.

Wed, 07/13/2011 - 21:29 | 1454560 bigwavedave
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seems to me that Obama can end this stalemate with a very simple offer.... "Raise the debt target by 2.5T and I will not seek a 2nd term"

Fri, 07/15/2011 - 19:28 | 1461203 BigJim
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Yes, I can see the big-O doing that, yessiree!

Wed, 07/13/2011 - 21:35 | 1454592 pgarner
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Coxon has always been one of the bright bulbs: careful with his words, blunt, and largely accurate.

Wed, 07/13/2011 - 23:31 | 1454916 sasebo
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"TC: If by some miracle the people who run the government decided that Big Government was a bad idea and small government was a much better idea, and so they set about ending government programs and pushing the level of federal spending way down, along with the level of regulation over the economy, then there would be a way out"

I see he's been smoking used rubbers.

Thu, 07/14/2011 - 08:15 | 1455460 DrunkenMonkey
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Best and most truthful article on the current economic reality I have seen in a very long time.

Thu, 07/14/2011 - 08:30 | 1455492 web bot
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Bar-none, this has been the best article that I have ever read on Zero Hedge in the 51 weeks that I've been on here.

An absolutely brilliant piece of work.

Thu, 07/14/2011 - 12:21 | 1456412 Marx_it_2_market.
Marx_it_2_market.'s picture

Harry Browne always said that gold would rise when real interest rates were cheap or even negative, and would fall when real interest rates were higher.  In the 1970's there was less concern, even for Browne, of a systemic collapse or Minsky Moment, IIRC. 

Excellent info from Mr. Coxon.  The decades have taught him good judgement and caution on timing.  Indeed, these are huge events that move very slowly.  LIke he said, the end game is coming in a few years - definitely not before November, 2012, and probably not until at least 2014, though obviously nothing is guaranteed.  Who would have thought Italy would start to fall before Spain, for instance ?

Thu, 07/14/2011 - 12:23 | 1456415 Marx_it_2_market.
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triple post Sorry, I'm new at this.

Thu, 07/14/2011 - 12:24 | 1456417 Marx_it_2_market.
Marx_it_2_market.'s picture

Triple post.  Sorry, I'm new at this.

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