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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Rogue Trooper's picture

Or a Smurf TV Tray..... enjoy!

May The Farce be with you ZH'ers!

Room 101's picture

We're doomed. DOOOOOMED!

(Look! Is that a comet in the sky?!)

CelticCanuck's picture

We all grew up with the old school values of earning an honest living, paying our bills, living within our means and then putting away whatever was left over and getting a decent rate of return on our savings. This is what pisses me off the most, we played by the rules and then they changed the game on us.
This isn't the America I remember pledging allegiance to as a child

SpykerSpeed's picture

When were you born? The US has been a fascist crap hole since the Civil War. Odds are you voted for many of the politicians that caused this problem.

Radical Marijuana's picture

SpykerSpeed, the social system destruction has been on an exponential growth curve ... therefore, it was barely noticed by most, at first ... It picked up speed, in a sufficiently blatant way, since the 1970s.  Fewer people saw that clearly back in the 1870s, although some did. A tiny minority of intellectuals have always been aware of these trends. However, larger numbers of people paid attention, more and more, as the doubling times of the exponential growth of FRAUDS, BACKED BY FORCE, became more painfully obvious. Recall that Bush II about doubled the debts of all previous Presidents before him, and President Obama has presided over doubling the debts of all previous Presidents before him, and, due to the inherent nature of the money-as-debt system, Obama MUST keep on doubling the debts ...

Who noticed? ... Well, more and more people ARE noticing! I agree that "The US has been a fascist crap hole since the Civil War." However, that runaway fascist plutocracy has been picking up speed at an exponential rate, which means it doubles, again, and again, and each doubling is more painfully obvious to more people than the last doubling!

Winston Churchill's picture

The future was cancelled, with no office memo.

We are going to revist the distant past.

Signed.The Management.

algol_dog's picture
I tried so hard
And got so far
But in the end
It doesn’t even matter
I had to fall
To lose it all
But in the end
It doesn’t even matter ~ Linkin Park
August's picture

"The breakpoint now approaches."

Mark Grant: hard-hitting.. and insightful!

Room 101's picture

Yes, the breakpoint approaches.  Someday soon.  Tomorrow. Or the day after that. Or maybe next week.  But certainly within this decade! Unless it doesn't for some reason.

Y'know, end-of-the-world prophecies have the advantage of being absolutely correct.  It's the timeline that they never seem to get right. 

davidsmith's picture

Wait a minute!  What happened to the "endgame"?  How ridiculous.  Make up your alleged mind!

JR's picture

As We Go Marching: A Biting Indictment of the Coming of Domestic Fascism in America is the classic work by the great John T. Flynn and its application here is unique. What we face is deliberate world socialism leading, of course, to fascism – engineered by the International Bankers.

Writing about the wars in the Forties, Flynn’s observations apply to our current catastrophe. Here is Amazon’s description of his book, Publication Date: 1973.

"As We Go Marching is John T. Flynn's classic work from 1944 on how wartime planning brought fascism to America. Flynn was a prominent journalist and the rare case of an American public intellectual who resisted the onslaught of both the warfare and welfare states during the period in which FDR ruled America. This study links the domestic policy of the New Deal with the drive for war and wartime central planning. Flynn draws attention to the bitter irony that America was becoming precisely what we were fighting. His analysis of fascism is incisive and devastating."

Writes Flynn:

“If fascism is the work of a handful of brutal and lawless men, we need have no fear of it here. We are never without leaders both able and corrupt. But they are not sufficiently numerous and powerful to make very much headway against the peculiar structure of our government…

“But alas, the most terrifying aspect of the whole fascist episode is the dark fact that most of its poisons are generated not by evil men or evil peoples, but by quite ordinary men in search of an answer to the baffling problems that beset every society. Nothing could have been further from the minds of most of them than the final brutish and obscene result. The gangster comes upon the stage only when the scene has been made ready for him by his blundering precursors.”

In short, good people are confused and herded into allowing evil men to put them in chains.

Radical Marijuana's picture

JR, that quote deserves multiple up arrows!

Lucius Cornelius Sulla's picture

The USG is a wholly owned subsidiary of Goldman Sachs, Inc. (GS).  As such, what is good for GS is good for your financial health.  So load up on bonds because you know that GS has your back.  There will never be a default of USG debt, ever!  GS will assure that every penny is paid in full.

Pareto's picture

Markets were punished yesterday, but, gold and gold stocks in particular did ok.  I think the crisis of confidence is starting to reveal itself and have the effect of investors and traders quietly moving out of stocks AND out of UST's, and into "going over the cliff, unlimited debt seiling, political gong show, ultimate currency debasement and monetization of debt" type scenario places to protect wealth instruments.  Its getting increasingly diffuicult to find a safe place to hide.

Jam Akin's picture

The opposite of "postponed" in Indian English is "Preponed".  A most foreign concept in the West.

Aurora Ex Machina's picture

I think the real question on everyone's lips is: Since even the technocrats don't seem to be able to solve / run the global economy, can weak AI do it instead?


Time to roll those dice.

Aurora Ex Machina's picture

To my phantom junker ~ might want to keep up.

Behind him is the support of a tech giant. This month, Kurzweil, a futurist, stepped into the role of Director of Engineering at Google, focusing on machine learning and language processing. "There is a lot of suffering in the world," Kurzweil once said, according to Bloomberg. "Some of it can be overcome if we have the right solutions." [source]

This was announced on 14th December, 2012 [here]

Forget about the singularity spin, here's Peter Norvig [Google] responding to Chomsky's attack on weak AI:

My conclusion is that 100% of these articles and awards are more about "accurately modeling the world" than they are about "providing insight," although they all have some theoretical insight component as well. I recognize that judging one way or the other is a difficult ill-defined task, and that you shouldn't accept my judgements, because I have an inherent bias...

Second the algorithmic modeling culture (subscribed to by 2% of statisticians and many researchers in biology, artificial intelligence, and other fields that deal with complex phenomena), which holds that nature's black box cannot necessarily be described by a simple model. Complex algorithmic approaches (such as support vector machines or boosted decision trees or deep belief networks) are used to estimate the function that maps from input to output variables, but we have no expectation that the form of the function that emerges from this complex algorithm reflects the true underlying nature.

It seems that the algorithmic modeling culture is what Chomsky is objecting to most vigorously. It is not just that the models are statistical (or probabilistic), it is that they produce a form that, while accurately modeling reality, is not easily interpretable by humans, and makes no claim to correspond to the generative process used by nature. In other words, algorithmic modeling describes what does happen, but it doesn't answer the question of why. [source]

Google has scanned 2million+ books, which is a fairly nice sample set for algos to mine for language patterns etc. I should also remind you of what HP was aiming for in buying their $8 billion over-priced Autonomy bid - from today: The former chief executive of Autonomy claimed that Hewlett-Packard was watering down the accusations it had levelled against him over the accounts filed by his old software company – and said that he had not heard from the US Department of Justice, which HP had revealed had opened an investigation into the dispute last month. [Guardian]

Darpa continues to chuck money at the problem:

Automated, deep natural-language processing (NLP) technology may hold a solution for more efficiently processing text information and enabling understanding connections in text that might not be readily apparent to humans. DARPA created the Deep Exploration and Filtering of Text (DEFT) program to harness the power of NLP. Sophisticated artificial intelligence of this nature has the potential to enable defense analysts to efficiently investigate orders of magnitude more documents so they can discover implicitly expressed, actionable information contained within them.[Darpa - tiny $4.6 mil grant to Uni of Washington, Patrick Allen]



2013 is about who cracks weak AI first; or at least an algo that can do similar things with-or-without the traditional measures of "What an AI is", and from Google rebuffing DC's offer at a place at the table ["Secretary of Business", here], all bets are off if someone does.

deepsouthdoug's picture

On the subject of beasts out there -


And what rough beast, its hour come round at last,

Slouches towards Bethlehem to be born?

William Butler Yeats

Radical Marijuana's picture

The worst is that we have postponed the death control events into the future, in order to keep the current debt control systems going. Since there is a combined murder/money system, in which "taxation" is robbery, backed by murder, allowing all of our problems to be "cans kicked on down the road" means that those problems automatically are allowed to get bigger and bigger! As the debt slavery transforms into debt insanity, the balancing of the books with buckets of blood becomes more and more the only actual alternatives left! This system is based on the FACT that the younger you are (including not yet born) the more you are being lied to, cheated and robbed by the political system you were born into.

There may come a crazy short-circuited jumping across in the future, where everything was deferred into the future, through the "money" made out of nothing, as debts imposed on the young, accumulating, while the effects of that were postponed! "... 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 ..."

The entire system was based on the privatization of the the sovereign powers of governments, which were taken over covertly by the biggest gansters, the banksters, who were the "best" at being dishonest, and backing that up with violence, which enabled them, through bribery, intimidation, and assassination of politicians, to gradually take over, and direct the sovereign governments, to give away the power to make "money" out of nothing, as debts, to private banks. What has ACTUALLY happened is that the power to control who lives and and who dies was transferred, systematically, from the People, to the banksters. Since the REAL system is a combined money/murder system, (since the thing that makes fiat "money" be "money" is that people were FORCED by legal tender laws, enacted by sovereign governments, to to pay their taxes with that FRAUDULENT, legalized counterfeit, fiat "money,") THEREFORE, the runaway debt slavery, becoming debt insanity, IS based on the death controls, which back up the debt controls. THEREFORE, postponing dealing with these problems means that the future INSANITES of drastic debt controls manifesting as drastic death control events ARE becoming more and more probable.

The increasing economic entropy drives us towards genocidal wars, along with democidal martial law. Meanwhile, the vast majority of people have been brainwashed sufficiently that they are unable to understand any of those basic social facts. Instead, they feel that they are not interested, and therefore, do not want to understand. The REAL "bottom line" is in human ecology, not in political economy. The REAL money system was based on the murder system. Since the vast majority of people were unable to understand that, to the point where they do not want to understand it, the international banksters were able to completely take over, and cause their systems to become runaway debt insanities, with runaway death dealing insanities being the probable final consequences of postponing understanding and resolving those problems, longer and longer ...

The ASTONISHING thing about contemporary "economics" is its ability to continue to operate in ways that deliberately ignore ecology! Nothing can be made out of nothing, or sent to nothing, except the "fiat money" which is the runaway triumph of fraud, backed by force, done through the biggest bullies, the banksters, being able to take control of "sovereign governments," and effectively privatize the powers to rob and to kill, through the operations of their monetary system, as legalized by governments.

That is accumulating an enormous backlog of death control imperatives, at the same time as it accumulates an enormous backlog of debt control imperatives. Thereby "we" appear to be deliberately building the biggest head of steam for world war, and martial law, that we possibly could, by postoning, and postponing, and postponing, as we keep on kicking the cans on down the road!