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John Williams Talks To BNN About The "Great Hyperinflationary Collapse"
Any interview that starts off with John Williams saying "Eventually it is going to be a hyperinflationary great depression" is sure to be controversial. While not necessarily news to those who subscribe to the Shadowstats.com editor's newsletter, sometime we wish that Blackhawk Ben was among them, because despite his 100% confidence that rates will never do the kind of move that they exhibited in the past two days, they, well, did. To quote Williamss, who actually keeps track of the US economy as if it were a GAAP audited corporation: "The annual deficit is running $4-5 trillion a year, that includes the Y/Y change in the NPV of unfunded liabilities... There is no political will to deal with this." The catalyst is well-known: "When you see panic selling of the US dollar, that's when you have to be really careful. But what's already been done with the dollar has spiked oil prices, and other commodity prices." On the question of why Bernanke would not be able to pull off what Volcker did in the early 1980s, Williams' explanation for why this time it is different, mostly focuses on the size of the US trade and budget deficits, which are not even remotely comparable on both an absolute and relative basis. Most specifically what consumers should do in the post-apocalypse world, Williams is not too optimistic. Ironically, he notes that Zimbabwe in its hyperinflation may have been lucky in that it had the dollar to fall back on in the black market, and now every market. However the US does not have that facility, and this "will get very difficult when food starts disappearing from shelves." Having goods for storage and barter would be critical. However, there may be a snag...
It appears that Mountain House, which is one of the better purveyors of freeze dried food and holds over 30 servings and last for 20 years because they are packed with nitrogen rather than oxygen, is now sold out of all #10 cans -link.
And for those who go to NitroPak, which sells these products, they have the following message:
***CURRENT INVENTORY UPDATE*** There is currently EXTREMELY high demand for all of our Mountain House foods nationwide due to current economic uncertainty and inflation fears. With this increase in demand, our food order processing times have increased also. As Mountain House’s leading distributor, we are receiving huge shipments weekly to fill our customer orders. We are shipping as quickly as we can. Your charge card will not be charged-up until we are ready to process your order. Thank you for your understanding and patience! Harry R Weyandt President
It appears that the battle lines have already been drawn, and the cheap optionality is gradually being eliminated. At this point the best the world can do is hope that Williams is wrong.
Full BNN interview with John Williams (after the jump):
h/t Robert
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Lame reporter/anchor... "Isn't this a bit catastrophic?.... Ah.. hahahahahahaha.." Add to the freakshow pile. Don't tell me I built my house wrong. Don't tell me the wheel's falling off my car... You must be an optimist on our show!! But wait.. If this were true, then why the interview in the first place?
Dud...
Folks. Stress can make you fat. The guy looks stressed out to me.
If the situation we're in isn't driving you to alcohol and comfort foods, then you're probably crazy.
DING DING DING! The dooming and collapse talk is extremlly unhealthy and has already ruined marriages since 2008.
Collapse didn't happen. Get over it. If not for yourself, think of your children!
Sad Youtuber. RIP...
http://www.youtube.com/watch?v=QWIenEil1fc
Don't fear the reaper.
You are a quack. Marriage died in 1960 you said so yourself clown show.
Children if not exposed to your types bull crap take care of themselves just fine.
Please actually make a real point instead of posting the same crap over and over again.
Can you give me one instance of how the economy is better, like employment, house prices, food stamp usage, besides capital market prices?
I know, I shouldn't feed the trolls.
On the contrary, it drives me to take optimum care of myself since I don't want to wind up in the sick-care system.
WOW and I thought it was said the mere HINT of tax cuts not being extended would be DISASTROUS to the markets, as everyone scrambled in total panic for the exit....guess its another ho-hum for the lone market participant HAL2010.
John W. rocks the house! Unfortunately.
" I was at a bankers meeting and a woman threw a jelly donut at me. Her point was she didnt like what I was saying"
So thats what donut throwing signifies. Were I in that position, I might have misinterpretted it as accolades due to the impending higher price of donuts...
big john probably caught it on the fly, stuffed it in his mouth, and thanked her profusely.
This could be reality soon.
http://www.youtube.com/watch?v=OTSQozWP-rM&feature=player_embedded
- well done.
You can get a years worth of wheat from the internet grocer and food grade diotomacious earth for less then 300 dollars. While I am long usa, I do have my position hedged with guns gold and food. Mountain house is a ripoff
Which internet grocery? Never made such a purchase. I'd at least check something out.
1000 lbs of wheat is 360 bucks not including shipping and they don't rip you off on shipping
Mountain House foods have been out of #10 cans for almost 4 years now. I was going to say that's old news but why would Mountain House not want people to believe in an inevitable doom in the works? Their business model depends on it.
A few idle thoughts thrown in;
(1) _toathis_ :"nothing else is coming. This is IT! the new normal."
Nothing about right now is normal; Helicopter Ben prints trillions, the Fed buys US Treasuries, Obama can't get support from Pelousy and Dingy Harry, and no one in D.C. has learned from a 63-seat shift in the House. Care to try again?
(2)_TheGreatPonzi_:"I'm curious about these cans. Is this really good, or tastes like dog food?"
Depends on the manufacturer; MREs taste slightly better than cardboard, Mountain House has a great reputation. I have some; maybe tonight I'll crack a can, to give you a firsthand report, but most online reviews are positive.
(3)_dussasr_:"Why does John recommend Mountain House nitrogen packs that are good for 30 years? These would only be useful if a Mad Max situation developed. For a run of the mill currency crisis you only need enough food to last for the period of time between when people quit taking the old money and the new money becomes readily available. This should be about 3-12 months so standard canned goods should be fine - just go out and stock up now. "
I never was able to get my crystal ball to work; I traded a guy named Ben for his, but it isn't any better (cloudy, no decent picture). I'd bitch, but I traded him a busted electronic Magic 8 Ball (stuck on "YES") for it, so really I came out about even.
If you can confidently predict a "run of the mill currency crisis", then do what you propose. I suspect it'll be like a 1950s diesel engine: cough, cough, jump, cough, crank, wheeze, and so on for a while until it finally catches and runs (somewhat). The reason for long-shelf life food is because you DON'T know what's coming - or whether it will come more than once, in different flavors, and perhaps from directions you weren't looking. If you don't need it, fine; if you do, best have it ready than go looking for it after TSHTF.
I just bought some more today; can't really afford much, but really can't afford not to have it (starvation is a REAL bitch). It'll help my silver last longer.
I dunno. I almost think you are better of with a good low cost index fund rather than overpriced mountain house food good for thirty years. But that's just me.
Huh? Different investments for different times. Preparation and diversification are the hallmarks of 'investing'.
Dried food works for more then just economic collapses, but storms, supply disruptions, etc. The grocery stores will be emptied in 12 hours or less with any natural or man-made disaster. Your family won't be able to eat your index fund...
Hyperinflationary depression is worse than just tortured language. It indicates a fundamental lack of understanding.
Inflation is a great stimulant to economic activity, in part because outstanding debt is quickly rendered trivial. Game this out, and act accordingly.
You need to read some of the stories about what it's like to live in hyper-inflation. It's not a stimulant.
I survived the reign of Jimmy-the-naive. That was close enough. My point is that deal making is relatively easy with inflation, as opposed to the slow starvation of Obummerville. Jobs are abundant. It's the old and slow who get crushed.
Inflationary depression, like humble lawyer, or military intelligence is an oxymoron.
The two year is at .62, so if you trust the gubmint with your purchasing power for 24 months, on one million of savings they will pay you $6,200... before taxes. Mighty white of them.
Inflation and hyper-inflation are very different animals. It's unfortunate that the two use a common word. It's a currency collapse. Not high inflation. Business is not booming.
Have 288 packets of 'Salisbury Steak' passed out by the Nat Guard after Hurricane Charley in metalized plastic. Dated 1994. Tastes great!
If expectations in inflation gets out of control then raising interest rates has no effect. Especially for where it hurts most like in food prices.
The thing that seems to escape most everyone (although it’s obvious) is that we have simultaneous inflation and deflation--but in all the wrong places squeezing people financially. We have deflation in wages, real estate and general pricing power. At the same time we have inflation in the cost of living and the cost of doing business.
US initial jobless claims are stubbornly high with too many people in the work force and home sales + prices are down (deflation) but there's a monster rally in commodities and stocks (inflation). Tuition hikes continue upward, credit card rates are high, health care premiums are rising and the cost of doing business is rising due to too many layers of government bureaucracy and regulations. This is squeezing the middle class and small businesses.
It is in great part due to over 30 years of a deliberate attack on wage inflation to increase corporate profits that has now turned into wage deflation thanks to relentless outsourcing of US jobs and the painful effect of globalization on the US. Credit has been the only way for the middle class to afford prices, so a debt bubble formed. Deficits were allowed to grow to the sky all to finance inflation masquerading as growth in a country that outsourced production and specialized in importing finished products.
This is increasing the divide between the haves and have-nots. The US is just a couple of years behind Europe. Wait until the Republicans gain full power and they start to implement austerity programs like in Ireland and Greece in order to reduce the federal deficit. Then, the riots start and crime spikes upward.
It’s the double whammy inflation/deflation squeeze that is stressing out the economy.
But toathis is happy: all's right with the world.
Wait till Toathis starts teething (oh, wait) :>D
Some affordable assault rifles to protect family, food and silver:
http://www.jgsales.com/index.php/rifles/ak-pattern-rifles/cPath/209_214
If money is too tight for that, even less expensive Russian surplus rifle, the M91 Mosin-Nagant. Sells for around $90-$100 in local sporting good stores, or here:
http://www.jgsales.com/index.php/rifles/russian/cPath/209_261
Uses the 7.62x54R ammo, very affordable at around $90 for 440 rounds. Very accurate and powerful rifle, high muzzle velocity round can penetrate light to moderate body armor - if your big game were wearing it.. just sayin'..
I still think the Spx will outperform your rifles over the next 15 years.
Why not both? Ammo has outperformed the S&P over the last 10 years...
Good luck with that!
Pass this along for what it's worth. I'm not a Mormon, but I buy food from the Church of Latter Day Saints home storage facility. #10 cans, basic foods, reasonable prices. Use wheat for bread, dehydrated apples for pies and snacking, powdered milk, dehydrated onions, cocoa, etc. Buy in $500-$600 increments every few months.
http://www.providentliving.org/content/display/0,11666,8133-1-4352-1,00....
Thanks, that's a good tip. I'll check it out.
A mormon classmate of mine told the they also use their used bleach gal. container to store water for emergencies because the slight taint of bleach keeps the water purified. It's the end of times.
So what happens when people figure that you have food that they need?
What happens when they figure out you have none? This is fun. Seriously is your supposition that having food is intrinsically more dangerous than having none, is that what your proposing?
God I love logic! :-)
OK, so tell me the time span for this (these) event(s). Are we talking weeks, months, years, or decades?
Timing is everything baby. Predictions don't mean shit without a calendar.
The fall of Rome wasn't part of history until a long time after it happened.
In fact it took a long time to rediscover calendars in order to note when Rome fell.
When things go bad they can go very badly. There have been many Dark Ages. We don't remember them to each other because nobody wrote anything about them.
When? Months. Not years. If I had to guess.
It depends on many factors.
We could see an Argentina style hyperinflation. In that case, be ready for very unstable year or so, followed by low wages, high unemployment, high violent crime (specially robbery and home invasions) and very high prices for basic goods. This could last 10-15 years until the reset is complete and the economy adapts to all the malinvestment.
We could also see a slow painful Japan style stagnation. High unemployment, high prices on everything, low wages, high crime. No real collapse that you can point to, just a steady decline into hell. This could last a generation.
Third, and the least likely, we could see a very sharp currency crisis, followed by a debt default at all levels (think Iceland), and a currency re-issue based on a something that appears at least to be tangible. Think papiermark vs. rentenmark. This could take 18 moths to a year to ramps up and another year to the transition. After that, expect slow recovery for about 10 years or so. Depending on the cause and solution, we might see a renaissance or the dark ages.
As to when they will happen? My crystal ball is out for repairs but I would venture to say that scenario 2 is already playing out, scenario 1 could be 18-24 months out and scenario 3 could happen when the OPEC countries decide to stop accepting dollars. The Chinese are already laying out the ground work for this and so are the OPEC countries. I dont see them putting up with the bernank for much longer.
Next week YOU will die. We'll talk about it here, thank you!
If this happens citizens will see to it that the Bernanks head is on a pike.
Can happen to like this man and his great
work over the years.One of the persons I
benifited from greatly for the right numbers
and therfore taken more wise financial steps.
TNX
So the trick to this is knowing when the inflection points are on the 'flation curve right?
1. Peak of "deflation". Take out as much credit as you possibly can. Buy Commodities contracts and physical PMs if you are in to that.
2. When the 10-20% inflation hits. Sell commodities and options to survive, but keep a low profile. keep the physical stuff.
3. When the hyperinflation hits, pay back all your debts (early with penalty) with monopoly money. Either obtained in Step 2 and/or from the helicopters.
4. You now own all of you assets free and clear with physical commodities stored away. You can be the first inline to convert physical things to the Amero, SDF or whatever we end up with. And you will have prime purchasing power while everyone else has to wait for the new currency to come in the form of a paycheck or subsidy.
So becoming fantastically wealthy is really just a matter of figuring out the timing of 1.2.3.4 Right? You don't need to play the "markets" just time the currency waveform.
I just read something linked that basically said the same thing as John W.
Currency crises of the USD will get to a tipping point, then prices willl skyrocket overnight because no one will want the dollar anymore. Really bad times.
ZH pretty much confirms this trajectory for me daily. (and I'm not a nervous person easily susceptible to panic attacks)
I'll hear about the end of the world here first, so I'm never leaving ZH.
Real statistics are being obfuscated by Big Gov and MSM. If you hear it on CNBC from Erin Burnett you'll be suckered punched, too late.
Thanks and despite all the impending doom, Merry Christmas to all. We will be the survivors favored by Darwin.
don't worry, Turdnanke is there to save us all
Wait a minute, deficits are $4-5 Trillion/year? Not $1.3 Trillion?
That's a lot of pop tarts. Big difference. I'm resetting my doomsday clock now.
I don't need any more reasons to off a banker, so if some banking bitch hit me with a jelly donut she might be the first casualty in the upcoming FIRE civil war.
Great comment. Fun, fun!
For some reason I always think "donut" is a funny looking word.
I watched Obama's "President's Commission on Deficit and Debt" reporting last Friday, and could not believe what I heard. After 9-months of 'investigation' they came up with a proposal to cut a pittance of a mere $4-billion from the federal budget over ten years? Or about $400 million per year (and it was not accepted to be even considered by Congress, and Obama wrote letter basically saying, "thanks, we'll keep it in mind, cya's".)
So lets get that straight, it's a 3.6 trill per annum budget;
3,600,000,000,000 - 400,000,000 = 3,599,600,000,000,000
And that took nine (enter own expletives here) months of 'effort', to propose to slash the deficit by that whopper amount (I'm pretty sure the average idiot could have 'achieved' that in less than a week).
These guys were supposed to be making-good on Obama's campaign 'promise' that he would halve the US deficit by the end of his first term.
Ok, presuming Obama was in late 2008 talking about the then Bush deficit of 1.017 trill (projected), that expanded to about 1.587 trillion (final), last I looked. So let's be generous, we are talking about something of the order of;
$1.587T / 2 = $785 billion USD in cuts
So to get there the guys whose job it was to find the path to that, came up with spending cuts that are 1,962.5 times too small to achieve.
$785,000,000,000 / $400,000,000 = 1,962.5
That's 'cutting' that is 1962.5 times too small!
So I think it's very safe to say that any political talk you hear in the next 2 years about "cutting the deficit" and "taking hard painful decisions for our future", is 1000,000,000,000,000% bullshite. I don't think it is too strong to say Obama is a blatant liar on this front, and his recent assertion that he has either fulfilled or is in the process of fulfilling his promises (like halving the deficit, and going through the budget line by line and even cutting whole programs and depts, and ending earmarks) is obvious utter bollocks and lies. No exaduration there!
These hopelessly inadequate spending 'cuts', which they took 9-months to identify, and which didn't even get formally looked at or voted on, are 1,962.5 times smaller than were required to meet the objective that Obama allegedly wanted them to achieve!
So as I listened to these two old geysers Friday I realized what it meant. Obama and Co (Est. 2009) had told them at some point that there must be and will be no real cuts - period – so don’t propose any and make sure the ones you do, are not voted on. And meanwhile, I'll pretend to offer a ‘cut’ in the form of a Federal pay freeze lock-in (while extending the tax cuts for everyone, to satisfy the Reps).
Ok, I get it.
Such cuts are flat-out not going to happen--EVER! There will be only tokenism cuts (like the mere 37 billion 'cut' in 2009s budget, when there was actually spectacular NET increase) but really, no cuts can be allowed. (valid) Krugmanite warnings of an austerity or even cutting induced downturn (predictably) won.
But why this choice? (ignoring the obvious aggregate-demand argument)
It's the same reasons that all of Obama's economic advisors and budget director jumped-ship. They realized they were no longer required - BECAUSE THERE NO LONGER IS REAL ECONOMIC AND SPENDING POLICY.
The US Government passed FISCAL policy to the Feral Reserve Bank (as I said in a comment last month #697526)
So why did Obama effectively do this?
It's because the US can't do what Japan did in the 1990s as per Koo's balance-sheet recession prescriptions, to manage an orderly US private delevering. The US CAN NOT 'park' growth near 0.0% to allow a slow pair-down of private debt over a decade or two that it will take even as public debt rises at a furious pace (as John Williams points out it already is).
US NET Public + InterGovt debt has risen almost $5 trillion in just 3-years (at a min)! Now that's scary, except, absolutely none of it will EVER be paid back so who really cares about the numbers anymore.
That's the real point.
But if US GDP growth drops;
1) the lower it is the faster US unemployment rises. Japan never had that problem as they managed near full-employment while they stalled GDP so it is a totally different social and political dynamic in the US case. And US UE benefit expires (unlike other countries).
2) the US body-politic and Washington in general, can not and will not tolerate sustained zero US GDP growth. There would be massive lobbying to act, to push for either massive stimulus, or even introduction of austerity (only after a crash, at this point, and as rationing). So again, a totally different US dynamic to Japan. When Japan sat on zero GDP, who was it that said "don't just sit there on zero! DO SOMETHING!" It's the predictable US political response. So sustained stagnation will not be possible!
3) When Japan did it, only Japan was doing it. But now a dozen big economies have to do it simultaneously. Thus the feedback of so many slow or no-growth major economies, with rising unemployment, and a currency printing war, doesn't work to provide the buffer of growth and demand elsewhere. Japan 'enjoyed' strong growth elsewhere to help its exports and stabilize at zero GDP, and maintain its trade stability and near full employment. Again, a totally different dynamic for the US today.
Thus the US Govt has effectively abandoned control of fiscal policy and even the ‘need’ for a US budget, and just ordered Ben's Feral Reserve to get slow growth out of the economy - no matter what!
They know stagnation is not sustainable, and the danger of a contraction is far too dangerous to risk spiral-collapse. So a bear-market in stocks, that leads to a fall of GDP, is now also out of the question, and must be prevented from occurring. Another 40% slump would be the end, so it MUST NOT HAPPEN. Hence the massive marketz manipulation and Ponzi jiggery-pokery.
Having exhausted the monetary options the Feral Reserve must print to prevent stagnation and keep stocks up. In other words, the Fed has the reins of fiscal NON-policy. There is no actual fiscal policy possible, but print-spend. The actual Govt will only go through the political motions of having a budgeting process and documents and bills.
There has to be not-too-much, and not-too-little growth, no matter what - who needs a Fiscal policy? Ben has no constraints except to provide slow GDP growth and not let inflation get away. US (un)employment is not really even a constraint anymore.
Except the people WILL beg to differ given that if employment does not rise then as far as the general public are concerned, as they ARE STILL in recession, no matter what +2.0% GDP or the Feral Reserve says.
But if you can manage +2.0% you can (theoretically) start to delever the private sector (maybe) and mostly by default, as pay levels steadily fall and unemployment steadily rise (hey, that’s a stimulus for business, always a silver-lining) as printing takes the dollar lower, and inflation goes higher ...theoretically ... most of which is not working out at all.
So the Feral Reserve will monetize public replacement spending as it has been, to keep US (statistical) GDP 'growth' in a positive range of ~2.0%. There is no choice now, so no policy and no budget. Any lower than ~2.0% and unemployment rises too fast and a dip and runaway contraction becomes increasingly possible. Can't have that so we'll get modulated printing to avoid slowing or dipping.
Growth above about 2.0% means Bernanke printed “too much” (ok, when you stop laughing, forget about real-growth occurring going forward with RE tanked, wages down, and credit falling). So >2.0% GDP equates to public debt exploding much too fast to keep a lid on the politics of it. So the Ferals must match printing levels to get a compromise between too fast unemployment growth, or else too fast public debt growth.
And no matter what is done, the result is a plague in US politics and worsening, while the MSM bound deeper down the rabbit hole of un-reason and non-think in 2011-12.
So the Feral Reserve, having destroyed the US economy via bubblism and swindlism, and non-regulationism, then exhausted monetary policy with ZIRP-ism, is now in the process of killing US budgetz and debt limitz, altogether, and is finalizing the manipulation and “take-over of anything left-ism” (sorry for pun).
One Feral squid to rule them all!
The facetious report drivel of Erskine Bowles and Alan Simpson, makes it clear this nonsense committee was head-fake, for the mid-term votes, and it did not even work toward that dumb end.
Which means the Heritage Foundation's mid-2009 "realistic" estimate, of where US deficits will really go, over the next ten years, will prove to be a substantial UNDER-ESTIMATE.
And are US households going to use this ‘better’ opportunity to actually delever and save?
HAHAAHAHAHAHAAA ....BWAAHHAHAHAHAHAAHHA!
... er, no.
It will still be a disorderly mess, and banks will still fail in its slowly gathering crescendo that ends like it did in 1934. And US GDP will only genuinely recover (from an eventually much lower level) only due to cash spending of debt installments, that then go to retailers, not to banks (as occurred in 1933). It's just a matter of when it happens. For now the US 'Govt', has managed to delay that collapse process by eliminating Fiscal policy. That is the “change you needed”, right there.
--
The CMI indicator's 2010 'contraction' seems in retrospect be the product of a reduced use of credit, online. i.e. rather than a straight decline in NET sales of durable goods. People are still buying, but buying bargains, with cash and savings from defaulting on their loans and spending at retail stores, rather than online, with credit. They probably can't get this credit anymore or they are maxed-out, so they default and buy stuff with the cash at an actual retail store. So the CMI data still declines (but is now getting better since QE2.0 seemed to lessen the impetus to delever) even though sales don't.
If unemployment is still rising, that's the explanation that fits (and if credit defaults rise in the next quarter). I suspect this is also part of why personal bankruptcy data is not as high as it should be. People don't care about the systemic formalities anymore - they just default.
Hence I think the CMI data today is not indicating a general downstream contraction in manufacturing, to the extent that same data trend line did in 2008, it's at least partly reflecting an increase in defaults and the use of cash offline to buy durable goods.
Just supposition.
--
So I would not expect either a bull market, or a bear market, or a recovery, or a collapse.
And I especially do not expect a sustained GDP stagnation. Unemployment will rise no matter what, only the rate of rise will oscillate with printing. The Public debt and Fed balance sheet will grow much faster than anyone projects (except Tyler etal of course).
These trends will remain until something that can not be manipulated or avoided then changes the underlying dynamic.
It could be peak oil, war, 'the-big-one', or inflation, or a mix that wigs-out the economy. But the Fed and ECB and BOJ will cooperate to make this last as long as possible. Hence the 'marketz' are probably safer than they appear, for now. Just don't expect to make money because any surge of actual growth would produce inflation and rate rise and that also can not be allowed to happen.
The Tea-Party saying it will, "do it all again in 2012", if they, "don't get what we want from Washington this time around" is a problem. The Tea Party's influence grew from the $3.1 trillion TARP/TALF car rescue money, etc., so to negate their resurgence, such overt bailouts must be avoided, and the best way to do that is to lie and commit more fraud, then make sure the economy does not stagnate, or dip, and no bank topples (hence Assange is a real pest, one of those ‘wig-out’ factors). And also that there’s sufficient free bucks via the discount window’s arbitrage to provide a continuous free 'bailout' and reserve buffer for any level of corruption blowback.
But Assange is an icon now and every Govt on Earth will (and must) read what he releases as must the MSM, so any financial shenanigans will be a big deal.
No one in Govt even cares about passing the US budget because both parties understand that any budget is complete BS because the Fed has full control and will pay not attention to any budget, and they will indeed print and monetize to spend, whatever amount is needed, to obtain the slow-growth. Thus a planned US budget process is no longer meaningful and whatever figures it contains are nonsense and what ever political gimmiks and debate that occurs, it is window-dressing for the rabbit hole.
I expect that the US is now massively and actively hiding (as per Greece) the true extent of the debt growth rate (as Williams asserts) , and the US deficit's true size. We all know NET borrowing routinely greatly exceeds the alleged deficit.
"...as never before has the very fate of the economic system been tied in with the continued ramp in Ponzi markets, any ability to derive history lessons fails. For the central banking cartel this is it: a do or die moment, in which the die is not even a possibility." - Howard Marks' Scrapbook On Lessons From A Rhyming History; And Why We Believe This Time It Is Different - by Tyler Durden on 12/02/2010
zh says what others dare not think, and unfortunately it’s right, things really are worse than anyone in the MSM rabbit-hole thought. The ironic thing is if things had been less bad (as I thought they still might be) we would actually be seeing a recession in late 2010 and 2011. But because they are actually far worse, it has required massive direct manipulation and monetization of everything. So instead we most probably won't see a US recession, for as long as the Feral Reserve can keep extending group-think pretending.
Instead, we will now enter (and already somewhat have) an intensifying Wizard-of-Oz-World or propaganda and statistical BS proper, until something totally uncontrollable upsets the Feral Reserve's attempt to make slow growth, minus constraints.
It’s life Jim, but not as we know it.
Well, aside from that Mrs. Lincoln, how was the play?
Excellent summary -- welcome to the working week!
"could not believe what I heard."
Did you just wake up?
As I.F. Stone quipped, All Governments Lie! (ones led by Dems, GOP, Commies, Tea Parties....).
But before one feels all glib about being superior (that one isn't as corrupt as "govt"), ask yourself this: Do you sign on to the paradigm of endless growth? If so, then you too are saturated in the Big Lie, and calling the kettle black really isn't a good idea...
What are the mechanics and consequences of depositing money in Canadian banks? Which Canadian banks are safest?
Hello just testing. It only took ZH two weeks to figure out I wasn't spam. But that's cool it took my Mum about 3 years.
Now let's see if this works - hit preview, OK now hit save...
Welcome aboard.
Finally, been waiting for you. I'm not the new guy anymore. Welcome from the old new guy.
Major Dollar Weakness Ahead:
http://lhmarketwatch.blogspot.com/2010/12/major-dollar-weakness-ahead.html
Inflation for the things you need, deflation for the way you have to pay for it...
This has been one of the more entertaining (and educational) threads I've read of late.
For rational people, it is always amazing to confront defenders of the predators-that-be with basic facts like those presented in the video and see their reaction (or non-reaction). I mean facts like $5,000,000,000,000 deficit every year, plus the fact that 100% tax rates is insufficient to cover expenses.
That anyone can defend such things, or claim "Obama and Bernanke will fix it" is proof of how utterly clueless and intellectually corrupt humans can be.
It boggles the mind to watch the circus.
Worse is those who get all of this, yet still can't figure out that we can't grow in perpetuity on a finite planet! I really don't know what group of people presents the greater danger!
Anyone know if there is also a shortage of shotguns?
Try poking your head in to places where it shouldn't be. Report back with your findings. (sorry, just couldn't resist :-) )
This has been an amusing read, I think that the only person that gets it, is his curmudgeoness Trav.
Follow the oil. The $US dollar will not collapse as long as the US military functions and is able to "police" the oil markets. There is a breaking point though, I estimate it to be by 2025. It occurs when the interest on US treasuries is sufficent to purchase the oil available on the open market. In practice, it will break before this limit is reached. To put it perspective, the coupon on Japanese and Chinese treasuries is suffucient to currently purchase ~4 mmbd.
There is currently ~35 mbbd of oil on the "open" market, this is decreasing as the oil exporting countries use more of their own production. This is the Export Land Model. Google it it you aren't aware of it. The US does not need an open market though, it force the acceptance of dollars for oil at gunpoint if need be.
The next country on the list of US action will be Venezuala. Large reserves of heavy oil in the Orinocco. Bitumen sludge is better description, but it is refiable. It will also take years to get to 2 mmbd with at least 2 trillion in CAPEX.
The US needs to secure a minimum of ~15 mmbd to function. Within NAFTA they have about 7-8 mmbd currently. When Iraq is developed and there is a "pacified" Venezula, an additional 3-4 mmbd will be secured. The balance will come from the ME or Africa. In addition, the Air Force is examing 1 mmbd CTL for strategic purposes.
Oh, what do I invest in? I stick to North american oil/NG producers, MLPs, royalty trusts (no options for the insiders, gimme the fuckin' cash flow!). Gold/Silver miners, strategic metals, primarily in North America. Did you know there is an interesting Tin-Indium property in Nova Scotia?
"Follow the oil. The $US dollar will not collapse as long as the US military functions and is able to "police" the oil markets."
So, we'll be able to continue to force people to pay for us to put guns in their faces to supply us with guns so that we can continue to hold them hostage? For some reason I'm not seeing that this game is going to be put up with for much longer.
The US military, which is the largest single-entity consumer of oil, squeezes the available oil, which will DECREASE productivity, which will further drive down the revenue needed to fund it.
While I agree with your general statement, I believe that you give it a much higher probability of survival than further analysis would suggest.
The leading indicator will be foreign purchases of US Treasuries.
We don't disagree, 10-15 yrs tops before a "reset" happens. War could bring it sooner. I fear that you see me as an optimist but I am not. I agree that it is the foreign purchase of treasuries that will be a leading indicator.
Fun thread. I think the discussion on food storage is interesting. Those of you who think you will survive on wild game are sadly mistaken. If that kind of scenario ever happens the game populations will be wiped out in a matter of months. Even here in the West where population is very low there isn't enough game to provide meat for more than a few months at most. Those of you East of the Mississippi have it even worse.
Food storage isn't complicated though. It was standard practice for every culture prior to refrigeration. Grains, beans, sugar, salt, dried fruits, root vegetables, dried chiles, spices, oil. These items will last for years if stored properly and you can make just about anything from them. Learn to cook from staples and you don't need to spend $20,000 on freeze dried fast food. Add some other basics like powdered milk to account for the fact that most of us no longer own dairy animals and you are set.
Forget guns and canned food - your main enemy will be bacteria. As you shun all the evils of modern society , all the cynicism, lies and inflation adjustments - and make your way back into the 18th century - the good old days - You might want to keep in mind the average life expectancy in the 18th century was 35 years.
So the good news is you actually dont need to store as much food in your cave as you might have imagined.
I suspect that that "average" is highly skewed due to high infant mortality. If you survived past, say, about 10 years old, then chances are you'd end up living a fairly long time.
The fact that this guy got this many comments is more scary than his doomsday video. Dah !!
It will also be amusing to occasionally crawl out of the cave, smelly, unkempt and bearded to watch the slick, beautifully dressed Chinese visitors as they glide by in the latest electric cars. They will certainly take an anthropological interest in the cave dwellers of north america - may even offer PhD level courses in the subject at Beijing University.
And, electric cars are powed by? US electricity production is roughly 51% generated from coal. There's also the issue of road construction and maintenance.
Sorry, but yours is even more probable fiction.
Got food?
Question: Do the cave dwellers get radiation badges for work at the nuke plant to recharge the gilded gliding cars of the Asian aristocracy? Or do we rub our feet on the cave floor and charge them using static?
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Food shortage? Ill go shoot some deer and eat venison, why eat spaceman food?
They should change the name from Hyperinflation to something else so people dont confuse it with high inflation.
Currency Death, Crucency Crisis, Dollar Death, Currency Fear, Currency Infarct whatever explains it to be a total loss of confidence in a currency and thus an intent to not hold it or get rid of it ASAP for fear it will lose value too quickly.
I think once you get to the phase shift moment thats the end, no turning back.
It'll be our LOT, our Loss of Trust that is the final demise of the fiat currencies. The rulers, who will have to brazenly sold us all for the benefit or their greed, represent the face of the system. Look around, is LOT increasing or decreasing?
We'll suffer a LOT...
I've noticed that just about every item at my favorite emergency preparedness store website is backordered and in short supply. I couldn't find a single item that was currently in stock!
One thing I know is that the best way to be miserable, impoverished and confused is by indulging in big-picture , macro thinking and designing your life based on that. Likelihood is you will be totally wrong in your "macro analysis". You would have better luck figuring out quantum-mechanics by engaging in ranting sessions on web sites. Better off focusing on your micro details - your family, your education, your job, your interests and do the best.
Until, that is, you are not...
But, what is "big-picture" to some, is actually pretty simple to others. Further, labeling something as "big-picture thinking" can be nothing more than a dismissal due to laziness, belief in the status-quo.
I don't know, maybe you're right. Maybe I should concentrate on the PhD in economics after all, and continue that climb up the corporate banking ladder?
According to your logic one would have to question why it is that you're engaging in this conversation.
When you guys learn uniform commercial code (UCC) and when money starts (when you are born) you will understand that much more money than the measly trillions (as we undertand it is being played with) just think 1 million in the states alone for everyone with a birth certifiate. Then the borrow into existence on that. The reason they can print forever is because this is chump change compared to what is really going on. They play a whole different game it is different when they dont tell you the rules it is way different when you dont even know there is a whole other game going on (btw this is canada, england, france etc.)
Real bonds are the bonds that are issued when a person is born none of this other stuff, this is what the big boys own.... YOU... where do your tax dollars go again? Has anyone really looked into how much money the govt raises vs what they tell you? Why is it they never seem to have enough?
You can think "Conspiracy" all you want which is the most clever way of saying "i will just deny it and not look into it"
UCC birth (or) berth certificate... as in when you are born you are berthed (like a ship) (your mother) the cargo needs a certificate (birth) to keep track of where it goes (you)
MARITIME ADMIRALTY LAW since people are being born everyday in countries these guys for the most part own.... there will never be a shortage of money (or debt that interest can be charged on) cops agents etc. do nothing but balance books and protect assets
that is all that is going on.
Do you know the difference between a human and a person? a driver and a human?
Do you know why every document or license you have is in CAPITAL LETTERS?
Do you understand the rights you lost when you created the CERTIFICATE
You are the corporate representative of what was formerly a human.
There are no laws there are only statutes posing as laws... only corporations can be charged in violation of statute so are you a corporation?
You Fuckn bet your ass you are (strawman) at this point ALL YOUR RIGHTS DISAPPEARED, this is part of why they dont give a shit because they technically dont have to answer to anyone (but the corporate reps of which they own)
MAKING SENSE NOW
Deny all you want it is for real
Don't look now, but they're standing right behind you!
But seriously... this is all nothing more than symptoms of the ACTUAL (sorry for the caps- don't run away!) issue/problem, that of insufficient resources to continue our "god-given" rights to endless growth on a finite planet.
Hack at the trunk, not the branches...
Seer ! You are a Malthusian! Club-Of-Rome , differential equations - the whole bit. Wow. I thought you guys went extinct.
So you have it all figured out - exponential population growth meets linear resource growth - end of civilization.
Right. That was a popular view among eggheads in 1979 - I know it well. We are not even supposed to be here at this time. We all died in 1985.
Only problem is that humans invented the microprocessor and figured out how to make a better wheat seed. So we are still here.
OK as a PhD economist planning on a banking career - just keep in mind there are no "Limits To Growth" ( hahaha).
Going back to the video . . . I wonder what effect a great hyperinflationary collapse would have on obesity in America?
That would be brutal.. Scraping the fat off the meat prior to grilling, tough on a guy.. Of course you could save it for rendering and make lamp oil. Overall, collapse is indeed rough on the obese, but probably no picnic for the truly anorexic either.
The guys who worked very hard to get Bs in Physics - finally see the light and switch to Economics. No the sharpest knives in society's drawer. So the metaphors are also so 1960s - I mean "liquidity" and all the plumbing analogies - gears and pipes and water flowing - metaphors from a bygone machine age.
Most modern humans have moved on to computers as underlying their metaphors these days. The brain is like a computer. The universe is just a computer ( Wolfram) etc.
No doubt that will be supplanted by metaphors from a new technology that we are giddy about.
But Economists - wow - still stuck on plumbing and gears? Wow.