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QE2 - The Day After: Entire World Blasts Deranged Madman's Uncheckable Insanity

Tyler Durden's picture





 

Yesterday's Ben Bernanke penned an Op-Ed in which he essentially said: "I am doing whatever I interpret my mandate to be, which right now means only thing: Dow 36,000. I am only accountable to the private bank that is the Federal Reserve, a few Wall Street CEOs, and no one else. Congress has no power over me. Try to stop me." And while the stock market is so far in love with this exhibition of outright hubris which promises record bonuses even as a record number of Americans subsist on foodstamps and real, not BLS, unemployment is over 20%, putting the Chairman in a long-overdue strait jacket will ultimately require an outright clash between those who still believe in that piece paper called the constitution and the kleptocratic cartel to whom the trade-off between a senior bond impairment and their first born is never all that clear. And while more and more try to educate a hypnotized, strategically defaulting US society what QE2 means to their future, the rest of the world is already rising in a tidal wave of disapproval aimed at the Federal Reserve. As the FT reports, Brazil, China, German, and Thailand, and soon everyone else, have already voiced thighest criticism and their condemnation of this escalation in FX wars.

China, Brazil and Germany on Thursday criticised the Fed’s action a day earlier, and a string of east Asian central banks said they were preparing measures to defend their economies against large capital inflows.

Guido Mantega, the Brazilian finance minister who was the first to warn of a “currency war”, said: “Everybody wants the US economy to recover, but it does no good at all to just throw dollars from a helicopter.”

Mr Mantega added: “You have to combine that with fiscal policy. You have to stimulate consumption.” Germany also expressed concern.

An adviser to the Chinese central bank called unbridled printing of dollars the biggest risk to the global economy and said China should use currency policy and capital controls to cushion itself from external shocks.

“As long as the world exercises no restraint in issuing global currencies such as the dollar – and this is not easy – then the occurrence of another crisis is inevitable, as quite a few wise Westerners lament,” Xia Bin wrote in a newspaper under the Chinese central bank.

Korn Chatikavanij, Thailand’s finance minister, said the Thai central bank had told him it was “in close talks” with regional central banks over measures “to prevent excessive speculation.”

The renewed tension is likely to complicate US efforts to get leaders of the world’s leading economies countries meeting in Seoul next week to press China to sign up to a new accord promising to limit current account balances.

Everyone now realizes that the most benign outcome of this act is the symbolic isolation of the US by the rest of the world. The outright isolation will come the second China, Germany and Russia announces they have come up with their own, commodity-backed currency.

Dan Price, partner at the law firm Sidley Austin and formerly George W. Bush’s White House representative at the G20, said: “The US may find it increasingly difficult to galvanize countries to push China on [renminbi] appreciation when many think the Fed’s quantitative easing policy is itself a major contributor to currency misalignment and imbalances.”

Neither the Federal Reserve nor the US Treasury commented on Thursday. The tension over exchange rates has created fears of a wave of protectionist trade and investment actions in response, a reaction that so far has been markedly absent from the global economy during the recession and recovery.

The World Trade Organisation, in association with other international institutions, released a regular report which said that new restrictions on trade, direct investment and capital flows had remained subdued.

At some point all Americans, no matter how engrossed with their facebook profile, will have to ask themselves: is preventing a few multibillionaires from suffering debt writedown losses a sufficient compensation for the trillions in incremental debt, for the conversion of America to the laughing stock of the world and its subsequent insolvency, and to the collapse of the standard of living of those 81% of Americans who barely have any stock market holdings, and thus benefit exactly zero from this action.

photo credit: William Banzai

 


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Thu, 11/04/2010 - 15:12 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Hey, Tyler, maybe Bernanke knows something you don't.

Perhaps he sees a major default event in the offing?

Thu, 11/04/2010 - 15:17 | Link to Comment mikla
mikla's picture

I'm sure that's true.  It's an economic war, and he's attempting to trigger foreign sovereign defaults before the US sovereign default.

For many reasons, it is quite important that the US sovereign default occurs *last*.

Thu, 11/04/2010 - 15:20 | Link to Comment jus_lite_reading
jus_lite_reading's picture

YES YES AND YES! Good GOD! You see the light! You must have felt my brain wave. If they default FIRST, then everything will be just fine!

Thu, 11/04/2010 - 15:27 | Link to Comment mikla
mikla's picture

I'm not sure if I read that right -- sarcasm?

This is a complicated topic related to "how to reboot".  In short, you are watching the reboot process.  For example, here's one scenario regarding a reboot that demands yesterday's actions to trigger foreign defaults before US default, the Fed removing itself from its Congressional charter, and becoming re-chartered under the IMF.

Why?

  1. The Fed would no longer bother with the silly Congressional testimony.
  2. The IMF would *finally* get to print without having to deal with sovereign political structures.
  3. It would yield a highly oppressive, but highly stable system from which it would be tremendously difficult to "opt out" (e.g., worldwide tax).

http://www.zerohedge.com/article/nightmare-scenario-fed-outlives-us-federal-government

Thu, 11/04/2010 - 15:32 | Link to Comment centerline
centerline's picture

I missed that orignal ZH piece.  Thanks.  Now, could you please pass some prozak or something.  I think my happy place is now being foreclosed upon.

Thu, 11/04/2010 - 15:38 | Link to Comment jus_lite_reading
jus_lite_reading's picture

I meant NO sarcasm. It was excitement that someone else sees the light! Sorry for the misunderstanding.

Thu, 11/04/2010 - 17:13 | Link to Comment Mediocritas
Mediocritas's picture

First rule of default: he who defaults first defaults best. Mikla doesn't understand this.

The Fed is *not* trying to cause foreign defaults. All central banks would prefer to see zero defaults. But what the Fed *is* trying to do is export deflation and import inflation with target #1 being the Chinese currency 'peg'. 

The Fed is basically taking aim at the BRICs and their suppliers and is, so far, losing. It doesn't help the Fed at all that the situation in Europe is so delicate which limits how far the Fed can go.

Thu, 11/04/2010 - 18:48 | Link to Comment FreedomGuy
FreedomGuy's picture

It almost reminds me of a short squeeze. You say to the Chinese, "Okay! You wanna peg your currency to ours at an artificially low rate? Well, wait and see how many of these damn dollars we can print! We will take this printed crap and buy real stuff from you! Then you will have our paper and we will have your stuff!"

 

Emotionally, I actually like that idea. It's a trade war of sorts. Rationally, its probably a disaster. Like war there are large casualties on both sides. Because its the dollar it becomes a trade war with the world. It will be interesting to see how the others play or fight it.

Fri, 11/05/2010 - 19:36 | Link to Comment BigJim
BigJim's picture

The problem I see is this:

What's stopping the Chinese buying a shedload of dollars with freshly printed Yuan, and spending it on silver, gold, platinum, coal, oil, etc, etc, etc? Why is China obliged to keep it all as US$? And wouldn't that stop monetary inflation (though not inflation in everything it buys, obviously)

Someone please explain....

Thu, 11/04/2010 - 20:29 | Link to Comment mikla
mikla's picture

First rule of default: he who defaults first defaults best. Mikla doesn't understand this.

That is true when you re-organize and come back (e.g., purge debts, and re-enter the system).  For example, Zimbabwe has better economic growth than does the US in 2010 (because none of its economy goes to servicing debt).

However, it is *not* true when the system is being rebooted.  The first central bank to default will drive all capital from that defaulting nation/region to perceived "safe" havens -- any other foreign country perceived as "safer".  Literally, people will trample each other to get to the "higher" end of the ship (even though the whole ship is sinking).

If the ECB defaults first, the US wins.  If the Fed defaults first, the ECB wins.

The Fed is *not* trying to cause foreign defaults. All central banks would prefer to see zero defaults.

We disagree on the assertion.

Further, I would prefer to be taller.  However, the Fed and all central banks know they are all going to default.  It's just business:  We are simply seeing "every man for himself".  Let me know if you see any "unity" in worldwide central bank meddling.

But what the Fed *is* trying to do is export deflation and import inflation with target #1 being the Chinese currency 'peg'.

There is no scenario by which this will occur.  Debasing the currency raises the cost of inputs (commodities and energy), lowering margins.  Those lower margins are expressed in decreased wages (typically the greatest business expense, and the easiest to compress).  This is demonstrably true:  We see low-and-lowering employment, and high-and-higher commodities and energy prices in the US.  Further, we see high-and-higher inflation in the rest of the world (those dollars are *running* to Brazil, China, anywhere in a worldwide carry trade).

Bernanke cannot halt the deleveraging.  Yes, the scale of his printing does grant him tremendous ability to make prices volatile.

The Fed is basically taking aim at the BRICs and their suppliers and is, so far, losing. It doesn't help the Fed at all that the situation in Europe is so delicate which limits how far the Fed can go.

The Fed is trying to kill other banks before they kill him.  And, the Fed is winning.

Thu, 11/04/2010 - 22:43 | Link to Comment zaknick
zaknick's picture

What a rube I am. Your explanation makes a lot of sense. I'm still not sure if you're correct but....

 

THANKS!

Fri, 11/05/2010 - 08:32 | Link to Comment Hedge Jobs
Hedge Jobs's picture

"If the ECB defaults first, the US wins.  If the Fed defaults first, the ECB wins." i would disagree with this. If the ECB defaults first the US doesnt win, it loses as the $ will rally which is the exact opposite of what the FED is trying to acheive.

"Let me know if you see any "unity" in worldwide central bank meddling." what about the swap lines that the FED voluntarily opened to the ECB a few months ago so they wouldnt defualt? that looked like unity to me.

"The Fed is trying to kill other banks before they kill him" The FED, ECB and BoE are all in this together and they are not trying to kill each other they are trying to kill the middle class of the western world.

"And, the Fed is winning" i have to agree with you here, a holocuast is coming for the middle class.

 

 

Fri, 11/05/2010 - 11:08 | Link to Comment mikla
mikla's picture

"If the ECB defaults first, the US wins.  If the Fed defaults first, the ECB wins." i would disagree with this. If the ECB defaults first the US doesnt win, it loses as the $ will rally which is the exact opposite of what the FED is trying to acheive.

If the ECB defaults first, capital would flow into the US economy (to perceived "safety").  That would bolster against US default. Yes, it would strengthen the dollar.  However, that won't matter at that point:  The goal is to destroy the ECB so the Euro is not a viable currency to compete with the dollar. 

At that point, a "stronger dollar" is the "eat-your-cake-and-have-it-too", as the stronger dollar will "back off" the US dollar from a similar collapse.  (Not permanantly, but temporarily.)  This is *also* the equivolent of Ben reloading his "big gun":  With a stronger dollar (resulting from the ECB collapse), Ben could print even *more* money (as the ECB collapse would be deflationary through defaulted counter-parties).  Ben could then spend these new dollars to buy more assets, and gain more control over the chaos in Europe.

Then, with the ECB in default, the damage would already be done:  It would likely trigger counter-party defaults to topple the Bank of Japan, which is quite coupled to the Euro (to achieve the similar goal of removing the Yen as a viable competing currency).

"Let me know if you see any "unity" in worldwide central bank meddling." what about the swap lines that the FED voluntarily opened to the ECB a few months ago so they wouldnt defualt? that looked like unity to me.

That was the Fed encouraging other central banks and sovereigns to lever debts denominated in dollars.  That establishes (1) leverage over those central banks and sovereigns, and (2) an explicit future demand by those central banks and sovereigns for dollars.  That action was absolutely necessary to trigger Fed control.

In contrast, all central banks are trying to debase against each other (not with unity), and all central banks are squealing about the Fed's current printing.  There is no unity here:  The Fed is on its own with no friends (and it does not care).

"The Fed is trying to kill other banks before they kill him" The FED, ECB and BoE are all in this together and they are not trying to kill each other they are trying to kill the middle class of the western world.

IMHO, it's both.  Kill the middle class, *and* kill competing currencies that might rival the dollar as the world reserve currency.

IMHO, BoE is on "life support", and assisting the Fed.  The Fed doesn't care about BoE:  It wants to kill the ECB and BOJ.  However, the Fed "knows" the BoE will die anyway.  The BoE probably knows that too, but is assisting the Fed, because the Fed is backstopping each breath of air the BoE takes day-to-day.

"And, the Fed is winning" i have to agree with you here, a holocuast is coming for the middle class.

Agreed.

Fri, 11/05/2010 - 20:33 | Link to Comment BigJim
BigJim's picture

I just went back to your October piece and read it. I don't know how I missed it the first time round. It was one of the more interesting things I've read for a long time, so, thanks for that.

My objection is this: I don't think the Federal government will collapse before a complete collapse of the US dollar. This would also mean the complete collapse in confidence in the Fed as a monetary institution. Now, as many people have pointed out (including yourself), for a fiat currency to be accepted, either the issuer has to be able to stand with a gun to your head, or you have to believe other people will accept it, ie, it has to be a store of value, even if that store is for a few days. And if the dollar is collapsing (ie, hyperinflation), I can't see our trade partners sitting around accepting the situation long enough for the scenario which you've envisioned to come about. Already a number of the BRIC countries have negotiated to do commerce in their local currencies; as the dollar went hyperbolic I think this would become more widespread until it became the rule, not the exception. 

People keep saying that most international obligations are in US $, and thus the US$ is necessary, but if the $ has collapsed I don't think meeting those obligations would be particularly difficult, do you?

The key is OPEC. As long as they insist on being paid in US $, there is some... 'hope'... that the US $ will survive. What the US military would do in the situation of the US breaking up is hard to predict, but I can't believe it will become more effective at projecting power abroad when it's facing mutiny at home. If the US starts breaking up, it's probably safe to say its influence over the Saudis will wane. China or Russia or even both could step in and guarantee their security, in return for them accepting yuan/rubles/gold in exchange for oil, and that would be the US $ finished as the world reserve currency.

That would still leave the Fed being the owner of most of the US, after having printed like mad and bought out the entire stock market and every single US mortgage. But I can't imagine even the US people would put up with them profiting from the destruction of their country.

Fri, 11/05/2010 - 20:52 | Link to Comment mikla
mikla's picture

I think we agree on the issues.  IMHO, the wild-and-crazy thing is that we're talking about "brinkmanship", and that implies some wild thrashing (e.g., the "unthinkable" becomes the "inevitable").  For example, it was unthinkable that GM would go bankrupt (but it did), and it is currently unthinkable that California will default (but it will, and *soon*).

My objection is this: I don't think the Federal government will collapse before a complete collapse of the US dollar.

I pray you are correct.  My fearful response is that IMHO, it is trivial for the Fed to trigger a US Treasury Bond auction failure in a matter of minutes on any chosen day (and the Fed's power over the Congress is increasing each day due to increased Treasury debt issuance -- we are already *in* the exponential feedback loop).  That would screw the Treasury, but not the Fed.  Similarly, as much as I agree with Paul that the Fed is "out-of-control", I don't see any possible "extraction plan".

I can't see our trade partners sitting around accepting the situation long enough for the scenario which you've envisioned to come about.

Agreed, that is *exactly* the question.  However, if the IMF *wants* to cut a deal with the Fed, they have the power to throw a lot of "trading partner weight" behind it.  And, they *want* the Fed's charter.

The only thing in opposition, IMHO, is a viable competing currency.  Oil must be priced in *something*.  That's why the Fed needs to kill as many foreign central banks as possible *now*.

Already a number of the BRIC countries have negotiated to do commerce in their local currencies; as the dollar went hyperbolic I think this would become more widespread until it became the rule, not the exception.

Yes -- exactly -- which is why Ben must print and detonate the economies in Brazil and China through high inflation in those countries, and reduced ability to export, from a dollar world carry trade.  That's exactly what's going on.  Ben needs Brazil to fall apart to "stop" such collusion that may compete against the dollar.  Ditto with the ECB.

People keep saying that most international obligations are in US $, and thus the US$ is necessary, but if the $ has collapsed I don't think meeting those obligations would be particularly difficult, do you?

No, *if* the Fed collapses first.  However, if the Fed collapses *last*, then *everything* is priced in dollars (e.g., sovereign default elsewhere in the world is deflationary, everybody holds worthless Euros, and can't afford to buy dollars to de-leverage).

Weird stuff.  I think we agree on the issues.  It's just crazy-nutty-stuff because it's "brinkmanship".  IMHO, we haven't even *started* to see Crazy Ben Unplugged.

Fri, 11/05/2010 - 21:12 | Link to Comment BigJim
BigJim's picture

Thanks for the chat.

Did you come up with this idea on your own? I ask for two reasons i) if so, hats off to you, sir; and ii) if not, and other people are thinking along these lines, then the other central banks must be drawing up defensive plans.

This is such an interesting time to be interested in geopolitics and macro-economics. Just hope it doesn't get too interesting, if you know what I mean.

Fri, 11/05/2010 - 21:48 | Link to Comment mikla
mikla's picture

Did you come up with this idea on your own? I ask for two reasons i) if so, hats off to you, sir; and ii) if not, and other people are thinking along these lines, then the other central banks must be drawing up defensive plans.

There was a committee comprised of stuffed animals, and voices in my head.  I usually don't listen the the voices, though.  Even when they get *very* angry.  They tell me to burn things.  The stuffed animals are more "team players".

Yes, it's my/our theory.  This theory kind of freaks me out.  Not as bad as the voices, though.  They yell in languages I don't even speak.

I/we merely compute probabilities based on "game theory", and I/we *hope* other people might also think about these things *before* they happen.

For example, if this comes-to-pass, I/we expect the following, and it freaks me/us out:

  1. Failed US Treasury Bond auction.
  2. Gas stations are closed and ATMs don't work.
  3. A deal is announced that the US Sovereign Debt will be forgiven if the Fed re-charters under the IMF.  (A similar deal will be made for foreign sovereigns, if they agree to merely adopt the IMF-dollar.)
  4. Thunderous applause worldwide.
  5. Gas stations open and ATMs work.
  6. I want to crawl into a hole and hide with the voices in my head, as I will find the voices preferable to keeping company with my elected "leaders".

IMHO, it's important to understand the implications for such things *before* they happen.  For example, the implication at that point is:

  1. No nation on Earth is sovereign anymore.
  2. Elections are mostly irrelevant.
  3. An oppressive (but stable) system will have been established that funnels a worldwide tax to a central ruling authority that unilaterally dictates all wars and commerce.
  4. We'll probably start immediate construction of the Death Star.
Fri, 11/05/2010 - 23:06 | Link to Comment BigJim
BigJim's picture

Well, if it plays out that way my PM collection won't have been much of an investment. I keep hoping FOFOA's got it right.

Did you hear about this?

    http://www.facebook.com/event.php?eid=137793666269183

it probably won't come to much but I think I'll be taking some money out of the bank well in advance.

Good luck with the voices. I prefer my guitar ;-)

Fri, 11/05/2010 - 11:05 | Link to Comment fajensen
fajensen's picture

All this talk of "killing": Bernanke ending up like Roberto Calvi would be both a start and a message.

Thu, 11/04/2010 - 15:40 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Mikla, please.

Wouldn't a very, very large monetization be a little easier?

Thu, 11/04/2010 - 15:48 | Link to Comment mikla
mikla's picture

No.   Too much, and too fast, and people flee the dollar.

Rather, Ben wants to debase the dollar to overheat foreign economics (e.g., worldwide carry trade).  That's exactly what's happening, which is why foreign sovereigns are squealing like "stuck pigs".

The goal is to trigger foreign default events.  I give 60/40 that Ben can pull this off.

Thu, 11/04/2010 - 15:54 | Link to Comment centerline
centerline's picture

With you there.  This is possibly the game to watch.  Risky bet for sure.

Thu, 11/04/2010 - 16:00 | Link to Comment SDRII
SDRII's picture

which foreign sovereigns do you have in mind? The idea that Bernanke engineers anything like what your saying is a long ball. Perhaps it is home bias but one wonders why it is assumed that everyone is playing for a US win? To suggest there is no aternative is a tad shortsighted but good for a trade (nto to be confused with trade) I suppose

Thu, 11/04/2010 - 19:57 | Link to Comment mikla
mikla's picture

which foreign sovereigns do you have in mind?

ECB (how dare they try to build a world reserve currency to compete with the dollar) and BOJ.

Sorry, BOE, it's just business.  Irritating BOC is merely a bonus.

The idea that Bernanke engineers anything like what your saying is a long ball.

True.  It's possible he's simply stupid.

Perhaps it is home bias but one wonders why it is assumed that everyone is playing for a US win?

Everyone is playing for an infrastructure to suppress the populace.  That is the only game since the beginning of the world.  The fact that you could actually suppress the worldwide populace is merely a *great* bonus.

To suggest there is no aternative is a tad shortsighted but good for a trade (nto to be confused with trade) I suppose

It is a "theory".  However, IMHO, we are seeing toggling among their "Plan A" and "Plan B" and "Plan C", etc.

In essence, we're merely looking at "contingencies" so that they "win" even when they "lose".  There is great precedence for this.  I'm currently unsure if this theory is in the "A" or "B" category.  However, actions are consistent with the theory.

Thu, 11/04/2010 - 16:38 | Link to Comment What_Me_Worry
What_Me_Worry's picture

Quite an original thought.  Never considered the Fed may be trying bring down the foreign economies, which would therefore make everyone trip over themselves to buy anything US$ denominated.  Which would therefore let you have your cake and eat it too.

The only way for them to do that is to punch themselves in the face hoping the other guy goes down first when he decides to punch himself in the face to counter you.  I guess the Fed is gambling that they don't decide to punch the Fed in the face instead and sell off the USD.  So far, so good.

This is so many levels of stupid that it could turn out to be genius.  And if they're wrong, only means the complete destruction of the USD and the worldwide economy.

Bernanke likes these odds.

Thu, 11/04/2010 - 17:15 | Link to Comment BKbroiler
BKbroiler's picture

+600b

Fri, 11/05/2010 - 02:16 | Link to Comment Bananamerican
Bananamerican's picture

"when he decides to punch himself in the face"

sounds like this crazy movie i saw a few years back...

Sat, 11/06/2010 - 14:38 | Link to Comment mikla
mikla's picture

I just re-read your post, and I agree with it, but I have something to add:

The only way for them to do that is to punch themselves in the face hoping the other guy goes down first when he decides to punch himself in the face to counter you.  I guess the Fed is gambling that they don't decide to punch the Fed in the face instead and sell off the USD.  So far, so good.

I didn't think about it that way, but yes, that metaphor works:  Fed printing will trigger *more* foreign central bank printing, which could trigger foreign sovereign default *first* (because for various reasons, the Fed is actually in a "stronger" financial position to weather the printing).  (You have no idea how painful it is for me to form those words).

However, there are a couple other variables where foreign central bank action *does not matter* (for whether or not they follow Ben into the printing abyss):

  1. Ben's printing generates dollars that flood foreign economies in a world carry trade.
  2. Foreign economy inflation takes *off* (we see this now).
  3. That inflation in the foreign nation triggers higher interest rates for the sovereign to service its debt (because people can get more money by *not* buying that government's bonds).
  4. The depreciated dollar kills that nation's foreign exports, lowering their ability to manage their sovereign debt (e.g., even though inflation is high, the economy slumps).

Think the US 1970's economy (high inflation, no economic growth) in Brazil, Japan, and throughout Europe.  It would trigger governmental collapse (especially for Europe, because it has tremendous-and-growing welfare expenses currently, but more-so in such a scenario).  However, even without welfare, it would *kill* productivity (even though inflation was high).

So, with this logic, Ben doesn't have to bet on *any-one's* "possible future action" (although as you point out, yes, a misstep there would make things easier for Ben).

 

Thu, 11/04/2010 - 15:52 | Link to Comment Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Here is my opinion on why Helicopter Ben is doing this printing.

1. Strike at China. This is going to cause rampant inflation there since they depend heavily on commodities.

2. Europe is going to strike back by throwing one of the PIIGS out of the Eurozone crashing the Euro and spiking the dollar.

3. You have to fund that enormous US gov't debt somehow with no buyers.

Thu, 11/04/2010 - 16:51 | Link to Comment Instant Karma
Instant Karma's picture

Well Tyler you've been warning us for a good while about this monetary mischief. I have a lump of metals in the bank and just tossed some money EWZ, GDX, GDXJ, SLV and OIH.

Thu, 11/04/2010 - 17:41 | Link to Comment Dollar Damocles
Dollar Damocles's picture

Instant Karma.  You are in the right sectors, but you haven't been reading enough of zerohedge.  The ETFs GLD and SLV are the largest ponzi schemes in the history of the gold market.  They are unbacked.  Read their prospectus, you can drive a dumptruck through them.  You will be defaulted on.  Also, why do you have your lump of metals in a bank?  If the dollar goes into a tail spin the first thing that will happen will bank holidays.  They will board up the windows to stop the bricks from the rioters and you will NOT get your metal.  See the great depression, or more recently argentina.  The ENTIRE point of owning physical metal is to be YOUR OWN CENTRAL BANK.  This means physical gold, in your possession, outside the banking system.  GDX and GDXJ are good, but frankly, at this point any paper investments are risky due to the total insolvency of the US banking system and counterparty risk with your brokerage.  If you want a really good mutual fund play, I recommend Sprott Asset Management and John Hathaway's Toqueville Gold Fund.  If you want to own physical bullion not in your possession - the only two insititutions I would give my money to are Sprotts physical gold trust (an ETF that is actually backed and independently audited) and James Turk's goldmony.com which is also independenly audited and is backed 1-1.  Most people who own paper gold are going to find themselves defaulted on with no legal recourse.  If you want more information on GLD and SLV and their fraudulent nature, let me know and I'll provide you with some good links.  Good luck and take care!

Thu, 11/04/2010 - 18:54 | Link to Comment FreedomGuy
FreedomGuy's picture

Banks will open to let you open your safe deposit box. They won't open for transactions. Worst case, you get a court order. Storing metals yourself, particularly in hyperinflation is very risky.

Thu, 11/04/2010 - 19:15 | Link to Comment Shameful
Shameful's picture

I would not trust a safty deposit box.  I would be more apt to trust the Bank of Folgers located in the yard a few feet deep.  Yeah the bank is a mother on withdrawls but people will rarely rob it.

Thu, 11/04/2010 - 19:18 | Link to Comment Instant Karma
Instant Karma's picture

Oh, I've been paying attention. I know about the concerns about the metals trusts, and the benefits of Sprout's little fund. However, for the time being I wanted some quick, efficient exposure to silver, with good tracking of the metal price. I've heard about concerns about putting metals in banks, and seizure or bank closure. So it's not all in a bank.

Seems to me the Fed is blowing bubbles, and I'd like to make some money on the way up, pay off the mortgage in depreciated dollars. I just have that feeling again.

 

Thu, 11/04/2010 - 19:36 | Link to Comment Yits and the Yimrum
Yits and the Yimrum's picture

you took the squids bait just like so many; need to speculate in the squid markets to keep your head above water

it doesn't work; your loading into fiatsco's as the rapid devaluation takes place in cyber space

we are at the end game, and those with the Spam will have a fleeting last laugh

Thu, 11/04/2010 - 19:32 | Link to Comment merehuman
merehuman's picture

DD has it right. Good advice. No trust, at this time its every man for himself.

Thu, 11/04/2010 - 15:16 | Link to Comment jus_lite_reading
jus_lite_reading's picture

You mean like Ireland's default?

But wait! I thought the PM of Ireland and JC Trichet said, "there will NO restructuring of debt in the EU!?!?!" I'm so confused...

Well, ok I'm not confused. But it is funny!

Thu, 11/04/2010 - 15:40 | Link to Comment Fascist Dictator
Fascist Dictator's picture

Just like when Ben testified (lied) to Congress that "There would be no monitizing of the debt by the Fed." Yeah, right....

Thu, 11/04/2010 - 15:51 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Well, the Fed's not going to monetize $4 trillion.

The Fed may "sterilize" the monetization of $4 trillion, but ultimately that has to be done at another part of the government.

The problem is not that Bernanke lied about monetization. The problem is that Bernanke can't monetize enough.

Thu, 11/04/2010 - 15:17 | Link to Comment Tyler Durden
Tyler Durden's picture

He certainly does see a "major default event in the offing."

Thu, 11/04/2010 - 15:35 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

So, who's the next "Banco Parmalat"???

Or are you talking about some Rothbardian mega-default?

Thu, 11/04/2010 - 15:36 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

The long rumored bank holiday?

Thu, 11/04/2010 - 15:42 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Well, of course it's getting reasonable to talk about "end games".

But if that's true, then it's time to talk about reasonable end games, not a silly circus.

This is no longer about selling gold coins on talk radio. This is now actual public policy that will affect millions for years.

Thu, 11/04/2010 - 15:59 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I would welcome reasonable end games, but who the hell is going to propose it?  Government?  I haven't seen that as of yet and I'm not so sure the new batch will either. 

Many civilians have brought solutions to the table, but if government will not implement we are left with a monetary and fiscal policy that is not sustainable for much longer. 

The circus is the circling of the drain of the dollar and a currency crisis tend not to be reasonably ending while a transition is being made.  At least that is what the history books tell me.  Then again history is always written by the victors’ right? 

All I know is that there are more insolvent banks than solvent.  A run on the banks is being orchestrated in Europe and these banks hold many of the "assets" that American banks refuse to recognize the losses on.  As more and more people catch on, more and more will stop putting their capital into these institutions just like I did.  Solvency is a just a reflection of perceived reality by the people.  Once an awakening to a new reality, the reality of insolvency of their banks comes into play. 

QE2 announcement has garnered much media attention which means the people are seeing this as well.  Who knows, but Obama left the country at an interesting time.

 

Thu, 11/04/2010 - 16:46 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

Attention!  Attention Everyone!!

I have an extremely Urgent Message!!

I've been in front of a chalk board all night trying to make sense of this quantitative easing nonsense.  I have sufficient evidence to believe that Obama is trying kill our grandparents. 

Here's the Glenn Beck-style flow chart:

1. QE2 leads to a weak dollar. 

2. The weak dollar leads to higher oil. 

3. Higher oil leads to more electric vehicles. 

4. Electric vehicles are dangerously quiet (in fact the new Nissan Leaf doesn't even make a noise) 

5. Geezers are normally deaf.

6.  Geezers will get killed when they cross the street because they can't hear the god-damn cars.

7. Obama is trying to kill old people.

Thus...

QE2 is a stealth attack on old people. The beginning of eugenics and a master race has been put in motion. 

Beck/Palin/Disinformation 2012

*this message has been approved by the Glenn Beck/Rupert Murdoch propaganda machine.   

Thu, 11/04/2010 - 16:47 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

HHAAA AHHAAA

Thu, 11/04/2010 - 17:19 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

Plus, electric vehicles will create more homosexuals. That's a fact. 

According to Jerry Falwell and many other fundamental Christian organizations, God will send hurricanes to punish Americans for their supposed tolerance of such buggery. 

So...

Unless we want a nation of dead senior citizens in the streets, rampant homosexuality and hurricanes once a week, we need to rise from our Lazy Boy Chairs and take our country back!

Tune into Glenn Beck tonight at 8pm on Faux to learn how QE2 is actually a sinsiter plot by the Obama brown shirts to bring back eugenics.    

Beck/Palin/Disinformation 2012

Thu, 11/04/2010 - 18:35 | Link to Comment kathy.chamberli...
kathy.chamberlin@gmail.com's picture

red neck never really ever followed you. but i like your Pluses.

Thu, 11/04/2010 - 16:02 | Link to Comment Rahm
Rahm's picture

At this point, even Stevie Wonder sees it ;) ...

Thu, 11/04/2010 - 18:56 | Link to Comment FreedomGuy
FreedomGuy's picture

LMAO! Best line of the day...so far.

Thu, 11/04/2010 - 17:18 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

What happens when the IMF takes over as the World Currency instead of the Dollar?  Does that mean that the US can no longer print Money to get ourselves out of trouble.  Just what does happen when we cannot print our way out of Deflation?

Thu, 11/04/2010 - 19:14 | Link to Comment Things that go bump
Things that go bump's picture

Don't cry for me, Argentina.

Thu, 11/04/2010 - 19:40 | Link to Comment scaleindependent
scaleindependent's picture

Any hints...?

Are you implying Ireland/EU soonish or are you implying the US in a longer time frame?

TIA

Thu, 11/04/2010 - 15:20 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I suspect Bernanke is read into a few planned "surprise" events, though not all.

Everyone who thinks they hold "public" power is subject to a "need to know" basis, including the President and Congress.

Thu, 11/04/2010 - 15:23 | Link to Comment jus_lite_reading
jus_lite_reading's picture

It's because of people like Tyler, CD and others that I have hope in mankind. After this collapse, the members of ZH will be like GODS and all others will follow their advice. Why? because they still have a brain that is not poisoned with Dancing With the Whores and Jersey Whore!

Thu, 11/04/2010 - 15:26 | Link to Comment Careless Whisper
Thu, 11/04/2010 - 15:34 | Link to Comment centerline
centerline's picture

"The conference's discussions focus on three themes: the origins of the Fed and lessons from the pre-1913 era, how closely the Fed's actual performance has adhered to the original vision expressed by the framers of the Aldrich plan, and what the Fed's almost 100-year track record teaches us about its role going forward."

 

Wow - lots of material here to work with folks.  Have at it.

Thu, 11/04/2010 - 15:39 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

http://www.frbatlanta.org/news/conferences/10jekyll_index.cfm

I wish this were a sick joke. I hope this is a sick joke. This is a joke, right?

<sigh>

Time to order more PM's and brass sheathed lead.

Thu, 11/04/2010 - 15:42 | Link to Comment centerline
centerline's picture

Sad thing is that I was going to buy some more silver last week and my credit card got jacked.  Think the culprit was the place I went to dinner with the wife a few days earlier.  Had to cancel the card and am waiting for the new one to arrive.  I won't buy on wire transfer these days... too chicken.  I did manage earlier this month to add more 7.62x39 and 45 to my "zombies are attacking" stash though.

Thu, 11/04/2010 - 19:43 | Link to Comment Yits and the Yimrum
Yits and the Yimrum's picture

that's about as sick as having a Pol Pot reunion

 

yuuk! is all I can say

Thu, 11/04/2010 - 22:18 | Link to Comment FEDbuster
FEDbuster's picture

Remember, remember, the 5th of November
The Gunpowder Treason and plot ;
I know of no reason why Gunpowder Treason
Should ever be forgot.

Thu, 11/04/2010 - 17:25 | Link to Comment Triggernometry
Triggernometry's picture

Hey, with the exception of Sammi, all those whores are actually from New York. Jersey shore locals greatly resent bennys such as depicted on that show. Speaking of which, I got a jersey shore saying for the Fed:

BENNY GO HOME!!!

JRZ- dasswassup!

Thu, 11/04/2010 - 15:50 | Link to Comment Mediocritas
Mediocritas's picture

Hey, Tyler, maybe Bernanke knows something you don't. Perhaps he sees a major default event in the offing?

I'm thinking the same. I know Bernanke bashing, faux Austrian, gun loving, gold hoarding, anarcho-capitalism is all the rage around here, but when I see so many shoe shine boys parroting the same lines over and over, I go the other way. My question to this flock is, "what the hell would *you* do if you were in Bernanke's shoes?" Oh wait, I already know the answer: let it all come crashing down while you beat off over pictures of Mantega's daughter, sitting in your bunker surrounded by canned meat and ammo.

Not helpful.

Thu, 11/04/2010 - 15:54 | Link to Comment the not so migh...
the not so mighty maximiza's picture

coffee shot out of my nose, thats hillarious

Thu, 11/04/2010 - 22:22 | Link to Comment FEDbuster
FEDbuster's picture

Printing worked out well for Zimbabwe, didn't it?  If they had only had the world's "reserve" currency status.

Thu, 11/04/2010 - 16:01 | Link to Comment TheMonetaryRed
TheMonetaryRed's picture

Quite right.

Even if one actually thinks a Rothbardian default is best public policy - and I'm not unsympathetic to some of the aims - it's a question of doing it!

Fail to make the default orderly (like through monetization) and you risk turning America into a harder-right, better-armed, more-corrupt version of Russia.

I predict most of these fellows who are very impressed with their gold, guns and bomb shelters would be saluting with fervor whoever it is Glenn Beck tearfully instructs them is the "New George Washington" he says he's "looking for".

Thu, 11/04/2010 - 16:16 | Link to Comment Terra-Firma
Terra-Firma's picture

Mediocritas, are you stupid? Yes you are! You asked what Bernanke should do. I say Bernanke should tell the truth. But wait. He does not work for the public; he works for the banks, and success is defined on their terms not ours. So my stocks are worth more, but my money is worth less. Zero sum game. The beauty though is that YOU are paying for my stocks. SUCKER. By the way he does speak the truth, but only to those he is fiduciary to: the banks stupid.

What should Bernanke do? Try this on for size dip shit. He should allow people to live within their means.

You are either very shallow, stupid, or don't know what living on a budget means.

Thu, 11/04/2010 - 16:37 | Link to Comment Mediocritas
Mediocritas's picture

Wait...you own stocks?

Thu, 11/04/2010 - 20:29 | Link to Comment Minion
Minion's picture

I think Mr. Chariman knows the US will default on its debt if FED does not monetize.  POMO is the slow route to the inevitable, while a new monetary system is prepared.  How very interesting that they're all having a meeting on Jekyll Island ......

My only fear is my student loans..... I don't see them going away if the dollar does. 

Thu, 11/04/2010 - 22:26 | Link to Comment StychoKiller
StychoKiller's picture

Question:  How long do the Govt Computers have to be powered off in order to forget what you owe them?  Will IRS agents have a paycheck in their hot little hands to tide them over while they try to round you up?

Fri, 11/05/2010 - 19:18 | Link to Comment Minion
Minion's picture

If debts really were wiped out in a hyperinflation, it could explain all the leveraged buyouts, consumer spending, and various other artifacts of pre-bust exuberance, as moral hazard sweeps through the collective subconscious of Americana, who can feel it coming, and just want to "get theirs" while the getting is good.

But I don't trust moral hazard.  Karma seems to get me in the end. 

Thu, 11/04/2010 - 16:16 | Link to Comment SDRII
SDRII's picture

What bernanke would do was well known and articulate in a speech back in 2002. You should be asking yourself if you were China what would you do; or if you are Germany what would you do; or if you were Russia what would you do; or if you were Saudi Arabia what would you do and so on. When you get passed the notion that China hasn't yet realized that there is stranded return in their smoking pile of treasuries ask yourself who amongst the various geographies has the best growth potential and highest threshold for pain (or perhaps proclivity for planning)

Thu, 11/04/2010 - 16:47 | Link to Comment Mediocritas
Mediocritas's picture

You're creating a strawman here, answering a question I didn't ask.

What I'm asking is for the critics of Bernanke to provide *viable* alternatives (and yes there are many). I just want to see if they're capable of doing it in between mouth foaming rants against Bernanke.

Anybody can be a critic but it takes guts to provide solutions and brains to do it well. From what I've seen to date, when the people I'm targeting start providing their solutions, these "solutions" are even WORSE than what Bernanke is doing. It's usually some weakly formed, supposedly Austrian-school garbage.

Thu, 11/04/2010 - 17:08 | Link to Comment SDRII
SDRII's picture

The bernanke bashing aside the guy laid out his kevorkian not keynsian solution years ago. Foresight? Of course in the meantime made the weong decision at every step along the way and now plays the long ball and you have confidence? At best he is pursuing ivory tower gaming hoping for a negotiated settlement that leaves some semblence of hegemony. The horse trading over imf and un leadership diltuion is part of that negotiation. Ultimately however proof is in the pudding. One need only look at the foresight of the blessed in jamie dimon 2010 dash to build up the asia operation. The idea the world would end is like listening to kanjorski. Tributaries around dollar settle are already in their ascendancy and with the advent of digital money a phase transition is infrastructure spend stimulus. The question isn't bernanke or default is the privilege prospective ly.

Thu, 11/04/2010 - 17:33 | Link to Comment Mediocritas
Mediocritas's picture

You say "Bernanke bashing aside" then proceed to do exactly that with the rest of your statement. Next, you again proceed with talking to a strawman, participating in a conversation that I'm not actually having.

Find me the part where I said that I support Bernanke's actions and have confidence in his abilities? I'm not asking for more criticism of the Fed, I'm asking for alternatives.

Bernanke isn't great, no shit. Further discussion of this point has zero value and I'm not interested in hearing it. Now propose something better; talk to *me* not your straw man.

Thu, 11/04/2010 - 19:14 | Link to Comment traderjoe
traderjoe's picture

In your original posts, you raise an interesting point. But, yes, I would let it all crash down, but in an honest, forthright manner that had a solution in hand at the time of implementation. BB's alternative virtually guarantees the end will be chaotic, anarchistic (at least to a certain degree) - since they are only propping up the house of cards with lies, charades, and deceptions. 

I start with the premise that the system is already insolvent. There is too much debt/equity in order to roll the debt, much less pay the interest on the outstanding principal. Austerity is a trap, as it only lowers GDP. Spending more only paints you 'further' into the corner. We have spend, and borrowed ourselves into a trap. 

The system *has* to reset. They can't solve it with more money printing, more debt. It is merely an attempt to forestall the inevitable, but it will make the inevitability even harsher when it arrives. They have systematically corrupted the entire system (as it has been for decades). 

So, any person in BB's shoes would have only gotten there in order to be a lackey to the banks. 

But, if it were me:

1. Abolish the Fed. Print currency - without debt - directly from the Treasury like Greenbacks or Kennedy dollars. 

2. A debt jubilee. People can have new Treasury dollars in some proportion to their current FRN's. 

3. Halt all wars, close bases, slash military spending. 

4. Re-jigger the political system, campaign finance, gerrymandering, etc. 

5. Close the IRS. Have a flat consumption tax on a Federal level.

IF a system reset was done in a time of 'plenty' the transition could be welcomed, planned, and orderly. 

It won't be as we head down this path...

Thu, 11/04/2010 - 22:28 | Link to Comment FEDbuster
FEDbuster's picture

About the only thing I am excited about from the election is the fact the Ron Paul will now be chairman of the House committee with oversight of the FED.  The Ron Paul vs. Ben Bernanke cage matches should be epic.  Grayson was an libtard on most things (glad he lost), but he would have been a great minority vice-chairman of the same committee.

Fri, 11/05/2010 - 03:09 | Link to Comment kayl
kayl's picture

Ron Paul is a 33 degree mason. He's been in office for years and has earned a title as vassal, overlord, or head honcho, in the feudalistic system owned by the private central bankers. Oh Yes, Ron Paul will get the Fed shut down. That's because they won't need it by the time they have the Basel accords and the World government in place.

Ron Paul for 2012, you say. Well, going through my history book of the Economic Interpretation of the US Constitution by Charles Beard, the founders of this country speculated in the land warrants and bonds issued under the Articles of Confederation. The wealthiest in the land bought these off the backs of the poor and men who fought in the Revolutionary War for 10 cents on the dollar. Then, when the Constitution passed, the securities were worth face value. It was a wealth transfer a la 1787.

They decided to send out propaganda to the America people to make them think that they were free--that the Constitution was a good thing for the people. The fact is, the Constitution is a bankruptcy proceeding of the Articles of the Confederation, and the people of the US are not a party to it.

That means any Constitutional or Libertarian party or candidate is full of BS. And it's people who don't know their history who fall for it. History is always massaged by the victors.

In 2012 Dr Ron Paul leads the secret wealth transfer and wins the prize of highest office in the land of Estates of the Sovereign banking power.

The only way to beat this stuff is through a 3-generation war on the banking system. Stop the registration of all birth certificates, refuse to get Social Security cards, refuse to register cars and driver's licenses, do not sign W-2 for a franchise to work as an employee in the US. Start your own businesses and file your common law right to be a traveller on the public roads.

For the adults who have participated in the indentured servitude, file UCC 1 and redeem your birth certificate and social security card. You have to wade through the Uniform Commercial Code and the United States Code USC to figure out the language and format. It has to be done properly. The UCC 1 filing is the most important document in the land to claim your duties and responsibilities and manage your own commercial affairs.

Fri, 11/05/2010 - 00:19 | Link to Comment RockyRacoon
RockyRacoon's picture

I would let it all crash down, but in an honest, forthright manner that had a solution in hand at the time of implementation.

It would be too easy for something to go wrong, then some other government could act on the advantage and get the upper hand.  It's a gamble they are not willing to take.  One mis-step and the U. S. is toast under an all-in strategy.

Confession:  I'm ready and willing to take the plunge!

Fri, 11/05/2010 - 07:23 | Link to Comment Mediocritas
Mediocritas's picture

@traderjoe. Good, finally some concrete suggestions.

1. Abolish the Fed. Print currency - without debt - directly from the Treasury like Greenbacks or Kennedy dollars.

Note that the Treasury is basically already doing this. It pays zero yield on bonds bought by the Fed and there is no intention of paying down base debt until there is a need to curb inflation. When the rest of the world finally loses appetite for US bonds, then the Fed will buy 100% at 0% effective yield which is effectively the same as the Treasury printing its own money. ZH loves to freak out about US govt debt, but it's not actually as bad as it looks.

2. A debt jubilee. People can have new Treasury dollars in some proportion to their current FRN's.

Definitely needs to be some wealth redistribution to deal with the current excessive imbalance. I'd suggest a citizen dividend, citizens are, afterall, shareholders of the country.

3. Halt all wars, close bases, slash military spending."

Has to happen at some point. Hard part is getting US citizens used to living with less oil.

4. Re-jigger the political system, campaign finance, gerrymandering, etc.

100% agree.

5. Close the IRS. Have a flat consumption tax on a Federal level.

Agree. If #1 is managed correctly, then the *only* need for taxation would be to curb inflation if the Treasury got carried away.
Thu, 11/04/2010 - 19:20 | Link to Comment SDRII
SDRII's picture

Straw man? You must have decoded the complexity down to a "solution" well lay it out for us. This isn't a dollar clearing problem it is a phase transition. Order from chaos as they say. The question is what order and your blueprint would be welcomed I am sure by every apparatus of every interested party as they each position and react and reposition. Your comment above re default is spot on and europe. Foolish to think somehow a euro default and diollar rally helps. Default on the periphery is an irritation for the dollar faction but that is a in the family problem so to speak. It is those outside the family that need to be persuaded to buy into a new "insert regime here." And any buy in comes at the cost of dollar dimunition which has its own set of problems and runs counter to some entrenched blunt forces. Bernanke is a brilliant guy no question. But he is playing version 2.0 in a 3.x world. There have always been alternatives but they all innure to those outside the dollar faction. They question is how are they positioned.

Fri, 11/05/2010 - 04:45 | Link to Comment Mediocritas
Mediocritas's picture

You're doing it again. Where did I say I had a solution? Where did I even infer it? For the third time now, stop having a conversation around topics you *imagine* and around the topics I am actually talking about.

I asked people for alternatives to Bernanke's actions because I'm actually interested in hearing alternatives to Bernanke's actions. I'd be a douchebag if I asked the question, already knew the answer and then provided it later in an attempt to look smarter than the people who tried to answer.

There's a reason I'm pushing people for this. I have been part of too many OK organizations torn to shreds by "whinetards" (I'm not educated enough to know the proper English term). People who criticize, criticize, criticize until they finally tear down those in charge (as has happened to me). The people in charge step aside and hand control to the whinetards who then proceed to destroy everything because they don't actually have any kind of alternative plan. Pragmatist motto: if there's no solution, it's not a problem.

ZH is full of whinetards. If there are better ways to handle this FUBAR situation let's discuss them. There are enough brains on ZH to come up with something half decent.

And yes, I agree that "Bernanke is playing version 2.0 in a 3.x world". Well said.

Thu, 11/04/2010 - 18:01 | Link to Comment jm
jm's picture

We are all going to be much poorer by the time this is over.  We can either choose default or inflation.  Inflation produces better outcomes than deflation.

If this is your premise, I agree with it.

However, the asymmetry (read: propping up losers) of the current policies are ridiculous.  The economy is showing some signs of life.  So let's create the risk of an economy that cannot function without near zero interest rates, a gigantic global carry trade that will unwind the instant rates do rise, and inefficient bloated companies and banks with black holes in theri balance sheet just keep on sucking up money.

Here's an idea.  Creditors take haircuts such that the debtors can service their debts.  Debtors pay for their mistakes.  Messy and imprecise but it has worked for centuries. 

When things go south, then do QE.  When the economy is showing signs of life, take it off the ventilator.  Put insolvent banks in receivership.  Clean up their balance sheets, float an IPO, use the proceeds to retire the government debt incurred in clean-up.  Let insolvent businesses go out of business, and let better hands use those resources.  Seriously, why should GM get what amounts to debt amnesty on the taxpayer tab, while Ford has the disadvantage of servicing their massive debt?  In a normal world, Ford will have to service their debt, but they get the benefit of gaining market share from GM.  No way that's gonna happen. Let house prices fall until there are buyers.  Bad time mean redistribution of wealth.   This shoudn't be fought, especially when some option ARM idiot doesn't deserve a house anyway.

The United States is going to become massively poorer, no way out of it.   Let existing markets and law decide who gets poorer, and how the losses are portioned. 

Fri, 11/05/2010 - 00:22 | Link to Comment RockyRacoon
RockyRacoon's picture

Seriously, why should GM get what amounts to debt amnesty on the taxpayer tab...

Fair enough.  Ford is having to do real independent business to survive.  Ask any other insurance company how they like AIG taking their business away because AIG has a government backstop and can't fail.

Thu, 11/04/2010 - 16:31 | Link to Comment Randall Cabot
Randall Cabot's picture

Nobody's going to beat off over pictures of Mantega's daughter.

Thu, 11/04/2010 - 22:29 | Link to Comment FEDbuster
FEDbuster's picture

Really?

Thu, 11/04/2010 - 16:50 | Link to Comment Randall Cabot
Randall Cabot's picture

Cliff High is wrong 90% of the time-that's not easy to do.

Thu, 11/04/2010 - 17:22 | Link to Comment Shameful
Shameful's picture

If I was Bernanke, ok the dream.

1.  Print 1*10^302 dollars and put them into private account.  Ben Buxs.

2.  Buy everything!  I mean everything and anything.  Anything for sale, or auction, everywhere.

3.  Make sure #2 includes biological, chemical, and nuclear weapons, as well as large merc companies, weapons, aircraft carriers and planes, nuclear subs.  Basically order off the Pentagon catalog.  Build super fortress in Africa, now controlled by merc forces.

4. Bring filthy lucre to African Super Fortress.

5. Bring down the global economy and menace the planet if they sought vengeance with my vast nuclear and WMD arsenal.  Demand a seat on UN security council for Shametopia.

6.  Write my memoirs "Buying the World for Nothing:  A Banksters Holiday" and then make it into a billion dollar budget series about my life and exploits.

But that is just the ideal musings of one man, a bout what he would do with infinite fun bux.

As far as what he can do, he can admit the problem or kick the can and let those in the know prepare.  I'm all for him kicking the can, lets me get more money into things that will survive the great fire.  But overall it's more ruinous to society, it's purely self interest that says kick the can.

Thu, 11/04/2010 - 19:09 | Link to Comment FreedomGuy
FreedomGuy's picture

There's two sides to that. First, austrians or faux austrians would not get into the mess. That's part of the discussion. Second, solving the problem IS the problem. Left alone it will have its own end in time. To me, there are so many things that would have to be done simultaneously that it boggles the mind. However, the starting point is not the Fed. It is the Congress and President. They must get the budgetary house in order, economy and therefore, balance sheets. It is the bad balance sheet now and in the future with entitlements that I think drives the Fed. The monetary policy the Fed follows which debases the currency is the desperate crappy play the Fed makes to save the gov't bacon down the road. It is a temporary fix to just buy time. If the gov't gets its balance sheets in order the Fed can and I think would stop the printing presses, maybe even reverse some of the damage.

Personally, I think Obama and crew are completely, totally, absolutely ignorant of any economic policies or theories. As a professional community organizer he assumes there is an unlimited supply of money. Any protestations to the contrary are just rich people, or conservatives or Tea Party crazies being selfish and trying to ruin his master plan.

Like the posts above, in the event of an economic meltdown, I am not sure who in the government would know what to do. Absolutely no one in the Obama administration, for sure. Ron Paul might, but I don't think he'd be prominent.

Fri, 11/05/2010 - 07:37 | Link to Comment Mediocritas
Mediocritas's picture

I have come to the conclusion (from seeing the inner workings of government staffers) that the primary role of government these days is simply as a money launderer for central banks. 

Distribution is one of the core factors of economics and central banks (being central) tend to suck at it. Government is their best proxy so they inject cash via bond purchases and hope that the government does a better job of distribution, leaving the rest up to the fractional reserve lending system once the cash makes it out into deposits.

The point I'm getting toward is that I think you're barking up the wrong tree if you make government your first target. Yes, govt is hopelessly inefficient and run unintelligently, but that's not an accident. If the govt were to suddenly become uber-efficient then the Fed would lose a major distribution channel and have to find an alternative. It would be problematic.

That's why I think central banking and the monetary system itself has to be the primary target.

Fri, 11/05/2010 - 20:58 | Link to Comment BigJim
BigJim's picture

"Government? That's how banks launder their money"  - classic. A one-line encapsulation of everything that's destroying us.

Fri, 11/05/2010 - 00:35 | Link to Comment Fraud-Esq
Fraud-Esq's picture

I'd cut a deal with China, Japan and the creditors like the old days, 1800's. We have lots of things around the world. We didn't have have 5% of this shit 100 years ago. China needs it all. Japan relies on the trade lanes we keep open. It's time to start MONETIZING our power.

In fact, I think we're already doing just this, to a degree. The problem is INSIDE our own government. Our leaders are more stupid and our private players are smarter. I think the privates are cutting all our deals and privatizing our American assets.   

Fri, 11/05/2010 - 02:28 | Link to Comment Bananamerican
Bananamerican's picture

 "what the hell would *you* do if you were in Bernanke's shoes?"

I would fire me.

Fri, 11/05/2010 - 07:39 | Link to Comment Mediocritas
Mediocritas's picture

You forgot to give yourself a $50,000,000 severance payout on the way out the door. 

Thu, 11/04/2010 - 16:01 | Link to Comment Common_Cents22
Common_Cents22's picture

Bernanke: "I see foreign dead people."

Thu, 11/04/2010 - 15:12 | Link to Comment Pladizow
Pladizow's picture

Yeah and so, what are you gonna do about it?!?

Ans = buy PM's

Thu, 11/04/2010 - 15:17 | Link to Comment kathy.chamberli...
kathy.chamberlin@gmail.com's picture

crotch to quite a bucket full, ZOW e .

Thu, 11/04/2010 - 15:26 | Link to Comment Jean Valjean
Jean Valjean's picture

Yes, the only successful way forward for the 81%, stop paying your mortgage and use the $ to buy PM's.  Before they get around to kicking you out of your house you'll be able to pay off your loan (if necessary) and still have some gold left.

Thu, 11/04/2010 - 15:13 | Link to Comment Cookie
Cookie's picture

The real world, thanks TD & ZH

Thu, 11/04/2010 - 15:14 | Link to Comment the not so migh...
the not so mighty maximiza's picture

If it collapses now Bernanke wasted his entire life.  If he can keep it together long enoough, like until he dies a natural death, he won't have to worry about it. 

 

 

Thu, 11/04/2010 - 15:15 | Link to Comment Xedus129
Xedus129's picture

False.  His life's goal is to kill the dollar and usher in a world currency.  Didn't you get the memo? Check your spam filter.

Thu, 11/04/2010 - 17:56 | Link to Comment Mediocritas
Mediocritas's picture

There's never going to be a single world currency so long as individual nations exist and there's never going to be a single united nation so long as individuals exist. Looked at another way, only Skynet could pull it off.

I view the EU and Euro as a case study / pilot program and IMO it has largely failed.

Thu, 11/04/2010 - 19:15 | Link to Comment FreedomGuy
FreedomGuy's picture

I agree that you cannot have a world currency without the consent of nations and I initially thought the same thing. However, if Ben Bernanke actually engineers a worldwide meltdown and hyperinflation then it is an appealing idea to punt it to the next level, kind of like our states are trying to punt their debt problems to the feds. A world central bank would be created with currency powers. You know that 3/4ths of the world would immediately vote for it. Maybe that's the endgame? I think you could engineer some worldwide default swaps by doing that.

Thu, 11/04/2010 - 22:44 | Link to Comment StychoKiller
StychoKiller's picture

Sounds like the mice with their "solution" of belling the cat:  Who's gonna bell the cat?  (i.e., which nation would you "trust" to lead the World Govt?)

Fri, 11/05/2010 - 07:49 | Link to Comment Mediocritas
Mediocritas's picture

@FreedomGuy. I've actually thought the same thing a few times. What better way to introduce a centralized control body than to engineer a huge crisis and demonstrate the 'need'. Afterall, there is precedent for such events.

Central banks came into being to install order amidst largely engineered mini banking outrages. The IMF came into being to install order amidst engineered currency wars. Etc.

However, in the end I don't buy this theory because, well, I just see so much damn incompetence and fraud all over the place that it more than explains the crisis.

Lastly, I'd point out something from biology. A high number of trophic levels can only be supported by a very wide base of primary producers. What we have in the world economy today is erosion of the base and, like in ecosystems, when that happens what you get is elimination of trophic levels, typically from the top down.

In other words, more layers of governance won't be possible in a decaying world.

Thu, 11/04/2010 - 22:37 | Link to Comment FEDbuster
FEDbuster's picture

I just hope the collapse comes while Greenspan is still alive, so we can watch his head roll down Wall St., too.

Thu, 11/04/2010 - 15:14 | Link to Comment jus_lite_reading
jus_lite_reading's picture

I expect a series of false flags, followed by some sort of "distraction" to get the people's minds off the total global financial collapse. It's imminent. I think Ben knows that. A few other people as well.

 

Thu, 11/04/2010 - 15:20 | Link to Comment Xedus129
Xedus129's picture

False flags with a new season of Glee or whatever the people watch, American Idol? (Interesting how FOX always has the "best" shows)

Thu, 11/04/2010 - 15:23 | Link to Comment Alexandre Stavisky
Alexandre Stavisky's picture

Do you think that the 34 ship navy escort to India with several construction brigades (to build underground tunnels for museum visits--and who are unaware of their multiple overlapping counterparts) could really be a staging event?

How can you aggregate a large military force in the modern age?  You can't.  So war must be over.

This india trip is a logistical nightmare, but will be well worth the global PR it shall generate.

Thu, 11/04/2010 - 15:26 | Link to Comment jus_lite_reading
jus_lite_reading's picture

Correction: 40 navy ships, and 40 aircraft. But that's just to keep the paparatzi from Michelle and family! LOL

Thu, 11/04/2010 - 15:27 | Link to Comment trav7777
trav7777's picture

Here's to Pakistan dropping The Bomb.  Think of just the fuel savings on AF1

Fri, 11/05/2010 - 00:17 | Link to Comment RECISION
RECISION's picture

Hahaha  :-)

Damn, that's good.

Thu, 11/04/2010 - 15:35 | Link to Comment King_of_simpletons
King_of_simpletons's picture

Those figures are wild exaggerations. Indian media tends to fantasize and pull numbers out of thin air. A DoD official has stated that these numbers are comically false.

Thu, 11/04/2010 - 15:43 | Link to Comment jus_lite_reading
jus_lite_reading's picture

" A DoD official has stated that these numbers are comically false."

Really? Do you expect us to believe THAT? What should he say? "Hey everybody! We're leaving with dozens of ships, planes and other classified transports. But we're not expecting anything out of the ordinary. Just Obama was in the mood for some curry!"

Yeah ok. I'll take an Obscure Indian Newspaper's word anyday over an "officials"

 

 

Thu, 11/04/2010 - 16:44 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Hey Jus, don't be dissing Indian officials now...

but hey, here in India, I smell something really bad in the air.

Too many signs.... tomorow is Diwali, the festival of lights which has now become an orgy of tremendously loud explosions from "bombs" thar a 5 year old is allowed to buy, it sounds like wartime here right now.

Frrrrrrrreaky, I did not know about the warships. Could they run Police state from here?

ORI

http://aadivaahan.wordpress.com

Fri, 11/05/2010 - 00:30 | Link to Comment Cathartes Aura
Cathartes Aura's picture

Rush Limbaugh claimed on his radio show that "Five hundred seven rooms at the Taj Mahal, 40 airplanes, $200 million a day this nation will spend on Obama’s trip to India." He repeats the "$200 million a day" claim several times throughout the show without specifying its source.

Update, Nov. 4: Republican Rep. Michele Bachmann of Minnesota repeated the claim Nov. 3 on CNN’s "Anderson Cooper 360," attacking Obama for "over-the-top spending." When Cooper countered that "no one really knows the cost, because for security reasons they don’t disclose the cost," Bachmann responded, “Well these are the numbers that have been coming out in the press."

gee, if Rush & Michele say it's true, it must be!!!

http://factcheck.org/2010/11/ask-factcheck-trip-to-mumbai/

Thu, 11/04/2010 - 16:32 | Link to Comment Apocalypse Now
Apocalypse Now's picture

There must be a story here somewhere with an intelligence angle.

In the main story headlined on drudge it included information that he was bringing the "nuclear button", and that a ridge area was being "illumined" by floodlights.

That seems strange to state, not sure if there is some kind of message here.

Pakistan, Iran?

Thu, 11/04/2010 - 15:23 | Link to Comment ElCapitanNemo
ElCapitanNemo's picture

Agreed, my study of history shows that these false flags are executed when the banksters want them to be, to scapegoat their parasitic sociopathic behaviours on humanity.  Interesting how so many celebs and politicians are heading to Australia and out of the country for a "few" days beginning tomorrow, Obama, Hillary, Oprah, Gates, etc. etc.  Hmmm maybe "Remember remember the 5th of November."  Who knows it is all fucked up and one forecast is good as another, due what history has taught us protect our savings with precious metals, and lead.

Thu, 11/04/2010 - 15:27 | Link to Comment jus_lite_reading
jus_lite_reading's picture

Wait! Stop the PRESSES! Oprah is leaving also? Say it ain't so! Gee, I will really miss her.

Thu, 11/04/2010 - 15:44 | Link to Comment gwar5
gwar5's picture

The Web Bot project has been calling for something big on NOV 8th +/-  to happen.

Obama is taking a small army of 3000? and a small Navy? Hillary is already out of town? ... mmmm...

 

If they make Joe Biden stay here with us --- then we know we are in deep doo doo for sure.

 

 

 

Thu, 11/04/2010 - 16:26 | Link to Comment NotApplicable
NotApplicable's picture

So you're sayin' that Joe is gonna be the next Baghdad Bob?

It just occurred to me that maybe the CFTC's Chilton's claim of silver manipulation plus the confirmation of QE to infinity serves the same purpose as Rumsfeld's infamous 9/10 quote "the DoD cannot account for $3T of expenditures," which is to get the bad news out in advance, so that it can be promptly buried after the SHTF.

In this case though, it could also provide (as well as the PSLV IPO) the rationale for today's big PM moves, while in actuality what we could be witnessing is the true start of the race for the exits in advance of an imminent false-flag op.

Time will tell.

Thu, 11/04/2010 - 16:04 | Link to Comment Common_Cents22
Common_Cents22's picture

Is this why MaoBama is going to India with 3,000 people and 20% of our ship fleet, spending $200million a day?

 

somethings up.

Fri, 11/05/2010 - 00:28 | Link to Comment RockyRacoon
RockyRacoon's picture

As FactCheck.org notes, there is no evidence to support the $200 million figure (other than the anonymous quote), and it seems like a serious stretch in light of the fact that the entire war in Afghanistan costs less on a daily basis. 

Writing about the initial report, the Wall Street Journal calls it "demonstrably incorrect" even without considering the $200 million claim. 

Fri, 11/05/2010 - 03:34 | Link to Comment Punderoso
Punderoso's picture

Oh geez, factcheck.org references give me a break with the nonsense.  TotallyHonestlyTruthTruth.org says something different along with TheAbsoluteTruthWithNoSpinIAintLying.com.  Besides, everyone knows that the $200 million is based upon post-QE2 dollars which means that this amount will probably mean Obama will only be able to afford India's equivalent of a Motel 6.

Thu, 11/04/2010 - 19:00 | Link to Comment Triggernometry
Triggernometry's picture

Unfortunately this seems very likely.

Thu, 11/04/2010 - 19:16 | Link to Comment FreedomGuy
FreedomGuy's picture

So, should we put World War III on our calendars? That's a favorite distraction.

Thu, 11/04/2010 - 15:15 | Link to Comment CashCowEquity
CashCowEquity's picture

Dow 36,000=

Gold $20,000.00 oz

Silver  $1,250.00 oz

Platinum $25,000.00 oz

Palladium $10,000.00 oz

Thu, 11/04/2010 - 15:18 | Link to Comment jus_lite_reading
jus_lite_reading's picture

And oil? answer: Too high to drive to the emergency room. I think a revolution will come before that happens.

Thu, 11/04/2010 - 15:26 | Link to Comment Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Nice, but how much will the Jack Daniel's cost?

Thu, 11/04/2010 - 15:29 | Link to Comment Xedus129
Xedus129's picture

5lbs of fresh red meat, or 1 gallon of oil.

Thu, 11/04/2010 - 15:31 | Link to Comment doolittlegeorge
doolittlegeorge's picture

that'll go down in price.  and it still won't be enough.

Thu, 11/04/2010 - 16:19 | Link to Comment TheDriver
TheDriver's picture

Heh. The missus looked at me like I was crazy when I walked into the house last weekend with a case of JD. "Just another box of insurance, sweetie. Go back to watching Glee."

Thu, 11/04/2010 - 15:16 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Tyler lays down the BOOM!  Keep booming TD!

Thu, 11/04/2010 - 15:17 | Link to Comment macholatte
macholatte's picture

The good news, the really good news, Sharon Angle is gone and Death Row T-shirts is back. I sure did miss her.

 

The pursuit of truth and beauty is a sphere of activity in which we are permitted to remain children all our lives.
Albert Einstein

 

Thu, 11/04/2010 - 15:40 | Link to Comment gwar5
gwar5's picture

I liked Sharon Angle.

Thu, 11/04/2010 - 16:06 | Link to Comment Village Idiot
Village Idiot's picture

The pursuit of truth and beauty is a sphere of activity in which we are permitted to remain children all our lives.
Albert Einstein

 

Love the quote.  Thanks.

Thu, 11/04/2010 - 15:18 | Link to Comment bingaling
bingaling's picture

Every economy that has actual growth is going to jump all over this to demand an end to the dollar .Bernanke has officially taken the US dollar out of the picture as a reserve currency . The world will look very different next week.

Thu, 11/04/2010 - 16:02 | Link to Comment Agent P
Agent P's picture

I'll bet you $1,000,000 that you're wrong...seems like a bet I can't really lose.

Thu, 11/04/2010 - 15:20 | Link to Comment Quinvarius
Quinvarius's picture

He can't really stop.  The banks are still insolvent.  I don't think he cares about anything else really.

Thu, 11/04/2010 - 15:29 | Link to Comment Duuude
Duuude's picture

 

 

Quinvarius...

 

We have a Bingo !

 

 

Thu, 11/04/2010 - 16:39 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Cenral Banker's joining instruction:

1) Oil is all that matters

2) Oil "price" in reserve currency is the key

3) Precious metals are the enemy

ORI

http://aadivaahan.wordpress.com

Thu, 11/04/2010 - 16:40 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Cenral Banker's joining instruction:

1) Oil is all that matters

2) Oil "price" in reserve currency is the key

3) Precious metals are the enemy

ORI

http://aadivaahan.wordpress.com

Thu, 11/04/2010 - 15:20 | Link to Comment carbonmutant
carbonmutant's picture

This is the definition of overshooting the end of the pier...

Thu, 11/04/2010 - 15:23 | Link to Comment Jake Lamotta
Jake Lamotta's picture
buffoonery from you so called experts!!!!  I have bought 3000 shares of LVS in march 2010 at $18.12.  presently worth $51.58 per share, you do the math!!!!!!!!

 

Yes i know what the graphs say for"generating cash", blah blah, but i made $100k and will now sell.  When you guys go to Publix, Winn Dixie or whatever grocery store, do you get your groceries for free?  Cause you need real money to pay your purchases.  VILLAGE IDIOT especially you with your stupid comments!!!!

 

YOUR BULLSHIT HAS CAUSED YOU TO MISS THE BIGGEST BULL MARKET EVER!!! Yes i know the market is rigged and yes there are alot of fraudsters, i agree 100%.  Again, i ask you if you pay for your groceries?  Bunch of clowns!

Thu, 11/04/2010 - 15:32 | Link to Comment wiskeyrunner
wiskeyrunner's picture

Talk is cheap, lucky you. Most of these doom and gloom are long metals, now I ask you what is doing better?

Thu, 11/04/2010 - 15:33 | Link to Comment doolittlegeorge
doolittlegeorge's picture

do something useful with your money and buy a bar and keep the booze cheap.

Thu, 11/04/2010 - 15:37 | Link to Comment gwar5
gwar5's picture

There's more than one bull market. There's always a bull market somewhere. Glad for you!

Thu, 11/04/2010 - 15:56 | Link to Comment kornholio
kornholio's picture

have to agree with Jake, now is the time to sell....

Thu, 11/04/2010 - 15:58 | Link to Comment PeterSchump
PeterSchump's picture

Great for traders, crappy for investors, since its not sustainable by fundamentals.

Thu, 11/04/2010 - 16:03 | Link to Comment jus_lite_reading
jus_lite_reading's picture

LMAO! Your opinion is like your unwashed asshole- it stinks.

"WE" have been long gold/silver. "We" are prepared for whatever. You just got lucky picking one stock. Try doing that a hundred times. Gold can easily be converted back into worthless paper if we so please to buy all the groceries we want. But we don't need to. 

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