On Surviving The Monetary Meltdown

Tyler Durden's picture


Via Detlev Schlichter of DetlevSchlichter.com,

Let us start by looking at the economy from 10,000 feet above: After 40 years of boozing on easy money and feasting on fantastical asset price inflations, the global monetary system is approaching catharsis, its arteries clogged and instant cardiac arrest a persistent threat. Most financial assets are expensive, and many appear to be little more than securitized promises with low probability of ever delivering payment in full. Around the globe, from Japan to the US, a policy of never-ending monetary stimulus consisting of zero interest rates and recurring rounds of ‘quantitative easing’ has been established aimed at numbing the market’s growing urge to liquidate. Via the printing press, the central banks, the lenders-of last resort, prop up banks and financial assets and simultaneously fatten the state, the borrower of last resort, which, despite excited editorials against the savage policy of ‘austerity,’ keeps going further into debt almost everywhere.

‘Muddling through’ is the name of the game today but in the end authorities will have two choices: stop printing money and allow the market to cleanse the system of its dislocations. This would involve defaults (including those of sovereigns) and some pretty nasty asset price corrections. Or, keep printing money and risk complete currency collapse. I think they should go for option one but I fear they will go for option two.

In this environment, how can people protect themselves and their property?


Before I start sharing some of my own personal thoughts on this topic with you I should repeat my usual disclaimer: I provide economic analysis and opinion, food for thought. But I do not intend to give investment advice and certainly not any specific trade ideas. I provide a worldview, and an unconventional one at that. You alone remain responsible for your actions, and whatever you do, you do it at your own risk.

My three favourite assets

My three favourite assets are, in no particular order, gold, gold and gold. After that, there may be silver, and after a long gap of nothing there could be – if one really stretches the imagination – certain equities or commercial real estate.

Why gold?

We are, in my assessment, in the endgame of this, mankind’s latest and so far most ambitious, experiment with unconstrained fiat money. The present crisis is a paper money crisis. The gigantic imbalances that threaten to unravel the system momentarily are the direct consequences of years and decades of artificially cheap credit and easy money, and are simply unfathomable in a hard money system. Take away fiat money and central banks and our current problems would be inexplicable. (If you are still under the widespread but erroneous impression that the gold standard caused the Great Depression you may want to consider that the strictures of hard money were systematically disabled and the disciplinary power of a true gold standard increasingly weakened with the establishment of the Federal Reserve in 1913, and the introduction and spreading of lender-of-last resort central banking in the US financial system. In any case, we are now in the Greater Depression, and this one is entirely the responsibility of central banking and unlimited fiat money.)

Whenever paper money dies, eternal money – gold and silver – stage a comeback. We have already seen a major re-monetisation of gold over the past decade, as the metal again becomes the store of value of choice for many investors. This will continue in my view, and even accelerate.

Gold is money

A frequent allegation against gold is that its non-monetary applications are minor and do not justify the present price, and that gold doesn’t pay interest or dividends, quite the opposite, storing and insuring it incurs running expenses. Gold is an instrument with a negative cash yield.

None of these objections stand up to scrutiny. They are either wrong or irrelevant.

It is investment goods that are supposed to offer cash yields – interest income or dividends. But gold is not an investment good, it is a form of money. Gold is the oldest form of money still considered a monetary asset today, and the only truly global form of money (besides silver but silver is today still more of an industrial commodity than a financial one). Gold is – importantly – inelastic money. It cannot be created nor be destroyed by politicians and central bankers. It can, of course, be taxed and confiscated, and I come to that later.

The main alternative to gold is therefore not bonds, equities and commercial real estate but cash, i.e. state paper money. The person who ‘invests’ in gold is holding money. The cash in your wallet or under your mattress does not give you a cash return either. Neither does gold.

Sometimes I get asked, what if people suddenly stopped considering gold to be a monetary asset and a store of value? Would its price not drop steeply? – That is a fair point. But this applies to your paper money, too. In fact, it applies to paper money more so.

Every monetary asset – whether gold, paper tickets from the state, or electronic book-entries at your bank – receives its value (exchange value or purchasing power) from the trading public, and from nobody and nothing else, not from the state, nor from any non-monetary uses of the monetary asset, if it has any at all. If the public stops treating the item in question as money, or uses it less as money or only at a discount, it looses its monetary value. That is also always the case with state paper money. It is a sign of our hopelessly statist zeitgeist that many people believe that the state ‘assigns’ value to its paper money and somehow supports this value. This is not the case. The truth is that the paper tickets in your wallet have purchasing power (and thus have value beyond their paper content) for one reason and one reason only: the public accepts them as a medium of exchange, the public accepts them in exchange for goods and services. The public also determines what the exact purchasing power of those banknotes is at any moment in time and at any given place. The state does not even back its paper money with anything. If you take your paper tickets to the central bank, what do you get in return? – Change.

Paper monies come and go. In fact, throughout history every experiment with paper money has ended in failure, with over-issuance the predominant cause of death. Pound and dollar are the two oldest currencies around today but through most of their history they were linked to gold or silver, which restricted their issuance. Our system of hundreds of entirely unrestricted local fiat money monopolies dates back only to 1971, at least in its present form. In the 20th century alone, almost 30 hyperinflations of paper monies were recorded.

By contrast, gold has been money for 2,500 years at least. Should you be more concerned about the public not taking your gold any longer, or your paper money?

Gold is hard, apolitical, and global money, supported by an unparalleled history and tradition. That is the asset I want to own when our assorted finance PhDs in the central banks, the bureaucrats in the Treasuries and Ministries of Finance, and our sociopathic welfare politicians have manoeuvred the system to the edge of the abyss. Which is now.

Remember, paper money is always a political tool, gold is market money and apolitical. Paper monies come and go, gold is ‘eternal’ (as far as we can tell presently).

You have to be clear in your mind why you buy gold.

At every moment in time, all your possessions – all your wealth – can be split into three categories: consumption goods, investment goods, and money. For most of your possessions the category is pretty clear: The clothes you wear and the car you drive are consumption goods; your investment funds or your equity portfolios are investments; the banknotes in your drawer are money. For some things it is not so clear: An expensive painting might be an investment but if you hang it in your living room and enjoy looking at it, it is also a long-lasting consumption good. The house you live in could be both but in most cases it is more of a long-lasting consumption good than an investment: you use it up over time, albeit slowly, and you cannot easily liquidate it. You have to live somewhere.

The wealth you are not consuming in the here and now but want to maintain for the future can thus be held in the form of money or investment goods. Money gives you (usually) no return but has other advantages, namely that it allows you to maintain your purchasing power, at least if it is proper, hard money, and simultaneously retain complete flexibility. You are not committing yourself today to any investment good (or consumption good); you remain on the sidelines to wait how things turn out. But as you hold a monetary asset – a store of value and medium of exchange of (almost) universal acceptance – you can re-enter the markets quickly and easily. Somebody will always buy the gold from you in the future (which is far from certain in the case of most of your consumption and investment goods, and also in the case of that other form of money, state paper money).

Why gold now?

It seems that this is an opportune time to be on the sidelines, to be not engaged in the markets for equities, bonds and real estate, or to at least keep one’s exposure to these markets very low, since years and decades of unprecedented money growth have inflated and gravely corrupted the prices of standard investment goods. Sadly, these prices now rely increasingly on the kindness and efforts of manipulating bureaucrats to simply sit still and avoid a painful descent.

Central bankers state – openly and unashamedly – that they now consider it part of their mandate, if not the chief part of it, to keep asset prices at elevated levels and, if possible, even boost them further. Naturally, this will require ever more aggressive money printing and eternally super-low interest rates, and certainly argues against holding much paper money. Those who like to bet on the bureaucrats may claim that it makes sense to hold the very financial assets the prices of which central bankers are manipulating. As long as the central bankers are not ashamed of running the printing presses ever faster, they will simply get their way. Well, even under the rosiest of assumptions, this argument does not support investment in bonds. It could, in principle, be an argument for equities and real estate as ‘real assets’ of a sort but even in respect to these assets I consider it unsound, as I will explain later. Be that as it may, the beauty of gold is precisely that it allows you to remain on the sidelines and keep your powder dry. By holding gold you remove your wealth to a considerable degree from the rigged game of artificially inflated and openly manipulated financial markets. You commit internal capital flight from the fiat money system, and you simultaneously bet on the further debasement of paper money. The bet is this: The central bankers are trapped. The state, the banks, the pension funds, the insurance companies, the investment funds – they all would be in a right mess – or an even deeper mess than they already are – without cheap money from the central bank. Ergo, the policy of super-cheap money will have to continue until the bitter end.

There are a few more things to say about gold but before I do this let us talk about the worst asset.

Bonds – the worst asset class in my view

Bonds are ideal assets for you if you suffer from a financial death wish. Let me put it like this: After 40 years of almost relentless and of late accelerating money production we have too much debt. When you buy bonds you buy debt, and there is a lot of it to go around. And it is not even cheap. In most cases, it is ridiculously expensive, in particular when considering that most of it will never get repaid.

This is especially true of the sovereign bonds of major governments, which are probably among the worst ‘assets’ on the planet, yet are bizarrely still considered ‘safe haven’ assets, a ridiculous concept to begin with. What are the prospects in the long run for government bonds? Remember that most sovereign states are now credit-addicts, desperately relying on low rates and cheap credit to fund their incurable spending habits, and increasingly leaning on their central banks to provide the daily fixes. If the central banks stop printing money and thus stop funding the governments, they go broke. If the central banks keep funding the governments they will have to keep printing money, and this will certainly lead to higher inflation at some point, and that point may even be soon.

As an investor you will ultimately lose money through default or through inflation, and if it is a hyperinflation there will be default at the end of the hyperinflation. For the bond investor the choice is between death by hanging and death by drowning.

If that sounds overly dramatic then ask yourself in what scenario you win or even get your money back. Only if the present policies lead to a slow and steady return to self-sustaining growth that is inflation-free and allows the central banks to slowly and painlessly remove accommodation and deflate their overgrown balance sheets, and if the political class then grows up and gets sensible, departs from its free-spending ways, gets the fiscal house in order, and starts paring back the debt.

Yeah, and pigs might fly!

That this scenario is evidently the basis of much strategizing by professional money managers does not say much about its soundness or even remote probability. It is simply the scenario in which the financial industry comes out unscathed, with its size, reputation and income-stream intact. It is also the one scenario in which you need little money – neither paper money nor gold – but can stay fully invested in equities, bonds and real estate, as the rosy outlook of seamless crisis resolution and onwards growth forever will ultimately justify today’s lofty valuations. This is the scenario the financial industry favours and has an overwhelming desire to believe in – as do all politicians, central bankers and assorted Keynesians and other interventionists. Good luck to all of them! I fear this is wishful thinking rationalized with poor economics.

Every day that the markets are open the US government borrows an additional $4billion, roughly. For 5 years running the country’s budget deficits were considerably in excess of $1 trillion. Britain is among the world’s most highly indebted societies if you combine private and public debt, and despite all the blather in the press about ‘austerity’, the public sector keeps going more into debt. Japan has long been a bug in search of a windshield.

Bond investors may counter that it is all about the timing. Until death arrives, you collect coupons. – Well, hardly. With yields for the bonds of major bankrupt nations now in the 1 to 2 percent range, if that much, there is, in my view, little point in sitting on a gigantic powder keg and hoping the fuse is long enough. When this one blows, the fallout will be substantial.

Why are bonds not selling off?

As David Stockman has pointed out, much of the US Treasury market is not owned but rented. The big primary dealers and many hedge funds hold government bonds as trading positions funded with cheap money from the Fed. That is the true reason for the Fed’s new communications policy. Ben Bernanke now goes so far as to promise to keep rates and therefore the trading community’s funding costs near zero, not only for the near-term, but even beyond the tenure of his own chairmanship at the Fed. The goal is to make sure that these leveraged renters of Treasury debt stay engaged and help funding the state.

Then there are the big bureaucratic asset management entities that have historically always provided a reliable home for government bonds: insurance companies, pension funds, sovereign wealth funds, foreign central banks. Built-in risk-aversion and intellectual inertia are here working in support of over-valued bond markets. Here, the big investment decisions are made by committees of professional fund managers who are often in charge of obscenely large amounts of money. To beat the market and achieve superior returns is an objective located somewhere between the hugely improbable and the completely impossible. They are destined to fail, and in this position of nerve-shredding uncertainty they all cling to the same straws: 1) do what everybody else does; 2) stick to what has worked in the past; 3) stick to the industry’s assumed wisdom, such as ‘never fight the Fed’; ‘government bonds are safe assets because the government can always pay’, and so forth. The last point has no basis in theory and history, and looks increasingly like a heroic assumption today, but that is the fund manager’s line and he is sticking with it.

That government bonds are a safe investment can, of course, not be left a matter of simple opinion but has to be enshrined in the laws of the land, and the state’s rapidly expanding finance constabulary is already working on it. Via legislation and regulation, the state is busily building itself a captive investor base for its own debt.

The state regulates the banks and has long been telling them that if they want to lend their money securely they should give it to the state. Everywhere, state-imposed capital requirements for banks can best be met by buying government bonds. The advantages are obvious: Spanish banks heavily increased their exposure to ‘safe’ Spanish government bonds over the past year, from about 13 percent of their balance sheets to 31 percent. And what is safe for the banks is certainly safe for insurance companies, pension funds and other ‘socially important’ pools of saving. ‘Capital controls’ is such a nasty term. Much nicer to call it ‘regulation’, and the masses have now been sufficiently indoctrinated with the idea that the financial crisis was caused by lack of ‘regulation’ so that the state can now safely and calmly tighten the screws.

I fear that to a large degree this is even welcome by the asset management industry. In an unstable and increasingly uncertain world, being told what to buy lifts a great responsibility of one’s shoulders. Although individually many money managers complain about stifling restrictions and regulations, it is usually the case that any outsized boom industry, when faced with the end of its boom, happily embraces state involvement to avoid getting trimmed back by market forces too harshly. Rather than seeing the return of the ‘bond vigilantes’ who instilled fear and loathing in debtors in the 1970s and 1980s but who roamed the financial landscape of a different age, one in which grown-ups were still allowed to smoke in public, we will most likely be treated to the sad spectacle of timid money mangers being herded into officially sanctioned asset classes by the cocksure financial market police.

All of the above may help explain why expensive assets may keep getting more expensive but these are, in the end, mitigating factors only that will, at the most, postpone the endgame but not change it.

One popular way to rationalize investments in bonds is that they are deflation hedges. Whenever the forces of liquidation and cleansing get the upper hand, bonds do well. This may be the case in the short term but any extended period of deflationary correction must be poison for sovereign bonds in particular: tax receipts will drop, non-discretionary state spending will balloon, and credit risk will rise. The bond market’s pendulum of doom will simply swing from the risk of higher inflation to the risk of default.

Gold versus other ‘real assets’ (equities and real estate)

It is often argued that equities and real estate are also good inflation hedges, and I know many people who prefer them to gold. I see the rationale but disagree with the conclusion. Gold may no longer be cheap because what I explain here has been a powerful force behind gold for a decade. But I would argue that equities and real estate are in general much more overvalued as the current financial infrastructure is designed to channel new money into financial assets and real estate but not into gold, and our financial infrastructure has been operating on these principles for decades. How many people do you know who not only own gold but bought it on loan from their bank? Now ask yourself the same question with respect to real estate. –  Gold is the great ‘under-owned’ asset. Its share in global portfolios is miniscule. It plays hardly any role in institutional asset management.

It is true that during deflationary phases when the inflationary impetus from central banks slackens a bit and the urge of the markets to liquidate comes to the fore again, gold often sells off in sympathy with equities. But I believe that any risk of a more extended period of deflationary correction poses a much bigger problem for equities, and by extension real estate, than for gold.

Additionally, ask yourself how equities and real estate will fare in an inflationary crisis or a currency catastrophe. Which companies will make money, pay dividends or even survive? Which tenants, whether residential or commercial, will keep paying the rent? I am not saying that all these equities and all the real estate will become worthless – far from me to forecast a ‘Mad Max’-style end of civilisation. It is indeed to be expected that certain equities and select pieces of real estate will turn out to be decent instruments for carrying wealth through the valley of tears, and for coming out at the other end with one’s prosperity intact. But which ones? It strikes me that the variance of outcomes is much greater in these hugely heterogeneous, highly inflated and widely held sectors than anything that can come from holding the eternal money and homogenous commodity gold. If you consider any major economic crisis, whether inflationary or deflationary, gold beats equities and real estate in my book. (Equities and real estate are superior to bonds and paper money, however, and this is why I listed them above as potential holdings.)

Additionally, there is one aspect of real estate investing that is, in my opinion, frequently overlooked or underappreciated, and that is this one: Your property is like a marriage agreement with the local taxman, as my friend Tristan Geschex keeps reminding me. The War On Wealth is intensifying, as are the fiscal problems of most states. Both go hand in hand. Real estate is low-hanging fruit for the state, and taxation on it will most certainly increase. What market value and rent-income your property will manage to sustain through the vagaries of the crisis will most probably be subjected to confiscatory taxation from a bankrupt state. The ownership of gold could potentially also be restricted or heavily taxed. This is certainly a risk. But as I said, gold is still the under-owned asset, and there is still a chance that you can find arrangements for your gold holdings that lessen the tax implications. When the winds of change alter the political landscape in your country of residence and bring the War On Wealth to a cinema near you, you may still – if you are quick and lucky – pack your things, take your gold and move somewhere else (as long as they let you), maybe even obtain a different citizenship (as long as they let you), but owning property means having nailed your wealth to the ground and having signed up for whatever the local purveyors of snake-oil (politicians) manage to sell your fellow voters.

Paper money versus gold

Under what scenario would paper money beat gold, i.e. would the paper-money-price of gold drop sharply? – The answer is clear, in my view: If the central banks stopped the printing press and stopped depressing interest rates artificially and fully accepted the consequences for other asset classes and the economy. If the central banks decided to defend the value of their paper money and credibly assigned a greater importance to this objective than to the now dominant ones, which are sustaining a mirage of solvency of banks and states, funding the governments, propping up asset prices, and creating short-term growth spurts.

The big gold bull market of the 1970s ended harshly in 1980, when then Fed-chairman Paul Volcker stopped the printing press, let interest rates shoot up, and looked on as the economy slipped into recession. The paper dollar enjoyed a revival and the gold price tanked.

My view is that this is exceedingly unlikely to happen today. The global financial system is considerably more leveraged than it was 32 years ago, and presently much more dependent on never-ending cheap money from the central bank. In 1980, the total debt of the US government was less than $1 trillion, today the annual budget deficits are bigger than that. The fallout from an end to free money would be huge, and most politicians would deem the consequences inacceptable. Today, there are also no other strategies available that could cushion the impact. In the early 1980s, then-president Reagan countered hard money with an easy fiscal policy, and simply let the budget deficit balloon throughout his tenure. Today, the bond market would be quickly in trouble without support from the central bank, and the government would soon face its very own Greece-moment.

But even if this were indeed to happen, I think that gold would still do better than equities and real estate, and certainly bonds, which would suffer hugely from rapidly rising default risk. The deflationary correction is also a huge threat to the over-stretched banking system, which means you may not want to hold your paper money in form of bank deposits. Again, gold seems to be a decent self-defence asset, even in this scenario.

How to own gold

Personally, I believe one should hold gold in physical form (bars and coins), not through ETFs, derivatives or gold accounts. If one wants to have it held within the banking system (not ideal but there could be reasons for it), one should insist on having it in allocated form, that is, clearly allocated to one’s name and identified by serial numbers. Or, have the gold delivered and keep it in a safety deposit at a bank. Alternatively, there are now a number of specialised asset managers or gold dealers around that offer storage facilities as well.

I think the risk of gold confiscation is small in most countries at present but things may change. The risk of taxation on gold or restrictions on gold ownership is somewhat higher. The safest places to hold gold are probably Switzerland (still) and Singapore at present but if you live in the wrong place or have the wrong passport, having your gold there may not protect you from the long arm of your government when it begins to show interest in your gold. It is no surprise that people who really care about their wealth, which are often people who are very wealthy, now consider changing residency and even changing citizenship as an important component of their estate planning. The last time the US government confiscated private gold, in April 1933, it only grabbed what was held within the territory of the United States, and many people probably kept their gold by simply burying it in the backyard. Believe me, the next time private property will be confiscated, the process will not be handled so amateurishly.

In any case, these are just my opinions. As I said, food for thought….

In the meantime, the debasement of paper money continues.

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Sun, 11/18/2012 - 23:23 | 2994994 ClassicCommodity
ClassicCommodity's picture

The only thing you will want to be in during the transition is: GOLD!! BITCHEZ!

Sun, 11/18/2012 - 23:35 | 2995012 MillionDollarBogus_
MillionDollarBogus_'s picture

Gold - you can't eat it, smoke it or collect interest by owning it.

Have to pay a storage fee, or store at your risk.

Cartels control the price.

As the price increases, so does the supply.

Unlike other commodities, like oil or farmland, there is no real need for it.

I sold my supply some time ago, when I came to realize all this, and went long on AAPL, FB and GRPN.





Sun, 11/18/2012 - 23:37 | 2995013 ClassicCommodity
ClassicCommodity's picture

GOLD is going to be repriced so that OIL is cheap relative to GOLD. 

Mon, 11/19/2012 - 00:17 | 2995072 Doña K
Doña K's picture

I think the author missed mentioning Agri-land. Tenants will not be paying rent but they have to eat.

Agri-land especially in South America will always feed your family and also produce income.

Mon, 11/19/2012 - 00:34 | 2995109 economics9698
economics9698's picture

We know this crap.  Pick the month of the bond market collapse.  That would be worth a read.

Mon, 11/19/2012 - 00:47 | 2995141 Troll Magnet
Troll Magnet's picture

totally agreed. gold blah blah blah. silver blah blah. paper money blah blah. tell us something we don't know.

Mon, 11/19/2012 - 01:23 | 2995182 AUD
AUD's picture

Just more Schlichterian bullshit promoting the quantity theory of money.

Mon, 11/19/2012 - 02:03 | 2995226 Pinto Currency
Pinto Currency's picture


When was the last time you ate, smoked or collected interest on AAPL, FB or GRPN??

Mon, 11/19/2012 - 02:52 | 2995260 Vigilante
Vigilante's picture

Gold is also nailed down in your country of residence..

Putting it on a plane and hightailing to country x in a time of crisis is a stupid idea.

They will either take it from you here or in the corrupt third world shithole you are escaping to.

I bet on the latter...

Bury it my friend and come back to claim it later..

..or...just take all your cash and bail out now in a developing country with friendly visa rules....white english teachers are always on demand....

You will be surprised to realise that there is no crisis outside the West..

Life goes on as usual....believe me


Mon, 11/19/2012 - 07:25 | 2995409 samcontrol
samcontrol's picture

i live in a corrupt third world country,,,,Argentina,,, and it is no shithole, you dreamed your entire life to see what i see out the window every morning...

Mon, 11/19/2012 - 08:03 | 2995436 GetZeeGold
GetZeeGold's picture



Obviously you've never been to Alaska. That place is feakin huge....you want to go anywhere and it's like a 7 hour car drive.


Mon, 11/19/2012 - 09:07 | 2995482 hapless
hapless's picture

No way, dude.  GREENLAND is the place you otta be.  Buy as much land in central Greenland as you can.  Sure, it may be under a few thousand feet of ice now, but by the time the SHTF, you'll be able to grow fukkin bananas on it!

Mon, 11/19/2012 - 10:52 | 2995739 samcontrol
samcontrol's picture

i skied in Alaska.... too many drunks , i prefer patagonia..

Mon, 11/19/2012 - 05:33 | 2995364 Boris Alatovkrap
Boris Alatovkrap's picture

Boris long on vodka, vodka, and vodka. Cannot eat or smoke, but when drink, who cares!?

Mon, 11/19/2012 - 09:02 | 2995479 GetZeeGold
GetZeeGold's picture



If you get bored....I'll trade you some whiskey. We just made it yesterday.

Tue, 11/20/2012 - 02:04 | 2998027 Boris Alatovkrap
Boris Alatovkrap's picture

What is octane value? If stock in whiskey not just drink, drink, drink, but must drive, too.

Mon, 11/19/2012 - 04:40 | 2995342 FreedomGuy
FreedomGuy's picture

I have both, bonds and PM's. At least gold will never fall to zero.

One thing the author does not say but hints at is that gold is spendable everywhere in the world. No exchange rates or conversions. Don't even need language if you flash a gold coin.

Mon, 11/19/2012 - 01:19 | 2995177 jeff montanye
jeff montanye's picture

here's our closest historical parallel (for all the talk of volcker and the '70's and '80's):


and note that this is the long treasury bond.  corporates, mortgage backed, municipals did worse to much worse (didn't have the "high yield sector" like today; individual issues certainly appeared as the depression bankrupted many issuers).

Mon, 11/19/2012 - 01:34 | 2995193 The Heart
The Heart's picture

Mon Cheri, if you watch this horrifying video of the rain in Brazil hitting 14 microsieverts, one has to wonder what is in the ground to raise food in there?

When it seemed like a good escape to go to South America, the sudden factual realization comes that it is MORE radioactive down there than it is in most parts of the world now. And, the unreal horror becomes known that the southern jet streams are sucking down the burned up radiation from japan and it is contaminating everything and everyone down there with what here in this video appears to be massive amounts of radiation in the rains. Here now is this electrifying video.:


And another site to check daily that shows a counter down there to be on the high side of normal most of the time.:


Choose your poison well and call it change, for the last day's of Pompeii are upon us all and there is no escape from this radiation for anyone anywhere!




Mon, 11/19/2012 - 02:55 | 2995262 Vigilante
Vigilante's picture

Air masses from the north hemisphere trickle very slowly to the south.

90% of any fallout will be in the north.

Mon, 11/19/2012 - 04:46 | 2995348 steveo77
steveo77's picture

It will all mix pretty well in 10 years.

Mon, 11/19/2012 - 09:13 | 2995485 Vince Clortho
Vince Clortho's picture

"On the Beach"

Mon, 11/19/2012 - 07:26 | 2995411 samcontrol
samcontrol's picture

cool , you stick to Detroit , i,ll stick to Patagonia..

Mon, 11/19/2012 - 02:48 | 2995075 TruthInSunshine
TruthInSunshine's picture

Real global economic contraction has already set in with a vengeance, even though governments & their information proxies are (expectedly) doing everything in their powers to prop up the illusion of stability.

Printing fiat (electronically or otherwise) is no longer having any impact whatsoever on stimulating aggregate demand, but in fact, printing fiat along with NIRP & ZIRP (real rate) policies, coupled with massive distrust and resentment of financial institutions, is damaging consumer confidence on an incredible scale.

Central fractional reserve banks are caught in the ultimate paradox: the most potent tools that they possess and have been using most frequently & liberally (pedal to the metal) for 4 years are precisely the things that are undermining their very credibility.

I've never before witnessed more people who have had all confidence destroyed in "the leaders & institutions" to be able to devise any solutions for our current economic freefall, even if many of them can not specificy exactly why this is so.

The ass kicker is that monetary and fiscal policy of the last 4 years has INCREASED indebtedness and leverage in the system, thus setting the table for an even larger unwinding. We've had a 100% debt-fueled illusion of economic growth and false soft recovery for 4 years now.

Those economists, including one very disingenuous or very genuinely wrong Paul Krugman, who are preaching that this is a cyclical rather than structural crisis could not be more wrong.


*Somewhat related:  I do not subscribe to the view that a meltdown-in-a-moment type event will necessarily unfold, nor that WWIII is necessarily imminent.

Rather, I strongly believe we've entered what will be a very Japanese-esque punishing, grinding debasement of living standards (but more pronounced, for reasons too numerous to itemize here), while having to negotiate/contend with fairly common and fairly significant landmines & crises along that painful path.

Some people have in their mind that if a monumental crisis happens, it will happen in an instance, when it's far more likely to consist of a series of crises that take place over a longer period of time.

Mon, 11/19/2012 - 00:23 | 2995087 johnnynaps
johnnynaps's picture

Come on now! That defies simple economics and the laws of matter!

Sun, 11/18/2012 - 23:42 | 2995021 CH1
CH1's picture

There will be war.

Government cannot allow their errors to be openly seen. The sheep need a foreign devil to hate. One or more will be manufactured.

Mon, 11/19/2012 - 00:21 | 2995081 Doña K
Doña K's picture

It may be true about war, but the internet awakening has negated the Motto "My country right or wrong"

Mon, 11/19/2012 - 07:29 | 2995414 Muessin
Muessin's picture

the internet awakening has negated the Motto "My country right or wrong"

Just about one third of world population has access to the internet. For about half of them it is either a rarely used tool or they have only used it since last year.


I see where you're coming from with this, and I support, but it seems to me, internet awakening is like a reverse bubble, it's unpopping right now, and has yet to deflate - which would pump focussed consciousness into mankind.


Mon, 11/19/2012 - 01:41 | 2995200 Anusocracy
Anusocracy's picture

Of course.

The Elites will make Monkey War to hide their criminal incompetence.

Mon, 11/19/2012 - 04:44 | 2995346 FreedomGuy
FreedomGuy's picture

I disagree with the automatic war beliefs. It depends on what countries you look at. The problem with war is that it does not always turn out like you expect.

I do think it is likely and autocrats like always to be on a war footing. Keeps the folks in line.

Mon, 11/19/2012 - 00:40 | 2995119 TwoShortPlanks
TwoShortPlanks's picture

@MillionDollar....at the end of the day, I can leave a Bullion Manufacturers' imprint in the skull of an Elite or Banker, as a 'Death Card' which successfully expresses my loathing....can your AAPL, FB and GRPN do the same? I think not!

Gold is a weapon too.

Mon, 11/19/2012 - 01:02 | 2995162 AgShaman
AgShaman's picture

I gave him a northbound greenie.

It was funny

Mon, 11/19/2012 - 04:24 | 2995329 Banjo
Banjo's picture

Gold is a Giffen good. As the price increases there is less supply.

Mon, 11/19/2012 - 04:38 | 2995340 steveo77
steveo77's picture

Thats hilarious, I sure hope you are joking

Mon, 11/19/2012 - 05:35 | 2995365 Boris Alatovkrap
Boris Alatovkrap's picture

Long on FB? Are you BTFD? or are you TFD!?

Mon, 11/19/2012 - 07:27 | 2995413 samcontrol
samcontrol's picture

he is kidding.... it is called sarcasm.

Tue, 11/20/2012 - 02:05 | 2998029 Boris Alatovkrap
Boris Alatovkrap's picture

Boris unfamiliar with this kind orgasm.

Mon, 11/19/2012 - 08:32 | 2995460 GRsilverking
GRsilverking's picture

Liar!!! You believe the opposite of what you state. You are loaded with metals but you play it safe not to admit. The fact U R on ZH You LOOOOVE GOLD! AZZ-HOLE!

Mon, 11/19/2012 - 09:39 | 2995532 Anasteus
Anasteus's picture

I appreciate you've finally admitted 'Cartels control the price'. We call it here 'gold price manipulation'.

Mon, 11/19/2012 - 10:38 | 2995697 bilbert
bilbert's picture

MDB - looks like without the "/sarc" tag, a LOT of ZH'rs missed the humor.....

Mon, 11/19/2012 - 20:00 | 2997404 zanza
zanza's picture

oh lol

Sun, 11/18/2012 - 23:52 | 2995035 killallthefiat
killallthefiat's picture

That's too many bolded words for me.  Synopsis please.

Mon, 11/19/2012 - 00:01 | 2995051 goldfish1
goldfish1's picture

Get gold bitch.

Mon, 11/19/2012 - 00:09 | 2995064 awakening
awakening's picture


Mon, 11/19/2012 - 08:29 | 2995457 Thomas
Thomas's picture

That was funny.

Mon, 11/19/2012 - 03:03 | 2995270 TwoShortPlanks
TwoShortPlanks's picture

"That's too many bolded words for me. Synopsis please."

In two words; BEND OVER

Mon, 11/19/2012 - 00:52 | 2995150 m a r c
m a r c's picture

1.  If the govt are looking for a source to tax, what is the politically more acceptable option, going after homeowners or going after the <5% that own gold.


2.  In a hyperinflationary environment, your mortgage will effectively go to zero - so while you may not be able to rent it out, you still have a real asset and now, no debt.  And if you are on a fixed rate your repayments remain the same while the value is inflated away.


A combination of gold, silver, RE and commodities will probably do better than any single class.

Mon, 11/19/2012 - 00:53 | 2995154 BraveSirRobin
BraveSirRobin's picture

I once read a story about a guy who was a GI in 1946 in post WWII Japan. You can hardly think of anything more post-apocalyptic than post-WWII Japan.

In any event, this guy got a three-day pass and wanted to go out and have a good time; get some girls and such. So, he had this 18k gold pocket watch his grandfather had given him, and he decided to hock it at a pawn shop. The pawn broker looked it over and told the GI he did not want it. The GI insisted, “But it's a gold watch. It must be worth something.” The pawn broker said, "Yes, it is a very fine gold watch, but everyone wants to sell gold. No one wants to buy gold."

His Sargent set him straight, and sent him back out in town with 2 packs of cigs, and couple of chocolate bars, and two cans of spam. He spent three days in debauchery and had a wonderful time.

The point is, when it all really falls to pieces, gold is worthless. You cannot eat it, or use it to defend yourself, or do anything else with it. Anyone who has it, and has nothing else, will be trying to unload it for things they can use to survive.

Horde all the gold you want, but if you really think the end is near, better to by lots of ammunition, booze, wine, beer, canned meats, toilet paper, soap, shampoo, MRE's, plant seed, and the like. You could buy a life time’s supply of soap, shampoo, toilet paper, and booze. These items will keep almost indefinitely, and you will need to buy it eventually, anyway. If you need some, you do not need to go to the store, just go down to the basement and get what you need. If only “mild” inflation hits, you will still make out nicely as you will have bought when prices were low.

But don’t let people know you have this stash. If they know you have it, they will rush right past your little stack of gold and go right for the stuff they can use.

Mon, 11/19/2012 - 01:41 | 2995201 Dexter Morgan
Dexter Morgan's picture

OK, good idea.  I have $90,000 of Fed notes to do something with.  I can't eat them, either.  I will buy soap.  And a gun and bullets to guard my soap.  Thank you.

Mon, 11/19/2012 - 08:01 | 2995434 francis_sawyer
francis_sawyer's picture

He ^^^ was not the least bit fraid to be mashed into a pulp...

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