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In Response To Concerns That EFSF Funds Are Insufficient, Axel Weber States Simply That Europe Will Just Print As Much As Needed

Tyler Durden's picture


After we noted earlier that the latest trending topic regarding Europe's insolvency was that the €440 billion EFSF rescue facility will likely not have enough cash to bail out Spain, the ECB immediately came to the rhetorical rescue, with Governing Council member and Bundesbank head Axel Weber speaking at a conference in Paris, telling participants that "The European Financial Stability Fund should be
sufficient to dissuade markets from speculating against the solvency of
Eurozone member countries, and if not, more money will be provided." Lamenting the market's idiocy, which refuses to stop punishing bankrupt stats, Weber further added that markets suffer from "limited rationality" and players
often follow market movements to the neglect of "fundamentals." Of course the same should be said for all those who are buying into this rally, which is driven exclusively by the genocidal desire of central bankers to ramp up stocks, kill currencies, and make the cost of living unbearable for half their constituencies. But nobody has ever accused central bankers of objectivity, or ever doing something that puts the interests of a few billionaire "Jenny 20" rejects over a billion or so filthy peasants.

Some more unbearable self-serving rhetoric from Jean-Claude Trichet's successor, via Market News:

It should be "easy to convince markets" with the EFSF backstop that
speculation against governments will not be successful, Weber argued.
The facility provides for up to E440 billion in government-guaranteed
loans, which is in addition to a pre-existing E60 billion EU emergency
fund. The IMF has also pledged up to E250 billion, bringing the total
pot to E750 billion. Weber said he was convinced that if the E750
billion is not enough, Europe's political leaders "will do more."

Furthermore, Weber managed to confirm that he is either stupid, or is convinced everyone present at the conference is a prime grade moron, when he said that "the sovereign debt crisis is not a crisis of the euro or the
Eurozone, but rather one of individual countries. The
structural problems of Greece and Ireland are not comparable to those of
other members, he insisted." The fact that the individual states are in crisis precisely due to the fact that their monetary policy tools are eliminated, which serves exclusively to keep the German export sector highly competitive and the German cost of productivity far lower than the rest of the Eurozone (and here we are blaming China for pegging the CNY), was oddly not mentioned by the corpulent bureaucrat.

Persisting with his projectile vomit session of aneurism-inducing mendacity, the rotund teutonic ogre claimed that EMU member states should retain as much sovereignty as possible in
fiscal matters. Oddly enough, this is happening precisely as deep behind the scenes we are now hearing that the EU is contemplating the finishing touches of a unified bond issuance mechanism, in essence completely removing fiscal independence, and making all of Europe a vassal state to a newly-ascendant Germany.

Weber completed his oratory with the following:

In the end, "the crisis will be positive for the Eurozone," since it will oblige the governments to extend their surveillance structures and establish a permanent mechanism to deal with future crises, which will "certainly" occur, Weber predicted.

In response to Eurosceptics, Weber argued that acceptance of monetary union is no longer an issue for younger generations with no experience of the previous currencies. "The D-mark would be no alternative to the euro!"

He is absolutely right. The transition from EUR to DEM will not be parallel. It will be serial, and will occur when all of peripheral Europe has abdicated its monetary and fiscal authorities, as well as it budgetary independence to a reincarnated teutonic knights counsel.

And they say history does not repeat...


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Wed, 11/24/2010 - 23:26 | 754058 DoChenRollingBearing
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Sinclair is right: QE to Infinity!

Thu, 11/25/2010 - 00:14 | 754121 RobotTrader
RobotTrader's picture

Gold $1,650  =  Dow 14,000

Thu, 11/25/2010 - 00:43 | 754147 Fish Gone Bad
Fish Gone Bad's picture

... puts the interests of a few billionaires over a billion or so filthy peasants.  That said, it only takes one angry filthy peasant to really ruin your day.

Thu, 11/25/2010 - 01:20 | 754187 i-dog
i-dog's picture

They should be charged with "Printing Under The Influence". They need to stop sniffing the ink.

Thu, 11/25/2010 - 01:32 | 754199 flacon
flacon's picture

> "more MONEY will be provided".


That begs the question: "What is MONEY?"


Money is a tool of exchange, which can't exist unless there are goods produced and men able to produce them. Money is the material shape of the principle that men who wish to deal with one another must deal by trade and give value for value. Money is not the tool of the moochers, who claim your product by tears, or of the looters, who take it from you by force. Money is made possible only by the men who produce.

Thu, 11/25/2010 - 04:37 | 754314 Herd Redirectio...
Herd Redirection Committee's picture

And what society needs us to produce right now is.... Sound money!!!

It will be a thankless job, but I am up for doing my share.

PsychoNews: Exposing the Oligarchy, one Psycho at a time.

Thu, 11/25/2010 - 05:49 | 754344 AnAnonymous
AnAnonymous's picture

Money is made possible only by the men who produce.

Reflective stupidity. So money enables itself for any "man" who produces money.

This guy must be an economist.

The story that money must possess a counter-value to exist, that it must cover goods against goods trade to exist is one delusion hard to explain.

Currently, people through debt mecanism do trade money vs goods without putting on the table goods to be bought by the said money.

Bernanke has abolished scarcity. He simply emits money and gets goods in return, without putting any goods on the table (more exactly, the US through the Fed puts the goods of others on the table so the deal can be done)

Far, far from what this propagandist recants.

Thu, 11/25/2010 - 08:36 | 754437 Paul E. Math
Paul E. Math's picture

AnAnonymous, you criticism is valid regarding paper money.

But I think the quote is about real money, not this paper stuff that Bernanke throws out of his helicopter.

Regarding real money, this quote is 'bang-on' accurate - you need to produce something of value in order for the money to have a purpose, which is exchange.

Thu, 11/25/2010 - 10:16 | 754496 Dan_Sylveste
Dan_Sylveste's picture

This is why you can't convince people rationally to buy Gold by saying 'it is money' or 'it is a store of value' because it is largely worthless _apart from the worth it has because people perceive it as being worth something_

Fri, 11/26/2010 - 13:44 | 755980 cranky-old-geezer
cranky-old-geezer's picture

"... because it is largely worthless _apart from the worth it has because people perceive it as being worth something_"

This can be said about everthing including the dollar and other paper currencies.  

And nobody needs to convince anybody to buy gold.  People who buy gold do so because they believe gold is worth something. 


Thu, 11/25/2010 - 10:12 | 754492 Top_Kill
Top_Kill's picture

It was a quote from Ayn Rand's "Atlas Shrugged" describing sound money, gold ,as opposed to the debased paper currencies which have been looted by the beurocrats to fund their special interests.

Thu, 11/25/2010 - 00:48 | 754152 dnarby
dnarby's picture

Err...  Isn't that only if the US prints faster than the EU?

Not disputing we'll get there, just think near term might hold something... Different.

Thu, 11/25/2010 - 06:02 | 754348 Sudden Debt
Sudden Debt's picture


The Americans are faster in the straight tracks but the Europeans perform better in the curbes!


The only question is how manny QE Laps there are.

Thu, 11/25/2010 - 16:48 | 755049 trav7777
trav7777's picture

apropos, totally.

Right now we seem to be in a curve

Thu, 11/25/2010 - 06:16 | 754359 taraxias
taraxias's picture

Gold to whatever the bearer demands = DOW 0

Thu, 11/25/2010 - 10:13 | 754493 Robslob
Robslob's picture

LOL Robo tranny...

If the DOW hits 14,000 then gold will go over 3,900 an ounce...chart that bitch!0

Thu, 11/25/2010 - 11:16 | 754534 cowdiddly
cowdiddly's picture

Boy thats an easy choice. umm.... Ill take the Pamp suisse over Credit Suisse anyday.

Thu, 11/25/2010 - 14:04 | 754802 ZackAttack
ZackAttack's picture

And that would be the status quo ante from 2007, except, um, for the gold portion of the equation.

Thu, 11/25/2010 - 01:54 | 754223 PiratePiggy
PiratePiggy's picture

to Infinity.... and beyond!

Thu, 11/25/2010 - 11:50 | 754588 scatterbrains
scatterbrains's picture

Anyone have any thoughts on what will be the ultimate hedge against printing? I keep thinking gold and silver are too obvious and will continue to be supressed while some other asset that the Bankers arn't paying attention to will increase by thousands of percent, leaving folks with that, (wish I bought MSFT in 1987) feeling.

Wed, 11/24/2010 - 23:31 | 754066 PolishHammer
PolishHammer's picture

Jesus QE'd bread and fish to feed people, can ECB do the same?

Thu, 11/25/2010 - 01:37 | 754207 StychoKiller
StychoKiller's picture

St. Matthew rightly called the fishes and loaves gig a miracle.  Central banking is as far away from miracles and saintliness as you can get!

Thu, 11/25/2010 - 14:44 | 754870 CPL
CPL's picture

Would all rise for the holy benediction of hookers and blow?

Thu, 11/25/2010 - 02:09 | 754233 snowball777
snowball777's picture

Let's just say the bread lobby and the fishermen were none too pleased with those shenanigans.

Wed, 11/24/2010 - 23:32 | 754068 cxl9
cxl9's picture

Of course they'll print, as will everyone else. What other plan is there?

Wed, 11/24/2010 - 23:35 | 754071 Kaiser Zose
Kaiser Zose's picture


Wed, 11/24/2010 - 23:37 | 754075 CheapKUNGFU
CheapKUNGFU's picture


Wed, 11/24/2010 - 23:46 | 754080 macholatte
macholatte's picture

...member states should retain as much sovereignty as possible...


I can accept it if that is some kind of TD paraphrase of something actually said however I find it difficult to believe. The implications is clear: Weber is arrogantly giving permission to EU members to be independent, to believe they are independant, to fantasize about sovereignty but which means that they are not. Soros discussed such things in his book "The Bubble of American Supremacy" regarding the concept of sovereignty, that it is an obstacle that needed to be overcome and how to do it.  Apparently that has been accomplished and is now openly being discussed in the press.

The Europeans are the sheeple and Weber is the new sheeple dog. All done without firing a shot.


Wed, 11/24/2010 - 23:53 | 754096 trav7777
trav7777's picture

gold, bitchez

Wed, 11/24/2010 - 23:56 | 754101 gwar5
gwar5's picture

The people of Europe have sold themselves down the river to a bunch of whiny cronies.

They should wake up ASAP and make Nigel Farage head of the EU. Santa Claus ain't coming this year.


Thu, 11/25/2010 - 01:22 | 754188 i-dog
i-dog's picture

No different from the US. It's a concerted and joint effort to drive the truck over the cliff.

Thu, 11/25/2010 - 10:50 | 754513 macholatte
macholatte's picture


One wonders if the powers that be in Europe would really allow country after country to go to the wall, enslaving their children and grandchildren into financial slavery ad infinitum just for some obscure idealogical reasons.
UKIP’s Nigel Farage on fine form!

Read more:
Wed, 11/24/2010 - 23:56 | 754102 wisefool
wisefool's picture

He has a PhD in Economics.

Thu, 11/25/2010 - 00:17 | 754123 IrrationalMan
IrrationalMan's picture

Dr. Mengele is small potatoes next to these Dr.'s

Thu, 11/25/2010 - 00:21 | 754130 Vendetta
Vendetta's picture

no doubt he has the ability to justify a massive fiat/derivative ponzi scheme with an equation that looks real complicated (a pythagorean equation squared plugged into an integral with limits to infinity should do the trick) so the lemmings believe it.

Thu, 11/25/2010 - 01:57 | 754225 flacon
flacon's picture

John Maynard Keynes also had a PhD in economics. Here is what they study behind closed doors:


"A sentiment of trust in the legal money of the State is so deeply

implanted in the citizens of all countries that they cannot but believe

that some day this money must recover a part at least of its former value.

To their minds it appears that value is inherent in money as such, and

they do not apprehend that the real wealth, which this money might have

stood for, has been dissipated once and for all.

This sentiment is supported by the various legal regulations with which

the Governments endeavor to control internal prices, and so to preserve

some purchasing power for their legal tender. Thus the force of law

preserves a measure of immediate purchasing power over some commodities

and the force of sentiment and custom maintains, especially amongst

peasants, a willingness to hoard paper which is really worthless...

If, however, a government refrains from regulations and allows matters to

take their course, essential commodities soon attain a level of price out

of the reach of all but the rich, the worthlessness of the money becomes

apparent, and the fraud upon the public can be concealed no longer."


John Maynard Keynes, Economic Consequences of the Peace, NY, 1920, p. 239-40


Thu, 11/25/2010 - 07:40 | 754400 Peace is the x-axis
Peace is the x-axis's picture

And here's what Keynes and "friends" got up to behind closed doors -

"Chief of this ring of homosexual revolutionaries was John Maynard Keynes, who eventually became the economic architect of English socialism and gravedigger for the British Empire...


Keynes was characterized by his male sweetheart, Lytton Strachey, as “A liberal and a sodomite, an atheist and a statistician.” His particular depravity was the sexual abuse of little boys. In communications to his homosexual friends, Keynes advised that they go to Tunis, “where bed and boy were also not expensive.” As a sodomistic pedophiliac, he ranged throughout the Mediterranean area in search of boys for himself and his fellow socialists. Taking full advantage of the bitter poverty and abysmal ignorance in North Africa, the Middle East, and Italy, he purchased the bodies of children prostituted for English shillings...


Such Leftist hypocrites then, as now, issued loud denunciations against poverty, imperialism, and capitalist immorality. However, for their own degenerate purposes, they eagerly sought out the worst pockets of destitution and backwardness to satisfy their perverted purposes through sexual enslavement of youngsters. While traveling in France and the United States they complained among themselves of the harassment by the police of practicing homosexuals. In degenerate areas of the Mediterranean, on the other hand, they found a pervert’s Utopia where the bodies of children could be purchased as part of a cultured socialist’s holiday."

Thu, 11/25/2010 - 11:16 | 754531 hardcleareye
hardcleareye's picture

The bias (and unreliability) of the author you quoted it very well establish.  Because Lytton Strachey "says is so", does not make it a "fact", it is nothing more than unsubstantiated nasty gossip.  While I don't necessary concur with Keynes, I can defend my views without attempting to slander (and in a truly ugly fashion) the individual who's view I disagree with, in the attempt to convince others my view is superior. 

Shame on you, there are enough valid debatable points without resorting to this tripe!!!


I was one of the individuals that junked you.

Thu, 11/25/2010 - 18:40 | 755164 Peace is the x-axis
Peace is the x-axis's picture

"The bias (and unreliability) of the author you quoted it very well establish."

Establish (sic) by whom, exactly? Please provide sources.

Further, and just as important, perhaps we should first clarify exactly which author/s statements you are dismissing/junking, as having a "well established" bias and unreliability? (a) Zygmund Dobbs? (b) The author publisher of "The Review of the News" (Robert W Welch Jnr, founder of the John Birch Society), which is the article being quoted by Dobbs in the link I provided? Or, is it (c) Lytton Strachey's own purported statements that you are dismissing? If so - as seems apparent from your comment - then I presume you are claiming that it is (d) Strachey's biographers Michael Holyroyd, Holt, Rinehart and Winston, who are the biased and unreliable authors .. correct?

FWIW, purportedly from the author (Dobb's) son -

"My father, Zygmund Dobbs, was a well-read autodidact of high intelligence who started out as a radical Trotskyite who was active in the UAW. Being the rare radical from a working class background, he joined those who were disillusioned with radicalism and devoted his life to fighting the illusions of the left.

After a picaresque life spent in union organizing, intelligence work, politics and much else, he settled down into doing research on Fabian Socialism for many years.

Keynes at Harvard was written at the suggestion of a Yale Economics professor, Olin Glenn Saxon. Professor Saxon felt that certain truths about Keynes, and others, could only be written by an outsider.

The work was sponsored by the Veritas Foundation, which was an organization of disaffected conservative Harvard alumni ('Veritas' being Harvard's motto.)

Fascinating as the questions concerning Keynes' sexual orientation no doubt must be (and my Dad was nothing if not a thorough researcher), the interesting issue the book raises is Keyenes' Fabianism, and how it was Fabian policy to conceal their socialist intentions and excellent relations with Russian communists. This is not a small matter. When one listens to the Democratic presidential candidates today, they are, knowingly or ignorantly, all espousing latter day Fabianism.

Someone who worked for me in the late 70's and who had an MBA and PhD from Chicago, said Keynes at Harvard had been required reading at Chicago business school."

Thu, 11/25/2010 - 19:09 | 755179 Peace is the x-axis
Peace is the x-axis's picture

And also fwiw, apparently the Ludwig von Mises Institute owns the bequeathed library of Zygmund Dobbs -

Thu, 11/25/2010 - 11:22 | 754544 flacon
flacon's picture

Thanks for the link. What a horror show!

Wed, 11/24/2010 - 23:59 | 754104 Arch Duke Ferdinand
Arch Duke Ferdinand's picture

Citizens of Europe should elect me Emperor and I will parade up and down all the squares of all European Capitals until China comes to its senses.

hrh ADF

Wed, 11/24/2010 - 23:59 | 754105 max2205
max2205's picture

Why give a broken state money when you can teach him to print it.

Thu, 11/25/2010 - 00:05 | 754112 Atomizer
Thu, 11/25/2010 - 00:13 | 754118 Hansel
Hansel's picture

"more money will be provided"

I never doubted it for a minute.  Which is easier, solving problems or printing money?

Thu, 11/25/2010 - 00:23 | 754131 Vendetta
Vendetta's picture

Phd's in economics are real smart and know how to run a printing press.  Problem solving is left to the lessers.

Thu, 11/25/2010 - 00:33 | 754140 Milton Waddams
Milton Waddams's picture

Phd's in economics are real smart and know how to run a printing press.

Oh, so much more so than you know.

Something only WB7 could dream up, only it is real:

Original can be found here:

Thu, 11/25/2010 - 00:26 | 754120 M.B. Drapier
M.B. Drapier's picture

I read him as suggesting that the member states will just chuck more money into EFSF, or into a new "mechanism". But of course that doesn't mean that the ECB won't head for the printer if the member states fail to oblige this time. Another round of chicken.

(Incidentally: in Ireland, this ad is on rotation on right now. (Or it was mere minutes ago. Here's the link.) Rabo seems to be upping its search for Irish deposits too. It's not reassuring when ZH's AdSense starts trying to sell me financial security rather than insanely-leveraged FX and spread betting.)


Thu, 11/25/2010 - 00:20 | 754128 Milton Waddams
Milton Waddams's picture

God damn it people, don't you understand- I'm an economist! What does that mean? It means I am highly competent in matters relating to finance and the economy. As such, I have formulated a very detailed plan that is far too complicated for all but the most formally educated economists among us to understand. I'm, uh, I'm, um - I might remind you again that it is a very complicated solution - I'm, uh, I'm ... going to print some money.

Thu, 11/25/2010 - 00:32 | 754138 Tense INDIAN
Tense INDIAN's picture

they r taking down the dollar , EURO and YEN all at the same time

Thu, 11/25/2010 - 00:32 | 754139 doolittlegeorge
doolittlegeorge's picture

First off "if they're paying, take their money ZH."  Moreover "since you don't believe it's real or maybe unethical in some way hand it over to me and Robo."  As far as "Germany" and "Axl"--I'll leave it to France and Guns and Roses. 

Thu, 11/25/2010 - 01:11 | 754155 Miles Kendig
Miles Kendig's picture

Schulden Macht Frei continues to be the refrain of the day.

Greeks - Platform 1

Irish - Platform 2

There will be cleansing showers when you arrive.  Here is your loaf of bread.

This definitely has a familiar ring to it.  Especially Axil Weber's insistence that capacity can be ramped up to meet whatever demands are placed upon the system. A true belief in his final solution to the twin market related concerns of imposing discipline on participants and eliminating irrational speculation.

Thu, 11/25/2010 - 01:04 | 754171 chindit13
chindit13's picture

The market does not follow the same god as ZeroHedge.  Though there are a few apostates amongst the ZH regulars (Harry, Robo), most people seem to be worshipping at the wrong altar.  The wider market has moved beyond debt as an instrument built of interest payments and principal, and has decided debt is merely the NPV sum of those service payments due before the freezing over of Hell.  Principal, to stay with the Hell analogy, be damned!

The inflationary impact, therefore, is just what might happen by the printing of the funds necessary to service the interest portion of the debt.  All in all, it is not such a big number, so inflation will be, at worst, "modest".  Principal is somebody else's problem, and since they are probably not yet born, they can be ignored without the possibility of retribution.

Leave the market to professionals.  Put another way, the non-professionals---who might still have retained the ability to think rationally---have abandoned the market.  The only ones remaining are those who live off bailouts and bonuses, and they have a faith stronger than Abraham.  Besides, they really do not care what happens to the non-believers, which is to say those who are not recipients of manna from Heaven, an idyllic place which can be found on GoogleEarth near both the ECB and the Marriner Eccles Building.

The dollar is rising because the market has realized that our Union is better than the Euro's Union, in that we don't have members needing to dangle 10-12% rates of money printing interest to lure buyers.  Ben and Tim have us on a combination of low rate, short duration fertilizer, so the actual amount of money Ben will have to both print AND put into the system (we are not ever going to pay back principal either) is much less than the grease Axel will have to provide.

What I will say now is pure heresy, but I would not be surprised that if gold and silver hit a dull spot somewhere along the way and stop what has been a fairly relentless climb, it will get dumped for the certainty of 10% on Greek, Irish or Spanish debt.  The euros earned might buy fewer iPads and Cisco servers, but it will still get them beer and sausages across a wide swathe of Europe.

I feel like a Pagan at a Baptist revival meeting.  Maybe it is time to get the healing power of the Lloyd.

Thu, 11/25/2010 - 02:03 | 754230 DoChenRollingBearing
DoChenRollingBearing's picture


I always read your replies with great interest.  Lots of experience in Asia, smart commentary.

I had not run into that idea of just making the interest payments is what matters now, not the principal, thanks for that...

Re leaving the stock (and other) markets to the pros, well I am already there.  I have stocks of course, but a much lower holdings than before 2000.

Re precious metals, the main attraction FOR ME is the wealth preservation they offer.  You may very well be right about PM prices hitting a dull spot...  To me, it does not matter, I will likely add to my PM holdings, "poco a poco".  And getting 10% on peripheral Euro debt, you might be right, but not my cup of tea!

Re the revival meeting, LOL...  Rather than the power of the Lloyd, I would suggest the power of the (Pink) Floyd with a little bit of PMs as insurance against .gov (Congress, Obama, Fed, etc.) malfeasance.  Unless, of course, you will stay in Asia and make tons of money not touchable by Uncle Sugar...


Thu, 11/25/2010 - 03:23 | 754280 qussl3
qussl3's picture

Your thesis presumes that the vultures will refuse the opportunity to make far more than 10% by not cooperating.

Regarding PMs, I think the what we may be missing is how the coming stagflation in asia will affect demand.

China and India are not going to go into nominal recession but their real rates of inflation is going to feel very much like stagflation to the man in the street.


Thu, 11/25/2010 - 03:40 | 754292 traderjoe
traderjoe's picture

A decent and appreciated thought experiment, but "it will get dumped for the certainty of 10% on Greek, Irish or Spanish debt."

I disagree. The vast majority of private bond investors don't want to take risks, per se. Payments are made up of both interest and principal, and principal has to be either paid or rolled over. Trouble is, rollover or payment in the EU (and increasingly elsewhere) is becoming a political calculation. Whether a particular party wins and repudiates the debt, whether Belgium ever unifies, what happens with Greece at the end of the three year bailout. Bond investors (not speculators) don't want to worry about political uncertainty and there's a whole lot of it now. And there seems to be a creeping realization that this is both a solvency and liquidity issue.

[I wouldn't have responded but I thought you called us 'Baptists' out. I appreciate the alternative and various viewpoints on ZH, even if there is a recurring meme to it all.]

Thu, 11/25/2010 - 04:32 | 754310 chindit13
chindit13's picture

Let me address your comment...

re gold, in context I said "would not be surprised if...". I need to remember that for many current holders of gold it is a trade and not an act of faith, and since they are sometimes large holders, their selling could drive it considerably lower. Whether that is right or wrong is up to someone else to decide; I just said it would not surprise me.

My comment on the interest vs. principal is based on what I see as either a very short term view being taken by holders (similar to what mortgage writers did when they intended to see the note before rate adjustment), or else people motivated by a desire to get paid now, the future be damned (or someone else's problem).  I can think of no other reason why these endless string of bailouts are so well received.  It is part suspension of disbelief and part simple "get mine now-ism".

Finally, my Baptist comment was part of an analogy I was making.  I am of the view that everybody's religion is as wonderful as they would want it to be.

Thu, 11/25/2010 - 06:39 | 754364 taraxias
taraxias's picture

It would surprise me. Gold will be part of the mix of a new currency replacing the USD. American monetary hegemony ended with Uncle Ben's QEII and every central banker around the world knows this, especially China who looks forward to driving the bus ib the future our nukes be damned.

The idea that as long as servicing the debt takes place return of principal doesn't matter is really not that new. The money cartel always thought of it that way. It's debt servitude of the highest order. The problem now is even the interest part has become impossible to service. Bailouts kick the can down the road a little further but change nothing. And given the amount of leverage and money printing that has taken place this is the last attempt by the money cartel to keep the system intact. When they attempt to kick the can down the road again in the next 18-24 months they'll find out that the can has come to rest upon a solid wall the last time it was kicked. Contrary to some postings on here, no, they can't keep doing this for ever.

Thu, 11/25/2010 - 05:47 | 754342 theprofromdover
theprofromdover's picture

Yes and no.

-but this has to be a zero-sum game. For this wretched, ugly world to continue, there have to losers -lots of them. It is either Asia or the West's middle classes, cos the financial sector doesn't think it is going to be them.

At some point the masses will finally wake up to the wholesale defiance of law, justice, honor & morality of the banks and governments, and will walk away from all obligations themselves.

And remember, all those banks think they are owed money by someone else (and expect their own debts to be written off). They can't mark to fantasy forever. The panic, when it happens, will be lightning-fast.

There is only one wheel left on this wagon.

That they managed to keep it upright for most of the past decade is quite amazing, but look how deep they have to dig,  and steal, and lie, and cheat, and print, and borrow, to keep a forward momentum.

You can't stop the people believing in something. Since they don't have any heroes in power at the moment, and they suspect that the old god of pension comfort is going to be unilaterally ripped from them, then it has to be gold.

Thu, 11/25/2010 - 06:09 | 754353 AnAnonymous
AnAnonymous's picture

At some point the masses will finally wake up to the wholesale defiance of law, justice, honor & morality of the banks and governments, and will walk away from all obligations themselves.


Groundless. That is the reverse (or close to) People want to stay into their 'obligations' because they know their 'obligations' (as you call it) are what enable their standard of life.

The default is a permanent process by now. People want to be part of the permanent default process because that is the best deal.

Debt is the promise of repeating an act of consumption in the future. A does not have the present resources to perform an act of consumption but predicts that in 30 years, he will get the resources. A goes to see B who has the resources so they can be lent to A.

A performs his act of consumption right now and if the debt process can be completed, in 30, B is able to perform his. A classical debt scheme recovers two acts of consumption, not one. To be repaid, a debt must allow the second act of consumption.

Now that is not the current framework. A knows that in 30 years, A wont be able to gather resources required to perform the act of consumption. A still borrows from B so A can perform the act of consumption right now, leaving to B the uncertainty of the future.

The default is permanent. A will not walk away from his 'obligations' because A knows that would turn him into B: being pushed out of a current consumption wave that lessens the likelihood of future consumption.

On the contrary, A is ready to pay to participate to the permanent default scheme.

Thu, 11/25/2010 - 06:58 | 754374 i-dog
i-dog's picture

"At some point the masses will finally wake up to the wholesale defiance of law, justice, honor & morality of the banks and governments, and will walk away from all obligations themselves."

If the masses don't do it very soon, it will be too late! TPTB are fully expecting public unrest and are well prepared for it in both the EU and the US. The ongoing demonstrations in Europe are being fostered by TPTB to provide an excuse for clampdowns.

Last time around, in Weimar Germany, there were outside forces to come to the rescue of the subjugated masses of most of western Europe. This time around, there will be no such outside help available when the masters close the farm gates, simultaneously in EU and US, and impose an iron rule.

A taste of things to come is already being simply demonstrated with the airport body scanners, aggressive pat down procedures and very heavy fines for non-compliance: it is partly training for them and us, and partly a quickly progressing clampdown on civil liberties, now that the economies are collapsing on both sides of the Atlantic.

Thu, 11/25/2010 - 07:43 | 754401 chindit13
chindit13's picture

I am not saying what is happening is right.  What I am saying is that they may have found another iteration of the Ponzi that will allow them to kick the can for a while longer.  Things move faster with each iteration, so this will not buy the same degree of time we got once Reagan decided debt was the way to growth, but it may get us through this year and next.  Europe is another story.  I do not see the euro lasting another two years.

As for currencies, it's all a sales game, and I am not convinced it is over.  Enough people still want to believe in it, and like the ease of paper.  It's like the toothpaste aisle in the supermarket...which one are you going to choose?  Who looks best, or tastes best, or gives one the freshest breath or whitest teeth or fewest cavities? 

Who can back its paper by its ability to tax production in their economy?  Who has a favorable or inviting investment climate?  Who has enough food to feed themselves?  Who has a large enough industrial base to take care of most of its needs?  Who has bright and innovative people, or attractive natural resources?  Who has the military power to protect themselves or even take what they want from someone else?  Who has a natural buffer from potential adversaries?  Who enjoys favorable terms of trade?By many of these measures, the dollar looks pretty good.  Also the US is hardly alone in over printing or allowing dangerous bubbles to develop.

As for PM's, there isn't enough gold or silver to run a world of seven billion, no matter what price PM's reach.  One would have the same crisis of faith in accepting what looks to be a gram of gold or silver for a small purchase as one now has accepting a piece of paper for a purchase.  Most people couldn't tell silver from pyrite from nickel, and if everyone was forced to use PM's, the amounts most people would have would be microscopic.  Hardly a workable system. 

The world has a supposed current value of $200 trillion.  Imagine taking a cube of gold, 60 feet on a side, and chopping it up into 200 trillion units.  Pretty damn small, but unfortunately most transactions on this planet are pretty small.

So how about a currency backed by gold?  Nobody believes anything any government says now, so why would we all suddenly believe that a particular currency is backed by XXXX tonnes of gold?  Are we all going to have access to the pile and can we perform an assay?  Are we all going to be able to count every piece of gold-backed paper out there, or must we take somebody's word for it?  Or do we have a central world body that keeps score of who has what and who has printed what?  I don't think we want to give up our sovereignty.

Going over this a thousand times in my own mind, I do not see how we can go back to what may or may not have worked in the past.  I always come back to the conclusion that absent complete anarchy, the market system we have is the best of a group of bad alternatives.  The market decides the relative values of paper, which represent a government's ability to tax production.

I'm willing to listen to someone who is more clever than me and has a solution, but I cannot get past the divisibility problem or the trust problem.

Then again, maybe anarchy and chaos are our future, and there's little we can do, other than individually, to prevent it taking us down.

Thu, 11/25/2010 - 08:56 | 754451 Ace Ventura
Ace Ventura's picture

"So how about a currency backed by gold?  Nobody believes anything any government says now, so why would we all suddenly believe that a particular currency is backed by XXXX tonnes of gold?"

Chin, I believe the factor that makes a gold standard work is the convertibility of the said currency into gold. In other words, we would 'believe' or rather 'have confidence' in the currency because any one of us could march down to our local bank and convert the paper into gold/silver. This convertibility factor would also simultaneously crunch down on a banks ability to practice fractional reserve banking, or for governments to 'print money at will'. Sure they could do so, but the moment enough folks seek conversion, the bank folds and the panic starts when confidence is again lost. This was the entire reason for going with fiat currency. That bothersome gold/silver shackle on the unlimited creation of money had to be eliminated.

Having said that, if alchemists ever figure out how to turn 'other stuff' into gold, then all bets are off again.

Thu, 11/25/2010 - 12:09 | 754618 Ahmeexnal
Ahmeexnal's picture

Having said that, if alchemists ever figure out how to turn 'other stuff' into gold, then all bets are off again.


They already have. Gold will soon start pouring by the tonnes out of the giant transmutator on the franco-helvetic border.

Thu, 11/25/2010 - 12:42 | 754670 snowball777
snowball777's picture

Sorry, the energy required to transmute even a teeny bit of bismuth into gold is well beyond the caps (pun intended) of any colliders we have in our possession and the rate of transmutation would never allow for tonnes even if we had the required inputs.

You'll have to settle for tin foil, I'm afraid.

Thu, 11/25/2010 - 12:44 | 754675 Scisco
Scisco's picture

Thank you for you comments chindit13. I would like to point out how isn't it a curious problem that this trust problem with receipts backing a commodity is only serious problem with money? Such frauds are far less prevalent in the private economy no? Bre-X is one that comes to mind but that was dealt with fairly quickly. I cannot recall a grain crisis or iron crisis because of a warehouse that overstated their reserves but then my experience is limited.

As for divisibility, competition can work that out. For example, gold does not have to be passed around in pure form. Coins can be manufactured with only trace amounts of the metal. This is not a problem as long as the content is known and not overstated. Competing coin manufactures or even private citizens could test and verify their content. With the development of the Internet, the logistics of tracking the reputations of different brands become feasible. Furthermore, services like Gold Money already allow digital transfers of gold to occur. The difference is a private institution with such transactions will exist only as long as their reputation is sound as they are under constant threat of loosing market share. Therefore, it is in their interest to be transparent and cost effect as possible. Governments stifle competition of currency so an alternative is not available. This allows fraud to be tolerated when it is preferable to the loss of legal protections if barter is used as payment.

Thu, 11/25/2010 - 23:34 | 755398 trav7777
trav7777's picture

gold never formed this basis; there was no true gold standard.

World commerce ran on Real Bills.

Thu, 11/25/2010 - 16:53 | 755055 trav7777
trav7777's picture

This is reasonably fair but you missed out on gold.

I maintain gold is rising due to peak production in 2001, not due to apocalypse fantasies.

There really has been a seachange view on debt, and I like your description of it.  It's NPV of payments plus whether the debt can be rolled in the future.  The rolling debt gathers no loss.

Fri, 11/26/2010 - 10:10 | 755704 THE DORK OF CORK
THE DORK OF CORK's picture

Ireland is unable to pay at 2% never mind 10% at current values of debt fiat.

Gold will at least have to rise to the M1 money supply in Europe before interest THAT CAN BE PAID on debt becomes net positive over Gold Capital.

At the moment the amount of Gold only covers the amount of cash in circulation or perhaps a bit more after the recent rise in Euro Gold prices.

We have a long way to go before the system has any hope of equilibrium again.

Thu, 11/25/2010 - 01:11 | 754175 tahoebumsmith
tahoebumsmith's picture

sO THE eUrO dIves.....>>> So JuSt SiT BaCk AnD PrInT...sIt BaCk AnD pRiNt, SIt BaCK aNd PriNt..... And forget aBout The FuTuRe! Too bad Bob MaRLeY wasn't here to sing it to you.

Thu, 11/25/2010 - 02:10 | 754236 flacon
flacon's picture

EXODUS from the bond market:

Thu, 11/25/2010 - 01:17 | 754181 ThreeTrees
ThreeTrees's picture

Something I have never understood:  Economists/Politicians definition of "rational".

The "wolf pack" is experiencing "limited rationality" because the politicians can't keep the ship of state from popping rivets?



Thu, 11/25/2010 - 01:19 | 754186 Ahmeexnal
Ahmeexnal's picture

The Euro is nothing more than the D-Mark in disguise. Always has been.

It is usually refered to as the E-Mark or Euro-Mark in private high spheres of power.

The plan is working as expected so far. How could it not! After all, last time them lazy gullible appeasing neighbors offered little or no resistance to military takeover. The hardest resistance they found took place in Warzaw.

There is an unexpected element in the newest pipedream of a thousand year reich: the millions of guest workers and their growing families.  How will they be dealt with?

With german predictability, they should fear for their lives.

Thu, 11/25/2010 - 01:27 | 754193 DonutBoy
DonutBoy's picture

This is insane - but they are making me lots of money.  Print away - Schnell!

The housing bubble begat the sovereign deby bubble begat the fiat currency bubble. 

History Lesson:  Representative Government & Fiat Currency = Fail

Thu, 11/25/2010 - 01:32 | 754198 Green Leader
Green Leader's picture

Can you see now why the Iraqi Dinar will be the next global reserve currency?


Read the Bible, bitchez!

Thu, 11/25/2010 - 01:39 | 754210 Kaiser Zose
Kaiser Zose's picture

I wouldn't wipe my ass with the Iraqi Dinar.  WTF are you talking about?  Read the Bile?  Grow up.  Scrawlings of the Ancients.  This is 2010. PRINT BABY PRINT.

Thu, 11/25/2010 - 01:50 | 754219 tmosley
tmosley's picture

The Bible was talking about the upcoming Zimbabwe Dinar, I'm afraid.

Thu, 11/25/2010 - 02:12 | 754241 flacon
flacon's picture

I thought the Bible was talking about the World Reserve US Dollar of Nixon 1971:


Ezekiel 7:19 (New International Version, ©2010)


 19 “‘They will throw their silver into the streets, 
   and their gold will be treated as a thing unclean. 
Their silver and gold 
   will not be able to deliver them 
   in the day of the LORD’s wrath. 
It will not satisfy their hunger 
   or fill their stomachs, 
   for it has caused them to stumble into sin.

Thu, 11/25/2010 - 08:19 | 754425 Peace is the x-axis
Peace is the x-axis's picture

"Their" silver and gold "will not be able to deliver them", "will not satisfy their hunger", "has caused them to stumble into sin" ... or alternate version "because it is the stumblingblock of their iniquity" =

SLV + GLD? Any/all other forms of 'paper' PM's, designed to inflate "supply" and manipulate price/demand (ie) a device to defraud your fellow man?

Consider -


Thu, 11/25/2010 - 18:16 | 755152 Green Leader
Green Leader's picture

Very interesting.

The book of Revelation indeed covers a lot about the financial system. Who does it belong to?

Thu, 11/25/2010 - 18:58 | 755172 Peace is the x-axis
Peace is the x-axis's picture

"Who does it belong to" .. the financial system, you mean?

..and specifically..


Thu, 11/25/2010 - 23:42 | 755399 Green Leader
Green Leader's picture

The Synagogue & its Talmud.

The Ashkenazis were fascinated with Judaism and Babilonian religions when they invaded Mesopotamia. The Talmud is a result of this syncretism, as far as I understand.

Yahushua ha Maschiach has no place in their religion. Of course not! Truth hurts.

Yahweh dislikes banks.

I just wonder if the new economic order will still be from the Synagogue or whether the Anti-Maschiach will be Muslim. Yahweh is the God of Ishmael. It was Yahweh who made the Ishmaelite covenant. Therefore, there is no natural enmity between the true House of Ya'akov & the House of Ishmael.

We'll find out soon.

Thu, 11/25/2010 - 12:48 | 754679 snowball777
snowball777's picture

There you have it: a refutation of 'sound money' straight from the Lord of Hosts.

"...the God I believe in isn't short of cash, mister."

Thu, 11/25/2010 - 23:38 | 755403 trav7777
trav7777's picture

I don't intend to try to bribe Jesus with shiny shit, just a border crossing guard or two

Fri, 11/26/2010 - 00:11 | 755409 Green Leader
Green Leader's picture

Why don't you buy a boat with that gold instead?

It will be easier to sneak by the Coast Guard, if you know how.

Learn the pirate ways (and I don't mean Jimmy Buffet romantesque).

Thu, 11/25/2010 - 02:03 | 754229 Fernley Girl
Fernley Girl's picture

Wednesday November 24 2010

Ireland's low corporate tax level of 12.5pc should be doubled to 25pc as part of a common rate across Europe, a cross-party group of MEPs said today.

Thu, 11/25/2010 - 02:13 | 754242 flacon
flacon's picture

Tax and spend... oops I mean "print". 

Thu, 11/25/2010 - 10:22 | 754501 THE DORK OF CORK
THE DORK OF CORK's picture

No objections here - if the British , Germans and French write off our external bank debt - otherwise they can go fuck themselves.

Thu, 11/25/2010 - 02:23 | 754245 MrTrader
MrTrader's picture


Thu, 11/25/2010 - 02:43 | 754256 i-dog
i-dog's picture

Errrrr ... the Angles were a germanic tribe -- as were the Saxons -- before they "settled" in Britain after the Roman period.

The Anglo-Saxons and their royal family -- the Saxe-Coburg-Gothas -- are Germans! Indeed, they are at the very apex of the oligarch control pyramid.

Thu, 11/25/2010 - 23:29 | 755393 Minion
Minion's picture

Assyra, who conquered the 10 tribes of Israel and carried them off captive, were a fearsome, warlike race who settled in central Europe after biblical times. 

Are "Saxons" just "Isaac's Sons" who were intermixed with Assyria (Germany) and eventually settled the north western region of the continent?  It would explain Jacob's pillar stone and the line of British kings who descended from Ireland and Scotland, and the Jewish traces in the royalty, and financiers.


Thu, 11/25/2010 - 23:55 | 755417 Green Leader
Green Leader's picture

Christian Identity leaders like to preach Saxon = Isaac Son.

I tend to think the royalty comes from the House of Dan who were cast out by Yahweh. Isn't Danmark the land of Dan? The Jew-ish have a hard time with this issue. The book of Revelation does not mention the House of Dan in the 144 thousand (12 tribes x 12,000 = 144,000). Manasseh, the younger son of Joseph, is substituted instead.

Seems to me Dan & Manasseh are like Batman & the Penguin.

Here's a Christian Identity video, for your viewing pleasure:


Fri, 11/26/2010 - 04:47 | 755503 i-dog
i-dog's picture

There is reasonable historical evidence that the Dan settled Phonecia (modern Lebanon) and became a seafaring race that spread through the Mediterranean (particularly Macedonia and North Africa) and out through Gibraltar to Northern Europe -- thence, as the Vikings, into Britain ... both directly as the Angles and Saxons and 600 years later through William the Conqueror. (The Normans were a warlike Viking tribe who made themselves at home in Normandy and were both disliked and feared as a bunch of crazies by the native French).

There is good evidence that the "12 tribes of Israel" were in fact 12 regional governors appointed by the Egyptians to govern Canaan when the Hyksos (foreign semitic rulers) were driven out of Egypt around 1540BC. The Old Testament of the Bible was written around 1,000 years after this and can easily be read in the light of recorded Egyptian history and Sumerian legends.

The Dan-Macedonian connection leads forward to the Ptolemy Dynasty of Egyptian pharaohs (from Alexander The Great to Ptolemy XV Caesarion) and also to the royal houses of Europe. It is also probable that the assumed character 'Jesus Christ' was in fact Ptolemy XV Caesarion, the only son of Cleopatra (direct descendant of Alexander the Great) and Julius Caesar (probably also of Macedonian lineage). Cleopatra's daughter by Mark Antony, Caesarion's half-sister, Cleopatra Selene II, is also likely to be the 'Mary Magdalene' of the Bible. Since both Cleopatra and Caesar were 'gods' (Cleopatra self-proclaimed as the daughter of Isis; Caesar proclaimed by the Senate after his death), 'Jesus' could logically be proclaimed by the writers of the New Testament to be 'the son of god[s]'.

The British royal family claims to be directly descended from Jesus, David, Abraham and Adam ... and this could well be [loosely] the case if one considers 'Jesus' in the light of his Egyptian-Macedonian connection and other Egyptian connections to biblical characters -- going back to the Middle Kingdom Pharoah Amen-emhat I (the likely 'Abraham') in 1991BC.

The Bible pays homage to Amenemhat -- and the monotheistic god, Amen, that he promoted to the top of the Egyptian pantheon -- through the word at the end of all prayers, 'Amen'.

The plot thickens.

Fri, 11/26/2010 - 22:28 | 756758 Green Leader
Green Leader's picture

"The plot thickens."

Simply amazing...

British Israelites (aka Christian Identity churches) claim that Iasiah's prophecy of Israel being located in islands whose inhabitants lost trace of their lineage refers to the British isles. I know better...Isaiah was referring to the Spanish Caribbean. The year is 1492. Columbus 'discovers' the islands. The year is 1492. The Sephardim are cast out of Spain. What a coincidence! And here I am, several hundred years later, on Zero Hedge.

Yahweh Yireh.

Thu, 11/25/2010 - 03:10 | 754273 hound dog vigilante
hound dog vigilante's picture


Iceland's decision looks better all the time. 



Long live Iceland.



Thu, 11/25/2010 - 22:59 | 755359 Fred Hayek
Fred Hayek's picture

The Swedes still put them, and everyone else to shame.  They didn't do ridiculous things with their economy like Iceland and when their big banks fell apart, unlike everyone else, they took apart their big banks rather than making all their citizens backstop bankster stupidity.

Thu, 11/25/2010 - 03:17 | 754276 blindman
blindman's picture

key words:  "as needed".  needed by whom and for what?  master / slave,

relationship in broad daylight.


Thu, 11/25/2010 - 03:30 | 754284 Double down
Double down's picture


Thu, 11/25/2010 - 03:33 | 754287 Troublehoff
Troublehoff's picture

I knew it all along - The ECB is no better than the FED.

Sheeeeyt Axel, that's all you had to say; And this coming from a man who's own country experienced hyperinflation less than a century ago. Come on guys, lets see some nuts and give everyone a haircut, and while you're at it dispense with fractional reserve banking.

Gold to the mooooooon!

Thu, 11/25/2010 - 03:36 | 754290 John_Coltrane
John_Coltrane's picture

"The race to debase occurs in many place-by George he's got it!"  The race to space is slower than to debase-he's really got it"

But on a less lyrical note your brilliant phrase  "Persisting with his projectile vomit session of aneurism-inducing mendacity, the rotund teutonic ogre.."   illustrates why scores of former FT, economist, and WSJ readers are abandoning those antidiluvian sources for zero hedge.

New Captcha suggestion:  x^n + y^n = z^n, n=?

Thu, 11/25/2010 - 23:57 | 755426 trav7777
trav7777's picture

Fermat's Last?  "n=" is not correct

Thu, 11/25/2010 - 03:43 | 754294 StychoKiller
StychoKiller's picture

PhD's in Economics and the best they can come up with is print more Fiat??  The phrase "Smart as a box of rocks"  springs readily to my mind! :>D

Thu, 11/25/2010 - 04:07 | 754301 Jendrzejczyk
Jendrzejczyk's picture

"Jenny 20 rejects..." ? Google-Fu is weak tonight but found this on the way-

Thu, 11/25/2010 - 05:07 | 754325 virgilcaine
virgilcaine's picture

Listen to the Bond Mkt , not the Eurocrats, nearing Greece 12% Ireland 9%, Spain 6 % and rising, noose is tightening.

Thu, 11/25/2010 - 05:10 | 754329 Motorhead
Motorhead's picture

These banksters are so full of shit I'm not sure they realize how easy it is to go contrarian.

Thu, 11/25/2010 - 05:22 | 754331 overqualified
overqualified's picture

"The population of the Republic of Ireland is less than 4.5 million.
The size of the bail-out of the country is estimated at 85 billion euros, and then some, plus the 50 billion already spent to bail-out the Irish banks, which makes a total of something like 135 billion euros.
So to rescue the deeply corrupt Irish banks, the government is negotiating a ‘saviour package’ of nearly 20 million euros for every Irish citizen - more like 30 million if you include the ’money’ already spent to save the Irish banks that, well, didn’t save them.
For a fraction of that they could let the evil banks collapse – good riddance - and make every Irish citizen a euro millionaire - total cost: 4.5 billion.
If this was done, do you think it might stimulate the Irish economy, er, just a little bit?" 
David Icke

Thu, 11/25/2010 - 06:37 | 754354 DonutBoy
DonutBoy's picture

Ha!  This is insane.  Helloooo..  All Irish citizens report to your work-camp to pay-off your German bond-holders, SCHNELL

To clean up the math 135B Euros of bailout divided by 4.5M Irish is 30,000 Euros/citizen, not 30 million.  They can easily clear that off in a decade of servitude each.

Thu, 11/25/2010 - 23:58 | 755428 trav7777
trav7777's picture

Arbeit Macht Frei

Thu, 11/25/2010 - 23:04 | 755369 Fred Hayek
Fred Hayek's picture

Uh, there are a thousand millions in a billion.

135 billion euros = 135,000,000,000

divide that by 4.5 million people or 4,500,000

and you get 30,000 euros, not 30 million. 

Thu, 11/25/2010 - 05:25 | 754332 orgonor
orgonor's picture

corpulent teutonic ogre...LOL...

man can we look to the US of A to get us out of the grip of ze Germans?once again??

Thu, 11/25/2010 - 05:29 | 754336 theprofromdover
theprofromdover's picture

"..It should be "easy to convince markets" with the EFSF backstop that speculation against governments will not be successful, Weber argued.."



That can only end in tears.

Thu, 11/25/2010 - 05:29 | 754337 Tic tock
Tic tock's picture

This all boils down to a single problem: the people responsible for finance are the wrong people.

...this whole QE thing, the whole Bailout notion, the German Beatnik bank's Weber, PMS Cowen, the fine variety of US home-made tools.. all of them prostrating before the alter of everlasting stockmarket wealth... but is this the economy, no.

Are the Banks the economy? -no. The banks hold little pieces of paper that say they own things. The Economy is the activity that goes on. The little pieces of paper, an aberrancy within the banks. 

The Banks can't get their accounting right, not our problem. Central Banks, price stability, full employment.. so what, the banks say they won't sort out their accounts, they will raise credit rates, they will smash employment - unless the Central Banks buy them a new car. Record bonuses. Everybody rolls over.

Well fuck this. We can organize a global economy from here. We can export, we can import, we can produce, we can keep individual and group accounts online and transparent, we can discuss things and arbiter them. like fucking Gosplan, almost.

All it requires is faith, (maniacal)hahaha. Keep the costs of interaction with the establishment low and that's all. One thing I've never understood, is why the bodies of cars have to be so dull..let's open a collaborative workshop of producing low-run plastic, wood, metal, kit-like cars...let's open a production unit for home-use algae fuel boxes...let's trade wheat and music, home-made computers, home-made jams...this is the possibility that has brought the future pricing of aggregate demand to it's knees.

Is this what you want? Do you think this is going in the right direction?

Thu, 11/25/2010 - 05:59 | 754346 zenon
zenon's picture

Speaking of PM's, has anybody seen the open interet for December Au & Ag?

Over 500 tons of Au and 200 million ounces in Ag (yikes!)

Comex is closed Friday and Monday is first notice day by the way.

Thu, 11/25/2010 - 23:06 | 755372 Fred Hayek
Fred Hayek's picture

Yup.  I've been following this via Harvey Organ's site.  Wonder what will happen to the price of Ag when the short sellers are forced to find some to satisfy contracts?

Thu, 11/25/2010 - 06:10 | 754355 FoieGras
FoieGras's picture

The hardline German banker Axel Weber quickly turned into some form of soft brown pudding.

Thu, 11/25/2010 - 06:49 | 754373 taraxias
taraxias's picture

It's the same jawboning tactic that Uncle Ben has pulled off time and again. He is saying all this to scare the wolf pack away from driving PIIGS bond rates even higher. Because if they keep doing that and anyone of the PIIGS defaults (Greece will be the first one BTW), German banks blow up the very same second. Axel knows that, all he is trying to do is delay the inevitable that why he's turned into soft brown puddy.

Thu, 11/25/2010 - 06:29 | 754363 schadenfreude
schadenfreude's picture

The last Hawk has been "doveerized".


Thu, 11/25/2010 - 06:32 | 754365 johny2
johny2's picture


In short, I really like Europe and its diversity, and i hope its politicians dont screw things up again. But with people like Weber in charge, they are screwed for sure.

" It should be easy....." remark says it all while for almost whole of the 2010, Europe is on the edge, and it makes me believe he is really hoping to see it go down.


Thu, 11/25/2010 - 07:02 | 754380 Manipulism
Manipulism's picture
Is there a greater Fucktard than S.Palin?

I bet americans elect this idiotic piece of for pres.

"Well, she is like one of us."

Here Are The Four Most Ridiculous Things Sarah Palin Has Said In The Last 48 Hours "Obviously we’ve gotta stand with our North Korean allies.”

Read more:


Thu, 11/25/2010 - 07:17 | 754389 johny2
johny2's picture

very funny, reminds me of that comedian called Bush.

Thu, 11/25/2010 - 08:15 | 754420 johny2
johny2's picture

but the funny thing is , she is probably right about North Korea being allies....after all, without bad guys, there would not be need for protection racket...

Thu, 11/25/2010 - 12:24 | 754646 Ahmeexnal
Ahmeexnal's picture


....after all, without bad guys, there would not be need for protection racket...


Bingo! 99% of the "enemies" are in reality paid shills. Some start out as allies and then the decision is made that there is more profit if they suddenly go off the leash (Noriega, Saddam, Osama....).  Others are created as "enemies" from the start, and kept as an investment for hard times (Castro, Chavez, North Korea...).

Sad but true, most of the harshest critics to TPTB are nothing more than Emmanuel Goldsteins to fool the rest of us.

Thu, 11/25/2010 - 12:48 | 754681 johny2
johny2's picture

Ignorance is a proven by Bush and Palin.

Thu, 11/25/2010 - 15:43 | 754963 cosmictrainwreck
cosmictrainwreck's picture

Holy shite! Ya mean all those paranoid nightmares I was having weren't really paranoid nightmares?

Thu, 11/25/2010 - 07:58 | 754407 Motorhead
Motorhead's picture

I'll vote for her if she lets me shag her.  Well, at least that's what I'll tell her, hehe.

Thu, 11/25/2010 - 12:42 | 754671 Loan Gunman
Loan Gunman's picture


Your precious Messiah just called Europe a country.  Everyone mis-speaks once in a while.


We always love it when someone who slavishly follows the MSM is in the game.  Pull up a chair.  Would you like a drink?

Thu, 11/25/2010 - 07:17 | 754390 Silverstar
Silverstar's picture

well... take a look at the Bond market.... i think these guys are impressed by this solution.





And now... cause no one else got it on Radar.




Have fun.. while watching them rising...

Thu, 11/25/2010 - 08:06 | 754414 bigelkhorn
bigelkhorn's picture

I love the fact that people think the government is failing and pretending they know what is not around teh corner. time to wake up people the goverment are the biggest fraudsters, and they want people begging for the NWO, I hope I am wrong but thre is more to meets the eye to this.

The sheeple will not wake from there slumber, and here is why these guys are tyring to wake us up

Thu, 11/25/2010 - 08:47 | 754435 gigeze787
gigeze787's picture


"...Persisting with his projectile vomit session of aneurism-inducing mendacity, the rotund teutonic ogre claimed..."

Nominations, please:

"....Orwell Award for Distinguished Contribution to Honesty and Clarity in Public Language"

Thu, 11/25/2010 - 08:48 | 754446 max2205
max2205's picture

Next wealth destruction of the middle class= crash silver. Just saying

Thu, 11/25/2010 - 08:54 | 754450 Burnsy
Burnsy's picture

"rotund teutonic ogre"



Thu, 11/25/2010 - 09:26 | 754468 THE DORK OF CORK
THE DORK OF CORK's picture

I am beginning to question zero hedges party line that printing high powered money is not the answer.

Speaking from a country where credit aggregates increased 20 - 30 % a year during the height of the madness , the damage was done when the mortgage was signed.

If the sustainable growth rates of a economy is now 2% and the bond market asks for 8% then that is merely a extractive form of capitalism.

People have the right to buy the monetory metals but surely in this environment the CB should function as lender of last resort as society will implode if it is asked to pay interest over and above capital growth.



Thu, 11/25/2010 - 09:58 | 754485 honestann
honestann's picture

Sorry, "society" absolutely must impode.  The current system is totally unworkable - period.  The productive folks in this world will do exactly what productive folks in the USSR did... say "to hell with it"... and stop being productive.

Morons who believe shoving pieces of paper and computer bits back and forth will build houses, grow crops, mine metals, design products and so forth... are insane.

The system cannot and will not work.  The system must be done away with (with modest discomfort for some, but joy and success for the honest, ethical, productive folks everywhere)... OR... the system will continue to degrade until shortages, decay and ever-increasing violence becomes everyday life.

There ARE only two kinds of human behavior --- predator and producer.  The producers are being abused and squeezed like crazy, and have started "giving up" in droves.  The predators will continue to run rampant, but as productive behavior drops, production also drops, and life will become hell, then eventually impossible for many.

The ONLY way out is... lock up the predators-that-be and the entire predator-class, and leave producers alone.

Thu, 11/25/2010 - 10:11 | 754491 THE DORK OF CORK
THE DORK OF CORK's picture

The writing of mortgage paper withen banks had real world effects - massive malinvestment in the housing sector.

This moves everything from copper, employment, to where people live.

When credit was growing 20%+ a year GNP was still in high single digits - this discrepancy had to be equalised and was pure criminal behaviour from the banking class.

But if you think you can have a modern complex society without trustworthy paper credit  you are dreaming.

Thu, 11/25/2010 - 10:34 | 754506 EscapeKey
EscapeKey's picture

It sort of resonates with farmers in the Roman empire as it collapsed.

Thu, 11/25/2010 - 12:06 | 754616 THE DORK OF CORK
THE DORK OF CORK's picture

Sort of  - but I guess they did not waste their time with the whole Christian faith thing over in the land of scoundrels and suckers.

Its good and profitable to have compliant Christian taxpayers , mortgage holders and soldiers of other strange destinys.

Maybe its time to go all Pagan again.


Thu, 11/25/2010 - 09:30 | 754470 johny2
johny2's picture

Mr Weber, it would be enough if Germany was to move from low yielding USA treasuries into high yielding European bonds. 

But why would anybody invest into the European bonds if German chancellor and fin min keep talking about bond holders having to accept the cut?

All this year its been marked by Crises in European debt markets, and more than once Germany has been throwing fuel on the flames.

I guess what Webber is saying is that if Germany wanted to stop this speculation against weaker European states they could do it at any time. But left unsaid is that are happy to see Euro weaker, and Germany having a mini boom in exports

Thu, 11/25/2010 - 10:19 | 754498 Portugal
Portugal's picture

The moment that EFSF has no money left to bail other EU countries if needed, the IMF will loose 34/36% of its support...

Thu, 11/25/2010 - 10:26 | 754502 SteveNYC
SteveNYC's picture

What the f*ck???? Bloomberg shilling for the TSA:


The "conditioning" phase is picking up steam, start to look for pieces like these strategically placed in publications everywhere.

Bloomberg is the biggest cheerleading, fascist shill source there is right now. Kind of amazing.

Thu, 11/25/2010 - 10:43 | 754509 DavidC
DavidC's picture

You have such a way with words - wonderful.

I wonder how big the implosion is going to be when (not if) it occurs.


Thu, 11/25/2010 - 11:04 | 754522 TheGoat
TheGoat's picture

Money doesnt have to be backed by anything all you need is to control its quantity.

End the FED. Why shouldnt the peoples govt be the ones to issue DEBT free money...... Bankers be damned...

Thu, 11/25/2010 - 11:21 | 754539 CrashisOptimistic
CrashisOptimistic's picture

Of course they are going to print.  All money is printed.  Just forget gold.  It's not a medium of exchange and doesn't exist in sufficient quantities to serve the globe, and if it did exist in quantity, storage (guarding costs) would be prohibitive.  But that is not important.  The issue is printing.

Real estate collapse erased money.  Defaulted real estate mortgages erased money from *the system*.  How can you not print when money disappears from your society.  Of course you have to print.  This is all replacement; not dilutive additional.  It's replacing money.

That's why the CPI does not rise.  It is very hard to raise the prices of things no one wants.

Before you start the knee jerk sneer about CPI measurement, go read the CPI measurement website.  They have a huge staff who very carefully in ongoing way measures what % each item is of American budgets.  Then they go out and measure the price behavior of each item.

Housing is a big percentage of almost everyone's monthly budget.  Next is their car.  These two collapsing prices (a Toyota Camry has risen about 10% since 2000.  That's the base model, which has zillions of new features that did not even exist in 2000, yet the price is only up 10%).drag down everything else.  No, forget hand waving at Shadowstats.  That's a one man operation with no staff, no budget to conduct its own survey of US households and no budget to examine the price of the array of items.  Go read the CPI methodology.  Those people try very hard to be accurate.

The point being. . . there is no inflation.  Printing has not caused inflation because it is not dilutive, it is replacement.  The issue is, and always has been, deflation -- because oil production can't keep up with growth in population or GDP.  They are fighting a losing battle.  They can, and will, print all they want.  It won't matter.  They can't print oil and it is civilization's lifeblood.

Thu, 11/25/2010 - 11:20 | 754540 huckman
huckman's picture


Check out this updaed graph from The Federal Reserve Bank of Saint Louis.

Thu, 11/25/2010 - 11:59 | 754600 Die Weiße Rose
Die Weiße Rose's picture

Weber further added that markets suffer from "limited rationality"....

reading through most of these posts, i must agree with him there.

It is amazing how greed and wishful thinking can warp some peoples perception of reality.

Suddenly they become masters of the Universe who can foresee the end of civilization...

and become legends of their own lunch times.The problem is not with central bankers,

the problem is with corrupt and greedy speculators, I would say...

although most of you will most probably beg to differ;)

fact is: without the FED buying and selling your own US Debt,

you probably would have to get off the net and go back to morse code,

to write your SOS _ _ _ ... _ _ _

Thu, 11/25/2010 - 12:05 | 754614 edwardo1
edwardo1's picture

"That said, it only takes one angry filthy peasant to really ruin your day." 

Indeed, that's how WWI started, an angry peasant shot a member of the elites.

Thu, 11/25/2010 - 13:20 | 754721 Die Weiße Rose
Die Weiße Rose's picture

An angry peasant shot a member of the elites and that's how WWI started,

that is very simplistic to say the least...

There were more than just one factor to cause the start of World War I.

The real cause of WWI was an long standing Trade-War between the British Empire and the German Austrian-Hungarian Empire and their respective colonies and trade-routes to the middle east, both naval and across land.

So I would suggest for you to read up on some basic history  like the Baghdad Railway which was built from 1903 to 1940 to connect  Berlin with the (then) Ottoman Empire city of Baghdad with a 1,600 kilometres (990 mi) line through modern-day Turkey, Syria, and Iraq.

The Germans gained access to and ownership of oil fields in Iraq, and with a line to the port of Basra would have gained better access to the eastern parts of the German colonial Empire, by-passing the Suez Canal.

Funding and engineering was mainly provided by German Empire banks and companies.

The Baghdad Railway became a source of international disputes during the years immediately preceding World War I  and it has been argued that the railway was a leading 

cause of the first World War.

History and economy is never quite as simple-minded in reality  and history as some (especially the British) record it and would like the world to believe.

Gott sei dank bin ich Deutsch !

Thu, 11/25/2010 - 13:54 | 754790 johngerard
johngerard's picture

Farage at his best.  To this day, no-one knows who the fuck van rompuy is::

Thu, 11/25/2010 - 15:13 | 754916 Burnsy
Burnsy's picture

"Of course they are going to print.  All money is printed.  Just forget gold.  It's not a medium of exchange and doesn't exist in sufficient quantities to serve the globe, and if it did exist in quantity, storage (guarding costs) would be prohibitive.  But that is not important.  The issue is printing.

Real estate collapse erased money.  Defaulted real estate mortgages erased money from *the system*.  How can you not print when money disappears from your society.  Of course you have to print.  This is all replacement; not dilutive additional.  It's replacing money.

That's why the CPI does not rise.  It is very hard to raise the prices of things no one wants.

Before you start the knee jerk sneer about CPI measurement, go read the CPI measurement website.  They have a huge staff who very carefully in ongoing way measures what % each item is of American budgets.  Then they go out and measure the price behavior of each item.

Housing is a big percentage of almost everyone's monthly budget.  Next is their car.  These two collapsing prices (a Toyota Camry has risen about 10% since 2000.  That's the base model, which has zillions of new features that did not even exist in 2000, yet the price is only up 10%).drag down everything else.  No, forget hand waving at Shadowstats.  That's a one man operation with no staff, no budget to conduct its own survey of US households and no budget to examine the price of the array of items.  Go read the CPI methodology.  Those people try very hard to be accurate.

The point being. . . there is no inflation.  Printing has not caused inflation because it is not dilutive, it is replacement.  The issue is, and always has been, deflation -- because oil production can't keep up with growth in population or GDP.  They are fighting a losing battle.  They can, and will, print all they want.  It won't matter.  They can't print oil and it is civilization's lifeblood."

Some comments:

-The amount of gold argument is ridiculous. You could probably base a currency on gold, silver, and copper for example. Why is this impossible? It is only impossible if you refuse to reform the banking system we have today sufficiently.

-Gold and silver have been used as exchange media for thousands of years. I used it today to buy swiss francs. Did I hallucinate this transaction?

-The (excess) credit that was created during the housing bubble etc and is now being destroyed does not need to be replaced. It needs to die, die, die. The system needs to be rid of this fictional wealth and fictional growth and reset at levels of growth that are sustainable. This will entail a horrible social cost for a while, but then yield a period of higher structural growth. There is no avoiding this fact in the long run. If you disagree, read J. Granthams excellent "Night of the living Fed", and tell me what is wrong with his data.

-The problem with the CPI is that it measures not the price increase of a fixed basket of goods, but tries (failry succesfully in my opinion) to approximate the ongoing cost increase in maintaing a certain standard of living. The CPI is fine for some purposes, not others. It does not accurately reflect commodity price increases for example. Inflation is a sneaky animal - it influences different sectors of the economy in different ways.

-Inflation is the act of diluting a currency, not price increases. Price increases are the consequences of inflation. You are right that so far, we are replacing by printing, not inflating. But this is a just matter of size. Steve Keen estimates that 6-7 trillion in QE would be inflationary, up until that point, we are merely replacing, reinflating the bubble that should be allowed to deflate. What guarantee do we have that Benny gets this just right and does not overdo it? Deflation is what we SHOULD see now. It is healthy. The system is trying to cleanse itself but is not allowed to.

Instead we are replacing money that should not exist. The output gap for example is a ludicrous, fictional entity based un unsustainable consumption pattern and bubble growth, and I agree, this in a way includes oil consumption patterns that we can kiss goodbye in just a few years from now. Anyway, the output gap that is perceived now is in a word, bullshit. We should not attempt to close it at all, and thus we should not print a single dollar to try and make this happen. (for an excellent explanation of why printing does not produce real growth, see J. Hussmans latest comments).


Happy Turkey day.



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