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Mike Krieger Deconstructs Commodity Inflation: "You Ain't Seen Nothing Yet"
Submitted by Mike Krieger of KAM LP
Commodity Inflation: You Ain't Seen Nothing Yet
Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.
- Norm Franz, Money and Wealth in the New Millennium
As soon as your born they make you feel small,
By giving you no time instead of it all,
Till the pain is so big you feel nothing at all,
A working class hero is something to be,
A working class hero is something to be...
When they've tortured and scared you for twenty odd years,
Then they expect you to pick a career,
When you can't really function you're so full of fear,
Keep you doped with religion and sex and TV,
And you think you're so clever and classless and free,
But you're still fucking peasants as far as I can see,
There's room at the top they are telling you still,
But first you must learn how to smile as you kill,
If you want to be like the folks on the hill,
- John Lennon, Working Class Hero
Thanks Ben…You Have Destroyed the Social Fabric of the World
History is littered with the carcasses of men that in their exaggerated hubris attempted to stop the forces of nature and the markets only to fall flat on their faces. We tell the stories of these men in history books and myths from prehistory, but it never stops men of successive generations from trying it all over again. What the current political class the world over (at the behest of Wall Street financial terrorists and other big corporate interests) are doing falls into the same exact formula of prior historical failures. Some of the historical figures that attempted to beat back nature were great warriors or kings that just reached too far. Some of them were evil megalomaniacs whose desire was nothing short of absolute power in their hands over any of the unfortunate human beings that happened to be in the way. Ben Bernanke is neither of these. He is a just a little dweeb with an electronic printing press. Tragically, because of modern technology and the way the monetary system works today he has the ability to cause more damage than any other one person in the history of mankind and he is doing it. I shudder to contemplate the ultimate effects of the inflationary holocaust he has unleashed on the six billion mesmerized and helpless souls present on earth at this time. The signs are starting to show up again just like in early 2008. Food is becoming scare at a “reasonable” price in many parts of the globe and the symptoms of this are starting to bubble up to the surface. For example in recent days we have witnessed food riots in Algeria and Tunisia where at least 14 people are reported to have died in each country.
These types of events were easily predictable and have been predicted by people like me and many other whose views will never be seen in the mainstream media. Fortunately, the alternative media is taking over (which is why the Obama administration is certain to increase its crackdown on the internet) and people are becoming very informed and linked all over the world. The divide and conquer strategy that has worked so well for millennia will be much harder to pull off this time around.
Inflation: There is No Putting this Cat Back in the Bag
Probably the most misleading thing Bernanke said in his sixty minutes interview was that he could snuff out inflation in 15 seconds (this was the most misleading thing not the biggest lie, which goes to his “I’m not printing money” statement). This statement is so misleading because it is true he can do what he says but he never will because at this point the effect of raising rates or tightening credit would immediately bankrupt every single part of the gigantic TBTF banker run ponzi scheme also known as the global economy. The world’s Western governments are loaded with more debt that before the crisis and many of these including the U.S. and Japan could not handle even a moderate increase in interest rates let alone what Volcker had to do in order to end the inflation of the 1970’s. Think about it. Other nations own our debt and currency in the form of their FX reserves. China just came out with its latest FX figures and guess what? You go it, a new record! $2.85 trillion to be exact, which is up 19% year-over-year. I want to reiterate a point I made earlier in the year on this. With their FX reserves up 19% year-over-year they needed to boost gold reserves 19% just to keep their puny 1.6% of gold at a steady percentage. If they actually want to increase the share, which they do, they need to buy far more. This goes for every other nation as well since FX reserves have been exploding across the emerging world.
You see this is the great game. The West and Japan and major debtors that know they can never pay it off and have no intentions of trying. The West keeps stuffing the emerging economies with their toilet paper currencies in exchange for real goods, which then fuels massive inflation and makes it virtually impossible for them to ever get their gold reserves up as a percentage of FX reserves. We just keep diluting the hell out of them! The Asians-ex Japan (they are a U.S. colony) and the BRICs certainly know this which is why they are buying resources around the world, strengthening their military and forming economic alliances with each other. A great example of this is when the Chinese and Russians decided to transact in their own currencies rather than the dollar http://www.chinadaily.com.cn/china/2010-11/24/content_11599087.htm. Also, there was this story about how India may pay for the oil it gets from Iran with gold as they try to hammer out another currency system http://economictimes.indiatimes.com/news/news-by-industry/energy/oil--gas/india-iran-mull-over-gold-for-oil-for-now/articleshow/7238760.cms.
So far, the official policy out of China has been to raise bank reserve requirements as well as interest rates in an attempt to cool things down slightly and instigate a soft landing where inflation cools but economic growth stays robust. NOT GONNA HAPPEN. While the initial reaction by a lot of talking heads has been to sell commodities and buy U.S. equities, the Chinese have already failed in their attempt. Asia Tapis crude oil (the WTI equivalent in Asia) just hit a new high last night at $104.78 per barrel, corn and soybeans are at new highs, as are cattle and hog futures. Coal prices have been going parabolic as a result of the flooding in Australia. If you think inflation is bad now you haven’t seen anything yet. As much as they do not want to use currency strengthening in a more aggressive way they will be forced to, which will mean huge increases in commodity prices in dollars. There have been reports that China has been releasing commodity stockpiles to keep things under control. This begs the question. How much have they released? How much is left This is about to get crazy and not in a good way.
Asia Tapis Oil Chart
Corn Chart
Soybeans Chart
Lean Hogs Chart
Live Cattle Chart
Banana Ben Will “Fight” Inflation by Printing MORE Money
As I have said since the Fed started its QE policy the global monetary and financial system will end in a holocaust of commodity price inflation. The mainstream media has only started to notice (I guess when people starting dying in food riots they can’t just totally ignore it anymore). That said, as I mentioned in last week’s piece I do not think we are anywhere near the end of this. While in 1H08 there was the commodity surge and banking system collapse that was then followed by a soaring dollar and deflation, this time when the collapse comes it will be seen in the destruction of purchasing power of Western fiat currencies. So rather than seeing the U.S. dollar limit up and commodities plunging, this crisis when it really starts kicking in will be characterized by commodity prices limit up and ultimately a crash in treasuries. We are starting to see the commodity moves in earnest, but the treasury collapse may take some time and here is why.
The consensus view of the market remains that if inflation gets truly out of control, the Fed will raise rates and then treasuries will get bid as everything else craters. I completely disagree. Ben Bernanke is no Paul Volcker, and I doubt even Paul Volcker would have the nerve to raise rates like he did with the U.S. government just having levered its balance sheet so extraordinarily. Thus, counter intuitively what do I think Banana Ben will do when prices start soaring? He will print more money. He will justify this by saying we need to get more “money in the hands of the people” so they can buy food and energy. Barrack "I am incapable of telling the truth about anything” Obama will also lead the propaganda charge on this front. They will demonize speculators. They will take no blame. They will be in a corner. They just saved the richest 0.1% of America from taking any losses on their investments and ensuring that Wall Street firms that are nothing but wards of the fascist state can make record payouts. They will have to print to “help the people” who’s future they just completely decimated. Let’s never forget who did this…
You will know the episode is over when there is a “new (or devalued) dollar” and indeed possible new currencies across the Western world. Not before this happens will it end. I still sometimes hear this argument that the U.S. dollar is a claim on the assets of the United States of America. Really? Last I checked it says “Federal Reserve Note,” which to me sounds like a liability of the Federal Reserve, which itself is a private banking cartel. Hmmm…dollar holders as far as I can tell have no claim on U.S. assets but rather claims on the assets of the Fed. Have you looked at the junk they own recently?
Conclusion
I could write for hours and hours on this topic but at some point I need to just say enough. That time has come. I just want to make a few final thoughts on two areas of the markets. First, copper. While I am not necessarily advocating people short it given my view on Western fiat money, to me this is the most overhyped elevated commodity out there right now. It is not strategic like oil, precious metals or agriculture are and it is really at the very bottom of any list of commodities I would buy. The other one I want to mention is the long GDX/short SPX trade. As many of my long-time readers know, I think this is THE macro trade. From time to time this spread goes the other way and macro investors are presented with a rare opportunity to put it on more aggressively. I think that time is now with this thing going the other way by 14% since the gold stocks peaked on December 6th. Be aware that like anything this can continue to go the wrong way just as it did for two months from December 2009-early February 2010 but if you start putting this on now I think you will be greatly pleased a few months from now.
Best of luck in the Fourth Turning!
Mike
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to: Things that go bump / " children have forbidden me to speak on this subject, as well. I do believe that most people have simply subconsciously decided they would rather die. "
that is exactly what my oldest daughter told me, "Mom, if things get that bad, I'll just kill myself! " ........I'm the oldest person in the family & no one understands that the past 25 years have been a blip-in-time / nothing but a great big shopping spree! I remember when I was a kid opening up my DAD'S COFFEE CAN filled with coins dated in the late 1800's / early 1900's ..... it was so fun to look at all the different dates ! we actually walked around with real silver coins in our pockets ......... our kids walk around with plastic credit cards & plastic debit cards ............ END THE DAMN FEDERAL RESERVE BANK ..... the Federal Reserve Bank have caused another GREAT DEPRESSION (worse than the first) & the coming food shortages have been DELIBERATELY orchestrated by them, too ! ......... thank you for reading my thoughts.
FWIW, my unsolicited advice to you is -
Relax, you have done your best, let events unfold as they will.
Take care of yourself, and don't cut yourself off from those moments
that you can still share with those you love.
Much as an addict can not recover until he himself wishes to,
so too will people cling to the ideas that they think are making their current lives possible.
No matter how deep the lie, people will accept it if they think that doing otherwise will cause too much pain.
Take care of yourself so that you can be there for them when you are needed.
Serve your purpose quietly and with diligence.
Remove 'educator' from your task list.
Hang in there girl. At the very least, you will emerge this period with some good profits.
I have the same problem from spouse whose father was a stockbroker in 1928 when the market broke. Her father had a heart attack and died during the mid 60's and her mother did very well on her own.
I protect my immediate family have not even tried with the extended. When and yes If it happens we will make it. Do your best to convince others but maintain your relationships on an even keel. Frankly, I would lie to them tell them after some soul searching perhaps you were wrong. It helps them deal with their CD and you keep right on preparing, mentally if not physically.
Good luck
Lynnybee, if you are lucky like me and live in an area where natural disasters are a certainty, and if I may be so bold as to suggest, you just use that as an excuse to continue to prepare for the inevitable. My wife thinks I am a total nut job but we have lived in Florida for many years now and have seen some pretty crazy weather. She has no problem with me storing food, gardening, dehydrating and canning in the name of hurricane preparation.
I have learned to pick and choose my battles with her, and continually steer the conversation to things like rice bubbles and the like. But I always have an alternative explanation as to why something is important just in case she feels like I am pushing her comfort zone. By doing this I have accomplished alot. Is it enough? I have no idea, but I had no idea how to be a parent before I had kids, so we will see. Having the knowledge to be self sufficient is power enough.
Others have suggested it and I will to. Don't press the subject anymore if people don't want to face the reality. I have all but alienated my family because of my "crazy" ideals, but my concerns are not so much with my extended family, as they are, with my wife and kids. Ask yourself, is it more important to have a relationship with that person or make them understand the consequences of the comming future at the cost of your relationship.
You may not have your old friends, but I bet you have not lost the ability to make new ones who have a similar understanding as you.
Keep a stiff upper lip and just adapt as you go.
lynnybee,
I join my friends above in saying keep preparing. And since they will not hear, just don't talk preparation or silver with them.
YOU ARE doing the right thing by preparing, even if there is just a 10% probability of something bad happening (my take is 50 - 50).
Let them be. Keep at it. Anything bad happens you were right. And you can decide how much to share.
Lynnybee - I understand how you feel. I have walked your path of trying to warn family and friends about the likely course of economic / societal events to unfold. Last year one of my sisters used the exact words with me "NO MORE DOOM & GLOOM."
My immediate family is more understanding as they have seen our net worth increase dramatically since beginning to purchase PMs in 2005. I have also bought and sold some stock, at considerable profit, by following contrarian techniques / advisors - this has also gotten their positive attention.
I have significantly changed when and how I try to give advice. I subscribe to Gary North's website and here are his recommendations that I have been implementing with success:
"Aug. 6, 2010
I believe in laissez-faire: "Let us alone." This philosophy applies the civil government, but it also applies to individuals who don't want your advice. Let them alone.
Did the person approach you and ask for advice? If not, there are lots of reasons why your friends may not want your advice. Here are a few.
1. They don't like free advice from anyone.
2. They regard free advice as nagging.
3. They regard offers of free advice as lording it over them.
4. They think you are an idiot, but hesitate to tell you.
5. They don't accept your philosophy of life.
6. They don't think you are rich. (Are you?)
7. They don't want to change how they do things.
8. They are not yet really scared of this economy.
9. They don't want to hear bad news.
10. They prefer to ask.
11. They received different advice from their CPAs or lawyers.
12. They don't want to be confused.
13. They think they know best.
14. They don't want to be reminded of their problem.
15. They think your advice will cost them money in the long run.
16. They don't want to become beholden to you if you're right.
17. They don't want you to be right if they won't change.
18. They want confirmation, not a warning.
Then there is this general rule: free advice is seen as being worth nothing. Because it's free, they will not act on it. You want them to act on it. So, don't offer it. Tell them where they can buy it.
I return to this theme every few months. I find that subscribers either did not read the previous article, or else they just can't accept the fact that their free advice will be taken seriously and acted upon. They ask me to tell them what to tell friends and relatives. I recommend telling them nothing. If you see an article that may help, send it. That's sharing information, not giving advice.
If you give free advice, and the person does not take it, he will be resentful if it turns out to be correct. If he takes it, and it turns out to be wrong, he will be resentful. Only if he takes it, and it turns out to be right will he be pleased. The odds are against you: two bad outcomes, one good one.
This advice applies to your adult children and your parents. At most, hand a print-out of something you think will help them. Do this only once."
I have so much more peace since taking this path...
LynnyBee,
From one contrarian to another...
After 12+ years of watching all the craziness and believing it was all coming down NOW, I had to re-evaluate my stance. Not that I am a sheeple, far from it, but I have had to let go of the perceptions on my part of WHAT will happen, HOW it will happen, WHEN and WHERE it will happen.
I recognized that as a person who thought the world was going off a cliff, I was in a "No Win" situation with those around me: If I was right or wrong I "lost".
If right, all those who did not heed my cries (99%) would look at me with bitterness as one who reminded them by my mere presence that they had been a bunch of stupid asses and there was nothing they could do about it now except hate me for finally being "right" and them being impoverished.
If wrong, I am the stupid ass they would never tire of reminding that I am a stupid ass.
Yes, we care about those around us, family and friends. We want to protect them, help them. And quite frankly they may not want it. In fact, they may prefer to remain deluded.
Love also has to be balanced with respect both for ourselves and for others. It has broken my heart to restrain myself from discussing what I see with those around me IF THEY SEEM UNINTERESTED. I've had to lay back and let whatever happens happen.
You may find that opting out of a role as 'forward scout' for those you love may have 2 benefits:
1) Let yourself let go and just be, rather than strive. This will help you relax and recharge.
2) When they realize you stopped trying and no longer are concerned about them, they will likely become a little concerned themselves and start to look at things for themselves. Then as their environment changes they MAY come back to you and ask for your advice or thoughts, in which case you would be wise to give a little bit but make them work for themselves for the rest of it.
You may find that to work or not. But whatever you do, pls take care of you first and foremost. You are the only you you've got.
My prayers for you, sister.
Good advice.
Chin up LynnBee :-) You've done what you think is best, but you're up against human nature.
The normalcy bias has your friends and family in their grasp along with most of the rest of the US population. Google it, but basically people have a hard time accepting anything so radically different then their current reality...it's human nature. This is a big reason why so many Jews did not leave Germany to escape the haulocast as it was starting. People just could not believe it could actually happen, but it did.
It sounds like you do need to lighten up on the doom & gloom, people just turning off after they hear it too many times. But at the same time, offer to make available the resources (like ZH) you have used to educate yourself. Being told repeatedly 'the shit is going to hit the fan' soon, and realizing it yourself (with the right resources at hand) are two different things. I had to research & read up on it all myself before I accepted the huge problems manifesting and an imminent economic collapse.
Try to educate them subtly, without being overbearing. When it happens, you'll be the first one they turn to.
You can always eat your gold. Oh, wait a minute. You can't do that
At least you have a spouse and children. It's hard to get a 2nd date when you refuse to talk about pop culture...
Do you really want a mate that is interested in pop culture?
Thanks, BCB. I needed that.
I truly feel for you because I'm dealing with the same thing. Not from my family because they know I'm not mental but from those in the workplace.
I hope relating my perspective to you helps you cope.
I currently believe that, on one hand, all of this deception, corruption, malfeasance, power-struggle, & theft by the powers that be cannot be changed PERIOD, and on the other hand, all of this complacency & ignorance found in the general populous cannot be changed either, PERIOD. I've come to the conclusion that all of this is due to the imperfection of mankind.
Others have already said it well. A commentor here says that "nothing is new under the sun". Another says what you are going through is the grief process.
On "nothing is new under the sun", these problems have come and gone before, granted, it hasn't happened on this scale, but so too was this true during the prior instances of upheaveal and one thing remained the same, human error, either planned or unintentional. All that really matters is how you respond and whether you can sink, swim, or fly and i guess that all depends on how much you let outside forces affect your mood and outlook on your future.
On the grief process remark, I've felt that is true for myself in that I'm grieving for the loss of the relative ease I had in my old perception. I used to be able to go through a full day without thinking of these huge issues but can't seem to stop trying to understand them and it effects me as I learn more. I know I can't go back to being deceived but sometimes feel like it looks so much easier to live in ignorance like those around me (I'm speaking only of current events and the implications of our debt-based money system with it's many conflicts of interest and the propoganda/talking heads supporting it... most people i know who are ignorant about current events are still wiser and smarter than I by a long shot and regardless of what I believe is ignorance about one thing, this thought in me is overshadowed by their many great qualities). Take heart because this is an opportunity to look deep into your soul and address all the wrong thinking that allowed you to live in deception for so long. It's a truly formative time for myself and one that I'm not taking lightly. I believe that to try and bring someone else to the state of mind that they can have the pivotal change in perception you've begun to implement is very difficult if not impossible, imagine in your life what the "perfect storm" was, so to speak, that brought you to the point where you were able to accept this wildly different perspective of reality after, for so long, you believed an alternate reality to be so vividly true. This doesn't mean I hope have hope that true freedom will be found by the masses, I just understand that there are a myriad of factors that need to come to be to see a meaningful change in all of society. It's mind boggling to say the least but to me a noble and worthwhile cause to begin this pursuit of true freedom while being surrounded by sheep in a pen...
I'm sure there are many deficiencies in my perspective and it isn't whole yet but I find great hope knowing that I'm learning everyday to become better at rejecting lies and seeking truth. My heart goes out to you...
So far at least 11 States are preparing contingency plans in the event of a failure of the Federal reserve system. India concidering buying oil with gold from Iran, and we are just one crop season failure away from a famine ...I hope our countrymen are stocking up on neededful things
Ain't seen nothing yet? F* me, can only imagine. I think TPTB just want to transfer world resources to China because they can't pay $$, and they don't care where the next 100 year growth market is
These pricks want $10 gas at the pump. Could China then, not unpeg at that point, and have inside track to all resources as the only ones who can afford them?
We suck
This is stupid. The US is the only country in the world to be able to buy oil, no matter the price. Oil is priced in USD. And the US has a monopoly on USD.
Does not mean that all US citizens will be able to pay for it.
Simply means that all US citizens who can not affor to pay for it, will have to relocate elsewhere, where oil use prevails less.
Once US citizens cannot afford oil, it will probably be no longer priced in US $, as the US will have all but collapsed.
You think so?
I think the top 20pc of US citizens can afford $20 per gallon.
Why would the US collapse without the other 80 pc?
"The US is the only country in the world to be able to buy oil, no matter the price. Oil is priced in USD. And the US has a monopoly on USD."
By gosh, your right man, you have hit it on the head, the solution to all our problems. You Sir are a national treasure. I believe we should preserve your head in a bell jar for future bright ideas.. We will just print enough right now and buy all oil reserves on the planet, problems solved.. Tyler pull the plug..
Your a deep thinker, I can tell. Report to surgery room 3 for the head dissection..
Now there is a junk I earned, right proud of it too..
That is not the solution but a solution. A solution that the US is practising.
The current situation must be enough to see that, the US is taking advantage of its monopoly on USD.
Useless to buy all the reserves of the world as it is better to buy the ongoing extraction result. By buying all the reserves, you buy oil that might not be extracted.
What is needed is to maintain the organization that allows the US to consume what oil they consume. Which includes maintaining some parts of the world in their oil consumption.
That is not deep thinking. It is straightforward thinking, plain to all to see.
" No one is a prophet in their own land"
Which is why Mikey moved to Montana.
With the USD firmly breaking the 50 day moving average so far, and Trichet in the inflation-fighting camp as of this morning, it is hard to be long the USD now. That gives the commodity market the green light for its blowoff top to begin.
Intel's report after hours, and the reaction to it, will be critical for the stock market. Alcoa has dropped since beating its EPS but missing its revs. We are seeing fewer and fewer leaders in the stock market.
Buy silver. Silver and platinum. And gold. Buy gold
Paper silver seems to be disagreeing with the downward dollar.....
Paper silver is an atrocity. Ideas are dangerous. Buy silver.
Any precious metals (physical) are OK now. Most ($ value) is in gold, but I also have real amounts of silver and platinum. And a small palladium spec.
Diversification and Agility! That's what will help each of us as individuals get through what may happen...
I disagree with the impact on commodities. Once the next crash comes, I think that commodities will get killed just like in 2008. As bad as the US dollar is, it is still better than the worst out there as Europe and Japan are even more indebted than we are. It's clear that Europe is failing first, which will be bullish for the dollar in the near-term. A lot of the dough printed by Bernanke has already made its way into commodities already. If there is a liquidity crisis, which there will be, what happens to all these commodities that have benefitted from the ridiculous leverage in the system. I believe that commodity and equity deflation will follow the inflation shock.
BTFD BTFD BTFD BTFD BTFD
We cant allow china to pull a Standard Oil trick and undercut the competition, watch them go bankrupt or get co-opted, then jack up prices when they are a monopoly in various industrial areas. They are following straight from rockefellers playbook but using a pegged currency instead. When people play mercantilist games only the good guys lose. This free gift as per wealth of nations is only temporary until monopoly status is achieved. We must fight back for our own survival. China.has food and inflation riots first because we hold the winning hand here. Choke them with dollars until the government is toppled by revolution and food riots or force them to depeg as a condition of eventually stopping QE. China has a choice. If we dont induce inflation china eventually takes our entire industrial base, and they will not be a nice monopolist. Their behavior in that regard has been clear.
in the short term maybe... we have plenty of factories already built ready for production... and people getting more hungry for work... collective bargaining tool.
this is chess not checkers.
use thier oil, keep ours..
export inflation, lmfao!
build them up so they can tear themselves down.
and all the while the masses blindly go to and fro... if there was a crash, 5% of America would know about it or care... the sheep staring aimlessly, waiting... for the next thing to take its place.
We cant allow china to pull a Standard Oil trick and undercut the competition, watch them go bankrupt or get co-opted, then jack up prices when they are a monopoly in various industrial areas.
Standard Oil did no such thing.
Lambs led to slaughter.
I had an interesting "Inflation Alert" at 7-11 this morning. I was paying for my coffee and a guy with the other clerk asked for a pack of Marlboros. I do not smoke and have not kept up on what is new in that racket.
I damn near shi'ited myself when the clerk said $7-something!!! They then told me it was $14 / pack in NYC. No wonder the mob(s) smuggle(s) cigarettes.
http://www.youtube.com/watch?v=iPhGybu1T8o&NR=1
I agree with your point topcallingtroll
In addition, I think China is running out of time to be the next "King of the Hill"
However the next war between East and West for sure will be a mutually assured destruction, at least in the economic front.
All the fucking crying about inflation around the globe.
Drop the fucking currency peg with the USD. Russia,Opec,China,India,Brazil, ect, ect, ect,ect,ect, ect ...... All the inflation goes away if they de-peg.
They can't. Or they would ....
humans are so 1984. set your inner algorithm free and btfd.
ergo sum.
"Our top news story tonight is the whole world is fucked. Back to you Bob."
Bob: "Thanks Trish. We now take you live to the home of a boy who says he found a potato chip that looks just like the latest winner of Dancing with the Idol Talent."
This is bit disingenuous since the majority of the world populace is unaffected by economic Tsunamis, man made or Gaian.
Do you think the native inhabitants of Papua give a hoot about the world price of oil, gold, ho-hos or twinkies? And the natives of Vanuatu, what do they care about the price of cocoanuts?
Since about 4 billion people out of 7 billion (and climbing) are exempt from theBernankinanigans, they be summarily excluded from any treatise that sees obliteration around every corner. That means there are 4 billion people to carry on, who will experience nothing but progress unencumbered by the Derivatives which will disappear as if they never existed.
And let's not forget the completely absurd notion that life exists at all, let alone prosperity. Ever see what happens to those who win 400,000,000 on a lottery? Would you want to look like Lord Blankfein for a billion dollars?
Since about 4 billion people out of 7 billion (and climbing) are exempt from theBernankinanigans,
Food prices, as affected by Ben Bernanke, will touch all 7 billion when all is said and done.
These people, the 4 billion, don't BUY food, they eat grubs, grass, snakes, whatever is handy. Those who are not on the grid are not affected by it. At least until we reach "PEAK PEOPLE", in which case the earth, which has endured for billions of years, will simply stop feeding them and since they won't control themselves by limiting their reproduction, mother earth will discipline them severely.
No problem.
I don't know about buying the dip in stocks for much longer, but until the USD breaks back above the 50 day moving average, you have to at least consider buying the dips in commodities.
Prudence still has its rewards. When the time comes, trade them your can of coffee and a carton of cheap cigs for all of the gold jewelry they own and don't feel bad about it.
Thats right, cartons of cigs and 350 mil bottles of Jack Daniels stockpiled. The real barter items. And I'll be happy to trade a can of beef hash for a silver round.
Good fukking luck on that trade. I offer a silver .440 round for a can-o-hash.
Mike Krieger would have said the same thing about Japan 20 years ago and yet they have been deflating for the last 20 years. What a clueless bafoon
The FRN is a debt instrument whose viability is tied directly to perceptions of the ability of the future to service today's debts.
End of story. A lot of people are going to realize over time that they built their Casa de Areia on paper of diminishing viability.
What is going to be the behavior of yeast people when actual scarcities manifest? To consume MORE before the other guy can.
Exactly.
Every barrel of oil an American consumes denies it to China.
America's imports arrive via Canada pipelines and some short runs across the Gulf. Not a hell of a lot comes in from long distance.
Not so with China. The US Navy submarine force can shut down their GDP in about 1 week, and then starve them in another week. America can come out of the die off losing only maybe 150 million people instead of all 300. China is a lot more vulnerable to oil (and therefore food) interdiction.
150 million dead! We Win!!!!
WTF?
You speak of mass riots and death yet you believe the current financial system will remian in tact allowing this destruction to take place?. Sure we could argue that billions are already starving but what about a billion more starving in places we never expected?? The system will burn allowing a new one to emerge levelling the playing field. The paper you recommend will blow up along with all things derrivative based if you're predictions of glome come..which they surely will.
Well, he is not lying when he says, "We are not printing money." That statement is 100% true. They are printing FRNs, aka, dollars. Dollars are not money anymore than toilet paper is.
It will all start with the unions and their Marxist leaders (don't junk me, just look at Trumka's latest speeches and Stern's of 2 years ago). There will be protests and then riots for wages to rise due to inflation. Many will die. Martial law will be declared. Whatever freedoms remaining will be removed (1st and 2nd Amendments). The internet will be shut down as well as all cable, except for "approved" channels. The IMF and the UN will form a "World Council". All banks will be closed, all safe deposit boxes inventoried for "hidden" assets. Those 1099 forms will be examined for any transactions made to purchase PMs. People will be given a 3 month amnesty to voluntarily turn their PMs into the nearest bank and given an IOU from the new World Council.
3rd worlders will over run the southern border. The Alamo is refought in Dallas. Jihadists cripple the Houston refineries.
And then, I woke up.
When Goldman Sachs (one of the owners of the Federal Reserve bank and a company for whom the bank works) intentionally manipulates grain prices higher, poor people all over the world starve TO DEATH, most of whom are children. Goldman Sachs kills people and they do it more effectively and efficiently than any guy with a hand grenade on a school bus.
The intentional manipulation of food products higher in price is an act of terrorism that kills children... thousands of children each and every day.
If I spend $500 a month on food, and the prices rise, I only have 3 choices:
1. Buy less food;
2. Take money allocated to something else to buy the same amount of food;
3. Borrow money to be able to buy the same amount of food and everything else.
3 Leads to inflation; 1 and 2 do not. Now, if my wages start to rise in tandem.....
German Bologna still $2.99 lb. No need to panic. I will panic when it goes above $3.99. I spend around $140 month on food.
If the average american spends $140 on food, a 10% food inflation is only $14. That is only 3 Starbucks visits.
The ingredients will change before price.
Depends on the terms. What you describe is price inflation, which is no doubt occurring and is caused by the "classic" inflation of the money supply.
Wage inflation is the normal result of price inflation, but with such high unemployment this will not happen this time around. Competition for jobs keeps wages low, and the Fed kows this. They are OK with every other type of inflation EXCEPT wage inflation, which their corporate masters will not tolerate.
And unemployed people provide this? Well, well... On the contrary, this is a perfect situation for a ten year experience salary person to request a pay rise.
Lets face it: most jobs require training and are specializations. Do you really think that a guy who spent one year jobless can provide competition to a guy in the same sector who accrue his experience by one year? Loss of qualifications happen.
So back to the beginning, it means that this unemployment situation will favour people who keep their job as the pool for concurrence is decreased.
On the other hand, people living on job benefits have to cut down on their living style (contrary to the US popular beliefs) That is where you do not have your wage inflation.
4. Starve, and leave all your ass(ets) to your benevolent goobermint.
4. Buy ground beef instead of porterhouse. Buy potatoes instead of pre cut frozen fries, buy coo-laid instead of coke, chicken leg quarters insted of seasoned breast,.....
Less food not neccasarily - but pre processed food definitely less.
Shalom Bernookystein is a puppet. Nothing more. No sense blaming him. His handlers are, as you call them, "evil megalomaniacs". When will you refocus your attention on those that run the little shtadlan w/ a printer? That's what I want to know.
Names and faces?
they're the fucks being carried around in limos, other 'expensive' vehicles, & helicopters--with their grooms of the stools.
exactly. That's what I want to know. Needless to say, there is still no reason to blame, to no end, this poor little shtadlan when he's got hofjuden breathing on his neck. Contrary to general opinion, I do not believe he is stupid and enjoys being labeled, in public, as a fuckup bent on destroying his country, chosen or not. He's just another spineless shtadlan who doesnt have what it takes to stand-up to his hofjuden masters.
Lynnybee - I understand how you feel. I have walked your path of trying to warn family and friends about the likely course of economic / societal events to unfold. Last year one of my sisters used the exact words with me "NO MORE DOOM & GLOOM."
My immediate family is more understanding as they have seen our net worth increase dramatically since beginning to purchase PMs in 2005. I have also bought and sold some stock, at considerable profit, by following contrarian techniques / advisors - this has also gotten their positive attention.
I have significantly changed when and how I try to give advice. I subscribe to Gary North's website and here are his recommendations that I have been implementing with success:
"Aug. 6, 2010
I believe in laissez-faire: "Let us alone." This philosophy applies the civil government, but it also applies to individuals who don't want your advice. Let them alone.
Did the person approach you and ask for advice? If not, there are lots of reasons why your friends may not want your advice. Here are a few.
1. They don't like free advice from anyone.
2. They regard free advice as nagging.
3. They regard offers of free advice as lording it over them.
4. They think you are an idiot, but hesitate to tell you.
5. They don't accept your philosophy of life.
6. They don't think you are rich. (Are you?)
7. They don't want to change how they do things.
8. They are not yet really scared of this economy.
9. They don't want to hear bad news.
10. They prefer to ask.
11. They received different advice from their CPAs or lawyers.
12. They don't want to be confused.
13. They think they know best.
14. They don't want to be reminded of their problem.
15. They think your advice will cost them money in the long run.
16. They don't want to become beholden to you if you're right.
17. They don't want you to be right if they won't change.
18. They want confirmation, not a warning.
Then there is this general rule: free advice is seen as being worth nothing. Because it's free, they will not act on it. You want them to act on it. So, don't offer it. Tell them where they can buy it.
I return to this theme every few months. I find that subscribers either did not read the previous article, or else they just can't accept the fact that their free advice will be taken seriously and acted upon. They ask me to tell them what to tell friends and relatives. I recommend telling them nothing. If you see an article that may help, send it. That's sharing information, not giving advice.
If you give free advice, and the person does not take it, he will be resentful if it turns out to be correct. If he takes it, and it turns out to be wrong, he will be resentful. Only if he takes it, and it turns out to be right will he be pleased. The odds are against you: two bad outcomes, one good one.
This advice applies to your adult children and your parents. At most, hand a print-out of something you think will help them. Do this only once."
I have so much more peace since taking this path...
Norm Franz?
LOL!
Austrian Economics bitchez!
Care to comment on this thought (not mine):
As you may know, inflation has been very low. We think the risk of deflation is largely behind us and expect low inflation to continue for the near-term and average around 1% for the next 5 years. What’s important to investors is their return after inflation is taken into account. A 10% return doesn’t look so good when the inflation rate is 8% - it’s only 2% after inflation. In the nearer term, we believe that cash and bonds will offer inflation-adjusted returns that are below historical averages; and equities, real estate and alternatives will offer inflation-adjusted returns that are above historical averages. Our updated strategies take this into account.
Horseshit. King Dollar is making a re-appearance as you all fondle the Bernank's dick.
Just keep that moron occupied for a little longer......
IF: if price x greater than price x, buy
IF: if price y less than price y, sell
ELSE: jump, lemming, jump
END
P U! Get your finger outta that Bernanke skank, would ya?
Best of luck in the Fourth Turning!
CIT, my map sez 'turn left at the fourth star, and continue on til morning'.
Is this the turn I am looking for?
Crap, now I have to wipe my ass(ets) with copper?
You are correct, you are correct. He will print and they will try to blame the speculators and others instead of themselves who protected that .1% of society from taking a loss. I project that their will be two currencies, one for internal us in the US and the other for international trade (which will be based on resources and other things). This way the new one will be able to be redemed on those resources and also be able to pay back the debtors (who depending what country they are will get a one to one on their dollar holdings or some real sweet deal). The internal currency will be used by the citizens and will be very inflationary.
But Mike Shedlock says there's no such thing as cost-push inflation!
http://globaleconomicanalysis.blogspot.com/2011/01/no-such-thing-as-cost-push-inflation.html
I'm sure when gas is at $5 a gallon he'll be telling us that isn't inflation, and maybe it isn't, but what is it?
Meanwhile, Money Magazine says gold is in a bubble!!
http://money.cnn.com/2011/01/10/pf/investing/investing_in_gold.moneymag/index.htm
Too funny.
Oh no, he's wrong. All wrong. We're about to see the Mother and Father of all DEFLATIONS. Mark my words, kids.
One of the few prescient comments on this thread.
If wages don't go up, people stop buying cheap Chinese crap and new cars and buy gas, heating oil and food. They stop paying loans and mortgages. Property taxes don't get paid and local governments cut more and more to offset Bennie's printing. Are wages going to go up when U6 is 17+ % and the rest of the world is waiting for us to outsource more ?
Nope, it's deflation everywhere, it's just that the relative costs of different items are changing. Houses will lose 40% and food will increase 100% etc etc. Economics is all about relativity, and this bitch of an economy is going down.
When ? Now that's the trillion dollar question we'd all like to have answered...