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Michael Burry : The Toxic Twins Of Fiat Currency And An Activist Fed Set The Route To Long-Term Ruin
Michael Burry's ironic plight against pervasive lemming groupthink (such as the one gripping the nation currently) has been well documented in Michael Lewis' "The Big Short." It is thus not surprising that the topic of his speech to the Vanderbilt University (of which he is an alum) Chancellor's Lecture series is the current flawed conventional thought paradigm: that of central planning, of quantitative easing and of dollar debasement by the Fed, which are far more dangerous than anything experienced during the credit bubble as when the current regime finally fails, and it will fail, there will be nobody to bail out the US. From Burry's speech: "I am worried about a future of a nation that refuses to acknowledge the true causes for the crisis. A historic opportunity was lost. America has instead chosen its poison as its cure... Today I expect the US government to attempt to continue easy money policies into the next presidential term, past the foreclosure crisis, and past the corporate and public refinancing humps that are forthcoming. Junk bonds incredibly are again at all time highs. Quantitative Easing seems to be working for now. Buit this is an invalid validation of what America is doing. This is in fact a Pyrrhic gamble. As we continue to debase our currency, Bernanke says he is not printing money, again I disagree. As it stands I get an email from the Fed saying we bought another X billion in Treasurys. I don't know - that's pretty clear to me. In fact this program QE2 its scope and breadth raises the severe question of the Treasury's needs. The government's borrowing of money for the purposes of injecting cash into society, bailing out banks, brokers and consumers, is a short-sighted easy decoision for a population that has not yet learned that short-sighted, easy strategies are the route to long-term ruin. We never quite achieved the catharsis necessary to stoke the reevaluation of our wants, need, and feers. Importantly, the toxic twins: fiat currency and an activist Fed remain firmly entrenched, even more so with the financial reforms last year."
Burry's practical advice: open a bank account in Canada.
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Fiat Currency Bitchez!
Best medium of exchange ever. EVER.
Aren't the intricate drawings in paper notes much nicer than the glow of gold?
Anybody else getting a "server can't be found" message when clicking on the video? Is there a transcript?
I know, right. Gold, shining in the sun... Who needs it! /sarcasm
Money, its meant to be a unit of account, and a store of value! Fiat currency, it reminds me of a contract thats won by the lowest bidder! Completely useless as a store of value when it can be printed out of thin air by a small elite! In turn, because it is constantly depreciating, it is nearly worthless as a 'unit of account' as well, because what does $100,000 revenue (for e.g.) over a year mean if the f***ing dollar is depreciating at greater than 10% annually!
Check out the latest from the Capital Research Institute "On Psychology & Markets":
http://www.capitalresearchinstitute.org
More and more people are catching on to the fact that two sets of rules are currently in place, one for the MEGAwealthy (net worth > $100 m), and one for the rest of us. Besides the issue of the US government’s debt problems, and spending more than they earn, there is the problem of the US dollar (world reserve fiat currency) on its deathbed, with a privately -owned central bank (the Federal Reserve) that has proven beyond a shadow of a doubt to have ONLY the interests of its private owners in mind. Not only were the bailouts in 2008 a mistake, they were the largest theft in the history of mankind! It was the largest reverse Robin Hood story in history! The rich stealing from the poor to a degree only imagined (and probably salivated over) by the ‘great’ tyrants of the early 20th century, John D Rockefeller and JP Morgan. Now in the 21st century we get Henry Paulson, Hank Greenberg, Ben Bernanke, Lloyd Blankfein, Jamie Dimon, etc.
The question left to ask, then, is why haven’t EVEN MORE people woken up to facts, and the dire situation we find ourselves in? After a long and careful look at this issue, the answer may be surprising to some.
Fiat has the one thing that PM's don't have, a convenient medium of exchange. The problem we all have now is that we are the abused children of the sociopaths-in-charge. However, nothing new here. Oligarcs have always worked for their own self interest at the expense of the peons. The USA had a good run for a couple hundred years, did wonderful things for the human race. That is slowly grinding to a halt. Sad. Very sad.
Tis but a scrath, a pimple on Soros' ass. The MSM is firmly in the grasp of the Progressives and the sheeple are still grazing. Will Oprah endorse Trump?
Brilliant lecture from the brillian Big Short. Bravo!
Despite being light in the loafers, this guy makes a lot of sence....however, My Gaydar Detector is going crazy!
BrobamaReds,
I'm ugly. Does that make my insights any less valid?
Grow up.
DavidC
DavidC,
Chillax. The guy is a homo, but like Jerry Seinfeld said: "not that there's anything wrong with that!"
Deal with it.
See my previous comment.
His sexuality is utterly irrelevant.
Grow up.
DavidC
I hear the gay sound also, but this guy has aspergers (spelling likely wrong) which is probably causing the voice tone issue. It is known to cause unwavering tone deaf type speech.
Good lecture. Unfortunately, his history does not begin far enough back. The adjustable rate mortgage was born as a knee jerk reaction to the failed policies of the Carter years. One of the most significant events in the history of tinkering with home loans was the elimination of assumability of loans. Anyone could sell his house and allow the new buyer to assume the existing mortgage without being forced to get a new loan. The seller could also take back a second. You could close a deal in 3 days. IMHO the end of affordable housing and the collapse of the market structure began then (sometime after 1978).
So so true. One of the most short term minded mistakes ever. A disgrace. If only a wond chould be passed over every home loan making them fixed & assumable. Commercial real estate loans always have and still are being originated as assumable loans.
So so true. One of the most short term minded mistakes ever. A disgrace. If only a wond chould be passed over every home loan making them fixed & assumable. Commercial real estate loans always have and still are being originated as assumable loans.
I think though he does discuss the "assets" being backed by nothing but paper, which is kinda what you are saying that suddenly only paper matters most. Now what happened just a few years before Carter in 1971 with the dollar and gold? Paper tied to nothing.
Only problem: this guy is not from Earth!
Lewis makes one common mistake. He assumes that the creators of this mess are incompetent. He never suspects that it is by design.
The end result is the desired one. Penury for us and our progeny and unlimited power for the cleptocrats.Dental Floss Tycoon,
We are, all in our own way, incompetent, so I'd be prepared to go along with it.
One of the problems with getting into a position of power is that most people who get there believe that they've done so by virtue of their own infallibility rather than a mix of ability and good luck. It takes a measure of wisdom that most people (me included?) don't have to appreciate that.
DavidC
And the solution is ...
...open a bank account in Canada.
AUGH! (insert Sudden Debt's avatar here) Are you kidding me? They are the next group of over-leveraged lenders to fall. Canada's property values are at a peak, and you know what happens AFTER a peak, no?
Yes -- we taxpayers will be on the hook, thanks to the CMHC.
You're right. Forgive me for glibly regurgitating from the article. But I think the idea is to get away from FRNs and our benevolent Uncle Sam as quickly as possible - and as far as possible.
screw it! if he's so damned smart, why doesn't he just recommend goin to the bank and buying some loonie traveler's cheques? too simple for a hedgie?
not enuf goobermints involved?
Burry is long farm land and gold.
central planning worked great in soviet russia, about time we tried it here in the west.
central planning worked greatly for China.
It all depends on the leadership. Central planning makes the game all or nothing deal for the entire populace. With leadership who does not know what they are doing, so much power in the hands of the few makes it dangerous.
Right now, America has no trust of the leaders in business, politics, academia since they have revealed themselves to be all greedy self promoting liars.
Society only benefits if populace chooses options that will benefit themselves AND the society, not just themselves.
Greatly? They have been using central planning for many decades and am guessing the average American would not change standards of living with the average Chinese person. But you are welcome to do so......
Central planning worked great for Russia.
Up to a point.
Central planning has worked great for China.
Up to right about... Oh, six months from now.
There's a great deal of difference between central planning and central management. Central planning gives long term goals, targets for development, infrastructure priorities, and R&D investment. Central management, or micromanagement, is complete control of an economy from government to handyman. It means huge numbers of laws, restrictions, certifications, compliances, worksheets, reporting, taxation, land-use restrictions, and myriad mindless bureaucratic departments to oversee everything. Guess which we are?
Third scenario : central BS management. Its worse than just CM as described above. Its mayhem level MIS-management. But its central at world level. Which is worse than at national level USA. Its financial Fukushima level 9! Main losers : DM
Nice summary of what most of us here have known for awhile.
Most of my time is spent looking for clues as to when they are going to intentionally crash it again. I still believe this summer, between QE rounds, we will get a crash to give cover to Benocide to re-start his evil printing.
A shitstorm of reality in just the first 2 minutes.
what the hell is wrong with this guy? his speech pattern, affect, bumbling sentence structures and candence. it's ALL wrong. this guy is horrible.
He has Asperger's syndrome.
ouch.
Oh, it's THAT guy! Thanks, now I know to watch this.
People who suffer from Aspergers also "suffer" from near-superhuman powers of concentration.
My 15 year old son has it, and he serves as my personal encyclopedia. No need for Google at my house.
If you guys haven't read "The Big Short", it's brilliant and timeless.
Tyler:
I cannot recall a day with better quality posts than today's. ZH rules.
I don't know what I would do without Zero Hedge. So don't forget to click the donate button as a sign of your appreciation. I do it at the start of every quarter and I use the Alcoa earnings kickoff as a reminder.
Even $10 helps folks. Keep ZH alive and kicking by dropping something in the hat. Have YOU fed ZH today?
+1
don't say fed . . .
KingdomKum,
Excellent, that made me laugh!
DavidC
+$20
+1 ....... best website for real education. i've learned so much / i used to be so damn ignorant, not anymore.
actually, you are still pretty ignorant.
Back in the day, before every twist and kink from the baseline of human experience had to be a diagnosis with its own ICD-9 code, we would have simply called Mr. Burry a giant shambling nerd. Which is to say, he would look right at home at any WorldCon I have ever attended. Whatever label he wants to wear, he has clearly done very well for himself.
His rise to fame is chronicled in GREATEST TRADE (John Paulson's book).
this is why i donate.....i hoping you are raking it in, you guys earn it....the information you provide us with is priceless..
i thank you
and most times i have to do the captcha using my toes and fingers but i don't care...
And just how much did this "bumbling" guy make based on his own research, logic, and willingness to take a risk? Go look it up. Then speak.
PS: He has an MD degree to top it off. No slouch.
Dude, bankruptcy just thinks if speech is pretty and eloquent than the thinking behind it must be sound, hence his love for Obama.
Foot, meet mouth.
Obamas teleprompter has unsurpassed fluency, however he needs more than just 2 to ensure he stops continously turning his head left to right during a speach
It was $200,000,000 wasn't it? Too lazy to look it up. What impressed me is he saw the shit storm coming 3 years ahead and bet the farm. Not sure which took more balls but it paid off for him.
Come on, get past the "style" of speaking and listen to the content. We're not all excellent public speakers. Not even all the geniuses out there are good public speakers. And it certainly doesn't mean they're wrong.
The guy might be smart but needs to join the Toast Masters club and lose the Teleprompter . We already have competition in that area.
amazing stocks and the euro deying gravity despite being the most overpriced assets on the planet. if you need a reason to sell silver and gold this is it
Dude gets one call right and all of a sudden he can see the future of a nation.
Yeah, by all means let's stick with the likes of Barney Frank and their extensive experience.
He got many "calls" in his life right...he put his money where his mouth is on one BIG call and he also got that one call very right.
Now some people will listen to his opinions on related topics. This is as it should be.
What is not as it should be is that this guy can only get his video on ZH and not on CNN or NBC. Instead a guy like Bernanke who got the same call EXTREMELY WRONG is still the head of the Fed and has been given even MORE power over our economy.
+1
Absolutely right.
Amazing, ain't it? Bernanke completely misses the worst financial crisis in the nation's history yet not only does he keep his position but is widely praised as some creative genius for concocting the Fed's emergency bailout facilities. Then again, it is like a trillion-to-one chance that the foremost expert on the Great Depression would be selected as Chairman of the Federal Reserve a year or so before the massive financial crisis and economic fallout. Pick one: fucking amazing fortuitousness or one of the greatest scams ever conceived and pulled off.
I'll take scam Alex for 200.
Lol.
I mean no disrespect gabeh73 but fuck cnn, fuck nbc, cbs, fox and all the other msm outlets.
ZeroHedge, and other sites worthy of inclusion, is where the truth telling begins.
none takin. I agree and the TV is losing it's grip as certain as the sun is setting. I know the TV news has never been on in my house with my kids present without me telling them the TV is propaganda.
Well said, gabeh73.
Best to you and yourz.
"Pile, there's an extra set of balls in the trunk. Put 'em on. You're going to need them."
The American Dream - Full Length
http://www.youtube.com/watch?v=tGk5ioEXlIM
No accountability for Fed for your and your children's misery.
Great powers of central banks should come with heavy accountability, but such accountability cannot be measured until it is too late to reverse any decisions.
Then the only logical solution would be to divide the power amongst Fed districts and let each district try different solutions. If Janet Yellen fails California, then people can move somewhere else.
Right now, America is putting ALL of her eggs into the hands of one man...Bernanke.
start prosecuting these people with long jail sentences, and they'd scurry off into the sunset. Umtil then, they don't care. goldman was Obama's #1 contributor, so that should tell you what to expect before 2012.
Jackshit.
What can Bernake do but keep the music playing?
Voters don't recognize that there's really no choice anymore--you can vote for Simms Red, or Simms Blue. It's a free dictatorship.
Secretively he give us an incredible answer to the Underpants Gnome business model
1. <insert anything here>
2. these are the tools we have to which make profit!
3. <insert american dream here)
Gold up 20 bucks, sliver nearly a deuce, oil up 1.30, jobless claims miss by 30k and the DOW is up going into the close. No they're not printing money...
heluva close, today, brownie!
Every 100 tons of water is 25,000 gallons to keep things in perspective at Fukushima Nuclear
At Chernobyl there was a fire, an explosion and radioactive material was exploded and ejected over miles. They used 600,000 liquidators to pickup much of this radioactive material.
Sure at this point the Tera-Becquerels were reported higher at Chernobyl, however, much of the release was picked up. No doubt, Europe was blasted with radiation nevertheless.
At nuclear test sites from the 1950's the fish around there are still not safe to eat.
Check this link for many nuclear disasters, most of which were "disappeared news". The general playbook is to try and cover up...."they" seems to do it all the time.
http://www.spiegel.de/international/world/0,1518,756369,00.html
Here-in "lies" the big difference between Chernobyl and Fukushima, much of the Fukushima radiation has gone directly in the air, floating over the Pacific for the most part lucky for Japan with the winds, and much has gone directly into the ocean via direct runoff or groundwater spillage/leakage/seepage.
Cesium has a half life of 30 years and Cesium bio-accumulates. It doesn't go away. In 60 years, 25% of it will still be present in the environment, spread out over the whole globe, much in fish, which will eventually end up in other critters. That sucks. Dumping radioactive water in the ocean is a crime. Why didn't they ask the US military to Huey in 100 plastic water tanks at 20,000 gallons each. Even that "low level"radiation is still radiation.
And the other big lie is "DISPERSION". Even those "dilution" will take effect as the radiation rolls out into the ocean, all of the individual particles of radiation will still be there and will bio-accumulate in sea plants and fishes, and eventually get into OUR food chain.
DISPERSION is a big lie....a terrible lie being pimped out to make the general public feel less fear, or even feel justified that "see nuclear isn't that bad, the earth is resilient"
If you haven't checked my favorite compilation of nuclear resources, check it out here, many links and important original work and research.
http://oahutrading.blogspot.com/p/japan-nuclear-information.html
Thanks Steve. It's much appreciated.
Helping those in denial to get a grip takes first and foremost a lot of patience. Keep up the good work!
Add: And if it's not misinformation/disinformation, it's a complete lack of information to begin with - an issue that Arnie Gundersen deals with in his latest update. As he says, hopefully things will be different in the internet era.
http://www.fairewinds.com/updates
basically, if folks don't understand the situation as the speaker recites by now they might - might - not ever. in polite company i keep my mouth closed, and listen to what other folks are saying. no need being a killjoy at a church picnic.
It occurred to me that several examples of the most surprising productivity of our time, that of Japan and Germany after WWII as well as China after Tienanman Square, occurred after some form of governmental collapse. As has been so carefully ingrained by the MSM the US was "saved" from collapse ... and here we sit in a quagmire of high structural unemployment and lackluster productivity. Coincidence?
I agree, a collapse would be much better for us. The sooner the system resets, the sooner compensation will find its way to people who are actually worth a shit. Maybe, just maybe some of those vampire squids might change back into decent human beings. Just the same, I like calamari.
Many of those bureaucrats and bankers would make excellent bricklayers, surveyors, or machinists and could have made useful contributions to society if we hadnt bailed them out.
I doubt it. Honest work and usefulness to society are against their religion. Better to use those bureacrats and bankers as gimps, soap, dog food, and shrunken-head necklaces.
A collapse MIGHT result in us returning to a Constitutional democracy built on a foundation of free-market capitalism.
Then again, Obama might blame all the above when the USD collapses and build something else in its place.
hi ho ...... silver.
Nice, silver over $42
it is really quite lovely ;)
Yes, very nice. And just at the bell too.
Couldn't have said it better. Bravo.
Silver $42!
Ron Paul was invited on President Reagan's Air Force One for a flight to Houston, Ron Paul commented on Reagan’s watch, which was made from a $20 gold piece. “I wish we still had that monetary system,” said Ron Paul... “You know, no nation that abandoned the gold standard has remained a great nation,” said President Reagan.
http://www.freedomsphoenix.com/Uploads/Graphics/004-0610085829-ron_paul_...
--------
Then he goes and establishes Working Group on Financial Markets, plunge protection team.
The President of the United States does not work for us! People don't realize how scary this truly is.
We lived in a "conquered" nation.
President Jackson, we need you!
Actually if you look at Reagan's term and imagine George Bush Sr.(ex CIA head) as the real moving force behind the presidency, The picture is much more accurate.
Let me put it this way, When George Sr's next door neighbor/Business associate's Son allegedly shot Reagan, ah, Reagan wasn't supposed to make it.
Spot on.
Ford suffered two assassination attempts in two weeks. Guess who was his VP? Rockefucker. Guess what the Committee set up to investigate/whitwash CIA crimes in the 70s was called? Yep, Rockefucker Commission.
Greenspan's books explains it really clearly. Reagan was popular, the establishment guys were all pissed off and worried...so they sent Kissinger to talk to Reagan and made him an offer he couldn't refuse...same day Reagan says Bush would be his VP running mate.
Surprise pick...all of a sudden he went from rebel anti-establishment actor to...MSM thumbs up!
i arrived in CA post-goobernor raygun. he'd closed all the mental health facilites and invaded berkleley! to this day, we still call berZerkeley "the open ward"!
i thought it was jodie foster's fault! she almost taxied the prez away! bush was so freaked, he refused to take over the duties as required by law. george! you've got to step up! fuk you! not unless he's dead!
finally, gen. alexander haig holds a press conference, @ the White House and declares: "I'm in charge!" fabulous, al!!!
still, people geting shot isn't fun. the best part of the day was when they realized they didn't know where the "football" was, with the nuclear codes. They'd completely lost track of it in the excitement! unhh...do you have it? no! i thought you had it! maybe those guys that went home had it... who can we call?
at least general haig didn't have it!
I guess Bernanke is in a race to see if he will be crowned the King of Genocide, surpassing Mao (250 million) Coming up fast behind him are the TEPCO execs.
We broke $42/oz silver
highs in the $40's coming soon to a bunker near you!
Huge day for REITs....
None of them own any silver mines or have any exposure to Bolivia.
Hence the constant "safe haven" bid.
I feel bad for the kids who get bullied, but I cannot wait for you to get beaten up by the football team after school you little geek...
LOL. Tough love, huh, mom?
Look at the volume area chart -- notice how there is less and less black as you move to the right.
somebody turned it down...
Put a chart up of ARL. It's all relative.
and of course the usa's worst trader made exactly zero money off this chart.
new diet for the robotard give his portfolio drawdown: lentil's for breakfast, lentils for lunch, lentils for supper. chased down with water.
The troll is right. Robofraud never puts down his buy and sell prices on the day he buys and sells, if he does any actual buying and selling.
my hunch is that he doesn't trade. too busy posting. plus he's fear based.
Catfish are generally not known for their seven-figure brokerage accounts.
I know youre just a troll now Robo and exist simply to bait people but this evening i shall duly oblige and feed your perverse ego : you're a total cunt.
This is a fantastic website but the oversight of allowing this gobby , hindsight trading retard to continue picture/chart_101 posting rights is rather unfortunate and denigrates Zerohedge.
Id lay good money you have made less out of this 2 year "bull market" as a cheerleader than people who bought some gold or silver in 2008 and then just got on with their lives without even looking at the market since. The reason for this is because youre a pussy. You're easy to read Robo and a poker players wet dream. And thats the last im going to say about you - i just hope Tyler gets around to an ignore function. Your constant mindless spamming is really very frustrating when trying to parse out the quality comments from the largely erudite ZH community (compared to any other blog community , this one is A+)
As for M Burry - the guys a genius. Thanks for posting this video Tyler.
I agree wholeheartedly --- RobotLemming, along with Leo Quislingasskiss, are just officially-sanctioned ZH trolls, if not actual agents provocateurs employed merely to stir the shit and generate additional forum activity.
Opening a bank account (Canadian currency hedge) in Canada is OK but be prepared for full ID and USA capital controls and reporting. Not so easy. Must report any assets over 50K to IRS.
It seemed that Burry said that as a joke of sorts. Point being to escape the U. S. coming debacle. It certainly didn't seem to be his investing advice as such. Did anyone listen to this to the end?
Yes. It was slightly tongue in cheek. He said "all that said, i MIGHT recommend opening a bank a/c in Canada" followed by some laughter.
If he was being honest im sure he would recommend opening a bank a/c in several countries , including Switzerland , and diversifying ones savings. There are many advantages to that. And if youre moving already taxed income , there is absolutely nothing to worry about. I would advocate some of you gold bugs spreading your stash abroad aswell if youre truly worried about the facists stepping up a few gears.
Swiss banks most definitely do not want money from U.S. citizens--unless you have a shitload of it, then MAYBE.
Capital controls=on.
no, rocky. i didn't even listen to the beginning.
No worries. The invisible hand will save us!
http://blogs.minyanville.com/dollar-bill/
"The researchers examined economic data and suicide rates for the 80 years ending in 2007. They didn’t evaluate suicide rates during the recession that ended in June 2009"
http://www.bloomberg.com/news/2011-04-14/suicide-rates-rise-in-u-s-as-economy-declines-cdc-study-finds.html
Open a bank account in X, Y, Z ???
Are you kidding? CLOSE all bank accounts, except maybe one checking account that contains only as much digital fiat as you need for next month bills.
Escape the fiat, fake, fraud, fiction, fantasy, fractional-reserve prisons... ALL of them, not just those in the USSA. Convert 100% of your paper assets into real, physical goods in your own posession: gold, silver, platinum, seeds, fertile land, productive equipment, etc.
This is the only way anyone can survive the next decade without certain major trauma. Why do most people wait until it is too late? Because modern humans are incredibly naive and stupid, and rendered braindead by mass media.
You know what is fly paper? Well, all paper assets are human paper. Think about it, then escape while you still can.
Opening a bank account in Canada is a waste of time.
First, wait for the election to be over. You will see another minority situation where the Conservatives will present the same budget as before. The opposition will decide whether to pass the budget or reject it and look to form the government...
...Watch the CAD fall like a rock... In the '90's, Cretin and the Liebrals got the CAD down to $0.63 to the USD.
Do not pass GO... Do not collect $200.
It's a monopoly game. 80% of GDP is exported to the USA.
"There is a history of governments lasting a lot longer than they should."
Burry replied to the question of how we would know when a collapse is eminent.
Truer words never spoken.
Libya's Self-Sufficiency -- Risk To Central Banks
(snippet) From Information Clearinghouse
........According to a Russian article titled "Bombing of Libya - Punishment for Ghaddafi for His Attempt to Refuse US Dollar", Gaddafi made a similarly bold move: he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar. Gaddafi suggested establishing a united African continent, with its 200 million people using this single currency.
During the past year, the idea was approved by many Arab countries and most African countries. The only opponents were the Republic of South Africa and the head of the League of Arab States. The initiative was viewed negatively by the USA and the European Union, with French President Nicolas Sarkozy calling Libya a threat to the financial security of mankind; but Gaddafi was not swayed and continued his push for the creation of a united Africa.
And that brings us back to the puzzle of the Libyan central bank. In an article posted on the Market Oracle, Eric Encina observed:
Libya not only has oil. According to the International Monetary Fund (IMF), its central bank has nearly 144 tonnes of gold in its vaults. With that sort of asset base, who needs the BIS, the IMF and their rules?
All of which prompts a closer look at the BIS rules and their effect on local economies. An article on the BIS website states that central banks in the Central Bank Governance Network are supposed to have as their single or primary objective "to preserve price stability".
They are to be kept independent from government to make sure that political considerations don't interfere with this mandate. "Price stability" means maintaining a stable money supply, even if that means burdening the people with heavy foreign debts. Central banks are discouraged from increasing the money supply by printing money and using it for the benefit of the state, either directly or as loans.
In a 2002 article in Asia Times Online titled "The BIS vs national banks" Henry Liu maintained:
He added, "Applying the State Theory of Money, any government can fund with its own currency all its domestic developmental needs to maintain full employment without inflation." The "state theory of money" refers to money created by governments rather than private banks.
The presumption of the rule against borrowing from the government's own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not. But all banks actually create the money they lend on their books, whether publicly owned or privately owned. Most new money today comes from bank loans. Borrowing it from the government's own central bank has the advantage that the loan is effectively interest-free. Eliminating interest has been shown to reduce the cost of public projects by an average of 50%.
And that appears to be how the Libyan system works. According to Wikipedia, the functions of the Central Bank of Libya include "issuing and regulating banknotes and coins in Libya" and "managing and issuing all state loans". Libya's wholly state-owned bank can and does issue the national currency and lend it for state purposes.
That would explain where Libya gets the money to provide free education and medical care, and to issue each young couple $50,000 in interest-free state loans. It would also explain where the country found the $33 billion to build the Great Man-Made River project. Libyans are worried that North Atlantic Treaty Organization-led air strikes are coming perilously close to this pipeline, threatening another humanitarian disaster.
So is this new war all about oil or all about banking? Maybe both - and water as well. With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible.
Most countries don't have oil, but new technologies are being developed that could make non-oil-producing nations energy-independent, particularly if infrastructure costs are halved by borrowing from the nation's own publicly owned bank. Energy independence would free governments from the web of the international bankers, and of the need to shift production from domestic to foreign markets to service the loans.
I'm not worried about a future America inasmuch as I'm more concerned about outing the assholes behind the centrally planned economic genocide. If we get rid of the problem i.e. people then we can begin to have a real debate about solutions-- debt is nothing more than an agreement between two parties-- this agreement is subject to change based on various outside factors. People are more to blame then the system itself, but a reboot and redesign of both is necessary.
It's Worth Repeating, and Repeating and Repeating
.............The presumption of the rule against borrowing from the government's own central bank is that this will be inflationary, while borrowing existing money from foreign banks or the IMF will not. But all banks actually create the money they lend on their books, whether publicly owned or privately owned. Most new money today comes from bank loans. Borrowing it from the government's own central bank has the advantage that the loan is effectively interest-free. Eliminating interest has been shown to reduce the cost of public projects by an average of 50%.
And that appears to be how the Libyan system works. According to Wikipedia, the functions of the Central Bank of Libya include "issuing and regulating banknotes and coins in Libya" and "managing and issuing all state loans". Libya's wholly state-owned bank can and does issue the national currency and lend it for state purposes.
That would explain where Libya gets the money to provide free education and medical care, and to issue each young couple $50,000 in interest-free state loans. It would also explain where the country found the $33 billion to build the Great Man-Made River project. Libyans are worried that North Atlantic Treaty Organization-led air strikes are coming perilously close to this pipeline, threatening another humanitarian disaster.
So is this new war all about oil or all about banking? Maybe both - and water as well. With energy, water, and ample credit to develop the infrastructure to access them, a nation can be free of the grip of foreign creditors. And that may be the real threat of Libya: it could show the world what is possible.
Both: it is about crude being traded in USD over Euros. US already lost the battle against Iran. US regained Iraqi pertrocurrency power only after military invasion.
US has built its debt based on oil credit assets they don't physically own. The trouble now is this privilege is being threatened and all of sudden US debt becomes backed by nothing. Other countries don't care abot "Full faith of the American people". No gold, no oil backed currency, no markplace power.
Possible future:
There will be a world war before all that happens.
"This is in fact a Pyrrhic gamble."
(Exactly. Super concentrated, in-a-nutshell, no B.S. perfect.)
Financial information with a delightful twist - http://www.youtube.com/watch?v=u47obON_aQM
I wonder if the curtains match the carpet, if you catch my drift.
Despite being light in the loafers, this guy makes a lot sence!
He's from Vanderbilt and he doesn't believe that theBernank is 'Not Printing money?"
Of course, he's not, you nitwit!
He's simply opening up his laptop and moving the decimal point two spaces to the right.
There. He's not lying.
When you get a chance, aks him if he has increased the credit balances of his zionist brothers.
MEGAwealthy in America means having $1 left over at the end of the month after paying all bills...
Yes and no.
As individuals, who hasn't maxed out a credit card once their life? Or had Amex call to give you a "friendly reminder" about your balance due?
Ryan came up with $13 trillion. The "messiah" came up with $4 trillion.
All things being equal, if they split the difference 50/50, that's an $8.5 trillion cut in spending. At that number we'd even be able to begin paying down the deficit.
I am with Ryan %100, but it's a good sign that even our Prez - who has never seen a federal program he couldn't support - is talking about the deficit in a big way.
I am optimistic. It's a bid deal that the Prez is acknowledging the problem publicly, regardless of anything else.
Still, que cynics:
when you say, "It's a big deal that the Prez is acknowledging the problem" you mean the shit is brewing in the country and he has to come out with lashings of sugar coated worthless snake oil (for that's what every Obumma speech consists of) in order he gets re-elected (to shaft the good ol' USA for another term)
"Change you can believe in". He's sold you a big fat fuking lie once, in fact there's almost nothing this slippery little shit has said that holds water for more than half a milli-second. You going to vote him in for a 2nd term??
"Chains we can believe in!"
I might disagree with you about deflation, but you are spot-on about that lying puppet scumbag currently occupying the White House.
"Slippery little shit" exactly! I have never, EVER seen what all his adoring acolytes see in him --- his every speech and every word is a just a series of empty platitudes, meaningless slogans, and vacuous appeals to hope and power.
ZeroGov
You are preaching to the choir.
My only point is this: turn your TV on, watch the news, read the papers. The deficit is topic number one, and it's importance is only intensifying with the general public.
How long have many of us hoped for the day the topic would even reach this point?
Well, it's here now, and it's not going anywhere.
So, now, those who know the Armageddon-like consequences of not dealing with the deficit properly, it's their responsibility to make their voices heard.
The national debate is upon us finally, and we must win it. We have to get the country back on solid fiscal ground.
That, or just place your life savings in market puts, buy lots of non-perishable foods and move to a cave somewhere, and then kiss our country goodbye.
You believe a politician when he says he's going to stop giving away goodies?
I thought Air Force guys had brains.
best explanation I've heard of the series of political errors that led, over decades, to the housing bubble and then crisis... and from the man that created the CDS's by badgering Wall Stret to short the crisis he saw brewing.
There's huge irony there, that WS will create the vehicle for you to bet against their own greedy pyramid.. and Goldman Sachs will hold down the price until they're aboard to bet against their own fradulent mortgage scheme collapsing!
Or is that the madness of WS. The Emporer has no clothes, and bugger me if he hasn't bet against himself being revealed as wearing no clothes
Robert Rubin.
Tyler,
I've been on ZeroHedge for longer than my (registered?) account indicates. There have been two postings that have really made a mark with me (over and above the amazing stuff that is generally posted here!).
The first was;
http://www.zerohedge.com/article/how-world-nuked-itself-over-2000-times
I've referred many of my friends to it.
The second has been this one. And you say that he has Asperger's? Amazing. Thank you.
DavidC
I knew of this guy but I did not know he was that human and at the same time a star! Thank you for posting. Wow.
Double down,
Wow says it. I'm with you.
DavidC
"Read every line item until you get it"
superawesome.
The government's borrowing of money for the purposes of injecting cash into society, bailing out banks, brokers and consumers, is a short-sighted easy decoision for a population that has not yet learned that short-sighted, easy strategies are the route to long-term ruin.
Amen.
If the Nobel Prize were actually worth something, Berry would deserve one. Perhaps they can give him a Medal of Freedom.
Great post. Thx ZH!
Thank you once more for this post!
Great quote by Burry:
"That was the secret sauce of The Doomsday Machine."