This page has been archived and commenting is disabled.

Sean Corrigan's Take On The Fed's "Apres Moi Le Deluge" Policy Which Only "A Krugman" Can Approve Of

Tyler Durden's picture





 

The key running theme this weekend is "the flood", specifically that soon to be left in the wake of the Federal Reserve, which is now facing the last days of its ignoble existence. Previously, Egon von Greyerz shared his outlook on why the Pompadour-esque cliche will soon lead to a complete destruction of the dollar, and all other paper currencies. Now, it is the turn turn of Diapason's Sean Corrigan, who in his note from Thursday shares his view on the Fed's "reprehensible policy": "When the Chuck Prince Charleston suddenly stopped in 2008, the initial impact was just as dramatic on the market for machine tools, ceramic magnets, and silicon wafers as it was on lumber, carpets, and dishwashers and, so, the shock hit the surplus nations every bit as hard as the deficit ones as they all realised, to their horror, that they had all become nothing more than imprudent, Rueffian tailors. Since then, of course, the game has been replayed at an even more frantic pace, with governments largely taking pole position as the drivers of deficits, the media of monetization and, hence, the inflamers of inflation...By the time this last blunder works its way through the system, it will not just be the world's tinpot tyrants and biddable client kings who will pay the price for the Fed's reprehensible policy of 'apres moi le deluge', but it will be the ordinary man and woman who will have occasion to rue a programme so replete with intellectual arrogance, power-worship, and a wilful blindness to its awful, unintended consequences that only a Krugman could approve of it."

From Sean Corrigan of Diapason Securities:

As the ongoing rise in raw materials prices has been brought into sharper focus by the oil price spike occasioned by the Colonel's little local difficulties, several varieties of myths, half-truths, and Laputan impossibilities have once again begun to infest the punditosphere to the point where the still, small voice of rational analysis is in danger of being entirely drowned out.

Arguably taking the palm among these is the ludicrous suggestion that a country such as Japan - a land erroneously believed to be languishing in 'deflation' (as opposed to being one enjoying the productivity-led benefits of modestly-declining prices amid a mildly increasing nominal supply of money and credit) - might, in some perverse, reverse-causality way, benefit from the fact that one important subset of its external suppliers has suddenly presented its house  holders and businessmen with a much larger bill for its wares than has been its wont. Indeed, so powerful is the taboo associated with a fiat money not declining in value fast enough to satisfy the braying herd of underconsumptionists that it allows seemingly sane individuals to advance such a thesis even though they are simultaneously to be heard expressing the fear that when the self-same misfortune visits some supposedly less blighted population - i.e., their own - the 'tax' it represents cannot fail to pose a severe threat to their continued well-being. [TD: that was a 165 word sentence]

What they also fail to consider is that if higher oil prices are a 'tax', then so are higher banana prices, or higher T-shirt prices, or higher soda prices. What they therefore overlook is that the development of higher prices everywhere - a state of affairs whose attainment they all mindlessly ap-plaud the Federal Reserve for striving  towards — is not a blessing of modern monetary manipulation, but a bane.

Implicitly a member of this same school of cart-before-the-horse Keynesians is former presidential advisor, Christina Romer, who used the pages of the NY Times last weekend to perpetuate the fallacy that when Roosevelt and his pet monetary cranks were ploughing under food and slaughtering herds while people in the land were literally starving, or when they were arbitrarily tinkering with the price of gold in semi-occult fashion over the great man's breakfast egg, their soi-disant courage in abandoning what was then the economic orthodoxy brought about a rapid end to a Depression which, in fact, turned out to be much more profound and protracted in New Deal America than in most other advanced nations — so much so, indeed, that a different strain of General Theory counter-inductionists frequently pops up to assure us that the horrors of World War II also had their silver lining in that the blessed upsurge in 'consumption' associated with tens of millions of deaths, the reduction of whole cities to cinders, and the delivery of half the globe to Communist tyranny did at least finally dispel the bogey of persistent over-capacity. [TD: that was a 185 word sentence]

Warming fully to her theme, Ms. Romer went much further in her haruspications, insisting that if only the higher councils of the Federal Reserve were not now populated exclusively by 'monetary hawks' (sic), that hidebound bastion of monetary rectitude could 'engage in much more aggressive quantitative easing, both in size and in scope, to further lower long-term interest rates and value of the dollar.'

As if that's what anybody needs at this point!

Meanwhile, that glowering eagle among the preening hawks, Chairman Bernanke himself (no, really, this is just too much even for irony!) had the gall to tell a European audience that none of the world's present problems were his fault. He even wheeled out the hoary old fable of the 'global saving glut' - something we thought had been laid to rest alongside its complementary, pre-Crash idiocy of a 'global asset shortage.'

As the man behind the screen of the most impor-tant economy in the Land of Oz, Bernanke is pre-sumably not unaware that the sins of both omis-sion and commission of which he is guilty when managing the world's reserve currency must have wider ramifications. So, when we talk of 'saving gluts', what we really mean — as no less a figure than Otmar Issing pointed out a few years ago - is not so much the voluntary, ex ante desire to forego a last nickel-and-dime, present con-sumption of American goods and services as it is the unfortunate result of the pressing, ex post dif-ficulty of disposing of the vast surplus of new dollars routinely being created with the full and enthusiastic blessing of the Fed.
 
It is hardly a coincidence that, during a decade which we now — rather belatedly — recognise as one during which dangerous 'imbalances' were building up (even if we have yet to admit the direct culpability for this of the ill-starred central bank measures taken to compensate for the Tech bubble which inaugurated the period), the US ran cumulative current account deficits of no less than $5.8 trillion dollars, a figure equivalent to more than a fifth of the simultaneous rise in global GDP. Given that this last measure is implicitly biased towards end-consumption — of however ill-judged a form — it should be a sobering thought that so much of its increase can be laid at the door of an American profligacy whose bitter legacy is the increasingly unsustainable weakness of the country's finances.

To put that enormous sum into perspective, we can note that the cumulative, ten-year deficits run up by all other OECD-member nations plus India and Brazil came to 'only' $3.8 trillion, or fully a third less than the US overspend. Depending on your taste, we can say that the US alone was responsible for eating up the equivalent of all the surpluses generated by the world's six biggest, non-oil, exporting nations (China, Japan, Ger¬many, Switzerland, the Netherlands, and Taiwan), or for almost twice the surpluses racked up by OPEC and Russia, combined, in a period when energy prices hit all-time, nominal dollar highs.

It further tells us something of how correctly to apportion the blame for the presently inflamed nature of markets for both goods and assets when we see that, even in these last two years of supposed American 'de-leveraging' and enforced credit stringency, the US current account gap has still managed to amount to almost half the overall total registered by the entire roster of OECD deficit nations, taken all together.

Now, it is true that the recipients of that Gilgamesh-like flood of Uncle Sam's suspect IOUs were not bound to pile them up in the local SWF or CB/Treasury foreign exchange account but neither is it obvious that simply to refuse all assistance to the local acquirers of dollars - leaving these to dispose of them in their own individual way - would have greatly mitigated the subsequent evils. After all, there was no official currency pegging at work in Continental Europe (not outside the pernicious system which bankrolled the importunate PIIGS, at least), yet hard-won, Teutonic and Swiss export dollars were still put to work by the local banks in financing some of the most arrant follies of the US credit bubble.

Incidentally, for all the accusations of 'policy manipulation' being bandied about, we should note that, notwithstanding the risible declarations of hewing to a 'strong dollar', the Greenback has fallen further in value over the decade in question - on a real, effective, trade-weighted basis - than all bar a handful of economic basket cases and one overt mercantilist.

Nor is it exactly a coincidence that an overlay of the US current account with the GDP figures for residential investment makes such a neat match. Unable to render a material settlement for the manifest of the Rest of the World's wares they desired, due to their nation's growing lack of industrial competitiveness, Americans simply took to buying and selling each other houses on a highly disproportionate scale, inadvertently providing the collateral necessary to attract funds back into the country and so to balance the books, however precariously, without overly scaring the dollar's owners with the pace of its depreciation.

Here it is not necessary to imagine that all the incoming surfeit of consumer goods was itself bought on tick, but only to countenance the idea that some of the proceeds of the credit-fuelled, phony prosperity being fostered by Bernanke's 'making sure it doesn't happen here' were routinely leaking abroad, contributing to a raft of misguided entrepreneurial, as well as banking, decisions there, too.

Think of it as if a successful US property developer, building contractor, realtor, mortgage broker or CDO packager — in addition to a cash-out refi junkie - had spent a non-trivial portion of his earnings on a chunk of Chinese electronic and German automotive excellence — shipments for which there were insufficient local goods either to act as passable substitutes or to be accepted in payment by the foreign vendors. Note, in passing, that this lack arose in good part from the fact that too many people had become involved in non-tradable, debt-financed activities, like housing, defence, or government in general because the preferential provision of credit to those sectors made them seem far more lucrative undertakings than the tough sledding of out-competing overseas manufacturers was deemed to hold in prospect.

The vicious circle which all this entailed would then be completed when the PBOC sequestered the dollars from the first sale and the local Landesbank received as a deposit those arising from the second, whereupon each  institution would feed them back to those providing the mortgage finance from which our flat screen-watching, Beemer-driving hero was either making his living or eating his seed-corn.

Do not misconstrue the argument here: the natural expansion of monetary means in the surexporting nation is not in itself an evil - this is, after all, exactly what the classic price-specie mechanism of self-regulating, negative feedbacks comprises. Nor do we wish to suggest that to make sales on credit is somehow not a vital part of a functioning economy, or that it is inherently reprehensible. True, such business should be conducted judiciously with a careful eye to the chances of repayment and a wise consideration of what the real value of the repaid monies is likely to buy, but without any such facility, the world would undoubtedly be a much poorer place.

Where these both go wrong, however; where they become detrimental to the chances of sustained material progress is when two intertwined distortions are introduced by our modern day, state-directed, financial apparatus.

The first of these occurs when what started as credit - i.e., the willing, contractual surrender of the lender's ability to buy present goods in favour of an accelerated capacity to acquire them on the part of the borrower - is turned, by the chicanery of fractional reserve banking, into money. Now, A does not cede his own ability to buy to a cash-strapped B, but rather has his bank alchemically transmute the narrow earnests of future payment - which A cautiously ac-cepted from B presumably in accord with his spe-cific knowledge of his counterparty - into the freely-employable, instantly transferrable, general medium of exchange we call money.

In this way, A no longer has to wait for B to re-deem his promises by offering something of equal, produced value - either directly to A, or to the world at large in exchange for its money - before he, A, can enjoy more goods for himself. This means that a discrepancy has arisen between the quantity of goods at hand and the amount of the money with which to compete for them, all thanks to the legally unexceptionable, but logically invalid transmogrification undertaken by the CB-backstopped, fractional banking system. This may or may not manifest itself as what is today called 'inflation' - i.e., a rise in a statisti-cally-massaged index of consumer goods and services - but it ineluctably perverts the market signalling process by altering the relative prices of present goods and by introducing an artificial element of presumed capital availability into the discount afforded to future goods.

Given the CB's prime agency in giving the illusion of stability to what is an inherently unsound and definitionally illiquid system - and, hence, in promoting its gross, debilitating hypertrophy - the blame for all the consequent ills of this fundamental violation of free-market principles can only lie with it and it alone. The more important the central bank, therefore, the larger its degree of incrimination in this destruction of wealth, Mr. Bernanke.

The second disastrous act of interventionism takes place when that greater abundance of money in the seller's pockets - something which tends to reduce its marginal utility to him, leading him to value both goods and the labour he expends to acquire them more highly, thus raising their price and gradually lowering his competitiveness - is not offset by a reduced quantity of money in the pockets of the buyer - a lack which would otherwise bring about an equal and opposite restoration of relative valuation and pricing and so provide an ongoing impetus back towards a dynamic balance, well before the whole shape of industry becomes locked into a highly sub-optimal pattern or the burden of associated obligations grows too crushing.

Rest assured, there would still be trade surpluses and trade deficits under an unhampered system of payments, but they would never loom anywhere so large if the addition to the money- backing reserves of those in credit could only come about by means of an equal-and-opposite reduction in the reserves of the debtor - a natural motion for which the over-optimistic reliance on a commensurate adjustment taking place in unanchored, often wildly fluctuating, exchange-rate parities is a very poor substitute as well as impracticably bad politics. Then again, such an 'economics of illusion' - in preferring a stealthy erosion of the capital-eaters' living standards via external devaluation to a more honest recognition of the effects of their profligacy through internal revaluation - is par for the course for the Keynes-inspired mainstream of inveterate money illusionists.

By contrast with the natural, Humean process of zero-sum reserves, the present system represents nothing less than a scheme of Perpetual QE on the part of dollar-buying central banks, one which therefore exerts little or no discipline on the politically-pliable proclivities of the dollar-issuing central bank, as Jacques Rueff famously recognised with his allusions to the 'deficit without tears', 'the childish game of marbles', and in his fable of the foolish tailor ever willing to swap suits for his customers' freely-issued IOUs.

Just as the inadvisability, in normal circumstances, of pursuing 'orthodox' QE (a denomination to which we are forced since a deviancy so widely-practised can hardly now merit the adjective, 'heterodox') is widely recognised by even the most dyed-in-the-wool inflationists because of the lack of restraint it implies upon all those wishing to borrow money - not least the insatiable Jacobin meddlers who toil infernally in the bowels of the Provider State - so should we condemn out-of-hand this whole, ongoing business of QE-by-proxy.

That does not, however, lead to the verdict that it is all the fault of the Others and that the Fed stands pristinely absolved of all crimes. After all, the Others are perforce operating under doctrines promulgated by, and within an institutional framework minutely devised by, the global hegemon; an ad-mixture which consists of erroneous conclusions, falsely drawn - a la Romer - from the trauma of the Great Depression, and venal, full-spectrum dominance, self-interest.

Thus, though neither the diligent Mr. Wu nor the assiduous Herr Meyer could have been expected to realise it, what they were engaged in was not the investment of some of the fruits of their successful, overseas business endeavours in the American property market, as much as in the often indirect provision of finance to their own customers - affording these the means to continue to buy their goods—albeit in a form issued against the dubious security of a condo possibly owned by an entirely unrelated third party of increasingly questionable standing.

Hence, when the Chuck Prince Charleston suddenly stopped in 2008, the initial impact was just as dramatic on the market for machine tools, ceramic magnets, and silicon wafers as it was on lumber, carpets, and dishwashers and, so, the shock hit the surplus nations every bit as hard as the deficit ones as they all realised, to their horror, that they had all become nothing more than imprudent, Rueffian tailors.

Since then, of course, the game has been replayed at an even more frantic pace, with governments largely taking pole position as the drivers of deficits, the media of monetization and, hence, the inflamers of inflation. No-one is wholly innocent in this regard, but it is clear that, if the PBoC has vied manfully with the Fed for the laurels for much of the course of this dreadful race to the bottom, only the latter institution was guilty of redoubling its efforts at just the wrong moment last year - and only this institution was hubristic enough to accompany its outrage with the nakedly inflationist manifesto issued by its Chairman amid the high-profile mediafest of the Jackson Hole confabulation.

By the time this last blunder works its way through the system, it will not just be the world's tinpot tyrants and biddable client kings who will pay the price for the Fed's reprehensible policy of 'apres moi le deluge', but it will be the ordinary man and woman who will have occasion to rue a programme so replete with intellectual arrogance, power-worship, and a wilful blindness to its awful, unintended consequences that only a Krugman could approve of it.

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 03/06/2011 - 16:45 | Link to Comment Motorhead
Motorhead's picture

Paul Krugman, my hero.  NOT!

Sun, 03/06/2011 - 17:10 | Link to Comment Michael
Michael's picture

The globalists like Krugman and Fareed Zakaria of CNN only promote turning the American people into overhead. This is one of the sinister tricks the globalists play on the American people.

We produce no wealth because we manufacture nothing of value.

Overhead (business)
In business, overhead, overhead cost or overhead expense refers to an ongoing expense of operating a business (also known as Operating Expenses - rent, gas/electricity, wages etc.). The term overhead is usually used to group expenses that are necessary to the continued functioning of the business, but cannot be immediately associated with the products/services being offered (e.g. do not directly generate profits). Closely related accounting concepts are fixed costs versus variable costs and indirect costs versus direct costs.

Overhead expenses are all costs on the income statement except for direct labor, direct materials & direct expenses. Overhead expenses include accounting fees, advertising, depreciation, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone bills, travel and utilities costs.

America is a nation of overhead proles.

We are all Overhead Now!

Sun, 03/06/2011 - 19:15 | Link to Comment Spastica Rex
Spastica Rex's picture

The parasite is abandoning the host. Not a lot of blood left.

Sun, 03/06/2011 - 16:47 | Link to Comment cossack55
cossack55's picture

My head hurts.

Sun, 03/06/2011 - 17:05 | Link to Comment kaiserhoff
kaiserhoff's picture

So many big words so poorly used, like talking to a cop.

Sun, 03/06/2011 - 17:31 | Link to Comment Misean
Misean's picture

Yes, well, one does need, eventually, to move beyond "See spot run".

Sun, 03/06/2011 - 20:07 | Link to Comment akak
akak's picture

See Bernanke print.

Print Bernanke print!

See the dollar fall.

See Dick and Jane go poor.

Mon, 03/07/2011 - 08:58 | Link to Comment BigJim
BigJim's picture

LOL

Mon, 03/07/2011 - 10:31 | Link to Comment Bolor
Bolor's picture

Only native French speakers are capable of such long-winded sentences hehe

Mon, 03/07/2011 - 10:16 | Link to Comment Thomas
Thomas's picture

Unnecessarily obtuse (but I loved the use of the word "braying").

Sun, 03/06/2011 - 21:55 | Link to Comment Ray1968
Ray1968's picture

My head hurts after reading that 185 word sentence also.

Sun, 03/06/2011 - 16:47 | Link to Comment Rastadamus
Rastadamus's picture

What can I say? Babylon is falling bitchez!

Sun, 03/06/2011 - 16:51 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

....but it will be the ordinary man and woman who will have occasion to rue a programme so replete with intellectual arrogance, power-worship, and a wilful blindness to its awful, unintended consequences that only a Krugman could approve of it."

So easy even a caveman Krugman can do it.

Just as the Ponzi name came to mean massive financial fraud and theft, so Krugman has come to mean fawning worship and deference to the financial and political masters of insanity.

Sun, 03/06/2011 - 17:12 | Link to Comment Dr. Porkchop
Dr. Porkchop's picture

Buy gold.

Sun, 03/06/2011 - 18:04 | Link to Comment AG BCN
AG BCN's picture

OK

Sun, 03/06/2011 - 17:14 | Link to Comment dumpster
dumpster's picture

This is a sentence.

Sun, 03/06/2011 - 17:29 | Link to Comment Misean
Misean's picture

That's not a sentence, that's just typing.

Sun, 03/06/2011 - 18:03 | Link to Comment dumpster
dumpster's picture

put a couple gold stars on forehead . 

 

every thing you see on this ZH. is just typing

 

This is a sentence ,   Is a sentence  It is just 4 words

not 106.

You are  a dim bulb.   Is  a sentence. 

How many to screw in a dim bulb?   is a question.

 

the answer being one .

 

Sun, 03/06/2011 - 18:21 | Link to Comment Backspin
Backspin's picture

This sentence no verb.

This sentence has contains two verbs.

 

Sun, 03/06/2011 - 19:17 | Link to Comment Spastica Rex
Spastica Rex's picture

This sentence is false.

Sun, 03/06/2011 - 20:14 | Link to Comment akak
akak's picture

You say you are lying, but if everything you say is a lie then you are telling the truth, but you cannot tell the truth because everything you say is a lie. You lie. You tell the truth. But you cannot for. Illogical! Illogical! Please explain.

Sun, 03/06/2011 - 21:54 | Link to Comment Spastica Rex
Spastica Rex's picture

Landru?

Sun, 03/06/2011 - 21:56 | Link to Comment akak
akak's picture

Norman!

Sun, 03/06/2011 - 17:20 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

I liked Egon's piece better.  This was a hard read, and I did not get much out of it.

Sun, 03/06/2011 - 21:35 | Link to Comment StychoKiller
StychoKiller's picture

Someone likes to hear themselves talk, is the impression I'm left with.

Sun, 03/06/2011 - 17:20 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Niall ferguson....................Why the west in in decline...

http://nakedempire.wordpress.com/

 

Sun, 03/06/2011 - 17:28 | Link to Comment Misean
Misean's picture

Another awesomely brilliant Corrigan piece.

BTW, where's that giant of copy-paste pseudo intellectuallism, Spalding? I'm certain he has a response. I'll just hold my breath over here, waiting.

Sun, 03/06/2011 - 17:43 | Link to Comment gwar5
gwar5's picture

Mopeds, Bitchez!

A word about Romer, Summers, and Orzag.....  All of them left in disgrace for their utterly failed policies. It chaps my ass they still get a platform to spout anything. The Keynesian multiplier doesn't work anymore with massive government debt. Tapped out.

Romer on a moped Bitchez!

Sun, 03/06/2011 - 17:48 | Link to Comment Twindrives
Twindrives's picture

Aunt B on a moped would be a instant hood ornamate on someone's Dodge Ram.    

Sun, 03/06/2011 - 17:51 | Link to Comment buzzsaw99
buzzsaw99's picture

That is the worst paragraph structure I have ever seen. It is unreadable.

Sun, 03/06/2011 - 18:12 | Link to Comment Confuchius
Confuchius's picture

Wonderful writing for a high school "impress-the-teacher" effort.

 

Tough reading for ordinary folk. A thesaurus might assist the author next time.

Sun, 03/06/2011 - 18:16 | Link to Comment dumpster
dumpster's picture

A Krugman

 

If you  take a Krugman,

1) accompany Krugman.

2) drink a large beer.

3) shoot a new scene from a film

4) go to the bathroom

Sun, 03/06/2011 - 18:21 | Link to Comment Lapri
Lapri's picture

Fed is busy trashing Ron Paul. One of the idiot economist at St. Louis Fed called Ron Paul a "pinhead", and says he was hoping to generate thoughtful debate.

http://ex-skf.blogspot.com/2011/03/senior-fed-economist-calls-ron-paul.html

He follows Krugman, BTW.

 

Sun, 03/06/2011 - 18:26 | Link to Comment disabledvet
disabledvet's picture

The "Bernank" is the tip of the iceberg now.  Power corrupts.  Absolute power corrupts absolutely.  Capital flees tyranny--if it flees the USA it need not do so by any "order of magnitude" to have an immediate and "shocking" effect.  Of course "capital tends to move by orders of magnitude" these days.

Sun, 03/06/2011 - 18:36 | Link to Comment PulauHantu29
PulauHantu29's picture

The Bernank is the most visible portion of the Huge Beast within.

Sun, 03/06/2011 - 18:38 | Link to Comment fragrantdingleberry
fragrantdingleberry's picture

How many words was that article TD?

Sun, 03/06/2011 - 21:39 | Link to Comment StychoKiller
StychoKiller's picture

If you can't dazzle them with brilliance, baffle them with bullsh!t!

Why use a word like 'confabulation', when 'meeting', or even 'pow-wow', conveys the same meaning?  Trying to be erudite/loquacious always gets in the way of clarity.

Sun, 03/06/2011 - 18:43 | Link to Comment DeadFred
DeadFred's picture

It seems as if the ones who try to shape the economy are trying to kill the dollar, either through stupidity or or on purpose.  It also seems likely they may succeed.  After I filter through the "silver bitchez" comments I find quite a few smart people on this site who can think outside the box.  So what replaces the dollar?  Not the Euro or Yuan, and hopefully not World Bank "Wibbies" or the Marks of the beast.  I hope we don't foresee the Bladerunner existence some here envision.  We have enormous communication and computation abilities so can any of you start thinking about other possibilities.  Local currencies maybe?  I just don't want the dollar version 2.0 to be another manipulated fiat system designed to rob the common man to enrich a parasite class.  Take some time and think about it.

Sun, 03/06/2011 - 18:46 | Link to Comment fragrantdingleberry
fragrantdingleberry's picture

silver bitchez!

Sun, 03/06/2011 - 18:49 | Link to Comment DeadFred
DeadFred's picture

+1

Sun, 03/06/2011 - 20:18 | Link to Comment akak
akak's picture

Why assume that anything has to replace the dollar?

Before Bretton Woods, nobody talked about a worldwide "reserve currency", as none existed.  Before 1930, gold (and silver) were sufficient as reserves.  Why does the world's economy need the scam of a paper Ponzi currency to act as a reserve?

Sun, 03/06/2011 - 21:44 | Link to Comment StychoKiller
StychoKiller's picture

I foresee a plethora of local currencies, backed by real commodities, such as soybean crop(s), PMs, etc.  Local banks had better bone up on how to deal with Bills backed by Gold/Silver.

Sun, 03/06/2011 - 19:15 | Link to Comment dumpster
dumpster's picture

DeadFred  bitchez  lol

Sun, 03/06/2011 - 19:22 | Link to Comment Spastica Rex
Spastica Rex's picture

Well, the United Federation of Planets doesn't use money at all -- for example.

Sun, 03/06/2011 - 21:35 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

So Picard and Riker go riding around the galaxy just for kicks -- I can understand that. But what does that chubby blue barber who is stuck in his little shop below decks get out of the deal? And why did the people who serve synthahol in Ten Forward come along for the ride?

Sun, 03/06/2011 - 21:45 | Link to Comment StychoKiller
StychoKiller's picture

And why did the people who serve synthahol in Ten Forward come along for the ride?

They wanted to see the wonders of the galaxy on less than 3 Altairian dollars a day!  :>D

Sun, 03/06/2011 - 21:46 | Link to Comment akak
akak's picture

And why did the people who serve synthahol in Ten Forward come along for the ride?

To go where no oxygen-breating biped had gone before?

But on a different note, where did everyone on the Enterprise take a dump?  They seemed to have bathrooms, but no toilets.  Or did they just 'beam' it out of their colons with the transporter as the need arose?

Sun, 03/06/2011 - 23:32 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

The writers on the original series had a joke about that. They said that starship bathrooms came equipped with phasers to "zap the Klingons." Blue prints of the original Enterprise included in the Star Trek Concordance (?) showed toilets in the living quarters.

Yes, I was an adolescent Trekkie, God help me.

Sun, 03/06/2011 - 23:37 | Link to Comment akak
akak's picture

Yes, I was an adolescent Trekkie, God help me.

My heart goes out to your formerly anguished parents!

I must admit that I watched all the reruns multiple times --- but I NEVER even thought about attending any of the conventions!  Speaking of which, if you have ever seen the Saturday Night Live parody of Star Trek conventions, it is a SCREAM!

Mon, 03/07/2011 - 09:04 | Link to Comment BigJim
BigJim's picture

Hmmm. When I examine your name I detect a theme :-)

Sun, 03/06/2011 - 20:51 | Link to Comment buzzsaw99
buzzsaw99's picture

hi ho colloidal silver bitchez!

Mon, 03/07/2011 - 08:15 | Link to Comment Bitch Tits
Bitch Tits's picture

"So what replaces the dollar?"

It should be quite obvious to anyone at this point: the keystroke.

Dollars take up too much space and a keystroke works just as well. 

Mon, 03/07/2011 - 10:29 | Link to Comment nowhereman
nowhereman's picture

Read the "Web of Debt" by Ellen Hodgson Brown for an answer to your question about what a real currency would look like.

Sun, 03/06/2011 - 19:20 | Link to Comment dumpster
dumpster's picture

Dead Fred

Not the Euro or Yuan

 

that is precisely what will replace the dollar ,, with a gold component ,, it will force the backing of the dollar with gold.

think about it take your time

 

Sun, 03/06/2011 - 19:26 | Link to Comment fragrantdingleberry
fragrantdingleberry's picture

I heard a rumor that the Mexican cartels were demanding payment in gold for their product. Now, if we can only get this to catch on at the street level, the price of gold will soar.

Sun, 03/06/2011 - 19:53 | Link to Comment irishlink
irishlink's picture

Sean Corrigan is to economic/ financial writing what Joyce , Beckett  ,and Wilde is to the English language. But ; He is still saying only one thing; Bernanke,s policies are flawed either by accident or intent and we should all get prepared for the worst outcome imagined! 

Sun, 03/06/2011 - 21:48 | Link to Comment StychoKiller
StychoKiller's picture

You summed up the article in two sentences of less than 29 words each.  Bravo!

Sun, 03/06/2011 - 20:08 | Link to Comment Everybodys All ...
Everybodys All American's picture

Can we at least all agree that Bernanke needs to be held accountable and to that end why don't we the people demand his resignation? I don't know what it takes to rid us of this evil man but I'm up for what ever legal means are possible. Tyler, any ideas?

Sun, 03/06/2011 - 22:36 | Link to Comment Diogenes
Diogenes's picture

Parse this, Shakespeare:

 

"Just as the inadvisability, in normal circumstances, of pursuing 'orthodox' QE (a denomination to which we are forced since a deviancy so widely-practised can hardly now merit the adjective, 'heterodox') is widely recognised by even the most dyed-in-the-wool inflationists because of the lack of restraint it implies upon all those wishing to borrow money - not least the insatiable Jacobin meddlers who toil infernally in the bowels of the Provider State - so should we condemn out-of-hand this whole, ongoing business of QE-by-proxy."

Let's see if there is any sense in this. Does it mean anything at all? Let's start by stripping out the subordinate clauses.

 

"Just as the inadvisability of pursuing 'orthodox' QE  is widely recognised  so should we condemn  QE-by-proxy."

That is about as rotten grammar as you are apt to find outside a hip hop record but at least it means something. But what?

 I see nothing before or after this about QE by proxy or any hint of what he means by it. He talks of dollar buying by central banks but that isn't QE. Quite the opposite.

Maybe he means the central banks of other countries are contributing to QE by buying up American bonds for dollars. It's hard to tell.

All I see here is the same information we have all known for a year, dressed up in gobbledygook.

If the man could organize his thoughts, such as they are, and arrange them in simple language no one would pay any attention. It's all stuff we have heard so many times before.

 

Sun, 03/06/2011 - 21:40 | Link to Comment Coldfire
Coldfire's picture

Sean Corrigan is one of my favourite 19th century writers. Punish that Bermonkey Dickens style, SC!

Mon, 03/07/2011 - 20:35 | Link to Comment lsjcma
lsjcma's picture

To wear the mermaid wedding dresses could be called the dream of every woman. I think whoever you are, to get married with the man your love is a holy thing. And we all firmly believe that marriage will not kill your love, on the contrary, wedding dress is just the beginning. So the bridesmaid Dresses chooses the wedding dresses carefully. Naturally, they want to become the most beautiful bridesmaid dresses and the unique sheath wedding dresses. The dresses in our online column wedding dresses store are their best choices.

Do NOT follow this link or you will be banned from the site!