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Niall Ferguson Video Lecture - "Empires On The Verge Of Chaos"

Tyler Durden's picture


ForaTV, in conjunction with the Australian Broadcasting Corporation, shares another terrific must watch presentation, this time by one of our favorite socioeconomic historians, Niall Ferguson, who in this lecture talks in depth, and with an objective perspective that only few can share, about empires on the verge of decline, emphasizing the precarious position the US has found itself in, now that China's ascendancy is undisputed, and only matched by the accelerating descent of the once great US nation. The fact that Ferguson is Paul Krugman's natural nemesis in all things only makes his insights all that more relevant (not to mention correct). And while the various chapters discuss such key concepts as the limits and implications of complexity theory, the ever increasing portion of US federal revenues attributed to interest payments (surpassing defense spending), China's military sustainability, the limits of Keynesian stimulus, investing in gold and hyperinflationary concerns, the primary highlight is Ferguson's discussion on what may be the primary topic of 2011: whether ot not debt will trigger the collapse of the US. To wit: "Sometime over the next decade the US will reach the crossover point at which it will be spending more on debt service, than it is able to spend on defense...The Chinese have noticed what the rest of the world's investors pretend not to see: that the US is on a completely unsustainable fiscal course with no apparent political means of self-correcting. Ladies and gentlemen, military retreat from the mountains of the Hindu Kush, or the plains of Mesopotamia has long been the harbinger of imperial fall." Recommended viewing.

From the official presentation:

Throughout history the rise and fall of empires isn't slow or cyclical, as we like to think, but mostly happens very, very suddenly. America is a superpower on the edge of chaos, according to economic historian and author Niall Ferguson. U.S. debt levels, he says, and its unwillingness to address the problem, has put it in the same category as other great empires which have collapsed throughout the ages.

Ferguson argues the world is changing. There's the rise of authoritarian China as a super-power; a Keynesian president leading a weakened United States; the re-emergence of democratic India as a great power; the continued decline of Japan; and the probability of continued global economic instability ahead.

Is the rise and fall of empires cyclical or arrhythmic? How does economic profligacy -- whether the result of arrogance or naivety -- contribute to the downfall of civilizations? Not to be missed, the address will offer a timely review of primacy, leadership, and the complex factors behind the rise and fall of great powers and civilizations.

The introuction, which incidentally is the weakest part of the hour long presentation, is below, with an indexed link to each section provided below.

01.    Introduction    09 min 09 sec
02.    Niall Ferguson Opening Remarks    01 min 40 sec
03.    Historical Cycles of Empire Decline    07 min 07 sec
04.    Complexity Theory    08 min 20 sec
05.    Implications for the United States    06 min 22 sec
06.    Interest Payments as a Share of US Revenue    01 min 56 sec
07.    Failure of Perception    02 min 43 sec
08.    Debt Payment Overtaking Defense Spending    06 min 58 sec
09.    Q1: Healthcare Reform    04 min 10 sec
10.    Q2: China's Military Sustainability    02 min 38 sec
11.    Q3: Gold Investing    01 min 24 sec
12.    Q4: Political Stability of China    02 min 42 sec
13.    Q5: Children Teaching You About Debt / Radical Islam    03 min 57 sec
14.    Q6: Advice to Obama    02 min 40 sec
15.    Q7: Limits of Keynesian Stimulus    03 min 46 sec
16.    Q8: Better Leadership in the West    03 min 27 sec
17.    Q9: Fear of Hyperinflation    05 min 09 sec

h/t asymptotix


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Sun, 01/02/2011 - 12:44 | 842546 Sean7k
Sean7k's picture

Niall Ferguson is the official apologist of the Bilderbergers, the chosen biographer for the Rothchilds and the wunderkind of the Council of Foreign Relations. While brilliant and useful as a tool to see where the elites are leading us- do not be fooled by the presentation. 

For those who continue to complain about the stupidity of the ruling elite, Ferguson should give you cause to wonder. Top notch rhetoritician and an excellent economist, capable of putting lipstick on the ugly pig of totalitarianism and leaving you fumbling for the opportunity to kiss your liberty goodbye.

Sun, 01/02/2011 - 12:59 | 842562 Clapham Junction
Clapham Junction's picture

How's AP history going?

Sun, 01/02/2011 - 13:10 | 842583 Sean7k
Sean7k's picture

Wow, strong argument- an implied insult. Is there some part of his resume you wish to dispute? Have you read anything from Ferguson? Are you aware of work as a historian? As an economist? 

Perhaps you have never seen his name on a list of Bilderbergers presenters and attendees? The two volume and rumored to be three, History of the Rothchilds, with access to family papers and records which NO one has ever been allowed to see is not known to you? Do you read "Foreign Affairs"?

Are you intelligent enough to dissect his arguments and understand the repercussions of  his recommendations? To see the endgame of his machinations and the actions of his masters?

You might find it useful, hopefully, you are capable. 

Sun, 01/02/2011 - 13:27 | 842606 Au Member
Au Member's picture

Sean7K well said

Critical analysis of Fergusons Ascent Of Money here:


The author of the piece seems to think Larry Summers penned some parts so that it fitted his particular (Shite) brand of economics.

Sun, 01/02/2011 - 13:32 | 842610 Sean7k
Sean7k's picture

Nice reference. Thanks!

Sun, 01/02/2011 - 13:41 | 842621 Au Member
Au Member's picture

Great quote from the article aimed squarely at the Ivy league economics lecturers who are clearly captured and programmed to self perpetuate this system of money=debt vorticular death spiral that we are caught in:


One of the saddest, and most destructive, of the many ripple effects of dishonest money is the government’s wholesale subversion of the economics profession and large swaths of the academic community. [12] Given human nature, it would be naïve to implore Establishment academics to bite the hand that feeds them and come clean about money, by appealing to traditional notions of scholarship, honesty and fairness. But perhaps the unfolding catastrophe, in its glaring obviousness, provides the basis for a different sort of appeal:

Ladies and Gentlemen of the Academy, look to your legacies. How do you wish to be remembered generations hence? As mere ‘servile writers’, as Mises put it, pliant members of a privileged elite who led a life of relative ease in the waning days of a corrupt regime? Or as individuals of distinction who dared to speak out and act honorably? Your call, Professors.

Mon, 01/03/2011 - 04:06 | 843718 Monk
Monk's picture

What's not mentioned is found in the liquidity chart in this site:

That is, most of the money supply consists of unregulated derivatives.

In addition, if there are only around 150,000 metric tons of gold and silver worldwide, then that leaves us with less than one troy oz. of precious metals per person, likely not enough to maintain a gold standard.


Fri, 01/07/2011 - 09:45 | 855666 4xaddict
4xaddict's picture

Some valid points AU but worth reiterating that like all information this just needs to be read with the author's political leaning/prejudices in mind. Much like every comment written on ZH.

There is some very good information in his publications as you say so those skim reading your comments should be sure to keep that in mind.


Fri, 01/07/2011 - 09:46 | 855667 4xaddict
4xaddict's picture


Sun, 01/02/2011 - 14:49 | 842703 JonNadler
JonNadler's picture

Au, great analysis of the Ascent of Money

Angry that the world is so unfair? Infuriated by fat-cat capitalists and billion-bonus bankers? Baffled by the yawning chasm between the Haves, the Have-nots – and the Have-Yachts? You are not alone. Throughout the history of Western civilization, there has been a recurrent hostility to finance and financiers, rooted in the idea that those who make their living from lending money are somehow parasitical on the ‘real’ economic activities of agriculture and manufacturing. This hostility has three causes. It is partly because debtors have tended to outnumber creditors and the former have seldom felt very well disposed towards the latter. It is partly because financial crises and scandals occur frequently enough to make finance appear to be a cause of poverty rather than prosperity, volatility rather than stability. And it is partly because, for centuries, financial services in countries all over the world were disproportionately provided by members of ethnic or religious minorities, who had been excluded from land ownership but enjoyed success in finance because of their own tight-knit networks of kinship and trust.

Despite our deeply rooted prejudices against ‘filthy lucre’, however, money is the root of most progress. [p. 2]




Pretty telling about Ferguson. That's so disingenuous it puts me to shame

Sun, 01/09/2011 - 18:03 | 862480 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

That everyone must forgive everyone... was my first thought after I learned about the magnitude of the lies that keep this broken system going.


Sun, 01/02/2011 - 16:02 | 842812 trav7777
trav7777's picture

why didn't he just break it down and say "white people are jewhaters"?

The reality is that this group of "tight kinship" aka clan nepotism has gotten rich lending what they did not have.  Look at our banking system now...$50T of Z1 credit outstanding...does ANYONE believe that the banks who lent this mass of money ever really HAD $50T in capital to actually lend?

Debtmoney is a ponzi, and emerging recognition of that provokes the hostility.  Fractional lending at compound interest has gotten people lynched because it really IS earning via parasitism.

Sun, 01/02/2011 - 17:51 | 843006 Bearster
Bearster's picture

Why is it seemingly impossible to differentiate banking from debt-based fiat money?  Does anyone here think that in an unadulterated gold standard there would not be (or should not be) banking and lending??

Why is it seemingly impossible to discuss finance without racist hatred?


Sun, 01/02/2011 - 18:47 | 843059 Alexandre Stavisky
Alexandre Stavisky's picture

Ferguson wrote a book on the Rothschilds.  Scholarly but very softball pitch.  I'm sure he uncovered some revealing but suppressed information.  They probably took him in and gave him their equivalent of the BEM and gave his career that "special interest" secret-keepers enjoy.  Undoubtedly erudite, but whitewashes the tyranny and conflict-producing-control exerted over the globe by money masters.

Imagine, if you will, extending UE and food stamps and social welfare until that "critical mass" of population percentage is reached.  And then close the books, destroy the currency, close the money conduit, and abscond.

Then watch from other commanding heights as your strategies of decades' intrigue produces the DEATH OF A NATION.

Then again maybe it is just a series of simple errors and random human frailty that invokes the destroying ANGEL.

Sun, 01/02/2011 - 20:00 | 843136 lawrence1
lawrence1's picture

Yes, good reference. I perused once the Ascent of Money, looking specifically what he said of gold, and distrusted him.  Thanks, now I know why.

Sun, 01/02/2011 - 20:46 | 843200 Kreditanstalt
Kreditanstalt's picture

@Au Member, thanks for the link to the review...!

Reading that book, I wondered how he could spend so much time devoting himself to describing the wonders of the development of CREDIT and how it had "allowed economic expansion", yet STILL not have any opinion about today's monetary system...!?!  One read that kind of book and expects a decent academic writer to come down on one side or the other.  But...NO.  Rather smacks of Francis Fukuyama, saying that history has reached its zenith in the present monetary system...

Sun, 01/02/2011 - 14:10 | 842646 Oracle of Kypseli
Oracle of Kypseli's picture

@ sean7k

Can you please take time and argue the points as if the lecturer was an uknown? I bet you can not.

Sun, 01/02/2011 - 15:06 | 842726 Sean7k
Sean7k's picture

Pick one, He's essentially a Keynsian, which means he's a tool and trapped defending a failed economic theory. I'll do it at halftime.

Sun, 01/02/2011 - 15:41 | 842775 Oracle of Kypseli
Oracle of Kypseli's picture

I did not see that in his lecture until the last question, in which he stated that it is difficult to create hyperinflation, which may be true initially as Ben is trying to inflate, but once inflation starts, can he stop it?

As an intellectual exercise, I wonder if it is better to flood all taxpayers with government rebates that have expiration dates and may kickstart the cycle of spending, especially if it is not your earned money. But some of us may use it to buy more gold and silver.  

Sun, 01/02/2011 - 16:02 | 842814 Jerry Maguire
Jerry Maguire's picture

Ben is not trying to inflate.  He is rescuing the banking system and imposing austerity, trying to avoid deflation as much as he can, and not succeeding much.

Hyper-inflation is a different animal than inflation.  It's a political event, not an economic one.

Sun, 01/02/2011 - 16:28 | 842873 Sean7k
Sean7k's picture

Two questions then?

One, hyperinflation has little to do with inflation. Hyperinflation is a loss of faith in a currency- common misconception. While an economy will experience inflation a priori, until there is a loss of confidence in the ability of the government to pay it's debts (Weimar) and the inability to buy inputs or sell outputs because people will no longer accept your currency at your perceived value (scarcity, Zimbabwe) does hyperinflation happen. Thus, hyperinflation can only happen through direct action of the monetary elites- it is always created.

Two, this is essentially a tax reduction with a requirement to spend. It requires a definition on what it can be spent on (cash for clunkers, house rebates, TARP, etc.), but the problems are manifold: first, is your admission- you would BUY gold and then hoard (as would I)=sterilizes liquidity, but fails to create sales or capital investment for additional growth. Second, it does not address debt. While the US has been able to create mountains of unpayable debt because it's reserve status, there may come a reckoning (the bond market, especially at the state and local level, but soon to hit Treasuries). The typical reaction is austerity, but austerity slows an economy, it doesn't grow it, making it MORE difficult to pay current entitlements and interest on the debt. Third, the inclusion of expiration dates implies record keeping and oversight- a huge cost that would diminish it's effectiveness.

Lastly, this implies spending is the answer(QE), if that was the case, why don't credit card companies just keep raising your limit? Because, while your ability to pay debt is limited, the ability of debt to be used to withdraw wealth from the generations of wealth creation by all Americans has yet to be exhausted. This is the point of currency inflation, giving the banks and corporations use of the currency before it is debased and depreciated as it works it's way through the economy. Giving the government unlimited funds to create debt that pays interest on money that was created through fractional reserve banking, rather than from the production of goods and services.

The only way to improve an economy is through the creation of wealth from the production of goods and services that have real value that results in other people buying the product. We spend more time abusing leverage for profit, then creating goods for sale. 

Sun, 01/02/2011 - 16:35 | 842890 GoinFawr
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Sun, 01/02/2011 - 21:51 | 843329 Red Neck Repugnicant
Red Neck Repugnicant's picture

If you examine Zimbabwe and Weimar, you will see that hyperinflation is a 4X phenomenon, where a currency is driven into the ditch by speculators.

The budget deficits of both Zimbabwe and Weimar were no more alarming than that of the US or Britain today.  So why did Zimbabwe and Weimar unravel, while the dollar and pound stays relatively buoyant? This leads one to believe that hyperinflation is not solely rooted in the printing press, or in politics or economics. There must be something else.

The answer is that Zimbabwe and Weimar were indebted in a currency other than their own, forcing them to participate in the currency markets to meet their debt obligations.  Conversely, the United States and Britain are indebted in our their own currency - treasuries and gilts.  Rather than being dependent on the currency markets to service our debt, we (US and Britain) are simply reliant on our Treasury and central bank. 

This makes all the difference in the world. Speculators drove rates to the moon when they realized that both Zimbabwe and Weimar had to enter the currency markets to service their debts.  It was not too long before those printing presses couldn't keep up with exchange rates.  

I think the difference between inflation and hyperinflation is primarily a speculator-driven 4X phenomenon on countries that have debts denominated in currencies other than their own, rather than a political, economic or supply/demand event. 

Sun, 01/02/2011 - 22:04 | 843370 akak
akak's picture

I think that is a grossly simplistic and, more to the point, incorrect analysis.

Zimbabwe, Weimar Germany, the USA today and the UK today all share one thing in common: a debt that realistically cannot be repaid or even serviced, regardless in just whose currency that repayment must be made.  The fact that the US can issue its own currency is beside the point; the underlying wealth sufficient and able to repay that debt does not for all practical purposes exist.  Governments can print or create all the currency they want, but at the end of the day that is ALL they can do ---- they have no ability to create wealth

Perhaps the USA and the UK will avoid hyperinflation on the scale of Zimbabwe, but in the end the value of their currencies will be similarly or equally trashed --- it is just a matter of timing, and the rate of that trashing.  If we experience 20% annual inflation for ten years, or an 84% devaluation of the dollar over the course of one month in a sudden but brief hyperinflation, are we fundamentally much better off either way?

Sun, 01/02/2011 - 22:25 | 843397 Red Neck Repugnicant
Red Neck Repugnicant's picture

Sorry.  You're wrong.  

Are you trying to tell me that there is no real meaningful difference between:


  • A country totally reliant on the currency market to service their debt
  • A country that can print their deficits, then sell it to their own central bank 


This difference means nothing in the hyperinflation argument? Are you serious?

Furthermore, the following statement of yours is very strange, with extreme data plucked out of nowhere and adds nothing to your point, nor does it subtract anything from my argument.  It's just a meaningless sentence, making an irrelevant point. 

If we experience 20% annual inflation for ten years, or an 84% devaluation of the dollar over the course of one month in a sudden but brief hyperinflation, are we fundamentally much better off either way?

Sun, 01/02/2011 - 22:41 | 843410 akak
akak's picture

Sorry.  You're wrong.  

Are you trying to tell me that there is no real meaningful difference between:

  • A country totally reliant on the currency market to service their debt
  • A country that can print their deficits, then sell it to their own central bank

Fundamentally, no there is not.  The underlying issue is still the same: The arbitrarily large issuance of fiat currency does NOT create wealth!  Whether a government defaults on its debt by formal default, or by the stealth default of currency debasement, they still end up screwing their debtors either way.


Furthermore, the following statement of yours is very strange, with extreme data plucked out of nowhere and adds nothing to your point, nor does it subtract anything from my argument.  It's just a meaningless sentence, making an irrelevant point. 

If we experience 20% annual inflation for ten years, or an 84% devaluation of the dollar over the course of one month in a sudden but brief hyperinflation, are we fundamentally much better off either way?

How was that out of context, when you were discussing inflation vs. hyperinflation, and claiming that we would certainly avoid the latter? I was merely trying to point out that we would be more or less equally screwed either way.  And since you are clearly mathematically challenged, the net currency depreciation over ten years is the same in both cases.

Sun, 01/02/2011 - 22:58 | 843444 Red Neck Repugnicant
Red Neck Repugnicant's picture

The underlying issue is still the same: The arbitrarily large issuance of fiat currency does NOT create wealth!  Whether a government defaults on its debt by formal default, or by the stealth default of currency debasement, they still end up screwing their debtors either way.

Yes. Of course. Anyone would agree with this statement of yours.  

But we're talking about hyperinflation - an event where a currency fluctuates by the hour.  We're not talking the slow drain on wealth through the gradual and stealthy rise in inflation.  Hyperinflation is a total collapse of a currency.  What you're describing is simply inflation and the effect it has on a long enough timeline. 

Mon, 01/17/2011 - 18:21 | 882704 Chappaquiddick
Chappaquiddick's picture

It was loss of faith in the Mark by external / foreign investors that lead to the hyperinflation.  The government was printing indiscriminately to boost the economy out of the post war recession.  They over did it and all of those marks which had flown overseas made an unwelcome return.  The result was too many Marks for things of value - they tried to clear their debt with a currency of decreasing international value and that pushed them to print even more.  That was Weimar and clearly the over use of the printing press was the problem.

The US is in exactly the same predicament and if the international community decides they have had enough and start to sell their dollars then the same shit will happen in the US too.  70% of the money in circulation on the planet are dollars, if only a small fraction came home prices would explode - that's why they've imposed capital flow controls, to try and prevent this repatriation.  That is where the 4X market plays its part in the process, but the printing press it absolutely integral as well.


Sun, 01/02/2011 - 22:23 | 843396 Sean7k
Sean7k's picture

RNR, as much as I enjoy your humor, you have really put your foot in it here. The German currency remained the same until the height of hyperinflation caused the government to create a new one. Regardless, the war reparations, in proportions that they were unserviceable forced the government to print money to pay them. This was exacerbated by the confiscation of key industries and sovereign territory when debts could not be met. Finally, Britain was allowed to keep a representative on their central bank board that determined policy (to protect Britain). Germany was left with no other option but to print. I recently ordered a 10000 mark note from 1922. The young man by Durer has a vampire hidden at the neck referring to the vampire actions of the French.

Zimbabwe 's currency was the Zimbabwe dollar. Hyperinflation was a result of excessive printing to encourage people to sell goods that were scarce from government policies that had destroyed productive capacity and left the economy with no goods to sell. Eventually, goods were better than currency and barter took over. 

So, what you have said here makes no sense to me whatsoever. Perhaps you could clarify?

Sun, 01/02/2011 - 22:46 | 843424 Red Neck Repugnicant
Red Neck Repugnicant's picture

Well, let's take a look at Weimar first. I suppose I could write an endlessly long explanation that would bore you to tears, so I'll just refer you to Stephen Zarlenga's A Private Affair, where I formulated my opinion:

No need to read the entire thing. The part that you will find relevant is between the 2nd and 3rd pictures.  

Sun, 01/02/2011 - 22:58 | 843443 akak
akak's picture

You still are ignoring or refusing to acknowledge the fact that whether a government formally defaults by repudiating their debts, or engages in a "soft default" through the debasement of their currency, their debts are effectively not being repaid in either case.  You can dance around the issue of printing currency to repay debts, but we all know that doing so is just another form of default --- a less honest and much more widely destructive one as well.

Sun, 01/02/2011 - 23:04 | 843448 Red Neck Repugnicant
Red Neck Repugnicant's picture

whether a government formally defaults by repudiating their debts, or engages in a "soft default" through the debasement of their currency, their debts are effectively not being repaid in either case.

As I stated above, I agree with this point you're making - anyone would.  But that is not the point of this discussion.  We're talking about the mechanics of hyperinflation, not the slow drain of inflation or how inflation eventually leads to default.

You're reworking this discussion because I have you hanging upside down, trapped in a potato sack.  


Sun, 01/02/2011 - 23:14 | 843463 akak
akak's picture

Not reworking anything --- merely trying to work with your tortured logic.

You seem to feel, like Ben Bernanke, that the government has a magical printing press that can issue not just currency, but wealth itself.  You are suggesting that hyperinflation can happen via only one narrow route, and refuse to recognize the underlying factor that triggers all such events: unpayable government debt.  Hyperinflations (or sudden currrency collapses, more or less the same thing on a shorter timeframe) have repeatedly happened due to unpayable debts in their own currency, as in Zimbabwe, or to debts in others' currencies equally.  In essence, you are tortuously trying to argue that "it can't happen here", when it has "happened here" in many places many times already.

Please take your neoKeynesian tripe elsewhere.

Mon, 01/03/2011 - 00:08 | 843523 Red Neck Repugnicant
Red Neck Repugnicant's picture

You might as well post, Big Macs have all beef patties, special sauce, lettuce and cheese.

No one is arguing about Big Macs, and no one is arguing that both hyperinflation and inflation (on a long enough timeline) lead to default.  You repeatedly make points that NO ONE is debating.   

We are talking about the mechanics of hyperinflation, much like what occurred in Zimbabwe and Weimar Germany.  We were discussing how it happened, and how do inflation fears suddenly spiral into a hyperinflationary collapse of a currency. While true, both inflation and hyperinflation lead to default, that is NOT the discussion!  Neither are Big Macs.

Hyperinflation is an entirely different phenomenon than inflation, even if both eventually lead to default.  

In the United States, we will see knee-buckling deflation before hyperinflation, and that is also my premise as to why gold will eventually collapse.  The overhang of debt that hasn't been written off by Wall Street is FAR greater than anything the Fed will print.  The debt/credit bubble worth tens of trillions still lurks on the banks' murky balance sheets, and is more powerful than the Fed's inflationary abilities.  Even if the Fed has demonstrated a temporary ability to inflate, the overhang of unrealized write-offs will eventually win.  The Fed can influence, but the market always wins. After the Fed's inflationary injections wear off, the economy will succumb to trillions in write-offs and the hangover from the debt bubble will take a buzzsaw to all assets.


Mon, 01/03/2011 - 05:26 | 843788 AnAnonymous
AnAnonymous's picture

You seem to feel, like Ben Bernanke, that the government has a magical printing press that can issue not just currency, but wealth itself. 


That is not a feeling. That is an observation.

Every USD the US emits is backed by the wealth of some countries forced to use USD to trade. It is a two way street problem. Many countries around the world, after a dedicated work by the US to achieve that situation, have to acquire USD to fund their debt.

Every single USD will buy wealth from those countries. This is where the US reserve lies.

The US deal is simple:

-free distribution of USD

-Little can be bought from the US because the US produces little tradable.

-But thanks to USD, people can acquire the wealth of a third party.

No hyperinflation coming up. Impossible until the third party still have wealth.

Mon, 01/03/2011 - 02:15 | 843647 Sean7k
Sean7k's picture

Thank you for the link. The author forgets to inform the reader about the history outside what would prove his thesis. Further, using Schaut's apology to prove Schaut's points is not good scholarship,but I digress.

The author fails to address the gold standard and it's re-institution, via the Genoa conference that attempted to create fixed prices for currencies. The fixes were set at values above their gold equivalents. This caused gold and silver to go underground and speculation in currency to thrive. Therefore, your first point blaming speculation is a smear against an effect without examining the cause. It is not speculation, per se, that causes the hyperinflation- it is the fixing of the mark at a value above it's value in gold bullion. 

Further, at this particular time, the world found itself without a reserve currency for the first time since the beginning of the century. The strongest currency was the dollar as the US had entered the war late and had not created as much debt as the european nations. All currencies had inflated, Germany being one of the worse, and this necessitated negotiations. Britain had come out of the war as the winner with US backing and proceeded to create a fixed currency valuation system favorable to the Pound.

None of this changes the fact that war reparations were debt the Germans were incapable of paying. With every default, more territory and industry was confiscated by the creditor countries (your article mentions the loss of the Ruhr valley- home to industry and wine). This exacerbated the problem until Germany was forced to print it's way out of it problem- what did they have to lose?

When you print in excessive amounts, you do destroy a currency. You also destroy faith in the currency- this is the cause of hyperinflation. When the charade can no longer continue, a new currency is created-the Rentenmark. Yes, speculators were destroyed in the transition to the new currency, but because it was not printed in ridiculous numbers, faith was restored. 

It would also help if the author had not tried to include modern methods of arbitrage, which include very sophisticated instruments unknown at the time, to lend credence to an action in the 1920's. 

I agree, speculation can frustrate the attempts of central banks to use QE to extend and pretend- that is a far cry from causing hyperinflation. Speculators have always existed in markets and help markets discover price equilibrium. The only reason their contribution can become outsized is because central banks have decided to work at margins that are inadequate to defend their capital requirements.

Sun, 01/02/2011 - 16:58 | 842928 Jerry Maguire
Jerry Maguire's picture

Very good post, with two caveats from my point of view. 

First, the "elites" operate in concert sometimes and are at each others' throats at other times.  They disagree among themselves often, like all other human beings.  Ordinarily, they prevail upon the governments to do their bidding, but a hyper-inflation, in my opinion, is more related to deflation.  Deflation is the result of large creditors not letting go of unpayable debt.  They demand enforcement.  And when the government finally refuses because it will not so openly and dramatically oppress its own people (stealthily doing that is another matter and much more common), they tell the elites as a group, and explicitly, to go fuck themselves, at which point the elites run from the currency en masse and destroy it.  That was Weimar.

Second, common people are not free from blame; elites are far more blameworthy because they have benefitted more and are better able to see what is happening, but that does not mean they are to a limited degree not to blame. 

We're going to have to learn to forgive each other, peons, elites, and everyone in between.  What has happened to the economy is much bigger than any individual or group of individuals and seeking punishment is not going to work out well for anyone. 

I've been writing a lot on this subject, and recently added Steve Keen's debt-watch to my blogroll:

Sun, 01/02/2011 - 17:27 | 842971 Sean7k
Sean7k's picture

Bilderbergers, CFR, Tri-lateral Commission- elites acting together. Morgan vs Rockefeller- elites at each other's throats. In both cases, the elites pursue and develop legislation that enhances their ability to act as government protected monopolies and cartels.Morgan may have lost some control over Federal Reserve to Rockefeller in the thirties, but more than made up for it in being part of the BIS. When you can identify any time government told big business to "fuck off", I will entertain your point.

Deflation is a reduction in the prices paid for goods and services. It benefits savers and consumers and hurts debt holders (banks) which is why we are told deflation is bad. Deflation is not bad. You can have productive growth, growing employment and deflation. The US experienced two such periods, 1880's and 1870's. If it had not been for the banks inflating the money supply, these would have been two of our most productive decades. Read, "History of Money and Banking in the US", Rothbard.

Lastly, I didn't mention the common people. I disagree, in order to bear responsibility, you have to have the power to influence and carry out policy. That resides solely in the hands of the FED- Private bankers. You may choose to forgive them, but I wish to see their heads on a pike outside Eccles Mariner- another fascist banker.

Steve Keen- not to bad.He's no Murray Rothbard, but he is a breath of fresh air.


Sun, 01/02/2011 - 17:59 | 843012 Bearster
Bearster's picture

If I was a conspiracy theorist, I would say that you are using the definition of inflation that "they want you to use."

Inflation is an expansion of credit in a fiat system, deflation the opposite (by debt payments a little but mostly by defaults).  Deflation is horrible, but inevitable once you pump up inflation in the first place.  As von Mises noted, the only choice once you inflate up a boom is to either take your deflationary bust or destroy the currency trying to prevent it.

We are on the path of destroying the currency.  That will be horrible enough without racist wannabe mass murders out there saying "kill the Jew!", "kill the black!", "kill the white!", etc.

You can't bring back the wealth destroyed by the ponzi scheme of fiat money.  And certainly not by advocating hatred or murder!

Sun, 01/02/2011 - 18:20 | 843028 Sean7k
Sean7k's picture

Deflation is not the opposite of inflation nor is it horrible. Deflation is a reduction in the price of goods and services. You are confusing credit destruction from malinvestment with deflation. While prices do fall from credit destruction, you can also have deflation from improvements in technology or economies of scale. The reduction in prices are beneficial to consumers (paying less for goods and services) and savers whose capital is not debased by inflation allowing them to receive real interest.

As you note, the creditary bust is essential so that price equilibrium can be re-established. Remembering that the business cycle is abused by the fiat currency system. Creating larger swings than would be possible in a sound money system.

The FED is on the path to destroying the currency for the benefit of bankers. I resent the implication that my comments are racist. The banker elites running the government and banking system are traitors to this country. The penalty for treason, last time I checked, was death. However, I have never referred to Jewish bankers. I have cited zionists, but they are not a race per se- while many may be Jewish, it is unfortunate that Jews bear the brunt of the blame for their actions (Rothschilds, Begin, etc.)

Though we may not be able to bring back wealth destroyed by the ponzi scheme, we can limit it's effect by defaulting on the national debt, eliminating personal income taxes and eliminating legal tender laws.


Sun, 01/09/2011 - 18:12 | 862500 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

I hope that whoever junked you dies in a fire.

Sun, 01/02/2011 - 18:01 | 843014 Jerry Maguire
Jerry Maguire's picture

I'm sympathetic that you want to see their heads on a pike.  Don't get me wrong.

I'm not saying there's a lot of blame for common people, or little blame for the elites.  Clearly, it's the reverse.  But to some extent both groups know not what they do.

Deflation is hell for debtors - mostly common people - unless the creditors show mercy, and even then it is hell.  Yet, the central bank system tries to practice mercy, by slowing everything down.  They have been very effective at that. 

If Bernanke saves the banking system while simultaneously giving the debtors breathing room, isn't that merciful, from his point of view?  It won't work, and it won't be merciful in the end, but he's trying not to be evil.  The evil of what is already in place constrains him.  He didn't put it in place. 

There's room to forgive.  You should consider it.

Sun, 01/02/2011 - 18:36 | 843048 Sean7k
Sean7k's picture

Bernake can only destroy the banking system, he can not save it. Further, why would you save a system that gives an advantage to the bankers through fractional reserve banking and eliminates your ability to choose which monetary substitute to use (legal tender laws)?

Why would you defend a private banking cartel that creates huge debts on a secret balance sheet, that are not responsible to the electorate, where the debt is then guaranteed by the people? Where is the discipline? 

Ben Bernanke is one of the most evil people on the planet. He is destroying the financial futures of every man, woman and child in America in order to allow banks to be recapitalized and insure their profits and bonuses. It is QE that is keeping price equilibrium from being established. A necessary baseline for the creation of jobs and producing goods and services at a profit- creating wealth. He is presiding over massive government debt creation that must be serviced- stealing over 400 billion a year in interest payments that could be used by entrepreneurs to create new business. With an interest increase- it could rise to 600 billion. All without retiring any principle.

The evil in place is the banking system! He is another torchbearer of the system! Even Keynes would admit that malinvestment must be reconciled- he may have been a Fabian Socialist, but he wasn't a monetarist.

Whether you realize it or not, you are merely Satan's apologist. I hope you have just been mislead. 

Sun, 01/02/2011 - 19:16 | 843093 Jerry Maguire
Jerry Maguire's picture

I have not defended the banking system; I consider it indefensible, but I have advocated forgiveness.  I asked you to consider it.  Is that Satan talking?

Bernanke didn't create the banking system.  He might be a thoroughgoing evil person, although that is rare.  People do evil things.  That doesn't make them evil in themselves, at least not relative to other people.

You brought up Satan.  Do you think Satan is real?  Maybe he is behind the banking system and not any particular human being or group of human beings.  It would be wrong to direct hatred and violence at other human beings who are mere pawns in a game.

You should think about these things.  Hate the sin, not the sinner.

Sun, 01/02/2011 - 19:28 | 843105 Sean7k
Sean7k's picture

 ' the central banking system has practiced mercy..." sounds like a defense to me. I have no idea whether Satan exists or not, it is an effective construct. 

Forgiveness is for slaves, family and friends. I refuse to be a slave, the elites are neither friends nor family. They are the enemy and as the enemy, they will kill you if you don't kill them first- simple as that. 

Sun, 01/02/2011 - 17:33 | 842983 Oracle of Kypseli
Oracle of Kypseli's picture

It seems to me that we are screwed every-which-way.

When do we start the revolution?

Sun, 01/02/2011 - 18:18 | 843025 JonNadler
JonNadler's picture

that's what I like to know, all talk but no action around here. Where's a real tea party movement?

Sun, 01/02/2011 - 21:20 | 843271 Calmyourself
Calmyourself's picture

It starts at your house, address please..  Seriously they (bankers, global elites) have successfully crafted a system and we have fallen in so deep real resistance in a 24/7 surveillance society is getting tougher. Hence, we use calls for bank runs and Bruces' suggestion of one penny over on invoices etal..  Of course these actions if catching on will elicit a reaction and more laws from our captured ( representatives).

Sun, 01/02/2011 - 18:41 | 843053 XPolemic
XPolemic's picture

You can start a revolution right now if you have a backyard.

Read up on gardening and grow some of your own vegetables.

Raise some chickens if your fascist overlords permit it.

Change your spending habits. The great mass of humanity have the power, because they really do control the bulk of the money. Don't believe this nonsense about the top 2% controlling all the wealth. 80 million people spending 100 dollars a week have 416 billion of REAL monetary political power each year. Where you send (spend) that money can cause the humble to rise up, or the mighty to fall.

Pretty simple really, and bloodless.


Sun, 01/02/2011 - 18:05 | 843019 dark pools of soros
dark pools of soros's picture

until you rip out the massive fraud in finance and insurance you can create all the weath you want and it'll all get sucked away and leave massive debts as always


Sun, 01/02/2011 - 20:05 | 843141 lawrence1
lawrence1's picture

Hope you will post more often.  Or maybe I missed your posts.  In any case, thanks for your comments.

Mon, 01/03/2011 - 15:53 | 844852 pslater
pslater's picture


A recent interview with Howard Davidowitz on ZH highlighted what I believe characterizes the current economic environment: a balance sheet recession where the existing levels of assets are barely able/unable to generate the income necessary to service the liabilities.

I would argue rather than spending (QE) being the recommended course (see Japan 1990 - 2010) the suggested course is haircuts for the liability holders.  In fact, I would argue that there can be NO meaningful economic recovery until this happens.  Any other course only hastens what Mr. Ferguson predicts - the collapse of empire.  Credit analysis has to be an integral part of capitalism.  Those whose credit analysis has proven to be very poor need to pay the price rather than have government shift the consequences of these poor decisions to the citizens.

Sun, 01/02/2011 - 17:45 | 842999 jm
jm's picture

The guy above likely didn't listen to the presentation unless he knew of it before the ZH post.  Therefore he likely has no idea of the content or what was said.  Therefore just another empty conspiracy comment.

Hopefully he proves me wrong by discussing the content.


Sun, 01/02/2011 - 18:33 | 843044 zaknick
zaknick's picture




Sun, 01/02/2011 - 13:10 | 842576 B9K9
B9K9's picture

Very well said.

It's too bad Mako doesn't post any longer. He always had a way of succinctly identifying the key concept underlying this entire passion play: credit growth.

Like no tickie, no washie, for the current global Ponzi, it's no credit growth, no economic growth.

But how does the world maintain constant, steady credit growth, along with the attendant compounding principal+interest debt load, without sufficient (energy) resources in which to support exponential economic activity?

Answer: it doesn't. So in essence, there isn't any "solution". From this, we can conclude that all activities witnessed so far are simply a mask to confuse the masses and provide rear-guard cover for the power-elite.

Riddle me this: how did Napoleon get out of Russia? Think of the 100s of thousands of soldiers in the Grand Armee that were needed to be sacrificed so that a handful of powerful leaders could survive.

That's where we are today. The vast majority of sheep are never gonna "get out of Moscow" and return back to their homes.

Sun, 01/02/2011 - 13:14 | 842589 centerline
centerline's picture

+1, unfortunately.  This IS the big picture issue.  The rest is noise.  How is it going to happen?  Who knows.  There are lots of ways this could go.  But the general trend is clear to me...

Sun, 01/02/2011 - 13:17 | 842595 Sean7k
Sean7k's picture

Happy New Year BK,

I would love to see people question the need for continuous growth. It is unhealthy for any market to continue to climb without a period of consolidation. That is the beauty of deflation and the elimination of malinvestment.

Having the people generate growth based on production and innovation rather than QE is a no brainer for me.

Additionally, consolidation in historical periods are not necessarily a two year process. The last depression required decades. 

Sun, 01/02/2011 - 16:09 | 842829 Lord Koos
Lord Koos's picture

Growth based on production and innovation is also unsustainable if it depends on finite natural resources.

Sun, 01/02/2011 - 16:36 | 842892 Sean7k
Sean7k's picture

 Growth based on QE is unsustainable if it depends on infinite credit facilities. I already addressed the possibility of zero or negative growth as being acceptable.

Sun, 01/02/2011 - 16:41 | 842903 Bow Tie
Bow Tie's picture

yup. which is why to move genuinely forward, humanity has to do away with failed economic models and ideologies, focusing squarely on innovating a way around the finite resources part - high technology, energy, recycling, etc. and policy to do encourage from the top down. does NOT seem to be forthcoming, brick wall does. a lot of the doom and gloom is entirely justified, there's no comfortable way out with the current financial machinations and govs that protect this :/

Mon, 01/03/2011 - 01:05 | 843583 StychoKiller
StychoKiller's picture

Is the surface of a planet the right place for an expanding technological civilization?

Mon, 01/03/2011 - 02:19 | 843654 Sean7k
Sean7k's picture

Supposedly, the Reptoids went underground  and continue to expand their empire. I guess we could ask- apparently, we are in contact... :0)

Sun, 01/02/2011 - 14:14 | 842672 tewkatz
tewkatz's picture

The governments are borrowing and spending for us.  That is why the band is still playing.  

Sun, 01/02/2011 - 14:24 | 842687 jdrose1985
jdrose1985's picture

In my simple mind I see the band still playing to prevent the masses from hearing the crashing waves at the bottom of the cliff the are being herded toward. There is no doubt in my mind that the first to be wiped out should be considered the luckiest.

The government only borrows from the existing money supply. The myth is that new money is being created by deficit spending. At the end of WW2 the USG had borrowed approximately half of the US money supply. We are far below that number today.

Sun, 01/02/2011 - 21:24 | 843281 Calmyourself
Calmyourself's picture

Yep and we used that money to crush the productive capability of virtuall y every country in the world.. I like those odds when selling my widgets that no one else can make; I flattened their factory and and killed half the workforce.

China makes the widgets and has a bunch of our paper they are using to build productive capacity and purhcase the raw materials to fuel it.  I do not like that scenario but your essentially correct just not in a macro sense, imo.

Sun, 01/02/2011 - 15:25 | 842756 Jerry Maguire
Jerry Maguire's picture

Quite.  They do that until the creditors scoff, as they have with Greece.

Sun, 01/02/2011 - 14:18 | 842680 jdrose1985
jdrose1985's picture

Unfortunately Mako was BANNED from ZH (the supposed holy grail of free thinking) for pointing out that Tyler(s) were BANNED from Wall St for a busted attempt at insider trading (basically defrauding the public).

There is only one possible outcome to the "Roaring 60 years" which will mirror the only possible outcome of the end of the "Roaring 20's" or end of the Mark carry trade. So if we are 10 years in, that leaves us about another 50 years of slow collapse which is overly optimistic. If/once global oil extraction rates go the way of PEMEX it could possibly become hyperdeflation and look like Ukraine in 1933 multiplied by 3.

Sun, 01/02/2011 - 15:28 | 842748 Howard_Beale
Howard_Beale's picture

Unless you know Mako personally and can back up that statement with proof, you are way off the mark. The day that the Post article was published we all discussed the insider trading story on this very blog, did more digging, found out the amount of money made (under $800), and continued to discuss it. Many even questioned why anyone would do a trade that small and get caught for it and lose their Series 7 license. Mako has been posting freely for a long time since then.

There was a great deal of talk that went on for a few days and no one was banned then or has ever been banned to my knowledge for talking about it since. And it has been brought up more than once since then, not just by Mako.

So maybe Mako did what most of us old timers have been doing....started reading, not writing. Most of us are around, lurking, we just don't engage much anymore.

Let's be honest here. The threads and junking often become abusive and belligerent. I think I can say this for most all of the old timers that rarely post (since I am in touch with quite a few)--engaging in discussion on ZH has changed in great many ways and the humor has dissipated from what used to be a lot of very funny and intelligent stuff, now mostly relegated to WB7 and MMB, to the more infrequent great laughs. It's a shame, because humor is healthy when you are living in a very uncertain world. It's good medicine. 

Hope you all have a good year. Enjoy junking the shit out of each other or maybe lighten up and realize none of knows what will happen. Not a single one of us truly knows how this is going to play out. As Deadhead and I used to discuss-- the choices of deflation, stagflation, hyper-inflation are all still possible. Unless you have a time machine and can state with precision, you don't know. Many want confirmation bias so they run with the herd that thinks the way they do. Those with a modicum of insight will continue to look at all possibilities.

Sun, 01/02/2011 - 16:25 | 842865 ArmchairRevolut...
ArmchairRevolutionary's picture

"Many want confirmation bias so they run with the herd that thinks the way they do."

I tend to believe that most people have emotional ties to their political/economic beliefs.  This emotional wall prevents them from gaining new understandings. In their posts, they often resort to name calling or factually deficient arguments. This lowers the value of discourse.

"Those with a modicum of insight will continue to look at all possibilities."

Do not take anything for granted.  These are interesting times.

Sun, 01/02/2011 - 16:35 | 842889 trav7777
trav7777's picture

about this junking...let me get this straight, help me out here:

Do you people honestly give a fuck if someone junks your post?  I mean, really?

I have never, ever paid attention to what the junks were on a post I wrote.  Why would I give a shit?

Junk away, knock yourselves the fuck out

Sun, 01/02/2011 - 16:47 | 842908 gangland
gangland's picture

nope i love it that's why i dooz it duh get off "junk" away i do

Sun, 01/02/2011 - 16:46 | 842911 akak
akak's picture

I will admit that I will notice, and pay attention to, the junkings that other posts and posters will receive (and I always got a kick out of seeing Leo's purposely antagonizing posts being junked into oblivion), but I rarely give a damn about any of my posts receiving junks.

Sun, 01/02/2011 - 20:20 | 843155 lawrence1
lawrence1's picture

Sorry that many oldtimers are not posting.  I, too, have noticed that junking seems to have increased.  Especially like your comment that "Not a single one of us truly knows how this is going to play out."  In spite of the the unpredictability, do you think there are any investments or strategies that are better than others?  Precious metals?

Sun, 01/02/2011 - 23:28 | 843482 jdrose1985
jdrose1985's picture

Howard, google:"world darkest days" to find Mako's work. Discussed being banned from ZH in detail.

So much for my perception of ZH; I quit hanging around very much after seeing the way people attacked him for acknowledging Truth. The dude knew his shit and is sitting on some powerful knowledge...its a shame he was booted like that.

Sun, 01/09/2011 - 19:32 | 862588 Guy Fawkes Mulder
Guy Fawkes Mulder's picture

Unfortunately Mako was BANNED from ZH (the supposed holy grail of free thinking) for pointing out that Tyler(s) were BANNED from Wall St for a busted attempt at insider trading (basically defrauding the public).

Soon after I found out about ZeroHedge, I did some straightforward internet searches and read all of Joe Hagan's "The Dow Zero Insurgency", among other things. Personally, I thought that it was a plus on Tyler's résumé that he got busted for insider trading. Sure, it proves he is no golden boyscout, but wouldn't it be foolish of me to expect everyone I look up to to be boyscouts? I expect that all leaders have feet of clay, that way I'm never disappointed and get bamboozled less often than I would otherwise.

Furthermore, I don't really know the circumstances of his insider trading crime. Although I'd be more inclined to cite this than the Murdoch rag New York Post, like Mako.

There really is no reason for to Tyler to be sensitive about formerly being a guy who got his license revoked over a $780-profit trade on inside information, when he has come out of it as one of the best crusaders in the war against the biggest inside traders in history. (Yes, I know Tyler is not just one person.)

I googled "world darkest days", and I guess you mean this and this

And that blog post shows Mako being disrespectful and shit-talking repeatedly in a ZH thread. Don't get me wrong, I don't think someone should be banned for being disrespectful and shit-talking at ZeroHedge. But the point I'm getting at is this: Mako didn't just simply "point out that Tyler was banned from Wall Street for a busted attempt at insider trading" and then get banned himself for saying that alone.

One of my favorite bits of narcissitic, nihilistic wisdom from Gordon Gekko is "If you are not inside, then you are outside." See him say it at about 0:30 here:


Sun, 01/02/2011 - 23:40 | 843499 chindit13
chindit13's picture


There's not much left besides humor, for two reasons.

The first is that little in the way of news, revelations, data, etc., can surprise us anymore.  We're all just waiting to see how it plays itself out, and trying to hedge against the possible outcomes (intentionally plural).

The second is that a certain zeitgeist has taken over the comments section where we have dueling disaster scenarios coupled with groupthink.  We now have people who want an "IGNORE" button so that the message they read can stay "pure", without such little nuisances as debate.

On a personal note, I'm a little weary of the endless conspiracy drivel, as if there exists a small group of people so much more clever and evolved that they can play puppet master to the other 7 billion.  By the definition prevalent on this site, I suspect I qualify as an Illuminati in terms of education, career and wealth (damn, I even had Bernanke as an econ prof---ace'd the course), and I hold the perhaps naive view that the "betters" are neither all that smart nor are they capable of controlling even a small portion of the bazillion variables that move the species forward and back.  It simply cannot be done.  Lobby and use the old boy network, sure, but control things down to the amount of "time" a second is allowed to possess, as many here seem to believe, is just plain silly.

By the way, anybody ever actually meet any of the now-existing Roth(S)childs?  My own experience is they are closer to carnival barkers than wizards.  Acorns fall far from the tree, and over generations they end up in an entirely different forest (Britain's Royals are another very visible example).  Of course, that is probably what they want me to believe.

On another post today I made a facetious comment suggesting why we are where we are.  The biblical account of Adam and Eve, to the best of my limited knowledge, only has this pair as the work of the Creator.  Thus, all subsequent humans were made the "old fashioned way", which means Adam, Jr. only had his sister to take to the prom.  Yes, we're inbreds.  Kind of explains things. 

I'll close with my personal four word philosophy:  Shit happens.  Be nice.

Mon, 01/03/2011 - 01:10 | 843588 StychoKiller
StychoKiller's picture

Another four words:  "All things must pass."

Mon, 01/03/2011 - 01:51 | 843622 trav7777
trav7777's picture

in your boat as well.  Seen way too many masters of the universe who are really just not that smart.

The danger from the "rothschild" empire is not in the descendants, it's in the perpetual foundations they set up.  These organizations are run by people with agendas and the power of the eternal wealth behind them.

The grandkids are too busy banging vacuous golddiggers and globetrotting to be much worried about world domination.  That type of machinating is left to the career employees and true believers.

Mon, 01/03/2011 - 09:37 | 843999 Bitch Tits
Bitch Tits's picture

"On a personal note, I'm a little weary of the endless conspiracy drivel, as if there exists a small group of people so much more clever and evolved that they can play puppet master to the other 7 billion."

Chindit, I submit to you that such a thing could and does happen. Have you ever worked in the corporate world? I started working at the corporate level for a three location business back in 1987, which now has hundreds of locations and thousands of employees around the world. As it grew, the leadership became more consolidated at the top, experiencing ever greater power and greater wealth, exerting ever greater influence outside its own realm, making "friends" in ever higher places - while becoming utterly corrupted and criminal in the process.

I see the world much like this corporation. It isn't a conspiracy. It is the nature of man.


Sun, 01/02/2011 - 15:40 | 842776 akak
akak's picture

If/once global oil extraction rates go the way of PEMEX it could possibly become hyperdeflation ....

Ah, now the threat of not just that never-before-seen fiat currency deflation, but actual hyperdeflation!  Do unicorns and leprechauns come included?

Sun, 01/02/2011 - 18:02 | 843015 tictawk
tictawk's picture

We have had 40 years of debt buildup and the Federal reserve's answer to every economic downturn was to pump more.  Even today the solution to a debt crises is for the govt to borrow more from the next generation to maintain today's status quo.  And the Fed is printing money in addition.  But this printing is not enough simply because the debt hole dug over the last 40 years is just too deep.  You cannot get out of a hole by digging deeper. At some point, deflation will reasset itself for all to see.  Hyperinflation would be far more destructive to society than hyperdeflation. 

Sun, 01/02/2011 - 21:32 | 843300 Calmyourself
Calmyourself's picture

Why would it be more damaging if it handled the oustanding debt issues and it is less damaging overall to the PTB?  Seems to be the bernank will avoid deflation with everything he has.

Sun, 01/02/2011 - 14:20 | 842682 Oh regional Indian
Oh regional Indian's picture

B9K9, let us not mourn Mako's temporary absence. I've really enjoyed reading your posts and insights, mostly in agreement, but that is not the point.

And really well said above.

I see it as the simplest Econ 101 baby lesson.

Current (modern) world, in it's entire functioning system has been forced into the Supply Side paradigm. Maximum, low-cost, acceptable quality production. Marketing/Sales will create the "need". Supply sidism in this sense has infinite, continuous growth built in to the system. I often ask big business people I meet if they have a plan in place to scale down gracefully if conditions dictated it. None do. Down-sizing is always un-planned for.

Demand sidism, bio-mimicking in business is of course the opposite. Needed volume, high quality goods feeding a clear, demonstrated demand.


Herd-culling up-ahead. Sad but true.


Sun, 01/02/2011 - 15:19 | 842739 Green Leader
Green Leader's picture

Wasn't Trav7777 who started mentioning "economics of contraction" as a survival strategy for business? I think he did, if I recall well.

Sun, 01/02/2011 - 15:41 | 842778 Oh regional Indian
Oh regional Indian's picture

Did not read that GL. It is clearly the need of the hour though.

Unfortunately, that thought-form does not exist in the supply side paradigm. It's sell what you manufacture and not manufacture what is demanded.

So, this system is bound to collapse because the thing this system needs to embrace for it's survival is the anti-thesis of it's very existence.



Sun, 01/02/2011 - 16:52 | 842810 gangland
gangland's picture

sl=e/p us sl peaked 1978(sic), oecd in 2005. sl = standard of living as measured by the ratio of annual per capita energy usage to population.

Sun, 01/02/2011 - 16:38 | 842897 trav7777
trav7777's picture

yes, that was I.  thanks for noticing; it is a meme I have been trying to get people to grasp for 7 years now.

It's been a challenge to get them past the false dilemma of either status quo growth or else complete madmax collapse.

Mon, 01/03/2011 - 02:35 | 843667 Dantzler
Dantzler's picture

Trav, can you give me a pointer/link to where you discuss this topic more in depth?

"economics of contraction" as a survival strategy for business

I appreciate your comments.


Sun, 01/02/2011 - 16:49 | 842914 Seer
Seer's picture

Not to toot my own horn, but I've been mentioning "economies of scale in reverse" for some  time.  Just about everyone can related to "economies of scale," as this has been pushed on us for decades- people understand that scaling up production tends to make things cheaper (until resource exhaustion takes hold), and that it's a non-linear function.  Take this and turn it around- not pretty...

Sun, 01/02/2011 - 17:06 | 842940 AnAnonymous
AnAnonymous's picture

Not pretty maybe but a convenient way to clean up the debt board.

Stated many times that the US will pay back their debt.

Debt is a way to consume more than you would have.

Plenty on the table, so the US is big on debt.

Much less on the table, and the US will pay back its debt.

You can hack your way to prosperity through debt pyramiding.


Sun, 01/02/2011 - 17:18 | 842956 centerline
centerline's picture

I used to do that all the time, even in good times.  Kept me grounded in reality.  I think it is also sage advice on a personal too.  Especially if having family in tow.  Yeah, the family "shut down" list gets really ugly towards the lower end... but the process of thinking through it as best as possible is critical (in my humble opinion).  

Mon, 01/03/2011 - 00:37 | 843560 Oh regional Indian
Oh regional Indian's picture

Down-sizing. It's not only for looking pretty, is it?

Agree completely Centerline.


Sun, 01/02/2011 - 14:42 | 842699 stuartbushcraftblog
stuartbushcraftblog's picture

"get out of Moscow"


How about "get out of Kabul"

Thats one of my biggest fears at the minute,all of those young men and women left stranded in a failed forever war.

Unlike the Russians they cannot just clamber on top of an APC and drive west.

Sun, 01/02/2011 - 15:20 | 842743 DosZap
DosZap's picture

No, but they could haul their ass out thru Pakistan, and no doubt get home, with Blood to Spill.

Sun, 01/02/2011 - 18:35 | 843046 akak
akak's picture

Boy, the TJB (Troll Junking Brigade) is really out in force today!

Fuck all the cowards.

Sun, 01/02/2011 - 16:06 | 842822 trav7777
trav7777's picture

we can't...thus we need to abandon the growth model and the monetary system that rides on it like a parasite.

Think about the privilege given to bankers, this "tight knit kinship" and whatnot.  They get to kite checks and earn interest off of it.

Maybe it's high time bankers and banking clans took their kinship and shit to producing real value instead of credit?

Allowing debtmoney to persist in a climate of lack of growth or even contraction is an abomination.  The parasite of interest will begin to increase its share of real production.

Sun, 01/02/2011 - 18:20 | 843027 dark pools of soros
dark pools of soros's picture

but rollback for a minute and look at all the economic activity that is being extracted in pure fraud.  You have a corrupt anti-trust insurance cabal that makes its own rules forcing pension funds to scramble to cover their liabilities which then lead to corrupt short sighted financing when said pension fund is bent over the barrel.

Then it blows up and bailouts get pushed through...  no reason to have a fucking war when you can push debt on the people via this circle of fraud?? 

Sun, 01/02/2011 - 13:15 | 842588 proLiberty
proLiberty's picture

I will take truth wherever I can find it, especially when it is easy to sift out of the noise.  No source is perfect.


Sun, 01/02/2011 - 13:21 | 842592 linrom
linrom's picture

The mathematics of cumulative compounding interest rates on debt are well understood. What is not understood is that government deficits represent wealth transfer to the rich. The debt that government borrows  consists of taxes that it should be collecting from the rich, instead the government borrows and pays interest to the elites that it should be collecting. That this goes unnoticed is a travesty that shows that almost all financial commentators are paid shills.

Sun, 01/02/2011 - 16:09 | 842831 trav7777
trav7777's picture

I must disagree.  The math is NOT well-understood.  Most people simply cannot grasp it.

I've met maybe one person who can answer the bacteria in a bottle growth question properly.  And most minds cannot wrap around that if, at close to zero hour, those bacteria found a new resource base over one thousand times as large as their original resource base, that given the compounding math, this resource would last them only another 10 minutes, or a minute fraction of the time it took to get from empty to full.

Sun, 01/02/2011 - 17:21 | 842960 AnAnonymous
AnAnonymous's picture

The mathematics of cumulative compounding interest rates on debt are well understood.


Compounding interest rates are irrelevant when it comes to debt sustainability. They might speed up the process to terminal, make the deal more attractive to the lender hence easening the job of the borrower.

A debt scheme can crash without coumpounding interests rates, no rate at all.

Sun, 01/02/2011 - 14:11 | 842663 sgt_doom
sgt_doom's picture

"Niall Ferguson is the official apologist of the Bilderbergers, the chosen biographer for the Rothchilds ..."

Listen, dammit, it's Rothschilds......Rothschilds.  For crissakes, when you make a highly thoughtful and correct remark, be sure to get the bloody name right!  (Just partially kidding here)

Ferguson is a clown and tool -- you are completely right, of course.  Simply another one of those "academia spokespersons" seeded throughout American academia by the Bretton Woods Committee (, that lobbyist group for the international ultra-rich.



Sun, 01/02/2011 - 14:17 | 842679 EscapeKey
EscapeKey's picture

Indeed. Rothschild = roth schild = red shield.

Sun, 01/02/2011 - 14:13 | 842670 Oh regional Indian
Oh regional Indian's picture

Superb observation Sean7K. These guys are Will.I.Am F'ed Buckley's at large. Apologist spokespeople. Maybe Thomas Friedman is the most egregious example.

They're doing the same thing here in India (which Incidentally is NOT the great blooming Democracy that all these Apologists want to make it out to be. BRIC is a sham, a Goldman designed diversion at best and poor mnemonic making at worst; at least the India part of it).

So much fawning attention on Indian achievers(also all preselected to push the agenda).... suddenly it's all Bollywood, india shining, winning sports medals galore, Bond Girl, Oscars, Grammys.....shit stinks to the high heavens...

It's so patently obvious, it's quite pathetic to see people get sucked in, wide-eyed and mesmer-ized.


Sun, 01/02/2011 - 15:55 | 842802 dearth vader
dearth vader's picture

I can find no fault with this man's ideas as presented here. He's very clever, to the point and witty. And man, is he a good performer! A pleasure to watch and listen to.

Sun, 01/02/2011 - 18:23 | 843031 Alexandre Stavisky
Alexandre Stavisky's picture

This has been a deliberate forced collapse.  See the end-game rampant speculation in land and structures as the industrial capacity and every factory were moved overseas to spur the rise of another nation.  The steering committee who preside over the rise and fall of nations care nothing for the unique land, culture, liberties of the people.

They deliberately packed the apple barrel with spoiled fruit to destroy the entire product.

Such a people derive benefit through sedating and enslaving a population.,9171,760453,00.html

At every critical political juncture they ever choose THE LEFT--Sinestra-sinister-corruption.  Never do they turn to the RIGHT--adroit--upright & correct.

Above all they hate liberty and individualism, meritocracy and lone achievement.  They strive to collect all creative human endeavor and force it into their web of control, their bourses and exchanges.  We're in the end-game of the corruption of global society.


What is that awkward lettering above the sign?  As Paris 1789, so USA 2012?  Snuff the exotica americana, kill the red man?



Sun, 01/02/2011 - 21:00 | 843226 lawrence1
lawrence1's picture

Wow!  That Willie article on Kitco is impressive ... just how fraudelant our whole fiat system is, e.g., wallstreeterrs trashing their coroporations and buying gold, developers buying trashed developments hoping to sell to the government.  Just when I  think I comprehend the depth of the corruption, I learn of another level of deceit or fraud. 

Mon, 01/03/2011 - 03:56 | 843714 mwmolloy
mwmolloy's picture

What an excellent lecture.  

This is my first post, after 36 weeks of lurking.  I just wanted to say 3 things;

1. Thanks for posting a lecture of such fantastic quality.  We want more! Might even be worth having a whole section for video lectures.  It makes a welcome change from reading snippets on blogs.  I graduated from Economics about 17 years ago and realise now that I really miss economics lectures.  I was never really keen on economic history but can now see that I was wrong.  

2. The quality of the comments on this video is one of the reasons why I look at ZH.  Some great analysis there, I can't think of another blog which has such articulate and interesting posters discussing the material. (sometimes this isnt the case...I sometimes wonder why posters think that simply writing "got gold, bitchez?" is a useful comment..).  

3. I am bemused by the posters that simply write off the lecture by attacking NF as an apologist for the establishment (or whatever).  Thats not the point - the point is the lecture.  He has succinctly laid out an interesting appraisal of how debt spirals end empires.  In fact, if NF really is "a co-conspirator of the banksters" then this lecture is even more interesting because it comes from the horses mouth.  All the more reason to listen. 

Mon, 01/03/2011 - 04:07 | 843720 akak
akak's picture

Great first post, MW! 

I hope you will find a welcome home in this forum, and will post here often.

Mon, 01/03/2011 - 04:41 | 843747 OutLookingIn
OutLookingIn's picture

@Sean7k You are right on the money! Just read some of Niall Ferguson's past ramblings, theories, prognostications and general economic (both micro & macro) pronouncements, will give you a clear idea as to where and who his loyalties lay. Certainly not with the common man!

The elites have a NWO (new world order) as their end game goal and a militarily/economically strong America is a road block to this aim. First destroy the currency, financial and economic engine. Next bring to heel and tame the military through cutting it's purse strings, by replacing the USD as a world currency. See where this is going? Niall Ferguson IMHO is nothing more than a NWO shill.

Sun, 01/02/2011 - 13:00 | 842569 TheGreatPonzi
TheGreatPonzi's picture

Clapham Junction is a recently arrived troll who defends the FED and calls "anti-Semites" those who like the truth.

Sun, 01/02/2011 - 13:06 | 842574 rumblefish
rumblefish's picture

anyone know if the posted link is available somewhere for download.

Sun, 01/02/2011 - 13:08 | 842575 billsykes
billsykes's picture

I am not going to bother to even watch this guy. He is a shill.

Sun, 01/02/2011 - 13:55 | 842632 Howard_Beale
Howard_Beale's picture

That is your loss. It's a very interesting video with a great deal of insight. Everyone here wants to shoot the messenger for whatever reasons (in my opinion, anyone that calls Krugman his arch rival (sic) is worthy of hearing)

There is a message here and that is complex systems (the US financial system) can collapse in a heartbeat. Watch sections 4 and 5.

Sun, 01/02/2011 - 14:08 | 842658 bronzie
bronzie's picture

"There is a message here and that is complex systems (the US financial system) can collapse in a heartbeat. "

that was the main message IMO

here in the western world that collapse will probably be triggered by a loss of confidence in fiat currency or confidence in the government's ability to address any issue with success

once lost, confidence won't be regained easily

Sun, 01/02/2011 - 17:10 | 842947 Seer
Seer's picture

I watched up until the questions period, and promptly bailed when he perpetuated the "radical Isamacists are going to take over the world" BS.  Consider that this talk was heavy on the "defense" side of things, the anti-Islam meme, and you see that he's just another neocon type who talks well...  Hadn't realized that he was close to the Hoover Institute- in my mind another strike against him.

Another tool of the establishment.  I'll take Steve Keen over this guy any day (esp since this is in Australia).

Sun, 01/02/2011 - 21:39 | 843312 Calmyourself
Calmyourself's picture

Perhaps the world is over reaching but have you checked, really checked the demographic trends in europe start with Italy and Spain.  If you think the Islamists reign in Spain will be peaceful this time well okay..

Mon, 01/03/2011 - 05:51 | 843806 AnAnonymous
AnAnonymous's picture

I did check them. And the only value of the information is that people who go the way on an islamist reign in Europe have a poor cover up for their lies. Extremely poor.

Sun, 01/02/2011 - 13:09 | 842579 TexDenim
TexDenim's picture

US citizens need to start learning mandarin so that they can understand their new masters.

Sun, 01/02/2011 - 13:24 | 842603 B9K9
B9K9's picture

Nope. There are simply not enough energy resources is which to power China to the level of developed Western economies. Of course, there aren't sufficient energy resources in which to maintain the living standards of current Western economies either, if that's any solace.

Poor China - they arrived too late to the party. Once they showed up, they discovered much to their chagrin that all the "good stuff" had already been scarfed up by the pigs.

The thing people seem to be confused about peak oil, is that peak oil isn't our real problem. Oh sure, it will become a real big problem as actual supplies begin diminishing and prices rise to reflect this imbalance.

But the major, overriding issue TODAY, in the here & now, is that we don't have sufficient energy resources in which to achieve a global CAGR in the range of 5-7%. This, of course, is the rate needed, for a period of generations, that is required to pay off the accumulated Ponzi debts.

The only problem with Ben's thesis is that he wasn't around to implement his policies in the 1930s. Back then, they would have worked, and in fact, did work once WWII was underway, primarily because the giant domestic & foreign oil fields had only begun to be tapped.

The history yet to be written will focus on this underlying issue as the key fact differentiating the GDI from GDII.

Sun, 01/02/2011 - 14:13 | 842669 bronzie
bronzie's picture

as Niall points out in his lecture, waiting for China to collapse shows a lack of critical thinking - maybe it happens, maybe it doesn't - assuming that it will happen is a Polyanna way of viewing the world

Sun, 01/02/2011 - 14:31 | 842694 Oh regional Indian
Oh regional Indian's picture

B9, there are enough energy resources to power the world into a really strong, stable place.


Triggered by your post on another thread, we ended up with this little discussion.


Please visit if called...



Sun, 01/02/2011 - 14:58 | 842712 Hulk
Hulk's picture

Your paper hat is on too tight...I suggest you grab your shoelaces and try and place your feet on the ceiling...

Sun, 01/02/2011 - 15:15 | 842736 Oh regional Indian
Oh regional Indian's picture

Your tinfoil hat is too loose...I suggest you grab your ass cheeks and try to place your feet in-between.


Sun, 01/02/2011 - 14:37 | 842697 jdrose1985
jdrose1985's picture

The history yet to be written will focus on this underlying issue as the key fact differentiating the GDI from GDII.

And before GDI was the so called "Great Depression" circa 1896 which was much more extreme than the 1930's. People were literally starving to death in the streets of America, all under the gold standard of course.

China was opened up to keep the US from hyperinflating in '79 and accomplished in a couple of decades what took Europe three centuries to accomplish. It would have been game over back then. In 1979 the can was kicked from the frying pan into the fire.

Sun, 01/02/2011 - 15:36 | 842768 DosZap
DosZap's picture

You left out the Depression of the 20's, Coolidge handled it exactly right, and was over in 18 mos.

The GDI was used to push an agenda, as is GDII,except Americans now are far too liberal, and illiterate about U S history, and could care less.

PC,has destroyed the country, and we should have taken a HARSH stand far sooner.

Sun, 01/02/2011 - 16:02 | 842788 akak
akak's picture

And before GDI was the so called "Great Depression" circa 1896 which was much more extreme than the 1930's. People were literally starving to death in the streets of America, all under the gold standard of course.

More pro-central banking, pro-fiat lies, and absurd ones at that.  But establishment economists and their lackies can never EVER seem to grasp the difference between natural and healthy deflation occuring under a hard-money regime, and government central banking(central planning)-induced, unnatural financial collapse and depression.


Sun, 01/02/2011 - 16:48 | 842917 Sean7k
Sean7k's picture

You always hear this argument, but what the authors choose to ignore is that banks were allowed to inflate the money supply and when called on to pay in specie, they were allowed to have a bank holiday on redemption- lasting years. While this plays out, the recessions were brutal, but short. Worse, debtholders were often required to pay in specie!

Further, bankers always refer to a period of deflation as a "depression" when in reality, it can be time of growth, employment and lower prices- study the 1870's and 1880's ( A History of Money and Banking In the United States, Rothbard).

Mon, 01/03/2011 - 00:14 | 843538 jdrose1985
jdrose1985's picture

We are already on a hard money system, have you ever heard of crude oil?

Fiat means by decree. Gold as money by decree is still fiat. Not a bad thing to own some of though, at any rate.

Have you ever read the Bretton Woods agreement? The US consumer and its thirst for oil drenched goods is what has driven growth for over sixty years. No expansion of oil extraction means soon to be collapsing production which strikes at the very heart of global civilization...the food supply which is the most important crude derivative. The mass starvations are coming..maybe ten years or less.

Sun, 01/02/2011 - 16:13 | 842841 trav7777
trav7777's picture

I used to make these same arguments over on TF at the China is the New Master crowd...basically, if you look at per-capita oil consumption, we need like 5 or 6 ghawars to get Chindia to our level.  Not gonna happen.

China has a lot of fine empty cities, though.  Talk about waste.

Sun, 01/02/2011 - 16:34 | 842879 DosZap
DosZap's picture


Enjoy your posts.

That said, I do not know if this was sarc/ or you meant it.

"Poor China - they arrived too late to the party. Once they showed up, they discovered much to their chagrin that all the "good stuff" had already been scarfed up by the pigs."

If not sarc, I disagree.

They are currently, and have been for a while buying, leasing, entering long term agreements, with most of the world( outside Western), in everything they will need for not only their survival, but long term growth,health, and viability.


Sun, 01/02/2011 - 16:43 | 842906 trav7777
trav7777's picture

you simply have no clue about per capita energy consumption, do you?

Sun, 01/02/2011 - 17:07 | 842941 Anarchist
Anarchist's picture

The West will no longer we able to steal it's resources as it had for the last 500 years. The US and Europe middle and lower classes will see a massive decline in their standard of living. One wonders how many wars the West will start before those carrying the burden of fighting the war rebel. The US military was in turmoil over the Vietnam war. We will see how long before the volunteer military decide they have had enough of the future wars yet to be fought.

Sun, 01/02/2011 - 17:47 | 843002 AnAnonymous
AnAnonymous's picture

The US and Europe middle and lower classes will see a massive decline in their standard of living. One wonders how many wars the West will start before those carrying the burden of fighting the war rebel.


Both the US and Europe are not properly fitted to host a massive decline in standard of living. Just as a rise in standard of living is not decreeted, a fall in standard of life is not.

What is going to happen is a new wave of colonization, with all the people in the West unable to afford the ever improving general environment of the west moving to other countries.

That is where the wars are going to burst. And this time, instead of finding large land ripped with resources, they are going to find environments depleted from their resources, turned in dump depots, sometimes radioactive.

Sun, 01/02/2011 - 17:06 | 842942 Anarchist
Anarchist's picture

The West will no longer we able to steal it's resources as it had for the last 500 years. The US and Europe middle and lower classes will see a massive decline in their standard of living. One wonders how many wars the West will start before those carrying the burden of fighting the war rebel. The US military was in turmoil over the Vietnam war. We will see how long before the volunteer military decide they have had enough of the future wars yet to be fought.

Sun, 01/02/2011 - 23:26 | 843478 chindit13
chindit13's picture

And Japan had long term agreements on sourcing rare earths from China.

Unless China is prepared to enforce all of its resource contracts via military force, the paper the contracts are written on is worth less than the Ben's in my wallet.

Mon, 01/03/2011 - 05:32 | 843794 AnAnonymous
AnAnonymous's picture

Or better a treaty signed with the US.

Mon, 01/03/2011 - 04:23 | 843731 mwmolloy
mwmolloy's picture

True Dos, but when the SHTF how will China enforce those agreements?  A deed title to a mine is simple a piece of paper.  Remember that the US still spends about 40 times what China spends on defence.  They occupy (to varying extents, some times explicitly (Iraq, Saudi, Kuwait) sometimes with military bases and 'good relations') nearly the entire oil producing land mass on this planet.  


Sun, 01/02/2011 - 16:54 | 842924 ArmchairRevolut...
ArmchairRevolutionary's picture

One of the benefits of a fiat currency is that you do not actually have to grow anything to get a positive GDP growth.  Thus, we can still experience positive GPD growth while at the same time experiencing negative real consumption.  For some reason, that is how I think this will play out: people will earn more money, spend more money, but actually consume less.  The funny thing is that a lot of people will feel good about their new found "wealth".

Sun, 01/02/2011 - 17:22 | 842967 Seer
Seer's picture

"negative real consumption."

Apply that to food, and I hardly think that people will be feeling good... (yes, many in the West can do without less food, but the problem is that much of the "food" has been empty calories, and when this fake shit is in severe decline there isn't going to be much ofthe real stuff avaiable).

Sun, 01/02/2011 - 14:16 | 842676 sgt_doom
sgt_doom's picture

Wow, having much trouble holding more than one variable in your itsy bitsy mind at one time?

American-based (and Euro and Nipponese) multinationals ship jobs and technology to China, thus making China the factory country.  (Not a lot of initiative on the Chinese end, chum.)

You may have noticed (just joking, you lowbrows are incapable of enviornmental or surrounding awareness) all the convictions of Chinese foreign visa workers in America (and other countries) for industrial espionage and the like?

Didn't think you'd noticed.... 

Sun, 01/02/2011 - 14:17 | 842678 tmosley
tmosley's picture

Nah, best to keep the slaves isolated by having them speak a language only spoken in poor countries around the world.  That prevents them from moving up in the world.

Sun, 01/02/2011 - 16:16 | 842842 trav7777
trav7777's picture

new masters?

What, are they going to come build empty cities here too?

A lot of talk about the US's debt...what about the debts in China?  They are loaded with negative ROI

Sun, 01/02/2011 - 17:00 | 842932 Anarchist
Anarchist's picture

China also has hundreds of millions of people they must move from the hinterlands into urban areas where they can live, work and be supplied economically. What jobs these Netizens will be doing is a problem they have not solved yet. China must secure it's long supply chain for the vital resources it's needs ot accomplish its long term growth. the West plans on being the spoiler by becoming pirates and blocking China's access.

Sun, 01/02/2011 - 20:35 | 843165 surfsup
surfsup's picture

nope.  China 2011 = Japan 1989.  Never under estimate the power of predatory interest to decimate an economy.  Nice new green fields they have but they took Mandrake's old worn out tractor design to till them with.  Usury goes un noticed for a time as the head slowly eats the tail -- its when it gets to the genitalia that things get, well... dicey.   

Another nation state duped into "group think" regarding debtinomics -- or is that detonate-o-nomics?  edit out Japan, replace with China.

Sun, 01/02/2011 - 13:09 | 842581 AnAnonymous
AnAnonymous's picture

Will try to listen to the video. Yet the excerpts do not invite to.

Democratic India? Whoooo, India was only offered the recognition as a democratic country in the scheme "lets play India vs China" A country  which exhibits daliht people's  condition is by no way democratic. Even China is closer to democracy than India.

This guy, considered his possible level of education, is probably on a  propaganda mode.

The fact is that the US has grown the most excellent extorter in the world history. And they are running a good style extortion scheme.

One crucial point for a successful extortion scheme is that the means of the extortion scheme are funded by the extorted, not the extorter.

The current burden of the US military budget is on the shoulders of all the extorters worldwide, minus the US citizens.

The debt servicing is loosely connected to the way the US funds the military and will evolve for the most part independently. There will be no choice over financing the debt service or the military budget.

Big failure.

Sun, 01/02/2011 - 23:31 | 843490 chindit13
chindit13's picture

Some of India's richest people now are dalits.  The entrepreneurial spirit has unleashed people bound in chains for millennia.  There's even a leading politician in India who is dalit.

I missed it in the paper, but when is China's election?

Hey, but China really is on the move.  Even got their own Nobel Peace Prize winner.  As he sits in jail, folks in Hong Kong are bidding for his organs.

Mon, 01/03/2011 - 02:39 | 843670 Oh regional Indian
Oh regional Indian's picture

True Chindit. Mayawati is the super-wealthy Chief Minister of india's most populous state.

In a stranger twist, her name is Mayawati, which means Full of Illusion, Queen of Illusion etc. She is an ostentatious gadfly and runs the most corrupt administration in India. She like to be weighed in Gold Coins and the like. 

This whole Caste System thing about India is probably one of it's most mis-understood facets, both in terms of it's origin and it's current manifestation. It started out as a division of labour, plan and simple. And like everything else, it got grotesquely distorted.


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