Tyler Durden's picture

By Mark Grant, author of Out of the Box


"Defer no time, delays have dangerous ends."
                    -William Shakespeare, Henry VI

“Postponed” is the official stamp across the world. This is the operative word of governmental policy. Whether Europe or America, whether capitalist or socialist government; this is the credo, the banner, the flag waving in the wind for dealing with economic problems. Throw more money at it and barrels of it, have the central banks print and defer any pain much less any tough decisions. We live in a state of postponement, defer and delay which cancels the consequences of the moment but places more severe consequences, greater pain and tougher choices but moments out into our future. Make no mistake; the world has become a more dangerous place either haunted by the specter of rampant inflation or haunted by valuations of debt and currencies that could turn the financial markets into a swirl of dislocation where a plunge into a freezing sea of disarray awaits as capital goes to gold, senior debt regardless of yields and nations deemed to be safe havens.
Grant’s first ten Rules, “Preservation of Capital” may exceed their present definition as they become all that is important and not just one of the considerations for making investments. Look about you, consider with care, what has been fixed and the honest answer, the truthful answer is Nothing. Greece is no better, Spain is no better, Portugal is no better and America is worse. Nothing has been fixed! Nothing!
The financial markets have not gone, yet, into demise because the central banks have printed massive amounts of money and the money printed is greater than the supply of products that can absorb the tremendous amount of liquidity and so we have compression in fixed income, we have stock markets that have been propped up and we have sovereign debt that has been multiplied all because no government has undertaken the pain and difficult decisions that will accompany fixing the problems that confront the nations of the world. I have stated all of this before but I wanted to take a moment and codify this in a succinct manner.
Postponement coupled with creating money out of nothing and the deferral of decisions exacerbates the problems when the time comes that there is nothing left to do, no other choice left other than to deal with them. To suppose that the present conditions will continue on ad infinitum is a foolish mistake that will be met with dire consequences when the wall is reached. When cash regains its mantle of King and commodities start their upward spike and gold begins to shoot up to levels once thought unimaginable then the game is on as Fear will overtake the lull that we have been living in for quite some time. Since people and institutions cannot invest off-world and we are stuck in the global container of where we can invest then it is Bill Gross’s “least dirty shirt” in the short run but then it will be the exchange of any shirt for the steel armor of protection and self-preservation as the stench of the unwashed exceeds our ability to remain in that garment.
Greece may well kick-off the show. We are not done with that travails of that country yet. Every game has been played now, every hit to the private sector that could be taken has been taken, every demand for austerity has been set into law and yet the country is worse off and their financial condition continues to deteriorate. The Greeks will suffer the consequences as long as new money is handed out but the next round is debt-write offs by the nations of Europe and the screaming and old divisions will rear their ugly heads and the history of the nation-states of Europe will result in national leaders calling for an end to the madness of money without end given to a nation that cannot afford even its present commitments much less its accumulated debts.
The Greek people, the recipients of the largesse that is really little more now than the countries of Europe paying themselves back with the sovereign nation of Greece as the conduit, will put up with it as long as some portion of the money is left in their coffers but I predict that the moment that new money stops being handed out that revolt will occur and Europe can go hang. I think that 2013 will mark the year when then endgame commences first from refusal to fund by some European countries and then a backlash in Greece. The breakpoint now approaches.
Then it will be Spain who takes the next plunge, the $112 billion write-off of the debt of Dexia that will impact Belgium, the failure of the austerity measures in Portugal, the elections in Italy, the travesty of Cyprus and the continuing recession in Europe that will cause devastation on the Continent. In America it will be the walk of shame over our cliff and then several weeks of political assurances and then the markets’ realization that nothing was really accomplished and the beginning of a great tailspin. Decisions have been postponed and the world is a mess and the first round of liquidity has just about run its course to support the marketplaces and reality, like our precarious fiscal condition, has been postponed but it has only deferred the inevitable and nothing more. One and one still makes two and the delay at the equals sign will only increase the severity of having to confront the answer.  The beast is there and while recognition has been postponed do not make the absurd mistake of thinking that he has gone away. He has only grown larger in forbearance and he waits, breathlessly, to pounce.

“Our civilization is still in a middle stage, scarcely beast in that it is no longer wholly guided by instinct; scarcely human, in that it is not yet wholly guided by reason.”
           -Theodore Dreiser

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masaccio's picture

Let's take the pain now, instead of later, as long as it isn't Mark and the good people of Zerohedge who eat the pain, amirite?

fonzannoon's picture

Most of the people on ZH have not lived life like a drunk on a spree. So why should we take the pain?

LawsofPhysics's picture

The average person is a sheep and is not aware of the socialization of private losses by those in "the club". Fraud is the status quo and possession is the law. Most won't recognize this or understand it, even when they are in the FEMA camps. The point being, don't be average.

Manthong's picture

Because cancer needs healthy cells to survive.

Nothing To See Here's picture

"whether capitalist or socialist government"

Hey... Capitalist government is a pure oxymoron, an existential impossibility. Show me where there exists a capitalist government so that I can move over there and meet the first policitian who has morals...

Water Is Wet's picture

"So why should we take the pain?"

Oooh.  I know this one.  Because it is proven that all the people of ZH will do in retaliation is bitch on the internet.  JACKPOT.

CPL's picture

Pot meet kettle, kettle meet pot.

Water Is Wet's picture

You must have multiple personality disorder.  Welcome all of you.

Shell Game's picture

Flakmeister, we've missed you.



Room 101's picture

Hell is always other people.  Not us. 

Jayda1850's picture

If you spend your life continuosly making poor decisions, then yes, you deserve the pain coming your way. whether you be Grant, ZH readers, or just your average joe, all actions have consequences and without those consequences bad behavior will continue to be rewarded and therefore encouraged. 

Eireann go Brach's picture

While the beast is in hibernation, ride the free money handed out by the Fed and make as much money as possible in the meantime! If you added up the countless hours of bitching some of you do on here, you have already cost yourselves a small fortune!

Get to work and when the whole thing crashes, then we can truly enjoy ourselves on ZH and gloat on facebook, because we all seen it coming and non one would listen!

in4mayshun's picture

I think we should "postpone" paying taxes this year to avoid the immediate pain... Just like the government.

shovelhead's picture

Way ahead of you on that count.

Cost me a pretty penny to investigate and pay for a tax lawyer who ordinarily deals with much higher income individuals and trusts than myself but it was the best investment I ever made.

Use the system to beat the system. No debt, no taxes. I'm a non-profit enterprise that does good charitable work.

Wage slaves need not apply, sorry. Sometimes the easy road is much harder than it looks.

Snakeeyes's picture

Does anyone at ZH actually beleive that the Federal government wll seriously cut spending?????????

ball-and-chain's picture

I'm not worried.

I just need enough money for a school bus and canned chili.

Tune in, turn on, drop out.

Screw Wall Street.  Screw the City of London.

tooriskytoinvest's picture

The West Is On Decline, Global Wealth Shifting To The East, The Expansion Of Government In The West Has Made It Possible For Countries To Load Up On Massive, Never-Ending Deficits, Will Soon Reach Crisis Levels.

Everyman's picture

How about Japan and their "infinite bond buying" from Abe?  I think YCS would be good right now.  What do you think?

Debeachesand Jerseyshores's picture

2013,Welcome to our brave new world and buy all the PM's before the SHTF.

a growing concern's picture

That most precious of metals, Pb, is doing pretty damn well lately, or so I hear.

mercenaryomics's picture

Yeah, found that out replacing a car battery not too long ago. Good thing there's "no inflation" right? 

LawsofPhysics's picture

The available resources are what they are. Yet, the number of useless eaters continues to grow exponentially. It is what it is, go be productive and hedge accordingly (it is all you can do anyway).

Landrew's picture

Usually I read and agree with what you write. However, "USELESS eaters", who or what do you mean by useless eaters? I think I understand your connection with farming but the phrase seems counter to your normal respect for ALL people. If however you are referring to beef cattle I would agree ha! 

Water Is Wet's picture

He's channeling his inner Kissinger.  You'll have to forgive him; he's just bitter.

Landrew's picture

Funny, thanks for the chuckle in these dark days. It could be that he thinks now he is a useful eater? Of course the top .1% are quick to remind he isn't in the club after he serves the drinks and buses the table ha!

DosZap's picture

Usually I read and agree with what you write. However, "USELESS eaters", who or what do you mean by useless eaters? I think I understand your connection with farming but the phrase seems counter to your normal respect for ALL people. If however you are referring to beef cattle I would agree ha!

Watch this and pay attention to the TOP 4,ALL Blue states, and the( 3 of 4) one's trying to run the entire country.Here's your useless eaters.

CrashisOptimistic's picture

Zero significance.  Why would an HFT robot care about any of this if its headline reading algorithm is told what it wants to hear?

spanish inquisition's picture

Delay , delay, delay. Print , print, print. War. Those are the Central Bank owners playbook rules for the last hundred years.

The Democrats and Republicans will be allowed to play for a bit until they are told what to do, so game time can be extended.

cossack55's picture

I guess Markey forgot about Iceland.

Salon's picture

There is an old joke among the bankers.

"a problem delayed is a problem solved"

Salon's picture

Brillant Salon.

Cuz inflation plus tincture of time equals cure

Joebloinvestor's picture

That is because they refuse to accept any form of failure anymore.

yogibear's picture

Japan is a prelude of what will occur in the US. Japan had a savings and investment mentality when they were successful.

The US and it's Federal Reserve banksters encouraged countries to spend and max out leverage recklessly.   

Let's see how high the Fed can leverage out before all confidence is lost in the US dollar.


Salon's picture

We got 10 years to go

Room 101's picture

Mmmmm. Probably not 10 years.  But longer than many of our Heaven's Gate disciples here at ZH think.  

Aurora Ex Machina's picture

Look at the differences in response to national crisises between Japan & the USA (let's say, Katrina vrs the earth-quake) for a reality check on this idea.


The USA has a zero chance of 'going Japanese' - as this site proves, the Mad Max ("The Road Warrior" for Americans) wild-west mentality is far too strong.

Jack Burton's picture

CASH should have been king after 2008. I was in cash before the blow up. What have I got for being in cash? Screwed by Central Bank money printers and ZIRP. The Powers That Be have been willing to burn the world down just to prop up their friends who were All In in the markets. We are at a point where being prudent and looking ahead to plan for what is clearly coming, only gets you SCREWED by the well connected elites who own, manage and profit from central bank money printers.

Yes, this game can't last, not one real problem has been confronted since 2008. Look to the UK for example, blatent money printing and fake austerity. If any nation is due to go down, it is the UK. In reality, the USA is pretty much the same as the UK. Being out of the Euro common currency gives the BoE unlimited power to print and QE. To fllod liquidity into the City of London and keep all the useless Wankers in "The City" living like the Queen. It's fake wealth they create, meanwhile, Britian has few private sector jobs, everybody works for a government entity.

bugs_'s picture

One thing that hasn't been postponed is the hit on the little guy.  The little guy has the layoffs, the pay cuts, the loss of future for his children, the increased prices of inelastic goods, the dilution of his savings, the reduction of his security, the loss of his retirement, and the collapse of confidence.

Postponement is the luxury of the political class.

tmosley's picture

One place is fixed.  Never forget about little Iceland.

Shell Game's picture

Iceland Air's has a pretty cool stopover policy. Anyone flying into Iceland on Iceland Air can disambark and visit for up to a week at no additional charge. Smart.

yogibear's picture

Little Iceland raised ther middle finger at the Bernanke, Evans, Dudley, Draghi types and defaulted rather than become slaves.

And are recovering. 

The message is clear. Be a fool and slave and follow the bankster or say F U to them, default and jail them!

Max in St Moritz's picture



The only reason Iceland survived intact is because their central bank raised interest rates to 18% to shut the spigot of capital flowing out of their country.  At 18%, capital suddenly reversed course and began to flood their system with desperately needed liquidity.

So, basically, you can thank their central bank for keeping them alive.  

Room 101's picture

I find it interesting that repudiating the national debt has not gotten the discussion on the blogs (including this one) that it deserves. You want a balanced budget and a future for your kids?  That's how it'll happen.  Otherwise, we'll continue to liquidate assets in the hopes of paying off a debt that can never be repaid.  

It's like a person who liquidates their creditor protected 401(K) to pay their mortgage. Eventually they lose both the 401(K) and the house.  The smart thing to do all along was to stay rent free in the house, build cash savings, and deal with the foreclosure. Eventually. When the bank gets around to foreclosing.  

Aurora Ex Machina's picture

Iceland has lots of internal issues, both in terms of inequality, youth unemployment, nepotism & minor corruption (largely social / political favour based), local sýslur [county districts] being broke (I think it's around 13 / 23 at the moment), an economy largely based on three things (fish, tourism, cheap energy; although there's been good progress on clean tech server nodes) and people underwater on properties that have their mortgages tied to foreign currencies (largely the kroner).

What they do have is three fold: a largely homogeneous demographic, a problem that's small enough to respond directly to modelling (i,e. only 320k people / relatively tiny economy) and the mind-set of the people. Although they'll disagree with this (while cocking-a-snoot at the Reykjavik hipster / money set), they're some of the most grounded, authentic, humans out there, and the majority have a high level of education. Do a little digging into how they raise their children, and compare it to the USA to get a better perspective on this. Add to that 1,000 years of living in cold, dank peat-huts gives them a lot of resilience. Oh, and the 'aliens' up past Hellnar.


The USA? The two aren't comparable problems.

walküre's picture

"Delay" is the policy du jour and a reflection of our lack of leadership.

When leadership is lacking and corruption, manipulation and theft are running rampant the collective policy du jour needs to be "everyone for themselves".

You will all soon figure out how that goes and what that means. Don't trust anyone with your money and don't speak to anyone about your financial affairs. If you don't hide it, the world knows about it. If you hide it, you truly own it.

I am Jobe's picture

is there an IPHONE sale or JCP having a sale is all the sheeples wants to know.

Pathetic. It's over .


Jack Burton's picture

All we need is another new I-Phone model. More apps and it is off to the races. Economic growth like you have never seen!

yogibear's picture

Yeah, the Chinese made I-Phone fixes the whole conomy. (sarc).

Just like the denmand for Pokémon cards fixed the slump in the 90's.

Jobs is gone. Apple just hs bunch of MBAs (suits)  running things now.