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John Taylor Parallels Current Situation To World War 2, Predicts Global Debt Structure Could Collapse
After the Phoney War, Things Really Got Nasty
October 21, 2010
By John R. Taylor, Jr.
Chief Investment Officer
Not too many traders remember ‘the phoney war,’ or the Sitzkrieg, as it happened 71 years ago. After Hitler invaded Poland on the first day of September 1939, Poland’s European allies France and England declared war on Germany, but nothing significant happened on that front until the following May when the German Army rolled through Luxembourg, the Netherlands, and Belgium and into France. Although the horror started in Poland in the fall of 1939, for a few months, the rest of Europe was spared that horror, which eventually lasted through the next five years. Strangely, this past September (2010), the US equity market rose by about 8.8%, its best return for that month, since that same September (1939). To me the parallels are ominous. What were those people thinking back in 1939? Could a coming world war have that positive an impact on the economy and on markets? They must have been crazy – of course equities gave up their gains and were cratered in May 1940 when Germany invaded the west. But, what are we thinking of now? A war has just begun. Didn’t Bernanke and the Fed announce in late August at Jackson Hole (and multiple times since then) that the US was going to enter QE2 and debase its currency setting off a currency war. Bernanke, like Hitler seven decades ago, had been warning everyone who would listen for years.
On November 21, 2002 he said that he would debase the US dollar if the American economy looked as though it would go through the same lost decades that the Japanese have recently endured. Now, it is clear that he has been true to his word and the currency war has begun. Although it took Guido Mantega the Finance Minister of Brazil to state the obvious saying that “an international currency war” had broken out, the reaction at the recent IMF meetings and among analysts of all stripes make it clear that this situation is well comprehended by everyone who is paying attention. The US has thrown a rock through the world’s plate glass window. This country will be severely disrupting the current global monetary system because the Federal Reserve – and not necessarily the Obama administration – believes that the status quo is not in the interest of the American people.
Right now the world is in the ‘phoney war’ period as the US has only just begun the process of flooding the world with excess dollars. The recent IMF meetings had and the coming G-20 meeting will see lots of venting and some skirmishes but no real attacks. Countries are complaining loudly because Bernanke’s excess dollars are being sold and their own currencies are being purchased, rising as the dollar declines. As most are trying to slow that rise by buying the dollars as reserves, reserves are climbing, their money supplies are ballooning, and inflation will surely follow. With inflation and strong currencies, these countries will see their trade positions destroyed. The real war will begin as countries place restrictions on capital flows. Mantega seems as though he will make a good economic general as Brazil is one of the first to move, taxing bond inflows. Interestingly the Brazilian leaders will miss the G-20 meeting in Seoul, avoiding any direct discussion of their actions.
Capital controls are likely to spring up in Asia and in other attractive economies during the next few months, but the really destructive war begins when tariffs appear. This should happen next year – maybe in May, mirroring 1940 – because by then the next recession should be in full force in both the US and in Europe, forcing many millions more out of work. The political pressure for raising tariffs in the US is intensifying and the new Tea Party supported Congressman will help tip the political scales in that direction.
This war will not be fought for territory, but for markets and wealth, and when tariff walls are raised the destruction of livelihoods and property will be almost as dramatic as in the old fashioned shooting wars. With the loss of economic value, the global debt structure must collapse and entitlement promises will not survive.
h/t Teddy KGB
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Tyler,
This is just a fabulous article. Needs to published on this sight.
http://www.creditwritedowns.com/2010/10/ny-fed-joins-attorneys-general-in-pursuing-foreclosure-frauds.html
Please everyone keep moving, nothing to see here, please keep moving....
The only reason the FRBNY is involved is that it had an affirmative obligation to investigate potential wrongdoing at BAC as a result of Maiden Lane's fiduciary obligations, once contacted by Gibbs and Bruns. Not doing so would put it in the uncomfortable position of not pursuing best equitable treatment on behalf of taxpayers. The Fed will shortly commence buying not only USTs but MBS all over again. If the Fed was so concerned about transparency, perhaps they could disclose how many of its $1.7 trillion in MBS are properly titled? If FNM/FRE is not aware, then Brian Sack most certainly has no clue what assets he has on his books.
IMHO it is even worth, because it seems the very same "assets" they are buying up like warm pretzels are the very same fraudulent MBS the banks are IN for! Thus, engaging in this scheme makes it a fraud in itself for the FED'sters, this is not going to end well, for none of us, rich, poor or otherwise!
But that's the point. The Fed doesn't want to do this, but has been forced to do it. And no matter how carefully they may want to skirt around the fraud issue, it becomes more and more difficult the more they are directly involved. You know-sunshine, disinfentant and all that good stuff.
Tyler,
You surely will love this one!!
http://www.ritholtz.com/blog/2010/10/foreclosure-fraud-for-dummies-4-how-could-this-explode-into-a-systemic-crisis/
This is a really well written piece.
But if you wanted to make an even better comparison then compare the current IMF/G20 meltdown to the 1933 London Economic Conference.
http://www.docudharma.com/diary/23391/the-crowning-failure-of-the-old-go...
TD: junked you by mistake.
Gloomy: the rest of us have the electroweb and can read, so stop the links
You can unjunk a comment by clicking on it again.
I like the links! Something that someone else found interesting might also interest me. FFS, stop with the rules on how other people should conduct their lives!
PIMCO has already tipped the FED's hand that Bernanke will be buying MBS. ForeclosureGate is no such thing. Watergate brought down a presidency....the worst ForeclosureGate will do is cost civil fines equitable to about 2, maybe 3% of the profits the TBTF banks will eventually reap. It's a total non-issue. FBI investigations, state attorney generals investigating.....all a grand show. Or did we already forget Vampire Squid's $550 Million penance or Mozila's $67 Million penalty (from his estimated $400 million take home). No harm from fraud, no foul from dumping people in the streets, silence from Obama and Holder, business as usual.
I still have that sinking suspicion that mortgagegate is, like you said, more theater. The unfunded liabilities on the other hand... can't be swept under the rug. That is, paper gains/losses can be hidden (at least for awhile), but cash flow is bitch when the money runs out.
Yep ....
Been speaking to this for a long time ....
It's time to read, its called history.
"The US has thrown a rock through the world’s plate glass window."
remember the koolaid refrain of how the world would love the us once the messiah was elected - LOL
wheres the love?
They have one plan and they will stick to it. Too many PhD's thinking one way because they know better??
For the most part, PhDs will toe the company/party/institutional line or their grant/book/paper money will be endangered. Yes, I know that's a sweeping generalization and thus applies to no one. But I have found that many (not all) highly educated people have a high degree of confidence in their own thought process, regardless of how narrow it might actually be. Often their own bias is as obvious as their open fly, something they're usually the last to notice.
Zip up there old chap, your open mind is letting in one hell of a draft.
Zip up there old chap, your open mind is letting in one hell of a draft.
I believe this may truly be the first time I've heard "one plan" lauded as the epitome of an "open mind."
Something new every day.
Ummm
I was commenting about PhDs, not "one plan". I even highlighted a quote, which did not include "one plan", to make sure there was no mistaking my intent.
Je vous demande pardon . . .
Time to sign out for a couple hours!
EDIT: Gonna watch a movie. But thought it worthwhile, since we're butting heads of a sudden, to let you know that I am not junking you.
I didn't think you were. But you do seem to be stalking me. What is it about me that just burns your ass and triggers all those neurons?
Go back and count all the times you responded to something I said to the community at large or someone else and then look at how few others you've responded to today.
Looks like stalking to me.
Nope.
You're a high-frequency commenter most days--between that increasing the likelihood of my responding to you and the way our areas of interest and emphasis intersect, some days I will be "following" you, but merely in reply. Look how a single reply develops into a long thread that would appear to be more than just a single case.
It's nothing personal. I do enjoy being able to hash out thoughts with someone who speaks a similar language. Yes, sometimes my ass does get burned, as you can tell, by my perception that you're using your influence in a pessimistic way at times, and that is getting old. But that is an extremely small portion (if any) of my comments most days.
I'll try to be more sensitive to your feelings about this. I don't want you to feel stalked nor vice versa.
I'm using my influence in a pessimistic way at times? LOL And this means what to you, assuming this is correct and not just your worldview being disturbed?
And what do you call your constant false hopium ingestion and regurgitation?
"and the new Tea Party supported Congressman will help tip the political scales in that direction."
really? where is the tea party pitch for "raising tariffs????????
Agreed. At its core the TP is ostensibly a collection of the fiscally conservative from both parties. I don't see how raising tariffs can be implied.
Somewhat agreed, however when it comes to the trade barriers we are not the country who started that war the first.
There is another analogy, like the world was watching the Hitler and did nothing so many years ago, the Western world has been watching Chinese entry into the WTO while limiting the entry onto its own markets and did absolutely the same - nothing.
It's easy to jungle the numbers sitting on economic high horse and conclude that overall we as the country are better off due to the trade with China (which may or may not be true, if one takes into account such externalities and DECREASE in the social mobility and increase in INEQUALITY.) It's much harder to do so if you are part of shrinking middle class and the only thing you see in the last 10 - 15 years are shrinking wages and disappearing somewhat OK payable jobs.
And here is the kicker, what has higher UTILITY weight, some extra backs in cheaper goods for somewhat who is already wealthy (and who benefited from the trade the most) or flat salaries of someone for whom each extra dollar has much higher UTILITY and impact on overall lifestyle?
I am not against the trade in between fairly playing sides with approximately the same lifestyles. However when it comes to government backed rape of middle class, so a few multinationals can ignore labor / environmental laws, squeeze smaller competition and make a few extra backs, well such a trade doesn't make sense from the stand point of the GAME THEORY.
p.s. Nailed my 400+ level Macro / World trade courses and what was correct in terms of the benefits of trade 100 years ago may not be correct today, unless the GAME is played fairly for all.
p.s.s. There was an instance when trade was not fair and collapsed two major world economies - China & India in the 19 century were FORCED to conduct unfair trade, and as the result dropped from the world leading economies.
Unfortunately, fair trade can be conducted only if there is an independent currency used for global trade -- can't have unfair advantage of controlling the currency used for global trade and then expect other participants to play solely on your terms. This system will collapse because of this inherent conflict/flaw in design...
P.P.S.
I am always surprised by people that think so much of themselves that they actually come to believe that they can control the consequences of drastic action. Bernanke is an ass this we know. But in response this guy thinks they can just crash the Global debt structure or the other guy who preaches "Savage Austerity" and all those dispossessed people are going to sit idly by and watch the traders banksters, mortgage thiefs and others enjoy their millions. Almost comical but haughty people exist in every generation and from time to time when they get out of hand they cause real problems measured in the millions of dead. Another one that kills me are these idiots that think we can fight an economic war without it devolving into a physical confrontation. Purest fantasy.
A physical confrontation between who? That makes no sense to me. What will happen is the banksters get thrown into jail and the rule of law restored. That will end it - no need for physical "wars".
Except for one small detail. They are the violent ones that will initiate the violence before they let that happen. Right now they are limited to covert funding of hate groups but if need be they will move past that.
they will do "whatever it takes." that's who they are, by definition.
Why would they need a confrontation when they have "backup" countries and the military industrial complex will be impotent from the deleveraging process? Either they hire enough mercenaries to keep us at bay long enough to leave or they just leave... why fight? A confrontation is only necessary if they want to keep looting (despite our corpse being bare) or they're just that desperate for direct and in your face/obvious control. I don't see it.
We know they'll just be back in a couple generations... with a similar gameplan, but executed a little differently. Hell, they can pack up shop and move to the next country that will provide the best results... they'll get back over here at their leisure.
seems like a long road from here to where the u.s. military is impotent, even if we're moving in that direction. the US military machine and the integrity of its home territory are the last thing they'll give up, no?
Yes, U.S. military hegemony is the prime requisite for reserve currency status. It allows, among other things, the dollar to be backed by oil.
I have a... theory that isn't wildly popular on this site. But, I think, push come to shove, the U.S.' relatively large gold holdings would be converted into some % backing of the dollar should we lose military hegemony>oil backing. This is a possible temporary safety net.
Also, there is only so long you can defy gravity. Simply put, the credit bubble cannot be reblown and all of the excesses created thereby will all be destroyed soon enough. In short, literally everything other than a skeleton crew for the U.S. is excessive and unsustainable. This especially rings true for our industrial military complex.
However, the whole point of central banks, unified banks through systemic risk, and corrupt/conflicted politicians is not for the banks/FED to remain as viable entities in perpetuity. Rather, all of these entities are vehicles of limited lifespan. They're simply the fuselage of a rocket ship with a crew of principal actors... ultimately, it is the principal actors who will benefit from the fraud... this is one of the reasons for the large bonuses... they take risk off the table of a sinking ship. A bird in the hand... the wealth gap will be converted into hard assets and our captors will fill the power vacuum left from the collapse of our government and its military (laughably, potentially in complete ignorance of the seeming concert).
Holy shit! You've taken a massive toke on the hopium pipe there, son!
Best case is a few token bankster patsies will take the fall. Congress will escape unscathed to pass more corrupt laws to try and keep the ponzi alive until those controlling the banksters and the political hacks can implement their next scheme through the IMF and UN (which bypass the American banking and political system) ... carbon taxes (ie. a tax on breathing) and transaction taxes (ie. a tax on living/eating).
Good luck with that "rule of law" thing while the ballot box (ie. suggestion box for slaves) is the sole means used to bring Congress to heel. Hitler was voted into power with a massive majority! So was Mugabe.
The urgent first step of the solution, IMO, is for every state to take control of who owns which property within their sovereign jurisdictions and to secede from the union ... thereby making Washington - along with all the tax-sucking federal agencies and the corrupt nest of vipers - redundant. Indeed -- and I'm no lawyer so this may be incorrect -- the "winding up" of the Federal Government would pass most of the national debt to a bunch of unsecured creditors. No?
Well, it did happen that way in Weimar - the middle class in fact did sit idly by for a very long time, while the unions were out smashing windows.
Do the Tea Partiers really support imposing tariffs on imported goods??
If so, that would suck because they would be no different than the other two parties: looting and imposing their notions on everyone else by the magic force of government.
This Tea Partier doesn't, but you can expect everything bad and stupid that happens to be blamed on us from pretty much here on out.
I guess Bush has some competition.
Whenever you hear TEA Party ask yourself, "To which TEA Party are they referring?". There is the real one(Ron Paul Libertarians and fiscal conservatives of all stripes), and the neocon controlled and left-wing promoted Sarah Palin one(undercover Statists - the forces behind the D and R parties).
Fiscal conservatives do not understand modern monetory mechanics or else they are corrupt charlatans.
All of this seeming madness is very much according to plan. To believe otherwise is to be a little sleepy at the wheel.
China is the new germany, but this time around, the composition of Axis and Allies will be different. Cock-Potatoes make the strangest bedfellows.
Americ(K)a is Germany, in it's Mil Ind Complex anyways.
All we can practise is alertness and refine our in-stincts.
ORI
http://aadivaahan.wordpress.com
China the New Germany he says. The doltishness is truly astonishing. For 20 of the last 24 centuries China has been the leading power on Earth. All they are doing is getting back to where they have almost always been and are NOT pursuing a policy of expansion or Lebensraum. Furthermore in case you hadn't noticed their market is more "free" in the classical sense and operating better than ours is! Their command economy works better than our command economy does. They actually still have capital formation and investment while we mere warehouse money in dead banks. Nazi Germany was Western and a former colonial power. China is Eastern. When looking for the new authoritarians look closer to home. Watch a tea-party rally or look in a mirror perhaps.
+1
Nobody in America understands China and her approach to geopolitics ... from Secretary of State, Hillary Clinton, right on down to the "nuke 'em" trolls on this board.
You don't need to like somebody to understand them! I understand American politics, but I sure don't like it!
Funny, you completely misunderstood or did not try to understand what I'm saying, lead off with an insult and then go on to make my points.
China is the NEW Germany, which shared many of the characteristics you mention.
In addition, if you practiced reading between the lines, you could see so amny other parallels that it would hurt your mind.
Try being civil at least at the start of a dialouge.
But right there is the American way. Lead with your fist.
ORI
http://aadivaahan.wordpress.com
Here we go with the "apples to oranges" comparisons of two VASTLY different times and two VASTLY different political environments. This is really too ridiculous to comment on.
Then why did you bother?
I will answer my own question.
Because you just can't not post. You have to. You can't help yourself. Your arrogant sociopathic personality requires you to do so as a matter of compulsion.
That's quite an indictment from someone who posted four times within minutes on the same thread. Nice.
Buy a new watch asshole.
Let's go over your mortgage restructure again while we have an audience why don't we?
on Wed, 10/13/2010 - 08:28
#646160
Have you noticed the surge in re-fi activity? Any fallout from this is more than being absorbed by strong re-fi's. This is exactly what the Fed wanted and it's working. Bringing down mortgage rates frees up tons of money to stimulate the economy through consumer spending. Can't you see that?
by A Man without Q...
on Wed, 10/13/2010 - 08:34
#646186
"Any fallout from this is more than being absorbed by strong re-fi's"
Since you clearly don't know what you are talking about, why don't you refrain from making dumb comments.
by functionform
on Wed, 10/13/2010 - 09:01
#646319
Not sure why you were junked, you're right.
by Miles Kendig
on Wed, 10/13/2010 - 22:37
#648487
Oh, that's just Harry saying that the last box of Massengill didn't rinse all the sand out and he's still chafin'.
by Robslob
on Wed, 10/13/2010 - 08:46
#646256
Yes Harry
Which will promptly be eaten away by surging food, energy and gas prices.
Net even best case...well done Barry.
The good news is I can now stop paying my mortgage and buy gold and silver...
by Miles Kendig
on Wed, 10/13/2010 - 22:32
#648489
WHOT !!
by Ripped Chunk
on Wed, 10/13/2010 - 09:04
#646337
What surge? Apps are at a 20+ year low.
Try refing if you bought a property between 2003 & mid 2008. Unless you put down 45% or better its a no go.
by HarryWanger
on Wed, 10/13/2010 - 09:09
#646371
I just did a re-fi on a property bought in 2006. Original mortgage on $1M place of $650,000.00. New mortgage, within conforming rates here, $500,000.00. Went very smooth with no hitches. And, even better, used some of the profits from AAPL trades to pay the difference to bring it within conforming levels.
So, I did what you said is impossible just 4 weeks ago.
by RichardP
on Wed, 10/13/2010 - 09:46
#646487
Sounds like you have a large difference between market value and amount refinanced. Which was Ripped's point.
by Ripped Chunk
on Thu, 10/14/2010 - 08:06
#646687
You initially put down 35%, bravo for you. But you paid down balance to restructure (not refi) because the value of the property has apparently dropped significantly.
Not many can afford to bring cash to the table at a refi. And if they could, why not deploy that money to purchase other productive assets or pay down more costly debt? Unless of course the bank was pressuring you to put more skin in?
Your boast is a different scenario all together from the one I posted. Especially if the original loan was 90% - 95% LTV.
the one thing that money printing and inflation is going to do is reduce the value of your outstanding debt in at least nominal terms. I have to question the sense of paying it down. it's dead money you paid down on that mortgage. Everyone should run out and borrow as much as they can before the inflation takes hold. Wait, isn't that exactly what the fed wants us to do? Hmmm...
Thus saving the exploitative "system" once again. And all it took was a few large clips from the edges of the "coin" in your pocket. No big deal, right? :>)
Yes, excellent observation. Inflation wipes out all debts and the banksters own the politicians and the debts. Why would they wipe out something that will give them license to populate those FEMA camps with busted (ex) citizens? The goal of any bankster is control - monopoly - of the money supply, the market, and the global population.
Debt is a tool for control. I don't see the rich men giving that up.
"Debt is a tool for control"
Moreso than TV or drugs.
Global debt structure "could" collapse?? Really?
Barring a massive accord where everyone would have to eat some shit, it is inevitable. Therefore, so is a major war.
Chi-ching !!!! WAR & RESTRUCTURE = BANKSTERS WIN AGAIN !!!!!!!!!!!
It is to laugh. Preadventure something happens in the Middle East that requires our forceful attention. Maybe the beligerents in Israel and Iran get into it. Maybe a crisis within the Saudi Royals. Maybe Inda and Pakistan have a serious row but something. Suppose for a year prior to that on the good advice of our banksters and political hacks that we have been wagaing quasi-economic war against China and the BIRC countries. A 50% loss on their reserve holdings the beginnings of social unrtest in their countries because of decreased growth etc. Suppose at that instant the Chinese decide to repatriate Taiwan. WHAT ARE YOU GONNA DO THEN BRIGHT BOY? Have you ever looked at a globe or paper map of the Earth? Your choices are expose the fleet to a very high probability of tremendous loss and with it American Imperium, engage in a nuclear confrontation or let them take their territory and with it a lot of our semi-conductor capacity. These musings are all so silly it's astonishing but the political leadership here is so bad leading a bunch of mindless citizens who are aboslutey devoid of any critical thinking skills whatsoever I could see us stumbling into it.
So your conclusion is? What? You are right and there will be no war? No major war? No debt crisis?
Or just that our fleet is exposed and no one has the balls to risk a nuclear confrontation because it would cut off our chip manufacturing access?
Otherwise, I like your flow and style.
My conclusion is that we should become serious about our own problems much like the British have and start implementing solutions. Trying to shift blame to China or look to them for solutions or worse yet treat them with the rod as a distraction form our own failures would almost certainly end badly. So when people suggest we are going to wage an economic war or just blithely let the Global debt structure collapse and they themselves are going to be fine because they own gold I just try and remind them of the foolishness of that. It don't work that way. Never has.
My conclusion is that we should become serious about our own problems much like the British have and start implementing solutions. Trying to shift blame to China or look to them for solutions or worse yet treat them with the rod as a distraction form our own failures would almost certainly end badly. So when people suggest we are going to wage an economic war or just blithely let the Global debt structure collapse and they themselves are going to be fine because they own gold I just try and remind them of the foolishness of that. It don't work that way. Never has.
The British? Ok, I get it, you are pulling my chain. Hey, I like a good laugh.
The first shot in the global debt restructure war was fired today: Anglo-Irish.
If they can impose restructuring and haircuts then nobody is safe.
Bank bondholders everywhere know they're sitting on time bombs. The prevailing winds are now turning against them.
The basic deal which "Saved The World" in 2008-9 was a globally coordinated, unlimited and unconditional taxpayer-sponsored bailout of all banks (which are interconnected in a precarious debt matrix).
The fundamentals of the deal started fraying since May: global developed economies are not picking up enough to offset killer underwater debt and the huge overhang of derivatives referenced.
Now the first brick in the dam has busted: bondholders forced to accept a big time haircut.
Bottom line: The haircuts DO NOT COMPUTE! The bridge computer aboard the Death Star is flashing red and screaming "Warning! Warning! Self-referential, fully interdependent, redundant debt-matrix about to go Super Nova! Abandon Ship!"
"The basic deal which "Saved The World" in 2008-9 was a globally coordinated, unlimited and unconditional taxpayer-sponsored bailout of all banks (which are interconnected in a precarious debt matrix)."
That "deal" was very short sighted as it did not account for the massive contraction in ALL incomes which most taxes are based on and the continuing erosion of the banks due to the massive level of fraud and gambling based on the financial "image" the frauds portrayed.
Game over fuckers. Instead of wasting more productive lives in a shooting war why don't we just kill all of the bankers???? The legislators will see the bankers being killed and flee to Paraguay or some other non-extradition country. 2 useless groups of people out of the pictue.
Probably is game over soon as rates rise and interest expense absent current very low rates approaches an untenable proportion of the budget. I am not sure that killing the bankers accomplishes anything. There will be new bankers and new legislators, and in the absence of some rules that establish expectations that they do not sleep together and rotate beds in some kind of swingers gone wild scenario like we currently have, the same set of shiteful conditions will arise again. That is unless you really do want to return to a medieval feudal type of existence. Personally I like my cars and I like my JetSkis and so on and so forth so no thanks. What is the solution? I do not know and I do not even have confidence that there is one. The current system is really the worst, except for all the others.
swingers gone wild scenario like we currently have +100 good image.
We don't have to go back to the medieval sort of existence to be serfs, you know. Tax freedom day was April 9th this year, I think. You and I pay more than 25% of our labor to our feudal lord.
It will become an old-fashioned shooting war as the creditor nations will need to enforce their debts
It always devolves to that doesn't it. I guess they don't have time to teach history anymore as nobody seems to have noticed.
It always devolves to that doesn't it. I guess they don't have time to teach history anymore as nobody seems to have noticed.
And the largest debtor has the biggest, newest, and most numerous guns. :)
No such thing as an "old-fashioned shooting war" between nuclear armed nations.
MAD is still in effect, and as such, there will be no broad based war. There might be a few exchanges of shells, maybe even a few air or naval battles, but there is unlikely to be an all out war until one side believes they can win it without triggering a nuclear response. We might be able to fight over Taiwan this way, or have a proxy war in NK or Iran (highly unlikely, but possible--a war here won't necessarily be a proxy between the US and China), but not much more than that.
Very good, but surprised to see he doesn't take it to it's logical conclusion, ie real war.
The global debt structure is collapsing wether there are tariffs or not. The trade war is just a symptom of the larger problem.
Picture this: If Anglo-irish can do it, than any PIIG bank can.
That is: reduce their onerous and impossible debt-structure that threatens to enslave the next 3 generations of citizens to debt-slavery.
Now we have a Real problem since everything is predicated on nobody saying that the Emperor has no clothes: that the entire trans-Atlantic banking system is busted way, way, way beyond repair.
We may have a crash today
The future is scary when a John Taylor investors letter sounds as dire as your common ZH post. Not that I disagree with most posts on ZH. I'd just hope my judgment is wrong. When Taylor writes to clients in this manner it confirms the likelihood of a very bleak future.
+++
+++ also
If history is any judge at all, this will play out the way the elite want it to. The people will be dumped on: to starve, die in war, lose their belongings and a new order will be imposed by the same elites that control things now.
You can plan for your own protection, but like many plans-things can go astray.
It is the use of government and law that is the problem. It allows for the use of violence against the greater population for the benefit of the elites. Until the people walk away from the responsibilities and duties imposed by governments and their controllers, we will continue to experience the trauma and drama of as the world burns.
+++ the comments on this thread are rocking hard
My vote for ZH Thomas Jefferson of the Day Award
Ask the elites in France where they are getting gas/diesel now. LOL
Some dislocations in the chain of just on time deliveries effect everyone.
Can't eat bread unless the trucks deliver the flower to the bakeries.
BTW, the so called 'phony war' of early WW2 was nothing more than Hitler using most of his troops in the East. Once the dust up in the East was concluded (until Operation Barbarosa), German Armies were shifted to the West and hostilities commenced immediately. Read 'The Rise And Fall Of The Third Reich' by Shirer for details. Excellent first hand account.
Appreciating the prospects for an increased one dollar, one vote dynamic. As a primary question remains as to where and how the expressions of wealth will actually end up and under what kind of o/s.
Meanwhile the US will continue to act like the all knowing adolescent 800 pound gorilla that has the power to implement all of its wildest fantasies and force them upon its doting seniors. While everyone begins to appreciate that this gorilla is gonna pull the rest under water since there isn't enough flotation available to save the gorilla, or anyone else under current or expected operating conditions.
Sheesh,
No, they were not crazy. The hofjuden banks profited nicely. As planned and designed. That was the whole point. To hell with the euro economy.
Who do you think is going to profit this time around? That's what I want to know.
"No, they were not crazy. The hofjuden banks profited nicely."
Where on Earth do they teach you your history? Yes things improved between 1936 and 1943 but after that there were a few minor problems that more than erased all the prior gains and nobody got out with the profits. They were physically destroyed. Killed. Doesn't sound like the best investment model in the World to me. It's notoriously difficult to enjoy wealth and Worldly stature when you are no longer in it. Additionally the relative improvment from 1936 to 1943 has to be kept in context. Always remember that Goering himself said the Nazi's could not have come to power had it not been for the 1922 -1923 inflation.
Who are "they"?? Are you saying that Oppenheimer, Rothschild et al. that financed both sides were destroyed? Killed? That's what I want to know.
You guys are both right.
The only question is, where do the oligarchs end and the nations begin? Pretty fuzzy line, most of the time. But you can often kill a nation without killing its oligarchs, and v-v.
The bastards are vampires, creeping off to their coffins of cemetery soil to rest until the nationalist fires burn themselves out. The oligarchs, I mean.
THEY hold more contempt for nation-states than can be fully appreciated.
Now that they have globalized things they might find it a little harder to slip away than they have in the past. They may be albe to personally but they won't be able to take the control of their capital with them this next iteration. IMHO
I like the idea of high tariffs - rather than income taxes.
The bubble that will burst is the one that Washington has built up around the Financial industry to protect it from those evil germs fairness and justice.
The U.S.A. is so intractibly up to its eyeballs in fraud that it is a miracle a Constitional Crisis has yet to occur. But it’s coming. How could it not? Would any other Western nation tolerate such willful criminal activity in its mortgage lending institutions? (maybe they do, but seems to me America is definitely #1 in the West when it comes to Fraudclosure!) The corruption that is eating at the soul of America is only matched by what we are used to seeing in places like Russia and China. And even THEY might take offense. At least their corruption is principled.
The Republicans tried to impeach Clinton for lying about a blow job. And yet when ALL the major mortgage lenders endemically LIE to the courts with falsified affidavits it is labelled a “technicality”?
The extent to which the White House is bending over backwards to protect the financial industry at all cost, both ethical and financial and at the expense of the rule of law should make it clear to anyone just how sick the U.S. economy has become at the structural level. The Obama Administration is essentially telegraphing that is has no faith America’s ability to face the music and start the long road to recovery which would require a monumental cleansing of the political and economic system. America has a weakened immune system and the White House and Congress have become its Bubble Suit for fraud has become so widespread in the American system that to restore Justice and the rule of law might seriously risk killing the patient.
This will become a very, very serious crisis on a scale not experienced since the American Civil War. Recent reports indicate that the U.S. is edging towards negociating with the Taliban. The U.S. has no choice but to withdraw from the Afpak war and retrench for the existential crisis that is brewing in the Homeland.
After 9 years in Afganistan the USSR began withdrawing troops in May 1988. The Berlin Wall fell in 1989. The USSR was no more by 1991. America withdrawing from Afganistan -the Slayer of Empires – without having reached it’s objectives will be the end of the beginning of the demise of America’s short tenure as sole Global Super Power. How the ruling Elite deal with the bursting of Washington’s protective bubble – along with the reality that America will soon be home to a majority non-caucasian population – remains to be seen. But my guess is that they will not go gently into the night.
"But my guess is that they will not go gently into the night."
A fellow traveler? Most of these people simply don't see it coming. It's diffiult to watch. Anyway, on the above statment we should always and everywhere remember that when faced with destruction of the old order the Russian did not expand his agony to the entire world as they might have. I agree with the man in that I do not believe we are as honorable a bunch.
Please, do not say "we" when you mean "them" (the predators-that-be who have taken control of the USSA).
+1 very nicely put.
My vote for ZH Best of the Day.
"This country will be severely disrupting the current global monetary system because the Federal Reserve – and not necessarily the Obama administration – believes that the status quo is not in the interest of the American people."
I don't believe for one second that the Fed gives a rat's ass about the American people. Trashing the dollar will benefit Wall Street banksters.
In fairness I think they would argue that trashing the dollar tends to boost exports tends to boost employment.
But since as a nation we mostly export fraud, I guess we'll be hiring more banksters and lawyers.
Still a boost is a boost, right? No? Okay, never mind.
The whole shindig's a sham!
"I don't believe for one second that the Fed gives a rat's ass about the American people."
This is your most insightful and most correct sentence. Don't back off. Screw Banana Ben, he doesn't give a whit about the American People.
+1
Collapse of the USD and the resulting hyperinflation is realistically the only option the US Gov't has to emerge from this unfunded liability of $23,000,000,000,000.00. Otherwise, it's game over for the US. Hyperinflation will destroy any outstanding debt and with the emergence of a new currency within 24 months or so, guess what - the US emerges still as an economic world power.
Make no mistake about it - this scenario is being well understood and modeled in a number of back offices in Washington.
If you don't think so, then what's the solution to the $23,000,000,000,000.00 issue?
How does the banksters' dollar keep world reserve currency status in that scenario??? No freaking way!However this unfolds one thing is sure: the fascist banksters will be weakened.
Beautiful changes are a'coming!!
The dollar doesn't keep reserve currency status. It self destructs. Hyperinflation also destroys any debt denominated in USD.
Due to the slate wiped clean... and the US capabilty in technology, agricultural production and what ever else is left in manufactuing capability, the US will emerge in a new currency order as a major force.
Otherwise by being strangleheld by its current unsustainable debt, it can't move ahead... nor does most of the world.
I am 64.I taught literature and Western Civilization in high school. I taught a little at a very mediocre college.I was a lawyer (mostly med/mal).Obviously I am not in your league. My last occupation in the matrix was electrician.This is what I know: master electricians are as smart or smarter than trial lawyers. Mano y mano it's no contest.Trial lawyers know the entire whatever (I can't find the words) is a scam.Intelligent blue collars are beginning to know it. God help the TPTB if America's blue collars become aware. I love your site. I've learned so much. I wish your captcha questions were harder. You are an elite site. Keep it that way.
Some of them are impossible...At least they used to be...
Never saw that one coming......
It's always easier to default on the social promises than the creditors, they have armies. Rationed health care and blue pills, already here.
We all knew it was going to happen, we just all thought we'd die before the nation defaulted. Not going to happen. Personally, I'm glad I lvied to see it, otherwise I'd be dead.
Ahhhhhhhhh!
I feel much better after reading this!
ROFLMAO
Can't wait for the coming whirlwind! Reap it!!
Reap the whirlwind, bitchez!
I am always bemused following all these throwaway lines on the Tea Party. They're protectionists now? They're gun toting kick ass types that are going to nuke China? they're white supremacists? When you look at Ron Paul's voting record and compare it to the claims of the trolls you have to laugh. They need their Palin narrative and they put any amount of money in to get her and the military industrial lobby's end in there just so they can destroy the whole show. But what did she get? 13% of the vote? Hard workd for the trolls isn't it?
And on the on-line banner of troll central at The Guardian the other day they had shock awe article of blacks support for the Tea Party in Kentucky with another article about Tea Party White Supremacy right underneath it.
What Mr John Taylor doesn't explain here is rational banker behaviour of the Ayn Rand endorsed kind. Yes they got their helicopter Ben installed and his narrative turned out buckets of liquidty. But how much of that empirically was dropped into the US economy versus that poured into extend and pretend balance sheets? How much of that generated by Treasury collateral was releveraged into carry trade rather than dropped into the US economy? What are the no.s?
And what crony banker is going to drop liquidity off their own balance sheets into 30 year term loans in the US economy when their locked funding base cycle for that lending would be what 5 years max?
Bernanke is just a narrative. Always was. You've got Obama the Eddy Murphy alter ego and you've got helicopter Ben. Both just peddle cheap penny lane tunes.
Correct observation about the endless absurd slanders of TeaParty folks. Unfortunately, since the TeaParty is not technically a single "fictitious entity" (like the republican and democrat parties), and they have no unified "platform", pretty much all slander is fair game.
What might be interesting is the follow-on election in 2012. If RonPaul runs again, perhaps with AndrewNepolitano as VP candidate, and most or all the current TeaParty groups back RonPaul, these slanders will be difficult to support, and easy to shred to pieces. RonPaul has too long a record to justify any absurd claims like "they are protectionists", "they want to nuke China" (or anyone else), "they are racists", etc.
The only shred of cover these anti-TeaParty liars have is a consequence of neo-con-jobs who tried to co-opt support from random misguided followers of badly organized TeaParty groups. Uniform TeaParty support of RonPaul would utterly destroy such a notion.
If candidates with strong TeaParty support do well in this election, that gives enormous credence to the TeaParty movement in general, which gives legions of "follower types" cover to support RonPaul in the 2012 election. Thus good results for TeaParty supported candidates could be the event that convinces RonPaul to run in 2012.
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
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Never saw that one coming......
It's always easier to default on the social promises than the creditors, they have armies. Rationed health care and blue pills, already here.
We all knew it was going to happen, we just all thought we'd die before the nation defaulted. Not going to happen. Personally, I'm glad I lvied to see it, otherwise I'd be dead.
nice approach
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This should happen next year – maybe in May, mirroring 1940 – because by then the next recession should be in full force in both the US and in Europe, forcing many millions more out of work. The political pressure for raising tariffs in the US is intensifying and the new Tea Party supported Congressman will help tip the political scales in that direction. swatch watches - watch winder
The Frenchies are whining because they might have to work to 62 before they can retire, and you would think that they are being asked to work to the death.That's because they know if you give the devils an inch, they're gonna take a fucking mile. We haven't gotten that smart yet unfortunatelyC-TADM51-70 \ 640-864 \ Pass4sure 650-177 \ 642-627 \ 642-647 \ Pass4sure 642-165 \ 642-067 \ Pass4sure 1z0-051 \ Pass4sure 310-065 \ Pass4sure 642-504