I Name The New Baby: "Intervention"

Tyler Durden's picture

Via Mark J. Grant, author of Out of the Box,

“Yes, in this immense confusion, one thing alone is clear. We are waiting for Godot to come.”
                 -Samuell Beckett, Waiting for Godot
It seems these days that we are all waiting. Waiting for some European Moment, waiting for the American elections and waiting for some central bank to propose the next new thing and flood the world, once again, with liquidity. The world seems askew.

There has been the thought, in place for decades, that the greatest danger lay in rapidly escalating Inflation and that governments could ruin the populace and devastate the purses of everyone if Inflation was allowed to run rampant. This was counterbalanced by the fear of Deflation which may have an even worse effect. These two twin evils have been viewed as the mainstay of things that could go wrong and they have each been battled in various ways for the last hundred years. Some missions were successful, some not, but the battle raged on from one administration to another.

Now I wonder if some new infant has not been born to join them. This morning I will name this new baby; “Intervention.” What has become clear to me is that while the worlds’ central bank cannot print money off-world is that we cannot invest money off-world either. They are stuck and we are stuck but the central banks have the advantage. They can print money in an open fashion such as at the Fed or they can do it in some hidden fashion, such as with the ECB and their Euroloans but the world is flooded with liquidity in either case and something must be done with the money. The stuff does not slosh around in giant jars and we are paid to make sure it is put to some kind of useful purpose. Hence the irrational behavior of some markets; they rise because they are forced to by the spigot of liquidity opened by the central banks.

In prior days we would have thought that the consequence would have been an increase in Inflation as the off-set of this scheme but we have now learned otherwise. By lowering interest rates just off Kelvin’s Absolute Zero and holding them there the incremental amount of Inflation that one would have expected is minimal as being so close to the temperature of freezing makes the response sluggish and anemic. We find ourselves in a new dynamic where investors are penalized, where it is possible to re-finance government debt at very low levels, where new debt is sopped up by liquidity and where fiscal cliffs and events that would have been defined as catastrophic are muted, dulled by the belief that the central banks will inject ever more liquidity to overcome the problem.

The new sibling, “Intervention,” has over-ruled both Inflation and Deflation by the use of liquidity so that all of the newly printed money soaks up not only the issues at hand but the normal reaction to them. The financial world has become muted and the rise in the equity markets and the compression in the bond markets finds a rational explanation along with why the reactions to Greece, Spain and the rest have not provided the devastation that we would have once thought. We are currently living in an oddly twisted world where the next new bad thing will be countered by some central bank providing ever more money which will cure the problem so that markets remain flat or rise with any new tragedy as it will bring the central bank running out to clean up the mess.

Mommy will make it all better.

So the central question becomes; can this go on forever? Is this a never ending story or is there now some pin that could prick the whole affair and send it wildly spinning out of control? Europe has been the best at the scheme creating an enclosed circle where money is minted, flows to the banks and other institutions who buy the ever increasing debt that is required to keep this plan in motion and so money out becomes money in and the assets of the European banks increase by 7% and the sovereign debt is placed and the circle is enclosed. America and China have also engaged in this game though not to the extent of Europe but the circle remains because it has become a global affair where the limit is where money can be invested and, again, off-world is not an option. It is a curious affair that gets curiouser and curiouser the more I ponder it.

I believe we find ourselves in unchartered territory and without a decent compass. Some ponder the question of what happens when the largesse of these central banks stops as I wonder why it would ever stop. If there is to be a point of embarkation from the current global scheme then it would ratchet up interest rates and why would the central banks head in that direction unless forced to by very different circumstances than our present ones. In the meantime, because they can, the governments of the world add ever more debt that is financed by the new money that they have created. The game continues but is there an end to it and what are the consequences of it ending?

I continue to muse. I have no answer at present. I continue to wonder.

“Take some more tea," the March Hare said to Alice, very earnestly.
"I've had nothing yet," Alice replied in an offended tone, "so I can't take more."
"You mean you can't take less," said the Hatter: "it's very easy to take more than nothing."
"Nobody asked your opinion," said Alice.”

                     -Alice in Wonderland

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The trend is your friend's picture

once skynet is on for good, it can just keep the imaginary money flowing back and forth all the time so markets necer need to go down.  A permanent time out.  Just keep passing the ball back and forth without a shot clock and the game can be played without anyone taking a shot.  No losers yay.

kaiserhoff's picture

Perceptive piece and frames the problem well.  Most of us have been looking for bond vigilantes or a currency collapse.  With free markets, one or both would happen.  Many are waiting for a black swan.  Who cares what the trigger is?  Get on with it.

I think the swan/albatross has arrived.  Weakness doesn't go away because it is papered over.  Pain is real, even if Lloyd and Ben don't mind.  The weaker economies are imploding.  When people are hungry and genuinely afraid of the near future, all hell breaks loose.  WELCOME TO THE NEW NORMAL.

falak pema's picture

I name the baby : rampant kleptocracy.

legorf's picture


(Government under the control of a nation's worst or least-qualified citizens)


Do you really think most Americans vote in favour of qualifications or tie color and shoo-shine? I would bet on the latter, not on the former.

El Viejo's picture

Yeah, but they are really goood at self promotion and keeping their jobs.

kaiserhoff's picture

Absurdistan has been taken.  How about Limboland?

fonzannoon's picture

anyone notice metals tracking the dollar lower today? what's up with that? 

mick68's picture

How will it end?


Simple: When the debt grows too large, speeding the printing to the point where the vast majority of our revenues come from the printing press.

At this point, confidence will be lost and the game will end, if not sooner.

El Viejo's picture

The author Sowell has written more than one book on the evils of intervention.



orangedrinkandchips's picture

No...It's not INTERVENTION....I call him GAMBLOR!!!



Silversem's picture

Intervene in your own financial future and trade this financial mess using the perfect instrument for that: the CFD

csmith's picture

...but the world is flooded with liquidity in either case and something must be done with the money.


Not necessarily. We're all sitting around doing nothing because there is no urgency. The intervenors have driven the real value of money to zero. Time is money. Therefore the money value of time has been driven to zero. 


When in doubt, invert.

Zadok's picture

Good point csmith. Currency/your labor/ your time / your functional value driven toward zero. Not for lack of potential but for lack of opportunity!

Radical Marijuana's picture

Yeah, csmith, that is also what Max Keiser has been repeating many times!

I totally sympathized with this article: It seems these days that we are all waiting. I have been gradually forced to come to the conclusion that there was NOTHING else I could do, but wait and watch as things automatically got worse, faster ... After several decades of doing everything I could think of to try to change that situation, I was gradually backed into a corner, where the more I knew, the worse it got, until that got so bad, I had to admit to myself there was NOTHING I could do about it!

I too struggled to try to understand the balancing between inflation and deflation, and then along came the Intervention Baby, howling at 100 decibels, which made rational thought practically impossible, because ANYTHING is possible when runaway fraud jumps the rails, since "reality" becomes like an insanely unpredictable cartoon, where whatever "reality" may be is hiding, under layer after layer of triumphant deceits, where the biggest bullies' bullshit dominates society, through the sheer inertia of social habits, and by being backed by threats of violence. However, meanwhile, any attempt at a more objective view discovers only absurdities! In that situation "reality" is practically impossible to figure out. Nothing needs to make sense, when everything is controlled by the psychotic psychology of the triumph of runaway financial fraud ... until such time as there may be some corrections outside of the frame of reference of that fraud, which means outside of the frame of reference of the entire established global systems of electronic fiat money frauds, backed by atomic bombs!

Just like the slightly later article http://www.zerohedge.com/news/2012-10-12/charts-day-why-america-needs-em... stated: ... the correction will come, but only after everyone has lost control of the big picture ...



After the whole world becomes a Bizarro Mirror World Fun House, that IS almost totally directed by runaway financial frauds, everything is BACKWARDS. Theoretically, we need to go THROUGH that looking glass, to understand that we were always looking in a mirror, where everything was proportionately BACKWARDS, and being distorted to the degree that triumphant financial frauds were backed by the force of hypocritical governments. We are living inside of a runaway system of organized lies, operating organized robberies, which make some sense, somehow, but only as runaway triumphant frauds. Hence, these the old slogans applied: As above, So below. As within, So without. The lies are different at every level. ...

As we went through an apparently infinite tunnel of deceits, waiting and watching the banksters endlessly making more money of out nothing, as debts, automatically becoming a more insane situation, as that got bigger and BIGGER ... what else could we do against those trillionaire mass murderers, but wait and watch them do that even more? Those people who made and maintained that system became more wealthy, and more powerful, and therefore, even more able to get away with bigger lies, backed by more violence.  After any group in society starts to get away with fraud, then they become able to reinvest the profits from that fraud into more fraud. They become more and more able to buy up control of the mass media, and the political processes, and so on and so forth! There is nobody else that can compete with those trillionaire mass murderers!  There is nothing else which actually can be practically done, but wait and watch as they continue to do bigger frauds, and back that up with greater violence.

The only thing I can think will eventually happen is the paradoxical way there will be final failure from too much "success" of their triumphant runaway frauds driving themselves MAD, and thereby destroying themselves. However, there is NO realistic and practical ways to prepare for that either, since they will simultaneously destroy almost everybody else at the same time! No possession of guns and gold is in the same order of magnitude of the crazy collapse of a global system of electronic fiat money frauds, backed by weapons of mass destruction. The debt engines have their peddle to the metal, as the runaway fascist plutocracy juggernaut automatically accelerates faster and faster, because that system has no brakes. The debt engines are like steam engines with no governors. There is nothing in the current structures of the established debt engines to enable them to be driven in any different ways. Indeed, the basic theory regarding doing that is banished from public debates.

Therefore, I totally agree we are all waiting ... and watching as ... everyone has lost control of the big picture ... Meanwhile, I spend my time attempting to still understand what that big picture actually IS, although that looks like it is a waste of time, since understanding this runaway insanity of triumphant financial frauds does not appear to produce any realistic and practical ways to DO anything about it ... other than continue to wait, and watch, as the trillionaire mass murdering banksters go MAD, and their Mutually Assured Destruction more fully manifests, and overwhelms us all, even more than it already is ...

Zadok's picture

Well stated RM! How long did it take you to write that? Similar path taken here. It is going where it is going with or without my cooperation. Stated another way, people do what they want. Very simple statement, great depth if you take some time to think about it. Best wishes to you!

Radical Marijuana's picture

Thanks Zadok! 

As you said, "It is going where it is going ..."

To answer your question:

It takes me about a half hour to write something like that, and then 20 minutes to try to find the mistakes I made while writing it ...

Zadok's picture

It's good to know I am about on par, perhaps a bit slower. I end up refining thoughts as well as grammar! Well done!

I wish you the best!

Cathartes Aura's picture

when one's realisation expands to acknowledge the depths of this "runaway insanity of triumphant financial frauds" then the realisation simultaneously arises that there's nothing to be done but,


surrender, dorothy, simply surrender to what is.

bank guy in Brussels's picture

So Mark Grant finally admits defeat about his earlier 'Europe will blow up - Germans will not pay' predictions.

He finally realises that many others were right, that 'QE to infinity' will be papering over problems and kicking the can for a while yet.

After being so cock-sure with his predictions, Mark Grant now has a different tune, writing about

« ... why the reactions to Greece, Spain and the rest have not provided the devastation that we would have once thought »

That 'we' is referring to Mark Grant himself and his fellow euro-doomers ... buying into the 'euro collapse' meme that has made so many euro shorts go broke recently

Mark Grant underestimated the central banks, and now he says « ... I have no answer at present. I continue to wonder ... »

Not quite the admission he was wrong like Graham Summers at Phoenix Capital admitted, but Mark Grant is at least admitting he has been clueless.

The euro-zone is certainly a non-sustainable farce, but Mark Grant should be reading Jim Sinclair and Ambrose Evans-Pritchard to get a more realistic view of medium-term events.

In the era of Max Central-Bankerism, and Max Kick-the-Can-ism, the old rules do not apply.

Ned Zeppelin's picture

Agreed, but this leaves us, and leads us - where, exactly?  To assume this can just go on forever seems wrong, but it is correct to conclude that it can go on longer than would seem possible.

Intervention = endless styrofoam peanuts in an ever-bigger box of mail-order crystal stemware. 

adr's picture

All I know is the regular price of a small KitKat bar is $1.39 at my local CircleK, and that is insane.

A smaller than expected increase in something, somehow means there is a shortage.

Up is down, and 2+2=5.

Life is getting more and more expensive and dealing with just about anything is reaching levels of unfathomable absurdity.

Zadok's picture

The longer Q-infinity goes the bigger the crash when it is pulled to execute the next step. Correct that it won't go forever, but there is a purpose to the apparent insanity. It only appears insane to the those who don't share their frame of reference. It is perfectly rational and planned, and spectacularly evil.

bilbert's picture

I hope you are wrong, but I fear that you are right.

canary's picture

I keep reading this guff; where inflation is benign.  Inflation is NOT benign on the essentials.  Food, Energy, Health service and indeed Education.  Inflation - on a relative basis and absolute - is high.  Everywhere.  It is stagflation.  There is no secure income, let alone rise in income, for the majority yet living essentials keep rising.  What planet do these people live on that can't recognise that inflation is much higher than supposed. 

topspinslicer's picture

War. Wonder no more.