Elliott's Paul Singer On How Money Is Created... And How It Dies

Tyler Durden's picture




 

When we launched our series into the US Shadow Banking system in the summer of 2010 we had one simple objective: to demonstrate just how little the process of modern (and by modern we mean circa 2004 not 1981) money creation was understood. Here was just one example where some $17 trillion (back then, now less) in credit money was rapidly liquidating, an amount greater than the entire M2 and even M3 (had that series still be in circulation) and yet not one academic, pundit or self-professed money expert had or has still accounted for the massive impact of this monetary abstraction on the markets and the economy, which as most know "grows" (to use one of the most misunderstood words in all of economics) primarily by expansion (or contraction as the case may be) of credit, both traditional, which is Bernanke's domain, and "shadow", courtesy of America's #1 export: "financial innovation."

It is now three years later and we are happy to report that almost not one person, not those that hide their complete lack of understanding of the money creation process behind big words, circular arguments, and three letter "monetary theory" acronyms, and certainly not those who set monetary policy, have understood a single thing of what we have been trying to explain all this time, which is merely the modern monetary reality but not from some textbook theoretical perspective, but from a purely practical, where money is nothing more than 1s and 0s in some server, standpoint.

However, one person has. That one person is Paul Singer. Paul is not some fringe blogger, some academic with a chip on his shoulder and an inferiority complex, nor some lunatic gold bug. Paul runs Elliott Management, one of the five biggest hedge funds in the US, which at last check had some $21.1 billion under management. And having managed money successfully since 1977, and witnessed numerous cycles of growth and contraction, not to mention money creation and liquidation, we would argue that his opinion on virtually all matters finance and money-related is second to none. It is certainly orders of magnitude more relevant and correct than that of the shamanistic central planning hacks who sit down every month in Marriner Eccler building to form a circle of depraved (and arguably deferred genocidal) cluelessness, and after a theatrical vote a la Stalingrad circa 1954, determine the cost of money (at least they did in the Old Normal) without even understanding what money actually is.

So for anyone who wishes to know what really happens in the modern world when money is created - and that would be most people who pretend to be informed on this, and other modern financial topics as nowadays it is all about money creation (and soon, destruction) here is, from Paul Singer's latest monthly letter, an extended discussion on the nature of money, how it is created, and most importantly, how it dies.

Money Tsunami

The concept of “money” used to be simple: items of recognized value, initially in the form of shells, livestock, and then precious metals. At some point, someone decided to print currency on paper, but it was widely understood that it had to be backed by something real, like gold or silver. That history is oversimplified, but it illustrates this central truth: Money that is created at will, rather than grown in the field, mined from the earth, or otherwise subject to supply limitations, can be easily degraded. Nobody would want to own something that may or may not have value and purchasing power in the future. What, then, determines the value of money? The worldview and ethics of those in charge of the printing presses are obvious answers that are often overlooked. Another is the confidence (or inertia!) of the people who hold and trade the money, or claims denominated in money.

Fast forward to the modern era, which features central banks, so-called “fractional reserve banking,” leverage, and derivatives. Central banks allowed commercial banks to create money by making loans while keeping small amounts of reserves on hand or at the central banks. As money market funds, bank CDs, and other like instruments were created and then became a sizeable portion of the global financial system, things got even more complicated. An obvious clue that the very definition of money, to say nothing of the appropriate ways to analyze and adjust monetary policy, have departed from the understanding and control of monetary authorities can be found in the proliferation over time of acronyms to describe what used to be called simply “the money supply”: M1, M2, M2A, M3, MZM, and several others.

Add modern derivatives, which entered the scene in a significant way only some 30 years ago, and the picture becomes even murkier. To demonstrate this, in slow motion, consider the creation of a credit default swap (CDS), and then a mortgage collateralized debt obligation (CDO). Assume an investor wants to be long the credit of IBM. The investor offers to sell to a dealer a CDS on IBM. The dealer purchases the CDS and either keeps it or lays off the risk by booking an offsetting transaction with someone else. Actual securities issued by IBM are not part of these transactions – the CDS is just a contract between the investor and the dealer. As IBM’s credit quality is perceived to change, the price of the CDS will fluctuate and money will change hands between the investor and the dealer (based on the “mark to market”). This position is basically a borrowing by the investor who now “owns” a security referencing the credit of IBM, and who has put up only a small deposit – a tiny fraction of the notional credit exposure that the investor is long. It also represents a highly-leveraged loan by the dealer. Although the investor/borrower does not receive the full proceeds of this “loan,” he or she bears the full risk of loss on the underlying asset. It is as if the investor borrowed money from the dealer, added a small amount of his or her own money, and purchased an IBM security with the total amount of money. Interestingly, such borrowings also have the effect of impacting the price of the actual underlying assets (in this case, IBM credit) due to arbitrage pressures. In effect, these transactions by investors and non-bank dealers represent many of the characteristics of the creation and dissipation of money, but they are outside the traditional and commonly-understood mechanics of fractional reserve banking. Most economists would not consider these transactions in the context of money supply, but we think that they are being mechanistic and not seeing the actual effects of the basically unlimited ability of private derivatives transactions to have many of the same effects as are caused by the creation and destruction of “money.”

The ecosystem of mortgage securitizations has similar characteristics. It starts with the tranching of pools of mortgages into mortgage-backed securities (MBS) and then the referencing (via derivatives) of low-rated tranches to form new securities called synthetic CDOs. Based upon fanciful assumptions about diversity that prevailed pre-2008, the bulk of synthetic CDOs that referenced low-rated mortgage-pool tranches magically turned into AAA-rated securities. These instruments, even in subprime mortgage securitizations, were consequently treated by regulators as zero-risk-rated. Until the music stopped, these high-rated securities had many of the powerful multiplier effects of money. Furthermore, the institutions that packaged and sold the MBS, and those that put together the synthetic CDOs, performed many of the functions of banks (conjuring credit out of small reserves) even if they weren’t banks. Finally, the entire process caused demand for houses to increase and prices to rise.

The purpose of this part of the discussion about money is to show that things have gotten really complex and subtle in the modern banking and derivatives era, and that the old model of money as being solely or mainly the product of bank reserves and bank loans is woefully inadequate.

Now one more element should be added to this mix: quantitative easing, or QE. The government spends money on roads, bureaucrats’ salaries, entitlements, etc. To pay for such spending, Treasury sells a security to the public, and it has an obligation to repay the purchaser when the security matures. The security might be a Treasury Bill, a 30-year bond, or anything in between. The Federal Reserve (or the Fed, as it is commonly known) has the ability to set short-term interest rates, which has incentive/disincentive effects on bank lending and consumer spending. In a nutshell, that model has prevailed as the status quo since the Fed was created in 1913, up until 2008.

Since the crash of 2008, there has been an additional dynamic at work. Namely, the Fed is purchasing massive amounts of Treasury securities, either directly or on the open market. To be clear, the cash outlays by Treasury for government spending are the same as in the preceding paragraph. The difference is that post-crash, there are far fewer securities outstanding that the Treasury must pay off at maturity, because trillions of dollars of such securities are owned by another department of the federal government. We think this process is the effective equivalent of money-printing.

For those who think otherwise, we pose the following question: If QE did not have the effect of printing money, why would the Fed do it? We do not think that QE is merely a duration swap. If the government simply wanted shorter duration and cheaper borrowing costs, the easy course would be for the Fed to set interest rates at zero and for the Treasury to issue only 30-day Treasury Bills to pay for government spending. One possible outcome of such an approach would be that the price of long-term bonds would be uncontrolled, and could possibly fall precipitously, thereby driving up long-term interest rates. Instead, the government adopted a zero interest rate policy, or ZIRP, and Treasury’s borrowing rates dropped as the Fed purchased its bonds, elevating the prices of virtually all other securities. All of this contrivance is intended to be an indirect way of supporting economic activity, and perhaps it has done that to some degree. But it is causing massive distortions of risk-reward in stocks and bonds, as well as significant expansion of future risks of both inflation and severe losses in asset prices. These losses would be experienced by both the Fed and by investors.

The Fed’s explanations of these policies are delivered with equanimity and aplomb. However, in our view, the inventions of modern finance have “gotten away from them” and are not adequately understood by the money-printing overseers. A “smoking gun” is the complete failure of policymakers (and financial-institution executives) to predict or understand the circumstances surrounding the 2008 financial crisis – neither the inner workings/interconnectedness of the institutions involved nor the risks inherent in the system. Recently released minutes of Fed meetings in 2007 make it clear that they did not understand the modern financial system: its structure, the instruments that comprised it, the implications of the leverage and risk-taking afforded by untested derivative products, and the vulnerability and opacity of the major financial institutions. It does not mean that the Fed has no credibility when it acts or makes pronouncements today. But it certainly means that they should not have a great deal of presumptive credibility, especially about elements that are experimental and untested or that they got so wrong recently (like QE, and the risks of a system comprised of modern highly-leveraged financial institutions laden with derivatives positions, respectively).

It is critically important for investors to try to understand what global QE is actually doing, where it may lead, and what will happen when it slows, stops or shifts into reverse. What we urge most strongly is that the current atmosphere of calm and stability, and the lack of virulent inflation, must not be relied upon to continue forever. There are certain words and phrases in official communications that give some hint of the uncertainty that exists about key elements of central-bank policies: confidence, anchored inflationary expectations, and velocity are prime examples. Our takeaway is that when investors lose confidence in ZIRP-soaked, QE-ridden, faith-based paper money, the consequences could be abrupt and catastrophic to societal stability. We do not know exactly what to do about it, except to urge policymakers to STOP substituting QE for sound tax, regulatory, labor, environmental, and fiscal policies.

Due to the combination of the lagged nature of inflation in wages and consumer prices, the vital (if possibly more ephemeral than policymakers think) role of “confidence,” and the fact that each particular brand of paper money is competing with other currencies that are similarly mismanaged, the world is in a position today in which the major central banks see only the beneficial effects of QE and not the risks. Bonds that otherwise might be collapsing and repudiated are at sky-high prices with stingy yields. Reported consumer inflation is near historic lows. Consequently, central bankers think that what they got away with yesterday will also work today and next week. Investors either have not figured out that they are long seriously overpriced promises or think that they will all have the luck and perspicacity to reject such instruments before they plunge in price.

The reason we combined derivatives and QE in this discussion is that both are proud inventions of modern financial science, both have many of the characteristics of money-creation, and both are undertaken without any real understanding by public or private sector leaders of their nature, power, interconnectivity, and ultimate consequences. QE is exceptionally dangerous and way past its tipping point. We do not believe it can be unwound without serious consequences. Central bankers think (hope?) that it can be easily unwound at some future date, but they may not be right.

When the rejection of long-term bonds and paper money starts at some unpredictable future time, it may be fast and difficult to contain or reverse. History is replete with examples of societies whose downfalls were related to or caused by the destruction of money. The end of this phase of global financial history will likely erupt suddenly. It will take almost everyone by surprise, and then it may grind a great deal of capital and societal cohesion into dust and pain. We wish more global leaders understood the value of sound economic policy, the necessity of sound money, and the difference between governmental actions that enable growth and economic stability and those that risk abject ruin. Unfortunately, it appears that few leaders do.

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Wed, 01/30/2013 - 21:54 | 3201015 Atomizer
Atomizer's picture

 


Statism Is Slavery|  http://www.youtube.com/watch?v=oOGq_1710U4

 

Wed, 01/30/2013 - 21:54 | 3201019 Joe moneybags
Joe moneybags's picture

How can we take this author seriously?

1. He failed to recommend gold

2. He failed to recommend firearms.

3. He failed to put forth any conspiracy theory

4. He used no profanity

5. He used good grammar

 

 

 

Wed, 01/30/2013 - 22:02 | 3201035 RebelDevil
RebelDevil's picture

"We do not know exactly what to do about it, except to urge policymakers to STOP substituting QE for sound tax, regulatory, labor, environmental, and fiscal policies."

That's why. He's deluded on that one. - QE CAN'T STOP!, it is IMPOSSIBLE at this point.

He honestly think's that the Gov. can cut entitlements and stop with the wars. That's also impossible, and explains why QE can't be stopped at this point.

Wed, 01/30/2013 - 23:57 | 3201354 mayhem_korner
mayhem_korner's picture

 

 

Once faith is lost in the currency, QE will stop, as its purpose of perpetuating the fallacy will be no longer.

Thu, 01/31/2013 - 08:01 | 3201897 Whiteshadowmovement
Whiteshadowmovement's picture

Thats correct. QE can't be stopped. There is absolutely no plan for unwinding it. From now on the Fed is playing a game where they central plan most prices. In any other historical situation this would have immediately caused price dislocations and a run on the currency.

HOWEVER, that wont happen for a long, long time. Because as the preface points out:

"purely practical, where money is nothing more than 1s and 0s in some server, standpoint"

Bingo! And as long as the Fed has the "confidence" of the people, which it will retain, as long as it has:

"combination of the lagged nature of inflation in wages and consumer prices, the vital (if possibly more ephemeral than policymakers think) role of “confidence,” and the fact that each particular brand of paper money is competing with other currencies that are similarly mismanaged"

So confidence will remain and wont be shattered until we see inflation. We wont see any meaningful inflation though, as Singer notes:

" Bonds that otherwise might be collapsing and repudiated are at sky-high prices with stingy yields. Reported consumer inflation is near historic lows."

And this is because the TBTF cartel works with the Fed (which Singer couldnt very well state publicly) to keep a total lid on M2 and rig commodity prices for subpar performance.

As long as the banking cartel exists, which controls almost all of the money supply (even "M2A, M3, MZM, and several others"), the Fed can indeed control prices to prevent inflation and ramp stock markets (for that "wealth effect") way longer than most expect.

Wed, 01/30/2013 - 22:02 | 3201043 knukles
knukles's picture

6. Was not presented as a topic du jour anointed by 37 talking heads on CNBS

7.  Was not written up in the San Francisco Fed Monthly Research and Nude Buttocks Celebration Review.

8.  Has not been curly qued with Lew's official signature

9.  Mandy Big Tits did not when asked about said topic respond; "Huh?"

10.  Nobody has accused the idea of being racist.

Wed, 01/30/2013 - 21:55 | 3201021 Being Free
Being Free's picture

But it is causing massive distortions of risk-reward in stocks and bonds, as well as significant expansion of future risks of both inflation and severe losses in asset prices. These losses would be experienced by both the Fed and by investors...

It is critically important for investors to try to understand what global QE is actually doing, where it may lead, and what will happen when it slows, stops or shifts into reverse...

Investors either have not figured out that they are long seriously overpriced promises or think that they will all have the luck and perspicacity to reject such instruments before they plunge in price...

It will take almost everyone by surprise, and then it may grind a great deal of capital and societal cohesion into dust and pain.

So I guess Elliott Management, ("one of the five biggest hedge funds in the US, which at last check had some $21.1 billion under management.") is busy stacking gold bricks for its clients.

Wed, 01/30/2013 - 21:56 | 3201024 knukles
knukles's picture

The "Paul" referred to in the double entendre cannot be that of the dubious Krugman variety, obliquely now, can it? 

"Paul is not .... some academic with a chip on his shoulder and an inferiority complex..."

(shame on me, Knuks)

And many thanks Tyler, for the nice reminder that methinks most will forget, ignore, miss or not understand with respect to understanding "money" referencing interest rates as "cost", not price.

(hugging self, making noises like Stimpy)

Wed, 01/30/2013 - 22:00 | 3201034 joego1
joego1's picture

It all still boils down to the collective faith that  we place in what we call money in the end. When people start to loose that confidence for what ever reason they will look towards their leaders to explain to them what the problem and solution is. It will not be a good moment in human history when our leaders admit that the don't understand what the problem is or how to fix it.

Wed, 01/30/2013 - 23:23 | 3201275 Calmyourself
Calmyourself's picture

Faith, absolutely correct, as long as faith persists the system maintains its faux integrity.  Want this sucker to reset? Your best weapon; person to person social media, make fun of your bennybux in a long line at the grocery store, complain loudly about package size and price changes.  Seem reasonable and sincere and you will be emulated thorughout your town.  Once this becomes endemic prices will rise ohh yes then JIT shows it weaknesses.  Those sucking on the .Gov tit or the MSM but I repeat myself should just shut up and swallow what benny is giving them.

Wed, 01/30/2013 - 22:02 | 3201036 Zgangsta
Zgangsta's picture

"Money doesn't grow on trees" has a whole different meaning in this day and age...

Wed, 01/30/2013 - 22:09 | 3201065 Rusty Shorts
Rusty Shorts's picture

It grows on Weed???

Wed, 01/30/2013 - 22:15 | 3201082 medium giraffe
medium giraffe's picture

No, I think you're thinking about the Californian economy there. The real money gets mined out at gunpoint in South Africa....

Wed, 01/30/2013 - 22:37 | 3201148 mt paul
mt paul's picture

Afganistan...

opium

at amerikan gun point

Wed, 01/30/2013 - 23:00 | 3201212 willwork4food
willwork4food's picture

Netherlands-

Heineken and Amsterdam!

Wed, 01/30/2013 - 22:29 | 3201134 Atomizer
Atomizer's picture

LOL,  that's what my grandmother told me. Penny wise pound foolish was her other gem. My mother would say, we're not the Rockefeller's. It's amazing to read how many of us grew up and became very smart in upper income families. 

Wed, 01/30/2013 - 22:02 | 3201044 medium giraffe
medium giraffe's picture

The last paragraph nails it, but I'm not sure that his opinion is any more valid that anyone else. Yes, he has the credentials (whatever value you place on that), but please can we not hype up the cult of celebrity money masters of the universe in such breathless terms.  Anyone who cares to look can spot the pig in lipstick...

 

Wed, 01/30/2013 - 22:04 | 3201051 miker
miker's picture

Well our leaders have basically revealed that they don't know how to fix it; even if they know how the problem formed.  That is why the Fed is QEing and the Congress is deadlocked.  The American economy has been painted into a corner.  The best we can hope for is quick drying paint.

Wed, 01/30/2013 - 22:39 | 3201152 mt paul
mt paul's picture

printed 

into the corner

Wed, 01/30/2013 - 22:06 | 3201056 RMolineaux
RMolineaux's picture

Singer's article needs editing, and the concepts and reasoning are not clear.  Must do better.

Wed, 01/30/2013 - 22:07 | 3201059 world_debt_slave
world_debt_slave's picture

Those who ignore history are due to repeat it.

Unfortunately those that pay attention to history are in the minority.

Wed, 01/30/2013 - 22:11 | 3201069 medium giraffe
medium giraffe's picture

Esp. in the credit swap market.  Exposure up significantly since '08, no lessons learned there...

Wed, 01/30/2013 - 22:17 | 3201089 world_debt_slave
world_debt_slave's picture

yeah, it is truly astounding to me the amount of criminal corruption that goes unpunished.

Wed, 01/30/2013 - 22:31 | 3201127 knukles
knukles's picture

Like laws unenforced and then the liberals say to pass more.... this one on guns...

http://www.sfgate.com/default/article/Guns-illegally-owned-by-20-000-in-...

Wed, 01/30/2013 - 22:16 | 3201094 Jason T
Jason T's picture

history will repeat and there is no power great enough to stop it.  The passions of man won't change and no one can change them.  we could be in for a dark age I fear.. in this life time.

Wed, 01/30/2013 - 22:32 | 3201140 Rusty Shorts
Rusty Shorts's picture

.stone age, monarchy, republic, empire, stone age, monarchy, republic, empire, stone age, ..and finally monarchy...

Wed, 01/30/2013 - 22:20 | 3201102 The Miser
The Miser's picture

Most dollars are 1 and 0s in a computer somewhere. Physical
dollars that exist are about 7% of the total. FDIC is broke. Good luck when there is a run on the bank.

Wed, 01/30/2013 - 22:30 | 3201135 knukles
knukles's picture

FDIC is Full Faith and Credit of the good olde USofA meaning they'll just print more by selling more treasuries to the Fed.

Simple as an aneurism.

 

Wed, 01/30/2013 - 22:20 | 3201103 Tinky
Tinky's picture

Should serve quite well as a forensic document when the cries of "Who could have seen it coming?!" begin to recede.

Wed, 01/30/2013 - 22:43 | 3201121 Dre4dwolf
Dre4dwolf's picture

Cant you guys like summarize all this into one paragraph? i can.

Shit I think I can summarize it to one word.

 

Fraud.

Wed, 01/30/2013 - 23:13 | 3201241 willwork4food
willwork4food's picture

What is the USD based on? Gold? Silver? Not a chance. Is it based on anything? Yes it is.

 Oil and the sweat from millions of hard working Americans through taxes, Judicial & Commoditiy fraud, and the new kid on the block: Algos.

Wed, 01/30/2013 - 22:28 | 3201131 NoDebt
NoDebt's picture

The further from hard assets you go, the greater the chances of catastrophic collapse.  Period.  Even gold-based money is already 1 degree of separation from real assets.  Everything beyond that starts at 2 degrees and goes up from there.

I see no functional difference between "leverage" and many derivatives contracts, which, I think, is one of the points he was trying to make (private sector money creation at will).  Some derivatives contracts exist at INFINITE leverage, as AIG found out belatedly, was a very dangerous place to be when things start moving backwards.

 

Wed, 01/30/2013 - 22:30 | 3201137 EmmittFitzhume
EmmittFitzhume's picture

Money is a medium of exchange of something that has value.  In a few years, I will make money selling fresh water

Wed, 01/30/2013 - 22:32 | 3201138 Kingkongballs827
Kingkongballs827's picture

PVC Gun Burial Tube. Holds 3 long rifles Ak47, SKS, AR15 plus ammo and gold & silver. Check it out here.

http://www.ebay.com/itm/160965515323?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649

 

 

Wed, 01/30/2013 - 23:46 | 3201333 brak
brak's picture

$275!?  for $20 worth of PVC and a shrader valve?

Thu, 01/31/2013 - 00:38 | 3201477 jomama
jomama's picture

fucking spammer.  getting real tired of seeing you post the same fucking thing

Wed, 01/30/2013 - 23:25 | 3201283 dark pools of soros
dark pools of soros's picture

Gaddafi's last words

Wed, 01/30/2013 - 22:32 | 3201141 Whiner
Whiner's picture

"QE is exceptionally dangerous and way past its tipping point. We do not believe it can be unwound without serious consequences." Uh..yeah. This about sums it up. And as The Man says, "it will come fast and take everyone by surprise." Dust to dust, ash to ashes. Great ready, Great Society. Try to wake up your debt-drugged children.

Wed, 01/30/2013 - 22:37 | 3201146 jplotinus
jplotinus's picture

""We do not know exactly what to do about it, ..."

Therefore the article is useless precisely because of the acknowledgment the author is clueless.

One cannot stake out a claim of economic expertise, let alone prescience, absent a willingness to articulate a viable solution, if one wishes to be taken seriously.

Solutions, please.

Wed, 01/30/2013 - 23:23 | 3201279 dark pools of soros
dark pools of soros's picture

Stare directly at the sun for 20mins

Wed, 01/30/2013 - 22:38 | 3201149 tony bonn
tony bonn's picture

although i disagree in part with some aspects of the article - eg why qe in the first place - i do agree emphatically with the prediction that this will end badly and the fed cannot under any circumstance - even if it wanted - unwind qe without dire consequences....that coupled with the continuing derivative disaster at jpm and morgan stanley means that financial armagedon cometh....

Wed, 01/30/2013 - 22:49 | 3201180 andrewp111
andrewp111's picture

There is only one way to unwind the QE at this point - the Treasury mints trillion dollar coins which are used to extinguish and replace debt, moving the USA to a fully MMT based monetary system in the process.

Wed, 01/30/2013 - 23:10 | 3201233 Tyler Durden
Tyler Durden's picture

which is it: extinguish or replace? because you do realize that every "coin" is also debt?

Then again you were obviously merely being sarcastic with references to MMT and what not ....

If, sadly, you were not, reread the first few paragraphs.

Wed, 01/30/2013 - 23:11 | 3201236 yatikto
yatikto's picture

It can't be unwound, it has to be containet, somehow insulated from real economy. I am not a market guy, but my biggest problem is the fact that these people with a few clicks can corner any commodity market. Am I correct on this?

Wed, 01/30/2013 - 23:21 | 3201268 dark pools of soros
dark pools of soros's picture

They can buy your whole town and piss on your bed and your grave... How's that for cornering?

Thu, 01/31/2013 - 00:38 | 3201481 MiltonFriedmans...
MiltonFriedmansNightmare's picture

War always seems to work, just sayin.

Thu, 01/31/2013 - 00:53 | 3201515 dark pools of soros
dark pools of soros's picture

But isn't the real benefit of war to lose many of your own people to reduce liabilities, unemployment and wtf drones nixes that...so... We will just spend to the hilt on all sides while sending forever bombs with our forever stamps

Wed, 01/30/2013 - 22:46 | 3201158 mt paul
mt paul's picture

long oakum 

rebalast the boat 

again ...

that darn .. garboard strake 

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