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Guest Post: Things Are Spinning Out Of Control
Submitted by Charles Hugh Smith from Of Two Minds
Things Are Spinning Out of Control
The pretense of centralized control of history is wearing thin.
The single greatest conceit of the Status Quo in the U.S., China and Euroland is that systems and trends can be tightly controlled. That conceit is slowly being revealed as hubris, as all sorts of things are spinning out of the control of the centralized authorities and financial elites in each geopolitical power center.
Does anyone really think the people of Greece will stand idly by while the state treasures of their nation are transferred to the banks which foolishly lent billions to a visibly risky enterprise? The banks, of course, lent freely to insolvent governments throughout the European Union, confident in the backstop of the E.U. itself.
The analogy to subprime mortgages in the U.S. is near-perfect: banks lent freely to extremely risky borrowers, breezily confident that their worker-bees in the Federal Reserve, Fannie Mae and Freddie Mac, the Treasury and Congress would all toil feverishly to transfer the risk to the U.S. taxpayers, by whatever means were necessary.
Does anyone really think the uprisings against this transfer of national wealth to the "too big to fail" banks in Europe will fade as unemployment rises and the true costs of the transfer become apparent to all?
Does anyone really think there is no chance that the citizens of one of the nations lined up to be stripmined by the E.U. will openly rebel against the stripmining, throwing out their government until they find some politicians who are not spineless lackeys and factotums of the financial Status Quo?
Does anyone really think the banks are really that precious to the people they are stripmining? Just how awful would it be if all the big banks with exposure to sovereign debt in the E.U. went belly up and were declared insolvent? A handful of very wealthy managers would lose their jobs, a handful of very wealthy owners would lose their stake, and all the pension funds and mutual funds which bet on the infinite passivity of the citizenry and the infinite checkbook of the E.U. would lose, too.
It's called Capitalistic risk and return, baby, and return can be negative. All the big players assumed the citizenry would quietly line up to have the clothing ripped from their backs and their flesh flayed to extract the pound of flesh "owed" the banks. But as the citizenry of Europe wake up to costs of the stripmining, which extends now to the taxpayers of Germany, Finland and beyond, they are withdrawing their support of the financial Status Quo.
Here is my plea: Ireland, Please Do the World a Favor and Default (November 29, 2010).
Things are spinning out of the control of the centralized mandarins in the E.U. They seem to have borrowed the Federal Reserve's playbook to keep the stripmining proceeding as planned: lie, frequently (practice helps); obscure systemic risks by printing money; and issue a foul sewage of propaganda about how nicely the economy is "recovering" to mask the real game, which is diverting the national income stream to the banking cartel.
The levers of interest rates, credit and money supply do not control larger trends; the appearance of control is illusory. The E.U. and the Fed are both busily applying the duct tape of various monetary machinations to the overheating boilers of the global economy, and presenting their frantic improvisations as "finely tuned, guaranteed to work" policies. As things spin out of their control, reality is poking through their rice-paper facade of "normalcy" and control.
Here in the U.S., the Fed's game plan of stripmining the nation to "save" the banking cartel is based on a cruel deceit I explained yesterday in The 'Baseball' Economy: The Fed Strikes Out (May 24, 2011): while the Fed maintains incentives for financial speculation and backstops any cartel losses in those speculations, it claims its policies are designed to "boost employment" in the real economy.
That is the world's most dangerous joke: if you believe it, you die from extreme irony. What the Fed is actually doing is starving the real economy and thus precluding any gains in employment as it diverts the national income to fatten the insolvent banking cartel.
Does anyone seriously believe their scam can endure? As I described in Your Pick, Ben, But One Goes Off the Cliff (April 22, 2011), the Fed's policies are setting up multiple double-binds. The Fed cannot finesse the unraveling of the entire financialization project.
There is currently a "great debate" over QE3, the next round of Fed "stimulus" (read stripmining). As things spin out of control, it no longer matters what the Fed does. That is, after all, their central conceit and the basis of their power: that the Fed actually controls anything. This quote, attributed to Napoleon Bonaparte, is increasingly relevant: "Do you know what amazes me more than anything else? The impotence of force to organize anything."
The Fed claims it can force the real economy to "grow" by forcefeeding it credit. But all the Fed is really doing is fattening the banking cartel with guaranteed profits (borrow from the Fed for free and then deposit the funds at the Fed for interest) and enabling another speculative frenzy which generates fees and profits for the banking cartel while the U.S. taxpayers play bagholder.
The Fed has lost control of the reaction to QE3. There is no "surprise" in QE3, so the potential positive is lost. Whatever the limitations the Fed imposes on QE3, they will be recognized as limiting the "high" of the credit-cocaine injected by the Fed.
If the Fed chooses an open-ended, essentially infinite QE3, then it will be recognized by the market that the Fed has lost all control and the pretense of "growth" is truly threadbare. No matter what the Fed does with QE3, the results will be negative. If they try to finesse a limited QE3, the markets will recognize the policy is unable to force-feed more speculative bubbles. If the Fed unleashes the printing press, then inflation will wrench free of the last rotten ropes restraining it, and the market will recognize that the current stock and bond bubbles are so tenuous that only unlimited money printing can keep them inflated.
Simply put, things are spinning out of the Fed's control. The Fed has been transferring the wealth of the nation to the banking cartel and the financial Power Elite for three long years, and the fraud at the heart of their claim to be "stimulating" the real economy is now in plain view.
Does anyone really believe Japan's economy is under control? The tragedy at the out-of-control Daiichi Fukushima reactors might well be an analogy for the entire Japanese economy. Does anyone seriously believe Japan's over-indebted experiment in endless quantitative easing will sustain a demographic sea change and yet another explosion of debt to support rebuilding and more "stimulus," i.e. bailing out Japan's insolvent banking cartel, which has been insolvent for 20 years?
As for China: inflation is now out of control. Party authorities are frantically pulling the same levers of monetary policy, but the wires connecting the levers to the real economy have snapped. All their efforts to "cool" rampant speculative bubble-blowing and rampant inflation are failing. Taking their cue from the U.S., they are desperately trying to mask their loss of control with doctored statistics, but the conceit cannot endure for much longer: rents are rising even as housing sales decline. Local governments are still borrowing and speculating wildly, in a last-ditch effort to prop up their own income streams, which are dependent on real estate speculation and land grabs from peasants.
Things are spinning out of control. Trends are beyond the feeble grasp of central financial authorities. Power is based not just on controlling events in the real world but on the perception of having some control over the real world. Once the central banks' control over large-scale trends and systems is revealed as illusory, then the unraveling of the Status Quo's powers will gain momentum.
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ayyyeeee!
The Ben is my shepherd, I shall not put. He maketh me to lie down in green ink: He leadeth me beside irradiated waters. He restoreth my 401(k). He leadeth me on the paths of porsperity for fuck's sake.
Yea, though I walk through the valley of the shadow of default, I will fear no rate hike: For He art light years ahead of me. Thy balance sheet and thy enter key, they comfort me. Thou preparest a tranche before me in the presence of mine counterparties; Thou annointest my hedge with oil; My margin runneth over.
Surely, Goldman and HFT shall frontrun me all the days of my life, and I will dwell in the house of cards forever.
In the name of the Lloyd, thy Blankfein, Amen.
awesome. well done.
flag as righteous (1)
+++++
Flock'n amaz'n. Best evar.
Flippin' hilarious!
The more things change...
http://www.sidis.net/continuitynews2.htm
Ex-military, eh? Nice work!
As they say in political ads, I'm an Evangelical Christian and I approve this message.
Wow, this guy is Angry-Guy. I'm there with him.
And I have this friend of mine. Meet Angry-Girl. Or -Angel. Or whatever she is:
http://madscienceunlimited.com/fiction/aTearForTheSinner.html
It's okay to cry a tear for the bankers. Hate the sin, not the sinner, right? No it's not? Oh okay then go ahead and eat them. We'll call it anger management instead.
As usual, nothing matters to NFLX.
New, all time highs today.
LOL....
by RobotTrader,
on Sun, April 14, 1912 - 11:45 p.m. - aboard the RMS Titanic
Nice points CHS. Yes, the subhuman oligarchs made crystal clear that their losses and ultimate bankruptcy would not be allowed to happen. Now, it's about designing a bankruptcy sale disguised as a bailout plan for each country so they can buy up whatever they fancy at pennies on the dollar and gain further control; Greece may become the straw that broke the camels back and what happens in Greece (revolution) may not stay in Greece.
5-yr. bonds lapped up at 1.75%, 320% oversubscribed.
"Infinite Fiat" lives on.
people cant handle the truth. the truth is that there are no actual indicators demonstrating we are at the end of the fiat world. u.s. bonds continue to be strong because there is no where else to run. infinite fiat does live on. jeez if spain can sell bonds without a problem, we are a long way off from the cliff
Kind of makes you want to go back and read that Albert Edwards article again.
And won't the Fed be the Happy Camper selling its book into that bond rally!
Capitalistic risk and return bitchez!
TBTF who haven't gotten their shit together are going down (QE3 is politically impossible until they do), and the Bernankster is going to be "lovin' it".
Everybody now:
The sun'll come out
Tomorrow
Bet your bottom dollar
That tomorrow
There'll be sun!
Just thinkin' about
Tomorrow
Clears away the cobwebs,
And the sorrow
'Til there's none!
When I'm stuck a day
That's gray,
And lonely,
I just stick out my chin
And Grin,
And Say,
Oh!
The sun'll come out
Tomorrow
So ya gotta hang on
'Til tomorrow
Come what may
Tomorrow! Tomorrow!
I love ya Tomorrow!
You're always
A day away!
Watch live "peaceful" protest in Athens LIVE....if this enormous crowd stays under control that will be remarkable: http://www.star.gr/ellada_kosmos/93174/%C2%AD%1C%C2%AD
As if we need these lessons again.
However, it is rather amazing that 7,000 people "control" 7,000,000,000 people.
However, what is most amazing of all is that people don't realize the predators-that-be are outnumbered 1,000,000 to 1.
I mean, really! Would you and 999,999 of your friends really be afraid to attack and kill ONE [well armed] predator? No? Well, shows how utterly stupid are human beings, because that's the state of the world.
if only things were as black and white as you paint them to be,
Hi I'm Irish and I'm one of the 10% (according to Sunday Independent poll) who wants to default and go with Morgan Kelly's strategy of the fast and ugly rather than slow and ugly kind. There isn't the will for it here, people have been bought off with good social welfare rates and high public sector pay and hundreds of thousands have and are emigrating. So those who may have protested effectively are literally bought off or have left the country. There is no point in any of us hoping that Ireland will default now/early/voluntarily as this new government won't do that, and they are even more inept and less shrewd than the FF party they replaced.
what did they call that in school again ... the big bang?
am I #2 now?
oh, where does it end?
the mirrors, the mirrors ....
If there is one easy way to qualify advice and to find a tilt to look for in analysis is to find out if there are two out of three or all three over all “moods”, or “conceits”, present. One is the presence of humor, especially if combined with cynicism, the second is the absence of double-entry accounting, with only one side presented to provide evidence of a view, and the last is any morality, especially if connected with debt. If you are pressed for time and you find two out of three of the above present, simply ignore and trash it as it will be wrong in conclusion and misleading in analysis.
Your views more often than not contain all three, and I have not found one yet that contain at least two.
First, “money aint funny”. To see any humor or “there you go again” world weary point of view, laughing at the participants, almost always goes with an undeserved elitist status. The champion of this style were the editorials that I think are still found in Barrons, though I stopped reading the paper decades ago for this reason. If one finds humor, especially cynical humor in large asset prices movements, it shows not only disrespect to those suffering, but also shows one feels one can take a arm’s length approach which more often than not means one isn’t involved to the extent that provides useful insight. “Money aint funny.”
Second, if only one side of an accounting (recounting, retelling) is provided, be it a small cap company, a junk bond, a SP 500 company, or a countries GDP – it means an analysis is being formed which is half baked and can only, at the most, understand ½ the picture. This is especially relevant to national accounts which only look sat debt or just the reserve position and fails to see the asset to the liability or vice versa. Each side of the entry has often completely different dynamics and it is usually a waste of time to consider only one set of dynamics. The most powerful critic of those who only use one side of the entries to provide an opinion was Rob Eisner (deceased) who would provide brilliant analysis on the last time we were in a deficit crisis with the most well known being his book “How Real is the Federal Deficit”. Keynes uses always “double entry” analysis as so does his main accolade, Minsky. This is what provides their ability for the brilliant leaps and the great descriptive power and analysis, even if one debates some of the conclusion. If one is not a Keynesian in discipline, no matter what your stance, you cannot make any sense of national macro economics. Sorta similar to how every historian is Marxist in his analysis, even if he comes out with a Whig conclusion.
Lastly, and this is related to the lack of double entry analysis, there is no morality in finance. There is no use in qualifying borrowers as proliferate or lacking character. There is no use in seeing the USA as spendthrifts and thereby not quite up to scratch with their foreign borrowings. In fact to be a moralist in economics and in financial analysis can not only lead to terrible error in perception and then prediction, but also lead to terrible remedy and even terrible suffering. Marxism is, for example, a moralist based economic analysis. This is related to the double entry point as most debt is because of someone’s assets and the second or third derivative that truly counts and is causative may very well be the creation of the asset. For example is USA borrowing beyond its means or is China pursuing a mercantilist trade policy with a rigged yuan? Just to look at the UA offshore debt will miss the ability to correctly consider the problem. It certainly will prevent you from making any correct predictions.
So, in sum: “money aint funny”; keep the green eye shades one whether one is looking at one’s checkbook or trying to figure out what the Irish are up to or will do; and don’t look to the sawdust in an eye unless you see the plank in another.
Now that doesn’t mean your stuff isn’t entertaining, it is!
Was today's equity session the last dead cat bounce before another big leg down?
http://deadcatbouncing.blogspot.com/
Bitchez, Off topic yet on topic - Get your eyes round this new offering from Adam Curtis
http://www.youtube.com/watch?v=xX5jImWRREc
silver
37.85 $
spinning towards forty....
PHYSICAL BITCHEZ!
This post triggered some twisted creative thoughts... Suppose you were president or dictator for a month. Hell, this would be a blast. Imagine what fun you could have...
1. Write an Executive Order to null and void all previous executive orders, void and ban all future executive orders and signing statements, and sunshine this order after 24 hours.
2. Rescind any State of Emergency that the whole usgov't is currently operating under. Common Law across the board.
3. Fire 90+% of all fed gov't employees and direct any unused funds back to every US citizen who doesn't directly receive a gov't handout (are there any left?)
4. Figure out a way to immediately end all subsidies to education, agriculture, energy, etc, etc. Oh hell, write an executive order. If you're gonna play dictator, might as well enjoy it.
5. Pink slips to every IRS employee, obviously.
6. Sneak in a quickee executive order eliminating all minimum wage laws. Coupled with zero irs withholding on paychecks you'd have 100% employment tomorrow.
7. All military out of every other country; 3 months max to git'r'dun ;-)
8. Speaking of military... get a few dozen super patriotic gung-ho generals and admirals squarely on your side, making sure they each have their respective solid and loyal officers all down the line backing them up. I'm sure many military brass are rightly pissed about the current state of affairs.
9. Have detailed list of names and addresses of every fed banker, commercial banker and all associated attorneys, and throw in a few whacked CEOs for good measure. GS, Monsanto, BP, a few others come to mind. Include all possible dirty laundry about each person so named. Encrypt the whole thing, WikiLeaks insurance-style, and disseminate files far and wide. Decryption keys poised to be disseminated at the first sign of anyone who tries to assassinate you or your inner circle. Should you be harmed or killed, it's now Open Season. Have many “pots of gold” waiting, containing multimillions worth of Au bullion coins, to be paid out as bounty to anyone taking care of business in regard to aforementioned names.
10. On second thought, no need for all that mess. Why not simply get your military buddies to round up all said names and place them, naked, on a deserted tropical island. Surveillance cameras everywhere on the island running 24/7 feeds to nationwide broadcast tv. Let these fine gentlemen figure things out for themselves mano-y-mano. The Mother of all reality shows. Who's got the popcorn?
And that's just within the first few weeks of your presidency.
A few more weeks of cleaning house, re-commoditizing the monetary system, informing our foreign friends about the new operating conditions back home and similar tasks, then you could turn off the lights, lock and chain the doors and hammer in some plywood on all the windows of the White House. Retire to Hawaii or Texas or somewhere, assuming they are still part of the uSA.
After all, no one here actually needs a leader, right?
The desperation of the centrally planned genocidal maniacs will reach an ultimate high-- a perceived risk of war will be the last attempt at control through fear and greed.
Whether war is imminent or not won't be the trigger that finally takes down the CPGM's-- it will be the awakening of the peasantry.
The "Big Reset" is coming, but it may still be years away. Or it could happen tomorrow. There is no way of telling when a bubble will pop.
That's what is amazing. In this fucked up mechanism for the big banksters via the EMU, as both sides of the transaction are screwed....the greeks...and the germans. It's those that own/run what is bailed out that benefit.
Greeks are made out to be deadbeats, Germans are made out to be assholes, and now since human nature shows us they won't want to lose their 'money', the stripmining is pushed for by one side against the other. The stripmining will create dissent between various member nations.
A recipe for terrorism from repression, wars of aggression or starvation, has rarely been passed around so widely. Even the shittiest recipe, will eventually be given a try by someone.
Guess they gotta create that need for more security, which must be bullish.
Why people fear the contagion of fraud, and fight each other instead....and somehow don't notice they are BOTH marks, is beyond me. Hopefully that will change. Germans and Greeks, and all nations within the EMU (this topic..otherwise all nations that participates in a monetary system).
After all, no one can create credit, it's too hard out of thin air, if the banks went under. Only they know the magic formula.
Their tools resemble how the catholic church tried to explain the motions of the planets, without them being revolving around the sun. By making bullshit sophistry up.
Glass-Steagall will end the bailouts and austerity measures
I'm sure this, too, must be all Israel's fault.....
guest post has a flair for drama. nothing is spinning out of control yet. market already expects greece to default, no surprise there. spain's bond sale went off without a glitch. our treasuries are still hot off the griddle. stocks still maintaining strength. no code red yet.
comment deleted and moved
Dr Helen Caldicott - Fukushima Nuclear Disaster- You won't hear this on the Main Stream News.
http://www.youtube.com/watch?v=4ITrXVJMKeQ&feature=player_embedded
What planet are you on? This is not going to be a soft collapse, in which anyone that theoretically has a claim on your 'money' will still have it afterwards. Go learn some economic theory; not the bullshit that you're supposed to believe, but the actual 'item value on Main Street' stuff.
For the purpose of illustration;
A really good loaf of bread, made by hand by a craft baker was worth, in 1900, about $0.11. Today, that same loaf is worth $2+.I'm not talking about mass-produced shit, here. A proper loaf of bread, made with care.
And the issue is that word 'worth'. It costs EXACTLY the same in time, manpower and materials to make that loaf now as it did then.
So why does it cost 20 times as much now?
Simples! The currency is worth 1/20th as much!
In real terms actually less, as economies of scale, mechanisation, improvements in farming/harvesting/storage/transportation/etc have actually driven the cost of the raw materials DOWN since 1900 in comparative terms.
The majority of that currency devaluation, as applied to a decent loaf of bread, is simple to chalk up; it's due to to every motherfucker in the supply chain wanting to make a million instead of making a living. And yes, that includes the 'people' (and I use that term VERY loosely) who were/are in the business of financing the improvements in that breadmaking process over the past 111 years.
And there is the crux of the matter. You can lay some, and realistically most, of the blame at the foot of the greedy 'I'm only richer if everyone else is poorer' bankster elite*. but only MOST of it!
The rest you have to firmly sucker, octopus fashion, on the stoopid bastards that consistently looked UP at this ladder of evil greed and thought, "I can reach that rung if only I can borrow some money to build a bigger footstool to stand on".
* I stand by that comment because the world has EXACTLY the same amount of exploitable resources as it did when the first human evolved from his/her subhuman ancestor. Simple conservation of energy/matter :- We do not consume resources, we simply change them from one form to another. The fact that form A (say, oil, gas, coal) and form B (say, heat, kinetic energy or electricity) are different does not change that fact. The problem being that you can't change it back.... and the 'people' that have made a nice bloody living for the past 300+ generations by treating finite resources in the same way as their ancestors were accustomed to treating gold, silver, crops, timber, etc (you can either re-use em or grow more in a relatively short time) have now realized this.
So what to do?
Solar, Wind, Geothermal, Ocean Geothermal, Tidal, etc power CAN keep the world in the pink - provided the population is small enough. 6.5 billion is not small enough by approximately one order of magnitude. So 90% of us have to die in one way or another in the relatively near future, just to keep the top 0.01% in the life standard to which they've become accustomed.
BUT, even that isn't enough! In order for them to feel richer, it's necessary to make the rest of us poorer. That is explicit instead of merely implicit slavery, right there. And they need to keep going in order to feel richer....
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