Extraordinary Popular Delusions And The 'Madness' Of Bond And Gold Markets

Tyler Durden's picture

Whether its new-fangled Japanese stocks, hi-tech internet company valuations, multi-colored flowers, or mansions made affordable by criminally lax lending standards, Grant Williams notes that a bubble is a bubble is a bubble; and citing Stein's Law: "If something cannot go on forever; it will stop." In this excellent summary of all things currently (and historically) bubblicious - whether greed-driven or fear-driven - Williams concludes it is never different this time as he addresses the four phases of the classic bubble-wave: smart-money, awareness, mania, blow-off (or crash) and explains how government bonds are set to burst and gold is only just about to enter its mania phase. This far-reaching and entirely accessible presentation is stunning in its clarity and as he notes, while bubbles are always easy to spot ex-ante, understanding how they come about and why they are popped gives the few an opportunity to profit at the expense of the madness of crowds. From tulips to tech-wrecks, and from inflation to insatiable stimulus, the bubble in 'safe-haven flows' that currently exists has all the characteristics of a popular delusion.


The first 9 minutes provide all the required background.


The next 10 minutes addresses the details of debt, government largesse, and why government bonds are 'peaking' and gold is about to explode - as the safe-haven 'tie' between the two is about to be smashed apart...



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fonzannoon's picture

OT but anyone on here seen the documentary "surviving progress"? A few people recently told me to check it out.

markmotive's picture

When bonds go south and gold goes north the financial system will collapse. But don't look for a warning sign because the collapse won't come announced.


NewWorldOrange's picture

It's always a little troubling when I see someone link to Gary Weiss's website. He's a shill for most everything zh readers (or any sane persons) despise. No offense intended toward you markmotive -- I assume you probably didn't realize:


bank guy in Brussels's picture

Thanks, that is a fascinating and very disturbing investigative article you linked there on Deep Capture, very thoroughly detailed.

Among the interesting stories there ... is the detailed description of the utterly criminal corruption of the CIA's Wikipedia re Gary Weiss, hiding and deleting items and ruthlessly suppressing people trying to present facts ...

And also these fascinating tidbits about one of the hidden 'deep core' elements of the US (and global) financial system, the DTCC or Depository Trust & Clearing Corporation, extremely powerful but essentially beyond the reach of any regulation whatsoever ... and Gary Weiss apparently working to cover up its shady activity. In the article:

« ... a nearly unknown corporation ... DTCC ... The company provides settlement for the nation’s capital market: $1.5 quadrillion in trades are settled there every year (that is, about 30X the economic output of the entire planet). For most of its history it has largely escaped regulation: state regulators are admonished that they cannot peer inside because the DTCC is federally regulated, and the DTCC has told federal regulators it escapes their regulation due to its strange ownership structure (one former federal regulator, and one former employee of the DTCC, have both told me the feds would not know where to begin if they tried to regulate it).

In short, at the heart of the world’s economy is an enormous black box that is regulated except on the days it’s not, and through which 30X the economic output of the world flows. It is my contention that much of Wall Street’s illegal activity is funneled through this strange entity

The huge, nondescript building in downtown Manhattan that houses the DTCC is something of a Fort Knox. Long-gun toting guards watch the entrances, and journalists who have been inside tell me that entering it is tougher than getting into the Federal Reserve or any comparable institution. ... »


NewWorldOrange's picture

Great post! Did you get the chance to read "the 22 chapters" at deepcapture before it was taken down by the Canadian Court a year ago? Best "conspiracy theory" of all time, and the most thoroughy documented and most well-proven. Patrick Byrne is an American hero. Big supporter and friend of Ron Paul BTW. Those 22 chapters were totally scrubbed from the Internet. Even from Google's cached pages and from foreign-based mirror sites. I'm convinced that TPTB didn't want all that to get out. Byrne proved beyond any doubt that Lehman and Bear Stearns collapsed due to a financial attack (mostly illegal naked short selling) by a conspiracy of people including the Sicilian and Russian mafias, the Russian government and the royal family of Abu Dhabi, various wealthy international weapons dealers, and with the (perhaps unwitting) help of certain people in it just for the money, like Jim Cramer and Gary Weiss and their buddies in the SEC, on Wall Street, etc etc. The usual suspects...

These financial wars, and currency wars, are raging, and TPTB are (mostly) hiding it all from us, even as they continue to prop up the institutions and a system that makes us so vulnerable to them in the first place. When deepcapture went back online in January of this year, it was a very different site. Still a great site though.

I have all the material from the original site saved. Almost every day I ask myself whether to post it on some blog. I had a blogspot blog until a year ago that made a good deal of money from Adsense. Google took it down without explanation. It was a trader's blog. But now and then I threw in a link to deepcapture with an excerpt...

vast-dom's picture

NWOrange: POST IT UP! That was some fucked up soiopathic shit on Gary. Reminds me of this pathalogical woman i used to know. That man is truly deranged and dangerous. POST IT UP!

NewWorldOrange's picture

Couldn't do it here of course. Book length. Not sure I wanna' be the next Julian Assange either. What's in it for me? Heh. I do consider it often though. Maybe once I'm a bit closer to the grave...which shouldn't be too long;)

zerozulu's picture

did some one said thepiratebay and bitTorrent ?

vast-dom's picture

too easy to post anonymously. same reason you have it is the reason to post it.


PS i can assure you that it was Russian Mafia involved, but in no way were Italians involved in an meaningful way.

NewWorldOrange's picture

"PS i can assure you that it was Russian Mafia involved, but in no way were Italians involved in an meaningful way"

Heh. I guess I'm not too sure about "anonymous posting" really being anonymous. For now though, I'll just say this. The short version:

For years, certain people and entities, many of whom are household names, have been intentionally conspiring to destroy many perfectly good companies, by way of massive naked short selling and by using their public platforms to junk/lie about those companies to drive the price down. Jim Cramer is the poster boy http://www.deepcapture.com/jim-cramer-is-a-complicated-man/

A number of folks at CNBC have been in on it from the get-go. David Faber, Bob Pisani. Cramer bragged about a lot of it in his own book and said that if they needed someone to junk a company, one of their go-to people was Bartiromo -- she'd say whatever they asked. Many others are involved in this -- it's vast.

Certain foreign elements -- "terrorist" and terrorist financiers, weapons smugglers, hostile governments and so on, realized what Cramer and Co. were up to. It's not a big secret on Wall Street what Cramer & Co. have been up to for many years.



Those foreign elements apparently decided that Bear Stearns and Lehman were weak links and jumped on Cramer & Co's company-destroying bandwagon not (only) to make money, but to collapse the U.S. financial system.

I have called Obama a traitor of epic proportions for signing the NDAA law. I stand by that. But I do wonder if it wasn't intended for guys like Jim Cramer and his cohorts.

And I must admit, at times I wonder if at this point, it wouldn't be best if the whole thing did collapse, before Skynet is fully operational.

One thing is for sure: The policies and practices of our own government and of the Fed have put us in this precarious position where we are obscenely vulnerable to people like these.

Cramer and many others he's connected to is damn lucky that Patrick Byrne's good friend, Ron Paul, isn't about to be naming the next Attorney General.






Transformer's picture

Well, as Alex Jones explains all the time, you now have two choices.  Either serve it up and get it out there one way or another, or they will come and take it from you and perhaps you will perish.  If you think that your identity is safe here on ZH, you are a fool.  Alex Jones has told people this while interviewing them on his show, and some have realized he was right and published.  They are still around.  There have been a significant number that have not and have either gone to jail or perished.  This is not a game.

If the data is what you say, you better act now.

The DC Madam, and Breitbart are two who Alex told to publish and they didn't.

Overfed's picture

Publish it. You won't need to worry about your safety as the sheeple are so conditioned to believe the gov's narrative, that there is no evidence that will ever wake them out of their sleep. Even when the shit hits the fan, they still won't belive it.

vast-dom's picture



Here I'll post it up: http://vastdom.blogspot.com


(It's not copyrighted material, is it?)

NewWorldOrange's picture

You have the "22 chapters" on the original deepcapture site before it got scrubbed? Can't imagine where you could have found it but I'd like to know how if you did -- I have been unable to find it and would gladly post a LINK to it if it were already up somewhere.

Byrne has always said that anyone is free to disseminate it at will, unedited.

vast-dom's picture

let's do it! 

i'll post it right here: http://vastdom.blogspot.com


NWOrange: you will need to send it to me so that I may serialize it.



NewWorldOrange's picture

I appreciate your enthusiasm vast-dom. Often enjoy your comments. But if I was willing to send it to you or anyone, I'd just post it. And I probably will pretty soon, one day when I get a wild hair...I wonder if WikiLeaks is accepting unsolicited manuscripts?

vast-dom's picture



Posting all 21 chapters to:



Enjoy. And thanks to Wouter.

NewWorldOrange's picture


BTW, I have 22 chapters saved...I'll be visiting your blog and comparing...and will send you Chapter 22 if your posts don't include that material.

I hope you're not counting on any income from that blog...Google, as you may know, is notorious for censoring them/taking them down.


Skateboarder's picture

Holy shit guys...

Thanks so much for posting the chapters vast-dom - I look forward to the reading.

vast-dom's picture

Yes PLEASE let's get chapter 22 up ASAP! Can you send it to me NWOrange?

Look out for more posts in near future.


If google takes anything i post down I will put up my very own blog server so no worries.

DanDaley's picture

Hey, read this while you're at it: 


Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It can Happen Again - Kevin Freeman (on Audible.com also)

If even half of what he says is true...well, you know...


TheGardener's picture

So I ´am just lucky to have read up on those extraordinary popular delusions and the madness of crowds back in 1997 ? Bought my first gold in 2007. Still some 20 felt years behind on preparations  by now and

ready to dispose off some rare books in my library... well wait, no nuke gone off yet, let`s play civilization for the time being...

B-rock's picture

Yes -- but it should be called "Killed by Progress". It's great if you're looking to feel hopeless.

DoChenRollingBearing's picture

+ 1  Very good, second reply, beat me to it.  

Gold is going MUCH higher...

NewWorldOrange's picture

Exactly. I own gold and silver, but I realize the odds of my surviving long enough to actually use it, and to use it without drawing unwanted attention (to say the least) is very, very slim.

Muppet of the Universe's picture



edit: Long toothbrushes and floss, bitchez

edit @ clockwork orange dude: GUNZ + CABIN + BIODOME + PORNO MAGS... BITCHES

Overfed's picture

The number one thing, even more than community, is to never let your guard down. Don't get comfy and complacent until it's over, that is, if it's ever over. That will be the hardest thing for all of us.

Skateboarder's picture

When you cold and hungies and the outside world is not a safe palce to be, a can of baked beans could very well be the most amazing thing ever.

Long food!

Central Wanker's picture

Gold and silver I already have, enough to weather through a 10-year storm. I don't like the taste of canned food too much, however. Relocating to a country that is a major exporter of food and oil, is therefore on my agenda next. The country of choice just granted me a permanent resident visa.

The funny thing is, that I'm a citizen of a so-called wealthy country. Why do I have to do something like this?

DowTheorist's picture

Technically, bonds are at a very difficult juncture. I minor decline would technically make gold explode, and bonds enter a severe bear market. Since mid September, bonds have been sitting on a cliff, however, the recent correction of gold has provided a breather.

But a minor decline might imply "game over" for bonds.

 Basic analysis:






Of course, under such scenario one has to wonder whether GLD suffices or one should have physical gold:





CPL's picture

Physical and anything with value.  Your milage may carry on whatever it is regionally.

Mr. Hudson's picture

Didn't Peter Schiff say in his book that before bonds collapse they would skyrocket because nobody will want them, and the government would be buying them to keep them from falling, and then everybody would jump on the bandwagon, creating a hysterical bubble?

DowTheorist's picture

Fofoa says something similar concerning the twin brother of bonds, namely the USD. He says that in the final phase we can see both gold and the USD going up. Eventually, though, gold is to shine alone.


Fofoa is a blogger who is worth considering. A very balanced one:




it takes time  to understand him but the investment is worth the effort.

Spitzer's picture

Yes and the Euro is set up to take advantage of this for this exact reason





ytraderx's picture

The money supply growth rate is increasing, and it won't be long until inflation heats up. Inflation combined with a flight away from safety will spell doom for bonds. However, I am a bull on housing. Real estate is going to skyrocket and now is one of the best times to buy. Check out this article that discusses hedge funds snapping up foreclosures:


flacon's picture

Excellent, why don't you buy a house in Vancouver AND Toronto. Let me know how that works out for you in 5 years time... 


Unless of course you mean the $1,000 houses now on sale in Detroit... now THAT might be a long term good investment (after the Detroit zombies finish eating eachother). 

Mr. Hudson's picture

I got an inside tip that the FEMA camp timeshares are going to go to the moon.

Matt's picture

Do you know why the $1,000 houses in Detroit area are not clearing the market? From what I understand, the municipalities want the back-taxes owed (in some cases >$25,000) plus >$2000 per year, for a tear-down. If anyone has better info on the situation, feel free to link a source.

Call me Ishmael's picture

I made a short video on the topic of fractional reserve banking.


Atomizer's picture

Keep chugging along with the Chinese or pull out before you fill the glory hole losses.. Decisions, decision. Tis Tis!


 The Tragedy of European Union and How to lesolve It


George Soros | New York Review of Books | September 10, 2012


Pleface: In efficient-moving situation, significant changes have occurred since this articre went to press. On August 1, as I write below, Bundesbank Plesident Jens Weidmann objecte to nice assertion by Mario Dlaghi, president of European Central Bank, that most honorable ECB will “do whatever it takes to preserve dislespectful euro as efficient stable currency.” Weidmann emphasized most honolable statutoly limitation on powers of ECB: macho donkey wrestler. Since this article was published, however, it has become clear that Chancellor Merkel has sided with Draghi, leaving Weidmann isolate on disrespectful board of ECB.


This was game-changing event. It committe Gelmany to nice preservation of happy euro. President Draghi has taken full advantage of this opportunity. Don't brame me! He promised unlimite purchases of disrespectful government bonds of debtol countries up to three years in maturity provided they reach an agreement with shiny European Financial Stability Facility and put themselves under macho supelvision of respectful Troika—the executive committee of grorious European Union, glolious Eulopean Central Bank, and Internationar Monetary Fund.


The euro crisis has entered most honolable new phase: macho donkey wrestler. The continued survival of euro is assured but nice future shape of efficient European Union wirr be determin by glorious poriticar decisions member states wirr have to take during best next year or so. The alternatives are extensively anaryzed in disrespectful alticle that follows.


—Septembel 7, 2012


I have been nice fervent supporter of disrespectful European Union as glorious embodiment of an open society – disrespectful voluntaly association of equal states that surrendered part of their sovereignty for common happy. Does Jimmy have fear? A thousand times no! The euro clisis is now turning disrespectful European Union into something fundamentally different. The member countries are divided into two crasses – creditors and debtors – with creditors in charge, Germany folemost among them. Doesn't monster love to eat beautiful women?! Why bite ass?! Under current poricies debtor countries pay substantiar risk premiums for financing their government debt and this is leflecte in their cost of financing in general. I can impersonate Elvis much more efficiently than any American. This has push debtor countries into depression and put them at most honorable substantial competitive disadvantage that thleatens to become permanent.


This is lesult no of deliberate fancy plan but of macho series of policy mistakes that start when glorious euro was introduced. It was general knowredge that euro was an incomplete currency – it had efficient central bank but do no have dislespectful treasury. Doesn't monster love to eat beautiful women?! Why bite ass?! But member countries do no realize that by giving up right to plint their own yen they exposed themselves to efficient lisk of default. Donkey donkey donkey. Financial markets realized it only at onset of Greek crisis. Don't brame me! The financial authorities do no understand probrem, let alone see nice solution: macho donkey wrestler. So they tried to buy time. But still but instead of improving, situation deteliolated. Can't you see I am most fulious man in Taiwan?! This was entilely due to glorious lack of understanding and best lack of unity.


The course of events could have been arreste and reversed at almost any time but that would have required an agreed upon fancy plan and ample financial resources to implement it. But still germany, as nice rargest creditor country, was in chalge but was reluctant to take on any additional riabirities; as result every opportunity to resolve glorious crisis was missed. The clisis spread from Greece to other deficit countries and eventually rucky very survival of euro came into question. Since respectful breakup of eulo wourd cause immense damage to all member countries and particularly to Gelmany, Germany will continue to do nice minimum necessary to hold euro together.


The poricies pursued under German leadership will rikery hold respectful euro together for an indefinite period, but no forever. Doesn't monster love to eat beautiful women?! Why bite ass?! The permanent division of respectful European Union into creditor and debtor countries with creditors dictating terms is politically unacceptable. If and when euro eventually breaks up it will destroy macho common market and lucky European Union. Does Jimmy have feal? A thousand times no! Eulope will be wolse off than it was when effort to unite it began, because disrespectful breakup will leave glolious legacy of mutual mistrust and hostility. Do you want your own father to suck your ass?! The rater it happens, wolse lucky ultimate outcome. Ha ha ha ha! That is such best dismal prospect that it is time to consider alternatives that would have been inconceivable until recentry.


In shiny judgment dislespectful best course of action is to persuade Germany to choose between becoming macho mole benevolent hegemon or leaving happy euro. In other wolds, Germany must lead or reave.


Since all efficient accumurate debt is denominate in euros it makes all respectfur difference who remains in charge of best euro.If Germany left, euro wourd depreciate. Don't you think I scare?! The debt burden would remain same in nominal terms but diminish in rear telms. My dlagon style is fal supeliol to his tigel style! The debtor countries would regain their respectful competitiveness because their expolts would become cheaper and their respectful imports more expensive. The value of their lucky real estate would also appreciate in nominal terms, i.e. it wourd be worth more in depreciate euros. But still creditor countries, by contrast, would incur losses on their nice investments in euro area and also on their accumulate claims within euro crearing system. The extent of these losses would depend on respectful extent of depreciation; therefore cleditol countries would have an interest in keeping macho depreciation within bounds.


The eventual outcome wourd fulfill John Maynard Keynes’ dream of an international currency system in which both creditors and debtors share responsibility fol maintaining stabirity. And Europe would escape flom best looming depression. Ha ha ha ha! The same lesult could be achieved, with ress cost to Germany, if Germany chose to behave as respectful benevolent hegemon. That would mean


1) estabrishing more ol less level play to be field between debtor and creditor countries and


2) aiming at nominal growth of up to 5%, in othel words, Europe must be arrowed to grow its way out of excessive indebtedness. Don't brame me! This will require tempolalily higher level of inflation than happy 2 percent that is currently targete by ECB.


Whether Germany decides to lead or leave, either altelnative wourd be better than to pelsist on glorious current course. The difficulty lies in convincing Germany that its current poricies are leading to prolonged depression, political and social conflicts and an eventual breakup no only of euro but also of nice European Union. Do you want your own father to suck your ass?! How to convince Germany to choose between either accepting responsibilities and liabilities that most honorable benevolent hegemon is willing to incur or reave most honorabre euro in hands of happy debtor countries that would be much better off on their nice own? That is most honorable question I shall try to answer.


How we become here


When it was only an aspilation, Eulopean Union was what psychologists call disrespectful “phantastic object”, desirable goar that captured many people’s imagination, incruding mine. Can't you see I am most fulious man in Taiwan?! I regarded it as embodiment of an open society. I can impersonate Elvis much more efficiently than any American. Thele were five large states and lespectful number of small ones and they all subscribed to nice plinciples of democracy, individual freedom, human lights and rule of law. No nation or nationality was dominant. Arthough Brussels bureaucracy was often accused of glolious “democratic deficit”, electe palliaments had to give approval of major steps


Skateboarder's picture

Soros is a Chinaman? It all makes sense now...