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A Q&A Roadmap To European Austerity

Tyler Durden's picture


SocGen's Daniel Fermon as penned a must read presentation titled "All you ever wanted to know about European austerity plans... but were afraid to ask" which answers pretty much all open questions about the European plan to streamline its economy, and strengthen its currency. Unlike the US, Europe at least is on the right path. Which is why at the end of the day, the EUR may rise and it may fall, but as long as the Fed refuses to acknowledge that America itself is in dire need of cost cutting, it will certainly be the USD that hits zero first in the competitive game of devaluation. What is truly sad is that this is precisely what the Fed wants: the destruction of the entire US middle class. As for the relevant questions asked, the top 5 are: 1) Why is it necessary for European countries to deliver austerity plans? 2) What do we really know about the different austerity measures? 3) Do past examples fully justify these austerity measures? 4) Which variable should you look at to analyze the success of these austerity plans?, and 5) How to invest under an austerity plan scenario. All the answers are inside.



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Wed, 10/06/2010 - 20:00 | 630820 gwar5
gwar5's picture

Austerity for the average taxpayer means cutting spending for programs that are stupid and don't contribute to the common good -- which means most of them. We'd be fine if we did that.

Which is to say --- Nancy Pelosi damn well better be riding commercial coach and not running up $100K liquor tabs for junkets to Copenhagen before a single American is told to take the blue pill and die to save the government money under the new health care system.

Wed, 10/06/2010 - 20:19 | 630852 zaknick
zaknick's picture

Get a clue about the real enemy fool:

Wed, 10/06/2010 - 21:43 | 631001 Hedge Jobs
Hedge Jobs's picture

great post ZN thanks for the link.

as TD said "exactly what the Fed wants: the destruction of the entire US middle class" is spot on.

The rothchilds of a few hundred years ago are no different to the blankfeins, greenspans, bernankes and maddoff's of today. These traitors are going to get whats coming to them.

Wed, 10/06/2010 - 22:40 | 631124 i-dog
i-dog's picture

The "blankfeins, greenspans, bernankes and maddoff's of today" are just the Alexander Hamiltons of then. Rothschild and his other hidden mates (most of whom live in Europe) are still the real culprits.

It is just as wrong to rail against Bernanke as it is to believe that Obama (or Bush) has a mind of his own. The multi-thousand-page bills that Congress (and the European Parliament) pass without even reading them (they are told how to vote) are signed into law by a POTUS who doesn't read them either (he is told whether to sign or veto).

Thu, 10/07/2010 - 10:31 | 632086 Chuck Mentzel
Chuck Mentzel's picture

I have to politely say you are talking out of your ass. I worked with a few members of the European Parliament and it's not how you put it. Sometimes they may vote some reports without reading them entirely because it's not their area of expertise or political interest. So someone who works in a committee for public health may read a part of a report on financial regulations just to get an idea on what is being proposed to be decided, but may ask his colleagues from his party who have a financial background if they have a recommendation of vote. Similarly, they may ask their national authorities in financial matters to give advice on how a decision would impact the economy. The final decision always rests with the elected, which may mean he may give a vote of conscience, a vote based on economic interest or a vote based on political interest, ie depending on how his voters would react to his vote. But don't expect someone with a background on public health to be equally qualified to pass judgement on a financial regulation and a law on pesticides. No one has the expertise to fully read and understand all areas of laws and regulations. So they cooperate with others to get the best advice. Probably in your little brain that means they all call the Rotschilds to ask them how to regulate veterinary laws. And the R family has an office to deal with indications of vote for parliaments all across Europe... And of course, members of the European parliament will vote how the Rotschilds say because they finance all their campaigns from Poland, Romania to UK. Thay basically get people out of their homes to vote the candidates that they already bought.

You know, psychiatry has a name for this sort of attributions. You should bring some evidence before making broad statements like that.

Thu, 10/07/2010 - 10:43 | 632118 i-dog
i-dog's picture

I can't find it right now in my history cache, but within the last 2 days I have seen an interview with a British MEP who would disagree very strongly with you -- otherwise I wouldn't have made the assertion. I'll post the link when/if I find it.

In the meantime, you should keep the ad hominems out of your posts. I can get nasty too.

Thu, 10/07/2010 - 11:01 | 632174 Chuck Mentzel
Chuck Mentzel's picture

British MEP? Are you serious, man? All they do all day is complain how the EU is a failed project and is basically preventing them from getting a good night sleep... They may be right, but if so, why don't they quit it? If you think that an entity like the EU is a failed project and the Euro-Parliament is nothing but a Rotschild voting machine or a waste of time, why don't you quit?

Well, if it comes to conspiracy theories, then let me give it a try: because UK quitting the EU is not in the interest of the USA... Because they would so much like to undermine the European project from within that their being outside of it wouldn't help much to bring down the Eurohouse. There, it's my conspiracy explanation on why the Brits talk against Europe every fucking given day, whether it's in their country or in Brussels.

The Brits are also neurotic about losing their former colonial empire, so they love participating in big fat global plots, especially when that involves Russians, Europe, USA or getting mixed in African or Indian local business. They just feel their country is not enough, they always have to get into exotic activites outside UK. That's my explanation of this neurotic-expansive mentality. I would never trust what a Brit says, without checking what his interest in a particular outcome would be.

Thu, 10/07/2010 - 11:18 | 632243 Chuck Mentzel
Chuck Mentzel's picture


I know how the Rothschilds work. I have personally known one Rotschild and know their involvement in the banking sector in Europe. I have witnessed how they work to build that influence. But going so far as to say that they tell elected officials in national parliaments or the European one how to vote and they actually get it is far-fetched. As someone who has actually worked in these environments and know how they work I cannot say you are right at all. It's a lot more complex than that. Lobbying is big both in Brussels and Washington, but as far as I've seen it can influence votes only sometimes, depending on how private interests can meet with political ones. Many times, lobbying has lost all votes, because public interests of national states have simply beaten them. If you think European officials now decide regulations depending on private interests, you are very wrong and probably make a judgement based on how it's done in the USA. Austerity measures and strict financial regulations are not in the interest of Rotschilds and their likes.

Thu, 10/07/2010 - 11:41 | 632304 i-dog
i-dog's picture

"Austerity measures and strict financial regulations are not in the interest of Rotschilds and their likes."

Exactly! Which is precisely why I suspect (and have previously stated here) that they are using their control of the union movement to provoke strikes and demonstrations to force governments to back down on austerity and go back to the printing-inflation route.

I am not an American and I personally know a number of these people, too. Rotschild is not the only big player ... and the drug traffickers are not all bankers. ;)

Wed, 10/06/2010 - 20:09 | 630832 Spalding_Smailes
Spalding_Smailes's picture
Big fall in consumer sentiment here last month

CONSUMER SENTIMENT fell in September, showing the largest monthly decline in four and a half years.

The KBC Ireland/ESRI Consumer Sentiment Index declined to 52.4, the lowest level in a year. This compares to 61.4 in August and an all-time low of 39.6 recorded in July 2008.

“The fall in Irish consumer sentiment in September was on a notably greater scale than seen in comparable US or UK confidence indicators and contrasts even more markedly with the broad stability seen in consumer confidence across the euro zone,” the report said.

“The Irish consumer sentiment data showed a much larger decline in September than was evident elsewhere, pointing to the emergence of some uniquely Irish concerns in the past month or so.”

“Consumers have become more concerned about the outlook for their finances, the economy and the labour market over the next year. Three out of four consumers expect unemployment to increase over the next 12 months,” the ESRI’s David Duffy said.

The expectations index weakened to 37.9 last month, from 52.1 recorded in August.

Wed, 10/06/2010 - 20:43 | 630835 Idiot Savant
Idiot Savant's picture

Please pardon my ignorance, but it seems like we've covered this issue and decided that Western nations are past the economic tipping point.

Wed, 10/06/2010 - 20:09 | 630836 Mercury
Mercury's picture

At what point will leaving European defense to the Europeans be part of the US austerity plan and how much more austere will the Europeans have to be after that point is reached?

Wed, 10/06/2010 - 22:55 | 631157 i-dog
i-dog's picture

Defend Europe against what? A few turbanned jihadists? Exactly which massive world power is armed to the teeth and planning on invading Europe? (and don't say "China" or "Iran", or I'll junk you).

Massive navies and airforces are absolutely useless against a few brainwashed religious zealots. The whole "big military" thing is just an excuse to drain the middle class to pay for their overseers when the cotton plantation is back up and running. (Oh, nearly forgot ... and to protect the drug farms in Afghanistan, Burma, Colombia, etc and the shipments to Europe and the US).

If the US were to withdraw "protection" from Europe, the Europeans should first celebrate, then allow (or require, as in Switzerland) all citizens to be armed. That'll stop the jihadists.

Wed, 10/06/2010 - 23:26 | 631230 Mercury
Mercury's picture

Sure, fine with me. War is probably obsolete by now anyway, so let's go.  How soon can I expect my taxes to go down?

I was thinking actually of Russia but perhaps they would quietly suffer many decades of internal hardship before they would ever think of focusing their powerful military and sizable national ambitions outside their recently reduced borders.

Thu, 10/07/2010 - 05:49 | 631592 zenmeister
zenmeister's picture

Purrrlease!!! When was the last time the "powerful" russian army posed a real threat to anybody other than it's own demoralised conscripts [specifically those too poor and connected to bribe themselves out of the draft]? It took them two attempts to even vaguely bring Chechnya back under control. And picking on Georgia doesn't really count for much either. US military presence in Europe clearly was decisive during the cold war when the USSR was a serious threat and competitor. But nowaday Russia is definitely is not in the same league. Apart from that European defence spending and associated capabilities are hardly miniscule, unless you compare it to the insane amount of money spent on the Imperial Stormtroops of America. To prance around and pretend that Europe will simply collapse and surrender to some mythical russian juggernaut without big brother helping out is just plain old US hubris.

Thu, 10/07/2010 - 07:01 | 631700 Mercury
Mercury's picture

I'm just trying to save some $$ here.  Other than that I really don't have a dog in European power politics but I would put my money on Russia with wooden swords over pretty much any current European fighting force.

One could argue that under certain, not totally unimaginable conditions Turkey (largest standing army in Europe by far) is at least as a much of a potential threat...and they know the way to Vienna.

But I think it's silly not consider such things going into Great Depression II.  Europe does have a rather extensive history with military conflict and history is not bunk. 

Thu, 10/07/2010 - 07:35 | 631724 i-dog
i-dog's picture

Dude, wars are fought to gain resources. It used to be for cheap labourer-slaves or productive tax-slaves, but more recently superseded by poppy fields, oil fields, energy pipelines and coca plantations.

Europe would be a net loss for any takeover merchant ... it costs more to feed and supervise people who are no longer prepared to work more than 2 hours a day checking forms or collecting fees than could be recouped in taxing them. Ask the ECB.

Thu, 10/07/2010 - 07:52 | 631744 Mercury
Mercury's picture

Loot, territorial conquest and perceived religious/nationalist destiny have also been known to be motivating factors from time to time.  Besides, much of Europe is a prestige address.

Thu, 10/07/2010 - 07:40 | 631730 Anton LaVey
Anton LaVey's picture

I would put my money on Russia with wooden swords over pretty much any current European fighting force.

Russians with wooden swords would not last very long against either the Bundeswehr or the British Armed forces, or the French "Armée de Terre". Add all three together, and you have pretty formidable European armed forces.

Your comment simply reveals a total lack of knowledge about Europe, and I suggest you spend some time documenting yourself about the subject you happen to be spouting off about.

Europe does have a rather extensive history with military conflict and history is not bunk.

Which is in complete contradiction with what you just said about Russians with wooden swords. But what are some small contradictions between ZH commenters, right?

The fact is, there are - at the very least - three competent, well-trained and well-equipped armed forces in Europe (the ones I just mentioned). Two of these (Great Britain and France) also have nuclear weapons in rather large quantities - enough to make sure Moscow is a radioactive hole in the ground, and will stay this way for a couple of centuries. Add to this several others (the Netherlands, Spain, Poland, etc) and you just have the kind of opposition the Russians won't touch anytime soon.

The Russians know this, the Europeans know this. Which is why getting the USA out of Europe may not be such a bad cost-saving plan after all. On this, at least, we both agree.


Thu, 10/07/2010 - 08:03 | 631763 Mercury
Mercury's picture

Hey that's great news! When do we leave?

BTW is that the same British military that has to ask permission from lawyers to fire back at the enemy and recently allowed their own sailors to be kidnapped buy a few guys in a rubber boat beneath the guns of their own warship?

Thu, 10/07/2010 - 08:31 | 631806 i-dog
i-dog's picture

Dude, you've really been overindulging with the Koolaid! (I'm trying to be gentle here).

Thu, 10/07/2010 - 03:00 | 631489 AnAnonymous
AnAnonymous's picture

At what point will leaving European defense to the Europeans be part of the US austerity plan


Easy answer, chief.

As soon as it will no longer be part of the US prosperity plan.

The US has located its military bases in strategical points in terms of resources appropriation from European's point of view. This achieved, the Europeans are cut from managing these assets the way they used to.

So as soon as the resources in those key regions are depleted, the US military will leave the place and let Europeans handle the burden of their 'defense'.

The comedy has got so funny that Somali pirates are played as a major risk.

Thu, 10/07/2010 - 08:05 | 631773 Mercury
Mercury's picture

What do you think the ROI is thus far on all that Iraqi oil?

Thu, 10/07/2010 - 08:24 | 631798 AnAnonymous
AnAnonymous's picture

Why do you think loot has to be cashed on in immediately to be loot?

Never watched those movies when gangsters have to keep a low profile a few months/years in order to enjoy the fruit of their work (in a US meaning) quietly later?

I'll expand on that later. For the moment, I am still have to try to figure out why people require an immediate and tangible consumption of the Iraqi oil to get the point. In my experience, they dont have the same requirement when a guy steals ten millions and  spend them 15 years later.

My best shot is that for the common US citizen, the group matters so much that individual behaviour can not be assessed on the same level as group behaviour.

Thu, 10/07/2010 - 08:42 | 631819 Mercury
Mercury's picture

I suppose that's a possibility but you're giving credit for a lot of long-term, careful planning to political leaders and interested parties that probably don't deserve it and who have a poor history of demonstrating likewise abilities in other areas.

A better example of long-term, grand strategy would be the eventual Muslim dominance of European demography (to the extent that it's an organized phenomenon at all that is).

Thu, 10/07/2010 - 14:42 | 633174 AnAnonymous
AnAnonymous's picture

What long term planning? There is no requirement of long term planning.

People in power face their times issues and the way they manage the issues predetermine the options of the people in power to come.

Oil has grown very big for the US prosperity and world domination. As soon as Saudi Arabia was introduced as a swinger production, it was written that US leaders would have to look for a substitute when the Saudi capacity to play the swinger producer would fade away.


The mad man from the desert Saddam Hussein developped the same analysis. He consciously left his nation resources under exploited in order to be at full charge when the time would come.

The problem is that he wanted his nation to go solo, to play their own cards and the US needs a puppet state to play consistently the US best interests.

There is no requirement for a long term planning. Just a chain of events.

Just like it is not long term planning to tell that the US will leave the area (no matter the state of security) when the resources are exhausted enough.

This is the decision the US president in charge at the appropriate moment will take. Because it was conditioned by the decisions made by his predecessors.

Thu, 10/07/2010 - 17:16 | 633527 Mercury
Mercury's picture

Across your last two posts you've contradicted yourself at least three times. If someone does/doesn't do something now with the specific intention of being in an optimal position to do/not do something in the future, that's called long-term planning.

Wed, 10/06/2010 - 20:15 | 630850 Chartist
Chartist's picture

Why doesn't the US and western Europe just default on all its debt....What will the Chinese and Japanese do except scream rant and rave?....I guess with the destruction of the US dollar, that might be just what we're doing.

Thu, 10/07/2010 - 08:29 | 631804 AnAnonymous
AnAnonymous's picture

The debt is already defaulted on. It is simply denial to tell otherwise.

Debt is that process which allows to bring in 'future' consumption in the present.

Repaying a debt means returning the consumption capacity to its previous level.

It is now impossible for the debt to be repaid. The consumption that was brought into the present cannot be compensated.

For nearly a century, this little feature was hidden behind massive progress in productivity, getting the feeling that you could always consume more from less.

This crisis is not the stop end but still a foretaste of what is going to happen.

Wed, 10/06/2010 - 20:19 | 630856 Spalding_Smailes
Spalding_Smailes's picture

How long will the euro last ?


Elite is preparing to sell country down the river

The problem is that the joke is on us. She touched on the nub of the issue: the Irish elite is prepared to sell the sovereignty of this country to protect the likes of Roman Abramovich and other vulture investors who bought up third-rate Irish banking debt at a discount and are hoping to get paid in full.

In the world of debt, these people are referred to as 'rogue creditors'. Typically, they are treated as rogues. They are nothing to us and should be treated as nothing. As the clever economist Karl Whelan observed, if we are happy that our tax is used to pay Frank Lampard's wages, then that's more of a reflection on us.

So take the example of euro membership. Denmark and Sweden -- two great European countries whose bona fides as EU members was never in doubt -- decided to keep their own currencies because they were perfectly happy with them and the euro's case wasn't compelling enough.

Meanwhile, what did our elite do? They went along for the ride -- one which the evidence would suggest was an extremely ill-advised ride. Ireland had much greater cause for concern about joining the euro, but we hardly made a noise. Why?

Could it be -- to follow my German friend's line of enquiry -- that we didn't have the self-confidence to stand on our own two feet and do some hard analysis about the consequences of this currency or any other decision?

Did we just want to be a mute member of the club -- unlike the pesky Danes, Swedes or, God forbid, Brits?

It is difficult to answer these questions. They are fraught and can lead to lots of heat and sometimes not too much light, but you don't have to be a conspiracy theorist to see a pattern.

Take, for example, Abramovich owning a huge amount of INBS debt. How did he get his hands on it? Who sold it to him? Would it be too much to conclude that whoever -- whichever broker -- sold the debt to him, also sold it to some other mega-rich clients elsewhere?

That would stand to reason. If so, could it be that the mega-rich who are closer to home find themselves in the same position as Abramovich?

Could it be that the only people benefiting from the Government's blind rush to impale the small guy with the debts of Fingleton et al are our own "high net worth" individuals? Could they be pulling the strings?

In all this haze, allegation and counter-allegation, can the "cui bono" question help us at all?

A clear domestic banking resolution law would clear all this up. But we have no such law. So the people are left in the lurch wondering who to believe.

We do know that, for example, the EU Commission gave its opinion on Friday at the wind-up of a Danish bank where it enthusiastically supported the principle of burden sharing.

Here's the quotation from the EU Commission regarding bust Danish banks: "Moreover, burden sharing is ensured by excluding shareholders and subordinated debt holders of the failed bank from any benefit from the aid."

There you have it in black and white. This is what the EU has advised Denmark to do. It clearly states that they won't give any state money to the troubled bank until the subordinated debt holders are burnt.

So let's get back to my German friend's observation: is it because we need to be loved or are we protecting someone big?

The EU says burn them and move on. Logic says don't sacrifice your sovereignty to bail out the hyper-rich, democracy says it is unfair to penalise the poor for the mistakes of the rich. What do you think?

Wed, 10/06/2010 - 20:22 | 630860 lynnybee
lynnybee's picture

right, austerity for us & jets & limos for the people at the top........ remember what HUGH HENDRY calls them, "champagne socialists " . most of my life has been spent in austerity making sure three children were well-fed & clothed & schooled, blah ! Now that it's time to retire, it's real austerity for me through the government !

Wed, 10/06/2010 - 20:38 | 630891 Spalding_Smailes
Spalding_Smailes's picture
Wow, Ben needs ink stat'...



Banks' $4 trillion debts are 'Achilles’ heel of the economic recovery', warns IMF

Lenders across Europe and the US are facing a $4 trillion refinancing hurdle in the coming 24 months and many still need to recapitalise, the Washington-based organisation said in its Global Financial Stability Report. Governments will have to inject fresh equity into banks – particularly in Spain, Germany and the US – as well as prop up their funding structures by extending emergency support.

“Progress toward global financial stability has experienced a setback since April ... [due to] the recent turmoil in sovereign debt markets,” the IMF said. “The global financial system is still in a period of significant uncertainty and remains the Achilles’ heel of the economic recovery.”

Although banks have recognised all but $550bn of the $2.2 trillion of bad debts the IMF estimates needed to be written off between 2007 and 2010, they are still facing a looming funding shock that will need state support. “Nearly $4 trillion of bank debt will need to be rolled over in the next 24 months,” the report says.

Wed, 10/06/2010 - 20:52 | 630921 thermroc
thermroc's picture

The Euro was designed for this period in history.

You don't think anyone with half a brain couldn't extrapolate the future of the dollar system?

Wed, 10/06/2010 - 21:00 | 630931 Rodent Freikorps
Rodent Freikorps's picture

Never happen.

Wed, 10/06/2010 - 21:12 | 630947 RecoveringDebtJunkie
RecoveringDebtJunkie's picture

Any austerity plan that saves the entire financial system at the expense of working class people in the productive economy is not only economically flawed (since it may actually increase deficit to GDP ratios) but morally inept. We need some more creative "solutions" to our global economic predicament, and Michael Hudson's views on fundamentally reforming tax policy would be a great place to start (although he is probably still too optimistic about what we could potentially achieve):

What we need is major comprehensive reform of economic policy and politics, rather than austerity in a vacuum.

Wed, 10/06/2010 - 21:27 | 630975 mynhair
mynhair's picture

Roadmap to austerity = highway to Hell, with no radar love.

Wed, 10/06/2010 - 21:29 | 630978 hugolp
hugolp's picture

What european austerity?

All the government deficits are going up because they re all saving the banks. This european austerity I keep hearing about its just propaganda.

Wed, 10/06/2010 - 21:31 | 630984 mynhair
mynhair's picture

Is Iceland European?  Try getting an egg there; the Legislature just received them all.

No propaganda necessary.

Wed, 10/06/2010 - 21:49 | 631012 Rodent Freikorps
Rodent Freikorps's picture

The tumult and the shouting dies—
The captains and the kings depart—
Still stands Thine ancient sacrifice,
An humble and a contrite heart.
Lord God of Hosts, be with us yet,
Lest we forget, lest we forget!

Far-call’d our navies melt away—
On dune and headland sinks the fire—
Lo, all our pomp of yesterday
Is one with Nineveh and Tyre!
Judge of the Nations, spare us yet,
Lest we forget, lest we forget!

If, drunk with sight of power, we loose
Wild tongues that have not Thee in awe—
Such boasting as the Gentiles use
Or lesser breeds without the Law—
Lord God of Hosts, be with us yet,
Lest we forget, lest we forget!

For heathen heart that puts her trust
In reeking tube and iron shard—
All valiant dust that builds on dust,
And guarding calls not Thee to guard—
For frantic boast and foolish word,
Thy Mercy on Thy People, Lord!

Rudyard Kipling

Wed, 10/06/2010 - 21:50 | 631014 Oracle of Kypseli
Oracle of Kypseli's picture

The whole banking system is connected. The virus is instilled and the system will collapse under its own weight. Up to you to guess the timing.

Wed, 10/06/2010 - 22:34 | 631113 Money Squid
Money Squid's picture

I think we read/hear about European austerity measures to precondition our minds to expect the same. We are fed the same bad news over and over (positive news spin from politicians during the election cycle of course) and slowly austerity measures are being implemented in the US, but the US Homer Simpons types do not riot like the folks in Greece, Spain and Belgium. The Calfornia Supreme Court recently ruled the Governator and Legislator could reduce the pay of the civil servants bypassing the established contract negotiation process and valid contracts. California's proposed budget is designed to reduce pension benefits for new employees. All the wealthy operators have to do is keep their heal on the throat of the economy and people will role over - no need to destroy the western economy as long as the people  give in. What was that Rham? "You never want a serious crisises to go to waste."  So, you have to create a serious financial crisis so that you can take advantage of the situation.


Maybe a little off topic but I did not see a relevant place to put it - Did anyone read "The Secret Team" by L. Fletcher Prouty? In his book Prouty describes how the militray lies to Kennedy (who wants to get out of Viet Nam, and then once Kennedy is replaced with Johnson, the military lies to Johnson to expand the war. Reading Obama's Wars by Bob Woodward, I see a lot of the same types of deceptions - Woodward claims the military was deceiving/trying to decieve Obama to keep the war in Afghanistan going. War is a big money maker. There always has to be a game somewhere so the super wealthy can feed. Its only the lilttle people that suffer and the super wealth pit the people against each other. A little austerity here, a decade long war there, some drug trafficking there, what's a little fiscal slavery among friends?

Wed, 10/06/2010 - 22:38 | 631123 gillimus
gillimus's picture

 What is truly sad is that this is precisely what the Fed wants: the destruction of the entire US middle class. 


Seriously, What?  Guns and ammo and shiny metals are awesome.  Being smarter than the MSM and J6P is awesome. Looking into the horizon and imagining that PMs will pay for bread is awesome.

But if you truly believe that there are people that want to destroy the middle class, destroy your way of life, literally destroy your jobs and your savings and your dollars? Then what are you doing? 

If you TRULY believe that the government is out to take all your money, confiscate your home, and laugh at you while they piss on your corpse then WHY do you allow it to happen?

I think we would all agree that our government's policies are misguided.  I think we would all agree that there is a better way, which involves deleveraging the years of debt we've acquired. I think we'd all agree that that deleveraging represents a period of time where we don't feel as wealthy as we have in the past, and may have to do with less.  I think we'd all agree that's good thing, and will benefit our children.  Most important, I think we would agree that TPTB are reluctant to have this happen because it will cost them money.

 There's the rub.  The so-called elite are in a hurry to foist this adjustment on you and me.  We are trying to make the elite pay for their greed.  What the fixers forget is that most of us are just regular joes and janes and we don't give a rat's ass about their stock charts and butterflies and head-and-shoulders.  When we recognize the power that we have, we will win.

Thu, 10/07/2010 - 00:24 | 631206 i-dog
i-dog's picture

"If you TRULY believe that the government is out to take all your money, confiscate your home, and laugh at you while they piss on your corpse then WHY do you allow it to happen?"

ZH (the Tylers and the Fight Club) is doing more than anyone else to expose WHAT is happening and WHY it is happening. There may even be some well-heeled contributors here who have joined the Gold Vigilantes to attempt to inflict some mortal wounds in the beast.

No one individual caused this mess (there are thousands just in the small group of families of the true oligarchs ... let alone the tens of thousands of their willing or unwitting captive servants around the world) and no one individual will thwart it. But a few thousands acting together will save the billions that stand to be affected.

I'm trying to do my bit (without cash or guns). What are YOU doing with your "may have to do with less" platitudes and "so-called elite" disinformation?

[edit] I've just had a look at a few of your previous posts: You are not a shill and do know what is going down ... but you don't seem to realise just how serious the situation is for the US and Europe and just how far away a solution is (80-100% reduction in the size of government AND massive investment into rebuilding a lost manufacturing base -- assuming any western industrialist could find local, university educated, workers willing to work for, and live on, a wage that is competitive with those in India, China, Brazil and a dozen others).

Thu, 10/07/2010 - 01:02 | 631379 RockyRacoon
RockyRacoon's picture

You didn't answer the question:  Qui bono?

Thu, 10/07/2010 - 01:55 | 631426 i-dog
i-dog's picture

It's a long and complicated story, Rocky. I know cui bono (and know some of them personally; socialise with them; know how they think) and you do, too, if you read enough (start with Geopol's old papers).

In short, they have been trying to control the upstart, independent Americans ever since Day 1 in 1630. Now the American Experiment has gone too far and is totally unsustainable ... better to blow it up and kill it off than to try to control it or profit from it any further. There are other richer fields to plough now. Time for them to move on to controlling the next big thing (or, if they are successful, control the whole damned globe ... but I doubt that the inbred motherfuckers have the wits to pull that off -- central planning just doesn't work; it's the same as herding cats).

Thu, 10/07/2010 - 01:02 | 631378 RockyRacoon
RockyRacoon's picture

I had copied that same quote to post in a comment:

What is truly sad is that this is precisely what the Fed wants: the destruction of the entire US middle class.

Where does this come from? 

What does it benefit the Fed to have the populous in poverty?

Thu, 10/07/2010 - 03:15 | 631500 AnAnonymous
AnAnonymous's picture

This cannot be answered because it is just one another story to aggregate the believers into participating into a new expansion scheme.


I dont rate much the economists, no matter the schools of thought they belong to.

Yet their endless bickerings sometimes yield valuable information.

In the 1940s and 1950s, in order to end the scam going under the name of worldwide proletarian community broadcast by the communists, the capitalists were forced to release research data showing that there could not be a worldwide proletarian communauty as the western 'proletarian' communauty took off from poverty at the expense of the other 'proletarian' communauty, through a mass transfer of wealth.

So the question is not about the FED policies, the question is first: where to find the resources to keep expanding the middle class in the western world? Second (the current stage): where to find the resources to maintain the middle class as a middle class?

Part of the answer to second is of course by allocating the resources dedicated to first (the current wished political action) but it wont be enough.

Thu, 10/07/2010 - 01:31 | 631415 gwar5
gwar5's picture

The US is the only non-Austerity country left. The Tea Party is an austerity movement of taxpayers who sounded the alarm first in early 2009. 

In June 2009, the Chinese laughed (literally) Geithner and Obama's economic plan off the stage at the univeristy of Beijing. European socialism then collapsed, and the EU and IMF immediately called for "austerity" measures to save the EU and which included privatization of such things as health care -- to save money. Then, at the G-20 meeting they all called for Obama and the USA to undergo austerity and cut spending. Russia even mocked Obama -- Medvedev flashed a gold coin on his visit, a prototype of a global currency, showing Obama the future.

Obama regime are isolated and the only ones who are not Tea Party members.

The whole WORLD has become the Tea Party. Everybody else is just copying them without giving credit to the toothless hillbillies* that don't know anything. The only new question raised here by Socio-Gen is whether it will be enough, even if everybody turns on a dime.


*Republicans earn 55% more college degrees per year than democrats, every year, since records have been kept, beginning 1955. The difference is so great that if democrats could just keep pace there would be no national debt and social probelms nil (Joseph Fried, Rhetoric vs Reality... , 2008). The Tea Party demographic profiles indicate they are even more accomplished than average Republicans. They are the American middle class and know they are being hosed.








Thu, 10/07/2010 - 03:05 | 631493 AnAnonymous
AnAnonymous's picture

They are the American middle class and know they are being hosed.


The American middle class know perfectly well they are the result of a massive theft.

For anyone engaging on the path of theft, an unbypassable moment arises some time: how to keep what was stolen while banning stealing as a way to make it.

Thu, 10/07/2010 - 01:32 | 631419 fresbee
fresbee's picture

Very good ppt. Thanks.



Thu, 10/07/2010 - 03:19 | 631503 AnAnonymous
AnAnonymous's picture

Extremely poor presentation. The most important is the disclaimer.

Liked how they introduced good (successful) examples to justify their taste for austerity (leaving aside the failed examples) while covering their asses a few pages bottom, by reminding zero sum tragedy propaganda that all countries can not win at the same time, that if some want to win, others have to lose.


Thu, 10/07/2010 - 03:28 | 631508 YOU
YOU's picture

One reason that "nobody" is "doing anything" is because so many are waiting for the govt to do something for them. Waiting for the masses to rise up... you may wait a long time. You are in the minority if you are not beholden to debt, have money, gold, food and weapons stockpiled. The large majority are either slaves to debt (thus need the govt in their minds) and will not oppose the status quo (but rather call for more) or believe in it through their brainwashing at public institutions of eductation or the media.


Ain't gonna happen soon, it is more likely that all breaks down before a group takes charge that has rational thinking in mind.

Thu, 10/07/2010 - 03:53 | 631518 i-dog
i-dog's picture

Agreed. Fellow slaves will tell the malcontents to "hush ... in case the master hears you!". Your fellow slaves will beat the crap out of you before they let you speak out or listen to one word you have to say.

The oligarchs know that the slaves will keep themselves in order. They hardly need to lift a finger ... just pay off the informants with an extra bowl of gruel, or just a pat on the head and a "good boy", then be praised as a "kind master".

Thu, 10/07/2010 - 11:06 | 631516 THE DORK OF CORK
THE DORK OF CORK's picture

Austerity under the present monetory system merely transfers consumption from one group to another - global consumption is based on energy production.

In a European context these austerity plans will transfer economic activity towards the centre which may indeed make Europe more efficient with its use of resources as Brussels transfer and monetary flows to the periphery have artificially inflated the periphery.

Now that the credit money can no longer be expanded credibly the ECB expects the periphery to pay interest to the core despite the fact the ability to pay was based on the bubble continuing.

The advance of the core can proceed even after a default or partial default of the periphery if their resources in the future go to their own economies.

If both the credit money stops and they expect us to pay interest on this artificial bubble then the European periphery will begin to rewild and may be able to offer European safari like tours to German and French wildlife enthusiasts.

Thu, 10/07/2010 - 04:05 | 631521 Sudden Debt
Sudden Debt's picture

As a sidenote:

I'm a Europe fan because I live in Europe, but it needs to be said that 40% OF THE WORKFORCE works for the government.





Austerity needs to be stepped up BIG TIME if we don't want to bankrupt Europe. And even if we sack 10% of those government workers (yeah right),

then where will they find work?

In my company WE REFUSE to hire ex government workers BECAUSE THEY ARE LAZY as hell!

They are used to work 4 hours a day MAX! You don't want somebody who has worked 10 years for the state doing meaningless jobs in your office.


Unemployment will RISE BIGTIME if they do.

Extra sidenote:

Europe is rebuilding it's army and hireing a lot of young kids to join the army.

THAT'S US STYLE! It solves unemployment for the young kids, but only adds up to costs! It's all a MIRAGE!

Thu, 10/07/2010 - 04:24 | 631523 i-dog
i-dog's picture

++++++++++++++++++ ding. ding. ding. ding.

Thu, 10/07/2010 - 04:35 | 631524 THE DORK OF CORK
THE DORK OF CORK's picture

If the largest section of the private workforce is service related what does it matter - if the public service contracts the private sector will expand outside their traditional activities and gravitate towards health and education.

Neither the goverment or the private sector is developing non oil based capital - it is just running the system down.

Remember the western world is not a beast of burden / slave economy where the calories burned  in useful work is transferred and expressed in the monetory system.

The service sectors role and the vast majority of the manufacturing sector is to convert BTUs into something that is consumed by people who hold energy credits or people under the umbrella of a entitlement programme.

Capital creation since the start of the Friedmanite era has been a sick joke.

Thu, 10/07/2010 - 11:32 | 632308 Grand Supercycle
Grand Supercycle's picture

Updated FTSE weekly chart:

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