The World Is In Trouble

Tyler Durden's picture

Via Mark J. Grant, author of Out of the Box,

The United States is in Trouble
We make more than we’ve ever made, we owe more than we’ve ever owed, and we have less than we've had in decades which is distributed to those that did not earn the money. This is a working definition of Trouble. The stock market is at an all-time high while the financial condition of the country has seriously deteriorated. We are printing $90 billion a month of little green pieces of paper while the Democrats yell at the Republicans to up the debt ceiling as they want to spend even more money to promote social welfare programs. We cannot afford the bills that we have now and we are being asked to add more to them. This is a recipe for disaster and I am reminded of those months right before the financial crisis of 2008/2009 where no documentation loans for Real Estate flourished and easy money was the normal course of things.

Perhaps the landscape has shifted from “money for nothing” for property to “money for nothing” for our national debt. Fiscal responsibility has evaporated in a grand scheme to get voters and Obama has put the Chavez Plan in place which appeals to the poorest of citizens, hands them money and expects their support at the polls. Hard work and earning a living are the ethics of past generations that are slowly being ground to dust in the flurry to socialize America and re-distribute wealth and having succeeded and having money is now thought of as a crime not far behind rape and arson. The White Knight is walking backwards and the Red Queen has lost her head and the Mad Hatter is in charge of the tea party.
“The trouble with practical jokes is that they very often get elected.”
                        -Will Rogers
Europe is in Trouble
The sovereign debt accounting is a fraud. Liabilities are not counted, contingent liabilities are not recognized and the balance sheet of the ECB is worse than America’s. Collateral considerations are a joke and loans are disguised, hidden and placed in various locked drawers and central bank vaults. The economies of Spain, Italy, Portugal, Cyprus, Greece, Ireland continue to deteriorate as their sovereign yields fall due to the Draghi put and the creation of their little pieces of blue paper which must be used somewhere for something. There is, once again, easy money in the United States but easier money in Europe and so the game continues as anyone with any common sense begins to wonder how it all will blow up and when. Is it to be Inflation or Valuation and will Gold be the next currency or are there going to be other answers.
Asia is in Trouble
Japan, once thought to be an ascending power, has drifted into a nightmare of insolvency and no growth where Deflation rules and the debts of the country now exceed the ability of their citizens and institutions to own them. The push is on for Inflation as the only way out as they argue with China over some islands that might have some oil reserves. In China growth is slowing, their one party system will not allow outside investment past a certain point, their banks are a shadow of the demands of the country and in disarray as political/economic scapegoats and the numbers that China provides for growth make no sense and so are discounted as maybe-maybe statistics. The central banks of both nations follow the tendrils of the American and European ones and the entire globe is encased in a soap bubble of our own making as some may see the fire but no one knows how to get safely out of the theatre.
Find two elephants, two zebras and two giraffes and start building the boat.
The World is in Trouble
The scheme has worked because there is no place to go, no place to run; no place to hide. The collusion is past anything we have ever seen in history. The central banks of the world are supporting intervention and massive protection of the State and we are witnessing the results while all of the newly created paper must be put somewhere and so bonds rise in price, absolute yields on sovereign debt will fall more, compression will continue and the equity markets will rise. All of this is not the result of fundamentals or of economics but solely the result of little pieces of paper being printed, distributed and having to find a home.
“God didn't make the little green apples, and it don't rain in Indianapolis in the summer time. And there's no such thing as Dr. Seuss or Disneyland and Mother Goose, no nursery rhymes.”
                -Roger Williams, Little Green Apples
The world is in a gigantic bubble and it is going to get pricked. Now it takes certain magical incantations and special spells to determine all of this but we learned a few things from our last go round so the crystal ball is less cloudy and my wand is at hand. Our last fiasco whacked the banks on the backside as the valuation of their holdings, most noticeably their ownership of subprime mortgages and of mortgage securitizations raised the specter of default and of systemic carnage. This time it will be certain sovereign nations that will be the catalyst. It may be the mundane running out of cash that will cause the torrent to flow as Greece, Cyprus, Spain, Italy, Ireland or Portugal that lines up for more money and is refused by various governments on the Continent. It may be a refusal by a sovereign nation to accede to the demands of the IMF/EU/ECB for funding or it may be social unrest in the spring that unseats some government as nationalism overcomes the grand European experiment. The giant central bank slosh of money has lowered yields but it has not improved the financial condition of any nation on the Continent and so push will come to shove once again. It may be that Germany refuses to waste anymore of their citizen’s money or that Britain will have had enough of being run out of Berlin or it could even be a refusal to fund America’s debt which comes from China and other Asian countries as our creditworthiness deteriorates. There are many pressure points pressing against the Bubble and one of them will give just as the subprime mess was where the prick took place last time. It was all the cause of “money for nothing and chicks for free” and while I am unsure about the chicks I am quite sure that the incredible amount of easy money will take its toll once again. Money, you know, ceases to be money when all that anyone sees is paper and not the guarantee that is imprinted on it. It could be Inflation on a grand scale or worse, Valuation that determines the charade and calls it for what it is and neither result will be pleasant.
You cannot keep printing money without consequences and when absolute and intrinsic valuations replace relative valuations then the game is afoot. Lower and lower yields also eventually have a serious impact on the people of a nation, pension funds, insurance companies and backlashes are certainly possible as the lives of people and institutions are put at financial risk. When the survival of the State puts its people in dire straits then, eventually, the citizens will rebel as the nation has forgotten just who composes its constituents. The people and institutions that have the capital will only go along quietly for so long when nations try to take what they have earned and dispossess it for others. The rich will become poorer and the poor will become poorer and when those with the capital have been deprived of it so that everyone is worse off then the Lords of Chaos will be in control once again. Look for securities that float, States that have no debt in Municipals, the few countries in the world that are still fiscally responsible and get ready to hold on to your hat. The charade goes on a little longer but it will not go on indefinitely and the time for preparation is now. When one plus one no longer equals two then something will give. Make sure you are not the one crying “Uncle.”
The trouble with going with the flow is that you might be the one that is sucked down the drain!

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ak_khanna's picture

Hit the Nail on the Head.....


Countries around the world are taking on more debt without any fruitful attempts to curb their expenditures. This has resulted in a much more fragile and artificially held up financial system which is on a much shaky ground than it was in 2008. In 2008 companies failed due to excessive leverage and debt and now countries are likely to default because they took on the same bad debt on themselves. 

There is no economic recovery because all the efforts of politicians, government, central banks etc are focused on saving banks instead of targeting job creation which is the only way economy can recover.

qqqqtrader's picture

NO job creation AND raise taxes on the ones that have jobs!

oddjob's picture

Any taxes paid by government employees are of ZERO benefit.

LawsofPhysics's picture

Given the corrupt fucking state of affairs and the dedication to capital mis-allocation and mal-investment by the current fascist regime, I would say that any taxes paid are now of ZERO benefit.

Xibalba's picture

If the USA can print its own money, why do they collect taxes? 

edwardo1's picture

It's the ability to demand/collect taxes in the dollar that underpins dollar usage. That, however, is not sufficient to prevent a run on the dollar which will occur after the Yen and the Pound are massively devalued in the next few years. I hasten to add that the timetable for the race to the bottom for all currencies against physical goods in general, and, ultimately, physical gold in particular, may be compressed into a shorter period than one to two years.

EnslavethechildrenforBen's picture

They collect taxes because people are stupid enough to pay them. There is no other logical reason that can be debated

edwardo1's picture

It has nothing to do with stupidity. Systematically refusing to pay one's taxes inevitably lands one in jail and financially ruined.

GetZeeGold's picture



....and misuse of tax dollars has zero consequences.

El Oregonian's picture

Because they want YOUR money, It's "Progressive Liberal 101", Silly!

LawsofPhysics's picture

not quite.  More like "because they want the real value of your labor in exchange for pretty peices of paper, while compensating themselves with quadruple the amount of paper."

Xibalba's picture

But first take away the guns.  Then impose your police mafia to enslave you, or else a FEMA camp

Flakmeister's picture

Systems that are in the process of imploding rarely accomplish anything like the above...

The laws of post-Diocletian Rome were very harsh and rarely enforced.... Your guns are safe no matter what noise comes out of D.C...  Depending on where you live I'd worry more about my fresh water supply...

In otherwords, quit your fuckin whining...

Xibalba's picture

Guns, like gold, are only safe if they are 'untraceable'  see Katrina, or more recently Star-Ledger.  And as far as the water supply is concerned, nothing a lil' hydraulic fracturing can't fix.  

DaveyJones's picture

and just to add to concerns..

Insecticide 'Unacceptable' Danger to Bees, Report Finds

but don't worry, pollination isn't that important

savagegoose's picture

They dont need to tax you, but they do need to punnish  you, for not doing what you're told.

daccord's picture

it comes down to "why the fuck not?" 

Waterfallsparkles's picture

They collect Taxes because it has a way of reducing the effect of Printing Money.  It is a way to take Money out of circulation.

The problem for most Americans is that the Dollars that they have are worth less because of the Dollar Printing.  Inflation also cuts away at the purchasing power of the Dollar.  With inflation your  wages go up which puts you into a higher Tax backet so that more of your Income is Taxed at a higher level.  This balances out the Printing of Money.

So, the more Money they print the more Money they have to take in Taxes to balance the Money printing.  Yet every time you have less and less.  Kind of like a circle of Poverty.

EnslavethechildrenforBen's picture

Interest on loans takes out three times as much money out of the economy as it puts in to it.

AgAu_man's picture

Because... although they know that the Emperor has no clothes, and hundreds of thousands or a few million people know this, the whole world must not know it -- just yet.

Until then, they need to keep using fiat to buy up real stuff.  It's the "Do as we say, not as we do." principle at work.

fockewulf190's picture

Not only does the Emperor have no clothes, he´s sold the Queen´s dresses as well and is now pimping her out.  Overheard him rambling something to the effect of "We are not a deadbeat Kingdom!" .  Right....well, just keep on pimpin´Emp!

Meremortal's picture

Why? The stronger the govt, the weaker the individual.


All govts move in the direction of totalitarianism eventually.

mumbo.jumbo's picture

the same reason why there are dozens of different tariffs and taxes (of which inflation is just one): to keep the sheeple in the dark about how much wealth is siphoned off by the central planners.

earleflorida's picture

corrections, 'for taxes without representation is a levy upon the heart and soul of a dying republic's core?'--  only upon the 'middle {[an adam?][ or eve?]} class', that eventually will lose its neutron?--  metaphorically speaking, there are three particles that make up an atom,... also known in the land of OZ the IRS-- *[proton/ upper class... the neutron/ middle class... and the electron/ poor class]-- but it all comes down logically to the 'four forces' ie. electromagnetic which is for all practical means and purposes, the socialist ussa-- next,... the strong & weak forces eg. the majority & minority,... and lastly, gravity,... the middle class that's fast becoming the first to arrive at the 'event horizon'! 

besides... when's the last time any u.s. corporation has paid taxes under the guise of a multinational in any country? 

jimmytorpedo's picture

Taxation is about control.

It no longer has anything to do with money.

Neo1's picture

Use federal reserve notes and incur an Irrecusable obligation.

Neo1's picture

Redeemed 12USC411 12USC501a Refusal Penalty

new guy's picture

It is morally reprehensible that western governments;through excessive taxation, should force private sector workers to put their children to bed hungry so that public sector workers can continue to eat beef for dinner. This cannot continue. The only question that remains to be answered is how much more pain is the state willing to inflict on its people before the inevitable collapse.

FoeHammer's picture

Any work/solution provided by government employees is of ZERO benefit.

Snakeeyes's picture

Yet the US media cheers our Soviet-era President Obama ... when the US can't even keep up with BULGARIA!!

LawsofPhysics's picture

Jobs doing what?  It takes energy in order to actually do anything.  The available energy on earth has flatlined since 2008.  Grow up and accept the fact that a new paradigm is coming.  The old eCONomic model requiring growth is dead.

Humanity is the ultimate unsustainable ponzi.

I remain long sharecropping, any physical assets of real value, and the means/tribe to protect it all...

cossack55's picture

Yes. Read "Daemon" and "Freedom" by Daniel Suarez.

francis_sawyer's picture

You mean the 'exponential growth' paradigm on a 'finite resource' planet model is dead?


What in Sam Hill is goin' on around here?

francis_sawyer's picture

<== I predict I'll get one vote here

<== I predict 3 votes are coming here 

qqqqtrader's picture

actually CV, this "UP/DOWN" arrow needs to have another... a neutral, or Nolo contendere, this way you'd prolly get alot more "neutral" votes as opposed to down votes... maybe not

Jason T's picture

Increase the energy flux density..or die.  

mess nonster's picture

Peak oil bitchez... yeah, LoP, had to jump in here, since I was perusing the equations that govern elasticity, ie Hooke's Law...

So the question is, "How much can it stretch without breaking?

Well there are variables, which means we can just guess, and at this point, everyone's intuitive physics says we're past the calculated limits of extension.

If given a perfect environment, ie, variables are all known, then elasticity calcualtions can be more certain. Of course what is not known are the internal variables, such as impuritiies in latex for example, that may provide hidden weak points.

In an open environment, where variables are not known, anything may provide a catalyst for sudden discontinutiy of the stretched material. A dandelion seed might come in contact with the soap bubble. The point is, once the substance is stretched to near its absolute limit of elastic potential, the number of variables which can cause a catastrophic discontinuity increase as an exponent of that progression towards the absolute limit.

of course, central bankers are magicians, not scientists. Their specialty lies in conjuring and illusionism, and in their ability to employ incantations that bind the dark powers of the transdimiensions to do their bidding, and create effects that seem unreated to primary cause. of course, they are deceived. The dark forces are the masters, and the bankers are the slaves. We should feel sorry for them. Their fate will be much worse than ours.

At any rate, I find it hard to define a catastrophic discontinuity of the elastic substance which had held within it a pressure elevated above that of the surrounding environment, a "hyperinflation". I must consider any such sudden, catastrophic discontiutity, in which there is a sudden and startling equalization of pressures, exactly what it is... DEFLATION.


LawsofPhysics's picture

Trying to keep my various crops alive and employees employed is enough for me.  No way I will wander into the prediction of how such complex systems will behave like the earth's biosphere (a closed system from a thermodynamic perspective).  It's good to be optimistic and realize that lots of things "could" happen that might turn things around but it's just plain stupid not to hedge accordingly when you see the fucking catastrophe coming right at you.

secret_sam's picture

    the earth's biosphere (a closed system from a thermodynamic perspective

To pick the nit: the Earth's biosphere isn't closed.  Virtually all the energy is provided from an external and effectively unlimited source...

mess nonster's picture

However, from a standpoint of human economics, as expressed in thermodynamic terms, it is an effectively closed system.

Economics is simply an expression of heat energy transfer. Money is a medum of that heat energy transfer. The more heat generated the more wealth, and thus the more wealth equivalent tokens generated, excpet when we indulge in creating more such tokens artificailly to disguise the heat energy deficit between elevated demands and shortfalls in supply.

The solar energy that is our planet's input is not readily available to humans. it is a vast energy source, but far too diffuse for our direct use. We almost always, no, ALWAYS have to concentrate it, or consume some other concentrator. The photons are useles to us in EVERY CASE. Even photovoltaics represent a vast concentration of previous solar energy, perhaps so much so that an accurate accounting of the EROEI may never be recouped over the life of the panel.

The time delays for most concentration systems are too great for renewal over the life-span of civilizations. Thus, for all practical purposes, we are stuck with what we have, and when its gone, its gone.





nofluer's picture

The solar energy that is our planet's input is not readily available to humans.

Wow! Dude... you must have slept through Jr High health classes! All you have to do to directly access the Sun's energy is go out and stand in its light. Your skin absorbs energy from the Sun, the surface of your skin is heated by the rays of the Sun, and your body is irradiated by the Sun's radiation which can have either beneficial effects such as the generation of vitamin D, or negative effects, such as being burned or irradiated to the point of genetic mutation (aka skin cancer) depending on how much Sun you choose to absorb DIRECTLY.

If you set up a reflector, you can focus and concentrate those diffuse streams of photons and directly cook a hot dog or light a fire. (It's still winter so you can make a reflector or a lens out of ice.) Or if you are in space, you can create a solar sail out of your tinfoil hat and you get 2X the motive power from each photon that hits the sail... so you get a freeby! (A photon imparts twice it's momentum to the sail when it bounces off. Although a photon has no mass, it is nevertheless a particle because it has momentum.)

sgorem's picture

Using the biometric calculation of apple pie squarepants to the 9th degree, adding vertical cortex(minus alternative affirmation of course), photovoltic/electolyte synthysis can and will be concentrated diametrically across all problematic scenarios,resulting in corresponding degredation of the linear ad infinitum, directly resulting in catastrophic annilation of all inverted, organic molecular combines within the nuclear arenas. Such is our circumstance, H E D G E accordingly."one good joke deserves another"...H O G 

secret_sam's picture

     The solar energy that is our planet's input is not readily available to humans

Nonsense.  Our economic system has evolved to discourage people from collecting their own energy, that's all.

LawsofPhysics's picture

go look up the definition of a closed system.  You are talking shit.  energy can still be exchanged in a closed system.  Don't blame me, this is how it is defined.  With the exception of an occasional metior, very little matter is exchanged in such system.  Do your homework before opening your mouth next time.

michael_engineer's picture

But his assessment is spot on in ways.

qqqqtrader's picture

yeh, but, when you add meteors into the equation, all hell breaks loose and everything falls apart!

secret_sam's picture

A closed system can't exchange matter with the surroundings, but the Earth does that also.  Matter falls to Earth constantly, and gases leave it.  Look it up.

nofluer's picture

Virtually all the energy is provided from an external and effectively unlimited source...

Wrong on several counts... the Earth recieves and radiates energy, and also has a 12,000 degree (+/-) core (which is hotter than the surface of our Sun)... to say nothing of the latent inertial energy of the planet's spin.

Slap an efficient non heat conducting thermal blankie around the planet to cut off external heat, and eliminate energy radiation to space and we'd cook in our own juices.

And although in terms of human life spans Solar energy is "effectively unlimited", the reality is that we live with a very small and weak star that will one day stop cooking our hamburgers for us... if we can manage to refrain from killing ourselves off that long.

secret_sam's picture

   Wrong on several counts... the Earth recieves and radiates energy, and also has a 12,000 degree (+/-) core (which is hotter than the surface of our Sun)... to say nothing of the latent inertial energy of the planet's spin.

   Slap an efficient non heat conducting thermal blankie around the planet to cut off external heat, and eliminate energy radiation to space and we'd cook in our own juices.

Your assertion is that the Earth radiates MORE heat than it receives from the Sun?  No.  Not even close.  Back to the books, son.

zerozulu's picture

Yhe issue is a 110lbs bitch doing grocery on a 4000lbs monster.