This page has been archived and commenting is disabled.
Rick Santelli On The Fed's Upcoming "Nixonian" Price Controls
Rick Santelli was on King World News today, discussing the distinction between deflation and deleveraging, or what some have dubbed the phenomenon of surging prices in things that one can buy without leverage (Friday's limit up open in various commodities being one example), and plunging prices in everything that requires debt (i.e., one's house). And while the Fed can game the CPI as much as it wants, once middle America see the cost of basic foodstuffs double (and it will once producers hit negative profit margins and are forced to pass input cost inflation to end consumers) they will realize just how serious this problem will be. Of course, the only way to offset this localized inflation is by returning to the time when America could use its houses as piggybanks in the form of taking out equity lines of credit. The problem with that, of course, is that the Fed will be forced to increase home prices at all costs, even as speculators take basic commodity prices up in anticipation of the coming hyperinflation. Which means that the Fed will be behind the ball, and will be forced to increasingly devalue the dollar as it is now obvious that no matter how cheap credit becomes, and how pervasive free money is, the last thing to go up are home prices which make up the bulk of US consumer "wealth." As such, today's collapse in the ceasefire in monetary talk is no surprise: every central bank is fully aware that with the monetary component to intervention, via cheap credit, now priced in, but priced in in terms of equities and commodities, the only way to create equity value in housing (of which per some estimates, 25% of all homes (and rapidly rising) are underwater to the underlying mortgage) is to broadly debase the currency. This is now a virtual certainty, and the higher gold (and soybeans, and corn, and what) goes, the faster the Fed will need to destroy the dollar, making the vicious loop of hyperinflation spin faster and faster...
We dare the deflationists out there to look at the charts of coffee, barley, oranges, pork, cotton, rubber, iron ore, and tell us where is this much-hyped deflation...The right answer, of course, lies in one simple word - and as Santelli confirms what every Zero Hedge readers knows, it is "monetization."
All that is well-known. What is more interesting is Rick's discussion of what will be the Fed's next step after another failed QE round: price target levels. This Santelli qualifies as a "Nixonian" approach of price, or specifically, yield controls, such as i.e., 2% on the 10 Year, and the Fed will keep bidding up securities until one after another target is achieved. Of course, for the abovementioned home equity values to reappear, the marginal cost of debt has to be as close to zero as possible, so that readers can refi into a new debt piece, which would make home prices essentially explode as consumer become price agnostic vis-a-vis taking one one dollar or one trillion in new loans: if the rate is zero, there is no cost. And this is what will ultimately happen, and be preceded by outright monetization and the collapse of the reserve currency system, and of monetarism as a result. That is, pure and simple, the end game.
Naturally, all of Rick's logical objections to the Fed's launch on this road to dollar debasement will be ignored by the relevant people.
Another amusing observation is the question by Jim Rickards addresed to Rick, and predicted by a Zero Hedge analysis on what is a statistically impossible perpetual upward revision in initial claims, as to whether "someone is finessing the data for the labor statistics." We agree and disagree with Rick that these adjustment are like noise in the grand scheme of things: agree in that indeed whether it is 450k or 455k is largely immaterial, when in both cases the economy is not generating jobs, yet when it comes to headline scanning robots, the difference can mean a world of difference to the marginal trader, who is being games by both the HFT system and the BLS bias.
A last observation, on what will likely be the source of the next major rant by Santelli in the upcoming week, now that FX wars are the topic du jour, is Santelli's very correct highlighting of Geithner's hypocrisy in damning FX intervention by others, when the Fed is the biggest FX debaser courtesy of Bernanke's printing press, whose only purposes these days it appears is to end the dollar's status as a reserve currency.
For all this and more, including Santelli's take on the upcoming mid-term elections, the link to listen to the always entertaining and informative Rick Santelli can be found here.
»
- 29866 reads
- Printer-friendly version
- Send to friend
- advertisements -
Price controls lead to shortages, we are truly following the Soviets.
Soon we will have items in display in our stores, that no one can actually buy.
Quote :
“Inflation is theft of labor by dilution. One should understand that the taxation/enslavement/inflation/property-seizure axis has one common denominator and one goal only: State seizure of labor…
“After centuries of government meddling in coinage and debasement, the stage was set for the introduction of the least understood and greatest scam in the annals of history; governmentally issued paper.
“When governments place their name on money, they are placing their name on the most generic form of private property, on the most commonly exchanged commodity. This is no different than if government placed its name on all clothing, houses or humans. The most damaging consequence of this action is that governments have taken control of the most exchangeable form of life, which is the most important aspect of money and its relationship to trade. Money makes the real medium of exchange more convenient. Based on this fact, government has placed it name on man’s greatest physical instrument of morality. It not only captured the most liquid form of productive labor, it imposed its name on the atmosphere that surrounds the free and honest dealings among men." – Hugh A. Thomas, STORED LABOR A New Theory of Money
And no one except savers blinked an eye when Gluskin Sheff economist David Rosenberg agreed that the Fed should target and rob savers with ZIRP, i.e., the prime source of sound money and stored value, because by not doing so “the stock market would be hurt.”
Well, didn’t those savers store their labor in Federal Reserve Notes that are issued at the discretion of the Board of Governors of the Federal Reserve System? Well, apparently what the governors issue with their name on it, the governors can take away.
Rich echoes what I've been complaining about recently - that halting foreclosures will severely retard the critical de-leveraging and capital re-allocation process plus it rewards bad economic decision making - causing the prudent and honest to feel like fools.
XYZ Bank doesn't have a good title to the defaulted mortgage? Find out who does.
Still doesn't solve the MBS problem.
If the MBS trust or whatever never had a good title to the mortgage, back up enough steps until you find out who the last good holder was - or unwind the MBS or both. It's complex but it's not impossible. The original mortgage was valid - maybe that will be the last time everything was legit, maybe not. Put the girl with the dragon tattoo on it.
Agreed. This is at best a waste of time.
Be careful what you ask for. If you demand an absolutely flawless paper trail for a foreclosure, the bank can add one more piece of paper, pay a $35.00 filing fee and perfect their judgement on the DEFICIENCY! Oops.
Lots of folks are whistling past the grave yard on that one. The bank doesn't have the staff, the "owners" have no assets... Horse apples. In central Virginia, the utility companies get judgements on people who had their power and water shut off. How prosperous is that group? There are bottom feeding lawyers in every town who do this full time. They are about to get rich. Welcome to the continuing clusterfuck. Once more, for the record, be careful what you ask for.
The MBS-holding banks really aren't in a position to be dictating terms here (or they shouldn't be - but that's a separate problem). The point is, something has to give here and if what gives means thw foreclosure process is frozen and deadbeat homeowners end up with free houses - that will be uncool and dangerous in several ways at once.
The Native Americas are gonna love that. At least you get your beads back.
I have an idea.
Just burn it all to the fucking ground. Less time and less pain overall.
O/T
@EVERYMAN
Dude, I'm with ya', buddy! Death to the fascists!
It's us or them if you folks didn't know it yet!
My kids have even figured it out...
"Dad, we are paying the same price for stuff but getting less of it than before"
When they could enter a grocery store and walk on their own two feet, I told them to not only look at the price but also quantity and better yet, price per quantity.
Yep. For instance, I bought some store brand ice cream at our national chain grocery store about 4 months ago. Didn't notice until I got home that what I thought was a half gallon of ice cream had decreased to a quart and a half for the exact same price. The packaging was very clever too. Exactly the same as the old 1/2 gallon, but just a tad shorter. I had just gotten off work and was in a hurry to get the shopping done and go home to make dinner so I didn't notice it in the store. I wondered if anyone else had noticed this or if everyone is so stressed out that it's the least of their problems.
That's what they prey on. You're in a rush and just looking at the price. Then you read the container when you get it home - it reads just a few ounces less than the standard sizes: 8oz, 16, 32, 64, etc.
All the while the government keeps on saying there is no inflation.
We had that exact discussion in front of the ice cream case a couple of weeks ago. Breyers is the worst culprit in my opinion... blantantly smaller packaging, not even trying to hide it while the price goes up up up. It's not even called ICE CREAM anymore if you read the fine print on the side of the carton! IT'S CALLED DESSERT PRODUCT!!! Arrrrrgh.
Take a good look at tuna cans--same story. They look the same, but do not weigh the same. Likewise with the various snack chips--same size bag, but a whole lot more air. It's pervasive.
it's been going on for at least 3 years now that I've noticed - primarily with the large corporate foodstuffs. . .
look for "new improved" re-packaging, obvious in things like boxes of crackers, cereals, etc. - as Bob mentions above, tuna cans are smaller too. . .
I don't shop supermarkets much any more, so I'm not as up-to-date on recent stuffs, but you can guarantee quantity will be reduced even as prices inch up. . . already noticing such things as "mechanically reclaimed" meats in prepared foods - aka pet food from decades past, now a staple in all fast fud "meat" based goop.
"We dare the deflationists out there to look at the charts of coffee, barley, oranges, pork, cotton, rubber, iron ore, and tell us where is this much-hyped deflation...The right answer, of course, lies in one simple word - and as Santelli confirms what every Zero Hedge readers knows, it is "monetization."
What a fucking joke...you do know that inflation/deflation is the result increase to or decrease in money supply right? You know...Mprime-M3 and credit...that stuff. If not, then no wonder that the CPI is still debated. Too many bafoons buying into the notion that price is a function. However, I will take the bait and ask you where global wage rates are about right now? I know, I know...labor probably represents only a fraction of total finished price. Fuck it!
There is more than one way to look at inflation. And who would know what Bernanke is doing with M3, even if he hadn't discontinued "reporting" it? Whatever, central banking is nothing more than centralized control of labor. To tell us "the money supply is being inflated" tells us nothing on the surface. To understand inflation in the context of life, we should say "money's value is being diluted."
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time. – Wikipedia, Inflation
Excerpt from John Williams’ Shadow Government Statistics (SGS) September 17, 2010, Newsletter Commentary
U.S. Economy Continues to Falter as Investor Concerns Mount as to Soundness of U.S. Dollar. Relative economic, political and fiscal strength and stability are key supports for any currency, and the U.S. dollar increasingly is in trouble. The latest numbers show faltering economic activity and mounting criticism of the sitting government (weak presidential approval ratings often lead dollar weakness). Presumptions of ongoing economic "recovery" are vanishing, and fears are increasing as to what the federal government and the Federal Reserve will have to do in order to maintain systemic stability. While actions taken may provide short-lived relative stability, the cost of same will be an extreme inflation problem…
Alternative Consumer Inflation Measures. Adjusted to pre-Clinton (1990) methodology, annual CPI inflation was roughly 4.5% in August 2010, the same level as in July, while the SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, was about 8.5% (8.50% for those using the extra digit) in August, versus 8.6% in July.
The SGS-Alternate Consumer Inflation Measure adjusts on an additive basis for the cumulative impact on the annual inflation rate of various methodological changes made by the BLS (the series is not recalculated). Over the decades, the BLS has altered the meaning of the CPI from being a measure of the cost of living needed to maintain a constant standard of living, to something that no longer reflects the constant-standard-of-living concept. Roughly five percentage points of the additive SGS adjustment reflect the BLS’s formal estimate of the annual impact of methodological changes; roughly two percentage points reflect changes by the BLS, where SGS has estimated the impact not otherwise published by the BLS.
http://www.shadowstats.com/
Meanwhile there will be no COLA for SS in 2011 (a second year running) as there's been no inflation.
http://news.yahoo.com/s/ap/20101010/ap_on_bi_ge/us_social_security_no_cola
John Williams warned of this.
And the ruling class wants to raise taxes because there’s no inflation.
Ernest Hemmingway :
“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”
I get it, you want to argue about the definition of what deflation so that you can claim inflationists are wrong even though prices are increasing, you're too cute.
Stupid comment of the week. No your right genius, price isn't a function of the supply of money and the supply of goods. (/sarcasm off)
Not sure really what you are trying to say here, maybe that you feel that because wages haven't increased that inflation can't happen, only you would be very wrong. Notice that prices are a function of the supply of money and the supply of goods and services. If the rate of production is dropping faster than the rate of deflationary forces then you will get "price inflation".
I am Richard M. Nixon
The trillion dollar question is, when will the worlds nations..i mean central bankers, stand under a proverbial Buttonwood tree and create Bretton Woods part Duex. And, the SDR will morph into and be known as? Whos faces will adorn this new Utopian-fiat-currency?
At the moment, it looks to be a tie between Ben Bernanke and Robert Mugabe.
What about Stock Equity Lines of Credit? Why must houses be the only things that are used to reflate consumer spending?
I like Santelli. I think he gets it, but can't look like an apocalyptical blowhard like me on CNBS. He seems genuinely stressed about the USDollar.
From http://www.forecastfortomorrow.com
The following transcript is a recorded phone call from a high-ranking bank employee who has
agreed to share his insider knowledge of possible events known and implemented by several
highly ranked elite bankers associates in the U.S and also the European region.
We have agreed to keep this person’s identity confidential for obvious reasons and for the full
release of this document. For privacy reasons we will refer to him only as JOE.
Participants: JOHN (FFT Managing Director), JOE (Informant) ,
Call Started 1:04pm AEST
Transcript :-
JOHN : Hello Joe!, is that you?
JOE : Hi John!, thanks for calling back. I am here and can hear you fine.
JOHN : OK! That is great. I know it is late where you are, so I will not take up too much of your
time.
JOE : John, yes it is quite late but I feel I have to do this. Go ahead.
JOHN : Sure, I understand. Now I believe you are a subscriber of mine over at our
http://www.forecastfortomorrow.com website. Is that correct???
JOE : Oh for sure. You have quite a nice following over there, and I have been a
subscriber for a few years, and receive your newsletters as well. I am quite amazed at
some of your information, and accuracy and that is kind of why I contacted you via email
in the first place.
JOHN : Oh really!, well I do appreciate that. We try our best, to help people out. I do not normally
do this sort of thing, but your email intrigued me. I wanted to find out more, so can you tell me a
little bit more about you and your background?
JOE : (nervous) Ahh, yes…..well….ummm… I have been working for ..(large US Bank)..
that is affiliated with ..(Large US broking Firm).. I have many roles but manage large
accounts for various wealthy clients both here at home in the U.S, U.K and also other
European areas. I authorize loans, deals and accounts and have close contact with many
wealthy bright bubbly characters.
JOHN : So you see people from all walks of life ey?
JOE : Eh, no most of my clients are the big wigs, wealthy and very important. I think their
ego’s are far bigger then their bank balances if you know what I mean (laughs)
JOHN : (laughs) Yes I am sure!
JOE : They are a different breed of people. And some of the meetings I have attended
lately have alarmed me, especially the way they talk about things, and events that are
possibly coming.
JOHN : You mean to do with the economy, right?
JOE : Well not just the economy….other things as well. But economic talk is high on their
agenda yes!
JOHN : But hang on. These meetings that you attended, were they just normal meetings you are
required to attend as part of your job.
JOE : Yes, but once the small talk and business dealings were out of the way these guys
had no hesitation at talking about the bigger issues and their insider knowledge at hand. I
felt like they should be asking me to leave the room, but they simply did not do this.
JOHN : I see! So you don’t think these guys are some secret powerful elite group setting us all
up for destruction.
JOE : I can honestly say no. But the way they kept talking and hinting at things that
happened months later. It was simply amazing!. I know these guys were not directly
responsible for these events but they sure do know some very powerful men in powerful
places. They like to brag about this to each other also.
JOHN : So these guys would be like the next of kin or something if you had to put a title on
them.
JOE : The way they talk, act and behave, most likely yes John! They know a lot more than
both you and myself.
JOHN : OK I see, so……is it…or…can you give me an example of this?
JOE : Well remember back to the stockmarket crash, back in 2008?
JOHN : Yes sure. We were warning our client’s months before?
JOE : Yes, But I remember these guys talking about a crash too, and getting their money
out of the market. That was back in June of 2008. But they were also talking about bank
bailouts at the same time. Months before Obama came on the news and said that bailouts
were needed, and before anyone was using the term “BAILOUT” It was quite amazing
when I did hear about this on the news, I realized these guys knew this was going to
happen way before anyone else. I was simply stunned. I knew then it wasn’t just a
coincidence.
JOHN : hmmmmm…. I see now. Go on…
JOE : At first I thought they were just educated guesses. But as time went on, there were
too many of these coincidences occurring. At least three or four occasions if I remember
correctly.
JOHN : So it was at this point, your thoughts changed about these guys. You were thinking they
knew a lot more than meets the eye?
JOE : Oh my word! They would say one thing, have a joke about it. Weeks later,
sometimes a month down the track it would happen. When I started taking notes and
seeing these things match up, I was flabbergasted.
JOHN : Ok, why were you asked to attend these meetings in the first place?
JOE : Good question! Apparently two of these guys liked the way I did business. I was
fast, explained things well, and didn’t disrespect them. These guys do not like to be
messed around especially when they are after money or depositing large amounts of
money. I was just there to make things sail along smoothly, and I made sure I did this job
as best I could. At times it was very nerve racking. But once you make friends with these
guys, you are treated like a brother. They never asked me to get up and leave at any of
the meetings I attended.
JOHN : Ok, so you are in these meetings, and helping them whilst taking notes. And I believe
you have something to share with our subscribers today. I mean solid knowledge that you think
is reputable? So whenever you are ready go ahead ‘Joe’?
JOE : Yes John, that is what I want to do (ruffles paper) I have with me here, some notes
that I scribbled during these meetings. And they keep talking about these events, like I
said they joke around and talk about them like it is not even important. Like kids on a
playground. It is really quite amazing.
JOHN : Oh before we get going, can can you tell us when these notes were taken? So can we
have a date or time estimate?
JOE : Oh yes, yes….sure! aghh these two series of notes were taken from back around
the middle of June 2010, yes June and we have not had a meeting since.
JOHN : Yes, hmmm ok…
JOE : Ummm, so I have 3 major things that they kept talking about and referring to. They
were constantly referring to the small things that have already occurred, but these three
events are what they refer to as being the “biggies”. You know, major events that could
be coming down the track.
JOHN : 3 major things huh? Ok I am listening….
JOE : (ruffles paper) Ok the first one I have written down here and they talked about a lot
was do not worry about the stockmarket. It is heavily manipulated, and will go up and
down and eventually change entirely. Especially after the whole economic system
collapses. They gave no timelines, but say it is coming soon.
They were also joking about the media, saying that the lies will continue, and that we are
actually back in a depression right now and it will get worse!. Not recovering like the
mainstream media keep telling us. If the markets do sell off again to deep dark levels the
stockmarket will seem meaningless anyway. That is because they see so many changes
coming. Similar to what you have been telling your clients.
JOHN : You mean there will be no stockmarket?
JOE : No, not entirely. They keep hinting that it will change so much and we will see so
many changes, that it will not be as meaningful as it is today. If the market does exist, it
will change a lot and be much stricter. They know that the government are covering up
how much manipulation and thievery goes on at the exchanges each day. And they do
not want us to know about this.
Many companies that people once thought were solid are doing illegal accounting and
fraud and other things. Think about how many companies have been exposed in the last
18 months. There will be many more to come. This also includes those agencies that
oversee these activities. Many shakeups coming were what they were saying. The
markets, when all said and done, will greatly change as they are not reality based. The
games and efforts to continue the financial cover-ups just cannot continue.
The good thing about all of this crashing. The corrupt cannot continue the game much
longer, as reality does not support it. Once things get worse, and they will get much
worse according to these guys, in the financial and economic sector, everything will have
to be adjusted, revamped and corrected. A good day will no longer be based on the
faulty or moody stockmarkets, if that makes sense. Things will recover but it will take
sometime.
JOHN : hmmmm Right? I see….that doesn’t surprise me in the slightest, but it is important
information. We trade stock and indicies here from day to day, and I have to agree with this.
There is always so much manipulation that goes on, you can actually see it on your screen.
Fake bids, sales order flows and stacks. I know that a lot of people think this is a false, but it
does really happen because we see it on our screens and have also recorded obvious
occurrences from time to time.
It is becoming harder for the retail trader to make money from the market these days I must say.
So I find your comments there very interesting. Continue on ‘Joe’ what was the second thing you
have written down?
JOE : Aghh ok, the second thing down on my list is……agh….. watch the US dollar. They
are saying that either two things will happen. One, they will crash it and send it to the
depths, or before this happens they will stop it trading and bring in an entirely new
different currency. It will hurt a lot of people, and business owners. All they said as they
talked amongst themselves is watch the US dollar. They are going to greatly and
massively devalue this and try and send people broke. This is scary I must say.
They then went on and described in great detail that this would have massive nightmare
consequences. Prices would rise, inflation would come in and most likely lead to massive
hyperinflation. It will happen a while from now, but they kept saying this is imminent.
The most alarming thing for me to hear, was they were buying gold and not just bullions.
Tons and tons of it. Yes they kept mentioning tons. I was totally stunned. They said this
was a safe haven and they are doing deals in gold already because they know of the real
worth of the US paper currency. They refer to paper currencies as “fools gold”. Now I see
why. ‘It has no meaning’ one of them abruptly said this day. I wrote it down. The words
‘No meaning’ really played with me that day as I went to lunch and payed the cashier with
my US paperback. They did not give a specific time for this, but as they said a new
currency will be coming in soon, again they were very solid on this idea, but in what form
then did not really reveal that.
They really talked a lot about gold the last few meetings, and said it will go a lot higher.
They did not give me a level, but they said when the smart people wake up and get into
safety then you will see it rise. But at the moment they are saying the smart people have
not even woken up in the slightest yet. And there really is NOT a lot of people that own
gold right now, like your average investor.
JOHN : Man that is so interesting right now….I say this because as you said that I whacked up a
chart of the US dollar and it is looking very sick particularly in the last few months. Down and
down she goes. (tapping noise) And gold today is at a new highs $1347 an ounce. So maybe
we are only just seeing the start to all of this, according to them.
JOE : I am not guaranteeing anything here, but from their language yes, the dollar will
devalue or stop operating and send gold up much higher. Silver too. They are investing in
silver and other metals at the moment and love talking about it. But gold and silver
because it has real worth. I did not hear them say if gold would go above $1347 an ounce,
but assume that is likely because they talk about it like it being very very safe in years
from now. So I am guessing the price will increase significantly with ups and downs.
JOHN : We have been telling our clients to invest in gold and silver for many years. Some of our
top business clients have made a killing. But they were the ones who took action, so they are
the ones who deserve credit.
JOE : Yes I own a little gold, and have a wife and two kids. I think I will be looking to buy
more down the track, to help secure our future a little more.
JOHN : Wow! Good for you. I agree with this we have been buying large portions of gold
whenever it has big dips down. Ok lets not get sidetracked here ‘Joe’ what else interesting were
these guys saying? Anything we should know about?
JOE : (Paper tares, ruffles) ok sure John! Yes I have one more. It was a bit generalized but
I made sure to write it down, because it was very interesting. They were saying there are
big political shake ups coming. I think I saw one of your forecasts that goes along with
this.
JOHN : Yes, we were saying look for a move by the republicans. Maybe in a big way. Who
knows?
JOE : I see, hmmmmm yes they are saying that this is a rigged game also. Politicians are
very good liars and there are major changes coming. Possibly in line with your thoughts
there John. They are saying congressmen are being set up and rigging things and saying
look for bigger changes in the November elections this year. They didn’t mention who is
going to get in, but they were hinting that there are major players behind in the
background making moves to get rid of the old dogs. It is quite interesting because when
you look at the news today this seems like it has already started. But the way they are
talking, this will continue all the way throughout the year. With the elections being the
pinnacle or highlight of these occurrences. So I am watching with keen interest.
Any new significant changes they say will come and will be very evident leading in
towards 2011. They are saying the political system is nothing more than a rigged family
board game with rules being bent and twisted all the time.
JOHN : That is very alarming to say the least. But I am not surprised in any way. Joe did they
have anything else to say regarding this matter?
JOE : Not really. It is hard to keep up with them as they are always joking and making
reference to things constantly. Just like you and I are talking right now. I just scribble
down anything that I think is of use. Sometimes I think they want to leak the info out just
so they can show off and try to outdo each other.
The only other thing I have written down and took interest in was when one of them said
sternly, ‘when the system really collapses a lot of people will sit or stand in silence in awe
of the new nation that is forming infront of them’. He actually said it in those words, I
scribbled it down as he spoke them. It sort of put shivers down my spine when I did this.
Also this same elderly gentlemen said 2011 will be a shifting year, and things will not
recover for a while like the idiots out there keep saying.
JOHN : I have to say, I agree with this. I think things will recover but that is years away, not a
month or so like the news keeps cramming down our throats.
JOE : Oh yes, spot on there buddy! They are saying things will get a lot worse before it
gets better the way they are talking. We won’t be eating lolly pops under cotton candy
rain clouds anytime soon.
JOHN : (laughs) )
JOE : (soft laughter)
JOHN : Yes! It is sad but true. It will be interesting to see what happens, and if these guys have
a clear case of things to come. Ok it is getting late your end. Do you want to add anything, or
yes, I think we might wrap things up now!!
JOE : well….ahhh I do not have much more at this time. So yeah, its getting late and I
just wanted to help you out. You do some great work so just wanted to help you out. I am
sure your members will find it interesting. I just didn’t want to keep this to myself. I know
you were a bit sceptical, but …..you know, hopefully chatting today has given you a bit
more confidence into what is really going out there in the business world and these little
elite groups that do exist.
JOHN : Well I appreciate that, and I will be keeping a close eye on this. I have not really done
this sort of a thing before and was a bit hesitant, but after listening to you today, it seems that a
lot of this stuff could be very significant, and I was actually taking notes whilst listening to you
‘joe’.
JOE : OH,….oh…you were taking notes. Well that is great. I know this is being recorded
also. Am I correct??
JOHN : Yes that is right, So thankyou for your kind words and for contacting me yesterday. And
for talking with me today. We are living in a very important time.
JOE : That we are my friend. For sure!
JOHN : OK I think that just about does it. So, joe thanks for the info. We will be watching and
waiting to see what happens. But I hope this information can help those who are indeed out
there still wondering what is really happening and why they need to wake up to what is around
them.
JOE : Oh john!
JOHN : Yes!
JOE : I know that right now, there might be people that are sceptical. But I have to say
that I was also sceptical at first. So being sceptical is good. I think it is just who we are
and our protective coating that we have around us.
JOHN : I would agree with that. Ummm…so I am going to let people decide for themselves.
JOE : Ok thanks for your time, I know you have lots to do. So thankyou for giving me the
time to share this knowledge with you.
JOHN : Not a problem ‘Joe’ thanks for taking out time and staying up late to pass on all this info
to us. And we will say our goodbyes and talk later.
JOE : OK, no sweat! Again keep up the great work you do, and if I get anything interesting
I will probably shoot you over a quick message.
JOHN : That would be fine! I would love to hear any more info that comes to light. Thanks a lot.
OK goodnight, and God Bless.
JOE : OK, Goodnight, bye. (hangs up)
Looks very suss to me.
Was he taking detailed notes (with dates on them), or not? Was he sitting there taking detailed notes of these guys talking about the secrets of the universe ... and none of them said "Hey, what are you writing there, boy?"
But anything is possible.
That's neat and all, but I could have made those predictions. Certainly smart people with a lot of political connections could have come up with that (the three current predictions) without "knowing" what was going to happen, any more than you or I "know" what is going to happen. These sound like educated guesses from their vagueness. If they had given dates, or specific plans for new currencies, then I could say that they had inside information, but everything that they said could easily be deduced from readily available public information.
That said, I would be interested to see more notes on this stuff if he puts out a followup interview.
STAGFLATION bitchezz
that is not regular inflation..
there is no way home prices go up in stagflation -- its an opinion of a meth head....
The argument of the deflationists is good, They fail by underestimating the corrupt and determined efforts of the global elite to do whatever it takes to prevent deflation, Inflation is a bullshit word for the truth, Debasement of the countrys currency thats inflation, Debasement = higher prices, The US is doing a good job at the debasement game and higher prices have come no if buts or ands,
Debasement is the inevitable end to a failed economic model Zimbabwe is a good one, The US UK and EU failed economic model is socialism and globalism, Debasement is the forces or nature to correct a failed state of affairs or a total default both are the same thing of correcting wrong doings but debasement is much more desireble as an elitist tool of correction,
Hyperinflation or more correct a collapse in the faith of a currency, No way will the elitist allow the US $ to collapse they may be corrupt but not that stupid, They may wish the dollar to debase by 5 to 10 percent a year and if the debasement goes over 10 percent you can bet your debased dollars measures will be taken to support the dollar at all cost to prevent the loss of faith in the dollar, Interest rates would rise and tax rises that would support the dollar big time they have the tools, Simple cash will devalue year on year and things like commodities will do well although they look overbought in the short term,
debasement of fiat currency will allow welcome of hard money, ( and their agenda). who has the hard money?
Wiki on Stagflation:
'...both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets,[9] Either of these factors can cause stagflation.'
There you have it, it is coming and there is no way to stop it given the current incumbents in the Fed and the White House. Deflation is a nonsense. Try telling that to people who see the price of everyday living rising, even without the impact of a depreciating currency.
I respect your views, or I wouldn't bother to argue, but this is why I hate macro. You lose all the interesting detail, and the incentives and disincentives which make the world run.
Inflation in the States is actually very limited. In my lifetime:
Taxes have tripled - total tax burden on median income up from 15% to 45-50%
Medical costs have tripled - 5% of GDP to 15% AND CLIMBING
College Costs have more than tripled.
Yes, housing is up right now, but along with commodities, that takes wild swings, and I don't see structural problems there, but god knows Ben is trying.
Here's my point. Real, after tax wages are dropping hard and fast. None of this is sustainable, but nothing Ben has done yet has translated into structural inflation. The problems are real, but the Fed is irrelevant. Until wages rise, I think deflation wins, but as usual, I'm an arb, and I hedge my bets. Any thoughts?
The debate about the technicalities of deflation/inflation, Keynesian economics vs. Austrian economics etc, is something many people clearly feel passionately about on ZH, and good luck to them. Seems to me that there are elements which make sense in most approaches.
I merely come at it from the angle of an individual. When the cost of living goes up via prices, but not my wages, that feels to me like inflation, even if somebody tells me that technically we're in a deflationary environment overall. I actually agree more than anything with the biflation thesis, since that is what I observe in the real world currently. The risks are increasing for an economic slump in the US/UK/Europe in 2011, at which point structural deflation may set in as aggregate demand falls. Given the extent to which the Fed will try to inflate via debasing the currency though, it will not feel like it to the man in the street.
Since I am the man on the street, thats all I care about. I leave the nuances of macro to those who find it relevant. So I guess we're broadly in agreement, no ?
Good grief, did you just say the emperor has no clothes? Have you defied the argument from intimidation; sidetracked by reality? Do you not fear the disapproval, the laughter?
Fie on you, Sir. “Who are you gonna believe, Bernanke or your lying eyes?”
Property has only just begun to move down again over here in London, having reached the old highs of 2007, since there's been an exodus of hot money in from Greece, plus the ever present Russians. It still remains an overpriced market, and thats why am not interested in owning (apart from not wishing to have any debt at all).
Tesco and Sainsbury are licking their lips at being able to put prices up for general food and groceries. It remains a mystery to me how so many people manage to live in this city on low wages. God help them all when interest rates finally turn, it will be a testicles in blender scenario...
Excellent observations. Housing in America is so out of whack it still doesn't pencil out for anyone hoping to invest in rentals.
“Today, [in America] over 95% of homes are mortgaged, even after more than 200 years of our nation’s founding. Put another way: Homes are in mortgage 95% of the time. One homeowner after another will pay for the same home again and again, with no end in sight. The debt has become perpetual. Debt that cannot be repaid constitutes bondage.” -- Kirk MacKenzie, Money, 2010.
Bondage :
When the happy couple begins to sign the papers for the major purchase of their lives—the home—the forms come in rapid succession across the desk. This provision to sign, that form to initial and these also to sign. The couple may be dealing with a realtor, but in effect, they are dealing with one of the largest, most extensive, and most complicated industries on the planet--the leviathan known as the housing industry.
And each of those forms represents the expensive and tireless work of lawyers and lobbyists for all segments of that industry--to protect the industry’s interests and exploit the homeowner’s using every possibility for profit.
Little does the happy couple realize how many entities they will be carrying on their backs most of the rest of their lives, tied up in the ownership price of their home—mortgage companies, realty companies, title companies, bank companies, insurance companies, pest control companies, building inspection companies, municipal regulators, lawyers, investors, and finally, the property tax man—all pushing their paper.
And should the government prize the equity they've establish on the way for its wealth redistribution programs, along comes the central bank and blows up that equity and the down payment--if the happy couple happened to buy "at the wrong time.”
We are in agreement. I was just trying to focus on where inflationary pressures are coming from in the hope of moving the ball forward. To me, the remarkable thing is how badly Keynesian theory has failed. Two years of throwing away money has produced almost no inflation, and less than no stimulus.
Comparisons of life in Europe vs. the States are always tricky, but when I first saw London, I noticed that wages were about the same, but prices were double. Amazing, and yet the populace found ways to live. So, I hope, shall we.
Still a little time left to prepare,they will sqeese most of us.
This end game will be nasty.A lot of people live on borrowed time,
once the suplly chain starts to break down a lot of people will dy,simply
because a lot of medicine will not be available.People in city's will
be vunireble too,because they are so dependant on the system.
I try to be a little less independant every day by hoarding metal,food,seeds
survival equipment etc.People around me think I am creazy but I don't care
just give them the big finger.By doing the logic and honest things my wealth
increasing all the time.Their fake paperwealth starting to loose big time
against my real wealth.Most of my friends would not listen to my story
and instead trust a comlete stranger a so called fund manager wich of
course are just people gambling with someoneelse money.They lost,manger
wins.Just buy good quality stuff,normal people never win this paper game
Get out while you still can!!
He's wrong. The Govt need only guarantee the 110% LTV, 3.25% 30 year mortgage.
This will get tens of millions of folks the hundreds of billions they think they need.
But should we really be going down the same path again ?
hmmmm... i believe he heard what he heard. time will tell if he's a prophet or a kook.
Somebody help me here ref: POMO. I understand the process but am having a problem understanding how the PDs prop up the equity market using the POMO funds. Is there somehow reduced risk for them that encourages them to continue to pour money into (into what...?..SPY or other index-based ETFs ?) the "market" at this extended point? What is their downside?
Can we limit comments to 100 words or less
How about we limit what you get to see at 100 characters or less?
Ignoramus.
Only if we limit IQ's to the same number...
The downward spiral is gathering momentum.Too many problems,too little time to sort them out.Buy Gold and Silver while still available to buy.
Santelli is carrying a lot of water for us - glad he's there.
Price controls are the beginning of the Keynesian endgame.
Inflation and Irrelevance. Things we need will continue to inflate. Things we don't need will become irrelevant.
Black market.
Everyone with a mortgage has that mortgage "settled", 0$ owed to the banks (All Leinholders). Those that still have a job, good income and were current on their mortgage can get a 30 year fixed mortgage at a very low interest rate AND at a home price determined but Uncle sugar. That mortgage will be in the form of cash like one gigantic ELOC with the owner free to do whatever he/she pleases with it. If they wish to simply have the house and no cash, then refuse the loan.
Homeowners who defaulted on mortgages will be given 2 choices; stay in the home with a lower modified mortgage amount, or leave the house. Those who stay in the house will not have credit rating affected. Those that leave the house will have a mark on their credit.
Now, let's systematically raise borrowing costs each year over a period of 10 years and let that schedule be known to everyone. Let's lower taxes dramatically, but set up a schedule to raise them incrementally each year for a period of 10 years so that in 10 years rates will rise to what they are today.
Banks can have a leverage ratio of 1:10 MAX. Glass Steagall reinstated.
Government embarks on a gradual systematic Reduction in Spending with National re-election "triggers" for every member of Congress when targets are not met. Target 25% lower spending in 10 years.
8 year Term limit for all members of Congress.
1. Injection of liquidity into the markets with new loans, better cashflow and lower taxes for consumers.
2. Assets values in banks (related to mortgages) are finally discovered since the Gov will set them at some discount to current values. Losses are taken and banks that go belly up, go belly up.
3. Strategic defaulters and defaulters in general are marked like the Scarlet Letter. Those that played by the rules can have their mortgage "relieved" since they will be paying for it in taxes over time from all the bailouts.
4. There are incentives to grow business since taxes are going UP, there are incentive to buy real estate since borrowing cost are going up. IT will not be cheaper to borrow money than TODAY, it will not be a better environment to keep more of your earnings than TODAY. There will be a sense of urgency to take advantage of opportunities today.
5. Instability is removed since everyone is aware of the "schedule" of interest rates and taxes. People can plan for the future and will have a good idea what it will look like.
Left a few things out, but it could be a start.....
“Keynes invented Theory to justify what he wanted to do.” – Robert Skidelsky, Keynes’s authoritative biographer
That is why Keynesian economics is paradoxical and defies commonsense. That is why Keynesian-socialist type economists use the paradoxes of Keynesianism to justify below-market interest rates and inflation to confiscate and redistribute wealth.
Keynesian in essence is merely unsupported intuited hunches, generally quoted by those with a socialist agenda.
Printing money is literally depreciating the value of the dollar. Says Ron Paul, “That’s why the Fed screams about a coming deflation, so it can continue the devaluation of the dollar unabated…the greater the debt, the greater the need to inflate the currency.
Printing money, inflation, is nothing more than a sinister form of taxation. After a man works 45 years of his life, the hidden tax on those dollars will be 90%, calculated at the Fed’s fairly constant inflation rate of 5% per year--"the Fed’s optimum level for generating the most revenue without causing alarm," says G. Edward Griffin.
“Quantitative easing” (QE) is a euphemism for what non-economists call "turning on the printing press." Or, as msn money says: “Often written as QE, this is where the state (normally in the form of the central bank) creates more money and hands it out. This money is used either to buy things from companies, giving them cash for assets that are hard to shift, or ultimately just printing more money.”
The inflation/deflation question: Is the Fed engaging in quantitative easing”?
Hope y'all are forming your voluntary associations.
Lone wolves won't last long.
Industry has been gearing up for the coming inflation - see shrinking consumables, packages etc... the deflationary reaction will give the middle and lower class consumers the big federal sheleighly.
Official body count to be cleaned up for daytime TV; official opium dispensing to continue at night..
Rick - is the only reason to watch CNBS.
The other reason would be the occasional shots of cleavage, but they are too few and infrequent to warrant watching... I am also kindof sickened by the pediphile nature that Becky tends to bring out of the billionaire guests (i.e. Buffett, Pickens...)
Emperors, kings, dictators and tyrants would enjoy power still if massively monetizing debt solves economic problems. It’s unworkable, period! The threat of QE2 is quickly driving up food and energy prices which will hit Americans hard, slowing down the real economy, causing a disastrous double-dip recession. Having a private company control the US money supply is unsound. I expect the Fed will lose this valuable franchise when QE2 causes a worse recession.
Your summary of the reality of history is my choice for the most important quotation of the year concerning the past, present, and future of the Federal Reserve System. Thank you.
QE2 at these levels? Nope. Sorry. The threat, yeah, sure....but full blown QE2 would take out too many elites, too many connected players. Ongoing POMO up until the election no doubt, but the scenario TD paints is in a vacuum - no disrespect intended at all - seriously, tons of respect, but I gotta be me.
The middle chart is GLD/SLV. You can see this is an excellent indicator, when this ratio is at a bottom, the market usually tanks, within 3 to 5 days, but sometimes immediately. The trick is figuring out when the bottom is.
This top chart is SPY/VIX I plotted it just to see if any interesting effects came up....none really
The Bottom chart is SPX, the S&P 500, follow each purple line from the GLD/SLV bottoms. Amazing methinks. The two highlighted candle patterns are similar, the first one started the Head of the infamous 2009 Head and Shoulders Bear trap. The second one is NOW.
And finally, a boatload of other charts for your free consumption.
Like this stuff? Sign up as a follower and then follow on your Google reader.
http://oahutrading.blogspot.com/
Didn't see this posted. Just a refresher.
Rick Santelli Ranthttp://www.youtube.com/watch?v=APAD7537RN0&NR=1
Price controls? Jesus H Christ. I just said this to my friend as we were driving home from the Student's For Liberty Regional Conference at Drexel, Saturday.
Price controls --> Shortages. But you all know that.
Stock up on Mason jars and powdered eggs, Bitchez.
ucvhost is a leading web site hosting service provider that is known to provide reliable and affordable hosting packages to customers. cheap vps company believes in providing absolute and superior control to the customer as well as complete security and flexibility through its many packages................ windows vps Moreover, the company provides technical support as well as customer service 24x7, in order to enable its customer price. Thanks forex vps | cheap hosting
ucvhost is a leading web site hosting service provider that is known to provide reliable and affordable hosting packages to customers. cheap vps company believes in providing absolute and superior control to the customer as well as complete security and flexibility through its many packages................ windows vps Moreover, the company provides technical support as well as customer service 24x7, in order to enable its customer price. Thanks forex vps | cheap hosting