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Devaluation
Submitted by Mark J. Grant, author of Out of the Box,
Clowns to the left; Jokers to the right.
Here we are; stuck in the middle. We play to win and win we shall but sometimes I look at it all and shake my head. The deceit of manufactured debt to GDP ratios in Europe, the complete deception of America’s CPI numbers and the political lies bandied about daily like they were some form of truth when they don’t even mirror a distorted view of reality. This morning I wandered into my living room and sat down on the floor; just sat there. Now I am not a yoga kind of guy and I wasn’t asking for Divine guidance, though maybe that would have helped, but I just sat there and took a measure of the world.
We are faced with the corollary of the famous maxim; “It is not who votes that matters but who counts the votes that matters.” It is not the numbers but who devises them and then applies them that matters. It isn’t magic but trickery and you and I are the audience.
The markets are where they are for one reason only, just one, the sea of money that the central banks have poured out across the globe. There is no other reason. Money flows into the corporations, money flows into the markets and the tide rises because it must but it is a House of Cards, a dangerous game that works because there is no place else to go with money and the euphoria, New Year’s Eve at the Big Casino, continues but the price will be high when it all ends and it will end because it is not this or that asset class that is in a bubble but the entire world that is a giant soap bubble that will float until the heat of the sun pops the thing in one ugly mess. I fear that subprime loans, dot.com fantasies, and the S&L crisis will pale when we are done with this party because, my friends, the bill for the festivities must get paid.
The next competition will be Currency Wars. Plenty of time to play; we have only had currency skirmishes to date. The boys in the backroom can’t do the Inflation play; “out of bounds” say the politicians. The little blue and green pieces of paper created out of thin air is growing limp and the magicians of money have searched their bag of tricks and will be performing live and in person soon. Here is the scheme; lower the value of all of the currencies and play the Absolute Value game where Relative Value is consigned to a secondary position. This means that all currencies must be deflated to a lower value regardless of how the Dollar trades against the Euro or the Yen. Now the simplest way to do this is to Devalue in coordination but that course is unlikely as it would be impossibly tough to explain. The trick will be based upon the same methodology as debt to GDP ratios or the CPI fiction; it all depends on what is counted. There have been many postulates floated about, in the case of America’s CPI number, that real Inflation is somewhere around 8.00%. However if this was accurate and the number used then everything tied to CPI such as wages and pensions would increase dramatically and so the reality is ignored and the data is defined by how it is counted. A great trick; an effective sleight of hand.
So those in the green eye shades sit around and plot. It worked for CPI, it worked for the debt to GDP ratios where liabilities of all types are not counted and tossed into the trash bin so why won’t it work for currencies; it will. Prices of goods and services don’t have to rise; it is just that a scheme to use more Dollars or Euros to buy them must be put in place. So it will be Devaluation by fiat but since it is a new game; it will be tricky. It is a game that has never been played before and there is no rule book for this one.
Watch the hat; the rabbit will be coming out soon.
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Haven't they sold the rabbit already..... Or do 5 people think they own it?
re hypothecated hare?
so that's where my hair went...
DEVALUATION
http://www.bearishnews.com/wp-content/uploads/2011/05/usd-purchasing-pow...
Of Mice and Men
The people are Lenny and the bankers are George.
We can have a rabbit farm, right George?
the fed is dead set on blowing out the dollar on an accelerated pace to institute the Amero and
remove completely Americas hard fought and won sovereign status.
"the fed" has no allegiance to the united states people, they answer to their owners,
the share holders of the corporation.
all is well and moving right along according to the plan laid out 100 years ago. the "system" is working perfectly.
I knew I shoulda taken that left turn at Albuquerque.
http://www.youtube.com/watch?v=e8TUwHTfOOU
We devalue the dollar everyday and we do that as a matter of fact. But when some third world country does it overnight a big deal is made out of what that banana republic has done. Sheer hypocrisy. Who is delusional here ? Ones who don't even know devaluation of the dollar happens everyday or the country that knows their currency has been devalued overnight.
The $ has been devalued against gold since 1913. It has been devalued against all first world currency since WWII.
For the US this is an old game, so no worries about whether it will be employed or not.
Watch the hat; the rabbit will be coming out soon.
Sorry to say this ... but if the last 4 years have told us anything, it's that the rabbit won't be coming out as soon as one thinks.
I fear that they can keep this going for a lot longer than we deem it possible now, but when the rabbit does finally appear, it won't just be coming out, he'll be leaping out with his tail on fire
http://www.youtube.com/watch?v=XcxKIJTb3Hg
This is more like the rabbit.....
Abracadabra, bitchez! Or rather, bend over and open sesame.
In order to pull a rabbit out of a hat, someone has to put the rabbit into the hat before the show.
Rabbits are like lunches. There aren't any free ones.
It's not rabbit, it's HORSE!
No, It's a rino
http://www.youtube.com/watch?v=e7mmrF-4rUE
It will soon be banker. Mmmmmmmm.......banker. Very tender and juicy. I can hardly wait.
I hear rabbit goes pretty well with rice and beans.
Perpetually $0.99/lb chicken breasts go even better.
I don't get how all currencies can devalue at the same time when they use each other as reference points.
Perhaps I am just missing something......
Wouldn't be the first time.
K@
Sorta have too.....it's the only way to keep the ball in the air.
What's hard to grasp about it? When you print trillions more fresh and minty dollars, the existing dollars are diluted, and all dollars are then worth less since they are backed only by faith in the USA which has infinite capacity to create dollars, but finite assets to back said dollars. When all countries do this in unison, they may retain relative value, but all the currencies purchasing power will decline in unison. This effect has the greatest impact on the poor and the least impact on the wealthy. Just the way God intended. See. Easy peasy!
so how long can they stave off the inevitable inflationary impact? Thats what I wanna know.
Try using a "real" good as a reference point.
Let me borrow 1 trillion at .25%. I will buy 1 trillion worth of treasuries and then consistently stimulate the economy with the monthly difference. I promise.
At least I can take solace in the fact that you have been saying this for some time now....just like most EVERYONE else out there. I will take the odds. Its become trendy to call the end of the world.....ha!
I don't have enough money to retire. Im to old to make enough money to retire. Recently in my area of residence, Will-kill-ya county, they busted the largest meth lab in the area.
A temporary supply and demand opportunity maybe. Obviously some short term inflation.
Forget the hat and prestidigiflation.
I am putting a rabbit in a terrine this weekend.
Every cloud has a delicious silver lining.
Maybe I should jump onto the printing wagon, and ride it out. Go into debt as much as I can, and pray for forgiveness.
...just another tin hat hater of our dear leader , herr obama. drone his ass daddy.
Fuck this...now I am just waiting for a pullback and a reasonable entry point. Why should I not be drinking at the party like everyone else? I could be the smartest guy in the room - but all the idiots are making money.
I'm getting stupid today and I am getting in!
what's a pullback?
Actually the DOW closed in the lower half of the range yesterday on volume so it could be some turnover or profit taking. Could be the crest. Maybe I go bonds and shorts here, along with adding to the stacks.
Keep on smokin' it!
The Fed Reserve has stood up and volunteered to increase prices for everything and they promise that you do not need to hedge any down side risk. Their life literally now depends on them being able to continue to push stocks higher and bonds lower because their whole mission is to get you to buy stocks. If everyone complies and gets levered long with no hedges and the market crashes Bernank and the banksta niggas will be hanged by the politicians, the people, everyone and all. Bennie literally should be shitting his pants.
Right, they're desperate to get 'retail' in there, create a 'new stock bubble mania' again so they can be slaughtered, and I dont think thats ever going to happen everyone I know is just terrified of markets.
They're starting to realize 'Hey...this isn't actually money it's just confetti'...then the Shitnami hits.
The markets are where they are for one reason only, just one, the sea of money that the central banks have poured out across the globe.
So what expalins Gold going down every day?
People have to buy food.
Irrelevant. According to one member here, constant inflation-adjusted prices prove that there is no inflation! (And no, I am not making that up.)
Besides that, according to another ZH member, chicken breasts can still be purchased for $0.99/lb. So all is well, inflation is dead, and angels daily fly from my bunghole singing hosannahs to Bernanke.
More magic. Here, have some of this paper, it represents a claim on gold.
Jeff Christian, LBMA, 99:1.
All you need to know.
Keep stacking.........the Chinese are.
M a n i p u l a t i o n
The relative debasement of Euro, JPY and GBP compared to the US dollar.
Devaluation in stealth has been going on for years across the globe. Look, Japan has been in 'inflate or die' mode for decades, China pegs to the US$, and the Swiss peg to the euro. IMHO, they have just been testing the waters, or rather boiling frogs in the water...it all has been semi correlated debasement and a steady race to the bottom for years. It will just become open warfare now. That is why China is threatening Japan over devaluation and we call China a 'currency manipulator', when we are the biggest currency manipulator around. Warning shots have been fired. Who will get there first? We know Zimbabwe and Iceland lost already. How long before Argentina and Mexico have to lob a bunch of zeros off their currency again? The Fed buys what are loosely called 'assets' from member banks and at the same time finances the US Treasury market to facilitate more printing to pay for the gubmint to give us shit WE DON'T NEED! Meanwhile 'mericuns are oblivious to it all. So far they have succeeded in their trickery. Wait until people start taking physical delivery of gold and silver to see the price spike. Germany knows the jig is up and wants their gold back has even given the Fed years to come up with it in order to save face since they probably do not have it in their possession. The gold coupled with a warehouse full of Deutschmarks that still exists somewhere over there and they may be the world's reserve currency by default when this all goes south for the final time. Just my ever depreciating $0.02 worth (but the melt value is worth more than that!).
Iceland won, Ireland and Greece are the losers.
Guess I never thought of that way, You are right, they are free from bankster shackles now!
The biggest lie now is the suggestion that the Fed will somehow unwind its massive balance sheet one day. Can you imagine what would happen to the markets (and the Fed’s solvency) if they even suggested a plan to do it? JPM learned the hard way with its London Whale experience how being able to say “We are the market” isn’t always such a proud moment. I wonder if (I mean, how long before) the Fed will find itself in the same position. Whatever the Fed does from here, and wherever we end up as a consequence, they at least have to admit they are the worst traders (or is that traitors) and risk managers on the planet.
Of course it will happen one day, but not in an orderly way. As with all other centrally planned financial disasters, no one will ever take responsibility for it and claim that they never saw it coming. I look at the Feds balance sheet now as just another dimension of the government (peoples) debt, neither of which will ever be repaid.
The Plan (IMHO - purely a speculation)
Step (1): Liquidate assets into cash
Step (2): The FED tightens monetary policy
Step (3): Markets crash 80+%
Step (4): Take cash from (1) and buy RE and stocks on the cheap
Step (5): Declare emergency and create Amero
I think the end result is going to be a new currency and that is how they will devalue but only after they have crashed the economy to buy up assets on the cheap.
When will the Fed start looking at the quality of all the MBS Securities/bonds/JUNK that the're buying from the banks?
Will Mark-to-Market ever be re-instated?
"Will Mark-to-Market ever be re-instated?"
The obvious answer is no. It has been replaced by Mark to Marxist.
This rigged game moves along slowly, much longer than many of us thought. But the endgame is near. And most of us here know the outcome. This charade will pass, as have all the others. But first, people must wake up. And if all they watch is the evening news and CNN, it will take longer than we thought. But it will happen.
It will be funny when this market tanks.....all the talking heads saying "I told you so..it was frothy....they were chasing dreams..returns...there was no value there but momentum...." how they will step away and be right again....
You all fail to see the forest for the trees...
http://2.bp.blogspot.com/-bERPlRQgYss/UTfzvM0st1I/AAAAAAAAFgA/8L4wDbJaw_...
Isn't this behavior TREASONOUS??
Here bunny bunny, Here Rabbit!!
The reason why coordinated, mutual devaluation won't work is that a currency is only worth what the country that issues it is able to produce in real wealth - commodities, goods, food, clothing, etc. If nobody's producing anything, and erybody's printing and devaluing, all that does is create more money for the same amount of wealth, commodities, goods, food, clothing, and stuff. The problem is not the money, it's the productivity and wealth that backs the money...
in the case of America’s CPI number, that real Inflation is somewhere around 8.00%. However if this was accurate and the number used then everything tied to CPI such as wages and pensions would increase dramatically and so the reality is ignored and the data is defined by how it is counted.
Well, that is true. But it would also put the real GDP "growth" at minus 6% which would not be the kind of publicity that the ruling elite would wish to publicize. Dead, brown shoots are the reality.
March Madness