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Key Theme In Interview With ShadowStats' John Williams - (You Guessed It) Hyperinflation And The Death Of The US Economy
If you thought John Williams, who a month ago prophesied that the US could be facing hyperinflation as soon as 2010, has changed his tune, think again. In an interview conducted by Phil Maymin of the Fairfiled Weekly, the man who has made a business out of debunking the government's data fabrication machine, dishes out some very hard to swallow truths about the US economy and where the fiat world is headed. As always, Williams' perspectives are debate-worthy by all, whether inflationist or deflationist: in a field of media sycophants, JW is not afraid to speak what we all know, yet rarely wish to acknowledge.
Maymin: So we are technically bankrupt?
Williams:
Yes, and when countries are in that state, what they usually do is rev
up the printing presses and print the money they need to meet their
obligations. And that creates inflation, hyperinflation, and makes the
currency worthless.
Obama says America will go bankrupt if Congress doesn't pass the health care bill.
Well,
it's going to go bankrupt if they do pass the health care bill, too,
but at least he's thinking about it. He talks about it publicly, which
is one thing prior administrations refused to do. Give him credit for
that. But what he's setting up with this health care system will just
accelerate the process.
Where are we right now?
In
terms of the GDP, we are about halfway to depression level. If you look
at retail sales, industrial production, we are already well into
depressionary. If you look at things such as the housing industry, the
new orders for durable goods we are in Great Depression territory. If
we have hyperinflation, which I see coming not too far down the road,
that would be so disruptive to our system that it would result in the
cessation of many levels of normal economic commerce, and that would
throw us into a great depression, and one worse than was seen in the
1930s.
What kind of hyperinflation are we talking about?
I
am talking something like you saw with the Weimar Republic of the
1930s. There the currency became worthless enough that people used it
actually as toilet paper or wallpaper. You could go to a fine
restaurant and have an expensive dinner and order an expensive bottle
of wine. The next morning that empty bottle of wine is worth more as
scrap glass than it had been the night before filled with expensive
wine.
We just saw an extreme example in Zimbabwe. ... Probably
the most extreme hyperinflation that anyone has ever seen. At the same
time, you still had a functioning, albeit troubled, Zimbabwe economy.
How could that be? They had a workable backup system of a black market
in U.S. dollars. We don't have a backup system of anything. Our system,
with its heavy dependence on electronic currency, in a hyperinflation
would not do well. It would probably cease to function very quickly.
You could have disruptions in supply chains to food stores. The economy
would devolve into something like a barter system until they came up
with a replacement global currency.
What can we do to avoid hyperinflation? What if we just shut down the Fed or something like that?
We
can't. The actions have already been taken to put us in it. It's beyond
control. The government does put out financial statements usually in
December using generally accepted accounting principles, where unfunded
liabilities like Medicare and Social Security are included in the same
way as corporations account for their employee pension liabilities. And
in 2008, for example, the one-year deficit was $5.1 trillion dollars.
And that's instead of the $450 billion, plus or minus, that was
officially reported.
Wow.
These numbers
are beyond containment. Even the 2008 numbers, you can take 100 percent
of people's income and corporate profit and you'd still be in deficit.
There's no way you can raise enough money in taxes.
What about spending?
If
you eliminated all federal expenditures except for Medicare and Social
Security, you'd still be in deficit. You have to slash Social Security
and Medicare. But I don't see any political will to rein in the costs
the way they have to be reined in. There's just no way it can be
contained. The total federal debt and net present value of the unfunded
liabilities right now totals about $75 trillion. That's five times the
level of GDP.
What can we, the people, do to stop the government from, you know, taking all our money?
We
should have acted 20 years ago. There's not much you can do at this
point to prevent the eventual debasement of the dollar. This involves
both sides of the political spectrum. It's not limited to the
Republicans or the Democrats. They've both been very active in setting
this up.
What can individuals do?
The only
thing individuals can do now is look to protect themselves. I wish I
could see a way, but shy of severe slashing of the social programs that
is so politically reprehensible and would create such problems and
social unrest, I don't see that as a practical solution.
If you're a young 20- or 25-year-old guy or gal, would you move to another country? What would you do?
We
still have a great country. We're going through a period of economic
pain. It's happened before. This is the kind of thing that's taken us
decades to get into and it will take us decades to get out. Although
the hyperinflation is going to be limited largely to the U.S., the
economic downturn will affect things globally. I can't tell you how
things will go with a hyperinflationary Great Depression, which is
where I see things going.
It's the type of thing that will tend
to lead to significant political change. People tend to vote their
pocketbooks. You could have the rise of a third party. You could even
have rioting in the streets. I'm not formally predicting that — anyone
can run these different scenarios. For the individual, what you need to
do, from an investment standpoint, look to preserve your wealth and
assets. Don't worry about the day-to-day fluctuations in the markets.
What I'm talking about here is over the long haul...
[Gold is]
going to be highly volatile, as will the dollar, over the near term,
but longer term, physical gold I would look at as a primary hedge for
preserving the purchasing power of your wealth and assets. Maybe some
physical silver. Get some assets outside the U.S. dollar. I might even
look to move some assets physically outside the United States. The key
here is to look at a longer range survival package, battening down the
hatches, and preserving your wealth and assets during a very difficult
time. Once you're through that, you'll have some extraordinary
investment opportunities, and I can't tell you what it's going to be
like on the other side of this crisis.
Dr. Phil Maymin is an
Assistant Professor of Finance and Risk Engineering at NYU-Polytechnic
Institute. The views represented are his own
h/t Steve
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In the name of the Dollar, the Treasury, and the Federal Reserve.
Amen
Which is why I have never contemplated moving to Brasil, or anywhere else, because we have a heritage of Liberty and freedom to act as we will. This is something in our collective consciousness: I have the right to be left alone.
We have lost our ability to be self-reliant, value dissent, and question authority - and our society shall pay dearly for it, as always thoughout history. The founding fathers basically handed their children the biggest hourglass of personal freedom, based on the rule of law, ever. We can rebuild, standing on their shoulders.
Jeez...do your posts come with a John Williams soundtrack? Where did you come up with this drivel...a Frank Capra movie? Your latent American Exceptionalism is getting a tad tired.
I was thinking that a soundtrack of people being burned alive in the background would be more appropriate. What about the Cayman's?????
No way, JW always comes with a happy ending. I was thinking more like this:
http://www.youtube.com/watch?v=6lj-17kkUZ8
Wait, I'm posting this one before Roddy does:
http://www.youtube.com/watch?v=UONGibstlbk
Oh, and in reference to America being exceptional, I ask you, Roddy, if you are referring to the what the zombie-class envisions, or to the lasting sacrifice made by generations of Patriots that continue to protect our way of life? Are we exceptional as a people anymore? I say no. We have lost a common bond to unite us. Get ready to get your socks knocked off:
http://www.youtube.com/watch?v=Ri1b8j8gG5A
We bicker back and forth instead of proposing constitutional solutions - meanwhile the military industrial-complex is testing new products on civilian populations.
What is exceptional is that the system could have lasted forever, always improving incrementally. Personal freedom can only be guaranteed by a vigilant citizenry. This isn't just flag waving - this is an active, eternal fight against tyranny. This is a way of life. If you're not outraged, you're not paying attention.
WaterWings, I agree totally.
Gotta go with WaterWings on this one.
I am Chumbawamba.
There is no truth that is not paradox . . .
People are too stupid to make their own decisions -- the paradox is, they MUST be allowed to do so anyhow -- no matter the suffering they cause themselves or others. The alternative is the ultimate evil of tyranny . . .
I think a soundloop of Doom II on nightmare level would be quite appropriate.
Failing that (and hat tip for the T2 song), does anyone have the Robocop theme song?
Ha! Doom II totally appropriate. funny how I hear Doom "noises" on Tv and in movies all the time.
Well let me tell you something brother! To all my little Amerimaniacs, say your prayers, take your vitamins and you will never go wrong.
I can't swallow bullets. I've never even tried.
I agree, WW.
Maybe...just maybe....the silver lining on these clouds of misfortune will be smaller government , increased self reliance and greatly reduced transfer payments. However, this New Society will require an enormous unwinding of the attitudes of American society's growing legions of non-contributors. Our country's urban areas will especially become a hotbed of criminal dysfunction as we reprogram our welfare-dependent society.
in another day and another time perhaps i might agree with you rainman, but unfortunately, i am sorry, but no such outcome will be in our future.
Nah, I think the suburbs will be worse off. Hyperinflation and peak oil will hit around the same time, causing the two hour commute lifestyle to become untenable both in dollars and in absolute terms. It'll be reverse-white-flight, with cities ringed by decaying ghettoes of suburbs.
Your final paragraph says it all. Let us hope the people
of this country take heed. More importantly I hope our government takes heed because it is they who are
draining our citizens of what it was founded upon
entrepreneurial spirit, risk taking and innovation...
:))))))))))))
Thank you! I laughed my heart out!
the skittles shitting unicorn brigade comes to
our rescue to tell us everything is going to be
ok and we can rebuild....isn't that speeeecial??
Unicorn brigage?
http://www.cinemaisdope.com/news/films/roadwarrior/lordhumungus-wez.jpg
Our problem is not disobedience. Rather, our problems stem from our (mostly blind and unquestioning) obedience.
citizenship is a terrible thing. it requires much for the system to work correctly. the founding fathers knew us all too well.
IMHO the founding fathers never seriously considered that the 4th estate, the so called mass media, would (or even could) be so compromised as to abandon its primary reason for existence. Nor that "we the people" would accept or tolerate a co-opted media.
The icon says it all, brother.
I am Chumbawamba.
Separated at birth, perhaps Chumba?
Ha. I cant decide if this is more insane or just plain old-fashioned stupidity.
1) Why should the US acount for social security liabilities the way a corporation does? Corporations regularly change, merger, or cease to exist... the US govt does not. And if it did, commitment to social sec would also be re-written. I have not funded my vacation in 10-yrs, but I am not overly concerned.
2) How can the US experience Weimar-style, Zimbabawe-style hyperinflation? We have NO EXTERNAL FOREIGN CURRENCY DEBTS! Never has hyper-inflation happened without massive foreign-denominated debts. We currently have exactly ZERO.
3) Savings and debt always balance. Every $1 of savings somewhere is $1 of debt. Money does not magically pay interest (interest is only paid by a borrower). Why again is there some massive problem in the current system?
4) IF we are going to have hyperinflation, isnt the advice really simple -- borrow every $1 you can and buy assets! Invest in every company that is highly levered. Hyperinflation makes super-winners out of big debtors and those who owe fixed debt and have bought assets (houses, farms, companies, etc). This is funny advice bc the scenario wont happen.
5) I think by "hyper" inflation, he means 2-3%.
So does milk actually cost only $0.50 a gallon? Does a new Corvette actually cost only $3,000.00?
Anonymous: your point #3 couldn't be more off. Ever hear of fractional reserve banking, and where money comes from? It does not need to be saved first, then lent. It is first lent, and when paid back, it is then "real," in your sense. Loans from Banks are always a 90/10% blend of freshly printed credit/"real" money. Or if you are a TBTF, maybe it's more like 98%/2%, the real high octane stuff - very flammable in the wrong hands.
Hyperinflation will result from the Federal Reserve covertly printing to buy up Treasury debt. I don't disagree that one strategy is to buy up assets so you are not stuck with less valuable dollars. But think of what the dollar is worth the day 100% of a Treasury auction is sold to the Federal Reserve. What is it worth that day? I think the answer is who knows? In 2009, a high percentage of the issuance was monetized, and we've not seen any particularly deleterious effects. A few commentators here have said this can go on alot longer than you might think. I'm not sure I can argue with that. If everyone just goes along, perception is reality, and the party continues. It's just at that point the cat is out of the bag and the foundation holding all of this up is getting very stressed.
Fed to World: "Sure we're monetizing the debt. So what you gonna do about it?" What indeed.
Actually by "hyper" I think he means "hyper".
While the pot of (M1-M3) soup is indeed huge and globally distributed... add enough water and eventually what is ladled into your bowl begins to resemble... ummm... water.
Also don't forget that any inflation expectations will have the effect of nudging up interest rates (unless people seek negative returns) which will in turn initially place downward pressures on things like... ummm... real estate, bonds, stocks...
The million dollar question is will Timmy and BB print more fiascos to fill the black hole or will they draw the line and let their bankster friends implode.
Bets anyone?
p.2 - you owe about 12 trillion nominated in USD to foreigners and debt rises rapidly.
2) How can the US experience Weimar-style, Zimbabawe-style hyperinflation? We have NO EXTERNAL FOREIGN CURRENCY DEBTS!
Simple: if trust in the dollar falls to zero tomorrow, you have instant hyperinflation.
Thank you.
Hyperinflation is a crisis of confidence in currency. It has nothing to do with finance proper.
I am Chumbawamba.
69 hits it on the head. The only reason the Weimar Republic blew up was because it was payong outrageous "reparations" to the Central Banksters of the day.
Zimbabwe? Please. Find a deeper pool of slime on the planet and I will give you a one-million-Zimbabwe-dollar bill.
Inflation is not going to happen. Deflation, though, is on an inexorable course to reset the entire credit fiasco and there is nothing anyone can do about it. Not even Unca Ben and the printing presses can stop it.
I bet hyperinflation is going to happen.
We will see :)
"Zimbabwe? Please. Find a deeper pool of slime on the planet and I will give you a one-million-Zimbabwe-dollar bill."
deeper pool of slime on the planet? Not hard the whitehouse and the majority of congress, now where's my one-million-Zimbabwe-dollar bill. While I agree a wage price spiral won't happen, any crack in the confidence game these fools are playing and all the inflation exported to buy cheap chineese crap and oil will come home to roost to buy physical assets, corps, farm land, and pm's and there you go uncle bens instant hyperinflation and dollar collapse..Of course
obongo and Benny are counting on the rest of the world
eating our inflation forever, perhaps they will?
Who cares? My only observation is will you want to hold US paper through this?
The US doesn't tax enough to pay its ongoing obligations...the externality or internality of the debt is irrelevant.
Rome did not owe massive foreign debt either and its currency incontrovertibly inflated to 0.
The point is WHAT finances the US deficits? Lending? If they cannot find buyers for the bonds, they will buy them with printed money, simple as that.
Whether this becomes "hyper" or not is anyone's guess. That said, a deflationary collapse of the US will result in sovereign default which pretty much gets the dollar instantly to 0.
robert prechter, will you please stop posting as someone else...
"Find a deeper pool of slime on the planet and I will give you a one-million-Zimbabwe-dollar bill."
Inside the Beltway, Wash. DC or the financial district in New York City. If you visit either place, be sure to wear a full-body condom.
Deeper pool of slime = Israeli government.
Keep your stupid paper.
Chumbawamba.
i am able to easily decide that you are just old
fashioned stupid.
1. i wouldn't care to build government finances
the way you plan for a vacation. keep your head
stuck in your ass until you suffocate...
2. currency debasement does not need foreign debt
to produce hyperinflation....please take your
correlation as causality thesis to where your
head is stuck....i hope that it further cuts off
sources of oxygen....
3. lmao....your fucktardedness is legendary....
4. ibid
5. i think by hyper he meant that some hyper-
fucktard would read his thesis....
the answers to all of your imbecility were in
his interview....god are we in trouble....go back
to your day job of cleaning toilets...
Hey, none of the fools responded to my post by saying - "Yes, I want to borrow every $1 I can and buy all risk assets". This is the BIG WIN trade in hyper-inflation. In this scenario you WANT to be a massive debtor.
If you dont want that trade, you DONT actually believe there will be hyper inflation.
If there is going to be hyper-inflation shouldnt you be buying Florida real estate right now at any price? Since it will cost us $20 for a loaf of bread, that Miami condo must be worth at least 100 loaves/sqft? Right?
Wont. Happen.
#69
Please restrain yourself. Right or wrong is no call for rudeness, as we are all stumped by the mystery of tommorrow as we attempt to weigh the possible outcomes.
thank you for your response, its amazing that he is an asst professor at NYU
Did you read the entire paper he wrote? You can get a grasp of his ideas from his website. It does not seem like you grasp what he is saying.
But hey, if it happens, let us know how that works out for you.
Somebody needs to (re)visit Chris Martenson's Crash Course
http://www.chrismartenson.com/crashcourse/chapter-1-three-beliefs
I read Soros, you keep reading your Chris Martenson.
Things are not "exciting" or "about to change". Preachers have peddled apocolypse every-single-year for 1000s of years. Wont. Happen.
Real life, even making millions or 100s of millions of dollar is quite boring. Its a grind of work, research, building something.
#69
It's pretty simple... there are a shitload of dollars outside our country, used as reserves by other countries. All it would take for John's theory to materialize is for those dollars to come home and go hot. Foreigners are already propping up property prices in Florida real estate. If a global dollar panic commences (I don't know why it would, I mean our country is so wlee managed by our rulers... that is said in jest), all those reactivated dollars will bid prices up. Way more than 2-3%.
with respect to point nr 3 "Savings and debt always balance. Every $1 of savings somewhere is $1 of debt. Money does not magically pay interest (interest is only paid by a borrower). Why again is there some massive problem in the current system?"
Ever heard of the fractionate banking system and debt leverage? Every dollar saved is turned in 10 maybe more debt dollars... That's the problem you ignore.
Out of curiousity, when did John Williams start to preach hyperinflation?
http://www.shadowstats.com/article/hyperinflation.pdf
For the illiterate, or just plain too lazy to read, the date on the report is April 8, 2008.
Ummm, can someone remind me what Treasury bonds did in 2008?
ps... of course if you're illiterate, you wouldn't be able to read this anyways :)
Ummm, can someone remind me what Treasury bonds did in 2008?
It's unlike you to be that snarky, so what the hell: ummm, can you remind me WHY Treasury bonds did what they did in 2008, more importantly why, and whether that course is sustainable?
I know I've been an ass recently and I do feel bad, but like Popeye said
That's all I can stands and I can't stands no moreI have been listening to a lot of treasury bashing right in front of what might finally be the correction we're waiting for, I agree we'll get hyper-inflation... in a few years, but just not yet.
- Why? Deflation
- Sustainable? That's the real $12.4 Trillion question.
Are you being selective in your longer term memory or did you only begin to subscribe to John Williams last year? Because JW has been talking about high inflation for years and years. In fact, he has regularly used the term hyperinflation as a distinct possibility if the Fed and Treasury got completely out of hand.
It was in that 2008 report that he first laid out IN DETAIL the underlying support for true hyperinflation and expressed his opinion that the Rubicon had been crossed. It is disingenuous to suggest that JW is a recent convert to the hyperinflation argument. He's been leading the way for years.
As a trained economist, John does not speculate as much as gather facts and figures to substantiate his thesis. If John goes out on a limb, you can bet he is quite comfortable there. He may not have been the first to go on record about hyperinflation but that is simply because he isn't the type to speculate without some substantial and verifiable basis. His "opinions" are different from yours or mine.
I'm not bashing the man, he's a freaking genius and I completely acknowledge that. Hell, a LARGE majority on this website are heros to me and I will still vehemently disagree with pushing the hyperinflation thesis before a possibly (even probably) disasterous deflationary wave.
Will I continue to be an ass as long as a singular inflationary topic path is taken? YEP.
Let me ask, when was the last time a deflationary thread was posted on the front? Or a defense of the t-bill and why deflation may still be the larger concern?
Deflation (270)
Inflation (572)
Hyperinflation (58)
I understand the thesis, I just think the argument has become one-sided at this point and that's what has me so incredibly incensed to the point where I will be a flat out ass.
I've been expecting the wave you speak of. I dove out of any short-term positions I had a few months ago. It makes perfect sense as a trigger for exposing national insolvency writ large. Argentina experienced such a wave before their currency blew up; it didn't last for years, though, but rather only about 10 months or so IIRC before the 'splosion happened. As the USD is reserve currency, if a rush to the exits starts, it could transition from deflation to hyperinflation rather quickly. That's why I can't buy your Treasury thesis. Deflation hastens the destruction of our ability to service debt.
My thesis isn't static forever, it's static until the wave is near complete or at least complete enough.
Will hyper inflation come? Yes, most likely, truly the choice is up to America. If we continue to pawn our debt outside of the nation, well of course it will come. If American's chip in and do their part for their country and purchase some of this bullshit debt, the most likely not. The dollar is a function of wealth positioning (more on that later) and as long as we keep borrowing from China to give to our corporations to invest these same dollars BACK INTO China, well duh, of course the dollar is going to be weak.
But telling people to run from the one item that people can invest in long only strategies (besides the inverse etfs) is not healthy or even respectable. Treasuries serve two purposes in basic portfolio allocation to me... income and PROTECTION. The point is you sell off some of your treasuries (or all) once the downwave passes and then invest it into the market. *shrug* it ain't that hard.
and with that said.....Happy New Year!
http://www.clipsyndicate.com/video/playlist/1778/1229570?title=bloomberg
Davidowitz weighs in on retail. not rosy at all.
green shoots anyone?
Sorry,
You guys are a little late. The government has taken the actions needed to save a private economy that was coming unglued and close to death. The Private Economy is now on life support via the Central Bank and Treasury of the most powerful nation (militarily and monetarily). Other countries may suffer parts of our economy may not fully revive, but the actions taken by the US Gov't and the FED are plugging those holes. They SAVED the PRIVATE ECONOMY from the brink.
Inflation may accelerate given we are still working off inventories and going to run them into the ground (ex-housing and CRE) and when those inventories get low enough timing of bringing production back online will likely be slow. Smart industries will start ramping up production now and start hiring to get ahead of the curve, bringing a bigger piece of the limited supply to market.
ZH- Still like the site a lot but the sensationalism has become obvious to me as a way to get attention and buzz and readership. You should consider a partnership with Glenn Beck.
the government has taken action....<<<<
well duh....yes this we know already. and believe, they have taken lots of action with debt that we now owe. this is what is the problem. this out of control government is the problem, not the solution.
You remind me of the dixie band that was playing on the Titanic. The ship was sinking, but they stubbornly kept playing as 'this ship cannot sink'. I call it the Great Denial. The economy is not interesting. It is the financial system that is bust.
Spoken like a veritable MSM shill.
What? You've got too much time on your hands as a CNBC desk jockey that you've got to come here and spew your tired cliches?
Anon,
They did this to you. They are now:
a. trying to fix what they did to you.
b. trying to cover up what they did to you.
c. continuing to do what they did to you.
I want to be angry with you but I can't. I want to be flip and say "step away from the kool aid," but I can't. Anon, I'm glad you are here. We're here too. Keep reading. But know this, they have done you no favors and at best, all they have done is try to save you from what they started. Incompetence, malfeasance, deliberate calculated conspiracy, or a culture of dishonesty gone bad. You pick. You look like a victim to me. Most everyone else here looks like survivors.
Peace.
Dennis Kneale? Is that you?
No WAY. not with all the criminality thats been observed. Our country is still run by a syndicate. Nor do i believe this crisis is accidental. I can not be persuaded that so many have been so wrong so many times. Its been said this could not be foreseen, yet it was. Tho denied then as now. Lies and cons have broken trust . Fortunes and bonuses for few, amidst the poverty of the masses. NO, this wont rest till its done with indictments and we return our country to the constitution.
With the advances in adhesive technology humpty dumpty has been put back together.
It may be time to recognize these new forces in the market as sufficient to change how to make asset allocation decisions in a Macro framework. Overweight risk assets you are be subsidized and you are being patriotic.
Disclaimer: Pardon me in advance for any ignorance I may show as I've only been here for 8 weeks and some of you guys still talk in a language that is foreign to me... ----------------------------------------------------------------------------------
I don't see how you can claim the govt fixed anything. In order for the the system to function like say a freshly repaired car , it can't be firing on a few cylinders with large puffs of black smoke as the car starts sputtering and jerking as it goes slower and slower. All the while the mechanic claims the fix will take time but it will do the trick.
The problem the way us simpletons see it is the economy cracked open , not as a result of a normal business cycle gone awry, but by outright fraud with vast amounts of money bet on failure. Instead of stepping in and say putting a freeze on the casual effects (derivatives) that was obvious to even dumb asses like me, we printed more and more money to pay off the bets using the excuse that we were "saving the banking system".
Once a vast amount of money is handed to people that should be in jail, our justice system has bifurcated along the lines of those who have connections and wealth and those don't. If our justice system is dysfunctional in that it ignores large scale white collar crime but goes one step further, the govt responsible for upholding the law rewards the crooks with more money than they could have imagined in their wildest most feverish whack off sessions, then it only stands to reason that greed will feed on itself once people realize, as they have here, there are no consequences for their actions.
Therefore, why not keep repeating it because in this case, doing the same thing over and over again and expecting the same result , has proven to be true? The problem is that country's debt level is rising faster than the temperature level of the above car that has a cracked engine block that the mechanic overlooked because, well he had never fixed a car before with a blown engine and WTF does a cracked engine block look like anyway?
The reason the debt is rising so fast is that money continues to be poured into the same system that cracked up last year in the hopes that somehow the people who caused this will somehow be satisfied with trillions instead of billions and stop and take corrective action themselves. Sure. Wouldn't you if every time you fucked up someone handed you a trillion dollars?
To sit there with a straight keyboard and claim that corrective action has been taken and that everything will be alright , especially in this crowd, is like claiming that car you just fixed is as good as new . Yes, you have taken action at Billy Bob's car repair and school of economics for crooks.
Do you want an explanation of corruption yes what is? Is what corrution a thing in that yes America is yet proud not yet government happy true good propaganda yes forever please yes bash skull bloody yes please wife rape you like pay United States dollar yes worthless tomorrow yes more today gold investment please fuck home! stay?
Any government inherently cannot fix anything. It's solution is always to expand and become more oppressive. Always. Let the free market be your guide. Your fellow human beings are always more innovative if you just let them work their magic (within the law of course; that's why we have our problems now; no need for paragraph after paragraph to explain that we have an absolutely corrupt administration - if anything, lengthy explanations muddy the water. Put these psychopaths in front of a jury of 12 peers, yesterday!
Put that through your damn translator. If you're going to talk to Americans that want solutions for peace you better research Dr. Ron Paul from the 14th District of Texas.
I think WW skipped your disclaimer. Excellent military posts Dburn. Give us more.
phaesed,
Ten-years were up 20% and 30-years were up 46%. This year, though, the tens are off about 10% and the thirtys about 30%. Is his theory faulty, or was he just early?
Knowing and speaking the truth can be quite liberating. John has been working with reality (maybe I should say working at deconstructing the official myth) so long that it comes natural to him to speak frankly and directly about what he sees coming.
On the other hand, other than pure psychopaths, who have no emotional or psychological problems with lying (because the only truth is what they say is the truth) the average person becomes (sometimes extremely) uncomfortable when speaking untruths or maintaining the myth. This is the principal idea behind lie detectors.
To take this one step further, people who are firmly anchored in truth instantly recognize truth when it's spoken and are very comfortable around it. Its only when they are hearing lies that they become distressed. But those who are in denial become quite distressed when the truth is spoken, as if it's a personal affront to them.
Why do I talk about this? Because the next time you're watching one of our fearless leaders seamlessly talk and expound upon items you know (or strongly suspect) are lies, you are looking at a psychopath. This is why I find some pleasure in watching Bernanke and Geithner squirm in front of the cameras. There are clearly suffering from the lies they tell. On the other hand, Obama has no problem with his lies. Nor does/did Paulson, Cheney, Bush as well as many corporate heads show any distress when lying in public.
It's a public myth that all psychopaths have blood on their hands and a wild look in their eyes. Psychopaths are the most accomplished liars precisely because there is no moral conflict inside. To take this the final step forward, isn't it interesting that the average Joe is most comfortable with leaders who show "confidence" and "certainty" when speaking publicly. It seems we love our psychopaths and elect them to high public office with loud cheers and great public spectacle.
The problems begin within us folks. Our leaders are simply giving us what we ask for. No aliens are buzzing DC, dropping politicians into Congressional office on the sly. They come from within the herd and are supported by the herd.
That is a really important and astute comment and I hope everyone here reads it.
+10
CD wins.
So if she weighs less than a duck.................oh sorry, sorry. So kill all the lying psychopaths, yes I get it. Agreed!
Or just don't elect them anymore??? Tall order when the most consistant personality trait seen amongst people drawn to public office is, you guessed it: Psychopaths.
So we are back to kill all the psychopaths. Good. I liked that outcome best anyway.
I don't see anything in that post about killing people. It rather appears that you are trying hard to create a straw man.
If you say so. My approach is dark (if I call it humor, you will jump all over me some more)
How many psychopaths have you seen cured lately?
Imprison them? Rehabilitate them? Force them to take phamacuiticals to mute the behavior?
I can see that you have a humanitarian component to your personal make up. You need to know your enemy better. They have no humanitarian component to their makeup what so ever. They consider it a weakness.
I like dark humor. It's true - you (our society) have to know your enemy better. They can see the behavior in brain patterns and they know from an early age, even if they don't understand it, that they are different than other children. It's freaky but reality.
And so they are still human. And as long as they break no laws I say let them be. But damn it, I hate competing with people that just want to see me lose for the sake of them winning. Everyone wants to win, to be validated. But these people won't lend a hand when you're in the mud unless it suits their personal interest, generally speaking.
So what can we do as a minority? I mean, in all actually, especially on a sharp financial blog like this one, we have multiple P's reading over this as we alkjsdf;ladaflk. Damn it! But, as another great poster, AnonymousMonetarist, described it to someone upset at hi(r)s long and excellent posts, [anonymity is a warm blanket]. A vigilant society is the only way.
Speaking of vigilant citizens, CD, have you seen vigilantcitizen.com yet? Hooooooweee! Although, I can say from personal experience some of it is a big stretch, it is highly entertaining in the least!
I was not aware of the vigilantcitizen.com web site but I am aware of symboligy, signs and code and it's usage in our culture. Regardless of whether you or I believe it, the people who place these symbols in everything and anything firmly believe in its power. And that alone gives it power.
I started studying this issue some months ago and continue to this day, mostly in two books I purchased on the subject. I saw a mention of this web site last month on ZH and now with your mention (two signs) I will take the hint (sign) and spend some time on the site.
Thanks
psi,
Few people realize or believe that symbols (as well as names) have actual power. But they do, and they are routinely used to draw power from unsuspecting people and direct it toward those who can utilize it. The spiritual leeches running this country are sucking us all dry...
Thanks, need to take a look at that. I was one of the first people to own the "Subway Vigilante" board game which came out in the mid-80's after the Bernard Goetz NYC subway shooting of some "folks" that tried to mug him.
Most of my friends did not get the humor. Some did.
Man! They really seem to have a thing for Rihanna!
She's one of the current pump and dumps. She's no Madonna. She might pull a Britney Spears, though. Round and round we go. I bet she gets pregnant before we see a food shortage.
That's the problem: we're top heavy with psychopaths. But psychopaths are something that will be with humanity as long as there is humanity. It takes a vigilant citizenry to prosecute offenses - until then, who cares if a psychopath doesn't care about you; they have to break the law to be a problem.
Great clarity, as usual, CD.
W could hardly speak by the end of his presidency. Compare his speeches from when he was the governor of Texas, quite a difference.
Drugged up, tanked up. Something:
http://www.fourwinds10.com/siterun_data/government/fraud/gw_bush_ghw_bus...
I agree that baby Bush was becoming increasingly incoherent towards the end. But I seriously doubt that had anything to do with remorse or guilt and more to do with his spiral down into insanity and darkness. I personally feel he was on high levels of drugs for most of his presidency, starting the day of 9/11/2001. I've been wondering if the ZH readership (and management) would tolerate my (fact based) opinions regarding this subject. They're obviously not mainstream.
I always read your comments. I don't know what to make of the W speculation, honestly, but it cannot be denied that something was going on. You just don't get that kind of loss of skill without some factor influence.
My bet is he was hittin' the sauce again. Alcoholics are never "cured", even after 10-20-30 years. They just commit to not drinking from day to day.
Second year of his second term I started to notice the slurring in his speeches more and more. Hope for his sake I'm wrong, but seems like that was the case.
Oh, you hit a nerve right there. I wonder if I'm a recent inductee. At least I don't drink at my wage job. Haha! Great post.
Cog Diss, Read your posts. similar beliefs here, 911, JWilliams, etc. You run money? would be fun to chat. bob@acelightning.net
A+ correct.
A sociopath seeks to control relationships for their own benefit. Sociopaths are typically polished. Those whose personality disorder rises to the level of psychopathy are usually very charming and engaging. How else do people suppose that serial killers succeed in killing so many people?
Pyschopaths like Ted Bundy were incredibly charming. A sociopathic personality type will do whatever they desire and lack empathy to feel what others feel as a result of their actions. A sociopath who is successful will necessarily be a very skilled liar, very charming, very charismatic, because the entire personality structure is built around needs gratification irrespective of the cost to others.
So what disorder is characterized by threatening to kick someone's ass in an internet post?
Internuttiness! Or maybe Internutty.
KB syndrome
Well, CD, I suspected from your handle that your were a fellow psychologist, but now I'm fairly certain of it. Or perhaps just an obsessive autodidact?
Is an obsessive autodidact the same thing as an obsessive masturbater? After all, I am a self taught masturbater.
It's an art, not a science. :>)
Cd, I have to disagree here.
It seems that the psychopaths are the ones who speak the truth because nobody wants to hear it.
The liars are merely giving what the people what they want, people don't want to know if things are bad.... hell, that's the entire THESIS behind your name.
In an insane world a sane person must appear insane.
"On the other hand, Obama has no problem with his lies. Nor does/did Paulson, Cheney, Bush as well as many corporate heads show any distress when lying in public."
I agree, but hold out that they may actually too self-deluded to know they are lying... Road to hell being paved with good intentions and all.
Interesting points. Bravo!
I admire his moxie for making such a bold call. However, if his thesis is wrong, will people still listen to Mr. Williams's prognostications or will he be discredited?
"The economy would devolve into something like a barter system until they came up with a replacement global currency."
I believe Mr. Williams is right about the replacement currency and it is a measure that will eventually have to be taken. The problem lies in the fact that the ones that are going to be offering the new currency as a solution are the same ones that caused the problems with the old one.
I doubt the Bank of England would allow the Forex market to simply disappear. HRH Queen Elizabeth makes far too much money on that enterprise.
:D
Her Majesty.
Royal Highness is reserved for a crown prince or princess
Once she dealt with that Soros fellow, you mean...
When Germany imploded and defaulted with hyperinflation they released a new currency backed by land and R.E.. Hmm... didn't the treasury just commit to buying up and backing everything and anything from Fredd and Fann. Hmmm....
...the government planning to dictate the value of Real Estate to prop up the value of their holdings ??
Is this another version of rent control?
My thoughts exactly. In addition, I am purchasing Silver. I suspect that any new currency, in order to have any credibility, will need some (small) amount of precious metal as a backing, even if it's only a 10% or 20% backing. While Gold would be an "obvious" candidate for duty, I suspect Silver will actually be used for lower denomination bills. Coins won't contain any precious metal at all because the metal would be worth far more than the coin itself.
Just an educated wild assed guesstimate on my part. But it's been working for me for whatever reason, so I'll continue until it doesn't.
And they didn't even own that much - just enough to put something tangible behind the Mark. Amazing it doesn't really take a lot, once the Full Faith & Credit farce is called. The Fed doesn't have skin in the game. Yet.
Tough comments above. My only question is if we have no plan to pay the principal down from the $12T national debt now or at any point in the next ten years (was $8T in '06, admin plans deficits to '19) and we intend to continue borrowing to maintain our government / states (likely debt to be $15 to $20T by '15)...then this is growing much faster than GDP or tax revenues. Ummm, when does this divergence of income/outflow cause a little problem? Seems sensible that since there is no plan to pay down the debt and only to continue raising it at a significant delta to GDP that strong inflation would be the only plausible answer. None of this deals w/ unfunded liabilities of $100T (=/-?) and remember these aren't just future liabilities but money that was a surplus and thus spent (increased GDP) and now, as of this year, Social Security is now needing to borrow to pay for this years payments.
Funny I just tried to search the internet for plans to pay down the national debt (not reduce the annual deficits, as Obama pledged, but reduce the debt). I could find none. I did find a prescient article for '06 and have attached for your enjoyment. We all know the political ramifications of reducing benefits for SS or medicare/medicaid...or the military. So what gives? Answer=Nothing. Just borrow more.
http://www.thetrumpet.com/index.php?q=2217.998.82.0
Bottomline, I'm open to other answers (GDP will outgrow debt...only trouble is we seem to find other programs in good times for that surplus instead of stabilizing or reducing debt). Anyway, somebody explain some option for avoiding an ever increasing amount of our taxes to be paid toward servicing debt (primarily through the issuance of new debt...i.e, Treasuries).
cH
we've already crossed the rubicon, just waiting for reality, to catch up.
Hyperinflation usually follows after high inflation, when people become frightened and try to get rid of their dollars. But Williams never fills in the steps of how we first get to high inflation. Most people now have reduced wealth and income, and companies have reduced sales. Those events tend to produce deflation. In this situation, price inflation would have to arise from some sudden spike in costs to businesses. It could be higher commodity prices, or generally higher import prices from a sharply dropping dollar. Just increased dollars in the banking system will not do it. Nor will a large fiscal deficit in today's environment. Williams needs to explain how these sudden cost increases to businesses would arise, preceding the high inflation.
Hyperinflation can follow instantly. Tomorrow. Trust is gone = dollar is gone. You do not need high inflation first.
Remember that:
1) LTCM went down because their models said the crash in derivatives 'could not happen in a trillion years'
2) The mortgage problems started because the bank's models said 'housing price increase will be always at least 5% a year'
3) A simple fact as the devaluation of the Thailand Bath led to falling domino's everywhere in Asia
4) The financial system is one big circular system, one bank failure (Lehman) almost led to the collapse of the whole system
It is my firm belief that models used by economists and bankers are not only far too optimistic, but they also do not take into account the massive risk there is everywhere. I am sure a sovereign debt will trigger something nobody ever thought of. It is a time bomb.
Agree. Well spoken from a Taleb/Mandelbrot point of view.
So let me get this straight:
Inflation/Hyperinflation - Occurs as dollar continues to be debased from over-issuance of government debt.
Deflation - When no one can afford anything anyway, inflated prices still have to drop because people aren't buying what others are selling.
Which leads me to the conundrum - why don't all inflationary periods lead to deflation?
why don't all inflationary periods lead to deflation?
It needs to be Hyper-inflationary periods BTW.
They DO lead to deflation, IN ECONOMIC ACTIVITY, Not in NOMINAL TERMS!
Zimbabwe 15 Quintillion percent inflation, 90% unemployment.
GDP?
In ZAR, up 10,000% per month, against some other currency, NOT MEASUREABLE!
Get it?
"The economy would devolve into something like a barter system until they came up with a replacement global currency".
And this is were the BS begins... why must our answer have to be a global currency? Nonsense. Put the dollar on a limited Gold Standard at say 3000? It's going to be bankruptchy and tough regardless of inflation. What does the author think life is like with no money at all in circulation? Because thats what will happen if the Fed doesn't print. People just have to exist regardless of Politic correctness .
The FED doesn't print neither literally or metaphorically. There is no such thing as money out of thin air. Money must have backing and security. No money in circulation "could" mean the US government has stopped issuing debt bonds.
Yes , but that just a matter of valuation. Besides you missed the whole point. We don't need a global currency for an American problem. I say, Get rid of the UN as a global mouth piece, that body is worthless. .
Whilst you're at it, the WTO, WHO, IMF, IPCC and the rest of that UN junk. Give countries back their sovereignty and allow the people in EU nations to vote on membership. The Euro did not stabilize Europe and neither would an international currency stabilize the US. Agree.
Zimbabwe's hyperinflation was caused as a result of its racist government's action on their own people of a different color. A case study of why racisim is harmful regardless of whether it's white on black, black on white, black on black etcetra. May Mugabe and his followers get their just reward.
Lets' get it straight. Hyperinflation is NOT high inflation. Hyperinflation assumes a loss of confidence in the currency (currency crisis). How would this happen if it'd debt default that's sinking the economy? Debt that can only be paid back in DOLLARS. High inflation YES BUT only after the deleveraging is over (DEFLATION) and we are nowhere near that point. Hyperinflation is too early to talk about because it would have to assume a withdrawal from Reserve currency and a total annihilation of the US Industry and military to defend it's currency ie. Weimar Germany after WWI reparations.
Nope...
15% US Treasuries
3 mos. to 2 years
More than 2 years....no buyers....
15% is better than 35%
Not the end of the world....
Are you kidding? Do you have any idea what real estate asset valuations would be in a 15%+ interest rate environment? Can you spell "massive insolvency?"
Deflation,hyperinflation..blah blah blah...the end result is the same..your life is much more bleak than it was before...either way we are in a debt trap and there is no way out..if you get shot do you want to know who shot you,who made the bullet,what kind of gun,was the shooter a lefty or a righty?nope,youve been shot and that is all that matters.History doesnt repeat itself but it does ryhme..just because we arent on the same exact path with all the same variables doesnt mean the destination cant be the same...All roads lead to Rome at this point.
Ha! I'm living like there is no tomorrow, enjoying the moment.
Que sara sara!
Oh, by the way, watch the classic "Yojimbo"!
Yeah... the Coliseum
Bread and Circuses:
MSM Television and Junk Food.
Keep 'em comatose. That always works.
We've had that for awhile already.
It's called the "Octogon".
I don't see hyperinflation of the classic type that has happened before in developed countries (Weimar Republic, Argentina, Brazil) happening here.
First of all, we have seignorage - the privilege of maintaining our external debt in our own currency.
Second, long before you get hyperinflation, the extreme deflation we will see in the next two to three years will lead to some very profound changes here in the U.S. - regime change along with structural change (Constitution 2.0).
Third, assuming that deflation doesn't happen, we might get a return to the inflationary environment of 1978-80 - which, because of short national memories would be traumatic enough to bring about the changes mentioned above.
In other words, whether it's hyperinflation or hyperDEFLATION, we're screwed.
KptLt. laughing swordfish
9er Unterseeboote Flotille
You make more sense than the article above except that deflation is occurring in the private credit market which is many time larger than the public debt.
This is old news! I was hoping for a newer, uptodate prophesy. Oh' well, good stuff anyway!
Goddamn US Economy - totally corrupt and rotten to the core. It's been on life support for so long yet the fucking thing just wont die. C'mon DIE goddammit!
Apple? Google? Goldman? WHAT DO THESE COMPANIES REALLY DO ANYWAY? They dont make spam. And they dont make shotguns.
I await the deflationary hyper-inflation spiral in my bunker.
we'll die when we run out of dye
at least that's our plan
It was gonna happen and then Kanye jumped in front again. It's his new thing:
http://msnbcmedia.msn.com/j/MSNBC/Components/Photo/_new/BANFFKANYE1.hmed...
As Chumba once put it, 'CROSS THAT LINE!'
This site has improved my math skills.
I second that!
A few things to think about:
1. What currency is the dollar going to lose value against? The yen? The pound? The rest of the world's governments are no less bankrupt than the U.S.
2. What will this loss of dollar value do to the Chinese yuan? If China de-pegs it will destroy its export business. If it keeps the peg, it makes Williams' scenario more far-fetched than it is already.
3. Didn't Japan do everything the U.S. is doing now? How did the yen stay so strong and Japanese bond rates stay so low? According to Williams' thesis the yen should have become worthless long ago.
4. When all of this capital flees the dollar in Williams' scenario, what will it be fleeing TO? Any other currency that saw the dramatic strengthening that a dollar flight would trigger would instantly attempt to devalue to prevent the destruction of its export markets.
5. If gold is going to be the basis for the new world currency, I suppose that the world's largest sovereign gold holders would probably be the beneficiary of such a step, right? And who is the largest sovereign holder of gold? The U.S.
I think that Williams would do better to apply his theories to Britain, Japan or other industrialized nation that is much more over-extended than the U.S.
The dollar only looks ugly until you look at its peers.
Greenspan already admitted in 2005 that the dollar would end in hyperinflation. That was BEFORE the disastrous parabolic debt increase of the current administration. I think Greenspan is fully aware the time of death has come a lot nearer. I give the current money system 5 years, 10 at best.
http://www.viewzone.com/fakegold.html maybe not
Can we just have a world war already?
Let's just secede from the union. Enough of these federal boondoggles.
Williams' thesis would require rising wages in the U.S.,which I don't see happening any time soon.
No rising wages means no hyperinflation, just demand destruction as the broke get broker.
Great Post.
He spoke of the potential for disruptions in the supply chain to food stores. That is where society as we know it begins to totally unravel. Speaking of which, I think were missing an even bigger black swan on the way.
I read a crop report out of Texas, seems they are having a difficult season:
http://www.chron.com/disp/story.mpl/ap/business/6783315.html
A little more sniffing around, I find this report out of Illinois:
http://www.pekintimes.com/news/x1679100990/Long-tough-harvest-Yields-loo...
Funny, in a contradiction to all that data, there is this:
http://www.usda.gov/nass/PUBS/TODAYRPT/crop0909.txt
Here is a quote out of that report:
Is the USDA trying to hide something awful?
While trying to search out more data on soybeans, I came across this :
http://www.marketskeptics.com/2009/12/2010-food-crisis-for-dummies.html.
I don't know who he is, but he smells a rat too.
Heads up!
You're definitely smelling a four legged rodent of the furry kind. Once a government has crossed the Rubicon and takes "normal" political lying to the psychopathic level, then everything must be covered up if it in any way can disrupt the status quo. A lie from the past that could be exposed (and undermine the leadership) is considered a National Security issue and is officially covered up.
I had the misfortune to once be married to what turned out to be a pathological liar. Once I divorced and recovered from the emotional and financial trauma, I spent many years studying that behavior. The lies begin as defensive lies and soon become offensive in nature. Then the person (government) begins to lie about everything and anything, almost as a reflex. It makes no sense to a healthy person, which is one of the reasons pathological liars can penetrate so deeply into mainstream. Most people simply would never lie to this extent and couldn't imagine anyone doing so.
Sadly we allow psychopaths among us because we lack the imagination to detect them early, before they cause great harm. Remember, the pathological liar has a keen sense and instinct when it comes to lying. They are careful to weave in some truth to make it plausible and they also make sure they're telling you something you wish to hear.
We are unfortunately (somewhat) complicit in enabling the very pathological liars that wind up destroying us. I learned more about this subject studying how I reacted to and enabled her lies than I did studying how and what she lied about.
If I chose to live in CDs world... paying $12T in debt would be no problem. Obama is clearly an alien (they all are). They have access to massive technology to help overcome any problem. Uh... conspiracy theory much?
When someone holds opinions you do not agree with (Obama, Bernanke, your Wife, Chumbawamba) they are not "lying sociopaths". They just disagree.
When you pass a large white building consider stopping at the door and checking yourself in.
You've obviously never had the pleasure of relating to a pathological narcissist. It's that kind of condescending attitude of yours that keeps people from talking about the craziness that occurs behind closed doors and allows it to proliferate. Normal, well adjusted, caring people don't tell bold faced lies. This isn't about differences of opinion.
Thank god! I'm glad the lizard people meme is finally spreading. Let's expose these reptiles for what they really are!
I am Chumbawamba and I do NOT TAKE SHIT FROM IGUANAS!
Yeah! what Chummers said. Throw the nearest iguana out the window of a moving car!
I heard they taste like chicken, so perhaps they should be cleaned, gutted and stored in the freezer for future parties. Would go great with the fried squid.
I am Chumbawamba.