Michael Burry : The Toxic Twins Of Fiat Currency And An Activist Fed Set The Route To Long-Term Ruin

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Thu, 04/14/2011 - 15:45 | 1169953 sachsich
sachsich's picture

Fiat Currency Bitchez!

Thu, 04/14/2011 - 16:05 | 1170059 Cash_is_Trash
Cash_is_Trash's picture

Best medium of exchange ever. EVER.

Aren't the intricate drawings in paper notes much nicer than the glow of gold?

Thu, 04/14/2011 - 16:51 | 1170279 hambone
hambone's picture

Anybody else getting a "server can't be found" message when clicking on the video?  Is there a transcript?

Thu, 04/14/2011 - 17:19 | 1170389 Herd Redirectio...
Herd Redirection Committee's picture

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":


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.

Thu, 04/14/2011 - 17:57 | 1170532 macholatte
macholatte's picture

Completely useless as a store of value when it can be printed out of thin air by  a small elite!

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.

More and more people are catching on to the fact that two sets of rules are currently in place...

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? 

Thu, 04/14/2011 - 16:53 | 1170301 theXman
theXman's picture

Brilliant lecture from the brillian Big Short. Bravo!

Thu, 04/14/2011 - 17:18 | 1170385 BrobamaReds
BrobamaReds's picture

Despite being light in the loafers, this guy makes a lot of sence....however, My Gaydar Detector is going crazy!

Thu, 04/14/2011 - 19:03 | 1170701 DavidC
DavidC's picture


I'm ugly. Does that make my insights any less valid?

Grow up.


Fri, 04/15/2011 - 06:21 | 1171663 BrobamaReds
BrobamaReds's picture


Chillax.  The guy is a homo, but like Jerry Seinfeld said: "not that there's anything wrong with that!"

Deal with it.




Fri, 04/15/2011 - 06:24 | 1171664 DavidC
DavidC's picture

See my previous comment.

His sexuality is utterly irrelevant.

Grow up.


Thu, 04/14/2011 - 20:04 | 1170871 Paul Krugman
Paul Krugman's picture

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.

Thu, 04/14/2011 - 18:28 | 1170636 macholatte
macholatte's picture

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).

Fri, 04/15/2011 - 11:36 | 1172592 huckman
huckman's picture

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.

Fri, 04/15/2011 - 11:36 | 1172594 huckman
huckman's picture

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.

Sun, 04/17/2011 - 15:05 | 1178279 Temporalist
Temporalist's picture

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.

Thu, 04/14/2011 - 17:39 | 1170467 supernickel
supernickel's picture

Only problem: this guy is not from Earth!

Thu, 04/14/2011 - 19:32 | 1170791 Dental Floss Tycoon
Dental Floss Tycoon's picture

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. 


Thu, 04/14/2011 - 20:47 | 1170951 DavidC
DavidC's picture

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.


Thu, 04/14/2011 - 15:45 | 1169955 LawsofPhysics
LawsofPhysics's picture

And the solution is ...

Thu, 04/14/2011 - 16:29 | 1170170 OldTrooper
OldTrooper's picture

...open a bank account in Canada.

Thu, 04/14/2011 - 16:36 | 1170212 SwingForce
SwingForce's picture

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?

Thu, 04/14/2011 - 17:22 | 1170402 Dionysus
Dionysus's picture

Yes -- we taxpayers will be on the hook, thanks to the CMHC.

Thu, 04/14/2011 - 17:26 | 1170427 OldTrooper
OldTrooper's picture

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.

Thu, 04/14/2011 - 17:50 | 1170488 slewie the pi-rat
slewie the pi-rat's picture

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?

Fri, 04/15/2011 - 00:04 | 1171386 thegr8whorebabylon
thegr8whorebabylon's picture

Burry is long farm land and gold.

Thu, 04/14/2011 - 15:44 | 1169961 spiral_eyes
spiral_eyes's picture

central planning worked great in soviet russia, about time we tried it here in the west.

Thu, 04/14/2011 - 15:59 | 1170025 AldousHuxley
AldousHuxley's picture

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.



Thu, 04/14/2011 - 16:46 | 1170251 Bob Sacamano
Bob Sacamano's picture

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...... 

Thu, 04/14/2011 - 18:11 | 1170577 LowProfile
LowProfile's picture

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.

Thu, 04/14/2011 - 17:06 | 1170341 Stuck on Zero
Stuck on Zero's picture

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?

Thu, 04/14/2011 - 17:14 | 1170367 falak pema
falak pema's picture

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

Thu, 04/14/2011 - 15:47 | 1169964 ghostfaceinvestah
ghostfaceinvestah's picture

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.

Thu, 04/14/2011 - 15:45 | 1169965 FOC 1183
FOC 1183's picture

A shitstorm of reality in just the first 2 minutes.

Thu, 04/14/2011 - 15:47 | 1169966 bankruptcylawyer
bankruptcylawyer's picture

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.

Thu, 04/14/2011 - 15:51 | 1169974 Tyler Durden
Tyler Durden's picture

He has Asperger's syndrome.

Thu, 04/14/2011 - 15:54 | 1170013 lieutenantjohnchard
lieutenantjohnchard's picture


Thu, 04/14/2011 - 16:01 | 1170028 LowProfile
LowProfile's picture

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.

Thu, 04/14/2011 - 16:17 | 1170123 RichardENixon
RichardENixon's picture

My 15 year old son has it, and he serves as my personal encyclopedia. No need for Google at my house.

Thu, 04/14/2011 - 16:48 | 1170259 Thomas
Thomas's picture

If you guys haven't read "The Big Short", it's brilliant and timeless.

Thu, 04/14/2011 - 16:03 | 1170058 Sancho Ponzi
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I cannot recall a day with better quality posts than today's. ZH rules.

Thu, 04/14/2011 - 16:29 | 1170172 Cognitive Dissonance
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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?

Thu, 04/14/2011 - 16:37 | 1170209 AccreditedEYE
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Thu, 04/14/2011 - 17:49 | 1170507 KingdomKum
KingdomKum's picture

don't say fed  .  .  . 

Thu, 04/14/2011 - 19:01 | 1170716 DavidC
DavidC's picture

Excellent, that made me laugh!


Thu, 04/14/2011 - 21:06 | 1170978 carbonmutant
carbonmutant's picture


Thu, 04/14/2011 - 18:14 | 1170586 lynnybee
lynnybee's picture

+1 ....... best website for real education.   i've learned so much / i used to be so damn ignorant, not anymore.

Thu, 04/14/2011 - 23:19 | 1171303 Alienated Serf
Alienated Serf's picture

actually, you are still pretty ignorant.

Thu, 04/14/2011 - 16:33 | 1170199 Antarctico
Antarctico's picture

He has Asperger's syndrome.

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.

Thu, 04/14/2011 - 16:41 | 1170228 SwingForce
SwingForce's picture

His rise to fame is chronicled in GREATEST TRADE (John Paulson's book).

Thu, 04/14/2011 - 18:17 | 1170599 smlbizman
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