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Matterhorn Asset Management: The Die Has Been Cast

Tyler Durden's picture



by Egon von Greyerz – Matterhorn Asset Management

Yes this is it! We have crossed the Rubicon and events in the world economy are now likely to unfold in a totally uncontrollable fashion.
Clueless governments still don’t understand that it is their ruinous
actions that have created a credit infested and bankrupt world. They
will continue to prescribe the same remedy that caused the problem in
the first place, namely more credit and more printed money. The
consequences are clear; we will have hyperinflation, economic and human
misery as well as social unrest.

When will the world finally begin to understand that we have reached the point of no return and that “the voyage of their life is bound in shallows and in miseries”
(Shakespeare, Julius Caesar).  Sadly, we are probably not very far from
that point. It is already starting to happen in many countries.

The latest EU and IMF package of $ 1 TRILLION (Euro 750 billion) is yet another futile attempt by governments to abolish poverty by printing paper. Let’s
be absolutely clear, this money does not exist and the EU governments
are hoping by declaring such a large amount that they can con the
Wolfpack speculators.
At this point the EU has just picked a
large round figure of out the air. But when their bluff is called by
the Wolfpack and the next attack happens, EU governments will after
initial huffing and puffing start printing unlimited amounts of paper.

So the world is now on its road to ruin
and there is no action, no leader and no new amount of printed money
that can save the world or prevent a hyperinflationary depression.

Never in history has the world been in
a situation when virtually all industrialised countries are bankrupt.
Therefore there is no precedent for what will happen in the next few
years. What we can be quite certain about is that events will happen in
a seemingly random pattern and that it will be impossible to forecast
where the next crises will start.

But although we will not be able to
predict in what order events will take place, we can expect much of
what is outlined below to happen.

Wolfpack attacks

Already back in 2007 we warned about
the very high risk of the CDS (credit default swap) market. This is now
one of the primary instruments used by the Wolfpack (expression coined
by the Swedish Finance Minister Borg). The Wolfpack, speculators with
enormous fire power such as hedge funds and investment banks, use the
CDS market to attack any weak financial sector, be it a country, a bank
or a company. The combination of the leverage of the CDSs and the
massive capital available to the Wolfpack makes it possible for them to
bring down or badly maul whatever they attack. It was not the Wolfpack
that caused the problem in for example Greece but they can bring down a
weak victim quickly and profit immensely and immorally from it.

There are so many weak potential
victims that the Wolfpack can attack and they will start with the most
vulnerable ones like, Portugal, Spain and Ireland etc. But when the
time is right they will also attack the US and the UK.

So in the coming year we will see
country after country coming under attack from the Wolfback which will
lead to acceleration in money printing and higher interest rates.

Iceland – Ireland – Greece – Who is next?

The EU support package of $ 1 trillion
is supposed to be sufficient to protect the rest of Europe from another
Greek tragedy. The dilemma with such a massive EU commitment is that no
government expects to have to pay the money out. If they did the voters
in the respective EU countries would throw out their government. Why
should the German people, who are also having hard times, pay for the
Greeks, Portuguese or the Spaniards, especially since these loans will
never be paid back.

Greece is bankrupt but is still taking
on additional EU loans of € 140 billion. In addition, their austerity
measures are supposed to bring the deficit down from 12% of GDP today
to 3% in a few years time. But who can be so stupid as to lend to a
bankrupt nation which will sink into the Ionian and Aegean Seas in the
next few years. With massive cuts in government expenditure, with major
falls in output, with unemployment rising fast, with tax revenues
collapsing how can Greece possibly be expected to improve the economy
and pay a high interest rate on their exploding debt?  In addition, as
long as they have the Euro they will be totally uncompetitive. So if
they couldn’t manage their economy in the so called good times, it is
absolutely guaranteed that they have no chance of surviving in bad
times. So Greece will default and so will Portugal, Spain, Italy,
France, the UK, the US and many more. But before that there will be the
most colossal worldwide money printing exercise which would have used
up most of the trees in the world but for electronic fiat money.

So, if virtually bankrupt nations don’t
cut their deficits, they will definitively go under and if they try to
cut, they will also go under due to collapsing output and tax revenues
and colossal debts. Thus whatever actions governments take or don’t take, they are damned.

The table below shows debt as a
percentage of GDP for various OECD countries. The official debts (in
red) are massive and unlikely to ever be repaid in real money. Total
debts (grey bars) include unfunded liabilities such as pensions and
health care. Spain has the lowest total debt to GDP of 250%. Germany and the UK have around 400%, the US over 500% and Greece over 800% debt to GDP. These
figures are absolutely astronomical and prove that most governments in
the world will be totally incapable of repaying their debts or funding
the pensions or medical care which they have committed to. It doesn’t
matter however much governments cut expenditure or raise taxes, all
these countries are insolvent and nothing can save them.

The world must permanently readjust

Most governments still believe that
deficit spending and money printing is the solution to all their
problems. Because the world economy’s expansion in the last 100 years
and particularly in the last 40 years has been primarily based on
credit and not real growth, governments live under the false impression
that money printing will work this time too. But we have reached the
point when investors will no longer buy worthless government debt that
will never be repaid with real money. We will first go through a period
when governments issue and buy their own debt thus monetising the debt
or print money.  This will be the hyperinflationary phase. Thereafter
the world will realise that none of the government debt and very little
of the bank debt will ever be repaid. Credit will then implode and so
will also the assets financed by credit. Eventually there will be a new
monetary and financial system and the world will start afresh. The
adjustment period will be very long and will involve economic and human
misery, leading to social unrest and major political change. It will be
a horrible experience for the world during this extended period of
adjustment. But it will be like a forest fire that clears out the
deadwood and creates the conditions for  strong
new growth. Once
the new era starts it will therefore be from a very much lower level
and individuals will be rewarded for hard work with  little or no
social security safety net. Credit will only be granted for sound
capital investment projects, not for consumption or speculation.
Ethical and moral values will return and the golden calf will not be
worshipped. But before that, the period of readjustment will be very
long and extremely difficult for the whole world.


For several years we have predicted
that hyperinflation is the most likely outcome of the economic
predicament that the world is in. But it is unlikely to be a
straightforward hyperinflationary period. Precious metals will be the
primary beneficiaries of hyperinflation. Certain commodities,
especially food and energy, will also go up in price.  But most assets
that have been financed by the credit boom will go down in real terms.
This includes property, stocks and bonds. In hyperinflationary money
these assets could still go up in price. If someone who earned $ 50,000
per annum in real money now earns $ 5 million in newly printed money,
his house will probably also go up in nominal terms. But in real terms
property prices will decline massively. There will be no credit
available and interest rates will be very high, probably at least
15-20% so very few people will be able to buy a house.

Hyperinflation will destroy many
currencies so paper money will definitely reach its intrinsic value
which is zero. Gold and silver will virtually be the only assets that
will protect investors fully against the destruction of money.

The next leg of the debt crisis is here

In our February newsletter
“Sovereign Alchemy will Fail” we discussed the Sovereign Time Bomb and
we are now experiencing the initial small explosions with Greece as the
first victim. The $1 trillion EU/IMF rescue package was never intended
to be more than a headline figure. EU governments were hoping that this
would frighten the Wolfpack away. But so far this has failed. The Euro
went up 4 cents when the package was announced but is now down to new
lows again. How can anyone take a massive rescue package
seriously when most of the countries making the commitments are
bankrupt themselves?
Spain and Italy have committed tens of billions each. And they are the ones that will be attacked by the Wolfpack next. This is the bankrupt saving the bankrupt. The
IMF has no money but is dependent on its members of which the US is the
biggest contributor. And they are bankrupt too. The UK, which is not in
the Euro Zone and which has a worse budget deficit than Greece,
contributed £15 billion. The new UK government is planning to cut a
massive £ 6 billion of costs out of its next year’s budget which will
bring major hardship. But as a last act, the outgoing labour government
committed £15 billion which if paid out will never be repaid. The whole
thing is a total farce. Governments commit trillions to rescue banks
and sovereign states but cannot even make budget cuts of a few billion
in their own countries. This shows that the world economy and the world
financial system is being run by morons who only have their own self
interest in mind and do not understand the consequences of their
ruinous actions.

When the $1 trillion EU rescue
package was announced, the US simultaneously offered European banks
dollar Swap facilities (dollar loans) of a minimum $500 billion but
probably much more. In addition the US Fed also injected at least $500
billion into the US banking system. These actions make it clear the
banking system is under tremendous strain similar to 2008. But this is
just the beginning. Things will get a lot worse.


In 2002 we advised investors to put
up to 50% of their liquid assets into gold when the price was $300. To
us it was crystal clear that the mountain of debts and derivatives
would never be repaid with normal money but would be inflated away by
money printing and this is what is now happening. The media are now
talking about a bubble in gold and comparing to the 1980 top at $850.
Let us be very clear, although gold has gone up 5 times since the 1999
bottom at $250,  it is nowhere near its peak. Adjusted for real
inflation (as per the 1980 gold peak in today’s prices
corresponds to around $7,200 today. So gold could easily go up 6 times
from the current price of $1,220 and still be within normal parameters.

There are many factors that will contribute to gold’s rise from here (in addition to money printing):

  1. Gold production is going down.
  2. Neither Comex (the futures exchange), nor the bullion banks would
    be able to deliver more than a fraction of the physical gold for which
    they have outstanding commitments.
  3. Central banks and the IMF probably don’t hold even half of the
    30,000 tons that they claim they have. Most likely, at least 15,000
    tons (6 years gold production) have been sold to suppress the gold
  4. The precarious financial system will lead to a total distrust of
    paper gold including most of the ETFs which have no physical gold.

The four factors above will lead to the
most massive surge in the gold price. There will be nowhere near
sufficient gold to satisfy demand at current prices. We had been
expecting gold to start its acceleration in March 2010 and this is
exactly what is happening. We expect the move to be relentless during
most of this year with very few major corrections but with high
volatility. Moves of $100 in one day could easily happen.

So gold is likely to make a top in
the next few years between $5,000 and $10,000. But if we get
hyperinflation the price could go exponentially higher like in the
Weimar Republic when gold reached DM 100 trillion per ounce in 1923.
Will gold experience the same type of correction when is has peaked as
happened after the 1980 peak? Probably not, because gold is likely to
be a part of a new monetary system that will be created when the
current one has collapsed.

The table below illustrates the
total destruction of paper money against gold in the last 100 years and
shows how many ounces of gold that $1,000 bought at various times. In
1910, $1,000 bought 40 oz of gold at $25 per oz. Today in 2010, $1,000
buys 0.80 oz of gold at $1,230 per oz. This is a massive decline of 98% in the value of the dollar measured in real terms in the last 100 years. The
next significant year is 1971 when Nixon abolished the convertibility
of dollars to gold. It was this disastrous decision that opened the
floodgates for the credit and money creation that we are experiencing
currently. The dollar is down 97% since then. But even if we take more
recent years, the purchasing power of the dollar measured in gold has
declined catastrophically. Since the 1999 gold low, the dollar has
declined by 80% against gold and since 2002 (when Matterhorn Asset
Management recommended major gold investments) by 76%.

Virtually all currencies show
similar declines in value against gold in the last 100 years. This is
the clearest evidence of governments and central banks defrauding their
people of their hard earned money. Where will it end? It will end when
the dollar and many other currencies reach their intrinsic value of
ZERO. That time is not far away.

h/t Robert|


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Tue, 05/18/2010 - 17:50 | 359147 LoneStarHog
LoneStarHog's picture

Let's hope that the "intrinsic value" of all banksters/politicians is reached and...

Tue, 05/18/2010 - 17:50 | 359148 Turd Ferguson
Turd Ferguson's picture

"This shows that the world economy and the world financial system is being run by morons who only have their own self interest in mind and do not understand the consequences of their ruinous actions."

No trues words have been said. See today's headlines for further proof.

Tue, 05/18/2010 - 18:39 | 359257 mikla
mikla's picture

+1 Great quote.  Sensational.  Wish I wrote it.

Tue, 05/18/2010 - 17:53 | 359155 partimer1
partimer1's picture

Like Larry Summers says "you changed your mind when the fact has changed".  It makes you wonder what kind of friggin fact he was looking at, while others come up a different conclusion.

Tue, 05/18/2010 - 17:55 | 359160 Ripped Chunk
Ripped Chunk's picture

A real visual memory from the middle ages is heads on pikes.



Tue, 05/18/2010 - 17:57 | 359167 Turd Ferguson
Turd Ferguson's picture

I was conjuring images of Vlad The Impaler...

Tue, 05/18/2010 - 18:44 | 359270 chumbawamba
chumbawamba's picture

Politicians adorning lamp posts.

I am Chumbawamba.

Tue, 05/18/2010 - 18:45 | 359271 mikla
mikla's picture

Tue, 05/18/2010 - 20:02 | 359430 Rusty Shorts
Rusty Shorts's picture

Fucking nice.

Tue, 05/18/2010 - 23:04 | 359831 clagr
clagr's picture

Actually, the impaling almost never was through the chest or stomach, but up the rectum, with the victim's body weight doing the finishing-- after a little initial tug on their feet to start things.

Wed, 05/19/2010 - 01:14 | 360071 Young
Young's picture

Apart from his aparent gayness, Ol' Vlad was a true innovator. Quick, someone invent a time machine so we can fetch Vlad/Dracula!

Tue, 05/18/2010 - 23:44 | 359941 BlackBeard
BlackBeard's picture

Don't tell Elton John.

Tue, 05/18/2010 - 17:57 | 359166 Trial of the Pyx
Trial of the Pyx's picture

Oh, so this? this is "it"


nice of him to clue us in

Tue, 05/18/2010 - 17:57 | 359168 for shizzle my ...
for shizzle my nizzle's picture

we have crossed the "RUBIN-COHN"..........and the Greenspan-cohn and the Geithner-con and the

Barry-O-con................and I am not Chumbawumba...............

Tue, 05/18/2010 - 18:01 | 359169 Mako
Mako's picture

"This is the clearest evidence of governments and central banks defrauding their people of their hard earned money."

No, it's clear evidence that people want something for nothing.  The global financial credit system doesn't operate without billions of you lending and borrowing at a rate of interest. Look at all the old people, they put their money in the bank and want more then 3% and are crying because nobody wants it.   They are delusional idiots. 

The system simply ran out gold to support your lending and borrowing long before any of you guys were born. 

The central banks are doing exactly what you have commanded them to do... pretend a system based exponential growth is sustainable long-term. 

How do I know that the masses still believe the lie... simple, the system would collaspe this second if they didn't. 

Tue, 05/18/2010 - 18:17 | 359203 nope-1004
nope-1004's picture

Exactly.  Well said.  Deflation is here to stay.

Tue, 05/18/2010 - 22:34 | 359754 LiquidBrick
LiquidBrick's picture

Deflation is here to stay.

McMansions sale - buy one get one 1/2 off.  Lumber down over 20% in last 8 weeks.

This is bullish for the Amazon rain forest and everything in it.

i'm Long Acai Berries and Ayahuasca

Tue, 05/18/2010 - 18:50 | 359279 perchprism
perchprism's picture


You need to get down from your high horse and breathe some oxygen.

Tue, 05/18/2010 - 18:50 | 359280 theprofromdover
theprofromdover's picture


First they introduced inflation, to hide the monkey business;

then they said 'leverage your company's borrowing, take a pay hike and buy yourself a new German car';

then they said '-cheap money, honest- here is a credit card for you, and another one';

then they said, 'Pension, that's what you want, we can treble what you put in';

then they said 'Bigger mortgage, no problem -better take it, house prices can only go up';

then they said, 'House prices have gone up, better bid more and buy quick';

then they said, 'We have new and exciting products for you to try. Just sign here';

but then they never said, .... we are taking a cut of quite a few percent every time your money passes our doors, it compounds up nicely...;

then they said -'We want it all! (God knows why) And if we dont get it, we'll crash the system'.

So how come its my fault?

Tue, 05/18/2010 - 19:56 | 359406 Mako
Mako's picture

"So how come its my fault?"

Because you and your parents and your parent's parents, etc. think you can have a system based on lending and borrowing at a rate of interest that will last long-term.  That is the lie.

There is no "they", you are the "they", you just think you are not, but you are.  The lemmings all line up to march to their doom. 

There is no "they", it takes billions of you guys to hold up the lie.  How do I know the masses believe the lie, the system would crease to exist this second if the masses didn't believe the lie.   The lie will crumble, just like all lies crumble, yet you will be sitting their thinking the is the work of the government and some bankers.  Nope, this is not possible without billions of humans supporting the lie. 

"Haven't you heard everyone is innocent in Shawshank"


Tue, 05/18/2010 - 20:31 | 359484 aurum
aurum's picture

mako- some are financially apt and some arent...some believe so called conspiracies and some dont...i bet you cant perform cardiovascular surgery 13 hours a if you cant produce a quadruple bypass surgery power point presentation without reference material, you're a lemming right?'re a fuckin moron.

Tue, 05/18/2010 - 22:53 | 359800 LiquidBrick
LiquidBrick's picture

"Haven't you heard everyone is innocent in Shawshank"

If this is true then prisons could finally file for IPOs and go public.  Full transparency prisons could be the next bull market, profitable from day one!  Productivity from 1,000,000 inmates on payroll will boost GPD, bring jobs back to America, and reduce unemployment from 15m to 14m. 

Of the 14 million remaining unemployed we put them all to work immediately [wash] by building more prisons (bullish for construction and raw materials - and BLS), then we find them guilty of something...I don't care, anything that will stick - something like tax evasion - "Not paying their fair share" - or something).

Then, we put them IN the prisons to work [rinse]. I don't care, any job - shredding documents for GS or melting the copper penny when its no longer in circulation.

Then, we make all illegal aliens legal and have them pick up their citizenship papers at their local FHA-approved banker's office and start the whole process over again [repeat].

On a serious note, this was one of the heaviest articles on ZH. Wow.  I didn't think it could get much worst but if every government is bankrupt everybody has to learn to farm and barter wisely.

Tue, 05/18/2010 - 23:32 | 359910 Oh regional Indian
Oh regional Indian's picture

That was brilliant Liqi, in a bankster/politician kind pf way.

Very funny.

And other-wiser, this article is a saver, an I-told-you-so-er, .

I've saved it.

Tue, 05/18/2010 - 20:02 | 359431 DosZap
DosZap's picture


Define old...................what age brkt ?

Also,  "Look at all the old people, they put their money in the bank and want more then 3% and are crying because nobody wants it.   They are delusional idiots."

Everyone is not a delusional idiot for following a system of law.

If it worked for their parents, and they paid for the SO called Entitlements, and THEY at least SAVED?....that makes them idiots?. 

While illegals, and welfare class did nothing,these OLD IDIOTS at least worked..............

Their not due the disrespect in your post IMHO. The LEECHES of humanity are.

Tue, 05/18/2010 - 20:51 | 359522 puckles
puckles's picture

Mako, I don't know how old you are, but the old "system"--i.e., gold-backed dollar receipts--died when I was still in college and that fool, Nixon, caved into French pressure and ended convertibility.  So your statement, "The system simply ran out gold to support your lending nd borrowing long before any of you guys were born. 


The central banks are doing exactly what you have commanded them to do... pretend a system based exponential growth is sustainable long-term " does not apply to yours truly.  I have always hated the result, because it is inherently unstable.

Although a neophyte economist at the time, I understood all too well exactly what Nixon's treachery meant for the USA and the world at large--that we were doomed to evolve into a global con game once the so-called reserve currency became a con game itself.  I well remember having numerous conversations with one or two relatives who understood this equally well, if not better than I, and the moment we have always feared since then is that time when the masses understand.

We are not quite there yet, but the evidence is mounting that reality will kick them in the kidneys very shortly.  Academics who are employed in the California state university system have already seen salary cuts of 10% or more (I am sure than other non-unionized personnel have suffered as well, but have no data).  If the State of California is slicing into one of the most sacrosanct sectors of state employment--tenured professors--the unwashed hordes cannot be far behind.  

The Japanese have been living this nightmare for years now, and to date have reacted, for the most part, exceedingly calmly (although essentially nobody there reproduces anymore, and some very strange social artifacts have surfaced); most people who rent just ask their landlord to adjust the rent down every year, which he does.  Their salaries are also adjusted down every year, for the most part, and prices of necessities have been slipping for decades.


The question that remains to be answered is, are we Japanese enough to weather this with equivalent grace?  I rather doubt it, as our habit has been, for at least the last hundred years or so, one of extreme gracelessness, which is likely to intensify, not decrease.  I really worry about what will happen when the average Joe realizes jus how badly his government has served him.  I don't, however, agree that there will be an immediate systemic collapse, simply because the Joe in question listens to the mainstream media, if he follows anything beyond lotteries, weather reports, and sports.

But if he tries to cash his paycheck, assuming he still has one, and finds that a) it bounces, b) his bank has closed, c) his company's bank has closed, d) he can't get a cash advance from his ATM anymore--yes, then it's pitchfork time.  So we'll have, at best, perhaps a week's lead time...


Tue, 05/18/2010 - 18:03 | 359170 etrader
etrader's picture

Bob Prechter will be right one day when he say's Gold will be below $*300

The problem is it will be in New dollars $* (think what happend in Turkey  1 New lira =  1,000,000 old Turkish lira)

Thats the tried and testest play book from 2006.

Tue, 05/18/2010 - 18:20 | 359208 nikku
nikku's picture

That's just stupid (is, does or otherwise).

Tue, 05/18/2010 - 18:21 | 359213 macroeconomist
macroeconomist's picture

As usual, the one who calls others dumb is the dumbest of all..Do your 30-year charts include an episode of largest currency crisis experienced by the system? If your answer is no, your charts are completely useless..How many times are we going to say this? Historical charts mean absolutely nothing at extraordinary times..If you still don't know this, short gold and go long on stocks.We'll speak again 1 year from now..

Tue, 05/18/2010 - 19:03 | 359329 contrabandista13
contrabandista13's picture

"...If you still don't know this, short gold and go long on stocks.We'll speak again 1 year from now...."


I don't think so.....  That is, I don't think that I'll be in any condition to speak with you 1 year from now, if I short gold and go long stocks.....  They'll be busy scraping me off the ceiling with a spatula.....





Tue, 05/18/2010 - 18:43 | 359267 hedgeless_horseman
hedgeless_horseman's picture

Then following your logic, the charts that show sovereign debt hockey sticks must also be topping, too? 

Tue, 05/18/2010 - 18:47 | 359273 chumbawamba
chumbawamba's picture

Does this guy ever offer an alternative form of wealth preservation or does he only serve to scare and confuse people who are already scared and confused?

I have two simple words for you: GOLD BITCH!!

I am Chumbawamba.

Tue, 05/18/2010 - 18:56 | 359296 dumpster
dumpster's picture

 JW n FL

please you dumb cluck ,, did you read ..

on a scale of 1 to 100 in th smarts department your post rated a -1

Wed, 05/19/2010 - 02:14 | 360119 DoChenRollingBearing
DoChenRollingBearing's picture

Chumba, dumpster,

At 2:00 AM on the glide path to bed, I salute you both for helping alert Americans to survive the financial swamps to come.

Gold, to the moon, Alice.

Tue, 05/18/2010 - 20:06 | 359436 DosZap
DosZap's picture


The 30yr charts do not mean shit NOW.

We are in totally uncharted waters.........even here, most people have no clue what to do for SURE, but they do have a Plan.

What Was before, the NORM, (as in the 30yr chart), has never seen anything like we are in..ever.

So, the books are being day at a time.Look for NEW 30yr charts, IF your around in 30.

Tue, 05/18/2010 - 21:06 | 359540 akak
akak's picture


JW, your charts, and any analysis to be derived from them, have been rendered moot by historically unprecedented events.  You're trying to drive by only looking in the rearview mirror, and are failing to notice the moose in the middle of the road in front of you that you are about to smack into.

Tue, 05/18/2010 - 20:10 | 359443 Frank Owen
Frank Owen's picture

Ignore the 30 year charts at all costs?

The only logical conclusion I can come to from your post is that you think that financial conditions that led to the spike in 1980 are about the same as now. Serious?


Tue, 05/18/2010 - 18:01 | 359174 youngandhealthy
youngandhealthy's picture

When you are going to cash in on your GLD....? and to what? and what will be left?


Tue, 05/18/2010 - 18:13 | 359195 nonclaim
nonclaim's picture

Answers: when you are hungry; food; some poor fertilizer, so you grow the next crop yourself.

Tue, 05/18/2010 - 18:37 | 359250 WaterWings
WaterWings's picture

That's the problem with GLD. You gave them a "loan" that will never be repaid. Should have sought physical delivery from the outset.

Tue, 05/18/2010 - 20:08 | 359441 DosZap
DosZap's picture


Not to late to BAIL on GLD,and get physical.

Next week may be............but, the ship has not sailed yet, the Dealers are still taking FRN's right and left.

Tue, 05/18/2010 - 18:04 | 359178 Goods
Goods's picture

No, no the people at Matterhorn aren't listening. They should hire Leo for his insights about future trends,



Thanks for quoting me, and as far I can tell, calm is restored and the markets are heading up again. Not good for gold.


Tue, 05/18/2010 - 18:09 | 359185 nikku
nikku's picture

"It was not the Wolfpack that caused the problem in for example Greece but they can bring down a weak victim quickly and profit immensely and immorally from it."

Immorally?  Is the author's mental image of Bambi (the "weak victim") being brought down by an evil "wolf pack?"  NOOOO!  Greece, the UK, the US and every other fiat-currency pozi scheme out there are "the damned"--the evil, walking dead!  The spawn of Bernanke and Greenspan.  In fact, he got it right later on...

"Thus whatever actions governments take or don’t take, they are damned."

Hahahahahahahahaahahah!!!!! (maniacal hahahahah again)!!!!

Tue, 05/18/2010 - 18:41 | 359266 Noah Vail
Noah Vail's picture

Immoral as in John Gotti shooting Carlos Gambino in the head.

Tue, 05/18/2010 - 20:04 | 359432 akak
akak's picture

One would think that Swedish finance minister Borg, of all people, would realize that when it comes to the market, resistance IS futile, and that he and his corrupt statist elites WILL be assimilated!

Tue, 05/18/2010 - 21:03 | 359538 Rusty_Shackleford
Rusty_Shackleford's picture

I was waiting for someone to run with that one.

Tue, 05/18/2010 - 21:10 | 359557 akak
akak's picture

Glad to be of service!

Let us just hope that the market does NOT add the statists' biological and technological uniqueness to its own!

Tue, 05/18/2010 - 18:10 | 359189 nikku
nikku's picture

Where's George Romero when you need him?

Tue, 05/18/2010 - 18:11 | 359192 lesterbegood
lesterbegood's picture

Wolfpacks make good fur coats for the long winter ahead....

Tue, 05/18/2010 - 18:12 | 359193 EscapeKey
EscapeKey's picture

Stand by for paper-bug threadshxtting... 3-2-1...

Tue, 05/18/2010 - 18:16 | 359199 plocequ1
plocequ1's picture

This is it? Shit, I better check the shipping status of my Mac book pro. Why must you post news like this while I'm taking a Dump? I hate rushing. Things don't come out as smoothly.

Tue, 05/18/2010 - 18:55 | 359294 Alienated Serf
Alienated Serf's picture

Want to read news while taking a dump?  There is an app for that.

Tue, 05/18/2010 - 19:47 | 359401 Zé Cacetudo
Zé Cacetudo's picture

Speaking of which (and this is somewhat off-topic):

Cash not always welcome at Apple stores

The Apple sales policy says if you want an iPad, you must pay by credit card or debit card. Diane didn't have any plastic and amazingly her cash was useless.


"It's sort of astounding to think here is this U.S. dollar, this money put out by the U.S. Treasury Department, and it's being turned away," Alan Fisher says.

This is hilarious for all sorts of reasons. One, you can't buy an iPad with cash. Two, the Treasury doesn't "put out" the US Dollar - the Federal Reserve does. Mr. Fisher, who "advocates for low-income consumers" (per the article) might be expected to know better.

And three, perhaps most importantly: here is a perfect demonstration that these green pieces of paper are useless in at least one real-world case!

After all, if you can't buy the must-have-idiot-device-du-jour with cold hard cash, what the hell good is it? Astounding.

Tue, 05/18/2010 - 20:09 | 359442 Pimp Juice
Pimp Juice's picture

I bought my iPad with cash. No problem.

Tue, 05/18/2010 - 20:16 | 359457 DosZap
DosZap's picture


This is ILLEGAL................if this woman forced the issue, Apple has to take cash.

It's LEGAL TENDER, and good for ALL Debts Public and Private.

Apple could get their tit in a sling if someone wants to push this.

Tue, 05/18/2010 - 20:37 | 359495 akak
akak's picture

Actually, it is legal to refuse cash for a sale, as illogical and disheartening as that may seem.

The pertinent issue is that the lady was not paying off a DEBT, but was engaging in a sales transaction.  In this case, the seller has the legal right to refuse cash, as the sale was not yet made when they did so, so no debt was yet incurred.

The thing I wonder is, why the HELL would any business refuse cash?  I virtually only use cash for all transactions, and will fight like the Devil if anyone ever refuses it!  Although it is already a lost battle with the #%@ing airlines, who will only take credit or debit cards onboard in payment for their overpriced snacks or booze.

Tue, 05/18/2010 - 21:00 | 359534 Zé Cacetudo
Zé Cacetudo's picture

My understanding is that you're correct re the debt/sale point. Apple is within their rights to specify what kind of payment they'll accept against delivery of goods as long as it's before the sale has occurred.

I suspect that Apple won't take cash for an iPad because they'd like to link each device to a credit/debit card. That would allow them to find out all sorts of information about who their customers are. There are lots of firms selling products with demographic information about credit card users. Knowing who bought which device would therefore give them a competitive advantage in marketing their products, for example. It may allow them to track resale and usage too - as the article points out, they have a policy about maximum purchases. Given the merchant fee and the delay in receiving payment from the bank for their sale, they must have decided the costs were worth it for some other (unknown, but we can speculate) benefit.

As far as why any business wouldn't take cash, maybe they're getting screwed by their bank on handling fees. Maybe they don't want to sell products anonymously. Your point about the airlines is dead-on too, although I wouldn't use the example of "cashless cabins" (no matter how frustrating that experience is), I would use the example of buying a ticket and paying for it with cash. See how fast that gets you onto a watch list!

Tue, 05/18/2010 - 21:16 | 359569 akak
akak's picture

Or try, as I recently repeated did, to pay your $25 per-bag checked luggage fee with Northwest/Delta with cash!  They huffed and puffed, and all but refused to allow me to do so, stating first that I had to pay the exact amount, as they could not make change, and then bitching that it was slowing down the process of checking my bag.  They asked me repeatedly, each time, was I SURE that I didn't want to pay with a credit card?  I told them, with a smile, "Yes, I am sure."

Wed, 05/19/2010 - 00:27 | 359994 RockyRacoon
RockyRacoon's picture

Some years back several friends and I were having early breakfast at a Denny's.  (Actually we were all drunk at 2AM.)  The bill fell to the poor guy who lost the "numbers game".  He tried to pay with a $100 bill but the cashier refused to take it.  My friend says, "Thanks for the food," and we began to walk out.  The cashier yells at us that she is calling the cops.  My friend says, "Please do."  We got fed for free.  The debt had already been incurred and legal tender was not accepted.  Debt forgiven.

Tue, 05/18/2010 - 23:41 | 359937 Alienated Serf
Alienated Serf's picture

damn it.  there goes my legal authority to yell and scream at cashiers who won't accept a 5 with a small tear in it.

Tue, 05/18/2010 - 18:16 | 359201 cougar_w
cougar_w's picture

We have crossed the Rubicon

This is an apt metaphor; Julius Caesar started a war by literally doing just that (which is how we use the term to this day) and he did it deliberately.

A prelude perhaps to bullets and an actual crossing of a real Rubicon. And even short of this, who wins a race to the bottom?

Tue, 05/18/2010 - 18:31 | 359235 cossack55
cossack55's picture

So, who are the Visigoths this time?

Tue, 05/18/2010 - 21:03 | 359488 Mercury
Mercury's picture

Think high birth rates and antagonism toward the world order status quo

Tue, 05/18/2010 - 21:17 | 359571 tmosley
tmosley's picture

The bond vigilantes.  First they take down Greece, then Europe, then the remainder of the West.  China may have a role, as did Byzantium.  

Tue, 05/18/2010 - 18:32 | 359242 Rusty Shorts
Rusty Shorts's picture

After he crossed, Caesar uttered the famous phrase ?lea iacta est ("the die has been cast").

Tue, 05/18/2010 - 18:44 | 359269 cougar_w
cougar_w's picture

Say. Do you suppose he meant at the time that the European Union was hosed? Because if he did, that was some mad prescience right there.

But they say he was a smart guy. So maybe. I wonder if he wrote down any thoughts about sovereign default?

Tue, 05/18/2010 - 20:52 | 359412 Rusty Shorts
Rusty Shorts's picture


Tue, 05/18/2010 - 18:21 | 359210 Instant Wealth
Instant Wealth's picture

Cui bono, Tyler ?

Tue, 05/18/2010 - 19:41 | 359389 Mercury
Mercury's picture

ZH readers of course.

Tue, 05/18/2010 - 18:22 | 359211 Psquared
Psquared's picture

Everyone is now saying this. MSM is so far out in left field for not adequately covering that which is most likely the most important story of the last 50 years it is pathetic. The list is increasing every day. Chris Pavese, John Hussman, Larry Jeddeloh, (never heard of him before today) and John Mauldin.

Previous sovereign crises have all involved debt restructurings.  We do not know of any examples in history, where a debt crisis was repaired by piling on more debt. Falling nominal GDP, amid a rising debt load can easily develop into a vicious cycle, keeping solvency risks elevated despite the approval of a “rescue” package.  The Euro crisis is deflationary in nature and as such, will continue to place downward pressure on G7 interest rates.  Investors should resist the urge to “bottom fish” and consider allocating a portion of capital to what BCA has deemed the Protector Portfolio, consisting of Treasuries, Gold and Dollars.

Hope is not an investment process.

And another quote:

The entire eurozone is in for a double-dip recession, if it is not there already. And one country after another is going to have to convince foreigners to buy its debt. But if they make the cuts, their GDP will fall, ironically increasing their debt-to-GDP ratio and making investors demand even higher rates, which becomes a very vicious spiral.

As Reinhart and Rogoff wrote: “Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang! – confidence collapses, lenders disappear, and a crisis hits.”Bang is the right word. It is the nature of human beings to assume that the current trend will work out, that things can’t really be that bad. The trend is your friend until it ends.

Tue, 05/18/2010 - 18:22 | 359215 Noah Vail
Noah Vail's picture

So this is finally IT? We can stop trying to warn people what is coming and they can stop throwing knives at us. And then we can say, "I told you so."

At least now I can sleep nights, even if it is in a cardboard box by the side of the road. Poverty isn't so bad once you get used to it. Its even better when everyone else is poor. And for those who aren't, they invented guillotines ( I always knew there was something good about the French.)
Tue, 05/18/2010 - 18:39 | 359260 WaterWings
WaterWings's picture

Poverty isn't so bad once you get used to it.

I recently read that the first stages of starvation are akin to euphoria. Hallelujah!

Tue, 05/18/2010 - 18:57 | 359304 Alienated Serf
Alienated Serf's picture

lol.  same is true of drowning.

Tue, 05/18/2010 - 22:56 | 359806 Canucklehead
Canucklehead's picture

Don't forget sex before marriage....

Wed, 05/19/2010 - 00:28 | 359999 mtomato2
mtomato2's picture


Tue, 05/18/2010 - 18:41 | 359265 Kat
Kat's picture

I know you're kidding...but, as someone who comes from a country where the vast majority of the population lived in horrific poverty....there's no comfort in others living in shit with you.  In fact, it's worse because you know for sure there is nothing to aspire to.  There's no hope.

Tue, 05/18/2010 - 18:49 | 359274 Noah Vail
Noah Vail's picture

Oh, yes, there is hope. You hope the bugs don't eat  your potatoes. What you mean is no hope of a Mercedes and a corner office and not doing work for a living.

Tue, 05/18/2010 - 18:24 | 359218 Duck Butter
Duck Butter's picture

So Shelby, Alabama's finest, is blocking finance reform today.  Says it's too tough on Wall Street.  I'm sure you'll post a story on this soon.

Tue, 05/18/2010 - 18:24 | 359219 Psquared
Psquared's picture

Things could unfold very quickly now. We may be talking weeks instead of months or years.

Tue, 05/18/2010 - 18:59 | 359312 Alienated Serf
Alienated Serf's picture

yup, i'm thinking sometime next week it gets REAL bad in europe.

Tue, 05/18/2010 - 18:27 | 359224 mjv
mjv's picture

how long can I store the gas for my Mad Max-style dune buggy before it goes bad?

Tue, 05/18/2010 - 18:46 | 359272 hedgeless_horseman
hedgeless_horseman's picture

Still time to swap it for a diesel.

Tue, 05/18/2010 - 19:04 | 359318 WaterWings
WaterWings's picture

Be sure to stash 5-gallon containers along an escape route - don't want to wait in line ANYWHERE in a panic. Make sure the route is "less popular" or you will end up caught in the interstate parking lot. For the intrepid that means using Google maps ("walking" option ON) to find the intra-neighorhood routes - never get on a road that has an on ramp. Yes, you will want to get out of the city. "Polite society" will end when the baddies perceive local law enforcement is overwhelmed - be sure to have a 9mm or .45 within reach while travelling or you'll be sorry when your windows are broken and doors are flung open:

Wed, 05/19/2010 - 00:35 | 360016 RockyRacoon
RockyRacoon's picture

I understood 4 of the words the gentleman said.  It sure was nice of him to remodel the car for those nice folks in the parking lot.  I'm sure he is fine fellow deep inside.  About as deep as a .45 JHP would travel.

Tue, 05/18/2010 - 19:44 | 359393 snowball777
snowball777's picture

I don't suppose you've heard of the bicycle or horse?

Tue, 05/18/2010 - 19:52 | 359408 Iam_Silverman
Iam_Silverman's picture

There are gas stabilizers that you can purchase from any home center, hardware store, or even WalMart.  They work

Oh yeah, diesel lasts a long time too.

I will probably resort to four legged modes of transportation.

Tue, 05/18/2010 - 21:17 | 359570 Rusty_Shackleford
Rusty_Shackleford's picture

1-2 years tops in normal conditions with Sta-bil or PRI-G.  Maybe longer if you're feeling lucky.

Tue, 05/18/2010 - 18:27 | 359225 Paul Bogdanich
Paul Bogdanich's picture

"Never in history has the world been in a situation when virtually all industrialised countries are bankrupt."


The poor man only knows what they taught him at harvard.  Actually early on 11th and 12th centuries all the nations of the Western world were bankrupt because the church owned all the property.  The solution, nationalize the assets and over time that's exactly what happened.  Same today.  The fact is that each of these "bankrupt" countries has more than eonough wealth to address their social problems.  The problem is the concentration and tax exempt nature of those assets.  These fund managers and promoters of old share one thing in common, they are the most dangerous when they begin to believe their own bullshit.  What is this fund manager going to say when confronted with the police power of the state?  Freaking self absorbed idiots.     

Tue, 05/18/2010 - 18:40 | 359262 cougar_w
cougar_w's picture

"Never in history has the world been in a situation when virtually all industrialised countries are bankrupt."

You may have missed an important distinction. "Industrialised nations" is not Medieval Europe. Back then they didn't have massive infrastuctures to finance, huge immigrant populations on the order of millions, and nuclear-armed militaries.

Bankrupting the modern industrialized world just freaks me out completely. There are so many sharp knives spinning in all but the smallest country that you do NOT want to be standing around with your dick in your hand when that mo'fo blows up. I mean there are about 50 kinds of "oh my fucking god" in there waiting to kill you.

Medieval Spain could go bankrupt and nobody would even know for 10 years. Spain doing BK today would be 45 continuous days of riots and bodies laying abandoned in the streets of Madrid to be eaten by dogs. I'm not even kidding.

Tue, 05/18/2010 - 18:51 | 359282 hedgeless_horseman
hedgeless_horseman's picture

His/her point is interesting.  Nationalizing all assets would certainly cover the debts.  In a choice between this, and jubilee, well we all know that the .gov would never pick winners and losers just to keep things stable.

Tue, 05/18/2010 - 19:21 | 359355 Paul Bogdanich
Paul Bogdanich's picture


Medieval Spain could go bankrupt and nobody would even know for 10 years. Spain doing BK today would be 45 continuous days of riots and bodies laying abandoned in the streets of Madrid to be eaten by dogs. I'm not even kidding."


I know your not kidding but neither are the Germans.  In simple language what they just did was raise the banner Germany for the Germans.  Soon to be followed by Italy for the italians, Spain for the Spanish and so on.  The Germans have decided, correctly in my view, that the price on world commerce we damand to support the Americna financial oligarchs is too high.  In particular they will not alow us to tie them to our impending hyperinflation.  They already did that one and it turned out badly.  Very badly.  They are keenly aware of that.  They do not suffer American media induced amnesia.  What happens next is the American oligarchs execute all the German financial prisoners they hold to reinforce their ruthlessness and will to dominate.  Then Germany moves East and breaks with the west.  Oil and gas from Russia industrial equiment of all manner, nature and kind for the Russians and Chinese in return.  We are like so freaking screwed.  It's going to be ugly but we are the ones with the ruthless oligarchs and their political minions.  Our masters are not kind.          

Tue, 05/18/2010 - 19:30 | 359368 cougar_w
cougar_w's picture

You nailed it. And once the Germans are in bed with the Russians, it's 1940 again and ... let's see where were we? Oh yes, entering Paris in tanks and no risk of winter snow.

Sorry, didn't mean to awaken old memories of days gone by. But while history does not repeat, it rhymes. And when the chips are down the Visigoths and Vandals might ride again.

Tue, 05/18/2010 - 22:54 | 359802 Double down
Double down's picture

One more quaintness of the early medieval period:  The consciousness of Christians of that time believe the second coming to be imminent; tomorrow, in a week or two, next year Midsummer etc... They believed this and lived a life in that belief for hundreds of years.

Just saying...

Tue, 05/18/2010 - 23:37 | 359866 Hulk
Hulk's picture

A Marine recruiter came by the house today and we went over my weapons cache and reminisced in general for an hour or so. He's been out of Iraq for a few years. Anyway, we spoke of financial collapse and TSHTF. It turns out that the local Marines, if TSHTF,  have already planned to return to base and circle the wagons..Very, very interesting. He specifically stated that the last place he would want to be is in the city if/when TSHTF. Food for thought for sure.

edit: He also told me he felt safer in Iraq than in some of the local cities he recruits in..

Wed, 05/19/2010 - 02:27 | 360124 DoChenRollingBearing
DoChenRollingBearing's picture

Hulk, thx for the update.  Am ready to redouble my efforts to keep our daughter safe through this Armageddon.

Tue, 05/18/2010 - 18:53 | 359289 Noah Vail
Noah Vail's picture

The fund manager saysm "Please! No! Don't! I don't want to die." Just like in the movies.

Tue, 05/18/2010 - 18:56 | 359297 Psquared
Psquared's picture

That wealth, if nationalized, will disappear very quickly. Production will dwindle, trade will be non-existent (unless you happen to be sitting on huge oil reserves like the Middle East) and pretty soon that wealth which covered all those debts will be gone and all you will have left is worthless currency and an unproductive society. Just ask the Soviet Union or Venezuala or Cuba.

Tue, 05/18/2010 - 19:26 | 359365 Paul Bogdanich
Paul Bogdanich's picture

"That wealth, if nationalized, will disappear very quickly. Just ask the Soviet Union or Venezuala or Cuba."


Can I ask Bolivia, Brazil, Aregntina and China instead?  If you contiune to reinforce a system where the oilgarchs demand tribute for every action of every person we will be the ones without any wealth or a functioning economy. Funny this was the original meaning of the term "free market."  What it meant was freedom from and oligach or lord or king colleting tribute on every transaction.   

Tue, 05/18/2010 - 18:28 | 359228 cossack55
cossack55's picture

Last time I heard the term "wolfpack" used in earnest it referred to groupings of German U-boats.  Rather ironic, what.


Someone should maybe check around the oil pipes in the gulf for pieces of Krupp steel.

Tue, 05/18/2010 - 18:29 | 359232 snowball777
snowball777's picture

Boingo: The Clowns of Death

I'm the one who preys upon the weakest 
And the weakest always preys upon the one who's underneath 
I'm the one who doesn't see the waves of human kindness or the tides that 
turn the day 
I'm the one who always turns and looks away 
Turns and looks away 

I'm the one treads upon the weaker ones 
Those that I can find 
And there'll always be some others who could march along in line, yeah  
And, we'll move upon the world in a massive tidal wave 
And we'll shout and make some noise, yeah 

The clowns of death are marching on their hideous parade 
Their glaring eyes are filled with hate, but I am not afraid 
Their painted faces cracked with age, their makeup old and worn 
With tattered wings and toothy grins to amplify their scorn

They're looking for the helpless ones 
They're looking for the misbegotten 
They prey upon the weak and fractured 
The crippled and the freaks of nature 

And when the come upon one who's lost or is alone 
Their smiles get even bigger and their noses start to glow 
Making snarling sounds to pantomime with furious abandon 
And with a scream they pounce to kill and all the while they're laughing 

Your sons and daughters, innocent, lay sleeping in their beds 
They'll catch them when you're not around and smash their little heads 
If you think it just a dream, or that it isn't fair 
Just look around outside your door, the clowns are everywhere 

Tue, 05/18/2010 - 19:02 | 359322 Alienated Serf
Alienated Serf's picture

i love evil clowns

Tue, 05/18/2010 - 18:31 | 359236 mjv
mjv's picture

The big issue with the financial reform bill is whether or not a resolution mechanism is installed in the bill.

Unfortunately, this is akin to rearranging deck chairs on the Titanic (unless they can float).

Tue, 05/18/2010 - 18:37 | 359251 Debtless
Debtless's picture

if only our euro nation friends were as fiscally prudent as us americans.

Tue, 05/18/2010 - 18:38 | 359255 Rusty Shorts
Rusty Shorts's picture


 - How in the fuck is it, after one hundred years of unprecedented progress and innovation, with a virtually free energy source (oil, coal), is everyone fucking broke???

Tue, 05/18/2010 - 18:40 | 359264 WaterWings
WaterWings's picture

The invisible hand bitchslap.

Tue, 05/18/2010 - 18:50 | 359278 cougar_w
cougar_w's picture

Oh oh! Pick me! I know!

It's because the wealth was nothing more than an illusion, spawned of the work that can be done by free energy, and the illusion is beginning to collapse. In 5 more years we'll have no idea what the fuck hit us, but it will have been peak oil, and we'll be well into the process via war and famine of reducing ourselves to a carbon footprint familiar to someone who lived in the 17th century. And well under 1 billion people on earth.

How'd I do?

Tue, 05/18/2010 - 18:59 | 359300 hedgeless_horseman
hedgeless_horseman's picture

That's right, Cougar.  Let's see what you have won...

Either a brand new GM Hummer,

a previoulsy owned 4,000 s.f. Las Vegas McMansion (needs wiring),

or a Saiga 12, semi-automatic 12 gauge shotgun with  two 20 round MD Arms drum magazines. 

Pick one, as they will all cost about the same shortly.

Tue, 05/18/2010 - 19:04 | 359332 RichardENixon
RichardENixon's picture

Items 1 and 2 will be worthless. Item 3 will cost a roll or 2 of 1 ounce gold Eagles or Maples.

Tue, 05/18/2010 - 19:05 | 359336 cougar_w
cougar_w's picture

I like to win. I think I'll take the 12g shotgun. That way I can keep winning.

Serendipity is cool; while writing this, the ad in the column was this:

Man, it must suck to be trying to sell anything more rich than lemonade right now.

Tue, 05/18/2010 - 19:06 | 359337 Alienated Serf
Alienated Serf's picture

let the bodies hit the floor

Tue, 05/18/2010 - 19:21 | 359354 ebeh
ebeh's picture

Check out this black swan that will cut into peak oil like nothing else..

probably the only good equity out there.. (and its public :) )

JBI Global

Converts waste plastic to petroleum wit 99% efficiency.. produces positive energy.. IE: 350 lbs of plastic for a barrel oil, and 85% of the 350 LB is converted to fuel, 14 % to gas and 1% residue.. only half of the nat. gas produced is used in the process hence the positive energy factor.. 


It's real deal check them out. 

Tue, 05/18/2010 - 19:24 | 359360 Citizen of an I...
Citizen of an IKEA World's picture

Check out this little company from Mower County, Minnesota., whose product will be in high demand like nothing else:

Hormel Foods

Converts hogs to shelf-stable meat with 99% efficiency.


It's real deal check them out.

Tue, 05/18/2010 - 19:33 | 359378 cougar_w
cougar_w's picture

ffttfth ... muaaaahahahaha!

Got me!

Tue, 05/18/2010 - 21:28 | 359596 Rusty_Shackleford
Rusty_Shackleford's picture

Mmmmmmm.  Pig rectum never tasted so good.

Wed, 05/19/2010 - 00:47 | 360040 mtomato2
mtomato2's picture

Damn.  That was really, really funny..

Tue, 05/18/2010 - 19:53 | 359411 Segestan
Segestan's picture

See usury. On a global scale.  It's designed that way.

Tue, 05/18/2010 - 20:32 | 359485 Psquared
Psquared's picture

I think your question was rhetorical. The last 20 years of that was all on credit. The bill is now due. (But I agree with your sentiment. The thing is, so much of the innovation has been in the area of financial products which weakened the real productive growth by trying to make a profit out of it twice ... sometimes three times.)

Tue, 05/18/2010 - 22:56 | 359808 Double down
Double down's picture

That is the funniest I have heard all day!!!!

And it is shit-true


Tue, 05/18/2010 - 18:38 | 359256 RobotTrader
RobotTrader's picture

Looks like the panic is into U.S. Dollars and Treasuries...

not gold....

Tue, 05/18/2010 - 18:48 | 359275 nope-1004
nope-1004's picture

Yes, now think on this for a minute.  The EU balkanizes themselves and cuts off capital market access.  The Euro dies and the USD rallies further (as it probably will).  Doesn't that give Bernanke, Obummer and Geithner even more power to manipulate Gold?


Seems to me it does.



Tue, 05/18/2010 - 19:08 | 359339 Alienated Serf
Alienated Serf's picture

i've often thought the same.  Dollar comes out on top, our "exports" become too expensive for anyone to buy, but lots of cheap trinkets to import and keep the impoverished sheeple busy!  T-bills for all!

Tue, 05/18/2010 - 22:42 | 359777 clagr
clagr's picture

But...since we hardly 'make' anything here, that won't matter as much as it used to. One of our big exports is still food; and in the end they will pay what ever they have to for it----if they cannot take it!

Tue, 05/18/2010 - 19:09 | 359340 cougar_w
cougar_w's picture

Is not a strong dollar deflationary?

Deflation is the monster now, all over the place. Literal helicopters, dropping literal dollars, for the win.

Tue, 05/18/2010 - 19:01 | 359319 dumpster
dumpster's picture

 every one is jumping in to the boat with the smallest holes ,

all currencies are sinking in value ,, but i suspect the chart .. next to gold would be going the other way.


Tue, 05/18/2010 - 19:30 | 359367 hack3434
hack3434's picture

That strong Dollar sure isn't helping me at the grocery store or the pump...$3/ga Gas? $7/ga milk? wtf?? lol

Tue, 05/18/2010 - 19:32 | 359372 SWRichmond
SWRichmond's picture

Looks like the panic is into U.S. Dollars and Treasuries...

not gold....

You're ignoring the fact that dollar-denominated gold is holding up in the face of this ruch into USDX.  Now, you're reasonably intelligent.  Tell us what happens next.

Tue, 05/18/2010 - 20:29 | 359480 DosZap
DosZap's picture


Yeah, now that IS some really dumb shit.

Going from BAD to the Worst.

I'll tell you WHO we're going to have to look out for, and that is radical Islam...........

If the SHTF , and this bitch goes down, their not going to be hurting like us....but, they have so many plants here now, and France, and the U.K., Katie bar the door..............

Time to wield the sword of Damacles...............and you know they will.

I look for the US to dissolve, and go into regions, the armed forces/ LE agencies, will not have the wherewithal , not the desire to mess with the citizens, they will want to care for their own families.

Tue, 05/18/2010 - 18:39 | 359258 Kat
Kat's picture

The consequences are clear:  we will all have currency wallpaper.  The truly chic will have interesting murals composed of both Euro and Dollars in their sitting rooms.

To obtain goods, we will go back to bartering.  Gee...I really just don't understand why some people don't trust governments to take care of them cradle to grave. 

Tue, 05/18/2010 - 18:52 | 359286 RichardENixon
RichardENixon's picture

Well that's all well and good, but does this Matterhorn guy have a take on who's gonna win Dancing With the Stars?

Tue, 05/18/2010 - 20:32 | 359487 Mitchman
Mitchman's picture


Tue, 05/18/2010 - 18:56 | 359301 Scout Itout
Scout Itout's picture

The Mayan calendar predicts 12-21-2012 as the date that the world as we know it changes. Perhaps that's the day that begins the Great Reset.

Change. Not just a good idea...It's the law! 

Tue, 05/18/2010 - 19:49 | 359404 Hephasteus
Hephasteus's picture

Ya but they also told the aztecs 6000 years ago they would drag the great snake from the sky. And they told the christians 2000 years ago they would drag the great dragon from the sky. So in 5 years when you are waiting for the great frog to get dragged out of the sky. You'll finally figure out that what this about isn't what we are told it's about. So you can pretty much guarantee that religious leaders are just the biggest liars with the longest drawn out plans that work while they "appear" to not be working.

Wed, 05/19/2010 - 02:05 | 360114 Bringin It
Bringin It's picture

Hephaesteus - you are too dismissive of the Mayan Long Count.  3,500 years ago, they had such amazingly accurate sky models that they could run the model forward and see what to them was a startling event.  Our solar system crosses the galactic plane.  If you see the Milky Way at night, you can make out the plane.  It appears to us as a dark line running the length of the galaxy. It's dark because it's a void.  There is nothing there.  Why is that?

Anyways, unlike our calendars that run forward into infinite time, their calendar counts down to zero on 21 Dec. 2012 when the sun will appear to rise out of this void in the galaxy.  Given how long ago they figured this out, I consider it an amazing intellectual feat.

Wed, 05/19/2010 - 07:32 | 360272 Rusty Shorts
Rusty Shorts's picture

"Our solar system crosses the galactic plane.  If you see the Milky Way at night, you can make out the plane.  It appears to us as a dark line running the length of the galaxy. It's dark because it's a void.  There is nothing there.  Why is that?"


Void my ass, it's dark because of massive amounts of dust, asteroids and comets.

Fri, 05/21/2010 - 18:08 | 366789 Hephasteus
Hephasteus's picture

I'm not dismissive of the mayan long count. I'm dismissive of any sort of ideologies concerning beginnings and endings. You see the world. It's a military industrial complex. It's stated in public that we will always have war. There never is any zero point or balance because it's not built for a zero point or balance. It's built to constantly war. The only achievement humanity has made is pretending it's not a war and manipulating who is targeted for destruction at the present moment in time. It's intent is clearly killing maiming hurting until everybody stops fighting back. But it can only do this in fractions. Just off the cuff mathematical guess it focuses 10 to 33 percent of the people for pain and misery while maintaining a large group who are disconnected from it's true intent in order to maintain a cover story fog of war about what it's true purpose is.

It reminds me of a deam I had the other night. I was fighting this short tiny girl with blonde hair and this big massive dude with blonde hair and a long pony tail. I was fighting with another person on my side on a boat.  Someone came up from below decks and tried to put a bullet in the big guys head but the big guy turned around and tried to shoot him in the head back but, his gun was empty. So they laughed and said it was over and jumped off the boat and walked away while the girl said I can't believe you came all this way to play with me.

What is so funny about all this is I'm unconcious and relatively defenseless though that's not always the case. A couple times i've completely just screwed over a dream. Busting the choreography of the entire thing. Taking control of how it evolves and ends. But like I said what is so funny is the way these stupid stories are choreographed and played out for us. It's rediculous. It's stupid, it's unmeaningful. Fuck them. Fuck their stories, fuck their dreams. Fuck their explanations. Fuck everything they have to say and do.

Tue, 05/18/2010 - 19:10 | 359341 Alienated Serf
Alienated Serf's picture

Hmm, should I start having children now to provide farm labor...

Tue, 05/18/2010 - 19:13 | 359345 bugs_
bugs_'s picture

Dr. Hemlock this will be called "The Eiger Sanction".

Tue, 05/18/2010 - 19:55 | 359417 Segestan
Segestan's picture

Egon is one of the smartest guys in the room.

Tue, 05/18/2010 - 21:25 | 359511 steve from virginia
steve from virginia's picture

Lessee ... Matterhorn Asset Management sez the world has run out of trust.

From Matterhorn Asset Management:

  • We buy and store the gold for our investors

    In other words, trust US and not that 'other guy'.


    Gold so far is a decent investment. It is not now nor will it ever be a currency, it is too valuable. Gold will never circulate freely. Currencies circulate as a consequence of commerce and trade. Gold as an investment makes sense as long as the finance system remains more or less intact so individuals can trade their gold for somethng else at a profit.

    No intact finance system and hand tools (with the skills to use them) are probably much better investments.

    Gold in hand is much better than gold in someone else's hands. If gold becomes as desireable as many here claim it will be, there is no reason to think the persons holding the gold 'in trust' won't simply walk off with it.

    Those Matterhorn dudes aren't any more trustworthy than Bernie Madoff.

    This lack of trust calls into question their sales pitch. Unfortunately, it's hard to pitch deflation as there are no hedges against it. One can only hold cash and be nimble.

    Right now the world's finance system is vomiting because the US dollar is a hard(ening) currency, exchangeable on demand for a valuable physical good at a stable price. That good is crude oil. Every time the price of oil declines the dollar becomes that much harder. The effect of high oil prices on industrial economies creates an upper bound that reinforces the exchange value of dollars. The dollar cannot be devalued against the one good that is absolutely essential to so- called modern life.

    At the same time the price of oil makes it too valuable to simply waste. Both the dollar and crude become perceived as proxies for each other, rather than dollars being the proxy for commerce that would be leveraged from crude if the price were lower. The 'investment' value of crude - and the dollar - are repricing commerce.

    'Out of business' is what the sign sez. 

    If you buy gold keep it close and buy physical. DO NOT BUY PAPER GOLD.

    Also, if you haven't already, close out your dollar- short positions. The worst is yet to come

    Tue, 05/18/2010 - 20:50 | 359512 Scout Itout
    Scout Itout's picture

    I'm pretty sure there ain't no Aztecs around to argue with. The Christians are still writing their story and some might agree that the Great Red Dragon was a metaphor for Satan and his minions and is still to come.


    I'll bet a philharmonic to a donut that we'll still be tickin after this lickin and moving on to higher and better understanding of our purpose going forward.

    I me a dreamer but I choose to believe that things will get better.

    But first comes the metaphorical, and perhaps also, very real conflagration. 

    Tue, 05/18/2010 - 20:52 | 359521 Mercury
    Mercury's picture

    The whole thing is a total farce. Governments commit trillions to rescue banks and sovereign states but cannot even make budget cuts of a few billion in their own countries. This shows that the world economy and the world financial system is being run by morons who only have their own self interest in mind and do not understand the consequences of their ruinous actions.

    Someone's been reading Zero Hedge

    Tue, 05/18/2010 - 20:59 | 359528 Mercury
    Mercury's picture

    The next significant year is 1971 when Nixon abolished the convertibility of dollars to gold.

    I believe that was technically a default just in case you think nothing like that can/will ever happen (I'm looking at you Timmy).

    Tue, 05/18/2010 - 21:33 | 359608 Rusty_Shackleford
    Rusty_Shackleford's picture


    Tue, 05/18/2010 - 21:03 | 359539 Gromit
    Gromit's picture

    I'd like to complain about the shameless hyperbole and bias shown by the author.

    To describe the $750 billion Euros bailout as costing $1 Trillion dollars is an outrageous exaggeration!  At most we are talking $910 billion.

    A fairer headline would be $90 Billion already saved and more to come.


    Tue, 05/18/2010 - 22:36 | 359763 clagr
    clagr's picture

    You sound like Christina Roamer

    Tue, 05/18/2010 - 21:08 | 359550 binky
    binky's picture

    This guy is a real downer.


    Remember what Howard Stern said years ago about investing in Gold (or was it the Tonya Harding sex video): I haven't seen a hedge like that since the shining.  Either way he was right. 

    Wed, 05/19/2010 - 06:36 | 359624 Mercury
    Mercury's picture

    I haven't seen a hedge like that since The Shining.

    Can that be ZH's alter-motto?

    Wed, 05/19/2010 - 00:28 | 360000 Rusty Shorts
    Rusty Shorts's picture


     - ah yes, the maze of hedges...good stuff.

    Tue, 05/18/2010 - 22:19 | 359717 MarketFox
    MarketFox's picture



    Debt destruction > money printing

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