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But in doing so they'll have to up the ante from "Fascism Lite" to "Fascism Heavy" and in the process more sheeple will become alerted. Make them play their cards. Move your money to state chartered, non TARP recipient, FDIC insured banks!
It's already having an impact. Notice how the community bankers don't want to touch the new SBA TARP money with a ten foot pole.
Let them start coercing the small banks, it results in thousands more deep pocket allies for us.
Holy Fudgesickles. That would explain a lot.
If I'm reading this right, Sprott is saying that Treasury sales appear to be just a front. The Federales have already gone Zimbabwe on us and are blatantly printing money, to the tune of $700 billion this year. Is that it?
LOL.
You mean you didn't know?
-MobBarley
Well, yeah. Just wanted to boil it down to the kindergarten level in case Barney Frank stumbled in here.
Interesting side note. Just found out Senator Frank's middle name is Eatmy.
And his nickname in middle school was "bone smuggler"
Interesting side note. Just found out Senator Frank's middle name is Eatmy.
@Molon Labe,
This must be answered before the Bernanke reconfirmation vote.
Well, it's actually somewhat brutally honest of the Fed to list the purchasers as 'Household' since it's definitely from within the same house that the purchases are being made. The house being the Fed house itself. I believe Chapman was pointing out about 8 months ago that the fed was using proxies in the Cayman Islands to purchase Treasuries.
Another great thing we can do is print cash and give it to foreign central banks and they can do the same and then we 'swap' the currency in a currency swap. Then, we buy their T-bills so they get their currency back to invest in their local economy via QE purchase of stocks bonds etc, and we get ours back from them when they buy our T-bills and then we use the money to QE PPT our stock market and so on.
It's all very simple , see?
Ostensibly, the main purpose of this is to keep up the appearance of mainstream economics and not Zimbabwe economics. Of course, we all understand that a central rate of 0% defeats the entire purpose of such a system to regulate the rate of currency production through 'currency cost'. I mean, for all practical purposes, a central interest rate of zero means an infinite money supply.
-MobBarley
Did you just use the words "brutally honest" in reference to the Fed?
It's a big game of hide the sausage and they think we're too stupid to catch on.
Has anyone stopped to think about 2-3-4-5 years out??
THE scary thought now being realized is that GenX & GenY may just pull a "strategic default" and just walk away from the Boomer debacle(s).
Bet your arse we will. You see, we have this thing called the internet, and we are like... informed. Boomers, my parents. I'm sorry guys. Biggest sellouts of all time. Let's just skip to the part where we burn this thing down, and build a better country that's actually based on our Constitution; shall we?
+100K. I've been calling for an intervention against boomers ever since I can remember. If WWII's are the greatest gen., how did they spawn the worst?Watching this spoiled lot, I'm all down on the class / generational warfare. They robbed us blind, built the unsustainable ponzi, and have the distinction of being the first gen. in American history to leave the planet and their off-spring a lower standard of living. Mission Accomplished? Let's burn this mofo down!
Good luck, son. I really mean it. I have wondered whether the Internet Gen would breed enough hardy souls to be their own "hope & change". I see a laughable Levi's commercial where the speakers intones Walt Whitman's Leaves of Grass, "Pioneers, O Pioneers" - and they show a bunch of models frolicking like youthful idiots. You listen to the words and it hits you like a ton of bricks. They don't get it. I hope enough do.
Yeah! Look how well that worked out in the 60s! We'll show those lousy Boomers!
I am 26, and you can bet your bottom dollar it will take some 'splainin from the boomers why we should keep them around, never mind pay for their mistakes.
If you are over 50, and formerly banker, finance industry, Wall Street... Just please do one of two things, go protest in Washington, or hell, in New York on Wall Street, about how this country has been taken over.
Because otherwise you WILL be blamed as having been part of the problem.
Here is the CHEAPEST, QUICKEST, EASIEST way to help your country out, WRITE on your dollar bills! Yes, WRITE the truth on them, using a sharpie etc.
"The Federal Reserve must be eliminated"
"Wall Street has taken over the country"
"Impeach Obama, the Wall Street Shill"
Its pissing off the crazies in Iran, I am sure we can make it work here too. I think we could see some real results within 6 months. And remember to write "from the community at Zerohedge.com" on there too
"from the community at Zerohedge.com" don't forget the 1st rule. and the 2nd rule.
+1
Wrong enemies and a big mistake
First of all, the enemy is a subprime generation of finanical and politcal elites. An oligarchy. As in 2% running 93% with 5% as flacks and technocrat servants to the 2%.
Second of all, check it out...BFGOTFO (Big Fucking Glimpse Of The Fucking Obvious) the boomers are just as upset and angry as you guys....its their kids and their lifes work that is fucked. They are fucked just when they need things to go smoothly as their inner strengths ebb. Your completely wrong that they planned this. You sound like kids unable to think clearly for your kee jerk unrespolved issues with your parents.
Third, You need every vote you can get and all the help you can get....and remember middle aged and above vote...outside of a few below thirties who get it....not enough of your generation ever votes or voted (even during the Vietnem era when they were getting slaughtered
Fourth, baby boomers strongly believed that the generation before them was out to get them and started Vietnam, the tax burdening conflict with Russia, the addiction to oil, the ending of pensions and the lifetime careers the elders enjoyed and started repressive drug laws to grind them down.
You are not the first generation to think the elders were out to get them and sold them down the river.
At least think more rigorously if you want to play in the real world.
Most of all, if you seriously want to change things, think about your own enlightened self interest and know who your enemies are and who the potential allies are. PS: Thats as enduringly true as Machevelli.
There are certainly knee jerk reaction unthinking emotional dumbasses at all ages.
Hope you grow out of it.
I'm 27 and couldn't agree with you more. Great post. Fighting between generations would only allow a "divide and conquor" strategy to be used.
The Treasury markets have,
short from two years on out...
This line of thinking just shows if your posted these sentiments you will never be ready to be an effective part of any solution. Never. Here is why:
1) The enemy is the oligarchs. If you do not identify the right enemy you will die in some sidebar blowback.
The 1% of the nation that compose the subprime generation of financial and political elite and the 4% of the population that forms the supporting technocrat and msms sell outs is the enemy.
All of the other 95% is either your active or potential friend...and you will need all of them.
2) The baby boomers were convinced that they were the victoms of genocidial hatred of the elders who taxed them into oblivion to support their foolish fight against the Russians and the Chinese (what do you think Dr Strangelove was about) killed them in Vietnam in a obviously corrupt and losing fight, incarcerated them in droves via draconian drug laws while they drank martini's, and ruined the safe lifetime employment situations they elders enjoyed while wrecking the economy via their addiction to big cars and middle eastern oil. You are the 5000 generation to believe the last generation wrecked it for you.
3) The baby boomers think ("are convinced") they worked hard their whole lives and now America is wrecked for their kids (yeah in case you did not catch on most people love their children) and in the years they have less ability to earn by a whole cabal of 40 year old Manhattan/Washington UN Americans. They are angry, worried and want to re-capture the America that existed before it became a rigged game.
Thats why some of them foolishly shed their wariness and voted for a seemingly non afftected different kind of Presidential candidate who seemed sympathetic to the grinding down the the vast middle class
Thats why others thought the antidote to the betryal of the elites was an anti elite and was willing to express that anger through even a bozo from Alaska
Thats why as soon as the President demonstrated that he is incompetent/blind/part of the financial/political cabal...they poll downward in disapproval faster than any other previosu President...ever. They do not want that...and their dashed hopes plummeting faster than any previous set of polls into ever higher Presidential disapproval ratings show that.
4) Like it or not, 45 and above age groups vote and below 30's do not. That was even true at the height of the Vietnam War ...below 30's stayed home and allowed Nixon to get voted in. Too cool and too convinced all was rot to save their own kind.
If you are part of the solution you need:
1) To correctly identify the enemy
2) To have superior solutions
3) To convince others
4) To get all the votes and all the consent of the governed and all the motivation for your solution possible.
Here is the truth:
In 1955 our nation was 45-48% of the worlds gdp at 4 % unemployment (U6) and a steady 2-4% growth with only minor recessions and the lowest effective tax burden of any OECD nation and overall at 150% debt to gdp. We had the worlds best infrastructure, military, health care system, longevity, middle class, agricultural industry, steel industry, electronic industry, hi tech industry, auto indstry, income per capita and educational system. All supported by a conservative, in expensive, low compensation, wisest adult in the room financial system
In 2010 we are 23% and declining with over 350% of gdp debt and climbing, a broken educational, financial and healthcare system and a broken middle class, infrastructure and unemployment of 17-18% (u6)
It has been as spectacular a collapse as the world has ever seen in as short as fifty years. And all without any external military conquest or epidemic.
(Now we all know their are exxaggerations and many missing nuances in my description...but the effect should be sobering)
The only way an Empire has that much collapse from within in such a short time is if its elite parasites waged war on their host.
Know the enemy
This article isn't coherent. He identifies that $500B came from a mysterious source. Then he says "therefore a ponzi." WTF? The mysterious source suggests shenanigans, but not Ponzi. Ponzi denotes a certain kind of system with certain characteristics not demonstrated here. Then he meanders off talking about Pimco and how they're also not buying treasuries. For goodness sake have a coherent point before writing something like this.
Obviouswe you didn't get the overall message. How can one have a coherent point when the Fed doesn't allow one to see the real facts behind the argument.
In-lieu-of, the author must choose silence as you suggest, or an educated guess. Scooby welcomes all discussions, silence is akin to submission.
My fellow readers, you have been consumptive sheeple for far too long. Save yourselves.
Thanks for the COHERENT analysis. Duh.....
Don't worry... Be happy!
This is all backed up by the "Full Faith and Credit of the United States Government."
You know, come to think about it, the government hasn't ever said what happens when enough people run out of faith and their unobtanium card is maxed out.
full faith of really means full faith in
Since the Fed can purchase unlimited quantities of Treasuries I hadn't really considered the possibility that the Treasury didn't even need them to purchase when with appropriate accounting entries a "sale" could be conjured out of thin air.
I'm suddenly intensely curious if similar anomalies are found in other government debt sales data. There's no point even looking at China since everything is so well cooked but the EU and UK would be interesting.
This may be a bit boneheaded or naive but I need to ask a question that I am stuck on and cannot work out an answer to. If the money that has been "lost" in the last couple of decades by the Pentagon/Defense Dept. was "reinjected" into the system by such means as purchasing Treasuries, what would the result be? I do not have the skills to answer this nor to even know if it is even a valid question. Someone want to break it into little pieces for me?
OK, I will break it down. That money is gone.
They used it to build underground bases on 5 continents, good luck finding them.
If it was re-injected, you are implying it wasn't spent, or that they just printed an additional 3 trillion and pretended that it was already in existence.
Finite material goods, and an increasing money supply. Figure it out. Here's a hint, everything goes up in price, and the value of the currency plummets.
Short answer: This is a red herring, and not a legitimate use of own's time or brain power.
anon, if you want to take a walk down tinfoil road on this topic, scroogle "leo wanta".
herd, nobody knows everything and anything is possible. there is as many truths as there are human beings. we all must find our own way, yes?
Of course it's a f#$%&@! Ponzi scheme.
You know what's next?
Controlled demolition, that's what's f%&*$@# next.
America. Got balls?
We're gonna find out.
Controlled Demolition? Why bother? Just set the building on fire and it'll take care of itself
Does anybody think that the reason Goldman is paying out those obscene bonuses to their employees this year (with no regards to shareholder sentiment) is because they know the gig is up?
Regarding Paraguay, when the time comes will there be extradition or rendition?
Yikes
Is it alarmist to say the end is near?
The end of the year at least...
Zero Hedge you are The First Brigade! In this our Third War of Independence. Godspeed!
http://www.youtube.com/watch?v=TYzt1ao81jU
Ok I am not a big fan of the Fed either, but I looked at the Fed flow of funds and the Sprott analysis doesn't quite make sense to me. Perhaps someone who is familiar with flow of funds report has some thoughts.
http://www.federalreserve.gov/releases/z1/Current/
1) Indeed the Household sector purchased $534B by Q3 09 - Table F209 pg.44
2) But I see the household sector in many other tables, for example Table F210 pg.45 Agency and GSE backed securities. Here the household sector SOLD $664B by Q3 09. That alone should be enough to account for 1). In previous years they were buying.
3)Another example Table F206 pg.42 Money market mutual funds the household sector SOLD $169B by Q3 09. Again in previous years they were buying.
4) There are also many other sectors were the household sector was selling.
5) Also the Sprott report say the household sector bought only $15B treasuries in 08, but the flow of funds says $174B in 08. So certainly not an increase of 35x
6) Just 5 mil people buying 10k each will equal $500B. I myself moved a lot of my stock assets to treasuries (way more than 10k) in early 08.
7) So can we really come to the conclusion that the Household sector is a phantom entity? Maybe it is, but it doesn't appear to be.
Realityvist
"Household Sector" includes both households and nonprofits, including labor unions. This sector holds about 40% of the total assets reported in the flow of funds.
Smalltownlawyer
Hey, Realityvist,
You and Sprott are both right about some of your figures. Apparently the "residual" nature of some of the estimates attached to this sector opens the door to discrepancies. However, the biggest problem with Sprott's thesis is the definition of "household sector" that the FRB uses. See my post at about the 125th comment for a complete explanation.
5 mil x 10k = $50 billion. Not $500 billion.
There's no way individual US investors bought $500 billion of TBills in the last year. Not even close.
See this later comment by smalltownlayer and my reply to that.
Comment# 173535 near the end on pg.2 (I would direct link, but direct links don't work for pg.2)
The household sector includes not only indvidual households and non-profits, but also domestic hedge funds. Not very aptly named.
See also this thread #173439, link below
http://www.zerohedge.com/article/sprott-calls-fed-ponzi-scheme-half-tril...
Finally someone to call this Sprott fart for what it is. Also from flow of funds, tables F.209 and F.210 are seasonal adjusted annual rates. The same 4x multiplier that takes a quarter to quarter change of 0.6 percent and says GDP increased 2.4 percent.
Domestic hedge funds? could that be the 5 Trillion in off balance sheet SIVs and Variable interest entities that the 5 big banks have created?
http://emac.blogs.foxbusiness.com/2009/12/15/should-wells-fargo-pay-back-tarp/
So to repeat other commentors. The SIVs sold their mortage securities to the FRB and the SIVs bought the Treasuries, just like China did. Only the FRB has the a longer maturity average, and the SIVs and China shortened their average maturity.
Hey where's our fiat Frosty?
Bonds:
Spoos:
Copper:
Crude:
Gold:
Yep. Big pile of Trashury issuance coming up, to be settled on New Year's Day. As Doc Stool says, should be a hell of a party. Unlike most New Year's parties, the puking will come before, not after. Got to puke up some schlocks to make room for Trashuries. First, though, let's lure in the rubes with the expected year-end rally so we can hogshank (tm) 'em. Wouldn't be Christmas dinner without some ham after all.
Setting up some great shorts...
Thank the Christ, someone finally blows a smoking hole in the ridiculous lie that this torrent of Treasury issuance is somehow being vacummed up by the broke, foreclosed (and still living in their $1MM McMansion rent-free) J6P. THANK YOU to Sprott for digging this up and to ZH for getting the word out.
Ok I am not a big fan of the Fed either, but I looked at the Fed flow of funds and the Sprott analysis doesn't quite make sense to me, but I am just a layman. Perhaps someone who is familiar with flow of funds report has some thoughts.
http://www.federalreserve.gov/releases/z1/Current/
1) Indeed the Household sector purchased $534B by Q3 09 - Table F209 pg.44
2) But I see the household sector in many other tables, for example Table F210 pg.45 Agency and GSE backed securities. Here the household sector SOLD $664B by Q3 09. That alone should be enough to account for 1). In previous years they were buying.
3)Another example Table F206 pg.42 Money market mutual funds the household sector SOLD $169B by Q3 09. Again in previous years they were buying.
4) There are also many other sectors were the household sector was selling.
5) Also the Sprott report say the household sector bought only $15B treasuries in 08, but the flow of funds says $174B in 08. So certainly not an increase of 35x
6) Just 5 mil people buying 10k each will equal $500B. I myself moved a lot of my stock assets to treasuries (way more than 10k) in early 08.
7) So can we really come to the conclusion that the Household sector is a phantom entity? Maybe it is, but it doesn't appear to be.
update: for 6) it should have been 100k not 10k (5mil x 100k)
Thanks for taking the time to do the analysis. It doesn't seem possible that the Fed could actually create a fictitious category of this size, comprised of no actual purchasers but simply backed into to fill the gap, -- and get away with it without anyone anywhere ever mentioning it before. Bernanke can always go back to Princeton - he doesn't have to cook the books on such a massive scale. All the money that's not in money market, not in equities, not in other bond funds, or is cash above FDIC limits could find its way into the Treasury's gaping maw.
This is mostly alarmist BS. Realityvist is correct. There has been a huge flight to quality by HNW. No faith in GSE discount notes, no more auction rate securities or asset backed CP or SIVs, no more VRDN and VRDBs, cautiousness over uninsured deposits and MMFs breaking the buck. Go research the size of each of these markets in Q2 2007. It makes perfect sense for T-bills and notes to pay nothing, demand for them is huge.
The domestic savings rate is skyrocketing and the peak of the boomers are just now reallocating asset classes from growth to income. The numbers involved are many $Trillion. Look at what Japan has gotten away with.
The interesting part is that at some point the flight to quality demand will wane and then the only market disciplining mechanism left will be the crowding out effect. Treasuries will compete for capital and create their own demand as an economic dampening force. High taxes to service debt will compound this mechanism.
Not that our fiscal and monetary shenanigans aren't horrific, but the above mentioned collapse of the private credit bubble has still only partially been replaced by the public credit bubble. The reflationist have a long way to go, but the horrible part is that the debt servicing cash flow of the private credit bubble was self-reinforcing productive enterprise-while the debt servicing cash flow taxes are a negative multiplier. The collapse of the private credit bubble takes down an economy into a severe recession, the collapse of a public credit bubble takes down a country. We have counted our Keynesian chips and are placing our fingers at the base of the stack to go all-in.
Sprott cap mgt is pretty respected in Canada, and I wouldn't call it alarmist.
Do you disagree with my source of funds explanation and why?
Book talking disclosure- I bought ten-year notes yesterday. Too much bearish sentiment on them to pass up.
Interesting observations, but wouldn't that imply a one-time only boost to Treasury purchases, in the sense that if everyone moved most of their savings to Treasuries, there is no more savings capacity on that scale to do it again year after year?
Yes this implies a one-time boost unless you expect a depression!
No, actually it is not so simple.
People are constantly getting out of stuff they will not buy again like maturing and called agency and corporate bonds and auction rate securites getting refied. They also are continually receiving coupon payments they used to reinvest differently and spending less of their income to be more careful. HNW people receive rent on property they used to buy more property with and they are always getting stock dividends they used to buy more stock with. They also have taken cash from hedgefunds. When this cash is added to the loss of all those other investment products it all adds up to orders of magnitude more than new Treasury issuance so far.
Another new source of Treasury demand is higher quality collateral requirements for repo and swap. The yield on T-bills tells me there is a shortage of them-WTF
Even if relativist is correct, I wouldn't think that households could buy that much each year.
See this later comment by smalltownlayer and my reply to that.
Comment# 173535 near the end on pg.2 (I would direct link, but direct links don't seem to work for pg.2)
Apparently the household sector includes not only indvidual households and non-profits, but also domestic hedge funds. Not very aptly named.
Update: See also this comment #173633 on pg.2 which has more info on the household sector
Thanks for correcting your math. Once you suggest that 5 million people each pouring $100,000 into Treasuries is the answer, then why not get the same 5 million to purchase $600,000 each next year then we will have the 2010 cash deficit covered.
And once these 5 million good citizens get 2010 covered, let's have them throw in another $300,000 each to buy out China's position so we can buy the country back.
You may be right my friend, but if the Treasury is getting that kind of individual support in the Treasury market, I think our politicians would helpfully point it out.
Oh, I wasn't suggesting people go and buy treasuries out of the goodness of their heart. I guess I didn't make that sentence very clear. It is like TimmyM was saying above, there was a huge flight to quality, people lost confidence in those aforementioned securites and switched to treasuries.
I was just throwing a random figure out that if 3% of taxpayers (5 mil people) did switch 100k that will be about $500B. I don't know what the actual figures are, maybe it is closer to 50k people throwing around larger figures. I myself switched to treasuries (in part) early last year because I didn't have as much confidence in stocks. That is the essence of what I was trying to say.
It appears that people are doing that even more of that in 09 looking at table F and L 208, 209, 210 etc: at pages 44 and 89 in the Fed flow of funds report.
The notes of a bankrupt state are "quality"? WTH?
The Fed has been buying treasuries to make up for lack of support for years. I mean, jeez, people, don't you guys watch TIC flows or NFP data?
China and Japan have been in no-net for quite some time now, yet we're still able to roll trillions in new debt via "Caribbean banks." There are writers on goldbug sites like kitco who've been pointing this out since 2006.
The FOMC's historical purpose has been to sop up issuance to prevent auction fails.
Yes, they will lend to the PDs at near-zero so that they can buy Treasuries with that money. They will call that balance-sheet-neutral lending while for all intents and purposes, it is a circle jerk.
The Fed functions like Enron.
Thanks Realityvist, for the clarification.
I still believe that the Fed and the Treasury would be well advised to clarify to the American people, exactly what their Balance Sheets are made of. Their current opaque presentation only leads to speculation, even if the speculation is well-founded and plausible.
I agree, I am all for more Fed transparency.
The point being made is that these numbers are falsified so looking at the Fed site is a waste of time.
"If you have a problem with a bank or other financial institution, contact the Federal Reserve for help." Need Help? call 1-800-851-1920
----------
What will the Federal Reserve do?
We will connect you with or forward your complaint to the appropriate federal regulator for the bank or institution involved in your complaint.
If your complaint is against a financial institution that the Federal Reserve supervises, it will be investigated by one of the 12 regional Federal Reserve Banks.
As the Reserve Bank investigates each issue raised in your complaint, it will:
* Ask the bank involved for information and records regarding your complaint.
* Determine if the bank's response addresses your concerns.
* Send you a letter about its findings.
The Reserve Bank may also contact you to request additional information necessary to complete its investigation.
The Reserve Bank will let you know if it finds an error or a violation of a federal law or regulation. Investigations typically take 30 to 60 days to complete. If more than 60 days have passed, the Reserve Bank will contact you to let you know the status of its investigation. Please note that it may take several months to investigate more complex complaints like those alleging illegal credit discrimination.
http://federalreserveconsumerhelp.gov/
now dag nab it...if that aint the most absurd website you ever did see eh?
gs_
Got it. If I have a problem with my bank, I can use the Fed web site for help.
What should I do if I have a problem with the Federal Reserve? Is there a website for that?
ha, wouldn't expect much help from the Fed.....guess the satire and humor was lost
http://mises.org/
The Fed IS a bank. Contact them and complain that you believe the Fed has illegally taken assets onto its balance sheet that it is not permitted, by law, to take. We should have a national week of calling the Fed on this. A million calls?
I'm going to add to this but only by bypassing my 2007 piece on the subject and returning to the original posting which made me think by Rob Kirby at FSO on March 18, 2005. It has been my opinion that Mr. Kirby was SPOT ON and that the Fed inflated the monetary supply in 2004-2005 by laundering funds via the Caribbean hedge fund operations of the various "investment" banks on Wall Street. If you notice the dollar amounts of the Treasury purchases per the TIC report from the original date of this story until now, you would understand that the total dollars purchased is far in excess of all of the GDP of all of nations in the Caribbean banking cartel COMBINED by a factor greater than 20. The hedge funds are basically mail drops and if anyone in Congress wanted to win some brownie points for their re-election they would open an investigation of the overseas hedge fund operations starting with the top 5 investment banks on Wall Street.
PIRATES OF THE CARIBBEAN
http://www.financialsense.com/fsu/editorials/kirby/2005/0318.html
Here you go.
http://www.youtube.com/watch?v=n3a7ATwS6-A&NR=1
We are on the Deathstar and ben has already pulled the trigger
Here is a slightly different look at the numbers. This is based on the Treasury working strictly on a cash flow basis, hand to mouth.
From Treasury report FY2009 deficit = $1.416T, see;
http://fms.treas.gov/mts/mts1109.pdf
The Flow of Funds level table L.209 from end of Q4 2008 (Q1 FY2009) to end of Q3 2009 (Q4 FY2009) the increase in Treasuries = $1.183T, $7520.8B - $6338.2B = $1182.6B, see;
http://www.federalreserve.gov/releases/z1/Current/z1.pdf
So how did we finance the difference $1.416T - $1.183T = $233B.
This must be Treasuries purchased by the FED for the period from March to the end of FY2009. My guess is that the Level table does not include direct purchases of Treasuries from the FED. Because this is not really an outside liability? Just like SS Special Treasuries are not part of the total "government" debt. However, this is just a guess on my part. The $300B long term treasury buy program is relatively new to me in terms of how to record it on the books.
----------
I am not sure what Gross means by a "Ponzi style economy", because to me a "Ponzi" scheme implies that incoming funds have real value, and this is paid out to simulate a return. Well we do not have "real" worth or investment coming into Treasuries when they are purchased with more debt from the FED. Its like Madoff accepting debt as a way to invest in his fund, which would obviously not work. Now perhaps Gross is seeing a "Ponzi style Treasury bond market" if he is selling long term Treasuries. I can see this.
----------
The debt funding for FY2010 will be greater than FY2009. So who will buy all of this debt? The question is a valid one, and Zhu Min is right, the world does not have the capacity to fund our debt?
Mark Beck
Your point is well made that "Ponzi" has become an overused term and does not describe what is going on here. Actually a Ponzi style operation is more honest and less harmful than the kind of ghost-money operations the fed is engaged in, because it steals real money from real people and in the end can be reconciled precisely: money paid in by all investors = payouts to early investors + rakeoff by scheme operators. While it wipes out all remaining investors, the underlying economy is not endangered.
The point is not to minimize the criminal actions of Ponzi operators, but that using this term in reference to the Fed and its enablers is to seriously understate the problem.
Thanks for the great post...
So how to we get a breakdown of WHO EXACTLY bought these $528.7 billion worth of treasuries categorized as "Household Sector"?? Can this be obtained via subpoena, the way Bloomberg was able to get the names of the AIG counterparties?
I find it hard to believe that we are not entitled to know where a mysterious half a trillion dollars came from! If the Fed has nothing to hide, then tell us exactly WHO bought those treasuries. Because we all know it wasn't "households".
Pay no attention to the men behind the curtain...
Who bought all those Treasuries you ask?
A coupla Japanese guys were arrested crossing the boarder into Switzerland, with a suitcase full of the stuff within the last year.....
Of course THOSE Treasuries were deemed to be forgeries by the "authorities".
Yakuza scam gone wrong...
Yeah but its interesting to wonder what would happen if they somehow made their way into the vaults at UBS. Would they ever be rigorously audited once there? Nice injection of tier 1 capital if you ask me, not that UBS need it ;-)
Absolutely idle speculation, but perhaps the $134B of (counterfeit?) bonds discovered in Italy last June would account for some of it.
Idle2 speculation: Perhaps those bonds were issued as additional compensation for certain (Chinese?) investors to keep them in the market while keeping interest rates low.
No evidence for this. Just a thought experiment.
I had actually dismissed that story as a couple of bungling counterfeiters getting caught.
Now, I am at the point where I believe that these may have been real. Think about it, the treasury printing up secret bonds, then ditching the numbers into the "household sector".
Yes, Anoymouse, but it is the Japs, not the Chinks who are complicit in the this scheme.
This is not just a thought experiment.
Regards,
...unexpectedly...
You are Tyler Durden, but I am the Household Sector. I moved mid seven figures out of the banking system into Treasuries. I`m sure there`s plenty of me out there...folks who are scared sh7tless and don`t want to chase anybody else`s bubble except Ben`s. Yes, I would have been better off in GOOG or DRY or GGP, but the list of fantasies to which I can subscribe is limited.
Yum, the new green Kool Aid really tastes great!
$14 going into bond funds for every
$1 going into equity funds suggest
once again John Q may lose on both
accounts. Cash is King Dollar, the only
thing Big4 buying on dips as they
sell almost everything else on strength...
http://www.jubileeprosperity.com/
I see pitchforks....and dead people.
Welcome again:
http://darkdiamond.net/wp-content/uploads/2008/09/hell-freeze-thumb.jpg
Enron bought all the treasuries.
LOL. Ya it was Captain Drop Dead Fred. From enron!!!
I think it's obvious! The Fed gov't or federal reserve loaned somebody (or a limited number of institutions) $500+ billion who then purchased all these treasuries in order to recapitalize their under-capitalized balance sheets.
So the tale of the tape is, there was 700B in UST printing in '09. That was approximately the *entirety* of the US debt (obligated) through '08.
If true, we're done.
Fed and Primaries can't manufacture debt dollars
fast enough to cover bad debt derivative
defaults. Getting ready for the giant sucking
sound...
While Bernake sits smugly at his testimonials, there is a real price being paid to give money to his friends on Wall Street. While money is infinite for his bank friends, it is being taken from biotechnology companies, for instance.
'The company has slowed or stopped work on the eye disease retinitis pigmentosa, Parkinson’s disease and diabetes to save money and focus on the stroke trial, Hunt said. It has cut staff to 15 from 45 since 2007 and reduced research and development spending by 39 percent last year, saving about 2 million pounds.'
The money is being saved in the wrong pursuits, in my opinion. The uncountable profits made selling Bernake's debt by his bank friends could have found real uses.
http://www.bloomberg.com/apps/news?pid=20601124&sid=ai7QxzgHwETQ
Crowding out's a beach.
What always happens with
central command economies...
I wasted 3 hours disproving for myself this conspiracy theory. The best evidence for my conclusion --- that Sprott is full of ****, is the clear explanation of the "household sector" found online in the FRB's Guide to the Flow of Funds Account. Sprott supposedly cites to this, so he should know. Check page 170, Explanation of Table F.100, Households and Nonprofits. Hell, here it is, read it yourself.
The households and nonprofit organizations
sector consists of individual households
(including farm households) and nonprofit
organizations such as charitable organizations,
private foundations, schools, churches, labor
unions, and hospitals. Nonprofits account for
about 6 percent of the sector’s total financial
assets, according to recent estimates, but they
own a larger share of some of the individual
financial instruments held by the sector. (The
sector is often referred to as the ‘‘household’’
sector, but nonprofit organizations are
included because data for them are not available
separately except for the years 1987
through 1996. Supplementary tables F.100.a
and L.100.a in the quarterly publications of
the flow of funds accounts present the latest
available annual data for nonprofits.) At the
end of 1997, the sector had total financial
assets of more than $27 trillion, about 40 percent
of the financial assets of all sectors
combined.
O.K. Anon #173529
You have identified the "size" of the "Household Sector" in the Fed guide for 1997. The $27 Trillion Asset base (not identified as net of debt, so we don't know if this is net or gross). And you have assumed since 1997 the "Household Sector" has not incurred the horrific losses that all other investors have taken, except for the anointed chosen few TBTF. So the next step ought to be simple.
Have Timmy and Ben disclose to you the actual purchasers and the mystery is solved. Once you have accomplished that task you can have my full congratulations.
p.s. digging out the truth is never a waste of time.
Sprott is a very highly regarded manager here in Canada - he's been going on abou the US situation for quite some time.. many of his past comments have been posted here via Tyler. As I recall he's long gold and very much anti US market & anti "green shoots". I for one listen to his commentary.. but take it and EVERYTHING with a grain of salt.
My humble advice to anyone is: Listen, think.. and do some of your own background work. Ultimately if we all do this and all come up with the same conclusion - then perhaps we are on to something. It might explain why all of us find ourselves frequenting this great site. To borrow a quote from SHerlock Holmes - "Once you have eliminated the impossible, whatever remains, however improbable, must be the truth"
ps - I will say my happy holidays to everyone now as I plan to be absolutely sh!tfaced until the New Year.
Love reading Sprott but I take everything he writes with a shaker of salt.
Right up there with Rosie...
I wasted about 3 hours trying to sort this out. I say "wasted" because the whole thing falls apart when one refers to the FRB's Guide to the Flow of Funds Account, available online or in print. Page 170 explains the use of "household sector"; it is huge, comprising 40 percent of the total assets accounted for. Here:
Table F.100 Households and Nonprofit Organizations
The households and nonprofit organizations sector consists of individual households (including farm households) and nonprofit organizations such as charitable organizations, private foundations, schools, churches, labor unions, and hospitals. Nonprofits account for about 6 percent of the sector’s total financial assets, according to recent estimates, but they own a larger share of some of the individual financial instruments held by the sector. (The sector is often referred to as the ‘‘household’’ sector, but nonprofit organizations are included because data for them are not available separately except for the years 1987 through 1996.
Supplementary tables F.100.a and L.100.a in the quarterly publications of the flow of funds accounts present the latest available annual data for nonprofits.) At the end of 1997, the sector had total financial assets of more than $27 trillion, about 40 percent of the financial assets of all sectors combined.
Thanks for looking this up. I was looking at F.100 in pg 18 of Fed flows of funds. In addition to households and non-profits it says it includes domestic hedge funds in footnote 1 at the bottom of the page. Well that is a catch all! That sector probably needs a new name.
Lets not forget that the good ol' Social Security trust fund also buys Treasuries.
So, in a way, you could say that was "households".
I had to scroll through all these comments to post this:
FUCK THESE FUCKING FAGGOTS!
Wow! What an effort!
My little understanding (and I probably understand every day a little less so correct me if I am wrong) is that:
Banks get tons of money through the FED discount window at 0% they use it to leverage themselves and buy treasuries they sit on those making a big gain on the process.
The pocket change and some computers is used to manipulate the stock markets. Amazing how they parked the dow at +0.01 % yesterday (god forbides red numbers on xmas season)
I sit here lamenting the sad state of affairs but after a year nothing has changed and the prospects do not look good for the economy nor for fair markets neither.
The Federal Reserve is a fraud. Every company and agency that is involved with the FED is not only a fraud, but it is a support pillar and control mechanism of the FED. It's just another way to prop up the original fraud.
If the original is a fraud, then every single company and agency tied to it HAS to support this fraud. That is why the system HAS to collapse. Every house of cards must fall sooner or later.
Morpheus: The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work... when you go to church... when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.
Neo: What truth?
Morpheus: That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.
yeah, but how good was the "real" world in that movie? It sucked.
A bunch of people fighting for the right to live a useless life buried under the earth. Wonder how they staved off rickets.
Cipher had it right.
Perhaps INTERPOL will help clean up the fraud
Maybe a counterbalance to the CIA ?
One step closer towards the NWO ?
Executive Order Amended to Immunize INTERPOL In America - Is The ICC Next? By Steve Schippert, Clyde Middleton | December 23, 2009Last Thursday, December 17, 2009, The White House released an Executive Order "Amending Executive Order 12425." It grants INTERPOL (International Criminal Police Organization) a new level of full diplomatic immunity afforded to foreign embassies and select other "International Organizations" as set forth in the United States International Organizations Immunities Act of 1945.
By removing language from President Reagan's 1983 Executive Order 12425, this international law enforcement body now operates - now operates - on American soil beyond the reach of our own top law enforcement arm, the FBI, and is immune from Freedom Of Information Act (FOIA) requests.
--snip
CONCLUSIONS
In light of what we know and can observe, it is our logical conclusion that President Obama's Executive Order amending President Ronald Reagans' 1983 EO 12425 and placing INTERPOL above the United States Constitution and beyond the legal reach of our own top law enforcement is a precursor to more damaging moves.
The pre-requisite conditions regarding the Iraq withdrawal and the Guantanamo Bay terrorist detention facility closure will continue their course. meanwhile, the next move from President Obama is likely an attempt to dissolve the agreements made between President Bush and other states preventing them from turning over American military forces to the ICC (via INTERPOL) for war crimes or any other prosecutions.
When the paths on the road map converge - Iraq withdrawal, Guantánamo closure, perceived American image improved internationally, and an empowered INTERPOL in the United States - it is probable that President Barack Obama will once again make America a signatory to the International Criminal Court. It will be a move that surrenders American sovereignty to an international body who's INTERPOL enforcement arm has already been elevated above the Constitution and American domestic law enforcement.
For an added and disturbing wrinkle, INTERPOL's central operations office in the United States is within our own Justice Department offices. They are American law enforcement officers working under the aegis of INTERPOL within our own Justice Department. That they now operate with full diplomatic immunity and with "inviolable archives" from within our own buildings should send red flags soaring into the clouds.
This is the disturbing context for President Obama's quiet release of an amended Executive Order 12425. American sovereignty hangs in the balance if these actions are not prevented through public outcry and political pressure. Some Americans are paying attention, as can be seen from some of the earliest recognitions of this troubling development here, here and here. But the discussion must extend well beyond the Internet and social media.
Ultimately, a detailed verbal explanation is due the American public from the President of the United States detailing why an international law enforcement arm assisting a court we are not a signatory to has been elevated above our Constitution upon our soil.
http://threatswatch.org/analysis/2009/12/wither-sovereignty/
Thanks for flagging that - I am sure there will be ample opportunities in '10 to remind folks of this little amendment.
What's 500B in mysterious purchases to the 3TR that we know has been in money market? And as for Gross at Pimco, exactly
what part of the yield curve did he unload and when?
I say it's the short end and I say he was DONE weeks
ago. C'mon we all know how this works....he's probably
already buying again. Anyone ascribing to a "new normal"
world (including the banksters) would be looking at the long end of the curve to capitalize when the equity and commodity party ends in tears as it must. When one hear
hoofbeats, think horses, not zebras:)
"New normal" will be real. Be there or be square.
http://blog.atimes.net/?p=1287
@smalltownlawyer
I feel for you on this one. I was scratching my head trying to figure out how to reconcile the changes in treasuries held by “Mutual Funds” and the explosive growth of treasuries held by “Other Investors” in table OFS-2 of the Treasury Bulletin with the October flow of funds data showing an inflow of 312.85 billion into bond funds. One would think that inflow would make its way to the OFS-2 chart as mutual funds no?
I haven’t seen this link to the “Money Masters” posted in a while. This guy breaks down the scam from the dawn of time.
"Our concern now is that this is all starting to resemble one giant Ponzi scheme. We all
know that the Fed has been active in the market for T-bills. As you can see from Table A,
under the auspices of Quantitative Easing, they bought almost 50% of the new Treasury
issues in Q2 and almost 30% in Q3. It serves to remember that the whole point of selling
new US Treasury bonds is to attract outside capital to finance deficits or to pay off existing
debts that are maturing. We are now in a situation, however, where the Fed is printing
dollars to buy Treasuries as a means of faking the Treasury’s ability to attract outside
capital."
Yep. That pretty much sums it up.
--Popo
Mish says they've started buying the long end....
http://globaleconomicanalysis.blogspot.com/2009/12/yield-curve-happening...
So we have two alternatives to explain this. 1) The Fed is printing up a half a trillion in new currency to buy the excess supply and then blatantly lying about it or 2) American citizens with substantial net worth are re-allocating their portfolio away from riskier asset classes into treasuries.
As I don't think that Bernanke is insane enough to organize number 1 (but I could be wrong) that leaves us with the even more horrifying prospect that the Fed is telling the truth and investors really are accepting 0-3.5% returns in exchange for safety. Which begs the question, what the hell has been fueling the enormous run up in the equity markets during the past 9 months?
Bwahahahahaha! Getting 2x-3x returns on select stocks in this ponzi market and 50% long everything. Uh no, let me pass on this, I'd rather take 0% in fiatsco treasuries. Sure, 2) seems more probable ;) Long the ponzi market until it rolls over, and even then you can just move heavily into foreign stocks/assets of countries with actual real, growing economies, why treasuries?? Rahmp up the printing presses!!
If I repeat myself it's because I've nothing else to do: The Negative Marginal Productivity of Debt is insurmountable. It is now a self-perpetuating Ponzi scheme that is exponentially consuming itself from within while its exterior facade grows.
exactly.
I have been hammering on this meme for some time here on ZH and elsewhere.
The real economy has peaked. The interest owed on the money lent in the aggregate will begin to consume the productive cash flow in the economy.
Economic activity and EROI are sliding toward unity. Consequently, the only returns to be had are with insane leverage.
Nobody wants to borrow and nobody wants to lend because BOTH see the same future - one of contraction. Lending in the aggregate into a contractive future makes no business sense because your interest claims will compete with all the preexisting interest claims for their share of a declining real production base.
Yields HAVE to decline into a business cycle because real profitability is decreasing.
Unless there is a sharp rise in population.
Scooby says: Lets ruck with no rondom.
"Economic activity and EROI are sliding toward unity" - in a nutshell
The sad thing is is that when this sh*t does hit the fan none of us will have internet access to say "I told you so." We'll be too busy defending our lives. I'm sure most here are with me in that I don't want to see it happen. It brings me almost to tears, but it's inevitable now. If you don't see it, you're delusional at best. Prepare yourself mentally so when you do see it unfolding you will perform at your best. This isn't anti-Americanism, this is survival.
I'm clipping the Euro and Cable on 100x leverage and withdrawing funds only to buy more guns, ammo and baked beans.
i recommend canned tuna, shelf life of 12 years if the can is not dented
http://www.federalreserve.gov/RELEASES/z1/Current/z1.pdf
Sorry I just don't fully buy into the thesis here. Lets be clear that these are seasonally adjusted figures and looking at the seasonal adjustments they look rubbish. Next are we really sure this is a catch all and could it be capturing chinese dark pool activity through London.
If households are buying then they are also selling a lot of agency debt and cycling out of mutual funds. This may not be new money but money switched from elsewhere which will reverse once fed agency debt buying stops.
I also notice that brokers and dealers dumped government debt like a hot potato and since they are supposed to be building capital using high quality debt, I would take this as a bad sign.
There are of course lots of little caveats and get outs which suggests that the whole report is not much more than a PR exercise. Thats perhaps why the FED gets into trouble each year with its auditors.
For me the whole report is so tweaked that producing any theory based on the numbers is bound to be somewhat wrong.
I told you guys in the Spring it was over. Federal Reserve Z1 report shows it all.
The amount of "money" or what you use as "money" is not being generated at a high enough rate to sustain the credit system. China admitted to this same fact this week with their comments. Eventually you will have one big huge run up in prices as people dump Treasuries, then it's hyperdeflation of the credit system to hell.
http://www.federalreserve.gov/releases/z1/
It was a ponzi scheme when it was created.
Who is buying is beside the point because in the end, the Chinese are correct. US "credit" formation is not being done at a rate high enough to sustain the ponzi scheme that is call the Global Credit System. Any system based on compounding interest is doomed to fail, the only question is when. Usually in the 60-80 year range.
Household savings rate allowed them to purchase the amount of new treasuries.
Listen to what the Chinese have said and not neccesarily the rest of the article. It's been over since 2007.
Household savings in 2009 was over $800B from $4T to $4.8T. The rate is increasing. http://www.financialsense.com/stormwatch/2009/images/0724/Personal_Savin...
http://research.stlouisfed.org/fred2/data/SAVINGS_Max_630_378.png
It's called slow death. The ponzi scheme is not the government buying Treasuries from itself, the ponzi scheme is a system where people steal from the future and start compounding it. The current ponzi scheme has been in place since 1944.
Bernake isn't stupid. He knows that the US is "too big to fail"...just like the big banks he saved.
Q: What happens if the US is in danger of default or indeed does default? Someone please draw out potential scenerios.
The worlds reserve currency cannot default. Full control of the magical printing presses is the reason.
We are currently devaluing debt which is an argument that we are defaulting on debt. But when the original purchaser of the debt bought into it, they had a responsibility to hedge their exposure to the risk. So the argument is inane.
Can't lay off that much risk in a system riddled with risk even with huge premiums.
Someone must step up and assume it, hoping that the gross near term gain will compensate for the eventual losses.
China stepped up. They have their reward. Now must be the time when they see a large portion of it fail.
Just like when a motherlode gold vein taps out. Time to pull up stakes.
They only need to keep the facade up for a short time longer until the "Cap & Trade" scheme kicks in, when all the Wall St. Vampire Squids and Zombie banks (and Al Gore) will make trillions from innocent citizens only trying to heat their homes and put a tank of fuel into their cars to get to work (if they have a job), read of Copenhagen, where there was no agreement on climate control but they did lay down the "rules" for bureaucrats to work by. Then they can "pay back" the monies stolen from tax payers.
What's the matter with all you sour ZHers? It's Christmas and Ciigroup just paid back $20 billion in TARP funds. In total, $165 billion of TARP funds were paid back (after they made trillions in trading profits!). The banksters own the Fed...get with the program already!
At no time do their hands leave their arms
Dear Mr. Sprott,
Hedge Funds are part of the household sector in the Federal Reserve Flow of Funds. Mr. Ponzi is not lurking around in Washington. Please refer to "A Comparision of the Household Sector from the Flow of Funds Accounts and the Survey of Consumer" Abstract: Federal Reserve Board. Additionally there have been main stream business articles about this very topic this year see: "Tracking Hedge Funds(Where's Waldo?)."
Happy Holidays
This whole mess has driven me to compulsive self abuse just like a one armed monkey who's been chained by the neck to a rock and left to 'prosper' and 'live the American dream'. I no longer care if the situation fits the definition for -Ponzi Scheme- or any other scheme. Their backroom manipulations and corruptions are as despicable as beating a starved screaming horse to death in the street.
And these elites truly believe they are doing the right thing. There is no recognition of unjust wickedness within their own hearts. Their T-shirts all profess, -The divine right of kings!, We do God's will!
AMEN--Never have I been so sure that the mainstream media is a complicit tool of the elite. This corruption is screaming at them, grabbing them around the neck, and all they report is sunshine and roses LIES...
Until Americans take to the streets en masse, unfortunately the elite will continue their rampage.
Wake up America, while there is still something to save.
Not to even speak of all the deals made by the FR and Timmy to accept all GSE debt if they will buy Treasuries....PLEASE, Please, please Mr. China we gotta make a deal.
I know, call Jesse Ventura, he will fix it....;<}
We first produced this chart several months back, no joke. For the DWC Total Market, we are now exactly at A=C, and there are 3 other reasons that this is a logical stopping point, besides the horrific fundamentals.<br><br>Now here we are.
http://oahutrading.blogspot.com/2009/12/merry-christmas-total-market-tur...
Why isn't that on page 1 of every paper in Amerika? Oh yeah, because it's now spelled "Amerika."
I marvel that anybody is surprised that a bankrupt State facing $80T worth of unfunded liabilities had to resort to BS to support its debt markets.
I mean, c'mon...do you really believe that there is enough real capital in the world to support this crap?
As for China, it's not just on our side; they have overbuilt and their industries are not profitable. The world hit a point of inflection in the mid 2000s. It doesn't matter how much we buy from China if their intrinsic business model cannot produce a profit! They will necessarily have less to recycle into Treasuries.
All the accounting bullshit in the world CANNOT turn a nonprofitable activity into a profitable one!
Let's do a thought experiment on this. A classic case of uneconomic behavior would be pumping water uphill to get the energy out of it coming down. It's clear that this must lose energy, thus be unprofitable. So, let's say that the Fed or gov pays you a subsidy to do this. So YOU are nominally profitable but somebody ELSE has to suffer a loss in order to accomplish that!
We must start looking at aggregate economics as a heat model or thermodynamic problem instead of the laughable Jr. High mathematics of the magnum opuses like the QTM.
Right now the entirety of growth and western economics is running on faith. If you take the time to understand peak oil and its ramifications, you will begin to see the fundamental problem. Economic growth tracks energy supply growth. That's because doing things, i.e., work, requires energy which engineers and physicists actually CALL "work." Nobody in a university calls energy "energy," it is always WORK. Force x distance. The rate at which you can do work is called power, the derivative of work over time. The rate of supply of energy is effectively power...if energy supply rates go down, maximum power goes down. That means things slow, less doing gets done.
This is the future staring us in the face, one of declining returns on investment, declining power, contraction. A future where new interest claims will compete with existing ones for a share of a SCARCER future. Can you jack up yields? NO. Because that just increases the stress on the system.
Imagine a system where all economic activity is in the production of one thing, widgets. And all monetary formation is a loan against and for the production of widgets. It's CLEAR that the interest claims by a loan today can only be paid back in the real world with a growth in widget production. Now, what if widget production is going to decline...who would in their right mind lend? Today's existing interest claims create a repayment need exceeding the future number of widgets.
If you assume simple interest at 5%, and every widget is a dollar, you borrow $100, you owe 105 widgets at the end of the year. If production of these things is decreasing because an essential input to widgets has gone into supply decline, then you can only get your 105 by cannibalizing someone else's production, which means that THEY cannot repay. If the aggregate system requires this 5% growth rate which cannot be met, the ENTIRE SYSTEM is in immediate systemic default.
This is the problem with debt and compounding against a finite real system.
Surprised Trav777? Do you really think anyone on this blog is truly surprised? No way.
Just let him rave. He is all alone at Christmas.
Seriously, as soon as I hear "peak oil" I tune out. WTF are these people smoking? The ponzi collapse has very little to do with resource availability and everything to do with a society that allowed far too much greed and far too little rule of law.
amen
many in denial about peak oil
peak oil is the end of cheap oil
with world population increasing 300k /day
peak food too coming up
Trav, my man, you're about the only other space monkey here that "gets it". Did you see this comment I posted on another thread?
***
At the risk of repeating myself, you guys are just too emotionally involved. During this Xmas break, please take the opportunity to step back, smoke a joint and/or have a drink (or two+), and consider the large, macro perspective.
To wit, our entire global economy is, and has been for quite some time been, based on nothing more than credit driven asset inflation. That's it; no mystery, no games, just simple mathematics.
Now, in order for us (by that, I mean the world) to return to "economic growth", we need to collectively be able to add yet another layer of debt on top of our existing pyramid of promissory notes & derivatives to fuel investment, production & consumption.
There's only one hitch: we need to have sufficient productive output in which to service the additional financing costs of these incremental loans. So the question then becomes one of: how are we to achieve greater energy optimization and/or economic efficiencies to fulfill the required output gains, or is this even physically possible in a closed system (ie the Earth)?
Any accurate modeling of potential outcomes would conclude that we have a relatively straight-forward set of binary alternatives: we either pull it off, or we don't. If we pull it off, then all the extra-Constitutional activities undertaken by this and previous administrations, which incidentally comprise the key nutrients for blog sustenance, will soon be forgotten. However, if we don't, then a long cascade of defaults and bankruptcy proceedings will accompany the great debt deflation of the 10s.
So there it is in a nutshell: the entire game comes down to technology & productivity. If we don't see something emerging fairly quickly, then these little parlor game debates will become quaint memories as we (re)discover our inner-savage.
***
Trav, I think the jury is still out whether or not humanity comes up with a new trick. It could be anything from a genetically engineered miracle foods that take 1/100 of the current inputs required to produce nutritious 2,000 calories/person/day, to 500/mpg fuel efficient engines, or the ability to download our conscious selves into virtual machines (thereby reducing our footprints by a factor of infinity).
If these alternatives sound like acid induced fantasy, then you're probably guessing what direction I think our world is going to take. That's why gold is a fool's choice - better to spend one's money forming a local collective who can help watch your back.
Exellent Analsis!!! along the line of Accam's Razor I believe; that the simplest explanation or strategy tends to be the best one.
In market time; not chronological time; maybe two weeks has passed since the crash of 08. Let's wait another week or so and see what happens.
It will look like a scene from the Movie "The Road" after the social and economic feces settles out.
"forming a local collective who can help watch your back."
spoken by someone who admitted that they're willing to push everyone else out of the way to be the first one out of a falling plane.
Golly, it's a ponzi scheme?
And does the author have any commentary as to whether or not the glowing ball of yellow gas in the sky is in fact the sun?
Stockholm syndrome is a psychological response sometimes seen in abducted hostages, in which the hostage shows signs of loyalty to the hostage-taker, regardless of the danger or risk in which they have been placed.
http://en.wikipedia.org/wiki/Stockholm_syndrome
Battered person syndrome is a physical and psychological condition in reference to any person who, because of constant and severe domestic violence usually involving physical abuse by a partner, becomes depressed and unable to take any independent action that would allow him or her to escape the abuse.
http://en.wikipedia.org/wiki/Battered_person_syndrome
***
We are engaged in mass psychological warfare - these types of reports/comments that point out the obvious are in fact nothing more than a form of tapping on cellblock walls to let others locked in solitary know that the sun still rises.
Spot on B9K9. Frankly, I couldn't have thought of a better response to the idiotic comment you just replied to.
Scooby-Dooby-Doo, here Are You.You're ready and you're willing.
If we can count on you Scooby Doo,
I know you'll catch that villian.