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Mike Krieger Topples The Last Domino

Tyler Durden's picture


Via Mike Krieger of Liberty Blitzkrieg blog,

Whenever you find yourself on the side of the majority, it is time to pause and reflect.
- Mark Twain

I think we’re being run by maniacs for maniacal ends and I think I’m liable to be put away as insane for expressing that. 
- John Lennon (watch the video of Lennon actually saying it here)

We the people are the rightful masters of both Congress and the courts, not to overthrow the Constitution but to overthrow the men who pervert the Constitution.
- Abraham Lincoln

The Last Domino
With the U.S. Presidential election less than one month away, I think it’s a good time to take stock on what has occurred in 2012 so far and look forward to the period ahead, which I think will be one of increasing social and economic chaos in the United States.

Earlier this year I wrote a piece titled Six Months Left…Can They Do It? in which I questioned whether the Administration and its cronies at the Federal Reserve and elsewhere would be able to hold  things together in a relative calm until November 6th. I wasn’t sure of their ability to do so, but I understood that everything would be thrown toward this objective, legal and illegal, to make it happen.  Well here we are, and to some degree they have held the undeniable disaster that is very apparent underneath the superficial surface of American society from exploding upwards.  Back in May I wrote:

Well the past is the past and the future lies right ahead, so how should we be thinking about things?  The assumption that is being made, and to some extent has to be made, is that if they have been able to pull off this total coup of the financial markets for the past seven months why can’t they keep it going until the election.  Well if we are to assume this, it means we must assume they can pull it off for six more months, which would bring the total to thirteen months.  This would be quite a feat.  They know how difficult it will be to keep things “together” in the markets amid a real world that is falling apart.  This is why the Fed is pretending there will be no more liquidity added to the system.  In their minds, the best strategy is to talk down QE while at the same time attacking commodity markets behind the scenes.  In their mind, this will give them the cover to create trillions more for their banker shareholders.  I have stated that this would be the plan and as we can see in the markets lately, it has been executed to precision.

It was always my contention (and still is) that if they successfully kicked the can until the election then there would be absolute hell to pay afterward.  That payment is now due.  The best way I can describe what I think the next six months will look like is: Europe.  Think the periphery countries.  Everything that we have seen in Greece, Spain and the other “PIGS” will be coming to America.  Investors have become completely lulled to sleep by recent benign trends in U.S. markets.  There is this almost religious belief that treasury yields will move sharply lower in an economic downturn or stock market plunge.  I am not saying this won’t be the case, but it is certainly not set in stone.  In the PIGS nations, we saw both collapsing economies and stock markets as well as soaring sovereign yields.  Can’t happen here?  Never say never.

That said, my assumption is that in the initial stages of the forthcoming move we could see treasury yields move lower as stocks head down to reflect the reality of the the much deteriorated earnings and economic environment as well as the realization that no real stimulus is coming other than continued money printing (which will not help the economy one bit).  However, the one assumption that I think will be proven incorrect almost immediately is the notion that precious metals must get sold off hard in an equity market drop.  The metals have been officially capped by Central Planners in biblical fashion over the past 12-18 months, and a lot of physical has simply been taken off the market that will not be coming back.  We have also seen the Italian and Portuguese populations fleeced of their metal in this year long correction, as well as lower income folks in the United States, when we saw earlier this year when EZCORP Inc. told us that pawn shops were running out of gold.  Physical metal will not be available at these prices when people realize how much they need them and any manufactured paper dips will be bought aggressively.

Dow/Gold Ratio is the Tell
I know I sound like a broken record on this one, but I am completely convinced that this ratio tells you everything you need to know from a macro standpoint.  I’m not just talking economics either, I mean from a societal perspective as well.  Yesterday, this ratio started to breakdown and I think this marks the beginning of a major move lower toward my six month target of 5.5x-6.0x.  This would represent a roughly 25% move from here to the lowest level since the secular bear market in stocks began in 2000/01.

The biggest mistake I made in the past year or so was a failure to realize the step by step fashion in which the global monetary and financial system would fall apart.  It is certainly happening in a slower manner than I had anticipated, but make no mistake about it; it is happening.  Like everything else, in retrospect, it becomes much more obvious.  Since the entire world is linked into the fiat petro-dollar monetary standard, the entire world suffers as the system breaks down.  While it was tempting to assume the U.S. would get nailed the hardest, what many people missed, including myself, was that the U.S. would be the last domino to fall.  Whether people want to accept this or not, the U.S. has unfortunately morphed into a global empire.

So as the empire crumbles, it is actually the regions of the empire that collapse first, one after the other.  The first evidence of collapse occurred in North Africa with the “Arab Spring.”  This makes sense as this part of the world is most vulnerable to the pressures evidenced by global systemic failure.  They were in essence the “weakest link” in the chain.  Shortly afterwards, the PIGS experienced similar economic collapse and social unrest.  Unrest that continues to this day.  Most recently, we have witnessed the collapse of China’s “economic miracle.”  What people fail to comprehend is that China’s recent decline is completely linked to the decline of the monetary system itself as well. Let me explain.  China is attached to the hip of the U.S. empire as a result of its foolish decision to put trillions of its fiat U.S. dollars into what are even more worthless treasuries (more worthless because you have to sell them before you can spend them and they can’t do that too easily).  As such, they were unable to make rational economic decisions in the aftermath of 2008.  Instead, they doubled down on a ponzi growth strategy.  It was their trapped position in U.S. treasuries which gave them little room to detach from the petro-dollar empire, and as a result they tried to boost growth by “playing ball” and supporting an unsustainable system and they got what was coming.  Collapse.  Thanks for playing boys.

It is at this point that I want to compare two charts.  The first is familiar to my readers.  The second is not.

Dow/Gold Three Year Chart


Shanghai Composite/Gold Three Year Chart


So the first chart is one all of you know very well.  It charts the Dow Jones Industrial Average in real terms, and this thing has been in a bear market since 2000.  Even over the past three years of  “recovery,” you can see stocks in terms of gold are down over 20%.  The more interesting thing is the chart of Chinese stocks in terms of gold over the same period.  They have gotten absolutely shellacked.  Down more than 60%, or three times as bad as U.S. stocks.  The same would be seen if you priced let’s say Spain’s market in gold.  In fact, it is even worse than China!  The point is, this is what happens in today’s world when you are faced with a downturn.  This is what is coming to U.S. markets next.


The Streets of Europe:  Coming to America
So my message is clear.  I think now with the election right around the corner, the chickens are going to come home to roost.  Our ability to print our own currency and buy all the commodities we want with it is the exorbitant privilege that allowed us to export most of the problems within the monetary system elsewhere first.  As Nixon’s Treasury Secretary John Connelly said when confronted by a group of European Finance Ministers: “it’s our currency, but your problem.”  At the time he was correct, as we were at the very beginning of the fiat dollar standard.  41 years later the system is in its final days and our currency is about to become our problem as well.

There were always going to be massive consequences to keeping this ponzi alive.  What is extremely unfortunate is the small number of U.S. citizens that actually understand specifically that the root of every problem we face right now is the fiat dollar monetary system, because it gives all the power in the country to the Federal Reserve and the TBTF banks that tell Banana Ben Bernanke what to do.  Since 2008, many of the consequences of the fraud called American Crony Capitalism Inc. have been clear, but it has yet to hit the boiling point.  I believe that the boiling point will be hit sometime within the next six months, and 2013 will see the streets of America  beginning to look a lot like the streets of Spain and Greece.

Interestingly enough, one of the key signposts for the next wave of civil unrest and activism is coming from the employees of Wal-Mart.  This is quite fitting considering the company is the largest private employer in the United States with approximately 1.5 million workers.  Moreover, the fact it is happening at a company so anti-union makes it sure to have a sizable impact on the American psyche should it continue to grow.  The strikes began in 12 states about a week ago, and although it is estimated that only 0.01% of Wal-Mart employees are involved, it is still the first multi-store strike in the company’s history (for a good summary of what is happening, read this Salon article).  More significantly, strikers are now threatening stepped up action during Black Friday.  Think it is a coincidence that right now in late 2012 is when Wal-Mart workers are pulling off the first such action in 50 years?  Think that this is just a one-off situation?  Not a chance. 

The main point here is one I was hammering on in my last piece The Global Spring.  You can only push people so far into hardship before things snap.  They snapped in North Africa.  They snapped in Southern Europe.  They snapped in China.  They are about to snap here.  Oh, and one last thing.  What do you think all of this signals for corporate margins?


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Fri, 10/12/2012 - 18:19 | 2883241 economics9698
economics9698's picture

As long as the Federal Reserve exsist we the people will never be in control.

Fri, 10/12/2012 - 18:36 | 2883288 The Alarmist
The Alarmist's picture

Serfdom is the longer-term natural state of the majority of mankind ... the people never really were in control, and what you are now experiencing can best be described as a reversion to the mean (pun intended).

Fri, 10/12/2012 - 18:45 | 2883306 Surly Bear
Surly Bear's picture


Yea, self-determination is the illusion of control, and this is a very, very old argument.


Fri, 10/12/2012 - 21:05 | 2883656 economics9698
economics9698's picture

Serfdom is mans natural state but that does not mean Spartacus will be denied his day in the sun.  Kill the bankers.

Sat, 10/13/2012 - 02:42 | 2884072 jeff montanye
jeff montanye's picture

that day is coming and christine lagarde may get some blood on her beautiful leather jacket as she was unaware and is still blase about the recent horrific admission by the imf that austerity is actually likely to grind the poor further into poverty in current circumstances (most non econ phd's would go duh):

zh had the tape of ann cahill's incisive questioning of lagarde but, as mish notes above, this is bigger news and deserves a more complete durden exegesis. 

Sat, 10/13/2012 - 11:58 | 2884979 Fukushima Sam
Fukushima Sam's picture

Come on Mike, a quote from Lincoln?  Did he say that before or after he forced a bunch of "the people" to stay in the Federal system they wanted out of?

Sat, 10/13/2012 - 09:00 | 2884552 Lost Wages
Lost Wages's picture

No, Surfdom is man's natural state. We must all move to Venice Beach and Hawaii before the economic cockpockalypse.

Sat, 10/13/2012 - 10:07 | 2884635 northerngirl
northerngirl's picture

Kill the bankers, always makes me laugh because for me that means the likes of Jamie Diamon, and Big Fed Ben on the streets as a penniless beggars fighting each other for hand-outs of passer buyers.

Fri, 10/12/2012 - 21:16 | 2883684 kliguy38
kliguy38's picture

Does anyone know what time Jersey Shore starts tonite?

Sat, 10/13/2012 - 03:43 | 2884117 Middle_Finger_Market
Middle_Finger_Market's picture

I be fucking dem hoes ye yup yup here we go here we go ya'll getting fucked with a big benranke dick boom boom. Am a party and party and p and p and party...90% of the world is ignornant and unaware of what is about to take place on a global that is scary, get out of the cities! 

Sat, 10/13/2012 - 10:15 | 2884641 Eireann go Brach
Eireann go Brach's picture

We have a ways to go yet Krieger, consumer confidence was the highest in 5 years yesterday (whether fudged or not), so the majority of the sheep will chow at the trough for a few more years yet, before they get off their fat asses and hit the streets!

Fri, 10/12/2012 - 18:22 | 2883251 francis_sawyer
francis_sawyer's picture

Nickles bitchez...

Fri, 10/12/2012 - 22:45 | 2883876 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, while they are still easy to get.  Besides, the looks you get are priceless from bank tellers when you ask them for $100 of nickels, from every bank in town.

Sat, 10/13/2012 - 10:29 | 2884658 patience...
patience...'s picture

Yea good luck with that, I have trouble getting 100's at the local usbank. They say

they don't have many. Go figure

Fri, 10/12/2012 - 18:25 | 2883261 Encroaching Darkness
Encroaching Darkness's picture

Good ideas, but consider: unemployment is running 20%+, per Shadowstats.

How long would it take WalMart to replace every striking worker if it fired them all?

There would be lines down the block and past the corner of those who would trade unemployment (if it hasn't run out already) for a chance at a real job, with real money (even if minimum wage, I suspect).

Would we have newly-unemployed ex-WalMarters battling newly-hired WalMarters in the streets? Who would the cops arrest?

it's going to get a lot worse than this before it gets better.

Fri, 10/12/2012 - 18:30 | 2883273 Mark123
Mark123's picture

Under the current nanny-fascist state, it is more lucrative to stay at home and milk the system.  I cannot understand why anyone works at Walmart.


On the other hand, Walmartians don't look like the sharpest tool in the shed.

Fri, 10/12/2012 - 19:12 | 2883354 jomama
Fri, 10/12/2012 - 21:00 | 2883643 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Interesting to note that the five owners of WalMart have a higher net worth than all of their 1.4 million US workers combined.

Madame Defarge would have said : "aux barricades!"

Instead we get....(crickets chirping...)

Did you read what Snooki said to Guido yesterday? OMG!

Fri, 10/12/2012 - 18:42 | 2883291 Slewburger
Slewburger's picture

Its sad to read the Salon article and see how low people have sunk. Both people in the comments and in the article itself. Those workers have little or no barganing power even on black friday. The high cost of low prices is becoming more and more evident. I already support WM workers with my taxes/Medicare payments. I don't shop there and don't care if their prices go through the roof.

An individual with options, skills, or other opportunities; just leaves. These people have nowhere to go.

I hope they unionize and the whole fucker crumbles under its own weight.

Fri, 10/12/2012 - 19:58 | 2883472 Solarman
Solarman's picture

I have a friend who is a department manager at Walmart.  He and the other two department managers for that department have no employees. 80% of the employees are cashiers.  I point you to JCPenney and their decision to go to RFID chips, and reassigned all of their cashiers.  


In five years Walmart will not be the biggest private employer in the U.S., but they will be doing just fine.  I'll let you figure out why.

Sat, 10/13/2012 - 11:03 | 2884691 franzpick
franzpick's picture

I point my friends to the possibility that 1) our empty Sam's Club, closed in 2010 lasting only 3 years, 2) the adjacent Walmart, mostly empty except at midnight bank-deposit and paycheck times, 3) our Best Buy vacating it's anchor position in our biggest mall to downsize into Circuit City's smaller previous location, 4) WMT's plan to open 1/10th size Express stores and 1/5th size Neighborhood stores, and 5) BBY's similiar plans to close 50 big stores and open smaller, smart-phone-tablet-Apple-type "Connected" stores, may indicate that both owners and employees of big stores may soon be blindsided by the recognition that the big-box store business model is dead.


Fri, 10/12/2012 - 20:15 | 2883524's picture



These people have nowhere to go.


And therefore Walmart is evil to employ them and pay them at a rate which their skills justify. Those who have nowhere to work but Walmart would be better off if they had nowhere to work at all. That'd fix things.

Sat, 10/13/2012 - 13:15 | 2885192 Slewburger
Slewburger's picture


Nice straw man, the big tell was.... And therefore Walmart is evil. WM was a good thing back in Sam Walton's made in America days.

I'm still trying to figure out which ism I want to reply with:

1)As a loving liberal who want to build more planned parenthoods in low income areas so we don't have so many eaters competing for these valuable jobs... I mean reduce health care costs for the tax payers. (Obama speak)

2)As a free market capitalist who thinks the new growth paradigm in this country has been brought to us via  wondrous machinations of free and open markets. (Romney speak)

My real reply is a thick gray line. All WM has done in the last few decades is take advantage of global arbitrage via low wages. Like every other corporation that isn't clever enough to create real profits via efficiencies. The window of opportunity in N. America is closing and as our living standards drop, WM will not be immune to this shift. With the extension of consumer credit via corporate financing maybe WM employees become indebted to the company store just to survive. How about Apple or Best Buy... think it can happen? As a society we are going backwards, this is history repeating. Owing money to the company store.... debt serfdom.

I want things to get better for these people, I sincerely do, but likely they will have to get worse first.

If there are no opportunities for them, eventually there are none for me or my children. You mistake me cheering for collapse, when I'm waiting for the rise of a phoenix.

Fri, 10/12/2012 - 18:58 | 2883323 SafelyGraze
SafelyGraze's picture

"Would we have newly-unemployed ex-WalMarters battling newly-hired WalMarters in the streets?"

that part-time (20 hr/week) minimum wage (7.25 per hour less 7.65 percent ss+medicare) job provides an incentive of $134/week or $7k/year.

not sure that's enough for taking-it-to-the-streets (or parking lots) over

Fri, 10/12/2012 - 22:42 | 2883858 Lore
Lore's picture

Exactly. Free citizens are citizens of means.  When you mortgage your future, save nothing, stand back and watch as your real economy goes offshore, you are in no position to whine about "entitlements." You take minimum wage scutwork and avoid getting fired. This is the great equalization hailed by the UN.

Fri, 10/12/2012 - 21:49 | 2883731 oldman
oldman's picture

@Encroaching Darkeness

Do-ing not-a-thing on the biggest sales day of the year, especially if it is an un-announced call in about how 'sick I am after eating all of that turkey and dressing, is pretty difficult to defend against under state labor laws. Sick is sick!

 I think that no matter how angry it is, even Walmart might be well advised, legally, to give firing those sick do-nothings a free pass.

And, if the WM employees/serfs fail to rally---what have they really gained? A great career with a golden parachute?

If they don't strike or call in sick, at least, then they truly are sick     om

Fri, 10/12/2012 - 21:57 | 2883776 Encroaching Darkness
Encroaching Darkness's picture

Have you ever been fired?

The reason for most HR personnel is to "build a file" on you - doesn't matter if you show up and work every day, for years, without problems. They build their file on you with every time you were late (due to traffic, child sickness, whatever), every time you were sick, every time you infringed on some picky or tiny rule, you name it. Then, when it serves their purposes (or just their timeframe; maybe you were about to vest in a pension, become covered under some statute, earn some higher rate) you will be discharged - not because you were lazy, thieving or slow, but because it saves them money. Or suits their superiors, or their agendas. And to keep the company clear from legal recourse.

I really detest most HR people - I have known a (very) few good ones, and lots of evil, conniving and abusive people. One tried to get me to enforce "discipline" against an employee in my group - her crime was that she (white) had a black husband. Of course, this is illegal, discriminatory and just plain evil - I refused, and left the company shortly after.

If a company is big enough to have an HR department, you really might want to think twice about working there - or at least, have more than one source of income.

WM may or may not do this, I've never worked for them - but I have had enough experience with HR departments to detest nearly everyone who works in one.

WM employees may have the best jobs or the worst ones - if they can create a better workplace, more luck to them. Globalization will make it tough to effect great changes, though - and the unemployment rate surely doesn't help. If they "fail to rally" - it may be because they recognize that a poor job is better than no job, especially when you have spouses and children to feed. I do not judge them, either way - strike or not, it's their choice, and I'm just pointing out the complications involved.

Fri, 10/12/2012 - 18:26 | 2883263 cooterman
cooterman's picture

agree mk  but give us  something actionable


Fri, 10/12/2012 - 18:27 | 2883264 walküre
walküre's picture

Image a nationwide strike at all Walmart stores! Maybe that will get people excited and ask questions.

Would a majority of Americans really finally "get it" or would they just be pissed that they're potentially missing a sale of HoHos and Doritos?

Fri, 10/12/2012 - 18:38 | 2883293 The Alarmist
The Alarmist's picture

Heartless bastard ... do you actually give a shit for the working poor who make their living slaving away at WalMart, much less the working and non-working poor who stretch their meager means by shopping there?

Fri, 10/12/2012 - 20:40 | 2883599 walküre
walküre's picture

Nobody should either be shopping or working at a Walmart.

Walmarts are an abomination. A part of all that is wrong with our society and culture today.

Imagine a Walmart in the Thirties with rows and rows of cheap mostly foreign made snacks or trinkets. We are so far from reality, it's not even funny anymore. We are grotesque and clearly in the last phase of our pitiful existence we dare call "civilisation".

There is nothing civilized about Americans and Walmart. Nothing worth preserving or recording. It is all for the here and now and as cheap as possible including the "labor" effort to stocking shelves or sliding barcoded items over a scanner. Forget it.

Walmart workers are on strike. I hope the shoppers will follow. Let's be the generation that puts the Walmarts into the dustbin of history.

Sat, 10/13/2012 - 05:40 | 2884147 The Alarmist
The Alarmist's picture

Yet I bet the Waltons would shop there ... Goodnight, John Boy.

Sat, 10/13/2012 - 10:42 | 2884672 northerngirl
northerngirl's picture

If Walmart is such a bad company to work for then don't work there.  I have yet met a person that has been forced to work at any company.  People do not like their employers for whatever reason and wrongfully set out to make the employer change?  No, the employee has to change-Find a new job with a like minded employer.  As to the shopping at Walmart, if you don't like the company don't shop there.  Why do people insist on making this any more difficult than it has to be?


Sun, 10/14/2012 - 06:06 | 2886583 bunnyswanson
bunnyswanson's picture

Well, you are a fountain of bad advice tonight.  If you live in North America, you'd known Wal-Mart is underbidding the competition and wiping them out.

When Wal-Mart is the only store left standing, even if Target manages to be allowed to participate, the selection on the shelf and the price will be set without regard to attracting smart shoppers. 


Three Wal-Marts within 10 miles of one another in a town of 190,000 is called the death of Main Street.  We all know this.  The Chamber of Commerce in each city knows this.  The money being exchanged to keep agenda in motion is far grander than we can imagine is my only conclusion.  The cost of lost local tax revenue is gutting city, county and state budgets.



  • Unfair Competition - Definition

    Unfair competition in a general sense means that the competitors compete on unequal terms, because favourable or disadvantageous conditions are applied to some competitors but not to others; or that the actions of some competitors actively harm the position of others with respect to their ability to compete on equal and fair terms. It contrasts with fair competition, in which the same rules and conditions are applied to all participants, and the competitive action of some does not harm the ability of others to compete. Often, unfair competition means that the gains of some participants are conditional on the losses of others, where the gains are made in ways which are illegitimate or unjust.

  • Unfair Methods of Competition

    Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.

  • USDOJ - Unfair Competition - FTC Act - Sherman Act - Clayton Act

    Federal antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade, such as price-fixing conspiracies, corporate mergers likely to reduce the competitive vigor of particular markets, and predatory acts designed to achieve or maintain monopoly power.

  • Sat, 10/13/2012 - 07:22 | 2884208 Zadok
    Zadok's picture

    Nah, they will just blame the poor while those at the center of this fraud rob them blind! /Sarc on Simply brilliant they are! /Sarc off.

    Isaiah 10:13. Consider who is talking and how it resembles this day.

    Fri, 10/12/2012 - 18:34 | 2883284 Mark123
    Mark123's picture

    If I wanted to take over the USA and rob it of all of its riches, I would populate it with subservient 3rd world people (promising them unlimited riches) and then divide and conquer.


    Oh wait...that already happened.

    Fri, 10/12/2012 - 18:36 | 2883289 mick68
    mick68's picture

    One day we'll find out just how many dead bodies had to be swept under the rug for the Obama admin to keep it together until November 2012.

    Fri, 10/12/2012 - 19:09 | 2883346 honestann
    honestann's picture

    If you count bodies all over the world, then the answer will be many millions.

    Fri, 10/12/2012 - 19:47 | 2883457 Uncle Remus
    Uncle Remus's picture

    As long as he doesn't go Carl Sagan on us...

    Fri, 10/12/2012 - 22:02 | 2883786 MiltonFriedmans...
    MiltonFriedmansNightmare's picture

    Ah yes, is this the culling of which you speak?

    Sat, 10/13/2012 - 10:34 | 2884665 Vooter
    Vooter's picture

    How retarded do you have to be to think that one presidential administration or another has ANYTHING to do with the situation that the United States finds itself in today? LOL...I sincerely hope the Romney clown defeats the Obama clown in November, so I can laugh when the death spiral continues and people like you are left scratching their heads in complete confusion...

    Sat, 10/13/2012 - 18:23 | 2885703 Being Free
    Being Free's picture

    Your reading comprehension seems to be deficient, though honerable mention on imagination.

    Fri, 10/12/2012 - 18:36 | 2883290 kito
    kito's picture

    everything is fine...........move along....................

    Fri, 10/12/2012 - 18:46 | 2883296 The Alarmist
    The Alarmist's picture

    In the classic "All I have to do is outrun the bear ...," all they have to do is get past the next election. Then people will be looking forward to Turkey day and their favorite games, followed by a round of midnight shopping.  Then everyone will be caught up in Christmans and New Years.  Then the leadership will be sworn in to do some more serious governing, like a new & improved NDAA, SOPA, PIPA, MOUSE.  Yeah, 13 months sounds about right.

    Sat, 10/13/2012 - 08:20 | 2884508 Freegolder
    Freegolder's picture

    'It was their trapped position in U.S. treasuries which gave them little room to detach from the petro-dollar empire, and as a result they tried to boost growth by “playing ball” and supporting an unsustainable system and they got what was coming.  Collapse.  Thanks for playing boys.'


    Mike, what do you  think China has been doing all of these past 12 or so years?

    Two things: giving the Euro a chance to get established (job done, it is now ready to take over from the dollar).

    And China has been hoovering up tonnes of physical gold, via Hong Kong and other sources. It will lose all of its so-called value in USTs, but that will be more than compensated for by the much much higher physical-only values attached to gold.

    China will be ok, it is ready for hard times.

    Fri, 10/12/2012 - 18:41 | 2883300 Go Tribe
    Go Tribe's picture

    The ponzi will crash only when every ZH reader is bullish.

    Fri, 10/12/2012 - 18:56 | 2883318 Conman
    Conman's picture

    I would love to be bullish, but when everything is telling you markets are artifically inflated and that growth is over how can we be. Until then play the game, btfd's and hedge yourself.

    Fri, 10/12/2012 - 19:06 | 2883335 honestann
    honestann's picture

    Bullish on what?

    If you say "bullish on gold" then perhaps so.

    Fri, 10/12/2012 - 19:04 | 2883333 geno-econ
    geno-econ's picture

    Objective of Democracy is  equal rights for everyone

    Objective of Capitalism is seeking individual wealth

    Objective of Socialism is to share the benefits of a society

    Ojective of Polititans is to balance these objectives to achieve justice, civil order and economic growth

    Polititians are failing us.  Why? Because Big Biz has stole the election process

    Alone, Free People , Capitalists, Socialists and Polititians can not survive nor can a nation

    Financial/Economic manipulation is merely an effort to postpone the eventual disintegration

    Fri, 10/12/2012 - 19:08 | 2883341 honestann
    honestann's picture

    Socialism is poison.
    Individualism is health.
    A balance between poison and health is... poison.

    Fri, 10/12/2012 - 19:22 | 2883386 geno-econ
    geno-econ's picture

     Are you suggesting no social security, pensions, health care, police protection, military , letting poeple starve etc ??

     Polarization of views is symptomatic of a decaying society especially by the uninformed 

    Fri, 10/12/2012 - 19:42 | 2883444 Uncle Remus
    Uncle Remus's picture

    It's called collapse. Or enema.

    Fri, 10/12/2012 - 20:08 | 2883511 Schmuck Raker
    Schmuck Raker's picture

    [Hyperbole] is symptomatic of a decaying society especially by the uninformed


    Fri, 10/12/2012 - 20:39 | 2883593 honestann
    honestann's picture

    Not at all.
    Think about what you said.
    I accept any fully voluntary program.

    #1:  If you want to save for retirement, and the predators-DBA-government have a voluntary system (called "social security" or otherwise), then you are free to subscribe to their system... or not.

    #2:  If you want a pension, create a retirement fund for yourself.  It is inherently, unavoidably and brazenly unethical for government to steal from the next two or three generations in order to establish a comfortable retirement for you.

    #3:  What are called "police" today are nothing but thugs and predators.  All legitimate functions of police can be performed by private entities that you pay for when you want their services (or subscribe to their services if you prefer).

    #4:  What is called "military" today is nothing but thugs and predators terrorizing innocents in other countries.  The fact they some tiny percentage of the people they kill happens to deserve it does not make it legitimate.  You want legitimate protection from invading forces?  Then let everyone arm themselves to the teeth, train themselves or pay for their own training... and no bunch of predators in their right minds would ever invade.  The scheme in Switzerland isn't perfect, but it shows what happens when "everyone is armed" and "the predators don't go around invading and bombing other countries".

    #5:  If the predators-DBA-government and predators-DBA-banksters were out of business, and stopped being a massive drag on producers, there would be so much excess production lying around that nobody would starve.  Go read a recent ZH article about what is ALREADY happening in the Detroit area, even BEFORE the drag of government is reduced.

    EVERY SINGLE PROGRAM that the predators convince you is for "the good of society" or "the good of poor folks" or "for the protection of everyone" DOES THE EXACT OPPOSITE --- EVERY SINGLE TIME.

    Wake up and smell reality.

    Fri, 10/12/2012 - 21:35 | 2883722 SilverFish
    SilverFish's picture

    To see the truth in what you say, all you have to do is look at history.


    Some people hate history.


    They think "yeah, but this time we'll get it right (socialism)"

    Sun, 10/14/2012 - 05:07 | 2886555 honestann
    honestann's picture

    Exactly correct.

    Sat, 10/13/2012 - 04:11 | 2884125 Parrotile
    Parrotile's picture

    The problem with your "voluntary systems" is exemplified by the (fairly) recent enthusiasm of many Governments to "Privatise" former State (and therefore "The People") - owned services.

    Do those now receiving the "privatised" services think they are getting a better deal? Try asking the British, and the Australians just how well they think this "Free Market" idea's working, and you'll be surprised at the dissatisfaction.

    Say, in the case of your proposed "Voluntary Welfare" situation, a subscriber was incapacitated permanently through accident, early on in their "earnings years". No subscription = no income, so by your model they'd be totally reliant on charitable support for the rest of their days.


    A Civilised society looks after ALL its members, and the UN specifically notes that the measure of civilisation is how the young, old and infirm are cared for.

    Your "American Model" of Healthcare is already the least efficient in the WORLD per dollar spent; All PRIVATISED, isn't it! And all those dollars go into the pockets of the VERY WELL CONNECTED HMO Executive Boards.

    In America today, it's not just those "at the top" who are greedy - the affliction has spread well down the foodchain. The general mindset isn't one of "I'll charge you a reasonable amount for my skills, time and materials", but rather "I'll charge you as much as I can squeeze out of you for as second-rate a job I can get away with".

    And with the mindset of "Free Marketeering" and "Minimal Government" so goes any means of regulation of the already very clearly unscrupulous.

    Co-operation works. Sharing tasks / abilities / resources is efficient. Laziness is not just a feature of Socialism - it's just as prevalent in your present model of crony capitalism.

    Sat, 10/13/2012 - 07:54 | 2884485 Mike in GA
    Mike in GA's picture

    You are just plain wrong about how our "American Model of Healthcare is...ALL PRIVATISED..."


    It is US Gov involvement and interference that imposes layers of cost and inefficiencies that distort the free market of healthcare. 

    No argument from anyone about how any government meddling in any business is an improvement over the practice of true free market principles has ever been validated throughout history.

    Sat, 10/13/2012 - 17:19 | 2885605 Clowns on Acid
    Clowns on Acid's picture

    Parrot - If "Co-operation works"...who will enforce the "co-operation"? The human species is programmed for self aggrandizement. Self aggrandizene t does not preclude assisting those in need...yes voluntarily.

    Please define "greedy". Your wide sweeping recommendations for Shangra La are puerile. Go back to the days where you studied subjects where critical thought was mandatory.

    If you have never had the opportunity, go create the opportunity for yourself. It's not anybody else's job to do it for you.



    Sun, 10/14/2012 - 23:28 | 2886552 honestann
    honestann's picture

    You simply have no freaking idea.  What you call "privitization" is a government action... a government action that artificially generates HUGE corporations with HUGE influence and MANY forms of monopoly.  That sucks precisely because government set it up, and they did so on the same basis as they do everything... to pay back the bribes from large corporations that financed their campaigns.

    Nothing is private unless it grows organically from individual small businesses.  ANYTHING else has nothing to do with honesty, ethics, liberty, freedom... or private.

    The UN is a criminal-predator fraud.  To quote anything those predators say proves you are completely clueless, or an intentional apologist and supporter of predators.

    A good human being, who has treated people well during their youth, will be taken care of if they have some horrible accident in their youth.  They might not live a "great life" (depending on the nature of their accident and situation), but they will live a much better and vastly more caring life under spontaneous private care in a free society than they will in some government run institution manned by typical government workers.

    FURTHERMORE, the conditions the poor and disabled live in is vastly better in richer, freer societies.  This is so obvious that any honest individual with a clue about the nature of reality would vote for anarchy every single time!

    When I was a kid... and I'm not old yet... and one of us kids got sick, the doctor would come to our house, check us out, give us medication, and charge $20.  That was just before the government started taking over healthcare.  That was fairly private health care, though even then it was largely screwed up by government regulation and government support for the various frauds being operated by the AMA.

    People, including you, don't even understand the term "greedy".  Why do I say that?  Because you (and virtually everyone else), throws that term "greedy" around without EVER once distinguishing the two VERY DIFFERENT ways of dealing with "greed".

    #1:  I want lots of great stuff.  Therefore I am greedy.  In order to get all this great stuff, I will need to work my ass off for years or decades, live frugally, be super productive, and work, work, work, produce, produce, produce... and eventually produce enough that I can trade my production for all the great stuff I am greedy to get.

    #2:  I want lots of great stuff.  Therefore I am greedy.  In order to get all this great stuff, I will lie, cheat, steal, gain powerful positions, become a worthless executive of some corporation and run the company entirely to divert the production of the employees in the company into my pockets.  With all this unearned wealth, I will buy everything I want.

    However, those two forms of greed are just about as different as any two kinds of behavior could possibly be.  And by ignoring this difference, and throwing the term "greed" around willy nilly, you make it IMPOSSIBLE for yourself to even distinguish the appropriate behavior for human beings.  Until you grasp this and similar kinds of intellectual ERRORS that have been shoved into your brain by predators and collectivists, you will never be able to hold any opinion that makes any sense.

    Yes, today far more people who practice "inappropriate/unearned greed" are poor or semi-poor.  Of course they are greedy on vastly smaller scale than inappropriately greedy CEOs who steal tens or hundreds of millions (or billions) each for themselves.  To a large extent the big-time greedy bastards and the small-time greedy bastards are both involved in an implicit (and sometimes explicit) conspiracy to steal from the ever dwindling population who are still willing to produce real, physical goods.

    Yes, cooperation and collaboration are very important.  In fact, individualists and liberty advocates care-for and value cooperation and collaboration infinitely more than anyone else.  Those others, those poor and rich "inappropriately greedy" folks have no real interest in cooperation or collaboration --- because both "cooperation" and "collaboration" are VOLUNTARY actions.

    But you pretend the opposite, which shows how completely deluded you are.  You advocate ALL SORTS of force against productive folks, to steal their production in order to give it to endless government scumbags and large hordes of corporate leeches who only pretend they are "helping the poor unfortunate little guy".  In reality, those predators MADE almost all of those "poor unfortunately little guys" what they are, by making "society" based upon fiat, fake, fraud, force and endless fictions --- that you support.

    So called "CRONY CAPITALISM" is not capitalism.

    Crony capiltalism is mutated elitism, fascism, collectivism.

    For you to not see this makes absolutely clear that you are completely clueless, and utterly confused by the propaganda linguistic constructs the predators-that-be have created and endlessly push.

    Sat, 10/13/2012 - 10:09 | 2884637 geno-econ
    geno-econ's picture

    Anarchy is alive and well. Greedy privatization will triumph. We can now have voluntary security for all.

    Sun, 10/14/2012 - 05:46 | 2886575 bunnyswanson
    bunnyswanson's picture


    Bring Me to Life - Evanescence


    WAKE UP 

    Fri, 10/12/2012 - 21:59 | 2883778 masterinchancery
    masterinchancery's picture

    You think the police and military are there to protect the public? Surely you jest.

    Sat, 10/13/2012 - 10:53 | 2884677 northerngirl
    northerngirl's picture

    Really?  Most Americans have stored up so much body fat that they will be able to live a long time.  Nobody I know will be starving. 

    Sun, 10/14/2012 - 05:37 | 2886571 bunnyswanson
    bunnyswanson's picture

    I'm old enough to remember when the US citizens did not resemble circus acts.  There was a time when the gyms will spilling over with memberships, the ball parks were packed and the people came out of their homes to get a breath of fresh air.


    It's obviously changed.  In the health care industry as I am, I noticed it taking place in a significant fashion since 2000.  The US citizens are a proud people, who are eager to look their best.  I have watched as an observer and as astonished as anyone to the soft and nearly disabled state of the human condition in the homes across America.  Bloated and lethargic, consuming gallons of energy drinks to make it through a typical day. 


    The housing crisis has left us with strangers next door to each other.  What has that done to communities?  More than you'd care to consider. 


    Call it feast before famine.  Call it gluttinous pathetic narcissism.  Call it fatty liver disease.  Call it overnourished but malnutritioned. 


    But one thing you should never say is that one day they will starve but not just yet.  Vultures and weak prey on the dying and these people are in fact very ill.  I remember when Americans were strong, hearty, confident, altruist and innovative.  Something has changed and I personally believe the finger should be pointed at their leaders. 


    You should be spanked and put to bed.

    Fri, 10/12/2012 - 19:22 | 2883343 UnpatrioticHoarder
    UnpatrioticHoarder's picture

    They've been holding it together like Sutekh in "The Pyramids of Mars"

    Watch from 4:05 onward

    but then the Doctor comes along and distracts Sutekh The Destroyer. And the explosion he has been suppressing is unleashed.

    The Doctor Meets Sutekh - YouTube

    Think of Sutekh as Ben Bernanke sitting in his Fed-cave surrounded by his mystical illuminati symbols.

    Fri, 10/12/2012 - 19:15 | 2883360 i8emallup
    i8emallup's picture

    Corporate margins????? Thats your last word??????????? 

    I know we have 12 Aircraft carrier battle groups and everything, but, , well. Nevermind.

    Fri, 10/12/2012 - 19:25 | 2883400 AUD
    AUD's picture

    Treasury yields moving lower is the credit of the government being inflated, not deflated, in Fed credit terms. Also, the $ price of gold won't be going down when the financial system 'falls apart'. And as if corporate margins mean jack shit if "the boiling point" is about to be hit.

    I think you're still making mistakes.

    Fri, 10/12/2012 - 19:31 | 2883416 q99x2
    q99x2's picture

    Abraham Lincoln made me do it: Fuck You Bernanke.

    and Fuck You Too WallMart, FaceBook, Apple and Ralph's.

    We're coming to the Hampton's next.

    Fri, 10/12/2012 - 19:41 | 2883445 spartan117
    spartan117's picture

    Hamptons?  I hope they have champagne.  I love champagne. 

    Fri, 10/12/2012 - 19:45 | 2883454 Uncle Remus
    Uncle Remus's picture

    From a can, with a straw.

    Fri, 10/12/2012 - 20:06 | 2883505 kalasend
    kalasend's picture

    No, they haven't snapped in China yet. When they do, oh boy.

    Fri, 10/12/2012 - 21:16 | 2883675 toomanyfakecons...
    toomanyfakeconservatives's picture

    Snap? Snapped? Never in the history of facist police states has there been one that remained so drenched in guns and vague notions of freedom and liberty. By far the largest army on earth is American gun owners, with huge numbers of verterans, patriots, citizens mixed in. Things would not just 'snap' in the U.S. the same way they would in sparsely-armed backwater nations.

    According to a bounty of sources, the assasination of JFK and the Bush crime family paved the way for the financial crimes and the current state of the nation. Countless good men know that dirty criminal vampires have carjacked the nation. Likewise, countless good men in the military know about slimy commanders-in-chief and the corruption and criminality that can come with power and rank.

    Some of the points made in the Wilcox-Drake interview are basically truisms that are not up for debate. The U.S. ain't going out like that. Evil can only exist as long as good men do nothing. Good men won't be doing nothing forever. Even if you don't buy the MASS ARRESTS, some of the points made in the Wilcox-Drake interview gotta make you think...

    Sat, 10/13/2012 - 07:56 | 2884487 Mike in GA
    Mike in GA's picture

    You lost me at "Bush crime family".

    Please.  Surely there are better conspiracies out here, somewhere.

    Fri, 10/12/2012 - 22:27 | 2883826 Lore
    Lore's picture

    "Interestingly enough, one of the key signposts for the next wave of civil unrest and activism is coming from the employees of Wal-Mart....More significantly, strikers are now threatening stepped up action during Black Friday. Think it is a coincidence that right now in late 2012 is when Wal-Mart workers are pulling off the first such action in 50 years?"


    Krieger construes this as precursor to dramatic social breakdown?  Fat chance.  Wal-Mart represents the employer of the future: a retail manifestation of "Too Big To Fail." This ship will float as long as the frozen section keeps stacking Hungry Man TV Dinners.

    Sat, 10/13/2012 - 08:24 | 2884513 disabledvet
    disabledvet's picture

    all debt monetization schemes are inflationary. that is AXIOMATIC. the idea that "growth therefore cannot materialize" is a complete falsehood as yet again we are told to discover through "the Golden Eye" all that needs solving can simply be abstracted. Not fact a complete falsehood. The question that needs to be asked is "to what extent is debauching the dollar growth"? You want to put a chart of THE DOLLAR next to the Dow...not gold. That would show the various markets SOARING in value next to say...what you get paid in when you work or receive a benefit check of any kind. it's also what you pay your TAXES in! Gold bugs would have civilization living in STANDARD people would have them living anywhere they wanted to. Of course "how to pay for all those Government programs" is a slight problem. Once i get a Government check i would understand its true value if priced in GOLD MONEY because i could then convert that money into an ounce of gold...and thus base the value of everything else upon that number and act accordingly. When JP Morgan's Gold Standard was involved in a massive Financial Panic (1906 i believe)...HE the BANKER bailed out the system...THERE WAS NO GOVERNMENT INTERVENTION. The other word for that is called FREEDOM. gold all you want. But don't delude yourself when the dollar is being destroyed that other "values" aren't being created. the question is "is it enough to stand in the way of CREDIT destruction?" when we're talking energy the theory...can be yes...PROVIDED it's oil and gas...then coal...then hydro...then nuclear. Under NO circumstance can it be solar because "the price has collapsed for solar panel tech...and the Government is now taxing those who even dare use them." Nice way of saying "YOU REALLY WANT TO BE INVESTED PERSONALLY IN SOLAR POWER." Alongside all the other energy plays of's one that includes every imaginable addition to oil which will soon be selling for 1,000 a barrel:

    Sat, 10/13/2012 - 08:41 | 2884532 shovelhead
    shovelhead's picture

    I can't imagine a Walmart strike being of any possible use in an environment where there are 500 applicants for every job opening.

    Walmart pays what it does because of that reality.

    The workers might wring a few minor concessions from management to avoid bad PR but the employment marketplace is their worst enemy.

    Their very narrow window of opportunity closed in 2007-8.

    Dog eat dog is a tough life when there are lots of hungrier dogs out there.

    Fri, 10/19/2012 - 01:25 | 2903515 MeelionDollerBogus
    MeelionDollerBogus's picture

    See what happens with a boycott of walmart. I'll do it.

    Sat, 10/13/2012 - 10:17 | 2884643 WhiteNight123129
    WhiteNight123129's picture

    You need someone to dump the dollar and alternative set of reserve currency. Teh chickens will come to roost when Europe stabilizes and China floats more of its Yuans. THen .... ouch.


    Sat, 10/13/2012 - 18:57 | 2885759 polo007
    polo007's picture

    Ben Bernanke also says that the Fed will, “gradually sell securities or let them mature”. Think of what this statement means.

    The Fed has Twisted away most of its holdings of sub 5 year paper, so the issue of normalizing the Fed’s balance sheet by allowing securities to mature would be pushed off for 7-10 years. That’s not monetary policy. That’s a biblical kicking of the can past the horizon.

    So Bernanke is telling us the Fed can/will normalize its balance sheet by selling some bonds. This is a joke.

    Take Ben on his word; at some point the Fed will normalize its balance sheet, it will do it by selling bonds to the market on a gradual basis. What does that mean? It means that Bernanke would have to sell $60Bn of bonds every month for three years! What would that do for the capital markets? What will the market reaction be to this headline when we get it?

    Ben is lying to us when he says that QE can be reversed without tremendous pain. Bernanke will be long gone as head of the Fed when the bill for QE is finally presented. Ben’s successor will be mired in the mess than he created.

    The reality is that there is no viable exit strategy from QE. Ben knows this. So do all the other Doves. Shame on them.

    Sat, 10/13/2012 - 21:43 | 2885964 polo007
    polo007's picture

    Seeking to stimulate the economy, the United States Federal Reserve undertook another extraordinary monetary-policy measure in September (the “QE3"), embarking on a third dose of quantitative easing.

    In theory, quantitative easing is a form of economic stimulus, differing from the stimulus passed in 2008 which cut taxes and raised spending by more than $800 billion. Simply put, QE3 is a dangerous monetary policy whereby the Federal Reserve purchases debt (bonds) from investors in an attempt to help them lend more money, while lowering interest rates. And with no end date being announced, it amounts toindefinite monetary meddling -- a stimulus without limit.

    Studies demonstrate that quantitative easing does reduce borrowing costs but are less clear on how a reduction translates into real economic improvement. Despite a clear track record, desperate politicians allow such experimentation because bond-buying enables them to ignore looming fiscal problems by providing a dependable purchaser for the republic's ever-increasing debt.

    Thus far, the central bank's policies have proven ineffective. Repeating efforts, therefore, are unlikely to create sustainable growth. The new action is little more than an admission that previous actions have not worked, demonstrating that monetary policy alone is unable to jumpstart the economy.

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