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Latest Inflation Riot Tally: Algeria, Tunisia, Morocco, Yemen And Jordan

Tyler Durden's picture





 

The Fed chairman is 100% confident inflation can be contained. Rapidly spreading rioting (5 countries so far) would take the under on that.

Latest on Tunisia:

Twelve people were killed in overnight clashes in the Tunisian capital Tunis and the northeastern town of Ras Jebel, according to accounts from two medical sources and a witness on Friday.

Ten of the victims were killed after clashes in the capital, two sources from Charles Nicolle hospital told Reuters.

A witness from Ras Jebel, who identified herself as Narjes, said: "I saw two dead people with my own eyes after police fired at youth".

Tunisian officials could not immediately be reached for a comment. It was not immediately clear whether the shootings took place before or after the country's president ordered police to stop using lethal force against demonstrators.

And now the violence has spread to Jordan:

Food price protests sweeping across North Africa and the Middle East reached Jordan on Friday, when hundreds of protesters chanted slogans against Prime Minister Samir al-Rifai in the southern city of Karak.

The peaceful protest was held despite hastily announced government measures to curb commodity and fuel prices. Similar demonstrations were held in three other towns and cities across the country, witnesses said.

"We are protesting the policies of the government -- high prices and repeated taxation that made the Jordanian people revolt," Tawfiq al-Batoush, a former head of Karak municipality, told Reuters at the protest outside Karak's Al Omari mosque.

Three days ago, after riots in Algeria and Tunisia over high prices, unemployment and falling living standards, Jordan announced a $225 million package of cuts in the prices of some types of fuel and of staple products including sugar and rice.

Other Arab countries have taken similar steps. Libya abolished taxes and customs duties on food products and Morocco offered compensation to importers of soft milling wheat to keep supplies stable after a surge in grain prices.

...Morocco (google translated)

Protests against price rises and unemployment moved from Tunisia to Morocco, where the streets of Rabat, yesterday, saw clashes between young protesters and police forces, which tried to prevent them from organizing a demonstration outside the Moroccan parliament, in protest against unemployment and high prices and the cost of living in Morocco

And Yemen:

In Yemen, Yemeni President Ali Abdullah Saleh fired Minister of Oil and Chief Executive, the Yemen Petroleum Company Omar Arhabi, yesterday, due to a lack in the supply of petroleum products, not available in the market, which led to bottlenecks in front of gas stations and the creation of indignation among the citizens.

Not like there is much to add here, but we would like to add that if a rising stock market was indiciative of "wealth" then the citizens of Zimbabwe have to be the richest people in the universe.

 


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Fri, 01/14/2011 - 11:17 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

They dont care. 1 vs. 1billion...they dont care.

 

It's more than a shame.

Fri, 01/14/2011 - 11:21 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

No inflation in the USA like the rest of the " dollar peg dogs ".

 

Those people burning tire should just ask for the peg to be broken from the dollar. Lol'

Fri, 01/14/2011 - 11:55 | Link to Comment B9K9
B9K9's picture

Why is everyone junking you for stating the obvious? We are exporting our inflation. If the host countries want to stop the pain, then simply remove the respective peg(s). Sheesh.

Ok, so now let's noodle through the effects as each country is forced (by social events) to remove their pegs. The $USD will weaken vis-a-vis a market basket of foreign currencies. Since we don't exactly import many goods/services from any of these countries, why are they hestitant to allow their currencies to rise in value?

Fri, 01/14/2011 - 15:24 | Link to Comment SgtShaftoe
SgtShaftoe's picture

Its an income vs food price issue, like during the french revolution:

http://freedomofoceania.blogspot.com/2011/01/inflation-impact-to-world-e...

 

Fri, 01/14/2011 - 21:08 | Link to Comment StychoKiller
StychoKiller's picture

Guns or butter -- guess what the Govts are spending currency on -- seen anyone getting killed from high-speed loaves of bread?

Thu, 01/20/2011 - 04:40 | Link to Comment scaleindependent
scaleindependent's picture

"Since we don't exactly import many goods/services from any of these countries, why are they hestitant to allow their currencies to rise in value?"

They do not do it because of us. They do it because of their trading partners who are also pegged to the USD. Remember, the dollar is currently the lingua franca of fiat. It has long been, pardon the pun, gold standard of currencies. IF they depeg first compared to their respective trading countries then they will lose competitiveness.

Fri, 01/14/2011 - 13:06 | Link to Comment ecuador mike
ecuador mike's picture

Don't they know that buring tires will be inflationary on tires??

Fri, 01/14/2011 - 11:22 | Link to Comment bob_dabolina
bob_dabolina's picture

Ben can tame inlfation in 15 seconds with his eyes closed and his hands tied behind his back, underwater while weaving a wicker basket.

He's like a fuckin' inflation ninja.

Fri, 01/14/2011 - 11:31 | Link to Comment free_as_in_beer
free_as_in_beer's picture

Chuck Norris in disguise?

Fri, 01/14/2011 - 11:34 | Link to Comment bob_dabolina
bob_dabolina's picture

Inflation doesn't rise.

Ben Bernanke falls.

Fri, 01/14/2011 - 12:00 | Link to Comment system failure
system failure's picture

Excellent thesis to sum it all up, of which, it worked in 2001-2003, when people had jobs per say. We shall watch it fail the second go around as people starve to death and reach reality of the madness. In addition, each state of the union are now falling prey to the madness one by one. Kind of hard for Ben when he has no other choice, or Ben can viewed as such his intials, as small as a BB. Let's make that Daisy BB, if Doc Holiday was still around.

Fri, 01/14/2011 - 14:37 | Link to Comment bugs_
bugs_'s picture

Its raining dollars

Fri, 01/14/2011 - 11:31 | Link to Comment bronzie
bronzie's picture

"Ben can tame inlfation in 15 seconds"

actually he can - the same way Volker did it - by raising interest rates into the double digits

of course the downside to this approach is that real estate prices will collapse and take down the rest of the economy ...

Fri, 01/14/2011 - 11:36 | Link to Comment bob_dabolina
bob_dabolina's picture

Well thats the trick isn't it.

He can raise rates to double digits but in the same stroke unemployment goes to 20%

But its ok because he said there is no inlation so there is no concern.

Fri, 01/14/2011 - 12:03 | Link to Comment TheBillMan
TheBillMan's picture

Real unemployment is already > 20%.

Fri, 01/14/2011 - 12:11 | Link to Comment bob_dabolina
bob_dabolina's picture

?

Sat, 01/29/2011 - 07:49 | Link to Comment doggings
Fri, 01/14/2011 - 12:33 | Link to Comment Bagbalm
Bagbalm's picture

You mean OFFICIAL unemployment goes to 20%. Real unemployment is already near 20% and real unemployment would go to 30% easily as well as the under employed increasing.

Fri, 01/14/2011 - 11:40 | Link to Comment flacon
flacon's picture

As the interest rates rise, the value of the underlying asset approaches zero and since the FED owns the assets it will go bust.

 

 

Fri, 01/14/2011 - 12:13 | Link to Comment SheepDog-One
SheepDog-One's picture

T's go up 1% from here and the FED is insolvent. Very little wiggle room for them. Damn I'd rather walk a tight rope over the grand canyon than have to deal with this BS every day.

Fri, 01/14/2011 - 11:43 | Link to Comment Sean7k
Sean7k's picture

Volker had to raise interest in the 80's to get people to buy the dollar. It is different this time. People are still using the dollar as a safe haven because ALL currencies are falling in value. 

A rise in interest rates now would only make things worse as it will increase the demand for dollars to hoard, rather than to spend while raising federal debt. The FED would have to print even faster- hyperinflation on a fast track, then collapse.

Fri, 01/14/2011 - 11:33 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

Clearly, he's got 2-3 options in mind. If you can hit the quinella you can make an assload of credits.

What's he going to dump from the balance sheet first and what's the trigger?

ideas???

Fri, 01/14/2011 - 11:38 | Link to Comment flacon
flacon's picture

The Ben Bernank is a Keynesian:

"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." ~ John Maynard Keynes

Fri, 01/14/2011 - 11:56 | Link to Comment flacon
flacon's picture


And here is Lenin on the topic:

 

“Hundreds of thousands of rouble notes are being issued daily by our treasury. This is done, not in order to fill the coffers of the State with practically worthless paper, but with the deliberate intention of destroying the value of money as a means of payment. There is no justification for the existence of money in the Bolshevik state, where the necessities of life shall be paid for by work alone.

Experience has taught us it is impossible to root out the evils of capitalism merely by confiscation and expropriation, for however ruthlessly such measures may be applied, astute speculators and obstinate survivors of the capitalist classes will always manage to evade them and continue to corrupt the life of the community. The simplest way to exterminate the very spirit of capitalism is therefore to flood the country with notes of a high face-value without financial guarantees of any sort.

Already even a hundred-rouble note is almost valueless in Russia. Soon even the simplest peasant will realise that it is only a scrap of paper, not worth more than the rags from which it is manufactured. Men will cease to covet and hoard it so soon as they discover it will not buy anything, and the great illusion of the value and power of money, on which the capitalist state is based will have been definitely destroyed.

This is the real reason why our presses are printing rouble bills day and night, without rest.”

 


Bernanke is not copying Keynes, he is copying Lenin.

http://investmentwatchblog.com/bernanke-is-not-copying-keynes-he-is-copying-lenin/

Fri, 01/14/2011 - 12:40 | Link to Comment I am more equal...
I am more equal than others's picture

The pain in Spain will fall mainly on the plains... except it will start with former European colonies.  The secret is out when less economically diverse countries can no longer hide the realty of The Bernank.  The world has been shanked by Bernank.

Fri, 01/14/2011 - 11:20 | Link to Comment JW n FL
JW n FL's picture

Let it Burn!

Fri, 01/14/2011 - 11:24 | Link to Comment Sophist Economicus
Sophist Economicus's picture

...Ditto that...

Fri, 01/14/2011 - 11:52 | Link to Comment CH1
CH1's picture

Amen, let it burn. The whole setup is an evil scam.

Fri, 01/14/2011 - 11:21 | Link to Comment Ragnarok
Ragnarok's picture

Crimes against humanity.  Bernanke better have a good plastic surgeon and some land in SA.

Fri, 01/14/2011 - 11:24 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Not his problem.

They control the peg .... 

Fri, 01/14/2011 - 11:29 | Link to Comment Hephasteus
Hephasteus's picture

Who the food rioters or the central banks that give them the inflation?

Fri, 01/14/2011 - 11:33 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Each country controls its own peg, every country can change any day they want....

The host banking system would be blowtorched, they cant break the peg. They are importing our inflation .... 

Fri, 01/14/2011 - 11:41 | Link to Comment ZEITGEIST
ZEITGEIST's picture

JUST SHOWS EVERYONE WHAT AN ASSHOLE YOU ARE...

Fri, 01/14/2011 - 11:43 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Your a fucking moron. How am I wrong you fuck, read a few books before you post again.

Fri, 01/14/2011 - 12:37 | Link to Comment pods
pods's picture

He called you an asshole, not an idiot.

I would have added arrogant, but to each his own.

pods

Fri, 01/14/2011 - 12:49 | Link to Comment ColonelCooper
ColonelCooper's picture

++++

Fri, 01/14/2011 - 12:51 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Every poster I have ripped into did so first ....

 

I have been talking about the peg, dollar denominated debt, china, for months ... Sorry I come off that way but everyone has blinders on ....

Fri, 01/14/2011 - 14:13 | Link to Comment Hephasteus
Hephasteus's picture

Ok. Go educate them on the "peg" and explain to them how it causes the "inflation" and then their masters can serve them by removing the "peg" and ridding them of the "inflation".

http://www.youtube.com/watch?v=IsvfofcIE1Q

These are not faceless pawns in a justification arguement. These are people. People without a sense of security and well being with survival on the line.

Fri, 01/14/2011 - 17:37 | Link to Comment pods
pods's picture

Thanks for this Hep, I was going to write something along these lines.  To be so casual about exporting our inflation whilst sipping a latte, complaining that coffee is up 30%.

The other half is literally getting the top of their heads blown off (vid from the other night) because they are further down on the shit pyramid.  These are not numbers, these are people whose lives are being destroyed by what the banksters are doing.

There will be a special place in hell for them.  Lets hope they get there soon.

(I cannot stream at work, I assume your vid is along the same lines?)

pods 

Mon, 01/17/2011 - 00:01 | Link to Comment mess nonster
mess nonster's picture

I m a fkng moron. Explain the peg. Please.

 

Fri, 01/14/2011 - 11:50 | Link to Comment tmosley
tmosley's picture

You don't seem to get it.  When a major currency like the dollar starts to crumble, people flee investments denominated in that currency, and instead run to real goods.  This drives the prices of those things up for EVERYONE.

Don't believe me?  

http://en.wikipedia.org/wiki/Algerian_dinar

http://en.wikipedia.org/wiki/Tunisian_dinar

http://en.wikipedia.org/wiki/Moroccan_dirham

http://en.wikipedia.org/wiki/Yemeni_rial

http://en.wikipedia.org/wiki/Jordanian_dinar

Jordan is the only one with a dollar (SDR) peg.

Sell your stupid someplace else.

 

Fri, 01/14/2011 - 11:54 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

 Holding the peg means buy more treasuries ... Wrong again.

 

Opec = Peg. China, India, Russia, Vietnam ect,ect,ect,ect,ect,ect  

Fri, 01/14/2011 - 12:00 | Link to Comment tmosley
tmosley's picture

Wow, you don't even know what a currency peg is.

Fri, 01/14/2011 - 12:14 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

 

Is that the school bell I hear, run along.

 

As the actions of China and Syria indicate, no list of pegged currencies can always be accurate

 

Nevertheless, as of 2008, there were at least 17 national currencies pegged to the U.S. currency,

Not counting other organizations that maintain a similar link.

 

 

 

These include the Netherlands Antillean guilder, Aruban florin, Jordanian dinar, Bahrain's dinar, Lebanon's pound, Oman's rial, Qatar's rial, the Saudi riyal, Emirati dirham, Maldivian rufiyaa, Venezuelan bolivar, the Belize dollar, the Bahamian dollar, the Hong Kong dollar, the Barbados dollar, the Trinidad and Tobago dollar, and the Eastern Caribbean dollar, which is used by Antigua, Dominica, St. Kitts, St. Lucia, St. Vincent, the Grenadines and Grenada.

 

 

 

Fri, 01/14/2011 - 12:19 | Link to Comment tmosley
tmosley's picture

You can bluster all you want, that won't make your asinine assertion correct.

Mon, 01/17/2011 - 00:12 | Link to Comment mess nonster
mess nonster's picture

Look, I AM a dumbshit, because I can't follow you. Let me see if I have it right.

Country A pegs currency to $... food prices soar, because dollar devalues (hence domestic currency devalues), causig prices to rise (inflation).

 

All fine as long as wages rise, but they do not, why?

 

Could it be that global M1 continues to shrink, while M3 soars to bloated levels unimaginable? Inflation is no worry if you have enough money to keep up with it. When you don't... that's when the riots start.

How does coming of the peg change this? Catch 22... on the peg you get riots because M3 inlation, M1 deflation is how we are robbed. Off the peg, your currency is worthless, your cronies won't let it happen- off with his head, same result as riots.

 

Bad time to be the ruler of US vassal state...

Fri, 01/14/2011 - 14:52 | Link to Comment BostonTettierOwner
BostonTettierOwner's picture

tou mean etc etc etc

Fri, 01/14/2011 - 12:01 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture


    Potential
  1. When a currency loses value, prices tend to rise in a phenomenon called "inflation" and currencies pegged to the declining currency also succumb to price inflation. The huge decline in the value of the dollar in the last half of the 20th century and the acute depreciation between 2005 and 2008 caused several countries to rethink their dollar pegs. Some, such as Syria, have instead moved towards diversified reserves including euros and gold. Some oil bourses have even contemplated pricing in local currencies and euros in addition to dollar, eroding demand for dollars. Though the dollar appreciated in the last half of 2008, many speculated further declines would ensue as a result of the huge economic stimulus and bailout packages aimed at the credit crisis.
  2. Time Frame
  3. As the actions of China and Syria indicate, no list of pegged currencies can always be accurate. Nevertheless, as of 2008, there were at least 17 national currencies pegged to the U.S. currency, not counting other organizations that maintain a similar link. These include the Netherlands Antillean guilder, Aruban florin, Jordanian dinar, Bahrain's dinar, Lebanon's pound, Oman's rial, Qatar's rial, the Saudi riyal, Emirati dirham, Maldivian rufiyaa, Venezuelan bolivar, the Belize dollar, the Bahamian dollar, the Hong Kong dollar, the Barbados dollar, the Trinidad and Tobago dollar, and the Eastern Caribbean dollar, which is used by Antigua, Dominica, St. Kitts, St. Lucia, St. Vincent, the Grenadines and Grenada.


Significance

  •  Currency pegs are usually undertaken by small countries and those whose economies are based on exports. The dollar became the world's reserve currency after WWII because represented the largest physical gold reserves. As those reserves dwindled and currencies left the gold standard, the fact crude oil is priced primarily in U.S. dollars on most exchanges helped maintain a constant demand for dollars around the world and reaffirm the dollar's status as the world's reserve currency. Countries that primarily export oil or have direct trade with the U.S. as a major component of their GDP are the most likely to have a U.S. dollar peg.


  • Fri, 01/14/2011 - 12:36 | Link to Comment Raging Debate
    Raging Debate's picture

    Good commentary Spaulding. As you note, the countries are diversifying away from dollars but they can't do this overnight. The Yuan will become the reserve currency after the next round of steep dollar devaluation and Yuan slow but steady appreciation, around 2013 by my estimates.

    Fri, 01/14/2011 - 12:52 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Pettis think's it will be 2030 before they can run free -

    Mon, 01/17/2011 - 00:19 | Link to Comment mess nonster
    mess nonster's picture

    No-one gets off the peg alive. I call it that $$$ doesn't collapse, but becomes the defacto global currency, but $$$ will operate under DBA...so, $$$ supports euro, yuan, but undereath, its all $$$.

    Why? Wild guess, who has the balls to QE 1.4 quadrillio debt overhang? Ben's the only guy with cajones that big. Who gets the liquidity? Not you or me. For us, it's deflationary times- er, let's call that "austerity".

    Fri, 01/14/2011 - 15:36 | Link to Comment SgtShaftoe
    SgtShaftoe's picture

    I agree completely, this is a matter of unlimited paper chasing limited amounts of goods.  We're just seeing the weak points right now.  Just wait till it gets worse and someplace like India starts to feel the pain.  I extrapolated a 50% compounding inflation rate and came up with this:

    http://freedomofoceania.blogspot.com/2011/01/inflation-impact-to-world-e...

    I tried posting the chart on in the comment, but it breaks the table.. and is unreadable.

    Fri, 01/14/2011 - 12:10 | Link to Comment SheepDog-One
    SheepDog-One's picture

    A hundred bucks says the Smailes kid eats it!

    Fri, 01/14/2011 - 12:52 | Link to Comment Richard Head
    Richard Head's picture

    Gambling is illegal sir, and I never slice!

    Fri, 01/14/2011 - 11:30 | Link to Comment spartan117
    spartan117's picture

    And the USD is the reserve currency of the world.  End that, and they will end the peg.

    Fri, 01/14/2011 - 11:33 | Link to Comment snowball777
    snowball777's picture

    +360

    Fri, 01/14/2011 - 11:38 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    They can't. They have had the peg for years borrowing cheap in the host countries currency .... If they de-peg .... BOOM. Everything goes up in flames.

    They need oil, global trade, they need dollars. To hold the peg ( they buy even more treasuries )

    Dollar denominated debt, I have talked about this from day 1 getting junk'd for months on this topic. Oh well.

    Fri, 01/14/2011 - 11:53 | Link to Comment tmosley
    tmosley's picture

    I love how you spout shit when you can't be bothered to do five minutes of research.

    Of the above listed countries, Jordan is the only one with a dollar peg.

    Fri, 01/14/2011 - 12:03 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Dollar denominated debt. Ask mommy if she can help you with this ...

    Fri, 01/14/2011 - 11:53 | Link to Comment Sean7k
    Sean7k's picture

    I may not always agree with Spaulding, but Spaulding is right here. Export economies can no longer afford to depeg without jeopardizing their market share and MS is too fragile.

    Fri, 01/14/2011 - 11:56 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Bingo-

     

    They all buy oil, food, commodities in dollars. Dollar denominated debt, its global.

    Fri, 01/14/2011 - 12:26 | Link to Comment Internet Tough Guy
    Internet Tough Guy's picture

    ANOTHER (THOUGHTS!) ID#60253:

    All modern digital currencies do not go into an investment, they move THRU it. The US unit is only an exchange medium to acquire assets valued in dollars. US government bonds are the usual holding. No CB holds any currency! They hold the bonds of that currency. The major problem today, is that digital currencies have erased the currency denominations of all government/nation debt holdings! Even thou a debt is marked as DM, USA, YEN, they are in "real time" / "marked to the market" and cross valued in all currencies! No currency asset, held by CBs today are valued in the light of a single issuing country, rather "all currencies are locked together". To lose one large national currency, is to lose the entire structure as we know it!

    There is an alternative. Gold! It is the only medium that currencies do not "move thru". It is the only Money that cannot be valued by currencies. It is gold that denominates currency. It is to say "gold moves thru paper currencies". Gold can be used to revalue any asset, and not be destroyed in the process!

     

     

    Fri, 01/14/2011 - 12:40 | Link to Comment Sean7k
    Sean7k's picture

    That is only partially true. Between the US and the World, there are trillions of currency dollars in circulation. Granted, the vast majority is exactly as you say and all currencies are tied together or better, pyramided weakest upon the strongest with the dollar at the foundation, Currencies still effect markets.

    Gold though- that is the best protection and the best revenge, because as you say: it has real value and isn't tied to any fiat currency.

    Fri, 01/14/2011 - 12:36 | Link to Comment dark pools of soros
    dark pools of soros's picture

    no - they don't ..  but their currencies are still playing in ball with the dollar so it is just a first step..

     

    http://community.nasdaq.com/News/2010-11/china-russia-open-up-nondollar-...

     

     

    Fri, 01/14/2011 - 12:13 | Link to Comment tmosley
    tmosley's picture

    This is stupid.  This is the exact equivalent of saying that a company can't afford to stop giving credit to it's largest customer, someone who, coincidentally, has never paid their tab.  They don't lose ANYTHING by cutting them off.  Rearranging workers is a lot easier than many people seem to imagine.  Look at what happened in the US after WWII.  We should have had a huge recession, according to the Keynestards, but there was hardly any.

    The stage is set for a stampede.  All it is going to take is for one country, even a small one, to start dumping.  Like supercooled water: http://www.youtube.com/watch?v=M1eTqsg2la0

    Fri, 01/14/2011 - 12:19 | Link to Comment Sean7k
    Sean7k's picture

    Then why is China building ghost cities, CRE they don't need, etc ? The export economies depend on consumers and the US is still the biggest consumer in the world- you must take dollars to sell your goods here.

    If they stop, it all stops and revolutions begin. 

    Fri, 01/14/2011 - 12:23 | Link to Comment tmosley
    tmosley's picture

    China has a bunch of Keynesians in charge.  They are building ghost cities for the same reason the same people said that the US needed to continue building warships and sinking them in the Pacific as WWII rolled to a close.  Eventually, the not-stupids prevailed, and we had a huge boom.  The same will happen in China eventually.  That, or they will burn up all their capital and collapse.

    Fri, 01/14/2011 - 12:28 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    More " classic " what if's ....... Lol' 

     

    Some day ....

    Fri, 01/14/2011 - 12:34 | Link to Comment Sean7k
    Sean7k's picture

    No, we were the only ones with manufacturing capacity and we took on the Marshall plan. We could require other countries give us favorable rates and take out loans. 

    This is different, way different. We are presiding over a global economic collapse and everyone is jockeying for position (wait until everyone lines up at the IMF for their gold).The only way to restart growth will be with a global die-off, similar to the Black Plague, that can create labor shortages and inflation as employment and production soars.

    This will not end well. 

    Fri, 01/14/2011 - 12:44 | Link to Comment tmosley
    tmosley's picture

    Continued existance of the manufacturing base is besides the point.  We realigned our entire eonomy from produing war machines for "export" to producing consumer goods practically overnight.  It is the exact same with China.  They have most of the surviving manufacturing base, just as we did.  They are producing goods for which they receive nothing productive (this time paper rather than protection from foreign enemies).  They can do the same thing we did, and convert to an economy that produces goods for internal consumption.

    Despite the best attempts at certain morons in this thread, this is a simple matter.

    Fri, 01/14/2011 - 12:57 | Link to Comment Sean7k
    Sean7k's picture

    No, it is not the same. We remained on a war footing (cold war) and expanded consumer products. However, by requiring Europe and Japan take out and pay loans and admit our corporations, we were able to profit off their resources and labor.

    That is not the case with China. Manufacturing is decentralized in other Asian countries, Germany, Australia and South America. 3 trillion in consumer production is three thousand dollars per person. That will not create a sustainable market.

    As long as they receive dollars and euros, they are receiving something of value. Whether that value is maintained is up for debate, but they are still able to purchase global goods and services. 

    If you think Central Bankers are incapable of managing this extend and pretend for much longer than anyone has yet to give them credit for- you are sadly mistaken.

    Fri, 01/14/2011 - 13:13 | Link to Comment tmosley
    tmosley's picture

    You do realize that China is the world's largest creditor, right?

    Seems like every point you bring up only makes my argument stronger.

    Further, we did NOT remain on a war footing.  We didn't go back into a war footing until Korea, well after the return to the recession was predicted (it should have been immediate).

    I'm not sure why you are so married to the idea that China must maintain its peg or die.

    Fri, 01/14/2011 - 13:36 | Link to Comment Sean7k
    Sean7k's picture

    Being the largest creditor, one third of which is held in treasuries and even more in dollars makes China susceptible to any increase in the Yuan. It's exports would soar in cost and drop in orders. They cannot afford the unemployment- it is sure revolution. This is futher compromised by their entrance into european bond markets. They are attempting to extort consumption through bond accumulation. However, they have not the military or political means to enforce it and are thus vulnerable to ending up with worthless debts- the haircut of all haircuts.

    How this makes your argument stronger, you neglect to say, which means it doesn't exist.

    If we did not remain on a war footing, then Eisenhower wouldn't have warned about the military-industrial complex. All the following actions have been in support of it.

    I am not married to the concept of a peg, except in the short term. I think China is doing all it can to protect itself and position itself as a major economic and military power. Unfortunately, it is a tool of the elites, just as we are and they owe their new found position to policies put in place by the elites.

    What we don't know is every step in the process to the endgame we see appearing before our eyes. In the meantime, the elites are allowing the markets to play as it enhances their ability to transfer wealth globally while increasing their military and control capabilities.

     

    Fri, 01/14/2011 - 13:38 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture


    One of the problems with a severely repressed financial system, especially one with rapid credit expansion, is that there tends to be a huge amount of capital misallocation supported by borrowing, and in an increasing number of cases it is only the artificially-reduced borrowing costs that allow these investments to remain viable.  I worry that even if the PBoC wanted to raise rates, it would not be able to do so without exposing how dependent borrowers are on artificially cheap capital.

    Take the most obvious example, the PBoC itself.  The central bank officially has about $2.5 trillion in reserves.  This by the way almost certainly understates its true position but let’s ignore that for a moment. 

     

    The PBoC has funded this position with an equivalent amount of RMB liabilities, which makes it very vulnerable to changes in the value of the currency.

    Rate addiction

    In fact there were strong rumors last year that the PBoC was technically insolvent as a consequence of the 20% increase in the value of the RMB against the dollar during the 2005-08 period of currency appreciation. 

    Weirdly enough, although the numbers are huge, it has proven difficult to convince anyone that the PBoC is not the richest institution in the world, and that it is actually very vulnerable to big losses (although I notice that Sovereign Trends’ Terrence Keeley, in an OpEd in the Financial Times Tuesday, seems also to have done the numbers).

    The problem for the PBoC occurs not just because of the currency mismatch but also because it needs repressed funding costs to keep it profitable.  How much do the PBoC foreign currency assets earn?  I would guess probably between 3% and 4%, maybe less.  The RMB funding cost, on the other hand, is roughly between 1.5% and 2.5%.  This leaves the PBoC with a net positive carry of between 1% and 2%.

    If the RMB appreciates by as little as 2% a year, in other words, the PBoC runs a negative carry on its assets.  Every further 1% increase in interest rates, or additional 1% rise in the value of the RMB, then, erodes its capital by at least $25 billion (annually, if it happens through an increase in interest rates).

    Let’s assume, for example, that over the next two years we see a combined appreciation and interest rate increase of 10% (let’s say a 2% increase in interest rates and a 4% annual appreciation), which is, in my opinion, the absolute minimum that China must do to slow down the worsening domestic imbalances.  Assuming no change in the rate earned on reserve assets, which in fact may decline, this means that the PBoC’s net indebtedness would rise by over $250 billion, or roughly 5% of the country’s GDP.

    Fri, 01/14/2011 - 13:47 | Link to Comment Sean7k
    Sean7k's picture

    Yep.

    Fri, 01/14/2011 - 14:10 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture


    by Spalding_Smailes 
    on Thu, 12/09/2010 - 23:53
    #794862

    That guys a fucking moron. They can't break the peg, they funded the manufacturing complex on cheap yuan .... The banks would get monkey hammered.

    They are on the other side of a 25 year credit orgy in the USA. Securitization market = cheap credit = ninja loans = house =sheeple = 2nd mortgage = big screen = river boat = 2nd home = big screen .... = Boom.......

    Who's on the other side of that epic credit/debt gang~bang..?

    Fri, 01/14/2011 - 14:15 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture


    by Spalding_Smailes 
    on Thu, 12/09/2010 - 16:50
    #794023

    The reserve currency status/dollar hememony/network externality/global dollar denominated debt/oil/letters of credit for global trade/global finance will insure we do not go through hyperinflation.

    The global web makes extraction from this impossible for the rest of the world. They all have borrowed in dollars.Look how much the EU borrowed via swap lines 3-4 trillion during the crisis.

    Fri, 01/14/2011 - 14:07 | Link to Comment tmosley
    tmosley's picture

    How this makes your argument stronger, you neglect to say, which means it doesn't exist.

    Which means it doesn't exist?  You must have failed logic.  What I said was that the similarities between China today and the US at the end of WWII are striking, including the creditor nation status (which you brought up as an argument against them being the same, which makes no sense).

    We didn't remain on a war footing in that the soldiers weren't kept on as soldiers.  The factories that were making machines of was did not continue making machines of war.  We had demobilization.  If you are disputing this, then you don't know ANYTHING about history.

    The longer they keep the peg, the longer they continue essentially dumping their products in the pacific ocean.  The sooner they dump the peg, the sooner thier economy will explode to the upside.

    Fri, 01/14/2011 - 15:10 | Link to Comment Sean7k
    Sean7k's picture

    What you are choosing to ignore is that the similarities don't exist, which if you had read my response you would have seen. As for history: http://economics.about.com/od/useconomichistory/a/post_war.htm explains how we continued spending on a war footing. You do not need soldiers to remain on a war footing. 

    If they dump the peg, that credit will dissolve proportionate to the rise. Additionally, they will lose market share to other countries that keep their currency tied to the dollar. This will depress their economy. No middle class exists to purchase these products, which means they would have to sell them at firesale prices- bankrupting producers.

    Fri, 01/14/2011 - 21:24 | Link to Comment StychoKiller
    StychoKiller's picture

    The typical Chinese farmer has no need for an iPad, (s)he needs better farming equipment, and fuel (there it is again!)

    Fri, 01/14/2011 - 12:53 | Link to Comment Raging Debate
    Raging Debate's picture

    There is no need for a planned global "die-off" although containment of increasing hostilities will be difficult, meaning large scale military misadventure should be considered by the investment community as risk assessment based on region.

    As basic necessities such as food and medicine become scarce due to expense (which decreases brand choices as well as they go extinct), the larger global demographic segment, Boomers will have shortened life expectency.

    The younger generations can only fund so much of the elder generations current consumption. The elder generation is failing to assign successors and global or national management are not focusing on increasing competition in necessities like investment energy and healthcare. That would be a solution which would increase the labor participation rate, bring down costs and be a short and long-term sustainable productive endeavor.

    Why reorganization of labor has not happened is that bankers run the nations and bankers make loans, they do not run fiscal policy, it is not what they enjoy doing. So now that Central Banking is the majority stakeholder of global assets, power sharing with governments will take place (not suggesting this won't get messy) for management functions of fiscal policy.

    On the subject of demographics, the real 800 lb elephant in the room see this article by the BIS: http://www.bis.org/review/r110112a.pdf . It is good to see Central Banking begin introspection of causation and possible solutions to these problems. However, they won't get solved without a serious focus on including the population on debate and assisting the population in labor reorganization. That is unlikely to happen in the next couple of years with a gridlocked Congress which I am sure for Americans will be extremely frustrating.

    Fri, 01/14/2011 - 13:21 | Link to Comment Sean7k
    Sean7k's picture

    You have an increasing labor pool and a decreasing production capability coupled with decreasing energy production. You have food shortages and increasing costs. You have extreme pressure on 1st world labor receipts and through computers and robotics- an increasing pool of low paid workers. This is a receipe for disaster. A decrease in worldwide population will be required to raise labor rates and consumption-otherwise, economies will spiral downwards.

    The boomers is a first world phenomenon. Birth rates in under developed nations are increasing. This is where the vast majority of the world's population resides. the only way to bring down labor rates is through increased efficiencies (education and training), not a third world priority or death. This is easily accomplished through war, disease, hunger or purposeful pollution with medical malpractice to shorten life cycles. This is already occurring globally.

    Bankers do run fiscal policy as they run the governments. The control of a nation's currency is the power to control the laws (Rothschild). That is pure, unabashed banker propaganda. 

    Quoting the BIS, which is a Central Bank, one willing to be an accomplice in the theft of 750 billion dollars from a Chinese company to The Federal Reserve, without cause is ridiculous. There is no intention of the BIS to help produce a better world, unless it is in the acquisition of wealth for a small number of international banksters. Congress is meaningless, it is a parlour game to pacify the ignorant. 

    You speak as if this is a policy problem, you are sycophant. Either willing or ignorant, to plead the case for the benevolence of bankers.Well, they are not benevolent- through a century long process of determined inflation, knowing the full effects, they have done their best to bankrupt this country- and every country in the world. 

     

    Mon, 01/17/2011 - 00:27 | Link to Comment mess nonster
    mess nonster's picture

    The last chance for things to end well passed on August 17, 1987. Now the shit tsunami is about to drop.

    Fri, 01/14/2011 - 12:35 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Mike Pettis (again)

     

     

    One of the problems with a severely repressed financial system, especially one with rapid credit expansion, is that there tends to be a huge amount of capital misallocation supported by borrowing, and in an increasing number of cases it is only the artificially-reduced borrowing costs that allow these investments to remain viable.  I worry that even if the PBoC wanted to raise rates, it would not be able to do so without exposing how dependent borrowers are on artificially cheap capital.

    Take the most obvious example, the PBoC itself.  The central bank officially has about $2.5 trillion in reserves.  This by the way almost certainly understates its true position but let’s ignore that for a moment. 

    The PBoC has funded this position with an equivalent amount of RMB liabilities, which makes it very vulnerable to changes in the value of the currency.

    Rate addiction

    In fact there were strong rumors last year that the PBoC was technically insolvent as a consequence of the 20% increase in the value of the RMB against the dollar during the 2005-08 period of currency appreciation. 

    Weirdly enough, although the numbers are huge, it has proven difficult to convince anyone that the PBoC is not the richest institution in the world, and that it is actually very vulnerable to big losses (although I notice that Sovereign Trends’ Terrence Keeley, in an OpEd in the Financial Times Tuesday, seems also to have done the numbers).

    The problem for the PBoC occurs not just because of the currency mismatch but also because it needs repressed funding costs to keep it profitable.  How much do the PBoC foreign currency assets earn?  I would guess probably between 3% and 4%, maybe less.  The RMB funding cost, on the other hand, is roughly between 1.5% and 2.5%.  This leaves the PBoC with a net positive carry of between 1% and 2%.

    If the RMB appreciates by as little as 2% a year, in other words, the PBoC runs a negative carry on its assets.  Every further 1% increase in interest rates, or additional 1% rise in the value of the RMB, then, erodes its capital by at least $25 billion (annually, if it happens through an increase in interest rates).

    Let’s assume, for example, that over the next two years we see a combined appreciation and interest rate increase of 10% (let’s say a 2% increase in interest rates and a 4% annual appreciation), which is, in my opinion, the absolute minimum that China must do to slow down the worsening domestic imbalances.  Assuming no change in the rate earned on reserve assets, which in fact may decline, this means that the PBoC’s net indebtedness would rise by over $250 billion, or roughly 5% of the country’s GDP.

    These kinds of number quickly add up.  And of course it is not just the PBoC that has this addiction to repressed interest rates.  Many years of very low cost borrowing has created a huge dependency on low interest rates among SOEs, local governments, and other creditors of the bond markets and the banks (not to mention the banks themselves), all of whom are directly or indirectly funded by long-suffering households.

     

     

     

    Hello -           < - pin drop - >

     

    Fri, 01/14/2011 - 12:41 | Link to Comment pods
    pods's picture

    People are junking you because you are an arrogant prick, not factually incorrect.

    pods

    Fri, 01/14/2011 - 12:56 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Bingo -

     

    I had an olive branch with all of this info 3 months ago .... Was blasted called every name in the book. I tried helping.

    Payback Bitchez'

    Fri, 01/14/2011 - 14:32 | Link to Comment ColonelCooper
    ColonelCooper's picture

    Your problem is that you're arrogant enough to think you're "helping".  You bring valid points to the table, but you do it in a way that makes people think you eat your boogers.

    Try not to break your own arm patting yourself on the back.

    Fri, 01/14/2011 - 14:56 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Hey,

     

    You would think people would be cool with my post, this goes back months. My first month on ZH was just pasting facts w/link. Started talking about dollar denominated debt and was cast as a wacko ect,ect ... And my gold top call. Have been posting housing bubble quotes for months. My call a bubble.

     

    And started posting calls on RIMM,JOBS,X,AIG,XOM,BAC,NVDA,ZEUS,ARMH,PRU, JPM,SPRD,MIPS. Stock calls also bring out the hate even if they all pop 10-20-30% in short order.

    Not just talking about apple every day ....

    Fri, 01/14/2011 - 16:09 | Link to Comment ColonelCooper
    ColonelCooper's picture

    I don't deny what you say.  The problem is that you need to understand that you are arguing whether or not I got chocolate in your peanut butter or you got peanut butter on my chocolate.

    I will grant you that the bears/bugs who tend to dominate here (and I am one, of a sort) tend to jump all over those whose opinions differ like sharks on chum; you put up a pretty good fight. 

    Don't assume that the people you argue with don't understand what they're talking about.  You may very well be right today, but wrong tomorrow.  The closest analogy I can come up with is arguing evolution with a Southern Baptist.  (or vice versa, I'm not choosing any sides here) 

    I do not have a financial/trading/investing background, that's why I started coming here in the first place.  I don't know how long you've been around, but back in the old days, [grin] this place was a lot more economy based, and frankly, more intelligent.  I guess I think of myself as one of the original "Dumber Downs".  I used to read the threads and spend more time Googling to figure out what the Hell it meant than it took to read te thread.  If I've learned anything at all however, it's that (just like in everyday life) smart people can't hang out with other smart people for five minutes without having to measure dicks to see who comes out on top.  The one thing that's certain in all this is that nothing is certain.  Yet most of the "knowledgable" posters here are more certain than ANYTHING that they are right and everyone else is wrong.

    The bulls keep saying, "It's a recovery", and the bears keep saying, "You're gonna get your ass handed to you".  Know what? EVERYBODY's been wrong.  So far.  The bulls are making money on stocks, and the bears are making money on metal.  So who's going to be right?  We'll see.  Hell, even the people who agree on "Epic Fail" can't agree on inflation/deflation, long term/short term, PM/FX.... 

    Try not to take the junks personal.  As a "Doomer" who just likes to watch, read, and use past experience mixed with a little common sense, I tend to like your posts even if what you say doesn't quite ring true with me.  You bring valid points to the table, and back your shit up as much as anybody else.  Keep it up, just don't get worked up.  You aren't any smarter than anyone else here; you didn't have to turn off American Idol to get us to listen to what you're saying.  The simple fact that we're here means we know shit's fucked up.

    Fri, 01/14/2011 - 17:18 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Peace. 

     

    Mon, 01/17/2011 - 00:32 | Link to Comment mess nonster
    mess nonster's picture

    tru dat...

    Mon, 01/17/2011 - 01:55 | Link to Comment Oh regional Indian
    Oh regional Indian's picture

    Excellent post ColnelC.

    You clearly learnt some wisdom in your years, how many ever they may be.

    ORI

    Fri, 01/14/2011 - 12:57 | Link to Comment ColonelCooper
    ColonelCooper's picture

    ++++.

    The flaw in ALL the arguments trying to predict the future is that they look at the past.  What we face now has NEVER happened before. 

     

    Fri, 01/14/2011 - 21:36 | Link to Comment StychoKiller
    StychoKiller's picture

    The edges of the petri dish are in sight...the pitiful thing is that a few amoebas have eaten more than their fair share (NASCAR anyone?)  A lot of un-necessary dying is coming, there is more than enough arable land and food production to feed the current population, but selfish interest precludes simply giving it to the starving masses -- I'm no socialist, which is why I can see that socialist policies have unbalanced ALL market(s) -- Chairman Mao would be so proud of us right about now...

    Fri, 01/14/2011 - 11:48 | Link to Comment Arch Duke Ferdinand
    Arch Duke Ferdinand's picture

    Speaking of "Crimes against humanity"

    British Bee Keepers Fume at Association's Endorsement of Fatal Insecticides...


    http://seenoevilspeaknoevilhearnoevil.blogspot.com/2011/01/british-beekeepers-fume-at-associations.html

    Fri, 01/14/2011 - 11:55 | Link to Comment Sean7k
    Sean7k's picture

    Stupidity is international.

    Fri, 01/14/2011 - 12:33 | Link to Comment Widowmaker
    Widowmaker's picture

    Humanity doesn't exist after incorporation.

    ...the banker-solution is [painful and obvious] total elimination of everything that isn't too big to fail (themselves).

    Fri, 01/14/2011 - 11:23 | Link to Comment lynnybee
    lynnybee's picture

    god help us all............

    Fri, 01/14/2011 - 11:24 | Link to Comment RobotTrader
    RobotTrader's picture

    Those riots probably rival the riot occurring now in Sharon, CT, where angry CIGA's with pitchforks are storming General Jim's compound.

    Poor General Jim is probably curled up in a fetal position with the 20 dogs that live in his house.

    It's official.  January 14 is here, and gold is going down, not up.

    Nowhere near the fabled, oft-predicted $1,650.

    Pretty soon, the CRB index will crash out, food prices will return to normal, and these riots will be long forgotten.

     

    Fri, 01/14/2011 - 11:26 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Got ARMH  ?

    Fri, 01/14/2011 - 11:31 | Link to Comment bob_dabolina
    bob_dabolina's picture

    We would need the stock market to go down for that to occur.

    We know, that Ben knows, that the stock market = the economy. The higher a country's stock market the wealthier that country is...its a no brainer.

    Good luck explaining common sense to an insane beard with a P.h.D.

     

    Fri, 01/14/2011 - 12:27 | Link to Comment CrazyCooter
    CrazyCooter's picture

    Its a good thing that the stock market is an input and not an output!

    CrazyCooter

    Fri, 01/14/2011 - 11:34 | Link to Comment The Third Man
    The Third Man's picture

    I thought Mr. Sinclair's prediction from, what was it.... from 2003?, has been pretty damn close. What were you predicting back then?

    Fri, 01/14/2011 - 11:39 | Link to Comment The Third Man
    The Third Man's picture

    Now you're talking. Here's a prediction, albeit not too specific, by the great Robot. Let's see if and when this comes to pass.

    "Pretty soon, the CRB index will crash out, food prices will return to normal, and these riots will be long forgotten." ~ RobotTrader January 14, 2011 at 10:24

    Fri, 01/14/2011 - 11:55 | Link to Comment Sophist Economicus
    Sophist Economicus's picture

    He also said he was selling all his stock at end of LAST year, LOL

    Fri, 01/14/2011 - 11:48 | Link to Comment Farcical Aquati...
    Farcical Aquatic Ceremony's picture

    Correct. The cake solution. It worked out great for late 18th Century France. They handed out cake, and everything returned to normal immediately. {sarc off}

    Fri, 01/14/2011 - 11:58 | Link to Comment tmosley
    tmosley's picture

    I note that you didn't have the guts to take the bet.  Tell me, shit for brains, exactly which fundamental has changed in the last month?  Has there been a parabolic blow off top?  No.  Have the central banks of the world stopped devaluing their currencies?  No.  Has ANYONE in the western world addressed their debt issues?  No.

    Sell your stupid someplace else, you and Spaldingbat.

    Fri, 01/14/2011 - 12:10 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Awwwwww ... Someone had miners blowtorched ....

    Fri, 01/14/2011 - 12:17 | Link to Comment tmosley
    tmosley's picture

    I don't own ANY paper.  Mining shares are paper.

    But hey, I guess you losers should have your fun while you can.  After all, you have only been wrong for the last ten years.  If I was wrong for ten years straight, I'd probably take advantage of any dip, even if it is a totally normal one, to make myself feel better.  Well, actually, no, I would just change my mind.  But hey, that's just me, the long term thinker who understands that you can't hold the fundamentals back forever, especially with a giant god damn debt hanging over your head like the Sword of Damocles.

    Fri, 01/14/2011 - 12:31 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    I was on Itulip in 2000. EJ said to buy gold under $300. I did not buy, I have a few bags of junk silver from my uncle.

    Fri, 01/14/2011 - 12:45 | Link to Comment tmosley
    tmosley's picture

    Exactly, you're a loser.

    Fri, 01/14/2011 - 12:57 | Link to Comment Spalding_Smailes
    Spalding_Smailes's picture

    Read a book dope. Everyone knows I'm right, your wrong. 

    Next.

    Fri, 01/14/2011 - 13:14 | Link to Comment tmosley
    tmosley's picture

    I see.  I possess wrong.  Wonderful.

    You are a child.

    Fri, 01/14/2011 - 13:59 | Link to Comment Hephasteus
    Hephasteus's picture

    Everyone. Idiots need them so they can be right.

    Friends romans, country men. Lend me your ear.

    We should all be of one mind. So that we may take that one mind and make it consitantly wrong and it shall not allow any to escape it's consistent wrongness. Dissenters shall be hunted down and gathered back up. Little bo peep lost her sheep and jesus went a hunting.

    Fri, 01/14/2011 - 12:19 | Link to Comment SheepDog-One
    SheepDog-One's picture

    tmosley...a hundred bucks says the Smailes kid eats it! Any takers?

    Fri, 01/14/2011 - 12:24 | Link to Comment Sean7k
    Sean7k's picture

    I wouldn't be too smug. What T is saying is correct, but you two are arguing over timing and risk. 

    I could care less what the LBMC says gold and silver are worth. The separation between paper and physical grows every day. The miners will be making huge profits until the mines are seized.

    You can make paper money in the meantime, but it is casino gambling without a net.

    Fri, 01/14/2011 - 11:24 | Link to Comment Ferg .
    Ferg .'s picture

    You can also add China and India ; violence may not have erupted yet but there are grumblings , especially in China , about the surge in food prices .

    Mon, 01/17/2011 - 02:03 | Link to Comment Oh regional Indian
    Oh regional Indian's picture

    You can add India for sure. Food price inflation is insane.
    And while the usual suspects (hoarders) are to blame to a degree (looks like everyone enjoys making money on someone's else's misery), I'll say it again, food inflation is insane.

    100-200% price rises in some of the most basic food-stuffs. Rice and Onions.... and the Onion riots are any Indian politician's worst nightmare.

    An Indian bereft of his/her Onion is an angry Indian.

    Food stress tends to stretch the social fabric to breakpoint faster than anything else. If this is a part of the plan, look for it to go nuts as Queensland's wheat wash-out hits the market.

    ORI

    http://aadivaahan.wordpress.com/2011/01/14/quiet-days-watery-days/

    Fri, 01/14/2011 - 11:27 | Link to Comment waldocktrades
    waldocktrades's picture

    Nice timing. I just wrote a piece on this. High food prices are here to stay and there's more to it than easy money and inflation.

    http://blog.commodityandderivativeadv.com/2011/01/14/food-inflation-is-h...

    Fri, 01/14/2011 - 11:28 | Link to Comment barthezz
    Fri, 01/14/2011 - 11:35 | Link to Comment snowball777
    snowball777's picture

    C'mon libertarians...now's your chance...paradise awaits...you can't get smaller than zero government!

    Fri, 01/14/2011 - 11:57 | Link to Comment Sean7k
    Sean7k's picture

    You deserve every tax, confiscation and fee the government can impose. 

    Fri, 01/14/2011 - 12:16 | Link to Comment euryale
    euryale's picture

    or Somalia - no taxes! whoo-hoo!

    Fri, 01/14/2011 - 12:17 | Link to Comment euryale
    euryale's picture

    opps - i clicked twice :) so excited

    Fri, 01/14/2011 - 13:14 | Link to Comment Calmyourself
    Calmyourself's picture

    Yep, don't actually have a discussion about limited Government and the utility of limited Government vis a vis markets, that would be painful and melt your snowball.  Take it right to the absurd and show everyone what a little statist / liberal looks and writes like..  What would you force us to do today snowball?

    Fri, 01/14/2011 - 15:26 | Link to Comment faustian bargain
    faustian bargain's picture

    Where is this zero government you're talking about? They've got martial law and curfews. That's hardly zero government.

    Fri, 01/14/2011 - 11:27 | Link to Comment Milton Waddams
    Milton Waddams's picture

    No doubt that The Bernank looks at this as proof that The Quantitative Easing is in fact working.

    Fri, 01/14/2011 - 11:38 | Link to Comment JW n FL
    JW n FL's picture

    It is doing exactly what he said it would... exactly.

     

    now he did leave out a couple of the side effects though...

    Fri, 01/14/2011 - 11:53 | Link to Comment Milton Waddams
    Milton Waddams's picture

    Public relations 101. You don't talk about the potentiality of collateral damage until after the objective is achieved. Then you use words such as "regrettable", "unfortunate", "unintended", "unforeseen", "models did not forecast", etc.

    Fri, 01/14/2011 - 12:18 | Link to Comment subqtaneous
    subqtaneous's picture

    Nonsense . . . you utter something tactful like this:

    "We're sorry for the massive disruption it's caused their lives. There's no one who wants this over more than I do. I would like my life back."

     

    Then YOU become the catastrophe. You've effectively diverted public attention from the damage done to their lives, and made yourself the object of scorn.  Once your job is complete, you're promptly relieved of command, free to sail away into the sunset to your Caribbean hideaway with more money than God.

    Now that's proper PR.

     

    ;-)

     

     


    Fri, 01/14/2011 - 12:37 | Link to Comment Larry Darrell
    Larry Darrell's picture

    100% spot on.  It goes to show that the old adage is true:

     

    "It is easier to ask for forgiveness than for permission."

     

     

    Fri, 01/14/2011 - 12:22 | Link to Comment SheepDog-One
    SheepDog-One's picture

    Yes Bernanke left out the part about the world burning down as a side effect to his 'equity wealth effect' 100 P/E stock pumping which at this point only the top 1% have anything to do with, those with Bernanke on Blackberry speed dial list.

    Fri, 01/14/2011 - 11:39 | Link to Comment Widowmaker
    Widowmaker's picture

    Why aren't these countries just excluding food prices from their models?

    That Western approach makes inflation disappear all the time.

    Dead bodies?   Exclude them from the model too, or just create another stimulus program - Bonuses-For-Bodies (B4B).

    Fri, 01/14/2011 - 11:40 | Link to Comment JW n FL
    JW n FL's picture

    they should drop the top and bottom 3, that way it would be more accurate over time... soften the curves.

    Fri, 01/14/2011 - 12:02 | Link to Comment Widowmaker
    Widowmaker's picture

    opps, forgot to say, "Presto!"

    Now, where's my taxpayer-reward for doing God's work (killing in the name of consumers).

    Fri, 01/14/2011 - 11:58 | Link to Comment SheepDog-One
    SheepDog-One's picture

    Yes, havent they learned anything from the USSA propaganda machine? Its EASY hell just tell the people things are NOT surging up in price, tell them to bask in the 'wealth effect' and to sit down and shut up and worship their messiah president, like good little peasants should!

    Fri, 01/14/2011 - 11:34 | Link to Comment Bubbles...bubbl...
    Bubbles...bubbles everywhere's picture

    I read an article somewhere about riots in Chile over rising oil prices. Sorry, I don't have a link; maybe someone can help out.

    Fri, 01/14/2011 - 11:49 | Link to Comment nonclaim
    nonclaim's picture

    Don't forget Bolivia, where gov raised fuel prices by ~70% *by decree* to make up for increased gov expenses...when things heated up on the streets they reverted the decision.

    There are many sources out there, here's one:

    http://www.bbc.co.uk/news/world-latin-america-12101199

    Fri, 01/14/2011 - 11:41 | Link to Comment hedgeless_horseman
    hedgeless_horseman's picture
    Grocery iQ

    “Best in Class”: One of the five hottest iPhone apps. —TheiPhoneAppBlog.com via USA Today, 3/31/10

    Now you can edit your list online at http://groceryiq.com/ and sync it automatically to your iPhone, iPod touch, or iPad!

     

    http://itunes.apple.com/us/app/grocery-iq/id290591617?mt=8

     

    Not available in dry places where men wear track suits, carry AKs, and speak funny languages.

    Fri, 01/14/2011 - 11:41 | Link to Comment SheepDog-One
    SheepDog-One's picture

    Yes so smart consumer monkeys can search for .1 cent off eggs across town and drive 20 miles out of the way on $5 gas.

    Fri, 01/14/2011 - 11:44 | Link to Comment cclaeys
    cclaeys's picture

    thanks for contributing to the moronification of america.

    Fri, 01/14/2011 - 12:16 | Link to Comment hedgeless_horseman
    hedgeless_horseman's picture

    Would not that be a bit like pissing in the ocean?

     

    A new outlet mall could soon be coming to the Houston area.

    Simon Property Group is planning to build a 350,000 square foot outlet center at interstate 45 near Holland in Texas City. It would be called Galveston Premium Outlets and contain about 100 stores.

    The Indianapolis based company owns the Galleria Mall and Katy Mills Mall.

    http://abclocal.go.com/ktrk/story?section=news/local&id=7897668&rss=rss-ktrk-article-7897668

    Fri, 01/14/2011 - 12:53 | Link to Comment pods
    pods's picture

    Well in 10 years it will be able to hold 35k homeless.  Figure 10 sq ft per person, bingo!

    I didn't think they even made malls anymore. I have not had the urge to enter one of those in years.  Maybe if I was studying the downfall of culture and society I would go, but other than that, negative Ghost-rider, that pattern is full.

    pods

    Fri, 01/14/2011 - 13:55 | Link to Comment cclaeys
    cclaeys's picture

    hope they have a rocky mountain jean and justin shitkicker boot outlet...I never shoulda left Texas!

    Fri, 01/14/2011 - 13:52 | Link to Comment Hephasteus
    Hephasteus's picture

    Expert systems. A total freaking moron in every home, phone, refrigerator. Under a guise of helping you out and making your life easier and simpler. Just there to find out what you like and don't like. For a better more targeted manipulation. Comes with rechargable batteries and free games. May catch on fire or explode in your ear. Not our fault.

    Fri, 01/14/2011 - 11:37 | Link to Comment Caviar Emptor
    Caviar Emptor's picture

    I said it already. This has the potential to explode into something much, much bigger. I'm not at liberty to discuss details.

    Fri, 01/14/2011 - 11:51 | Link to Comment The Third Man
    The Third Man's picture

    Aw, c'mon. Pretty please??? Just a couple of juicy tidbits? 

    Fri, 01/14/2011 - 11:53 | Link to Comment The Third Man
    The Third Man's picture

    .

    Fri, 01/14/2011 - 11:57 | Link to Comment MachoMan
    MachoMan's picture

    Shit, I don't think the bible or Ms. Cleo are that vague...  I bet in a couple thousand years you can have some disciples defending the prediction in unknockoutable fashion.

    Fri, 01/14/2011 - 13:55 | Link to Comment cclaeys
    cclaeys's picture

    fluoride?

    Do NOT follow this link or you will be banned from the site!