Mike Krieger Explains Why A Calm Sea Does Not Make a Skilled Sailor

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Thu, 03/24/2011 - 14:13 | 1096135 Bleeping Fed
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So we should compare the dollar with the strong, unmanipulated yuan, yen, dong, or won?

Thu, 03/24/2011 - 15:07 | 1096309 ConfusedIdiot
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No BF. Compare USD to the top 7 US trading partner's Index.

Regards.(also helps to reweight EU based on pseudo mark value as per cent of US trading partner - ie US/GER is major trading partner after Can/China/Mex/Japan/Ger/.... ) CI 

Canada 45.03 45.03
China 39.43 39.43
Mexico 34.57 34.57
Japan 14.97 14.97
Germany 10.42 10.42
United Kingdom 7.73 7.73
Korea, South 7.40 7.40
Taiwan 5.51 5.51
Brazil 5.44 5.44
France 5.04 5.04
Thu, 03/24/2011 - 15:46 | 1096469 Thomas
Thomas's picture

Did they spring Armstrong to free up a cell for Aleynikov?

Thu, 03/24/2011 - 16:44 | 1096788 IBelieveInMagic
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At the core of the malignancy killing the nation is the fact that we possess the world’s reserve currency that can be created at will out of thin air and forced upon goods producing nations (whether manufacturing or resource goods).  This means we do not need to produce to consume, which hollows out the entire core of the economy over time and has made us the generally lazy and decadent society we are today. 


Man, this is depressing -- Mike is destroying my delusions of what US is all about :(

Thu, 03/24/2011 - 19:48 | 1097494 dark pools of soros
dark pools of soros's picture

the Niger Dong is stronger than the Yankee Bernuck

Thu, 03/24/2011 - 14:12 | 1096138 scythian empire
scythian empire's picture

What makes a butt-pirate?

Thu, 03/24/2011 - 19:52 | 1097507 dark pools of soros
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sailing half mast too close to Key West?

Thu, 03/24/2011 - 14:15 | 1096149 malikai
malikai's picture

Everyone is also wondering how the criminal bankers are going to weasel their way out of this one.

Easy, they will declare fraud majeure!

Thu, 03/24/2011 - 14:18 | 1096166 Caviar Emptor
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Once politicians, bankers and citizens got the idea in their heads that "someone proved that deficits don't matter", it was all downhill from there. Just like giving a tween-aged girl a high limit credit card or a tween-aged guy a motorcycle, it was bound to end badly. 

And it's not over. Because we're also living in the shadow of 4 decades worth of cumulative money printing as well. Dollars never get destroyed. They exist in ocean sized pools known as petrodollars and eurodollars and there are Asia dollars and deep pockets here there and everywhere. 

So a tipping point has been reached since 2008: the desire to spend those dollars is beginning to exceed the desire to save them. For lots of reasons. But as the value of those dollars is perceived to be diminishing, the impulse to spend is growing fast. 

So now the US has gotten the entire world on a spiraling spending binge. And that is bound to end badly. 

Thu, 03/24/2011 - 15:19 | 1096339 B9K9
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Actually, the calculus is pretty straightforward:

(a) preserve the $USD reserve status via economic policies

(b) preserve the $USD reserve status via military policies

'A' would require discipline, but would have the beneficial effect of stabilizing global tensions and facilitating capital's search for positive returns via productive investment.

'B' (our current path) would require NO discipline, but would have the beneficial effect (from a military perspective) of DE-stabilizing global tensions and preventing capital's search for positive returns via productive investment.

B seems like a winner to me, because both the bankers & MIC benefit from continued debasement and conflict.

Thu, 03/24/2011 - 16:44 | 1096793 IBelieveInMagic
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Thu, 03/24/2011 - 22:41 | 1098090 MrPalladium
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Wow! Best analysis I have seen in a long time!!

Thu, 03/24/2011 - 14:22 | 1096171 Oh regional Indian
Oh regional Indian's picture

War! It's already happening. Why is that difficult to see that it is the get-out-of-jail-card-and-send-someone-else's-kid-to-their-death play?

It's been done over and over and over last century. It's already been done over and over this century.

It's happening right now.

Broken Window, Broken Arrow, it's all the same to mammon maddened maniacs.



Thu, 03/24/2011 - 16:32 | 1096739 Bicycle Repairman
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Thu, 03/24/2011 - 14:22 | 1096177 mynhair
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Kinetically winning?

Thu, 03/24/2011 - 14:35 | 1096202 10kby2k
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Even if America could repatriate its manufacturing base.....the people here wouldn't want to do the work for $15/hour. Its now beneath them. Unemployment pays almost as well and they demand to be paid more than unemployment.  Plus, who would want to do such rigorous work for such a meager paycheck?  There is little hope for this country.

Thu, 03/24/2011 - 14:35 | 1096208 campag
campag's picture

Gaddafi flees country..

Thu, 03/24/2011 - 14:35 | 1096209 TradingJoe
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So I should go ahead and short GLD now?!?! All GLD holders who would eventually want delivery and ...wont get it...:))) ?!?!

Thu, 03/24/2011 - 14:36 | 1096217 Misean
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Such a nattering nabob of negativism! Surely this nothing a little more printing can't fix...and if it can't then a whole lot MORE printing surely.

Thu, 03/24/2011 - 14:36 | 1096218 Temporalist
Thu, 03/24/2011 - 14:38 | 1096220 americanspirit
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Hoard silver where they can't find it. Then sit back and watch as things fall apart. Remember to duck and cover at the appropriate moment.

Thu, 03/24/2011 - 14:41 | 1096230 americanspirit
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Repeat after me - there is no strong China that is going to keep things from falling apart. repeat this until it sinks in.

Doubt it? This from Mish   http://www.sbs.com.au/dateline/story/watch/id/601007/n/China-s-Ghost-Cities

Thu, 03/24/2011 - 14:43 | 1096234 Clampit
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Martin Armstrong for POTUS? Seems more plausible than my first attempt of Robert Karhe, and I'm increasingly inclined to limit my search to those who have been imprisoned for economic "crimes."

Thu, 03/24/2011 - 14:47 | 1096250 PulauHantu29
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"The above chart shows the magnitude of the housing bubble.  Keep in mind the massive run from 1999 to 2006 largely occurred at a time when real household incomes were falling.  So you ask again, how was this possible?  Pure and simple it was built on debt...."

"This was completely a Wall Street push.  It wasn’t like some Republican or Democrat sat behind their crony desk and conjured up the ideas for collateralized debt obligations.  They got this idea from their overlords of banking lobbyists."


Thu, 03/24/2011 - 14:47 | 1096251 Spalding_Smailes
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Once QE ends & the middle east clears up it's game over for Turd. He also said he would no longer post on ZH. We will seeeeeeeeeeeeeeeeeeeeeee if Mr. Snake Oil lives up to his promise.


Turd " Snake Oil " Ferguson ( Jan. 20 2011 )

......... " So, here's my promise to you. Gold will trade at $1600 on or before 6/10/11. If I'm wrong, I'm shutting down this blog and going away, never to be heard from again as I will have proven myself to be of little value. If I'm right...well, let's just say it would be perfectly appropriate for you to hit the "Feed The Turd" button every day for the rest of your life. " ...............

Thu, 03/24/2011 - 14:50 | 1096265 Shameful
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So when QE ends where will the capital come from to buy US debt? I reckon it at 2.5% world GDP just in US debt not including other sovereigns, most all who are swimming deep in the debt pool. Is there that much savings and that much appetite in the world for Treasuries at these yields? If yields move up that will make the carry cost greater and even greater deficits, further increasing yields...

If dollars aren't flying from the printing press, where will they come from in a world of slowing economies and expanding deficits?

Thu, 03/24/2011 - 14:54 | 1096274 malikai
malikai's picture

If dollars aren't flying from the printing press, where will they come from in a world of slowing economies and expanding deficits?

Lots of fluffy unicorns will fly in on rainbows with pots of gold and silver.

Thu, 03/24/2011 - 14:58 | 1096286 Misean
Misean's picture

Ugh! Unicorns have horns on their heads. Pegasi fly! People gotta stop mixing their metaphorical mythologies. And let's not forget that leprechauns are necessary for rainbows and gold, and leprechauns are a bit tapped out right now.

Thu, 03/24/2011 - 15:31 | 1096400 malikai
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Please accept my humble apologies for disturbing your metaphorical mythological knowledge. Now, as a good troll, I will retire to underneath my bridge.

Thu, 03/24/2011 - 16:42 | 1096784 Buckaroo Banzai
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Yes, exactly. Everyone knows that Unicorns don't fly, they dance under rainbows and crap skittles.

Thu, 03/24/2011 - 20:09 | 1097575 Temporalist
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Unicorns don't need to fly they magically appear whenever The Bernank farts.

Thu, 03/24/2011 - 20:50 | 1097703 Calmyourself
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When QE ends and the ME calms ha, your a tool..  The ME is never going to calm down, this is it for the ME. new normal pal, it is going to stay this way for a long, long time.  This is the distraction they need and the price impetus to print even more and I think you know who "they" is.  Turd may be off o n the numbers a little but his macro call will eat your lunch

Thu, 03/24/2011 - 15:21 | 1096346 Spalding_Smailes
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Manufacturing is booming in Chicago. I know the owners of two of the largest manufacturing plants and one has a 8-10 week lead time the other is no longer quoting jobs. Chicago PMI is at a 22 year high, banking on QE 3 is a fool's errand ... They are working on everything, oil and gas projects, printing equipment, mining, blowers, everything is picking up and he said the quotes really started pouring in 2-3 weeks ago ....


"We have quite a tight range in Treasuries right now, even though there's a lot of risk events being thrown at the market," said John Stopford, head of fixed income at Investec Asset Management Ltd. in London, which manages about $80 billion. "There's a tug-of-war going on between a flight to quality and the market's expectation that yields will have to rise at some point as inflation and economic growth pick up.


Thu, 03/24/2011 - 15:36 | 1096395 Shameful
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So your argument is the US will have a massive economic boom, and in manufacturing. So China, the current main manufacturer with opaque polices and cheap labor will lose to the US with opaque policies and expensive labor (ignoring environmental regulations)...man I hope your right, but I'm not seeing it.

So I take it then you agree with the White House's budget projections of revenue growth in the US? And then I have to assume that flush Americans will keep part of it back to self fund the deficits?

Thu, 03/24/2011 - 15:45 | 1096472 Spalding_Smailes
Spalding_Smailes's picture

We are going to find out real soon who's right. I kept hearing QE 3,4 not 5 not 6 not 7 just like Lebron James that goof .... And " they can't raise rates " never,never,never because the banks would get monkey hammered.... Well get ready.

My buddy is even getting quotes from overseas now with the dollar plunge. The USA still has many high end manufactures ( CNC- Robotics ) and the only other countries that can match this capability Japan and Germany, well look at those exchange rates and Japan will be in trouble for months going forward.

Thu, 03/24/2011 - 15:53 | 1096501 Shameful
Shameful's picture

Well US makes all sorts of great toys, biggest arms maker in the world. But being our own best customer does not help the bottom line. But won't an economic recover put pressure on oil prices? Won't that squeeze people unless the recovery really is mighty enough to pick up the unemployment and stagnate wages with a quickness? Especially if we are relying on a weak dollar, weak dollars buy less oil.

We'll see, calling for economic boom before QE2 ends is a bold prediction. Know my fellow starving students would love to see it. And I would much rather you be right, then me.

To exchange action, have seen the BOJ is willing to intervene. Don't know to what extent. And the EU is still going through their meltdown, Portugal bellying up to the bailout bar.

And if the Fed acts against the TBTF interest they would be overturning decades of prior action. Could it happen, sure. But then I could beat Lebron one on one...if he was drugged and tied up...

Thu, 03/24/2011 - 15:52 | 1096494 jesse livermoore
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hey spalding smalies  .. I was just wondering, are clothes more expensive inside the matrix ??

Thu, 03/24/2011 - 15:23 | 1096363 Abitdodgie
Abitdodgie's picture

I think he is going to be spot on with that one .

Thu, 03/24/2011 - 17:21 | 1096963 Vagabond
Vagabond's picture

And if you are wrong and it turns out you have been spouting misinformation for months, are you going to likewise go away?

Thu, 03/24/2011 - 14:47 | 1096253 Shameful
Shameful's picture

Personally I can't wait to see what spin will be put on failure to deliver of metals. I hope they put some good writers on it, I'd like ot at least get a laugh out of it. Maybe just go absurdest "We would deliver...but we were storing out silver on site at Fukishima...who knew? So we will deliver when the radiation dies down enough for us to go get it. 6 billion years ok?"

Thu, 03/24/2011 - 14:49 | 1096260 malikai
Thu, 03/24/2011 - 14:53 | 1096270 Misean
Misean's picture

There won't be any story to write. Anyone not taking $50 in cotton/linen to close out their contracts will call a nice cell in southern Cuba home for a while.

Thu, 03/24/2011 - 14:50 | 1096262 Miss Expectations
Miss Expectations's picture

Fortune cookie message:

That wasn't chicken.

Thu, 03/24/2011 - 14:52 | 1096264 Racer
Racer's picture

"Fed's Bernanke to hold press briefings four times a year, to present economic forecasts after FOMC meetings"


The ChairSatan make economic forecasts?  ROFLMAO

More like economic daydreams .. or rather.. nightmares for the poor people


Thu, 03/24/2011 - 14:54 | 1096279 LawsofPhysics
LawsofPhysics's picture

All economic models remain disconnected from the physical laws of nature (which really decide whether you live or die).  Modern economics in particular is even worse, because it grew out of a time of cheap labor and cheap energy.  Only cheap labor and cheap energy will sustain our current economic model.  Not going to happen.  Thermodynamics are a bitch, hedge accordingly.

Thu, 03/24/2011 - 14:56 | 1096281 Gully Foyle
Gully Foyle's picture

Is this prophecy?


No Escape, released in some territories as Escape from Absolom is a 1994 action/science fiction film shot in Queensland starring Ray Liotta as John Robbins. As a former American Marine serving life imprisonment on an island inhabited by savage and cannibalistic prisoners for killing his commanding officer, the commandant of a Benghazi military base


In the 21st century (film taking place in 2022), the penal system is now run by corporations, with prisoners seen as corporate assets.

Ex-soldier John Robbins is imprisoned for life for the murder of his superior officer, who had deliberately ordered Robbins to lead a helicopter assault on a civilian village during a war which was going very badly for the USA, which was supposedly a source of "bio-weapons fire". In the assault, (which was later covered up and for which Robbins was awarded a medal) 342 women and children were "vaporized". This causes Robbins to have flashbacks of them screaming and dying over a backdrop of flames.

Thu, 03/24/2011 - 14:59 | 1096291 DavidC
DavidC's picture

Likewise, I've looked forward to Martin Armstrong's pieces and have read them avidly.

I tried to send a mail to him on learning of his release last week but couldn't find any contact e-mail address, so I'd like to add my regards and best wishes to him.


Thu, 03/24/2011 - 17:00 | 1096883 Liquid Courage
Liquid Courage's picture

Me too, Mr. C, tho' many of the (presumably) younger posters here seem to be unaware of the sad & sordid tale of Marty Armstrong's fall from grace.

I hope he's "allowed" (or even, after all he's been through, wants) to establish some sort of web presence.

Welcome back to "freedom" (such as it is), Martin!

Thu, 03/24/2011 - 15:02 | 1096294 mule65
mule65's picture

Blah blah blah.  1350 before tax day.

Thu, 03/24/2011 - 15:29 | 1096393 Abitdodgie
Abitdodgie's picture

what will be 1350 silver or the S&P ?

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