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John Taylor: "Dead Man Walking...The Euro Is Finished"

Tyler Durden's picture


By John R. Taylor, Jr., CIO of F/X Concepts

Dead Man Walking
May 6, 2010

One of the incidents that I remember from my youth was the first time I saw a chicken slaughtered and running around headless for quite a few minutes before it keeled over and died. The euro is at that stage. Its life is finished, but it will be around for some time before it becomes a subject of historical analysis. Actually the euro was always a short term solution, even on the day it was born. There were only two possible outcomes: the euro would blow up, or it would lead to an EU with taxing and borrowing authority. Theoretically those two choices are still possible, but the euro’s disintegration is moving so quickly and the political barriers are rising so fast that the chances of a much closer and ever tightening political bond between the internal surplus countries and the internal deficit countries is basically non-existent. Fifty years ago, Europe had some great leaders in Robert Schuman and Claude Monnet, who had the vision to start the common market, but it does not have the visionaries necessary to take the next step. Building Europe has always been done from the top, by the politicians and the corporate chieftains who had the most to gain from it. In the beginning, the man on the street went along with it because it cost him nothing and it would keep his children out of the next war. Most of the time, there was no cost to the average European, only benefits: more products to buy, better roads and holiday destinations, and the feeling of being a global leader. The farmers got mad in the 1980’s but the Common Agricultural Policy exploded with butter and other mountains growing larger and the farm lobby was paid off. When the euro came along, interest rates dropped everywhere south of the Alps and this meant that things bought on time – like cars and appliances – were cheaper and houses were easier to own. Despite some gripes about inflation as prices were rounded higher, the changes were pleasant, not painful. All of that has changed. Now having the euro and being a member of the European Monetary Union will be hard on almost every voter – for as far as the eye can see. The United States dollar was forged in war, but even that wasn’t enough. The country had to go through another six or seven years of disjointed financial sovereignty, somewhat similar to the current euro structure, suffering internal dissention while continually being threatened from outside before it made the change to a more centralized (but still not modern) system. The critical actor who served as midwife at the dollar’s birth was Alexander Hamilton. A headstrong leader, Hamilton, had the power and foresight to deal and compromise his way to success. The European equivalent is nowhere to be found.

Europe is dead. The European nations are the victors, and the way ahead will be one hell of a mess. Without taxing and borrowing power, there is no way to square the inter-euro trade balances between the countries except ‘internal devaluation,’ which means years of deflation and poverty for the voters – and protestors – of the deficit countries. Our pencil pushers and Excel experts have made lots of projections on the Greek situation and can find almost no possibility of success. The EU/IMF team projects Greek debt at 149% of GDP when this rescue ends, but their nominal GDP estimates are incredibly optimistic when salaries and jobs are cut dramatically. We see a 20% decline over the three years as a good outcome, the debt would stay the same, and the ratio goes to 186% of GDP. Almost like Japan, but foreigners own the Greek debt – no way! This rescue reminds us of Bob Rubin’s rescue of Russia in July 1998, which lasted about one month before the whole house of cards collapsed. We knew that one couldn’t work, and this one can’t either. It might take longer, but the euro is finished.

Goodbye euro, hello drachma, peseta, lira, and the others. The world had hoped for more, none more than the Europeans themselves, but now we are all left to pick up the pieces.

h/t Teddy KGB


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Thu, 05/06/2010 - 10:26 | 334375 B9K9
B9K9's picture

Sorry for the re-post, but events are moving so quickly that each thread is being rapidly pigged by the next. This comment is a partial defense of Mako's recurring theme that what we are seeing was destined from the start, so why get excited about what is occurring?


Let me provide a touch of perspective. Most of the popular financial blogs got their starts back in 2007 because they addressed the fundamental nature of the mortgage meltdown.

Fast forward to 2009 as we began to move from market fundamentals to the politics of bailouts. Coincidentally, a new financial blog called Zero Hedge appeared on the scene with all sorts of insider reports detailing the fraud & various illegal activities.

I remember coming across this site just a few weeks after it was launched and marveling at the information sources they were posting up on the interwebs. Then came the flury of legal take-down notices and Tyler's decision to move the servers off-shore.

But time & events wait for no man. Now the world is waking to the fact that it was always a scam, so where's the thrill in discovering new cover-ups & other blatant illegal activities?

What Mako is advising Tyler is that the game is now moving on to the process of reform. And by that I don't mean audit the Fed or other such meaningless nonsense. If Tyler wishes to see ZH escape the same fate of other stale blogs which couldn't keep up with changing demands, then it is time to begin focusing on the next stage of the game.

The next stage is where the rubber hits the road. Reform might be peaceful, but as usually happens throughout history, it has its periodic 'hiccups', which is what we are seeing play out in Greece.

I've advised Mako to try and be more constructive - people understand the message. It's time to add value by analyzing how exactly the existing credit-money system is going to be modified & replaced.

Thu, 05/06/2010 - 10:32 | 334392 Village Idiot
Village Idiot's picture


Thu, 05/06/2010 - 12:04 | 334635 Simon Jester
Simon Jester's picture

Yes, I'm listening as well.

There are some of us out here who realize that there simply aren't any true solutions that will save the current paradigm in any recognizable form. It is rotten through it's core and must be discarded without remorse.

IMHO, the complete implosion of the current system MUST happen, in order to rebuild a new, sustainable system upon it's ashes.

Of course, this will not be a pretty process. Unfortunately, we are fresh out of painless ways out of this mess.

Reform? Reform what? Please.


Thu, 05/06/2010 - 13:16 | 334860 WaterWings
WaterWings's picture

Pretty much. Right now I think ZH is trying to maintain credibility (even thought they are the most credible source of information on the web) and pushing that limit gets you labeled. Hell, ZH is already labeled, so I think we are Jack and Marla, watching out the window, waiting for the detonations.

This is a very strange time in my life.

Thu, 05/06/2010 - 10:38 | 334409 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Somewhere between BAU and Mad Max lies the future.

I fail to see how the 'political class' can possibly reform themselves.

I have noticed the same issue up and down our society, how do you replace the whole thing at once?

Teachers are a good example. We need better teachers, and to attract them we should pay them better. But how do we get rid of the old ones?

Extend that to a govt, and there is the issue of 'institutional knowledge', and the fact that all those being groomed for leadership are just as corrupt as the ones in power now.

To summarise, where do you find people who are simultaneously experienced/capable of running the show WHILE resdesigning it, who havent already been corrupted?

Thu, 05/06/2010 - 11:36 | 334541 Adam Neira
Adam Neira's picture

A Rubik's Cube can always be solved in 27 moves no matter how diabolical it's configuration.

Thu, 05/06/2010 - 11:43 | 334566 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

thats a really interesting comment, makes me think. Could there be some sequence of events and choices which could 'solve' it? What would a solution look like really?

Thu, 05/06/2010 - 12:17 | 334668 WaterWings
WaterWings's picture

If only we had some Anti-Federalists around to ask.

But would "we" listen? They're sending kids home from school for wearing the American flag:

Thu, 05/06/2010 - 12:39 | 334757 Cpl Hicks
Cpl Hicks's picture

True, but you can't take a building that has been leveled with explosives and blow up the pile of rubble back into a building.

Thu, 05/06/2010 - 13:19 | 334870 WaterWings
WaterWings's picture

Speaking of bombs in buildings the Ryder truck had help:  @ 1:20

Thu, 05/06/2010 - 11:43 | 334563 Adam Neira
Adam Neira's picture

"To summarise, where do you find people who are simultaneously experienced/capable of running the show WHILE resdesigning it, who havent already been corrupted ?"

G-d always makes sure that a certain number of righteous souls are present down here on terra-firma. These people hold the very fabric of the universe together. Dynamic, multi-faceted problem solving is required. Time is both linear and expansive.

Thu, 05/06/2010 - 11:48 | 334584 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Amen to that, you sing like an angel :)

Communication is the key right now, the PTB's strengths are organisation and illusion.

I work for a finance company, and some of us see it comming.

PS: According to the, the reason for the GBP selloff in the last hour is comments by a German opposition poli saying he will vote against the Greek bailout.


Thu, 05/06/2010 - 11:50 | 334588 chumbawamba
chumbawamba's picture

Yep, and you're welcome.

I am Chumbawamba.

Thu, 05/06/2010 - 10:45 | 334427 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

The key objective of the conference is to examine weaknesses in the current international monetary system, and identify reforms that might be desirable over the medium to long run to build a more robust and stable world economy.

Thu, 05/06/2010 - 10:45 | 334429 Cursive
Cursive's picture


I agree we should be more constructive.  Mako's comments are somewhat fatalist.  Maybe we are entering a more activist period and until I see something like ZH 2.0 the best vehicle to take it to the next level is the Swarm.

Thu, 05/06/2010 - 10:48 | 334437 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

not if the PTB have anything to say about it...


activist + Patriot Act I&II = Guantanamo cell

Thu, 05/06/2010 - 10:59 | 334469 Cursive
Cursive's picture

Maybe you are correct, but doing nothing and accepting debt slavery is not a good alternative either.  It's not as though we have a "no personal harm" alternative here.  Prisoner's dilemma?

Thu, 05/06/2010 - 11:45 | 334570 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

im not saying 'do nothing' , but be aware that if tshtf (Weimar) there will be ... issues.

The best thing we can do right now is communicate with people around us, and warn them of what it will look like before the barbed wire goes up.

Thu, 05/06/2010 - 11:53 | 334598 chumbawamba
chumbawamba's picture

Gold, guns and garden are the way.

Self-sufficiency, self-reliancy.

We can only kill the beast when we deprive it of a need to be.  Stop fearing the beast: no amount of tribute will quell its appetite for your soul.  Instead, learn to ignore it, and live your life according to how you see fit, and let others do the same.  Respect your fellow humans, and require the same of them.  Take personal responsibility for yourself, your community, and your family.

That's how we fix this.  One individual at a time.

I am Chumbawamba.

Thu, 05/06/2010 - 12:58 | 334805 SteveNYC
SteveNYC's picture

Chumba, I'm impressed. One person at a time, one person taking responsibility for both their actions and their "internal" state. To ensure that the "bad seeds" that dwell within themselves, whether they be greed, hatred, selfishness, sloth etc. are not passed onto those around them, but are transformed.

All we ever need to do is take responsibility for our selves. The way we treat others will then be a natural by-product of this process of introspection. Some will do more, sure, but if all just spend some time doing this, learning about themselves, weeding the garden, we might just get throught this.

Thu, 05/06/2010 - 10:46 | 334431 chumbawamba
chumbawamba's picture

We've been discussing how it's going to be replaced.  I regularly sum it up in two words: GOLD BITCHES!!  I'm not sure how to make it much more simple than that.

We will eventually return to some form of transactional currency that includes a paper component, and that paper component may one day once again give rise to a fiat-based currency, because humans are generally stupid.  But for the meantime, we will likely initially fall back on barter and trade for a short period while the people who had the prescience to accumulate real money start spending it into the economy so the rest of you can have some money to spend as well.

There will be a long period of collapse, deflation, devaluation, etc.  Meanwhile, in the background, in small local groups that will eventually spread like a slow-moving brush fire that eventually meet up with each other, our currency system will be rebuilt.  The medium will be metal, just as it always has been.

The overall winners will be people who know how to do things (practical skills, like fixing a motor, rigging a well, building a solar water heater, repairing a firearm, etc.) or people who have a lot of stuff that will be useful to a broad array of people.  Having lots of "things" gives on a better chance of having something that someone else will want.  At least until the money starts flowing again.

I am Chumbawamba.

Thu, 05/06/2010 - 10:50 | 334446 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

Nice vision, would possibly happen except for the guys with the FEMA jackets and infinite ammo who will round you up 'for your safety/survival'.

I dont think the PTB are going to just give up and start growing corn.

Thu, 05/06/2010 - 11:19 | 334491 Whizbang
Whizbang's picture
Finally someone else gets it! If the u.s. loses the ability to get funds on the internation credit market, they will simply confiscate your gold, and probably your 401k as well, you will be compensated with 30 year t-bills, which will be advertized as safer and protected from "greedy speculators". This is already being discussed in some circles here in D.C. that would horrify you. 
Thu, 05/06/2010 - 11:30 | 334527 WaterWings
WaterWings's picture

Come and take my gold.

Thu, 05/06/2010 - 11:37 | 334547 Whizbang
Whizbang's picture

I hate to break it to you, but your .38 special is not going to mean a whole lot against swat and the national guard. However, you should be aware that I have no intention of taking anything. I just want to remind people that the country's supply of gold has been confiscated before, and at need, probably will be confiscated again.

Thu, 05/06/2010 - 11:56 | 334600 WaterWings
WaterWings's picture

1) (eats class III body armor)

2) National Guard/SWAT will have far more problems than me if they try to confiscate anything - seizing 401ks will be a catalyst for violence.

3) I would love to see the accounts of gold being confiscated. No gold was physically confiscated.

Thu, 05/06/2010 - 11:55 | 334604 DoChenRollingBearing
DoChenRollingBearing's picture

They will have to come and take my gold too.

I and many others have ARs and AKs.  Too many of "us" for "them" to take on.  And not all cops and soldiers will shoot on their fellow citizens.

Still, the next few years will be interesting.

Thu, 05/06/2010 - 11:59 | 334620 WaterWings
WaterWings's picture

On another thread a former marine officer mentioned that troops come largely from the intermountain and southern states. The ones that are passing laws right now on the road to secession.

It'll have to be blue helmets - and that's open season.

Thu, 05/06/2010 - 12:00 | 334624 merehuman
merehuman's picture

lets not worry about our gold so much. Lets instead see what we can do for our community to strenghten it.

Plant fruit trees along the roads, it will pay off for our children.

Let the nation solve itself, work/love, think  LOCAL

Inevitably as all falls apart you are left with your neighborhood and assets at hand.  Communities will find their own leaders and teachers in time.

Trust a little, fear only makes the illusion seem more real. No  true harm can be done to any of us. Perceived harm is based on attachment  to illusion and its values as culturally taught.

We are not human so much, we are living awareness. The only real death is to live in ignorance and without love. So fear not, smile at the day and your felow travelers in time and space.



Thu, 05/06/2010 - 12:13 | 334670 chumbawamba
chumbawamba's picture

Your word is good.

I am Chumbawamba.

Thu, 05/06/2010 - 12:21 | 334697 WaterWings
WaterWings's picture

I usually tune out new-agey garbage but your previous posts prove you walk your talk. Thank you fellow traveler.

Thu, 05/06/2010 - 13:03 | 334820 SteveNYC
SteveNYC's picture

Actually, Merehuman really "gets it". His stuff is not "new age" at all, but as old as the Buddha. Wise words, see through the illusion. Namaste gents.

Thu, 05/06/2010 - 13:22 | 334880 WaterWings
WaterWings's picture

Agreed. I'm a greenhorn.

Thu, 05/06/2010 - 12:11 | 334662 Chump
Chump's picture

And how we burned in the camps later, thinking: What would things have been like if every Security operative, when he went out at night to make an arrest, had been uncertain whether he would return alive and had to say good-bye to his family? Or if, during periods of mass arrests, as for example in Leningrad, when they arrested a quarter of the entire city, people had not simply sat there in their lairs, paling with terror at every bang of the downstairs door and at every step on the staircase, but had understood they had nothing left to lose and had boldly set up in the downstairs hall an ambush of half a dozen people with axes, hammers, polkers, or whatever else was at hand? After all, you knew ahead of time that those bluecaps were out at night for no good purpose. And you could be sure ahead of time that you'd be cracking the skull of a cutthroat. Or what about the Black Maria sitting out there on the street with one lonely chauffeur - what if it had been driven off or its tires spiked. The Organs would very quickly have suffered a shortage of officers and transport and, notwithstanding all of Stalin's thirst, the cursed machine would have ground to a halt!

Aleksandr Isayevich Solzhenitsyn

Thu, 05/06/2010 - 12:26 | 334706 WaterWings
WaterWings's picture

Especially if they knew what fate awaited them. Alas, just about any sudden loud noise requires years of victim counseling these days.

They have no idea what is coming:

Thu, 05/06/2010 - 12:28 | 334715 Burnbright
Burnbright's picture


You seem to be under the impression that the US has infinite supplies and infinite man power at their disposol. They don't. It would really only take 100,000 people or so to fight back in this country and the government would lose. Hell it would take even less people to tie up the court system and bleed the country dry through costly and time consuming legal battles.

Thu, 05/06/2010 - 13:17 | 334866 Whizbang
Whizbang's picture

well, the latter would be a better way to go, but in the end it doesn't matter. All of you talking out of your ass on a public forum about violent revolution should realize that we are already in the globalization trap. As long as the fed can print infinite amounts of money, and has the reserve currency at its disposal, for all intents and purposes it does have infinite resources. In the interest of international socialism horrors beyond your imagination are justified by men and women who don't see you as people, but numbers on a page.You have no idea what little treats your tax dollars have been working to develop in the DARPA labs.

May I remind you that the united states government just obliterated two sovereign nations in the middle east, killing an estimated 300,000 civilians over the consolidation of oil producing nations for the purpose of "stability". The Khmer rouge, darfur, the soviet union, cambodia, all of this has happened before, and the people were slaughtered wholesale. It can happen here too. The federal government does not rule with the consent of the governed, it rules through the threat of overwhelming force.

Thu, 05/06/2010 - 13:35 | 334902 WaterWings
WaterWings's picture

Which is why it will collapse. Which is why you want gold. The dust always settles. The United States will balkanize - any "revolution" will be between military units. No way in hell civilians are going to "organize" - all those groups are infiltrated anyway - and they will stay local for self defense. The Hutaree case is falling apart because it's still legal to talk about violent revolution - it's not a good idea to do so because Mako's probably right. And if he is it will be very important you stay far away from areas that will likely be fought over. Very far away.

I would say 1,000,000+ direct and indirect deaths in the sandboxes. The Army is trying to keep the suicide rate from getting too high. 

Thu, 05/06/2010 - 18:10 | 335400 Double down
Double down's picture

How is the SWAT being paid?  With my Gold?

Thu, 05/06/2010 - 11:56 | 334614 chumbawamba
chumbawamba's picture

Sure, if you want to be a coward and an idiot, then obey.

But if you're like me and hundreds of thousands of other people, you will not obey.  You will tell them that if they keep trying to impose their control, you will fight back.  And if they take you out, there are ten more behind you, and ten more behind them.

This is where we make our stand.  Admitting defeat before we've even started is a bit retarded.


I am Chumbawamba.

Thu, 05/06/2010 - 12:36 | 334744 RobD
RobD's picture

They can have my 401K, it's not going to be worth spit anyway. As for my other stuff, well there are not that many feds, what less then 100k that are armed, not counting the mil? I guess if they find me either I will be unlucky and die or they will. Better to die free then live as a slave I suppose.

Thu, 05/06/2010 - 11:35 | 334528 Ripped Chunk
Ripped Chunk's picture

There are not enough FEMA jackets and rifle to stop everyone.

And many of those mindless fucktards that sign on for the law and order gig have families too and eventually succumb to animal reason.

Thu, 05/06/2010 - 11:39 | 334554 Whizbang
Whizbang's picture

most of them will continue to do exactly what they are told. Right now one percent of our population is currently locked in prison. Another .001% that make up the gold owning population is not even going to raise eyebrows.

Thu, 05/06/2010 - 11:58 | 334619 chumbawamba
chumbawamba's picture

Dude, we have guns.  And lots of bullets.  And we're going to use them anyway, so it may as well be defending our lives and liberty.

Liberty or Death: in either you are free.

I am Chumbawamba.

Thu, 05/06/2010 - 11:42 | 334562 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

I wish it were true, but there are always plenty of brownshirts.

Look at it this way, you have a choice...

1) Go independent and face the possibility of being rounded up by brownshirts or not being able to feed your family

2) become a brown shirt


As long as the FEMA jackets come with 3 meals a day for you and family, plus all the raping you can do, they will never run out of volunteers

Thu, 05/06/2010 - 11:48 | 334583 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

you are all being stupid. Mind your OPSEC. 

Thu, 05/06/2010 - 12:05 | 334638 chumbawamba
chumbawamba's picture

I am Chumbawamba.

Thu, 05/06/2010 - 11:46 | 334573 Adam Neira
Adam Neira's picture

Have faith in the potential goodness of human beings. The noblest of actions can surface in an emergency. We have the gift of free-will.

Thu, 05/06/2010 - 11:47 | 334579 Whizbang
Whizbang's picture


Thu, 05/06/2010 - 12:06 | 334643 chumbawamba
chumbawamba's picture

Try to make the best of your stay behind the chainlink fence.  We'll try to liberate you as soon as possible.  It might take some time, as we'll be fighting every inch of the way.

You can pay us in beer later.

I am Chumbawamba.

Thu, 05/06/2010 - 14:10 | 335047 Whizbang
Whizbang's picture

I like beer. I'll support that.

Thu, 05/06/2010 - 11:50 | 334590 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

gotta stop it early before bad habits become the new normal

Thu, 05/06/2010 - 12:11 | 334663 Kegfreak
Kegfreak's picture

Danny, do you stand for goodness, or badness?


I want to be good!



Thu, 05/06/2010 - 11:30 | 334507 Ripped Chunk
Ripped Chunk's picture


Thu, 05/06/2010 - 11:36 | 334534 Mako
Mako's picture


"I've advised Mako to try and be more constructive - people understand the message. It's time to add value by analyzing how exactly the existing credit-money system is going to be modified & replaced"

If the credit system after this credit system collapses is built on an unsustainable equation, it will fail. 

The Math is pretty simple by today's standards, yet you see people fighting the truth.  They will fight it till their dying breathe. 

"If they are not one of us, they are one of THEM"

It is frustrating at times, because people refuse to see what is right in front of their eyes.  I am all about discussing a proper system, I can't say that choice will be easy either.  Nor can I say how it can be implemented.  I know the system that has been used since the dawn of civilization will always fail because of a failed Math assumption.

My only point is if you don't even address the problem, well you are doomed to repeat.  Which is why humans have been done this road before.  It's Tyler's choice to address it or not, his board.   Bitching about the Fed, bitching about the government, bitching about bankers, Bitching about the Greeks, etc. is not going to change anything... the only way REAL change will happen is addressing what is or soon will be the problem.

Thu, 05/06/2010 - 11:44 | 334568 Hulk
Hulk's picture

If history has anything to teach us, its that history doesn't teach us...

I made that one up myself...

Thu, 05/06/2010 - 11:46 | 334574 Mako
Mako's picture

Up to now, I would have to agree.

Humans have choice, whether they choose a different path this time is not decided.

Thu, 05/06/2010 - 11:49 | 334585 Adam Neira
Adam Neira's picture

"History is bunk !"

- Fenry Hord

Thu, 05/06/2010 - 12:02 | 334629 WaterWings
WaterWings's picture

Here's one I thought up:

Apathy is the greatest form of slavery.

Thu, 05/06/2010 - 12:10 | 334658 chumbawamba
chumbawamba's picture

History teaches, but most people are rolling up spit balls and passing notes to each other.

In contemporary parlance, that translates to partisan political bickering and social networking.

About 10% of us really know what's going on.  The rest are left wondering at the magic and mystery of the universe.

I am Chumbawamba.

Thu, 05/06/2010 - 13:52 | 334985 Marla And Me
Marla And Me's picture

85% - 10% - 5% ... Chumba, would have thought you to be a 5%, not a 10%...  ; )

Thu, 05/06/2010 - 11:39 | 334553 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

I think Tyler should do whatever the hell he wants.


and I don't necessarilly think "reform" or modify" is really the correct word for what could happen. It would all be speculation unless someone has some inside intel that is legit.


Besides, why do you guys want to spoil our popcorn moment. Can't we just enjoy, if only for a few days, that "told you so" moment? Then there are those who just want to be Woody Harrelson in that movie 2012.


Please don't obstruct the view. Sit down.

Thu, 05/06/2010 - 11:47 | 334577 Mako
Mako's picture

Heck, I kind of like watching this but I kind of feel bad that billions are going to have to be liquidated.  The fireworks will be fun to watch for a while.

Thu, 05/06/2010 - 12:20 | 334690 merehuman
merehuman's picture

Mako, i do not know what you and a few others see in your imagination.

Sounds like you expect billions to die. Humans i assume, tho money is dying as we speak. From what? Do you have inside info on this?

Remember that we are creative beings, bound to the body or not we live . Thoughts have power, complemented by imagination , intent, emotion and focus and will take form in the world of perceived reality.

I prefer a picture of the future including hands and hearts sharing  for the love of it. I prefer to envision us gardening rather than farming. I dont see cars in my future or large structures.

I do see picnics and outdoor dances. Solar panels And a return to horse and buggy. Amish had it right all along.

Thu, 05/06/2010 - 11:56 | 334609 Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Here is my cyni-vision regarding the USA-- as the pendulum swings back from Hope and Change, the country will become anti-immigration, "Buy American", and generally blame the rest of the world for its problems. This will become more of a police state and more militaristic and focus that anger on some other country. Economic policy will be addressed in an intermintent, arbitrary, and or hysterical fashion. Those who have financial mobility will levae the country.

As entitlements break down, crime will rise. Creative, but sociopathic folks will target "the problem" to support themselves financially. No Mad Max, but increased risk for the top 20%.


Of course, I merely speculate. It could all be rainbows, unicorns and a chicken in every pot.


Hope for the best, prepare for the worst. stay out of harms way.


Thu, 05/06/2010 - 13:13 | 334849 Noah Vail
Noah Vail's picture

My guess is that it will be quite a while after the dust settles that any meaningful changes take place. In the interim comes the "marshall law" type temporary fixes like currency and price controls.

Fri, 05/07/2010 - 03:33 | 336483 kapillar
kapillar's picture

Word, dude. Thank you. While certainly true to its ambitions and still an incredible resource, this blog has spread and attracted an intellectual version of the popular blame game which will lead us nowhere. This is not to say that any of the scam and fraud reported here is excusable or can simply be overlooked. It's just that I and I think many others in the financial industry have no use for the recurrent announcement of doom and the advice to go long grain, prozac and ammo.

Thu, 05/06/2010 - 10:27 | 334379 Hephasteus
Hephasteus's picture

But couldn't they stretch it out to 3 months if they use a condom and think about baseball?

Thu, 05/06/2010 - 10:59 | 334467 Winston Smith 2009
Winston Smith 2009's picture


Thu, 05/06/2010 - 10:29 | 334386 Orly
Orly's picture

More currency pairs to trade?



Thu, 05/06/2010 - 10:33 | 334390 macfly
macfly's picture

In many ways I hope you are right. I grew up in the UK, and remember us joining the EU when I was very young. It all seemed such a glorious dream then, but the reality became endless laws and restrictions on the most stupid things passed down from above, the power of Europe became an ugly intervention in ever aspect of daily life. Bland bureaucrats gone wild in an ivory tower, costing us millions as they straight jacket our lives in so many ways.


Good riddance is what I expect many of the people on the street will say to the demise of the greedy, restictive leviathan.

Thu, 05/06/2010 - 10:46 | 334432 desgust
desgust's picture

+1 I love the dead euro!

Thu, 05/06/2010 - 11:35 | 334540 alt-shift-x
alt-shift-x's picture

total agreement from germany!

Thu, 05/06/2010 - 10:33 | 334395 John McCloy
John McCloy's picture

  See now as bearish as I am on the economy (Global depression) I always thought the dollar will continue to rally for not just eventual interest rate hikes but one simple fact...Military defense. We are not 16 nations tied to one currency and we still have the "veil" of unmatched liberty along with geopolitical supremacy and the nukes to match.

In the event the world crashes upon itself we stand alone and untouchable. We can repudaite our debt and dare anyone to collect. Reiterate the Monroe Doctrine and rebuild America from the ground up by producing and consuming amongst ourselves for the next century. Meanwhile the remainder of the world collapses because the American consumer vanishes and there would be no need to pay a non existing nation. Reset button. Out of fear for resources the remainder of the world becomes embroiled in perpetual war and nobody dares disturb the U.S. giant.

  The Euro was a foolish foolish attempt considering the continent has had two World Wars in under one hundred year. There will be more wars our civilization is not yet sophisticated enough for peace. We are about 1500 years away from that prospect. In the meantime the United States should not just eat alone but not even pass the fucking salt.

Thu, 05/06/2010 - 10:50 | 334445 exportbank
exportbank's picture

John, just as a side note, the huge debts are the internal ones - social security, medicare, medicaid, Fannie-Freddie, pensions - both public and private, all the bank guarantee's and the pile of crap assets in the FED's magic box. I don't want to be around when you tell your grandparents that the checks aren't coming any longer. Enjoyed the read - stimulated the mind for a moment.

Thu, 05/06/2010 - 12:07 | 334646 Common_Cents22
Common_Cents22's picture

The race is on to take in more capital from flight to quality disasters overseas than our own "elected elite" can spend to get re-elected.  Getting a new credit card only postpones the inevitable of a spendaholic.   Our advantage is the lesser of evils ilk.  Be the last man standing.

Thu, 05/06/2010 - 10:59 | 334468 IBelieveInMagic
IBelieveInMagic's picture

The US had the best deal so far -- so it has the greatest to lose!

Thu, 05/06/2010 - 11:32 | 334531 Ned Zeppelin
Ned Zeppelin's picture

got oil?

Thu, 05/06/2010 - 21:04 | 335911 Moneygrove
Moneygrove's picture

Got fire wood ???? Got a wood stove ????????

Thu, 05/06/2010 - 12:18 | 334685 Anonymouse
Anonymouse's picture

Ignoring the moral issues of intentionally repudiating debt....

I think you are ignoring the fact that the US is not the only player with nukes.  I don't think China would take repudiation very kindly.

Thu, 05/06/2010 - 12:32 | 334730 John McCloy
John McCloy's picture

  I hear what you are saying and nobody could predict how this would play exactly however my feelings are China would be too concerned with feeding their citizens without the U.S. manufacturing dollars and bond yields from the U.S. Essentially their only comparative is that they are the "factory of the world". I am not saying this could not lead to war but I think every other nation is well aware that this is a war they cannot likely win. What upsets me the most is that now we can glimpse at the dangers of central bankers and plutocracy. I would be more concerned about Kim Jong Il on his death bed ordering a submarine armed with a nuclear missile to park itself off of D.C. or New York. A man like that could care less about the death of his own people if he will not be around next year.

Furthermore the most frightening consideration is that Russia and China get on the phone and decide they will hit the remaining cities together and divy up America now that Noko sacrificed itself to take out the leadership and financial markets. This country would not be able to function let alone retaliate if China & Russia followed right behind. It would be the only chance they would ever have at taking the most valuable land mass on this planet. Scary stuff. I will go have some Kool-aid now and watch CNBCs animal orchestra.

Thu, 05/06/2010 - 13:03 | 334819 AnAnonymous
AnAnonymous's picture

The debt is already repudiated.

The underlying motive to lend wealth is in return to receive more.

Remove the mask of productivity and behold! Paying back nominately a debt shall  lead the lender to receive less.

The debt will be paid back. Now is simply not the time.

In a consumption game, debt shall be repaid when goods are scarce or their circulation low, never in the high.

Thu, 05/06/2010 - 10:34 | 334398 exportbank
exportbank's picture

Every politician in every nation is planing to "export their way to prosperity". Watch trade protectionism torpedo that.

The truth is often ugly but the truth is your friend. Face up to it and you have a fighting chance - deny it and reality will (at its own pace) roll over your nation.

Thu, 05/06/2010 - 10:34 | 334400 lynnybee
lynnybee's picture

this was an excellent article.    thank you, Tyler, for all that you do, i love your website & i've learned so much.    sincerely .......

Thu, 05/06/2010 - 10:45 | 334426 Mitchman
Mitchman's picture


Thu, 05/06/2010 - 10:37 | 334407 Ras Bongo
Ras Bongo's picture

I believe this EUR trashing is to divert attention from the forthcoming GBP and USD failure. The fiscal situation in the US and UK is far worse than in the EURO zone, but nobody seems to care about it right now. It is only a matter of time...

Thu, 05/06/2010 - 11:27 | 334515 gringo28
gringo28's picture

No, wrong. Euro zone is worse which is not to say things here better in the US, just less worse. Time to stop thinking US vs Europe; they are both going to slide for different reasons relative to commodity/EM Growth countries. But if you asked me which one has a higher probability of experiencing socio-political conflict? Hand's down it's Europe.

Thu, 05/06/2010 - 10:44 | 334419 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

As mentioned by another commenter (Tyler, you rock, and can you cover this?), the IMF is having a meeting on May 11th to discuss our future. CNB-fucking-C had Jim Rickard talking about it.


The IMF press release


and another blog about it

Thu, 05/06/2010 - 12:26 | 334710 merehuman
merehuman's picture

Jacks,  Thank you for the links.

Thu, 05/06/2010 - 10:42 | 334422 desgust
desgust's picture


It's soooo stupid to compare European and American history!

We don't want to be Eurolanders!

We are different nations and we want to stay so!

Nobody really asked us what we want and we don't want to be ruled by  unelected politicians. Our own treators are enough! We want to stay different and competitive.

Europe it's on its way to became a dictatorship!

Death to the fiat euro! I hope the euro is finished, better yesterday than tommorow! Some have prepared and the others who have been busy consuming, yes, a haircut, who cares? Their damned politicians will help them - not.


Thu, 05/06/2010 - 11:31 | 334530 zenmeister
zenmeister's picture

Dood, you seem tense. R-E-L-A-X!


Thu, 05/06/2010 - 11:50 | 334587 Hephasteus
Hephasteus's picture

Well. You just wouldn't fit in at australia or canada. You just wouldn't be the right colour.

Thu, 05/06/2010 - 11:55 | 334602 Ripped Chunk
Ripped Chunk's picture

Zurich is a good place for the meeting. The Swiss will not let 250,000 protestors into the country on May 10 & 11.



Thu, 05/06/2010 - 10:50 | 334447 kaiten
kaiten's picture

I´ve got a strange feeling in the guts that it´s not John R. Taylor who´ll decide whether euro is finished or not.

Thu, 05/06/2010 - 17:18 | 335308 SlowLoris
SlowLoris's picture


Thu, 05/06/2010 - 10:55 | 334455 THE DORK OF CORK
THE DORK OF CORK's picture

I think the Internet gives people a attention deficit disorder - we are moving from pillar to post and back again.

All of a sudden people are talking of a dollar ascendancy when it has done nothing to reform its internal contradictions - Europe is up to its eyeballs in shit but this ain't over yet folks.

If the dollar system holds together then America will indeed be the last man standing but what makes you think the German and French elite will give up this historic opportunity without a fight - if they recognize the cuckoo's in the French and German executive then things will change.

I am expecting massive capital walls to be built around Europe - if that happens the Anglo Saxon economies will be deprived of revenue and will have to reduce consumption dramatically as they will have to put their remaining capital into actual real capital growth.

The world is too complex to expect certain linear outcomes as events create new political and econimic realities that change events again in a even more unpredictable cascade pattern.

Thu, 05/06/2010 - 10:58 | 334464 kaiten
kaiten's picture

Indeed, euroarea have one of the highest saving rates in developed world. There´s sufficient money in system to finance the deficits.

Thu, 05/06/2010 - 12:01 | 334626 DoChenRollingBearing
DoChenRollingBearing's picture

Euroland, even Greece, has a lot of gold.  More than we do.

That will help them at some point.

Thu, 05/06/2010 - 12:41 | 334760 THE DORK OF CORK
THE DORK OF CORK's picture

Just remember the Gold vault in the NYFR is international territory - do not get any ideas or we will send the French Navy over..............

On second thoughts : please please no cheating, we are all gentlemen yes.

Thu, 05/06/2010 - 11:41 | 334555 Ripped Chunk
Ripped Chunk's picture

Yes sir! You allude to something that used to be known as nationalism.  The  marauding scumbag bankers seem to have discounted this "phenomenon" but they will soon see what it is all about. Something that rests withing the average citizens gut. The average citizen who is not completely consumed by greed.

Thu, 05/06/2010 - 11:46 | 334572 DiverCity
DiverCity's picture

+ 1776

Thu, 05/06/2010 - 11:53 | 334597 Adam Neira
Adam Neira's picture

A commonwealth of nations under the sway of an international authority is possible.

Thu, 05/06/2010 - 12:20 | 334694 chumbawamba
chumbawamba's picture

The dollar is rallying because investors are likely shifting out of various vehicles and into cash before they decide what to do next.  It'll be just like the Fall of 08, but this time the dollar will go down and stay down when everyone cashes out into metal and physical commodities.

I am Chumbawamba.

Thu, 05/06/2010 - 12:33 | 334737 merehuman
merehuman's picture

Hi Dork, funny name that. Intuitively the dollar rising as it has gives me the willies. I fear it could drop suddenly and all expectations of a prolonged downturn are a false notion assumed by those who have attachments to the present system.

Thu, 05/06/2010 - 10:57 | 334460 Cursive
Cursive's picture

The critical actor who served as midwife at the dollar’s birth was Alexander Hamilton.

It's not as though this is something that Americans should be proud of or other regions should be proud to emulate.  History will show Hamilton as the banking shill that he was.

Thu, 05/06/2010 - 11:29 | 334524 WaterWings
WaterWings's picture


He was born in the West Indies, had no loyalty to any state, and therefore was at the forefront of making DC as centrally powerful as possible.

Thu, 05/06/2010 - 12:00 | 334623 Rossalgondamer
Rossalgondamer's picture


Finally signed-up/in to 2nd that.

Thu, 05/06/2010 - 11:02 | 334474 godfader
godfader's picture

R.I.P. Euro. Where is Peter Schiff? Dollar collapse not imminent anymore? LOL

Thu, 05/06/2010 - 11:04 | 334480 Segestan
Segestan's picture

Like a whine goblet that has just been dropped , this whole ponzi gig and all it's many preposterous expectations will shatter into a thousand little pieces all with the ability to cut and bleed. Nothing this big ever ends in peace with good statesmanship at the helm. Man the ramparts!!!

Thu, 05/06/2010 - 11:16 | 334483 DiverCity
DiverCity's picture

The author says that:  "Without taxing and borrowing power, there is no way to square the inter-euro trade balances between the countries except ‘internal devaluation,’ which means years of deflation and poverty for the voters – and protestors – of the deficit countries." 


Not so fast -- there is one way to square the balances and it's gold.  Don't forget that the European nations are not, as a rule, gold poor.  If that happens, what happens to the "price" of gold?  Perhaps the Euro was designed with just such a crisis in mind??.... 

Thu, 05/06/2010 - 11:26 | 334510 Segestan
Segestan's picture

you mean the Gold Nuclear Option of say 10,000 per ounce? True but such a change will save what should be saved and without a realistic view even this will fail.

Thu, 05/06/2010 - 11:22 | 334490 Segestan
Segestan's picture

Slow server ... double post

Thu, 05/06/2010 - 11:34 | 334537 BlackBeard
BlackBeard's picture

Eurozone was a stupid ass idea anyways.

Thu, 05/06/2010 - 11:38 | 334552 -273
-273's picture

ZH T-shirts (American Apparel versions) are now back in stock, priced in bargain Euros! Get 'em while they (and the Euro) last!

Thu, 05/06/2010 - 12:06 | 334641 WaterWings
WaterWings's picture

I want a t-shirt with a picture of Marla and one of her zippy comments on it.

Is it just me or is Marla running silent, running deep?

Thu, 05/06/2010 - 12:52 | 334787 Cpl Hicks
Cpl Hicks's picture

Me too.

I like the 'cave' pic that came up the other day when the website was (mysteriously?) down.

Saved it....smooooking!

Thu, 05/06/2010 - 11:46 | 334571 RagnarDanneskjold
RagnarDanneskjold's picture

Deutschland uber alles!

Thu, 05/06/2010 - 11:48 | 334581 dot_bust
dot_bust's picture

The process of recovery can only take place if all the bad debts are cleared out of the global economic system. I'm actually suggesting that systemic collapse would be good. The reason that it hasn't been allowed is that the system belongs to a handful of rich families in the U.S. and abroad. Ordinary people don't own the banks and brokerage houses that comprise the system.

This brings me to my main thesis, which is that the bailouts of banks and countries are theft and only serve to prolong the recession/depression. The bailouts transfer wealth from the middle class to the rich. This wealth transfer involves devaluing currencies by printing money for bailouts. It also involves a prolonged economic downturn that depletes the financial resources of the poor and middle class and lowers their wages, forcing them to work longer and harder for less money. This enriches the upper class.

Clearly, bailouts must be made illegal. Only when the natural process of bankruptcy is allowed to proceed will a return to economic growth be possible.

Thu, 05/06/2010 - 11:50 | 334586 Robert J Moran
Robert J Moran's picture

If the Euro implodes, I'd go long the German Mark in a heartbeat!

Thu, 05/06/2010 - 11:52 | 334592 godfader
godfader's picture

EURJPY blowing out. Good night.

Thu, 05/06/2010 - 11:52 | 334593 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

according to


theres a German opposition politician saying he will vote against bailout

Thu, 05/06/2010 - 11:52 | 334594 GloriousBastrd
GloriousBastrd's picture

GBP/JPY, EUR/JPY, AUD/JPY EUR/USD in total free fall

Thu, 05/06/2010 - 11:55 | 334603 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

wow ... equities holding up suprisingly well EUR/USD went as low as 1.2653!

Thu, 05/06/2010 - 11:56 | 334610 godfader
godfader's picture

Did anybody just feel how approx. 1,000,000 japanese FX gambling accounts just blew up with their NZDJPY and AUDJPY long positions @ 1:100? Poor Japanese housewifes.

Thu, 05/06/2010 - 12:05 | 334640 GloriousBastrd
GloriousBastrd's picture

holy crap yeah! I'm looking at a 4-hour window and seeing -200 pip change on AUD/JPY, -400 pip change on GBP/JPY, -200 pip on the EUR/JPY.  EUR/JPY was last at this level in Feb 2009.  Massive flight to "safety" in the yen.  GBP/JPY wasn't moving much the last few days but seems to be playing catch-up now with UK election uncertainty.  If EUR/JPY is supposed to move as S&P moves, I would think it should be corresponding with a massive drop in the S&P.  Either decoupling going on or S&P will soon move to catch up. 

Thu, 05/06/2010 - 11:56 | 334615 JacksCompleteLa...
JacksCompleteLackOfSuprise's picture

WTF is up with GBP? Its tanking against everything, including the EUR!

Thu, 05/06/2010 - 12:33 | 334733 Kegfreak
Kegfreak's picture

Election uncertainty? 

Thu, 05/06/2010 - 12:19 | 334687 Thoreau
Thoreau's picture

Get a grip; the Euro ain't going anywhere - just yet. Germany's running the show right now, and the last thing they want is a strong currency. The Chinese had to pay a lot for weak Yen; Germany is following suit, until it no longer suits them!

Hopefully, the EU will ultimately fail allowing individual countries to maintain some semblance of their respective cultures.

Thu, 05/06/2010 - 13:36 | 334926 MarketFox
MarketFox's picture

Here's the EURO....


Any "blanket over" the problems currency WILL FAIL....

It is sheer lunacy to expect that a simple blanket currency will resolve indigenous differences between sovereign and uniquely indigenous populations....

So much for "A New World Order"....

More like "A New World Disorder"....


Thu, 05/06/2010 - 13:51 | 334983 poorold
poorold's picture

I would very much like to see discussion of what changes will necessarily result.

First though, what is going to happen to force the changes?  Clearly the CB's are currently conspiring to simply continue to print money to forestall the problem.


Well, what is the problem?


There is simply not enough money to go around anymore.  Not that there ever was.  But, it is blindingly obvious now that governments are asking to borrow money that everyone knows cannot be repaid--EVER.


I'm not convinced gold is the way to go because I believe as a population, making believe some shiny metal is the medium of exchange simply isn't going to work.  And there is clearly no reason to artificially tie x amount of FRN's to some shiny metal to fool yourself into thinking the paper in your hand has real value.


It seems more likely the plastic card in your wallet will have a certain number of debits credited to it and price controls of necessities will be instituted.


First though, the printing of money is going to have to continue in the US simply because if government transfer payments stop, tens of millions of people are instantly homeless and hungry and these hungry people will be knocking on the doors of those who have food and housing.


To me, my previous comment deals with the realities of what the leaders are talking about right now and trying to solve this problem and, I'm sure, a multitude of others, is the key to understanding what the likely future will be.


At some point, I also believe population birth controls will be instituted.

Thu, 05/06/2010 - 14:26 | 335137 AnAnonymous
AnAnonymous's picture

Just some remarks: you tell not enough money going around yet still speaking about money printing.

Money is not an issue.Credits are emitted everywhere. The issue is that the resources needed to support certain societies can no longer be injected at the proper rate.

This cant be expanded, contrary to money supply.


Population birth control is useless as it is a consumption issue and human beings have no standard consumption.

A food stock fares well with 8 billions starving human beings.

Much better than when consumed by one million people who feed 5 times per day four times what they need each day.


Control of population is not a solution. Expecting starving people to bail out the glutoons is not a solution.

The only solution is either to reduce the number of glutoons or to turn them into far less eating people. 

Thu, 05/06/2010 - 18:39 | 335503 poorold
poorold's picture

Sorry, let me be more specific.


When I say there is not enough money to go around, I mean there is not enough accumulated wealth (i.e. savings) to go around.  Clearly there is enough "money" because the Fed can just keep printing.


Given it's clear that ANY government spending above current tax receipts is unlikely to EVER be repaid, what is the solution?


I expect TPTB will tax lesser mortals to death to get all the peons on the level, much lowered playing field as they are enslaved to work for the state.

Thu, 05/06/2010 - 14:11 | 335046 LeBalance
LeBalance's picture

Fear motivates it all.

I am scared of the uncertainty of tomorrow's earnings, so can I be more sure by controlling my competition, the cost of business, etc?

This is a emotional issue.  Ready the psychologists' couches!

The reform stage, eh?

Personal responsibility, almost no laws, sidearms for everyone, if you're just too much of a bastard 20 of your neighbors are going to come for a neck-tie party.  But that is just a wee bit too uncivilized.  And that is my vision, not what I need.

I will receive what I need from what is to come and I know I will aid in the change because I do not feel comfortable with the present "kleptocracy."

I thank each and every one here and especially those who make this site happen.

Thu, 05/06/2010 - 14:29 | 335152 TruthHunter
TruthHunter's picture

"About 10% of us really know what's going on. The rest are left wondering at the magic and mystery of the universe.

I am Chumbawamba."

The way I heard it was "1% think, another 7% think they think.
The other 92% would rather die than think.
Another similar is " 1% makes things happen, another 7% watch
what happens and the rest wonder what happened"

I really don't think any where near 10% know whats going on,
even here.

Fri, 05/07/2010 - 05:23 | 336541 Grand Supercycle
Grand Supercycle's picture


MAY 1st:

"The weekly DOW chart shows an expanding wedge indicating a significant move is probable... this remains an overbought bear market rally and the uptrend could falter at any time.

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sun1's picture

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sun's picture

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