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"Skunked": Bill Gross On How "The U.S. Will Likely Default On Its Debt"

Tyler Durden's picture


In a letter focusing on what has been well known to Zero Hedge readers for about two years now, Bill Gross' latest investment outlook does the usual attack of Beltway stupidity (as if Congress is in any way competent of making math-related decisions - they do what Wall Street - that's you Bill! - tell them to do, and you know it), emphasizing the impossible math of total US entitlement liabilities (on a net present value basis), which Gross estimates at $75 trillion. That Gross conclusion is predetermined from the onset is not surprising: "Unless entitlements are substantially reformed, I
am confident that this country will default on its debt; not in
conventional ways, but by picking the pocket of savers via a combination
of less observable, yet historically verifiable policies – inflation,
currency devaluation and low to negative real interest rates
Then again, that America is bankrupt is not really news to anyone. Neither is it news, that Gross, as we first reported, no longer has any US bonds to dispose of. What will be news is the inflection point at which Gross starts purchasing Treasuries once again. And after all with $220 billion in AUM in the Total Return Fund, what else will he do: hold on to cash? Buy Netflix? Then the only question will be how Gross spins the inevitable capitulation of the re-hypocrisy trade, validating that he, in a narrow sense, and PIMCO in a broad one, is perhaps the biggest cog in the very system that Bill spends so many hours writing letters about and complaining against. But yes, even that won't be all that surprising to us. After all, in this bizarro world absolutely everything is now priced in.



  • Medicare, Medicaid and Social Security now account for 44% of total federal spending and are steadily rising.
  • Previous Congresses (and Administrations) have relied on the
    assumption that we can grow our way out of this onerous debt burden.
  • Unless entitlements are substantially reformed, the U.S. will likely
    default on its debt; not in conventional ways, but via inflation,
    currency devaluation and low to negative real interest rates.

That adorable skunk, Pepé Le Pew, is one of my wife Sue’s favorite
cartoon characters. There’s something affable, even romantic about him
as he seeks to woo his female companions with a French accent and
promises of a skunk bungalow and bedrooms full of little Pepés in future
years. It’s easy to love a skunk – but only on the silver screen, and
if in real life – at a considerable distance. I think of Congress that
way. Every two or six years, they dress up in full makeup, pretending to
be the change, vowing to correct what hasn’t been corrected, promising
discipline as opposed to profligate overspending and undertaxation, and
striving to balance the budget when all others have failed. Oooh Pepé –
Mon Chéri! But don’t believe them – hold your nose instead! Oh, I kid
the Congress. Perhaps they don’t have black and white stripes with bushy
tails. Perhaps there’s just a stink bomb that the Congressional
sergeant-at-arms sets off every time they convene and the gavel falls to
signify the beginning of the “people’s business.” Perhaps. But, in all
cases, citizens of America – hold your noses. You ain’t smelled nothin’

I speak, of course, to the budget deficit and Washington’s inability
to recognize the intractable: 75% of the budget is non-discretionary and
entitlement based. Without attacking entitlements – Medicare, Medicaid
and Social Security – we are smelling $1 trillion deficits as far as the
nose can sniff. Once dominated by defense spending, these three
categories now account for 44% of total Federal spending and are
steadily rising. As Chart 1 points out, after defense and interest
payments on the national debt are excluded, remaining discretionary
expenses for education, infrastructure, agriculture and housing
constitute at most 25% of the 2011 fiscal year federal spending budget
of $4 trillion. You could eliminate it all and still wind up with a
deficit of nearly $700 billion! So come on you stinkers; enough of the
Pepé Le Pew romance and promises. Entitlement spending is where the
money is and you need to reform it.

Even then, the situation is almost beyond repair. Check out
the Treasury’s and Health and Human Services’ own data for the net
present value of entitlement liabilities shown in Chart 2.

The above four multi-trillion-dollar liability balls are staggering
in their implications. Remember first of all that the nearly $65
trillion of entitlement liabilities shown above are not some estimate of
future spending. They are the discounted net present value of current
spending should it continue at the projected demographic rate
(importantly ­– it is much higher than the annual CPI + 1% used as a
discounter because demand for healthcare rises much faster than
inflation.) And while some Honorable Congressional Le Pews would counter
that Medicaid is appropriated annually and therefore requires no
discounted reserve, those words would surely count as “sweet nothings,”
believable only to those whom they romance every several years at the
polls. The incredible reality is that the $9.1 trillion federal debt
that constitutes the next-to-tiniest ball in our chart is nothing
compared to unfunded Medicaid and Medicare. It is like comparing Pluto
to Saturn and Jupiter. The former (the $9.1 trillion current Treasury
debt) does not even merit planetary status in our solar system of
discounted future liabilities. It’s really just a large asteroid.

Look at it another way and our dire situation becomes equally
revealing. Suppose that the $65 trillion of entitlement liabilities were
fully funded in a “lockbox,” much like Social Security is falsely
imagined to be. Just suppose. And say the cost of that funding (Treasury
debt) was the same CPI + 1% that was used to produce the above
discounted present value in the first place. Actually, that’s not a bad
guesstimate for the average yield of all Treasury debt. If so, then the
interest expense on the $75 trillion total debt would equal $2.6 trillion,
quite close to the current level of entitlement spending for Social
Security, Medicare and Medicaid. What do we pay now in interest? About $250 billion.
Our annual “lockbox” tab would rise by $2.35 trillion and our deficit
would be close to 15% of GDP! The simple conclusion would be this:
Unless you want to drastically reduce entitlement spending or heaven
forbid raise taxes, then Pepé, you’ve got a stinker of a problem.

Previous Congresses (and Administrations) have relied on the
assumption that we can grow our way out of this onerous debt burden.
Perhaps we could, if it was only $9.1 trillion, as shown in Chart 2.
That would be 65% of GDP and well within reasonable ranges for sovereign
debt burdens. But that is not the reality. As others, such as Pete
Peterson of the Blackstone Group and Mary Meeker, have shown much better
and for far longer than I, the true but unrecorded debt of the U.S.
Treasury is not $9.1 trillion or even $11-12 trillion when Agency and
Student Loan liabilities are thrown in, but $65 trillion more! This
country appears to have an off-balance-sheet, unrecorded debt burden of
close to 500% of GDP! We are out-Greeking the Greeks, dear reader.

If so, and if the USA were a corporation, then it would probably have
a negative net worth of $35-40 trillion once our “assets” were properly
accounted for, as pointed out by Mary Meeker and endorsed by luminaries
such as Paul Volcker and Michael Bloomberg in a recent piece titled
“USA Inc.” However approximate and subjective that number is, no lender
would lend to such a corporation. Because if that company had a printing
press much like the U.S. with an official “reserve currency” seal of
approval affixed to every dollar bill, that lender/saver would have to
know that the only way out of the dilemma, absent very large
entitlement cuts, is to default in one (or a combination) of four ways:
1) outright via contractual abrogation – surely unthinkable, 2)
surreptitiously via accelerating and unexpectedly higher inflation –
likely but not significant in its impact, 3) deceptively via a declining
dollar– currently taking place right in front of our noses, and 4)
stealthily via policy rates and Treasury yields far below historical
levels – paying savers less on their money and hoping they won’t

If I were sitting before Congress – at a safe olfactory distance –
and giving testimony on our current debt crisis, I would pithily say
something like this:

“I sit before you as a representative of a $1.2 trillion
money manager, historically bond oriented, that has been selling
Treasuries because they have little value within the context of a $75
trillion total debt burden.

Unless entitlements are substantially reformed, I
am confident that this country will default on its debt; not in
conventional ways, but by picking the pocket of savers via a combination
of less observable, yet historically verifiable policies – inflation,
currency devaluation and low to negative real interest rates.
clients, who represent unions, cities, U.S. and global pension funds,
foundations, as well as Main Street citizens, do not want to be
shortchanged or have their pockets picked. It is incumbent, therefore,
in order to preserve the integrity of the U.S. Treasury market along
with its favorable global interest rates, and to promote a stable U.S.
economy, that entitlement spending be reduced, and that future
liabilities be addressed in terms of healthcare and Social Security cost
containment. You must attack entitlements and make ‘debt’ a four-letter word.”

Thank you, and like Pepé Le Pew, why don’t you try changing your
stripes or at least pretend you’re a French-speaking cat. The odor in
these chambers is all too familiar and a skunk needs all the help it can


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Wed, 03/30/2011 - 19:31 | 1119457 buzzsaw99
buzzsaw99's picture

Bill plays the fascist fiddle as well as anyone.

Wed, 03/30/2011 - 19:47 | 1119505 quintago
quintago's picture

14% interest rates
14% inflation
0% real rate

Bill makes it sounds like pick-pocketing, but inflation won't stay at those levels in perpetuity.

Wed, 03/30/2011 - 19:54 | 1119534 Shameful
Shameful's picture

Your right, Zimbabwe Ben can kick this pig into at least 3 digits no problem.  If he really wants to hear the roar of the press maybe well get 4,5,6 digits.  Havenstein used to brag about his printing operation.  Wonder if Ben will brag about his computer scientists making an system that goes past quad precision floating point to keep track of the money supply.

Wed, 03/30/2011 - 21:19 | 1119786 Ray1968
Ray1968's picture

0% only if the IRS indexes capital gains to inflation... which they don't.

Its a lose-lose for everyone.

Thu, 03/31/2011 - 05:18 | 1120228 Harlequin001
Harlequin001's picture

What about poor Dicky Fould, his faith in the banking system must be completely shot...


Wed, 03/30/2011 - 20:42 | 1119691 Bob
Bob's picture

He's a virtuoso, it seems.  I  now fully understand and support in a very big way Tyler's seething disgust for the snake.  What a despicable creature. 

Wed, 03/30/2011 - 22:37 | 1120038 YouBetYourLife
YouBetYourLife's picture

Why is Gross saying this at this time?  What is his angle? How does PIMCO profit or position itself through these statements? 

Insiders like Gross don't go against FedSpeak, which would earn Bill a tazing if Ben thought he could get away with it, without having some reason for doing it.  Why wouldn't he just keep his thoughts to himself?

I agree with Gross - the U.S. will default - but can't figure out why he's speaking out this way.


Wed, 03/30/2011 - 23:30 | 1120170 chairsatan
chairsatan's picture

He just sold all his treasuries, he recognizes the inevitable, and he wants to be on record that he warned of the impending doom and distranced himself from it.  Otherwise his reputation would be destroyed in a mid-doom and post-doom world.  Enitrely self serving and consistent with everything we know about human nature... basically exactly what we'd do in his shoes.

Thu, 03/31/2011 - 02:06 | 1120470 DaBernank
DaBernank's picture

How entertaining would it be if PIMCO morphed into Berkshire 2 and began with a takeover bid for NFLX, tho?

Thu, 03/31/2011 - 04:30 | 1120572 Weisbrot
Weisbrot's picture

positioning himself for something that has yet to become self evident or perhaps he's just doing the right thing and little more.

Thu, 03/31/2011 - 04:33 | 1120573 Pondmaster
Pondmaster's picture

What does Gross hold that would benefit him from touting US default . Come on !, the guys is as much a crook as Madoff . So... his insider positions and benefits aside .

His second reason for speaking now is to start a "movement" amongst the congress crittters  to "austerize" the American working class .

A middle class society , having FOLLOWED the example of spend beyond ones means ,set by our doting Parents in Washington , have merely preceeded the parents fall .

Unserviceable debt !





Thu, 03/31/2011 - 09:16 | 1120987 tradewithdave
tradewithdave's picture

Good question. This is what is commonly referred to as being the "bagman" or a messenger. Effective expectations management is crucial to a smooth transition to the new global basket/SDR currency.

No one will be surprised by the self-fufilling prophecy. This is Pygmalion central banker version. PIMCO will receive special consideration in the form of a warning prior to the flipping of the global reset switch.

Dave Harrison

Wed, 03/30/2011 - 19:33 | 1119458 NewThor
NewThor's picture

Grozz bitchez!

I've got an idea.

How about the Fed allow each individual American to borrow

up to 1 billion dollars at a ZERO percent interest rate?

Economy fixed.

Wed, 03/30/2011 - 19:36 | 1119470 TeMpTeK
TeMpTeK's picture

How about world wide reset button.. All debts wiped.. everybody takes in a japanese family and re all rive happiry ever after..

Thu, 03/31/2011 - 04:32 | 1120574 Weisbrot
Weisbrot's picture

lets import the Japanese and export the illegals to Japan. many problems solved.

Wed, 03/30/2011 - 22:37 | 1120037 Harlequin001
Harlequin001's picture

Wouldn't work, you just end up with a bunch of Americans, all $1 billion in debt...

What do you do when you've all spent it?

on a pint of milk...

just thinking...

Wed, 03/30/2011 - 22:40 | 1120054 Harlequin001
Harlequin001's picture

A better idea would be to just GIVE me $10 billion, or so, and you lot can all go back to work.

I'm sure I could find something to spend it on that creates jobs...

I know, gold. I would need TV cameras which require electronics for surveillance, security guards who buy food, transport from GM, keeps the govt happy don't you know...

I could go on....

Oh, and a Maclaren F1, two actually, one for each foot...

This new job's sounding better by the minute...

Wed, 03/30/2011 - 23:54 | 1120236 Harlequin001
Harlequin001's picture

ok, we can swap the Maclarens for a fine pair of Bristols...

if anyone's got any...

Thu, 03/31/2011 - 01:12 | 1120393 IQ 145
IQ 145's picture

 Bristol City, as in Fine Titty;? Cockney slang?

Thu, 03/31/2011 - 02:36 | 1120502 Harlequin001
Harlequin001's picture

Bristol cars mate, classic...

Thu, 03/31/2011 - 04:39 | 1120577 Weisbrot
Weisbrot's picture

I read somplace that president bj lewinski had created a supply of tungston core gold bars, perhaps you too could create some more of these and through your initiative, sell them at a 5% discount to spot. you would get good biased press miscoverage too.

Wed, 03/30/2011 - 22:44 | 1120062 YouBetYourLife
YouBetYourLife's picture

Even at 0% interest, I think I'll pass. 

Let's see, at $100/month, how long would it take to repay $1 billion.

Umm . . . 10^9 divided by 10^2 . . . ummm . . . 10^7 months.

That's . . . ummm . . . 833,333 years and 4 months.

Nah.  There's gotta be a better deal out there somewhere.

Thu, 03/31/2011 - 00:34 | 1120320 Harlequin001
Harlequin001's picture

there is. Take the money and go find a hedge fund. Leverage up a few times, take your stash out and go buy building number 666 in NY.

Then bugger off with your cash and watch it all go bang...

It's good for GDP, builds character...

Thu, 03/31/2011 - 03:00 | 1120529 NewThor
NewThor's picture

building 666?

Isn't that the Marvel Comics building?

Good idea!

First thing i'd do is fire Brian Michael Bendis,

he's like the modern day Jim Shooter.

Thu, 03/31/2011 - 05:37 | 1120613 Harlequin001
Harlequin001's picture

666 Fifth Avenue building...

Wed, 03/30/2011 - 19:34 | 1119459 TeMpTeK
TeMpTeK's picture

Game over

Wed, 03/30/2011 - 19:50 | 1119512 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The front page is reading like an epitaph for the neo Keynesian system. 

Wed, 03/30/2011 - 19:59 | 1119551 JLee2027
JLee2027's picture

We do appear to be there. TPTB will stay in denial of course.

Thu, 03/31/2011 - 04:47 | 1120581 Weisbrot
Weisbrot's picture

if you are right, then a new game is about to begin. or has it already started?

Wed, 03/30/2011 - 19:32 | 1119460 gold mans sack
gold mans sack's picture

We can't attack entitlements because that is racist.

Wed, 03/30/2011 - 19:53 | 1119527 tekhneek
tekhneek's picture

haha +5. that shit's hilarious.

+500 trillion unfuded, fuck it.

Wed, 03/30/2011 - 20:55 | 1119729 Henry Chinaski
Henry Chinaski's picture

What comes after trillions?  Bet we find out.

Wed, 03/30/2011 - 22:24 | 1120008 JustPrintMoreDuh
JustPrintMoreDuh's picture

The Q in QE stands for quadrillions female dogz

Wed, 03/30/2011 - 19:34 | 1119464 Cursive
Cursive's picture

After all, in this bizarro world absolutely everything is now priced in.

I feel like I'm in a Hieronymous Bosch painting.  I couldn't bring myself to read the tripe, even if only excerpted, from Shrill Bill.

Wed, 03/30/2011 - 23:58 | 1120248 Harlequin001
Harlequin001's picture

It's a bit like living in Coronation street, where everything is planned for you, every crisis, every scandal and every bit of good luck...

and the best actor on the set is the budgie...

Thu, 03/31/2011 - 01:18 | 1120398 IQ 145
IQ 145's picture

 No, it isn't. It isn't a damn bit like Coronation street. It's a lot like a Hieronymous Bosche painting, and you'd better start taking it seriously.

Thu, 03/31/2011 - 05:28 | 1120532 Harlequin001
Harlequin001's picture

what art or crashing bond markets?

Hieronymous Bosche sounds like Parsimonious Bitch,

How uncanny is that...

Wed, 03/30/2011 - 19:39 | 1119489 Tail Dogging The Wag
Tail Dogging The Wag's picture

We had the Opium Wars with China. Now bring the Dollar Wars with China. This time the Chinese will win, afterall, the Chinese love the colour red, as in red buttons.

Wed, 03/30/2011 - 19:43 | 1119494 Sam Clemons
Sam Clemons's picture

Everything is priced in...until the gap the next day, then it is because of whatever the media's flavor of the day is.

Wed, 03/30/2011 - 19:44 | 1119500 Shameful
Shameful's picture

Chances of entitlement reduction, about 0%.  Chances of default on the debt via monetization and devaluation, about 100%.  Funny thing old people vote.  Much easier to keep them watching Dancing with the Stars and having Zimbabwe Ben wizard the money into existence.  At least then can pull out the boogieman of "Evil Speculators".  But actual cuts means it might get reported on and some blue hairs might read it.  Not going to happen.  If WI taught us anything is here in America we don't handle even tiny cuts well.

Wed, 03/30/2011 - 22:58 | 1120093 francis_sawyer
francis_sawyer's picture

I can picture it now...

A "million man" HOVEROUND march on Washington DC... - ror


Thu, 03/31/2011 - 01:22 | 1120404 IQ 145
IQ 145's picture

 Evil speculators were all the rage in 1979, when president Nixon decided to punish the dollar detractors by selling a shit load of Gold from Fort Knox; this failed; and nothing more was heard of the evil dollar speculators; look it up, it's a real tour de force of idiocy played out on the stage of the world.

Thu, 03/31/2011 - 03:07 | 1120534 OldPhart
OldPhart's picture

Most of your post I agree with.  But not all of us "bluehairs" watch the boob-box, some of us aren't even senile yet.

I know my memory's still sharp because over on that corner was nothing but open desert.  Across from it was one big-assed turkey ranch, and where that buncha stores are was the one house that had six girls between the ages of 15 and 19 and extremely friendly.

Used to walk the three miles from high school to the junior college and then at 10PM hitch-hike or walk the twenty five miles back home, praying to see a damned car come down the road.  Not like now, where there's a shitload of cars all day and all night.  I found this big fucking patch of cholla cactus quite unexpectedly on night walking home from somewhere as I took a moonlit shortcut across the dry lake and ......zzzzzzzzzz

Thu, 03/31/2011 - 10:28 | 1121247 dbTX
dbTX's picture

You must have been in Utah

Thu, 03/31/2011 - 04:49 | 1120582 Weisbrot
Weisbrot's picture

if that is true then the USA has become the USSA. now where was that slope the korrupticians slid down...........

Wed, 03/30/2011 - 21:15 | 1119502 bigdumbnugly
bigdumbnugly's picture

pepe shouldn't have to stand for that libel.  gross should be getting a cease and desist odor from pepe's legal team soon.

Wed, 03/30/2011 - 19:47 | 1119503 tekhneek
tekhneek's picture

That highlighted part stinks of: "I was wrong last time... NOT this time! I'm going to get the goddamn collapse of the dollar right this time."

Jesus, even today Tyler you posted about concerns from countries (think during your bit on the recent Budget Deficit being passed) about our ability to repay the existing debt, and if we even would. That's existing. Not unfunded liabilities.

Or he finally saw meltup. Or read ZeroHedge. Or pulled his head out of his ass. Or... pulled his... head out of his... ass?

Wed, 03/30/2011 - 19:45 | 1119504 NOTW777
NOTW777's picture

right and as soon as Bush or any conservative attempts to reform SS or social programs Bill Gross is writing checks to Soros to slander the attempts to fix things

Wed, 03/30/2011 - 19:46 | 1119507 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

SH'nTF epically right now.  Boy do I have some reading to do.  Looks like I will be on here for awhile.  Thanks for all the work you do, guys and gals.  Big ups Ty guy.

Wed, 03/30/2011 - 19:48 | 1119513 fragrantdingleberry
fragrantdingleberry's picture

The U.S. can easily grow its way out the current morass by eliminating income and payroll taxes on adjusted gross incomes below 150K for two years and instituting a 20% surcharge on all incomes above 150K with a 2% annual wealth tax.

Wed, 03/30/2011 - 20:18 | 1119615 JLee2027
JLee2027's picture

Like a soon-to-be-bankrupt company that focused on revenues and not profits, you forget about the coming hyperinflation. What the fuck do we do about that?

Wed, 03/30/2011 - 20:23 | 1119635 fragrantdingleberry
fragrantdingleberry's picture

End the Fed.

Thu, 03/31/2011 - 00:02 | 1120265 Harlequin001
Harlequin001's picture

alternatively you could just default...

Wed, 03/30/2011 - 19:51 | 1119517 savagegoose
savagegoose's picture

he could order silver on the market and stand for delivery i hear they pay rather nice premiums to " not collect "

Wed, 03/30/2011 - 20:21 | 1119620 JLee2027
JLee2027's picture

70% cash back + SLV shares is the Yahoo rumor. I wouldn't consider scam shares of SLV a nice premium, because SLV has only paper pretend silver backing it. So, you could lose 30%. Not a good deal to me.

Wed, 03/30/2011 - 22:54 | 1120089 Abitdodgie
Abitdodgie's picture

What and you don't think the compulsive gamblers wont take that.

Wed, 03/30/2011 - 19:49 | 1119518 leathaface
leathaface's picture

Just to tack on to the level of insanity, i work for a company that manages approx $70 Billion and i asked our CEO the likely hood of a US default (this was in December of '09 that i asked), and his response:  "Impossible, we have our own printing press."  Needless to say 95% of the company had no clue as to what i was talking about. 

Wed, 03/30/2011 - 19:52 | 1119529 long juan silver
long juan silver's picture

Couple of years back I have my retirement funds and several of my
inheritance, invested in Fidelity on a Seven (7) years contract agreeable
within the investors.Presently, I am going through financial crisis; the
banks are on my nape,and all my projects remain static.A huge amount of
funds are involved in this project, but I am not capable enough to
shoulder the penalty, due to my stocked funds in Fidelity and my ongoing
construction project.After applying for several loans, I decided to
terminate my contract with fidelity and have liquid cash, for more
reasonable purpose instead of having my funds stocked in somewhere for
Seven (7) years.
Steps to achieve this project:

Fidelity needs a good reason for terminating my contract with the rest of
In this case, I came up with a plan, I would want to go into partnership
with anybody who has a private business/ company or could probably provide
a reliable source to find a third party. So doing I will have the
confidence to confront fidelity of my partnership/ business venture with
you. As a matter of fact I am looking into reinvesting part of my funds
into Real Estate, Agriculture or Production also a better investment plan
from you would be looked into if well advised as no man is an Island.

Wed, 03/30/2011 - 20:30 | 1119664 ShouldveLeftHer
ShouldveLeftHer's picture

I could punch up a fake business model for you and be on the other line when they call? For a fee naturally. Capitalism. Greed is good. Really though, look for whats called an "Incubator". Its a source of many small business upstarts looking for FINANCIAL partners only, not to make business decisions. Im sure for a small portion of your money, someone would agree to hep you get all of your money out. That might be your best option, a "fake out" of Fidelity if your need for liquid assets is overwhelming you.

Thu, 03/31/2011 - 01:28 | 1120413 IQ 145
IQ 145's picture

 "small business upstarts"---language, you gotta love it. In this case, it says it all.

Wed, 03/30/2011 - 22:20 | 1119998 beastie
beastie's picture

My Dear Friend,

I also have a similar problem when my uncle in Nigeria died in a plane crash. Now here is where we can help each other. If you send me your account numbers I can have my brother in the Nigerian embassy move that money for you and in exchange we can pay off some corrupt officials and take 13 Trillion USD from my uncles account. 

Your friend,

Beastie Umbaku


Wed, 03/30/2011 - 23:04 | 1120114 Abitdodgie
Abitdodgie's picture

That my friend that is brilliant.

Wed, 03/30/2011 - 19:53 | 1119530 reader2010
reader2010's picture

Gold and silver, bitchez!

Wed, 03/30/2011 - 19:54 | 1119532 Herman Strandsc...
Herman Strandschnecke's picture


 'Begin at the beginning and go on till you come to the end: then stop'

The King. Alice in Wonderland.

Thu, 03/31/2011 - 01:32 | 1120419 IQ 145
IQ 145's picture

 If only human beings would actually do this; ninety percent of human suffering would cease; but of course, they will not.

Wed, 03/30/2011 - 19:56 | 1119537 ebworthen
ebworthen's picture


Guess what is gaining popularity to help recover the "housing market"?



OMG...the monster re-emerges from the deep.

Can you say extend and pretend?

Yeah, like that.

More POMO Ben!  More TALF, HAMP, and 0.025% at the back door!  Those consumers need some cash to spend on furniture and cars and iPads!


Wed, 03/30/2011 - 20:15 | 1119610 wisefool
wisefool's picture

Not a Beck Fan, but this week he said .gov/Bair is thinking about starting a "Cash for Keys" program. You could effectively Section 8 yourself. This would make means testing much more politically easy to pass for entitlements. Combining the reverse mortgage and SS programs in a way that is "Fair" for everyone. Add in Obamacare and you got socialism, and it unfortunately might be the only way other than 20% inflation.

.gov does not give a crap about confiscating gold or guns. Where this will get nasty for many ZH'ers is when they try to push people with farmland into the program to implement price controls on food... If you don't go along with it like the city folk, we will make your land holdings pay ALL the property tax, since everybody else is in government housing.

I think we've seen this happen before, eastern europe, 1930s?

Wed, 03/30/2011 - 21:00 | 1119744 Ricky Bobby
Ricky Bobby's picture

In 1932 Stalin raised Ukraine's grain procurement quotas by forty-four percent. This meant that there would not be enough grain to feed the peasants, since Soviet law required that no grain from a collective farm could be given to the members of the farm until the government's quota was met.

Wed, 03/30/2011 - 21:16 | 1119777 wisefool
wisefool's picture

Well then I stand corrected. They will need to take the guns. Ain't no way you are going to get american farmers to starve themselves.

Thu, 03/31/2011 - 00:15 | 1120286 Harlequin001
Harlequin001's picture

or give up their liberties...

hang on, Patriot Act...

Thu, 03/31/2011 - 00:15 | 1120281 Harlequin001
Harlequin001's picture

wisefool that's the risk of buying property: you are subject to whatever terms a govt might choose to impose whenever they might choose to impose it because it isn't easily moved.

unlike gold...

We are looking to invest in farmland but not until this crisis is nearing its end, which we won;'t see until after govt's have manipulated the food prices and undermines every entitlement you have, in the name of the state.

Thu, 03/31/2011 - 01:35 | 1120424 IQ 145
IQ 145's picture

 Silver pays more returns than gold; and will do so in the near future; unless of course you have some philosophical reason for not making profits.

Thu, 03/31/2011 - 03:43 | 1120553 Harlequin001
Harlequin001's picture

not doing too badly with both at the moment...

still not selling....

Thu, 03/31/2011 - 06:21 | 1120632 Snidley Whipsnae
Snidley Whipsnae's picture

Both will be needed in the long run. Don't put all your eggs in one basket.

Thu, 03/31/2011 - 00:09 | 1120277 Harlequin001
Harlequin001's picture

so who's going to lend you long term money at a fixed rate in a rising rate environment?

ARM's are popular because they are sensible, if you are a lender.

Of course, you're still grossly overpaying with a loan the cost of which will increase significantly.

Still, a lot more people have to get a lot poorer yet before this is over...

Fri, 04/01/2011 - 03:38 | 1124306 ebworthen
ebworthen's picture

Well, with FED and Fannie/Freddie backing everything out the monkey's ass you are right.

What if you had a 50/50 chance of getting any money from the mortgagee one year from now?  20/80 two years from now?


Wed, 03/30/2011 - 20:06 | 1119572 web bot
web bot's picture

I'm trying to contain myself without taking a fit. So here's what I think (and this is not investment advice):

* 17% unemployment

* ANNUAL Structural deficit of over $1 Trillion for the next 10 years

* debt of over 13.5 Trillion (100% of GDP)

* depending on what department of lies you follow, unfunded liabilities of between $75 Trillion and $120 Trillion

* "full scale" nuclear meltdown in 3rd largest global economny with radiation in ocean, soil and air

* Most of Europe is insolvent... not 1 country, not 2.... all of them

* EURO is built on a belief between countries that have been at war for the last 600 years... and they do have their well known prejudices, mythology and biases towards each other

* 3 Middle East governments have fallen

* don't forget the onset of Iran's nuclear capabilities


Now... consider this

* bad news comes out, gold, silver and most commodities go up

* good news comes out, gold, silver and most commodities go up

* old rules (pre 2008) of correlation between currencies and commodities don't work

* FACT - PIMCO is out of US Bonds to the tune of $236 Billion

* The economy has Trillions of QE sloshing around seeking yield


Now pick up your pencil and connect these dots

* teleprompter as a President

* Fed signaling premature ejac with ending of QE2. That means $100 Billion of heroin will stop being pumped into the market each month

* every #uckin low life and schill you can find on Wall Street is being paraded around on CNBC to talk about "strong fundamentals".

* 89% of all trades on the NYSE are robot controlled (algorithms)

* Trades on the NYSE are held for an average of 11 seconds

* extraordinarily low volume



This market is being goosed by ETFs, hedge funds and major banks who have been the recipients of QE. They are currently tweaking their algorithms to assess probability scenarios and when they have enough evidence that QE2 is over... or will end prematurely YOU ARE ABOUT TO SEE A #UCKIN BLOOD BATH... WITH COMMODITIES FALLING 30% - 40%.

Them comes QE3... and PMs to the moon.

The US dollar is finished as reserve currency. It is a controlled crash. Don't believe a #uckin word what these ghouls are saying. We all think that endings come like a freight train... but in reality... they do happen in slow motion as we are witnessing now.

Print this off and stick it on your wall and come back to chat with me in 120 days.

Wed, 03/30/2011 - 20:15 | 1119607 Shameful
Shameful's picture

Yeah but the good times won't be till late 2012 or 2013.  That's when the real 'fun' begins.  So yeah they might crack open the deflation black hole, and then back to filling it with endless fiat, but I'm guessing the food isn't priced out of the average people's hands in the US till at least late 2012.

Also got me a feeling that when gold/silver paper prices go down the premiums for them will be this side of retarded for us average Joes.

Wed, 03/30/2011 - 20:18 | 1119614 Boston
Boston's picture

What will be news is the inflection point at which Gross starts purchasing Treasuries once again. And after all with $220 billion in AUM in the Total Return Fund, what else will he do: hold on to cash? Buy Netflix?

When the "BLOOD BATH" arrives, Treasuries will soar--especially as Bill Gross starts buying.

Jeffrey Gundlach (TDCW/DoubleLine) has been buying.  When the SHTF, he'll be selling to Gross and the rest of the crowd clamoring to buy.



Wed, 03/30/2011 - 20:43 | 1119695 jkruffin
jkruffin's picture

Gross won't be buying any Treasuries until he can get 10% on the long bonds at a minimum.

Wed, 03/30/2011 - 20:51 | 1119720 tom a taxpayer
tom a taxpayer's picture

Did Gross actually sell PIMCO's Treasuries? I thought I heard Gross say in an interview that he had offset or neutralized his exposure to Treasuries, like buying something that goes up when the Treasuries go down. The impression I got from what Gross said is that he still owns his Treasuries, but he is hedging his position. Does anyone here know: did Gross sell Tresuries or just hedge his position?

Wed, 03/30/2011 - 21:03 | 1119734 jkruffin
jkruffin's picture

He has done both. He has purchased small quantities of stocks as a hedge, shorted the dollar, and probably did some other hedges beyond what I can describe, but he has reduced his Treasury holdings beyond 5yr by a ton. The average of his holdings to my knowledge has fallen from a little over 5yr term, to a little over 3yr now.  He dumped alot of longterm paper.


Read this:

Wed, 03/30/2011 - 22:58 | 1120095 tom a taxpayer
tom a taxpayer's picture

jkruffin - Thank you for responding.

Wed, 03/30/2011 - 23:18 | 1120143 Double down
Double down's picture

I would not sell BLOD BATH insurance; would not dare. 

Wed, 03/30/2011 - 21:02 | 1119750 Ricky Bobby
Ricky Bobby's picture


Wed, 03/30/2011 - 22:01 | 1119923 samsara
samsara's picture

I said basically the same thing the other night.  From a programming perspective,  the numerous mini/flash crashes seemed like unit testing in the live environment.

Running certain algorithms in different markets, different conditions, and receiving system results to twik the code. 

Then, get it ready for a "Live" test of All routines acting in concert. 

It will be an incredible thing to watch.  

From a distance...

"Mortimer, Tell them to get back in there..."

Wed, 03/30/2011 - 23:30 | 1120172 Abitdodgie
Abitdodgie's picture

That is very good " conspiracy theory " so good it is getting printed and put on the wall . One thing i would change is ,I will get back to you in 60 days .

Thu, 03/31/2011 - 06:21 | 1120630 web bot
web bot's picture

So which one of the 3 do you work for?

I did say 120 days, not 60. You do remember canaries in the coal mine?


Thu, 03/31/2011 - 06:30 | 1120639 fiftybagger
fiftybagger's picture

Yes, but if silver falls 30% will there be any for sale?

Silver For The People

Thu, 03/31/2011 - 08:05 | 1120759 Chuck Walla
Chuck Walla's picture

“The main obstacle to a stable and just world order is the United States.” 

~ Georgi Soros

Fri, 04/01/2011 - 03:38 | 1124307 ebworthen
ebworthen's picture


Amazing though, how much they've re-inflated the Hindenburg, no?

Wed, 03/30/2011 - 20:08 | 1119575 Waterfallsparkles
Waterfallsparkles's picture

So, what happens to the old folks.  They just schrivel up and die?  Does that solve the problem?

The FED just GAVE the banks close to 3 Trillion dollars.  Now it is the old people that have paid into Social Security, Medicare for 50 years.  I know I was paying around 35% in income taxes and another 15% in Social Security, Medicare taxes.  Around 50% of my income.  Yet, the Government said that my tax rate was 35%.  So, now claiming Social Security is an entitlement (like I did not pay into it for 50 years).  In effect they are now saying that I was just paying 50% in income taxes.  No one would have gone along with that rate of taxation  on a middle class American.  If I could have invested the 15% of my income that was paid for SS, Medicare I would not need SS or Medicare.  But, they took the money and now do not want to do what they promised.

So, now that the FED have given most of Americans money to the Banks it is now the problem of the elderly to pay off all of that debt. 

Wed, 03/30/2011 - 20:12 | 1119596 Shameful
Shameful's picture

You got hustled.  It's really as simple as that.  Boomers thought it would all be good times if sat back, and this is the result.  They whispered sweet nothings in your ear and spent all the money.  Now they are looting the last of the assets and will burn the place down for the insurance money.

Truth is they not only don't care about you, they want you to die.  Read the writings of the big boys and their statements about the masses.  There is a desire for a VASTLY reduced global pop, don't get there from here without a lot of death.  You and a lot of other people got hustled.  The sooner we realize we all got played the sooner this mess ends.  If we as a society never realize it then we go all the way to the bottom.

Wed, 03/30/2011 - 23:18 | 1120142 forexskin
forexskin's picture

There is a desire for a VASTLY reduced global pop, don't get there from here without a lot of death.

Georgia Guidestones, bitchez

Thu, 03/31/2011 - 06:32 | 1120642 fiftybagger
fiftybagger's picture

Soylent Green is people

Thu, 03/31/2011 - 09:13 | 1120967 Bicycle Repairman
Bicycle Repairman's picture

You're getting hustled.  It's really as simple as that.  Gen Xers thought it would all be good times if you sat back, and this is the result.  They whispered sweet nothings in your ear, loaned you money more money than you could ever pay back and now you'll spend the rest of your life paying it back with interest.  You have no assets, no idea how to create wealth, so you'll live in company housing and shop at the company store.

Truth is they don't care about you, either.  They want you to slave your life away and then die.  Read the writings of the big boys and their statements about the masses, which includes you.  There is a desire for a VASTLY reduced global pop, don't get there from here without a lot of death.  Your generation is terminally ignorant and have been  getting hustled.  You think the mess will end by kicking grandma into the street  Your generation is hopelessly naive, and you'll live in the nightmare world you create.

Oh, and if my check doesn't clear at my bank in Mexico, I'll have the IRS kick in your door, drag you ass into the street and beat your ass in front of your wife, your kids and the neighbors.

Wed, 03/30/2011 - 20:19 | 1119625 forexskin
forexskin's picture

and what part of Ringo's law did you forget all those years ago?


"everything government touches turns to crap."


if you were my grandpa, i'd help you, but on your honor, don't let any more generations fall for the lies you swallowed. families have always historically cared for their elderly, and this time will be no different, except that MOST of us are much poorer...


i truly feel for you, but my friend you and we were robbed. i suggest you look to the perps instead of trying to collect damages from your children's generation.

Wed, 03/30/2011 - 21:09 | 1119763 FreedomGuy
FreedomGuy's picture

Nice point. It's all tax money. Also, the "social contract" is no contract, or its a contract with no performance clauses. One of the prime reasons you never ever want government to provide any service is because you don't get a contract. In essence, the government unlike any private entity can change the deal at any time for any will. If you have an annuity or some other form of investment, you have a contract. It cannot be changed without your consent or without legal penalties. We are all suckers in Social Security. I don't blame the first generation or two as the U.S. and world were experimenting with socialism. However, for most all of my life we have know of the impending insolvency of SS. We know it is a true ponzi scheme, yet the only fix has been to raise taxes. It's still there, still insolvent, still has a ponzi structure, still untouched by politicians who only have the collosally stupid ideas of raising retirement age and maybe means testing or uncapping the tax. All stupid ideas from stupid politicians to an unsuspecting public.

Never ever let government do anything for you or the general population you can do for yourself...ever. You give up your own autonomy and you get a crappy product.

Thu, 03/31/2011 - 08:51 | 1120890 Bicycle Repairman
Bicycle Repairman's picture

Look at the graph above.  The problem is not the SS retirement fund.  It is medicare and medicaid.  The US healthcare system is too expensive. We'll never open up the medical system to a free market, so that will never change.  We cannot even have a public conversation.

Send my retirement check to Mexico and you can do what you want with Medicare.

Fri, 04/01/2011 - 03:00 | 1124270 FreedomGuy
FreedomGuy's picture

It's not any "one" thing but both are squarely connected. They are connected to an aging sedentary population that is proportionately larger than ever planned and living longer than foreseen. Our collectivist system alwasy counted on larger and more prosperous generations. We will be proud to preside over generations now less prosperous and smaller than their predecessors. It would be OK if we'd saved for ourselves, but we bought the collectivist bullshit that never ever has or ever will work. We also took the easy path of not really paying for it but laying it off to future generations. The national debt and the unfunded liablities are exactly the measure of having "stuff" now but not paying for all of it. The difference between what we want and what we are willing to pay is the deficit-debt-unfunded liability. We should be proud of our generations. Frankly, we are all selfish generations.

(I know some, including me railed against these things, but as a generation, we've still done them.)

Thu, 03/31/2011 - 09:16 | 1120993 Bicycle Repairman
Bicycle Repairman's picture

"If you have an annuity or some other form of investment, you have a contract. It cannot be changed without your consent or without legal penalties."

The banks weren't the only people bailed out in 2008.  Most major life insurers were as well.  So who guarantees your annuity?  The same folks that guarantee SS.  Ain't that a bitch.

Fri, 04/01/2011 - 02:55 | 1124261 FreedomGuy
FreedomGuy's picture

Your point is taken. However, it doesn't invalidate my point about contracts and performance. We can always invest in a bad company or buy a lousy car. However, there are legal recourses in the extremes. There is no legal recourse in government. How many people in Congress actually know a thing about medicine, farming, oil production, medicine development, financial planning, etc.? Not many, in fact only a few on any one topic. However, they create retirement plans, medical benefits, industry regulations, etc. It's not a lot different than asking me to build an airplane that actually flies. I understand the science but i couldn't begin to build one. We ask government to build all sorts of things it knows not a damn thing about. The government didn't invent doctors, certifications, medicines, insurance, etc., but we think they will be good at running a system. They also won't invent anything new for the future just like they didn't invent the stuff in the past.

Wed, 03/30/2011 - 23:38 | 1120186 Abitdodgie
Abitdodgie's picture

You went to work and gave away 50% of your earnings what were you thinking?

Thu, 03/31/2011 - 01:05 | 1120378 Milestones
Milestones's picture

There was Honor among men then. No one can comprehend that now. Your word meant something. Same with a hand shake.     Milestones

Thu, 03/31/2011 - 02:30 | 1120497 Temporalist
Temporalist's picture

These days people sue McDonalds for spilling their own coffee in their own lap while driving because the coffee was too hot.

Thu, 03/31/2011 - 06:45 | 1120645 wisefool
wisefool's picture

That was one of those MBA maximize growth for the shareholders thing. 

Must pay rent, upkeep and taxes on a building 24x7, so you need to make money in the morning too. Commuters don't have time for breakfast, so use the drive thru and see if they'll buy product in the morning. high margin breakfast food is not really drive through fare, its more sit down stuff. Sure you can sell them danish and coffee through the window, but they can buy thier own coffee and danish at home or at the donut shop.

Ergo. Brew and keep that coffee so hot that customers can smell it outside the store, especially through the drive through window. Hopefully you'll get them to ignore the fact that a cold mcgriddles sandwich tastes like crap 15 minutes later when the customer gets to thier destination to eat (cold eggs, meats, syrupy bread, congealed Butter). Or better yet, get the customer to come in the store and sit down to eat "proper" entree breakfast which is much higher margin and is actually palletable when fresh.

The breakfast market is one of the last frontiers for our MBA cowboys. This market was the Netflix of the previous crop. Starbucks, Dunkin Donuts selling thier blend of coffee in supermarkets. TacoBell trying the breakfast burrito thing. Subway selling bacon and egg footlongs for $5. etc.

In the old days, somebody cooked breakfast for the family unit. Now adays that person is getting ready to go into work too. Don't worry about the kids. Thanks to our federal government our grade school kids get fed 5 square meals, a snack, a measure of condoms and a nap every single school day. Provided by another MBA genious. To give our unionized "overworked" teachers breaks from thier "heroic" work. And the whole process ... not just coffee burns ... is litigated by ambulance chasers from all sides.

Hate the game, not the players.

Thu, 03/31/2011 - 08:51 | 1120901 Bicycle Repairman
Bicycle Repairman's picture

I was thinking that the IRS was watching my every move, and would lock up my a$$, if I didn't pay the vig.

What were you thinking?

Thu, 03/31/2011 - 19:10 | 1123263 malek
malek's picture

With that income tax rate you either should have moved out of California (or whatever state you lived in) to lower your tax rate by 8%,
or you earned so much you shouldn't need to rely on SS or Medicare...

Fri, 04/01/2011 - 03:42 | 1124308 ebworthen
ebworthen's picture

Fuck those FED assholes, they have NO IDEA how mean a 65 year old can be and HOW LITTLE patriotism has survived the past three years.

Wed, 03/30/2011 - 20:08 | 1119578 forexskin
forexskin's picture

money schmunny.

with all that wealth tied up with TPTB, the rest of us buy lots less stuff. its like rationing with a twist - TPTB gets its share, and part of its share is for us to not get a share.

pretty soon the entitled class that props up TPTB is going to be insisting that all the rest of us get busy serving them, cause that's what this is - claims on assets and future productivity. i can't wait to go surf(ing) - you? lets get busy! we've generations of entitlement holders that expect some SERVICE from US! they got a lifestyle to maintain, you know - didn't we promise them at least that?


this economics stuff is so easy...

Wed, 03/30/2011 - 20:08 | 1119582 sschu
sschu's picture

One simply has to look at the current political climate to see where this is heading.  Right now the budget situation is being politicized, hence no meaningful reform can be expected unless one of the parties gains the political power needed to implement reforms.

If the Repubs get power, then we will see if their word is good, no better chance than 50% in my estimation.  If the Demos get power, then massive tax increases or confiscation will be the solution.  If things remain "divided", the most likely scenario, then no real solution will be forthcoming.

In the end the chances are very small for realistic budget reform.  The earliest we can expect anyone to begin to address the situation is after seating of the new Congress and President (new or otherwise) in January 2013.

Whether we can wait 2+ years is questionable, time is slipping away and the world is on fire.  The circumstance is quickly moving from a Political crisis to a People crisis.  It is difficult to see how a catastrophic currency failure is not in our too distant future.



Wed, 03/30/2011 - 21:36 | 1119842 I am a Man I am...
I am a Man I am Forty's picture

"If the Repubs get power, then we will see if their word is good"

the repubs and democrats are currently haggling over $60 billion fucking dollars, rearranging fucking deck chairs and you are asking if the repubs word is good??  let me help you out, it's not, it never has been, and never will be

Thu, 03/31/2011 - 06:36 | 1120644 fiftybagger
fiftybagger's picture

+1 quadrillion

Fri, 04/01/2011 - 03:44 | 1124311 ebworthen
ebworthen's picture


Neither side's word means a damn thing.

They are kicking the can to have some more drinks and whores in the moment and funnel some money to their progeny.

We are completely screwed left or right.

Thu, 03/31/2011 - 06:51 | 1120656 Snidley Whipsnae
Snidley Whipsnae's picture

sschu... The more time you waste thinking in terms of dems/repubs/balanced budget the more time you are wasting.

None of those azzhats are going to fix a problem that they and their predecessors caused. None of them are going to take any action that could possibly hamper their reelection chances. They will ride this horse, playing for one more day in the sun, till the horse dies.

If you can't get your head around that then you will be toast along with millions of other Americans. This is not a problem that politicians can least, not the current American politicians.

Wed, 03/30/2011 - 20:08 | 1119583 Waterfallsparkles
Waterfallsparkles's picture

So, what happens to the old folks.  They just schrivel up and die?  Does that solve the problem?

The FED just GAVE the banks close to 3 Trillion dollars.  Now it is the old people that have paid into Social Security, Medicare for 50 years.  I know I was paying around 35% in income taxes and another 15% in Social Security, Medicare taxes.  Around 50% of my income.  Yet, the Government said that my tax rate was 35%.  So, now claiming Social Security is an entitlement (like I did not pay into it for 50 years).  In effect they are now saying that I was just paying 50% in income taxes.  No one would have gone along with that rate of taxation  on a middle class American.  If I could have invested the 15% of my income that was paid for SS, Medicare I would not need SS or Medicare.  But, they took the money and now do not want to do what they promised.

So, now that the FED have given most of Americans money to the Banks it is now the problem of the elderly to pay off all of that debt. 

Thu, 03/31/2011 - 09:38 | 1121058 Bicycle Repairman
Bicycle Repairman's picture

You'll get your retirement SS, but the medical care won't be there.  Healthwise you're on your own.

Wed, 03/30/2011 - 20:19 | 1119584 web bot
web bot's picture

#uck... triple post... I'm so pissed

Wed, 03/30/2011 - 20:12 | 1119588 web bot
web bot's picture


Wed, 03/30/2011 - 20:11 | 1119593 buzzsaw99
buzzsaw99's picture

The maggot way. Make Gross whole and fuck granny in the ass.

Wed, 03/30/2011 - 20:27 | 1119648 Rhodin
Rhodin's picture

Hmm...Ya think if all those banksta bonuses were taxed for SS and medicare it might put a dent in it?  /sarc off

Wed, 03/30/2011 - 20:42 | 1119693 Stuck on Zero
Stuck on Zero's picture

It's not Social Security.  It's medical care.  The government decided to give a monopoly on medical care to the AMA.  The result is extremely wealthy doctors, too few of them, and a carte blanche check from Washington. Not only do we spend outrageous sums but we have some of the worst medical care in the world.

We need to reduce the percentage of the GDP spent on healthcare to the 9-10% range.  We do not need to spend $1.5 billion dollars per life saved on MRIs for headaches and we do not need to spend $300K per month of life saved for 85 year olds with progressive organ failure. 

Thu, 03/31/2011 - 02:24 | 1120490 Cassiopia2011
Cassiopia2011's picture

It is so true. The AMA is very similar to a cartel of medical professionals. Membership has been limited for years (likely since the early 1950s) to a small group of doctors who had the money to attend the medical schools and pass the exams to certify them as the monitors of American health. I, for one, know that any person, no matter how qualified, did not have the financial backing to pay to attend the medial school, they were eliminated from studying to practice medicine in this country. I hope that I do not sound too bitter about this (being almost age 70), but I do regret a system that allowed many to practice medicine who were ethically challenged, but attended the medical schools and practiced simply because they had the financal means to do so. I, for one, would like to see a better method of qualifying doctors to care for the people of this country.

Thu, 03/31/2011 - 06:41 | 1120646 fiftybagger
fiftybagger's picture
100 Years of US Medical Fascism

Thu, 03/31/2011 - 09:45 | 1121066 Bicycle Repairman
Bicycle Repairman's picture

Rising medical costs are at the root of many of our problems.  Free market reforms could change that and quickly.  But look at the public discussions during the Obamacare debate.  It's hopeless.

Fri, 04/01/2011 - 03:46 | 1124313 ebworthen
ebworthen's picture

Yup, crony system, and quickly eliminating the Hippocratic oath from any medical school.

"Tag 'em, bag 'em, cut 'em, slice 'em, abort, euthanizes; no worries, we take all sizes, as long as you have the $$$, bitchez!"

Thu, 03/31/2011 - 02:27 | 1120491 Cassiopia2011
Cassiopia2011's picture


Wed, 03/30/2011 - 20:45 | 1119698 max2205
max2205's picture

Ten bucks Bill made a deal with Ben to sell those bonds. $250 Billion?!

No wonder rates have gone up the last 4 months. Look at TLT to verify.

Ben knew if he didn't buy them rates ie 5-30 yr would skyrocket.

Bill is protecting clients and his ass before the real bond crash happens later in the summer.

More big money frontselling with privlaged info

USA sucks

Wed, 03/30/2011 - 20:48 | 1119713 thexcount
thexcount's picture

you think japan will have to sell us treasuries?  interesting thought in this article...

Wed, 03/30/2011 - 20:53 | 1119718 jerry_theking_lawler
jerry_theking_lawler's picture

give me access to bennie boys machine and I can take care of this problem quickly.....




done! problem solved. you can all thank me later.

Thu, 03/31/2011 - 03:08 | 1120535 OldPhart
OldPhart's picture

Gosh, Cecil!

Wed, 03/30/2011 - 21:00 | 1119745 johnnymustardseed
johnnymustardseed's picture

Gross =douche, stealing from Social Security started with Ronald RAYGUN and continued with every asshole congress and president to date. Social security is not an entitlement it would be self sustaining if they hadn't robbed it.

Wed, 03/30/2011 - 21:25 | 1119807 web bot
web bot's picture

I don't know what kind of men Bill Gross or Mohamed El-Erian are, but I parse every #uckin syllable they say... not that they are beyond reproach, but because they are the canaries in the coal mine. They are also #uckin geniuses.

When you own over $1 Trillion in bonds and can move markets, what you say and don't say matters... you just need to be sophisticated enough to be able to draw implications and know what data to look for, for confirmation of what these canaries are singing.

Don't hate them... enjoy the song.

Thu, 03/31/2011 - 00:30 | 1120308 Harlequin001
Harlequin001's picture

or at least talk directly to a central bank that cannot afford to have it's biggest bond fund lose money. To do so leads to increasing pension funding deficits for companies, lower profits and falling stock markets having just completed the biggest ramp job in the S&P in history.

Let's also not forget that falling bond values equals increasing need for more capital at banks, and bigger problems rolling over debt at the discount window...

genius, I don't think so...

we used to refer to it as insider dealing...

Thu, 03/31/2011 - 06:37 | 1120631 web bot
web bot's picture

Canary in the coal mine... Whether you hate them or love them.... listen to their song.

Thu, 03/31/2011 - 07:16 | 1120674 Snidley Whipsnae
Snidley Whipsnae's picture

'Canary in coal mine' is correct. It boils down to... Gross/El Erian have access to much better inside info than we do. Watch them like a hawk... Not what they say, what they do.

Thu, 03/31/2011 - 13:10 | 1121933 web bot
web bot's picture


Thu, 03/31/2011 - 09:50 | 1121103 Bicycle Repairman
Bicycle Repairman's picture

The retirement part of SS is OK.  The medical part is not.  The answer to the medical part is to set the free market loose on that part of the economy.

Wed, 03/30/2011 - 21:09 | 1119762 azengrcat
azengrcat's picture

He told Congress to put their big boy pants on.  

Wed, 03/30/2011 - 21:21 | 1119783 Samsonov
Samsonov's picture

I protest the constant comments about "Zimbabwe-ization" of the the US.  From Wikipedia: "As of November 2008, unofficial figures put Zimbabwe's annual inflation rate at 516 quintillion per cent, with prices doubling every 1.3 days. Zimbabwe's inflation crisis was in 2009 the second worst inflation spike in history, behind the hyperinflationary crisis of Hungary in 1946, in which prices doubled every 15.6 hours."  

We're nowhere near that yet.

Wed, 03/30/2011 - 21:55 | 1119913 robobbob
robobbob's picture

But if we all pull together, keep our heads up our collected asses, and do nothing, we know we can get there. Afterall, who are you going to believe, our glorious rulers or that lying math and statistics?

Print Benny print!!

Wed, 03/30/2011 - 22:03 | 1119946 Backspin
Backspin's picture

Agreed, we're no where near that.  But we don't need to be anywhere near that for life as know it in the USA to completely fall apart.  I'd guess that even one trillionth of one percent of that, which works out to 5000 percent inflation would be pretty bad.  In other words, we could have 5000 percent inflation, and the "Hey, it's not as bad as Zimbabwe" line would still be true.  But you know what, it would be really bad, about as bad as Zimbabwe.

Thu, 03/31/2011 - 07:21 | 1120681 Snidley Whipsnae
Snidley Whipsnae's picture

Samsonov... Think about the term the Fed uses... "inflation expectations".

Inflation happens quickly.

Hyper Inflation happens quickly.

When people become convinced that the money is no good and will continue to be inflated away the people will dump the money for almost any tangible object worth anything... even if it's worth something only in barter. Hyper inflation can happen very fast.

Wed, 03/30/2011 - 21:34 | 1119831 Atomizer
Atomizer's picture

Fuck me seven ways to Sunday. We need the newly installed ME muppet administrations too buy all of this toxic bank paper under humanitarian efforts. Spreading the debt obligation's has become a three alarm central bank fire. Can't let those derivatives implode.

Mission Objectives:

Find all uneducated cock sucking Middle Easterners that believe we're saving them from a dictator. Once we hook em on 24/7 media propaganda, tax the fuck out of the peasants and take all their natural resources. Remind these dumb ass camel jockey's, they need to share their wealth with other poor nations. Repeat cycle with remaining country expansion plans.

Welcome to the chaos within the ME. Coming soon.. the State architects will be revealed. They'll plea for protection and the State will deny any association or prior knowledge of operation.

Wed, 03/30/2011 - 21:37 | 1119844 jmac2013
jmac2013's picture

Bill obviously reads ZH.


Wed, 03/30/2011 - 21:38 | 1119850 QQQBall
QQQBall's picture

Sue Gross loves Pepe La Pue... now I can die happy. Read this shit and see that these morons are so full of themselves its mortifying. Shit, if I could front-run the FED, I could get enough air time to bore you to death too.

Wed, 03/30/2011 - 21:41 | 1119851 QQQBall
QQQBall's picture

dupe - apologies to Sue Gross and Pepe

Wed, 03/30/2011 - 21:40 | 1119857 HomoHominiLupus
HomoHominiLupus's picture

Ok, so I read this and the ‘ BTFD, USA sucks and Gold Bitchez’ responses  that seem to mandatorily accompany the majority of the posts on ZH and I wonder: What is it going to take before the blood starts running in the streets in this fair land?

After all, both Charles the First and Louis the 16th lost their respective heads for a fraction of the infarctions that are perpetrated against the unwashed masses in this day and age. What will be the drop that will cause the proverbial water barrel to overflow and will cause the pitchforks to come out?

Recall that as recent as the late 1980s, heads of business routinely were picked off in Germany by the Red Army Fraction for comparably minor offences – Deutsche Bank’s Alfred Herrhausen springs to mind.  I well remember a crude joke from my childhood days which goes like this: What is white and travelling at 500 Mph across the Irish Sea? Answer: Lord Mountbatten’s sailing shoes.

Why is it that personal strategies  such as stocking food supplies, divesting yourself of US Dollars non-fiat payment tenders and ammunition, etc. appear not to be accompanied by a discussion of what can be done organizationally to stop this madness? Have our asses become so leaden that we can only fondly remember bonfires and public beheadings instead of envisioning how to hold the ‘esteemed members’ of our community accountable for screwing us over?

For starters, how about burning effigies of Bernanke. Geithner, Dimon and Blankfein in the village square ?  Let’s have our own Guy Fawkes day, who, btw, was a saint by today’s standards. I doubt very much that creating a website and collecting signatures are going to do the trick this time around…

Wed, 03/30/2011 - 21:59 | 1119926 web bot
web bot's picture

Ok... I'm going to presume that you are a reasonable person and I'm going to put my vitriol in a jar.

Despite the ranting, I have yet to hear anyone on this site propose violence. People have commented that this could be an outcome due to historical presidence, however we are certainly not there yet. Anyone who would propose this is just plain nuts or full of bravado.

So, what can be done?

The problem is structural and deep. Think of it as you start to slide down the top of a hill... things work fine for a while (1970s).... you hit a couple of bumps... but start to accelerate. You eventually get to a point that it's impossible to stop without killing yourself and others.

The politicians, Fed, etc... are doing what they "believe" as liberals, should be done to save this mess... but this is based on hope. Anyone can see this, they are just hoping their solutions will work and in the end, they have no precedent part from Wiemar, the 1970s and loads of academic writing. Obama is a public speaker... despite his polish, he simply doesn't have the experience or knowledge to understand what is happening. #uck, you get 5 economists in the room and they'll have 5 different answers.

In my opinion, the best thing that could happen is to allow high inflation (which is different from hyperinflation) which will destroy the government debt, then reset with the major world governments. The problem with this however is social unrest imo.



Thu, 03/31/2011 - 00:14 | 1120280 Matto
Matto's picture

Inflation is theft. Don't ever forget that.


If you haven't seen anyone on here proposing violence you must have skipping a lot of comments.


BTW - The correct thing to do when you can't pay your debts is default, not usurp the nations currency.

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