Santelli's Paradox And Why The Fed's Exit Will Be "Very, Very Messy"

Tyler Durden's picture

We are in our sixth year since the US officially went into recession and yet, as CNBC's Rick Santelli notes, we are still in crisis management mode. Some argue that any day now, the Fed will begin to remove its mega liquidity pipe from the market but Rick exclaims in this wonderfully succinct clip that: "there is no expiration date on faulty illogical ideas," as he expects any Fed exit to be "very, very messy." Rick's dilemma is the seemingly paradoxical need for yet moar and bigger monetary policy crisis management by Ben Bernanke when day-after-day we are told by the very guests on his network that "stocks look great." At the end of the day, when the Fed decides to exit, they will not be able to put the liquidity 'toothpaste' back in the tube.


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Landotfree's picture

There is no exit.

Rick better get with the program.   The Fed's job is to prolong the system as long as possible before the eventual collapse, their job is not to stop the collapse, as that is impossible.  Yes, it will get messy.

 Spoon boy: Do not try and bend the spoon. That's impossible. Instead... only try to realize the truth. 

Neo: What truth? 
Spoon boy: There is no spoon. 
Neo: There is no spoon? 
Spoon boy: Then you'll see, that it is not the spoon that bends, it is only yourself. 

NotApplicable's picture

Besides, without toothpaste everywhere, just what would there be for the IMF to clean up?


The Juggernaut's picture

A mess because there is no buyer.

Stackers's picture

And its going to be 2 girls and 1 cup kind of messy too.

fourchan's picture

unless they let us suspend mark to market in our own lives and give us access to the fed window of zirp.

NidStyles's picture

Talk about turning a mess into a catastrophe.

King_Julian's picture

I've seen that. Absolutely fucking disgusting.

Stackers's picture

How do you think the Fed is going to feel when it quite litterally has to perform the same trick ??? And not just a cup full, but barrels and barrels of it.

Temporalist's picture

Two girls and one mountain?

Overfed's picture

I dunno. Bernanke and Krugman eating shit might be pretty good times. Be even better if they ate shit and died.

Debt-Is-Not-Money's picture

"A mess because there is no buyer."

You don't need a buyer.

When the FED has scoffed-up all of the govt paper it can lay it's hands on fearless leader will shut down the FED, simply cancel all of the paper they hold, and replace all of the FRN's with U.S. Notes (Lincoln Greenbacks- after all Lincoln is his hero). Fearless leader will then be assassinated.

All Problems solved!

centerline's picture

My bet is the messy part is on purpose too.  A public outcry to "End the Fed" that culminates in Washington grabbing hold of the proverbial wheel - ending in a spectacular crash.  Oh the irony.  The scapegoating.  Blame for everyone!

Landotfree's picture

The scapegoat is always something or someone other than the actually problem... in this case the use of an equation that demand exponential growth.  GROW OR DIE.  Of course all systems have lifespans and cycles, but this is a system which comes at a huge price at the end.

Rick's problem is he thinks you can just get off the wave.  The guys in the movie point break disagree.   The commitment was made before any of us were born, more or less, our own choice is to choose differently.



ROACH See, it's all dynamic, it's all in motion. You can't just stop and walk on in to the beach if you don't like the way things are going, y' know what I mean? You gotta ride it out man, all the way. GROMMET You ride the monsters, you gotta know you're ridin' a line between life and death. There ain't no forgiveness.
UTAH So what's the biggest? Waimea? BODHI (V.O.) No, Bells Beach, Australia.



centerline's picture

Considering the global nature of this particular cycle, along with the massive population growth over the last century now pressing up against resource contraints including the end of cheap energy... this is one hell of a wave we are riding.  I suppose the term "wipe out" is quite fitting, unfortunately.

NidStyles's picture

The energy resources are not that strained, if you count how much malinvestment and inflation is being experienced. When the cards fall the reality will be made apparent, that we have plenty of energy and that people should stop wasting it on ideas that will never work.

beachdude's picture

Love point break. Watched the gas station scene filming in Redondo near dive n surf. Back then a knock down on the strand could be had for <$1M.

Curiously_Crazy's picture

UTAH So what's the biggest? Waimea? BODHI (V.O.) No, Bells Beach, Australia.


I know it's only a movie and all but christ they could at least get something as a surf beach right. Margret River in Western Australia consistently has higher waves - on greater occations - than bloody tourist trap Bells.

Link just for image of the waves not the story:

AlaricBalth's picture

“Anything, anything would be better than this agony of mind, this creeping pain that gnaws and fumbles and caresses one and never hurts quite enough.”
Jean-Paul Sartre, No Exit

SheepDog-One's picture

Yep, the fact is, the FED can NOT just 'exit' at all any more than a comatose life support patient can just be unplugged...there's no way out and they know it.

Goldilocks's picture

Bachman Turner Overdrive - You Aint Seen Nothing Yet (3:49)

Pure Evil's picture

Isn't this why they're planning on a collapse of the dollar? The Fed loads up on all the debt and implodes taking the FRN with it.

Next, martial law, dissolution of US sovereignty, final formation of NAU, and approximately 10-20 years of killing off the dissenters, need to give the military something to do.

Remember, the dollar is just a debt instrument of the Federal Reserve. They can easily create a new central bank that prints a new Federal Reserve Note, it can be called the Amero or NAU Federal Reserve Note.

IamtheREALmario's picture

It already exists in the IMF and the SDR... An ounce of gold is priced at 42.50 SDRs and countries have bought into the IMF proportionately with gold. The US owns somthing over 17% of the IMF through its purchases... and Ben Betwinkie is our representative.

kchrisc's picture

Ah SDRs.

These are going to be fun.

Not only are they using these to currently backstop the "system," but they are also using them to ameliorate the effects of inflation that would accrue to them, the world bankers.

In inflation, especially hyperinflation, the underlying debt's value drops to zero leaving the debtor with title to the underlying collateral. However, if the world banks get everything valued in SDRs as well as the "local" currency then the debtor may not owe on the debt in say dollar terms anymore, but will still owe in SDR terms.

We will see situations where hyperinflation wipes out a country and its currency but everyone that owed before will still owe, just in SDR terms. Not going to like those apples too much.    hujel

lasvegaspersona's picture

Does anyone really believe that after the failure of a fiat reserve that the world will be psyched to embrace another fiat medium of exchange without some thing secure to save with? SDRs are Soro's wet dream. I guess he has a few.

rbg81's picture

NAU?  Ha--your're thinking too small.  The only way the System survives is to have one world currency.  That way, there is no where anyone can go to escape the Fiat declaration.  Space travel will have to outlawed too--its too good an escape route.

hannah's picture

the system will only survive if they can keep the toilets working and fresh TP. when that stops....we will really see all hell break loose.

dunce's picture

Or a trillion dollar platinum coin, viola, obamas new deal!!

yogibear's picture

Exactly! The Federal Reseve cannot exit.

Their trapped buying US debt until there is a currency crisis. 

It's not if but when. The Fed's plotted the Zimbabwe methodology where debt is printed down and the stock market goes parabolic. 

Everyone starts dumping US dollars for stocks as a way of retaining value.

IamtheREALmario's picture

Obviously Obummer does not care how many dollars he creates and spends since the dollar is going away anyway. He just want to cement as much power as possible before the collapse.

EscapingProgress's picture

There will never be an exit. The Bernank put his cards on the table, and he is all in. Any decrease in buying by the Fed could very well be cataclysmic, so I certainly do not believe the Fed has any intention of beginning to sell, ever. The path has been chosen and this path will lead us to currency destruction by way of debasement whether the Columbia, Harvard, and Princeton graduates realize it or not. The central planners have trapped themselves in a sticky web of hubris and willful self-delusion. Create your own escape route or suffer the destructive consequences of ivory tower insanity.

disabledvet's picture

He was TOLD to do what he is doing. ("get to work.") if Banzai here thinks "he's got the goods on the Bernank"...well, obviously so do the people in this world that matter. The question obviously...and it is a question cuz that equity space is surging "not for nothing" "what can the Fed do if there's a correction?" When Morgan ran the country he literally "swooped in from the Church pew" and "saved the day." Needless to say New York City greeted him like the hero he actually turned out to be...unlike the current variation where "we're all going to need bigger rocks to climb under" if this thing has something "serious and provacative" about it. In other words "the Fed will be watching" if the market tanks cuz it can't do anything about it. "Now work on that!"

dunce's picture

Bernanke is no Machiavellian financial wizard, he is just a bush league hack with a blank check on our future.

brokenclock's picture


Most of you complain on here about the same dam thing your really hoping for over and over.  The scary thing is you are really getting what you want, just not fast enough for your liking. So go get some help for your personality disorders. You can’t have it both ways.


All of you who have wishful dreams of market collapse and a financial reset should love Obumer  at this point in time. He is speeding his way to exactly what you want. But no, you complain he is doing everything wrong.  He is ruining this country.  You all know we can’t fix the problem if you’re a ZH reader.  So its’ print or default.  No other option.



On the Obumer path


1)    We run out of money and default in epic fashion.

2)    Silver and gold shoots to the moon in prices

3)    Guns and ammo. The best way to make you want something more. It to threaten to take it away or abolish it.  (Guns & ammo all time high prices and supply is low)  Obumer built it, sold it, and pushed the agenda. He made you buy that new assault rifle you been putting off.

4)    All EBT, SNAP, Food, or welfare will be declined at your local fake fiat bank and grocery store.

5)    Breaking many of our constitutional rights as free Americans

6)    This list can go on forever ………


Who are you, well incase you can’t figure it out.  I will tell you.


The a$$ that keeps saying, gold and silver biatches. Then says obumer sucks. When you should be cheering for him if you have any silver or gold..  The a$$ about my boat was loaded with guns and PM’s tipped over.  Really, a mentally challenged person can use a metal detector you moron. If you have an amount of guns and PM’s that’s worth looking for someone will find it.


Fuck BEN, well….. is he not printing fast enough for you, poor baby…… idiots.


What you should be doing is filling out any all government forms to get your free money and handouts.  That will help in speeding up the process you so desire. Tell people on here factual information.



If you can’t understand this, I will make it easier for you.  If you can’t add something of substance to this blog backed by fact then STFU.  

Pure Evil's picture

Well, aren't you the splooge that dripped out of the tooth fairy's ass.

shovelhead's picture

You were much kinder than I was gonna be...

Big Slick's picture

broken clock: Do you buy homeowner's insurance and then wish for a fire???

brokenclock's picture

I do have insurance and no I don't plan on a fire ,  but you missed the whole topic of the post.  read it again.....


read below for comment on fire insurance. no need to cover that stupidity again

donsluck's picture

I think your basic premise is reversed. I notice that most ZHers do not WISH collapse, but are instead gaping at it in horrified fascination. Recognition is not the same as desire.

brokenclock's picture

Desire has nothing to do with it.  We are playing the finance/money game. It's called put your money where your mouth is. Many ZH's  are bet heavy on gold, silver, guns, ammo, and food. If i was bet heavy in those areas, i would be hoping for the total collaspe .  I would be in  joyful delight about all the excellent choices as of late. ......They are not using metals as a hedge against a diversified portfolio. 

Otherwise why keep pounding the dirt with the same old stupidy.  Maybe I should just refer to it as pesonality  disorder and move on.



akak's picture

You are truly both a stupid and a disingenuous fuck.

Many ZH's  are bet heavy on gold, silver, guns, ammo, and food. If i was bet heavy in those areas, i would be hoping for the total collaspe .

Oh, AND a raging sociopath to boot.

Buying insurance as a hedge against calamity does not necessarily (or even usually) equate to a desire to meet and experience that calamity.  Do you itch to burn down your house after buying fire insurance, or to go out and crash your car merely because you have automobile insurance?

Your "logic" is as faulty as your morals.

brokenclock's picture

You didn't pay any attention to the post. Another troll.  It has nothing to do with insurance or being hedged on postitions.  It's about wasting time reading the same stupid  trolls that are pushing for what they want.  No infomation, no facts, no meaning,  Just post the same dribble over and over again. Then complaining about the same people who are helping to make there postition favorable.


Now make sure you call your therapist so he can increase your dosage, looks like you can't focus and are very defensive. Looks like your off topic rant and lack of understanding of my original post caused short term memory loss.

The post was to make a point and distinguishing between a thoughtful fact based or informative post. That intelligent readers come here for. 

I will answer your stupidy about the fire insurance, to show your how rediculous you sound.  I do have insurance on my home. But if i was postitioned to financialy gain more from it buring down then I wouldn't complain in Obumer and Uncle ben came around with carosine and blow torches. 

If you can't get the desired results from your therapist I'm sure there are a few people that will be happy to point you in the right direction.



akak's picture


It has nothing to do with insurance or being hedged on postitions.  It's about wasting time reading the same stupid  trolls that are pushing for what they want.

And so you are here, then, in the midst of your putative "same stupid trolls", .... why?

I will answer your stupidy about the fire insurance, to show your how rediculous you sound.  I do have insurance on my home. But if i was postitioned to financialy gain more from it buring down then I wouldn't complain in Obumer and Uncle ben came around with carosine and blow torches.

So apparently your response to my logical analogy (which you clearly lack the intellect to grasp) is .... even more stupidity.  Stupidity, because NOBODY, here or probably anywhere else, has MORE to gain from the collapse of our economy and our financial and monetary system than they do from the continuation of our current, if diminished, level of prosperity.  One might be relatively better off holding gold during a monetary collapse or a period of high inflation than they otherwise would be, but that does not equate to them having MORE to gain from an economic or monetary collapse than if such a collapse did not take place.

Logic is evidently not one of your strengths, is it?

brokenclock's picture

Your response has no logic since it was never based of the topic of discussion in the first place. You spew crap out of you mouth and think it's articulate and intelligent. When really your argument has no merit. If this happens then this could happen theory.  If horse didn't stop to shiat it would of won the race theory.  


I understand a person like you, and you choose to create an argument based on some illogical random fallacy that has nothing to do with the topic of point. Good job pointing out to everyone you have a reading comprehension level of a 2nd grader. Now go back to that school that gave you your degree and tell them you want a refund, cause we don't sell crazy here. I'm done with you at this point.  This conversation will not assist anyone with any financial facts.

So I will restate the obvious at this point.  Increase your meds and seek further therapeutic guidance.

Tall Tom's picture

"But if i was postitioned to financialy gain more from it buring down then I wouldn't complain in Obumer and Uncle ben came around with carosine and blow torches." (sic)


Let me see if I understand you clearly. If you are Financially positioned to gain from someone else's loss then you shall move to take the gain and screw the morality? Arson happens to be Criminal.


If someone steals an item from someone else and offers to sell it at a marked discount to you will you move to take the gain and screw the morality? Fencing Stolen Property happens to be Criminal. It is no different than Arson.


If Obama, Bernanke, Geithner, et al. commit crimes against the American People and, as a result, you can realize profits you will position yourself to take the gain? That makes you Criminally Complicit. That is no different than Arson.


So you are, in essence, writing that you are AMORAL, without morals. That is Psychopathy. You demonstrate a lack of respect of the Rule of Law by your initial statement which I quoted.


Yes you are free to make that choice. Just be aware that there are consequences and that you will be paying for those after you are caught violating the laws.


Just who is your Homeowner's Insurance Company?

brokenclock's picture

Tom, What point was my original post addressing?  Did you ever see anything to do with any criminal activity? Did I say I want my house burned down or my car to get wrecked?  Once you understand the original post then you will see what a waste of time both your response is and mine for having to type this. 


Your next post is a good read. I will adress that and I'm done.

dunce's picture

You disparage gold, guns, and ammo, and talk about putting your money where your mouth is. On the chance that you are right, where are you putting your money?

brokenclock's picture

I do not disparge gold, guns, and ammo. They are the logical choice of investment in this bizarro market cycle.  I never once said or hinted that I was against those invesments as a percentage of anyones portfolio. 


I am well diversified mostly in tangible assest. Very little exposure to any paper investments.

nmewn's picture

"We are playing the finance/money game. It's called put your money where your mouth is."

There is more to my life than just "finance & money" and none if it is a game, you fucking imbecile.

Maybe you should see a shrink...there's a few running around here with scissors and their hair on them out.