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The End Of The Central Bank Put: From Mugabenomics To MadMaxnomics

Tyler Durden's picture


Authored by Joel Guglietta, originally posted at Steen Jacobsen's blog at,

There exists a super-Bernanke who proved also a super-Hollande, a gentleman who Japanese Prime Minister Shinzo Abe cannot compete with: his name is Robert Mugabe, the president of Zimbabwe. When he took power, he seized the farmlands of one social group to give them to another social group. Afterwards, in part because the new social group did not manage the farms that well, the economy took a turn for the worse. Therefore, the state issued some bonds to finance its spending and asked the central bank to issue some money to buy this government debt. But they printed big time and turned the printing press into something of a cosmic proportion. According to Professor Steve Hanke from John Hopkins, monthly inflation was 80 billion percent, so per year it is a 65 followed by 107 zeros. This is what I call Mugabenomics, the conjunction of (i) state-forced wealth transfer between two social groups along with (ii) the monetisation of the debt. As we shall see below, Mugabenomics, or at least its mild version implemented now in the Western hemisphere, has drastic consequences on the final episode of the global financial crisis.

Let’s start with the obvious: the Western world is completely bankrupt

The average total debt of the 18 OECD countries is now well above the 330 percent of GDP computed by the Bank for International Settlements (BIS) in 2011 (Figure 1). Government debt ranges from 80 percent to 100 percent of GDP, non-financial corporate debt is higher than 90 percent of GDP and private household debt is higher than 85 percent of GDP. What is less known is that real household debt tripled between 1995 and 2010 (Figure 1; right-hand graphic). “We” (more on this “we” below) are collectively completely broke. What to expect then? History gives an answer.

Figure 1: Non-Financial Debt

Non-financial debt chart

Source: BIS Paper, “The Real Effect of Debt”, Stephen G Cechetti, MS Mohanty and Fabrizio Zampolli


During the Middle Ages, lenders used to apply an interest rate to the loans they granted to their kings to make up for the risk they incurred. Back then, what we now call risk premium was death. Indeed, when the kings could not pay back their debt, they sometimes simply slaughtered their creditors. In today’s civilised world, we kill the creditors with two weapons of choice: inflation and “debt restructuration”. For instance, a haircut (debt cancellation is a 100 percent haircut and happened many times during the Bronze Age in Mesopotamia). In the face of the magnitude of the above numbers, the fact that GPP can grow at 2 percent to 3 percent in the US and zero percent to 1 percent in Euroland is totally irrelevant. Monetisation of the debt, ongoing erosion of the value of currencies and a looming 10 percent to 30 percent haircut are inevitable. This is bad news for undercapitalised European banks.

Therefore, even half-smart creditors know for sure that they are going to be obliterated one way or the other. So let’s spend some time on the haircut solution. A very good old paper from the Boston Consulting Group (“Back to Mesopotamia”, Sept. 2011) suggested that politicians would tax wealth to finance controlled debt restructuring and implement an additional tax on real estate. The BCG scenario has not happened yet, but tax has been increasing everywhere for sure. Please do not raise the Cyprus “guinea pig”: the island is the black hole of the black economy where illicit activity makes almost 30 percent of total GDP! Do not say the ECB and IMF opened Pandora's box. They just asked Cypriots to pay what should have been paid in the first instance. It is an insult to common decency to ask European taxpayers to pay the bill for the national sport in Cyprus: the non-payment of VAT, social contributions and income tax, and recycling of criminal money that has lifted the real estate, hospitality and tourism industries.

Still, taxes are rising everywhere. For example, France has a wealth tax called ISF.  Moreover, in this country, known as the big sick man of Europe after the fiscal law amendments implemented by former president Nicolas Sarkozy, total taxes due for property capital gain are 54 percent (33.33 percent + 15.5 percent CSG/CRDS + 6 percent others). On top of that, French pay a tax called the ISF on the total value of their property.

However, why has the BCG’s prediction of a much more aggressive wealth tax not materialised yet? Actually, something way smarter than a simple tax on wealth seems to be at work. Before explaining what could it be, let’s go back to the second key point of our story: who is “we” and how did we get there?

When I say that “we” are all broke collectively, this is not exactly true. We need a little bit of granularity. Let’s take the case of the US. The left-hand graphic in figure 2 shows three developments of paramount importance.

  • The share of wages in the GDP has been constantly falling since the 1950s;
  • The share of profit in the GDP has been steadily rising since the 1980s;
  • There is clear evidence of shorter-term profit-wage cycles: when the wage share rises (falls), the profit share falls (rises), shedding light on an ongoing fight between two social groups to capture the highest share of the value added.

What this chart does not show, but what is evident regarding what has been discussed above, is that this steady fall in wages as a share of GDP has been accompanied by a steady rise in private debt.

Figure 2: The Galapagos and the others

 The Galapagos and others chart

Source: FED Saint Louis


How the ecosystem has auto-organised is mind blowing. Wage earners have structurally received a lower share of the value-added and at the same time, because the ecosystem needs to grow constantly to survive. They have sold their future work to the banks to fulfill their social utility: consuming. And all this has happened without any other violence save a salary contract and the compulsory need to fulfill the much-advertised dream of consuming what the other Joneses consume (whatever it is: a house or a USD 200 pair of shoes).

In the same time, the inequality in earnings is back to what it was at the beginning of the 20th century: the top 1 percent gets 25 percent of all incomes. For those living in emerging markets like Russia, China, Mexico, Indonesia, or Brazil, such a polar social structure is the norm. So, I have news for you: the emerging and Western economies have finally converged, but not precisely how we thought they would. On the one hand, we find the top 1 percent living in the Galapagos, a very unique and exclusive ecosystem protected from the harsh conditions of the world. In this ecosystem, they are all kings - they are the Kings of the Galapagos. On the other hand, you have the 99 percent for whom weather conditions are not that stable. They live in the Land of the Others.

Some of the Kings of the Galapagos are creditors (what a difference compared with the Middle Age!) and some are not. But all share a common feature: they have equity shares. That is to say, a property right on the means of production. As we shall soon see, this property right is what really matters; way much more than its price that depends upon the social conventions on what value is and that change time to time.

So where do we go from here? Stifle your yawn, the story ends soon

I have previously described Mugabenomics as a “stylised fact” of what’s going on in the G10. For sure, this is not exactly applicable as G10 countries have institutions that protect both the Kings of the Galapagos and those living in the Land of the Others. More precisely, what they protect are the property rights. And now, all the pieces are in place.

As Donald Trump said, what the FED (ECB, BoJ…) is doing “is good for people like us”. Let’s assume that “us” are the Kings of the Galapagos. It is not that good for those living in the Land of the Others because the “monetary helicopter” never existed. It is the most stupid thing never invented in economics (among many others, agreed): there is no helicopter, there is a queue, and some are at the beginning of the queue and others at the end.

So, back to our Kings of the Galapagos. They perfectly know that if they hold some debt, they will lose a lot, as the BCG hinted. They also know that maybe they will have to endure some wealth tax as French citizens happily pay every year with no other social disorder than the recurrent demonstrations that define our art de vivre. But here, the beauty of the extreme monetisation we are going through now is twofold.

On the one hand, assuming that inflation does not shoot up in Zimbabwean cosmic proportions, current inflation in asset prices – lifted thanks to central bank monetisation - will pay for the risk of a wealthm tax tomorrow. Moreover, should we go back to Mesopotamian times with a write-off of debt and a big celebration, banks would have rebuilt some of their balance sheets in the meantime, too.

On the other hand, if indeed inflation explodes and if the value of money vanished with the complete obliteration of the creditors, the Kings of the Galapagos will end up with the one and only thing that has a real value: an equity share, such as a  property right on the means of production. Let me quote what Harold Demsetz writes in Toward a Theory of Property Rights: “[…] an owner of property rights possesses the consent of fellowmen to allow him to act in particular ways. […] Property rights convey the right to benefit or harm oneself or others. [They] specify how persons may be benefited and harmed and, therefore, who must pay whom to modify actions taken by persons." This goes without saying that this holds true in the first scenario too: property power is social power, and social power is all what matters.

This is why the Kings of the Galapagos are long equity under (mild) Mugabenomics. This goes way beyond the so-called put of the central banks, which are there to support asset prices. Yesterday, the multibillion hedge fund Brevan Howard said on Reuters:  "Having faith in policymakers' ability to provide a perpetual put may yet prove to be a serious error.

"Tail riskswhich have haunted the markets for the last five years, appear to have receded for the time being, but have by no means disappeared."

Yes indeed, I agree with Brevan Howard: the risks have not disappeared. But if so, why assume an end of the central banks’ put?

Well, the central banks could turn their backs on Keynes, become Austrian and raise interest rates in a world of sub-par growth and massive debt. Really? Would they? Having a constant faith in the put of the central banks proved a mistake when the system was within boundaries.  But as figure 3 suggests, boundaries have been broken and policymakers are in uncharted territories, or rather territories rarely revisited since Mesopotamian times. 

Figure 3: How a complex system evolves during a crisis

 complexity during a crisis

Source: Journal of Futures Studies, Feb. 2007, 11(3),:29-46. BestFutures©, Duncan & Graeme Taylor


Indeed, with 46 million US citizens on food stamps and the unemployment rate in some European countries equal to what was seen during the Great Depression, boundaries have clearly been broken. This is not a put, this is a blatant admission that we are at the end of the road,. For example, a major bifurcation. Calling an end to the put of the central banks is moving from (mild) Mugabenomics to MadMaxnomics. This is what figure 3 shows: we are smack in the middle of this bifurcation, If (mild) Mugabenomics goes along with structural reforms, we can hope to move to a world of greater complexity and evolve. If not, there is still the fragmented scenario, which, unfortunately, has not a zero-probability.


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Fri, 03/22/2013 - 21:07 | 3364598 maxmad
maxmad's picture

Hey I made the Headlines!!

Fri, 03/22/2013 - 21:15 | 3364623 Western
Western's picture

Sorry only Forbes, NYT, Atlantic, and The Economist count.

Fri, 03/22/2013 - 21:31 | 3364662 AlaricBalth
AlaricBalth's picture

Link to BCG's "Back to Mesopotamia".

Fri, 03/22/2013 - 21:45 | 3364694 francis_sawyer
francis_sawyer's picture

Figure 3: How a complex system evolves during a crisis


It looks like a goddamned SPERM!...

Fri, 03/22/2013 - 21:51 | 3364716 Fedaykinx
Fedaykinx's picture

would be nice if we could actaully read the text on the image

Fri, 03/22/2013 - 21:58 | 3364730 francis_sawyer
francis_sawyer's picture

It's written in some kind of ancient Aramaic pig latin... It says "umanityHEY ihZAY verpricedOYEH ~ ibonnachiFEY raceTRAY innentIMEY"...

Fri, 03/22/2013 - 21:59 | 3364737 toys for tits
toys for tits's picture

Figure 3. It's still small but you can blow it up.

Fri, 03/22/2013 - 22:05 | 3364754 francis_sawyer
francis_sawyer's picture

Oh thanks ~ I can see it better now... It says "kito ~ THERE'S A SALE AT PENNYS!"

Fri, 03/22/2013 - 22:46 | 3364836 knukles
knukles's picture

Thank God for sane people. 
I thought it said "There's a sale at Penis."

Silly me...



Fri, 03/22/2013 - 23:35 | 3364914 flacon
flacon's picture

Did you hear about Bernankie's mission to the sun?

How you ask?

He plans to go at night.

Fri, 03/22/2013 - 22:08 | 3364757 AlaricBalth
AlaricBalth's picture

See page 13 of this link from the original in the Journal of Future Studies. Clear as day.

Sat, 03/23/2013 - 15:21 | 3366328 He_Who Carried ...
He_Who Carried The Sun's picture

"The Western World" is not bancrupt.

Governments and a few states are, but not the populace...

Fri, 03/22/2013 - 22:15 | 3364769 Better_late_tha...
Better_late_than_never's picture

It looks like a sperm, because we all got fucked.

Fri, 03/22/2013 - 21:13 | 3364617's picture

Can I eat the crops from my old farmville account yet?  Or at least trade them for some sweet bitcoins?

Fri, 03/22/2013 - 21:15 | 3364621 knukles
knukles's picture

Goddamn it Tyler!
I was hoping for no bedtime Ativan and Thorazine enema tonight...




Fri, 03/22/2013 - 21:15 | 3364622 Hedgetard55
Hedgetard55's picture

Fucking moolies. You can take them out of the fucking jungle but you can't take the jungle out of them.


Fucking Jews. You can take them out of Egypt and the fucking wilderness, but you can't take the fucking money grubbing out of them.

Fri, 03/22/2013 - 21:18 | 3364631 knukles
knukles's picture

So I take it you're not a follower of Rousseau's construct of the Nobel Savage?

Fri, 03/22/2013 - 21:52 | 3364720 Fedaykinx
Fedaykinx's picture

i see what you did there.

Fri, 03/22/2013 - 23:00 | 3364838 knukles
knukles's picture

Some sneaky shit, huh?
Yeah, yeah it's cultural.


Look, I didn't name the fucking theory, some sensitive Frenchie didn't do that himself.

Fri, 03/22/2013 - 21:18 | 3364632 kito
kito's picture

@hedgetard---youre an embarrassment to humanity...............

Fri, 03/22/2013 - 21:22 | 3364644 Hedgetard55
Hedgetard55's picture



     Thank you, brother.

Fri, 03/22/2013 - 22:11 | 3364761 pods
pods's picture

If you really think about "humanity" it really is quite a compliment.


Sat, 03/23/2013 - 11:16 | 3365468 Kirk2NCC1701
Kirk2NCC1701's picture

Spock tells me that he finds the Up/Down arrows to Kito quite telling: strong response, split community.

So, long 'lively debate'? Kirk out.

Sat, 03/23/2013 - 12:01 | 3365574 akarc
akarc's picture

And therein lies the real reason I own guns.

Fri, 03/22/2013 - 21:21 | 3364639 Hedgetard55
Hedgetard55's picture

My Viking ancestors were right. Kill them all and let Odin sort them out.

Sat, 03/23/2013 - 11:20 | 3365478 Kirk2NCC1701
Kirk2NCC1701's picture

And what happened to these ancestors/Vikings? How enduring was their world view and business model? Oh, I forgot... they were the ultimate socialists, but with weapons.

Sat, 03/23/2013 - 12:28 | 3365654 tarsubil
tarsubil's picture

Viking is a verb not a noun. You "go viking"; you are not a viking. A bunch of priests going against God hoard gold in their abbeys oppressing the people around them. Yeah, those men that went viking weren't the nicest but it is a clear lesson that hoarding wealth, especially stolen wealth, without the means to defend it leads to bad things. How did the men that went viking turn out? Well, the Danes that migrated to eastern Britain and settled down to farms contributed to the local culture and had a part in two of the biggest empries since, the British and the American. Not bad.

Sat, 03/23/2013 - 01:43 | 3365004 mean divergent
mean divergent's picture


Sat, 03/23/2013 - 01:40 | 3365006 mean divergent
mean divergent's picture

Fucking white guys.  You can take the togas off them, but you can't get them to quit fucking everybody in the ass.  (-1 for me from all you white ass-fuckers out there)

Sat, 03/23/2013 - 12:04 | 3365581 akarc
akarc's picture

Proof that the enemy is not evidenced on skin color but on ignorance

Sat, 03/23/2013 - 14:32 | 3365566 akarc
akarc's picture

So Hedgetard. Just where did you get your ligthting bolt tattoos? And please don't tell me you work in a bakery! 

Fri, 03/22/2013 - 21:16 | 3364628 kito
kito's picture

 we can hope to move to a world of greater complexity and evolve........


speak for yourself son.........greater complexity is EXACTLY why the world is in this mess.....................ONLY when this complexity (ie--derivatives that nobody understands, health care and tax laws that nobody understands......etc, etc) ENDs, will we all move forward and evolve...................................

Fri, 03/22/2013 - 21:20 | 3364641 knukles
knukles's picture

A repost but none the less; do you realize that the Second Law of Thermodynamics suggests that evolution as professed by modern scientists (sic) suggesting greater order and advancement is in error?
The Second Law suggests that the universe tends toward decreasing order as opposed to the statist, socialist dream.... so there really should be no surprise as to the trends becomingly increasingly irrelevant with respect to man's survival. 


Just thought I might cheer up everybody's day a bit.

Disintermediation Bitchez!

Fri, 03/22/2013 - 21:24 | 3364648 Hedgetard55
Hedgetard55's picture

+55 million.


Only the arrogant scientist can possibly believe in Darwinism, which defies all common sense, logic, and science.

Fri, 03/22/2013 - 21:36 | 3364677 Urban Redneck
Urban Redneck's picture

Not to dumb down Darwin too much, but evolution (survival of the fittest) is no longer applicable to a species once it starts employing technology to prolong life and increases the reproduction of "inferior" specimens, i.e. the explicit revocation of survival of the "fittest".

Fri, 03/22/2013 - 21:47 | 3364703 knukles
knukles's picture


Like spectacles!
Everybody who's blind as a bat without glasses would have been eaten by the bankers or whomever, run over by the proverbial bus, starved as unable to either work or scavenge in garbage bins, humongoliod gatherings such as conventions or political entities would not be able to exist as everybody'd get lost on their way to or from, and the guy with only one eye would be King.

The advent, the introduction of technology defeats the entire premise of the original "theory".

Fri, 03/22/2013 - 21:55 | 3364721 prains
prains's picture

"Think of all the peaches and mangos you could sell for me" _ Frank Ocean

Sat, 03/23/2013 - 08:29 | 3365196 new game
new game's picture

the laws never changed, just the time horizon

s.t. yea(fooled again)ha, but longer, ha, you gonna tell jamama is the supperior outcome-lmfao.

Sat, 03/23/2013 - 08:33 | 3365202 prains
prains's picture

it's "supper"ior rhetorironical my friend

Sat, 03/23/2013 - 07:24 | 3365153 Tango in the Blight
Tango in the Blight's picture

Watch "Ideocracy" to see where it goes.

Sat, 03/23/2013 - 08:47 | 3365213 dark pools of soros
dark pools of soros's picture

People misspell that movie more than they butchered old Gadaffy's name, rest his soul

Sat, 03/23/2013 - 12:17 | 3365617 akarc
akarc's picture

"It is not the strongest of species that survives, nor the most intelligent. It is the one most adaptable to change" Charlse Darwin.

Somebody made alot of money making glasses.

Fri, 03/22/2013 - 21:53 | 3364705 francis_sawyer
francis_sawyer's picture

I always thought the next 'quantum leap', you know, evolutionary 'monolith' [2001: A Space Odyssey] moment would occur when we stopped buying khakis from Jos A Bank...

Fri, 03/22/2013 - 21:54 | 3364726 kito
kito's picture

what about those cashmere v necks from BANANA REPUBLIC?????

Fri, 03/22/2013 - 22:02 | 3364747 francis_sawyer
francis_sawyer's picture

'High Fashion Douchebag' is out of my budget... I'm scaling back to military duds...


But chicks in New York are paying top dollar for this garbage...

Fri, 03/22/2013 - 22:31 | 3364797 francis_sawyer
francis_sawyer's picture

$35 bucks to look like the fucking black Marlin Perkins?


I'd rather join the Army & get to shoot all the ammo I want at live targets for free...

Sat, 03/23/2013 - 01:09 | 3364983 GoinFawr
GoinFawr's picture

"Dressed up like a million dollar trooper; trying hard to look like Gary Cooper...SuperDuper!"

Sat, 03/23/2013 - 05:15 | 3365110 StychoKiller
StychoKiller's picture

The point A Clarke was trying to make was that Humanity has to leave the cradle (Earth).

Sat, 03/23/2013 - 07:29 | 3365155 Dugald
Dugald's picture

Leave Earth? go forth into the universe taking our corruption and fucking over who ever we meet out there......better we stay here and wipe ourselves out.....

Sat, 03/23/2013 - 08:32 | 3365200 Anonymous peon
Anonymous peon's picture

We will. Humans aren't responsible enough to have the technology we are developing. It will be our undoing.

Sat, 03/23/2013 - 08:34 | 3365203 booboo
booboo's picture

"Leave Earth? go forth into the universe taking our corruption and fucking over who ever we meet out there......better we stay here and wipe ourselves out"

Correct, now deal with it. Space travel with the ends of finding other planets that will sustain man is a pipe dream as big as the expanse. The best we humans can do is sit still in a geosynchronous orbit around the earth and take photos. The entire "space program" is designed around the military and the race to dominate the space above another country with the ends to dominate the lifeforms under that space. But fooling the sheep into thinking there are a whole host of planets with perky virgins waiting to be plugged has kept hollywood makeup artist busy for years. It pays huge dividends for the government to keep the sheep thinking this way. NASA is just another Krugmanite wet dream, a black hole money pit run by the military. Wake the fuck up space tards, you ain't going "where no man has gone before" but the grave and the only transporter that will disassemble your molecular structure is the crematorium. Love your fellow man as yourself and you get them molecules put back together some day. 

Sat, 03/23/2013 - 08:58 | 3365220 dark pools of soros
dark pools of soros's picture

Actually it would be fun to be on the second trip to planet X since you'd have better tech and actually get to Planet X before the first travellers and can moon them as you zip by...until later on in the trip when the third trip passes you by

Sat, 03/23/2013 - 12:22 | 3365633 akarc
akarc's picture

Ya may wanna rerun the numbers and figure in the industries and jobs NASA has created. You may even wish to consider the computer you are using.

Sat, 03/23/2013 - 14:00 | 3366044 booboo
booboo's picture

First of all NASA did not nor does anyone "create" shit, they can re-assemble shit already in existance. Second, they are a govenment agency that directs stolen wealth towards the biggest lobbist in a particular field that hires smart folks to do the shit they are told and along the way and trip over a better idea once in a while and third, I see you have drank the Tang on "all the shit that would never have been discovered if it were not for NASA" since there is no possible way to replicate a vacuum at sea level right? 

Sat, 03/23/2013 - 14:07 | 3366068 akarc
akarc's picture

"First of all NASA did not nor does anyone "create" shit, they can re-assemble shit already in existance."

Therefor creativity does not exist and my Hoover does not work. 

Sat, 03/23/2013 - 08:51 | 3365216 dark pools of soros
dark pools of soros's picture

Or maybe wipe out the type you describe

Fri, 03/22/2013 - 22:03 | 3364750 pods
pods's picture

On the whole, you are correct, but along the way there are spectacular failures.

Just because you have access to building great technological devices, the critical thinking needed to use them is many times quite lacking.

For example, the kids who tried to fire the frog out of the potato gun, only it didn't ignite.

Well, until one budding biologist decided to check and see how the frog was doing.........

As Neal Boortz said:  "That frog musta hit him at about 90 miles per hour."


Sat, 03/23/2013 - 12:25 | 3365645 akarc
akarc's picture

"Just because you have access to building great technological devices, the critical thinking needed to use them is many times quite lacking."

Therein lies the problem and the solution. Though I have little hope the solution will be applied. Most especially at governmental levels.

Fri, 03/22/2013 - 22:13 | 3364765 Lednbrass
Lednbrass's picture

Depends on how long such a period lasts. It's quite possible that what we see now has little in the way of long term viability and there is a reasonable chance that survival of only the very strong in the harshest most natural terms is on the horizon.

Fri, 03/22/2013 - 22:18 | 3364777 Monedas
Monedas's picture


Sat, 03/23/2013 - 12:32 | 3365665 tarsubil
tarsubil's picture

Totally wrong. Darwin's evoluation was vertical but the general concept of promotion of the fittest (not strongest by the way) also applies to horizontal evolution of pre-Darwinian life or the modern cultural evolution of man.

Fri, 03/22/2013 - 23:03 | 3364873 Tunga
Tunga's picture

Violating the laws of thermodynamics is a victimless crime 

Sat, 03/23/2013 - 10:54 | 3365438 spentCartridge
spentCartridge's picture

The old laws of physics have now become irrelevent...


Apparently, just a touch after big bang, everything accelerated beond C and therefore, if it can happen once, it is the standard.


Conclusion: time travel is real.



Sat, 03/23/2013 - 11:35 | 3365499 Kirk2NCC1701
Kirk2NCC1701's picture

Christ, not another C student, with partial knowledge... to snow or impress the rest! You CAN have increased Local order, but at the expense of increased overall entropy.

But let's get back to the main topic, and not hijack the thread with 'How many angels fit on a pinhead' debate.

Sat, 03/23/2013 - 13:47 | 3365992 Tunga
Tunga's picture

"You're gonna need a bigger calculator!" - Orion
Tunga put's another notch in his belt.  

Sat, 03/23/2013 - 15:08 | 3366280 Drachma
Drachma's picture

REJOINDER: 99.999% of the universe is composed of plasma, that is matter in the form of ionized gases. As any plasma physicist will tell you, plasma instabilities following very simple electromagnetic force rules, exhibit very complex dynamics and in fact can tend toward higher orders of complexity as the discharge phenomena proceed, current density being a prime mover. Plasmas form cellular boundaries between plasmas of differing temperature, voltage, ion density and profile. Every star and galaxy you see in the sky is a plasma, as is every atom and sub-atomic particle in your body and they are fractally ordered into bound levels of increasing complexity (i.e. sub-atomic particles, atoms, molecules, stars, galaxies, galaxy clusters, super-clusters, etc.). All this increasing complexity does not necessitate a violation of the Second Law of Thermodynamics. It all depends on your cosmology. One must check one's assumptions and theories based on those assumptions. Of course this is not to say the Second Law is necessarily inviolable. And of course this is not to say that Darwinian Evolution is possible just because the universe tends to increasing complexity. Remember, they are just theories, and imperfect ones to be sure. Cheers.

Sat, 03/23/2013 - 00:46 | 3364968 seek
seek's picture

Nassim Nicholas Taleb's Antifragile pretty much revolves around this. It isn't complexity per se that's making the world a mess, but TPTB's fanatical obsession with control and centralization that end up building systems (be it financial, social, political, you name it) that are pretty much bound to fail; once they reach a certain level of complexity, pretty much any change will break them. Hence the fixation on the status quo.

We don't need a world that's more complex. Evolution is much more about dynamic adapations, fitting the problem and tolerating change than it is about migrating to more complex, brittle systems. We need a world that is, in NNT's terms, more antifragile, e.g. decentralized, free, and open.

Sat, 03/23/2013 - 05:17 | 3365111 StychoKiller
StychoKiller's picture

Rube Goldberg FTL(ose)!

Sat, 03/23/2013 - 05:18 | 3365112 Poor Grogman
Poor Grogman's picture

The fixation on the Status quo is a fixation on economic numbers that are increasingly irrelevent to most people because they are not leading to a better standard of living or better future prospects. In fact the numbers have been so fudged misused and manipulated that they are starting to be viewed even by the sheeple as contrary indicators.

More GDP. = More debt
More "stuff" = Less jobs
More education = lower prospects
More $$$. = Less purchasing power
More food. = Less nutrition

The decline of our civilization caused by the impossibility of accurate economic calculation, the misallocation of resources, and the outright theft of wealth caused by inflation, is being masked by our fixation on the status quo.

It's a bit like watching reality TV while your house burns down...

Sat, 03/23/2013 - 08:41 | 3365206 Temporalist
Temporalist's picture

Shut the fuck up and go buy the new AAPL iWatch that will revolutionize...ummm...watching watches or something.  Do your part and spend you selfish bastard!

Sat, 03/23/2013 - 11:19 | 3365473 GoinFawr
GoinFawr's picture

I thought Casio already made those things in the 80's? Coveted by dorks everywhere.


"It's more fun to compute..."

Sat, 03/23/2013 - 12:15 | 3365611 DanDaley
DanDaley's picture

When it comes to complex societies, it's not too big to fail, but rather too big to survive -the law of dimisishing returns comes more and more into play the more complex and interconnected we become -too much neergy is needed to sustain it.


Check out Joseph Tainter's The Collapse of Complex Societies for a look at 20+ civilizations that got too big for their britches and hence bought the farm.

Fri, 03/22/2013 - 21:17 | 3364629 q99x2
q99x2's picture


I was sort of hoping for an asteroid strike.

Fri, 03/22/2013 - 21:19 | 3364636 THE DORK OF CORK
THE DORK OF CORK's picture

But the system cannot the money is not tokens without interest .... it is double entry assets.


There is not much wealth remaining............the "assets" have destroyed it all ,leaving nothing for the workers in the fields as when you haircut debt you reduce the token money supply also......


The farmers therefore cannot hire labour as there is no token money supply.


Soon we will have crop failure.


The current dynamics is in fact very different from Mugabenomics

Sat, 03/23/2013 - 09:39 | 3365287 dark pools of soros
dark pools of soros's picture

The farmers can birth more workers like the old days and get their kids back in the fields

Sat, 03/23/2013 - 12:33 | 3365672 akarc
akarc's picture

Bullish for forced labor.

Fri, 03/22/2013 - 21:22 | 3364642 sitenine
sitenine's picture

"This is what figure 3 shows: we are smack in the middle of this bifurcation, If (mild) Mugabenomics goes along with structural reforms, we can hope to move to a world of greater complexity and evolve."...

WTF, it's Friday..

For those of us with a few beers downed already, Figure 3 shows exactly what again?

Sat, 03/23/2013 - 09:47 | 3365297 dark pools of soros
dark pools of soros's picture

It shows how you perceive your chances of getting laid as you drink more and more tonight

Fri, 03/22/2013 - 21:23 | 3364647 ronaldawg
ronaldawg's picture

Wow - what a bunch of Gobbledygook - can we have this in English please - also can't see Figure 3.

Fri, 03/22/2013 - 21:51 | 3364715 francis_sawyer
francis_sawyer's picture

You must have a sophisticated web blocker activated because Figure 3 looks like a giant sperm...

Sat, 03/23/2013 - 01:25 | 3364997 ronaldawg
ronaldawg's picture

I can't see the writing which is probably the justification of the spermy thing.

Fri, 03/22/2013 - 21:24 | 3364651 chubbar
chubbar's picture

I guess I've had too much wine. I didn't understand the point he's trying to make, he sounds smart though. Anyone out there who speaks plain english want to unpack this for me? Thanks in advance!

Fri, 03/22/2013 - 21:34 | 3364670 Burr's 2nd Shot
Burr's 2nd Shot's picture

Gold, bitchez!

At least, that's what I got from it.

Sat, 03/23/2013 - 07:56 | 3365167 Pegasus Muse
Pegasus Muse's picture

Guglietta argues equity holders will be saved:

".... if indeed inflation explodes and if the value of money vanished with the complete obliteration of the creditors, the Kings of the Galapagos will end up with the one and only thing that has a real value: an equity share, such as a property right on the means of production."

What he fails to address is the established Pecking Order in the event of bankruptcy: secured creditors get paid first, then unsecured creditors, and then equity holders. Equity holders take the highest risk and get wiped out first.

What am I missing here?  That Kings are Kings and, as such, are 'entitled' to make up their own laws as they see fit .... like O'blamer does right now?  lol

Sat, 03/23/2013 - 08:45 | 3365209 new game
new game's picture

short version; he or she who holds the property rights to future production has the where with all to keep you ass sub servant.

but, i add, you must have force to do this as the majority are not going to like this outcome and will loose most everything they cherish right now. We are moving along this decent via standard of living decrease, but there is a point when it becomes unbearable relative to your lifetime of existence(inflation and unemployement facts).  that point is fast approaching.  the weight of servicing this scheme is too large a burden to pay by even the serfs created by this game of money terror as witnessed in a small country way over there.

he stops short of the chaos that will ensue.


Sat, 03/23/2013 - 09:06 | 3365229 new game
new game's picture

the war on money terror

defined: money terror is bankster/government/c.b. created debt holding major populations of people against their free will to liberty.  they use the ultimate power of force (police power of arrest at gunpoint) to keep this regime in tact. Non compliance is certain to be met with force. ie. tax avoidance.

the best way to offset this force is to withhold your money from this system. the risk and hassle is dealing with the safegard of your assets whether it be cash, gold or anything you value.

otherwise you are just part of the system they use to control you.

the wake up call has yelled to you, get your assets in your physical possesion or be subject to this terror as witnessed unfolding around the world by ever increasing narcissistic psycos.

and what i suggest is all legal and within the current laws...

Sat, 03/23/2013 - 11:46 | 3365529 Kirk2NCC1701
Kirk2NCC1701's picture

Allow me to summarize what you said, like this:

Q: What's the difference between Central Banks and a counterfeit money operation?

A: Only one of them is backed by force (police, military).

Fri, 03/22/2013 - 22:02 | 3364745 formadesika3
formadesika3's picture


-- To ensure a socially acceptable sharing of the burden, politicians would no doubt decide to tax financial assets only above a certain threshold -- E100,000, for example.

 Back to Mesopotamia, Boston Consulting Group August 2011


Fri, 03/22/2013 - 22:46 | 3364835 HD
HD's picture

"I didn't understand the point he's trying to make"

   You didn't miss anything new. His point (which we've read on ZH 1001 times) is that the central bankers have to print and will print until it all blows up.

Sat, 03/23/2013 - 11:53 | 3365550 Kirk2NCC1701
Kirk2NCC1701's picture

Close. I up-arrowed you in my haste, till I realized that their true purpose is to control the money supply (row the economy), so that they and their close cohorts become rich & powerful.

/But what do I know. Should've asked a Rothschild first, if this aligns with their Strategic Vision. /sarc

Sat, 03/23/2013 - 12:40 | 3365696 akarc
akarc's picture

And when you control the money you control the people. That is the end game. And judging by the peoples reaction to date it would appear being a slave is just okey dokey by them.

Fri, 03/22/2013 - 21:30 | 3364658 Moe Hamhead
Moe Hamhead's picture

Is this an economics lesson or sex education, I'm confused by figure No. 3?

Fri, 03/22/2013 - 21:39 | 3364685 knukles
knukles's picture

That's the illustration for the girl's sex ed class warning them of the increased danger of pregnancy which follows from the little holes made whilst gnawing upon their diaphragm in moments of intense boredom. 

Fri, 03/22/2013 - 22:06 | 3364755 pods
pods's picture

Pure gold knuk!


Fri, 03/22/2013 - 21:31 | 3364660 Paracelsus
Paracelsus's picture

Funny,a few writers have mentioned this. The point where propaganda breaks down.

I would still like to see the CDS breakdown on Cyprus.

I have this annoying feeling some hedge fund is gonna clean up on this one. 

Fri, 03/22/2013 - 21:42 | 3364692 knukles
knukles's picture

If Goldie bought the CDSs it'll get paid in full. (ref: AIG)
If Goldie wrote the CDSs it'll be deemed not quite bad "enough yet"* to be considered an event of default as there still remain peasants to enslave.


* Hunter S. Thompson referring to weirdness.

Sat, 03/23/2013 - 04:21 | 3365088 chindit13
chindit13's picture

I'm a broken record, but CDSs do not impact all things all the time.  Cyprus never drew much interest in that way, so the gross notional of CDS written against the sovereign paper is $2 billion.  On the banks in total it is a rounding error in relation to the $130 billion of deposits.

Cyprus is an asset-liability mismatching problem, which will become a sovereign problem.  CDSs are immaterial in this instance.

Sat, 03/23/2013 - 12:10 | 3365592 Kirk2NCC1701
Kirk2NCC1701's picture

Ok, I'm game to explore this to lower than a 30,000 feet view.

And these 'assets', were they not Greek bonds (debt!)? And did GS not sell their toxic sludge to Greece? While cooking Greece's books and help them get into the EU?

Until proven otherwise, I contend that they ended up with 'Crap' that links back to MBS/CDS era. After all, that Ponzi had to be unwound and disposed somehow. A la W.C. Fields: "There's a sucker born every minute."

Sat, 03/23/2013 - 22:24 | 3367493 aka_ces
aka_ces's picture's_a_sucker_born_every_minute

=> "'There's a sucker born every minute' is a phrase often credited to P. T. Barnum (1810–1891), an Americanshowman. Though this phrase is often credited to Barnum, it was actually spoken by a man by the name of David Hannum."


Fri, 03/22/2013 - 21:33 | 3364661 nmewn
nmewn's picture

Here we go again...

"...the island is the black hole of the black economy where illicit activity makes almost 30 percent of total GDP!"

What illicit activity? Are they slavers, eating babies? What?

"Do not say the ECB and IMF opened Pandora's box. They just asked Cypriots to pay what should have been paid in the first instance."

You are saying a popularly elected, "democratic" government promising trinkets and baubles to maintain power eventually has spending problems that has some impact on its own sovereignty? Who knew?

"It is an insult to common decency to ask European taxpayers to pay the bill for the national sport in Cyprus: the non-payment of VAT, social contributions and income tax,..."

Its an insult to the people of Cyprus to impose all of that from far off Brussels, don't you think?

"...and recycling of criminal money that has lifted the real estate, hospitality and tourism industries."

One would assume an indictment (of some description) has been unsealed by the EU against these "criminals"?

No? Why not?

Fri, 03/22/2013 - 21:41 | 3364691 Burr's 2nd Shot
Burr's 2nd Shot's picture

Thanks, the "they're all criminals so stealing their shit is ok" meme is both tedious and false. Writ large, it encourages all manner of theft by those who control the definition of "criminal".

Fri, 03/22/2013 - 22:08 | 3364758 pods
pods's picture

If anyone needs clarity, see US "civil forfeiture laws."


Sat, 03/23/2013 - 06:43 | 3365137 Dane17
Dane17's picture

Amen brother, that propaganda stopped passing the sniff test real quick.

They are simply declared criminal in the newspaper therefore lose all right to due process. One can say with certainty that not everyone with Cyprus bank savings is a criminal.

Sat, 03/23/2013 - 15:15 | 3366308 dark pools of soros
dark pools of soros's picture

They're not criminal just foolish.. There is no Rule of Law white knight to save anyone outside of commentator fairy tales

Banks are insolvent AND give shit interest so what the fuck is your money doing in there?

Fri, 03/22/2013 - 21:45 | 3364700 Urban Redneck
Urban Redneck's picture

He just doesn't want his poor little overpaid banker buddies to take a haircut on their worthless monopoly money positions.

As much time as I spend in Africa I didn't realize that Mauritania (north of my stomping grounds) didn't even nominally abolish slavery until 1981, too bad the Cypriots are so far behind the times. 

Fri, 03/22/2013 - 23:20 | 3364899 Broomer
Broomer's picture

And Mississippi nominally abolished slavery in Feb 7th, 2013.

Sat, 03/23/2013 - 01:07 | 3364986 Urban Redneck
Urban Redneck's picture

Residents of Mississippi pay federal taxes and subjugate themselves before the IRS, EPA, FDA, OSHA, etc. So I'm pretty sure slavery has been illegal in Mississippi since at least December 1865.  But for them to have fucked this up again in 1995 really doesn't speak well to their indigenous capacities.  The again Obama doesn't like talking about what his rich Luo grandfather (who only died about the time Mauritania abolished slavery) was doing in Zanzibar all that time.  

But that is really damn funny nonetheless.

Fri, 03/22/2013 - 22:00 | 3364743 gwar5
gwar5's picture

Yeah, the bit suggesting Cypriots deserved to be treated like shit was pretty haughty. Like the author never heard of DSK, the Libor Fix, HSBC drug money, or MF Global stealing client money, to name a few.


The whole point of the article seemed a little dated anyway. We know we are in a Depression, we know it's being covered up. We know we have not seen the worst, and we know when we emerge on the other side it will not be the same. Probably worse.


Fri, 03/22/2013 - 22:41 | 3364822 nmewn
nmewn's picture

gwar, I'm constantly amazed at how easily a meme can take root...a black hole for "criminals"

Hell, they're in the EU!!! Wasn't the whole idea of a European Union just to have one common currency and NO concern of one sovereign law? Well, you got it.

Now what does this say about the standards and motives of membership into the EU? It was all fine and dandy for "criminals" to be propping up the economy until someone (Brussels?) forced Cyprus to purchase Greek debt.

So who are the real "criminals" here now, when the EU/IMF turns on Cypriot fruit vendors to make good on EU obligations? 

Dear God lets protect "the core" makes me sick...different century, same shit.

Sat, 03/23/2013 - 06:04 | 3365129 Ghordius
Ghordius's picture

the whole idea of an European Union was alway on the basis of a Trade Zone, first. on this, ever the Brits agree and had a referendum on it in 1975

on top of it, a shared, common ministry to manage this Trade Zone - this is the commission, the 30'000 civil servants, and the budget financed by the sovereign partners, you know, the "merry gangs" with armies, treasuries, taxes, police and secret services that go under the name of Finnland or Denmark or Hungary or Poland etc

still in the Trade Zone Admin mode, several scopes were given per treaty to Brussels, including agricultural subsidies, some products oversights etc. and one function: to serve as the continental sewer for lobbyists - ours and the US ones - the same function that is done by Washington the city in the US, the other, way bigger Cloaca Maxima of this planet

then, in the realm of diplomacy, Brussels has the facilities for summit meetings - which are institutionalized as Council Meetings so that we are sure we don't get moments again where our dear idiot leaders don't talk to each others "because you know he said I'm fat and she said I'm unfuckable" because when we europeans meet it's like hillybillys clans capable of holding grudges for ever (myself I just had to hear criticism of something that happened in the 16th century)

it's a bit like we force them in a meeting cage - "you are the Prime Minister and you will shake the Mrs. President's hand and will have a civilized meeting"

there are other details, nevertheless please do note the confederative setup: it's a group of peers - not a capital of capitals, king of kings, government of governments hierarchical setup


the common currency is a different matter - and a different club, with different members


as usual, when some talk about sovereign I just wonder if this word means something different in American English. Cypriot Banking is done according to Cypriot Law. WTF do you mean with "Wasn't the whole idea... to have ... NO concern of one sovereign law?"

The whole thing is about which Cyprot law will be done by the Cypriot parliament, elected and empowered to make laws by the Sovereign People of Cyprus

You are feeling the issue as a Common Law concern - which is a tradition. Which again is a way of thinking, if you want, a cultural thing. To be seen how much Cypriots, after gaining independence from the UK in 1960, still feel and act this way

I think yes, but we will see

Sat, 03/23/2013 - 08:43 | 3365208 nmewn
nmewn's picture

"...the whole idea of an European Union was alway on the basis of a Trade Zone, first."

Well, hows that working out anyways? By all appearances what they enjoy most is trading huge amounts of debt...kinda like playing the game of hot potato, only by elites.

But lets stick our heads down the rabbit hole here and look around in the corners.

Did or did not Cyprus (I'll say in the name of unity & fraternity to be generous, but we know different) take a haircut of 4.5 billion euros on Greek debt? Was that debt purchased at the request of the EU "Trade Zone" in the first place?

The answer to both those questions is, yes.

So, the larger picture is this, within this "trade zone" where Cyprus was just rocking along, doing whatever they do, minding their own business, at the "request" of the EU they become entangled in Greek debt they did not create and now "criminal assets" have suddenly become an issue (when they were not just a few short years ago) when the EU was going door to door begging for bailout money for Greece.

Now, the Cypriot "man on the corner" was being asked (no, forced through an act of law) to subsidize the past actions of the Cypriot government and its banks, as well as the EU, & the IMF for their folly. Ethically and morally challenging to say the least.

Who was really "laundering criminal assets" here then, with the intent of committing yet another crime (by administrative, ministerial or managerial decree) while declaring it to be justifiable law? Now is the EU going to allow Russia onto "its turf" for basically nothing as the price for its own ineptitude? Was that the plan all along?

Ghordius, its as simple as this, debt, like cancer, must be eradicated or it spreads. You either refute it or pay it off, you don't add more cancer with the expectation it will kill the original.

Its certainly not charity.

Sat, 03/23/2013 - 14:00 | 3366032 akarc
akarc's picture

"Well, hows that working out anyways? By all appearances what they enjoy most is trading huge amounts of debt...kinda like playing the game of hot potato, only by elites"

Indeed it is. It's a freaking circle jerk we have been watching for years now as each country takes on the debt and then passes it on to the next country at the direction of Germany. It almost came full cycle when Cyprus looked to Greece for help???  The EU is failed it will not work because it is not working.

BUT, why does it continue and how come very little attention is being paid to U.S. Banks complicity in the whole mess??? It is only continuing because somebody is making big bucks off of every swap and move. And other somebodys afraid to go after the robbing/stealing somebodys (i.e. American banks subsidized by the taxpayer who has also paid a large amount of QE to bailouts in Europe) do everything they can do prop up a system that can not avoid the inevitable.

Goldman Sachs was in on this from the beginning and does anyone think that they still ain't playing.

I ain't link pimping here as I have not posted on this site since election day when I realized the futility of it all.  All this discussion of the EURO ZONE and little discussion of the complicity of the known criminal American banks and how when the shit hits the fan the American tax payer is gonna get hit with a skinhead haircut, the elite will have their assured chain of supplies guarded by mercenaries  and the scum bags that "we the People" elected with the help FEC vs Citizens United will continue to allow every liberty oppressing executive order stand because they have been paid to.  Anybody see anything different??? Cause I see an acceleration of events that is frightening and a populace that is blind.

I don't know about anyone else on this site but I don't hear anyone on the streets having these discussions pro or con. Do You???

Think about it, wholesale destruction of American values, assets, wages, rights by a corporate/governance alliance that allows world wide criminal acts without punishment and the "people" come home and watch "American Idol" or whatever your choice of a reality show that defines your reality may be.  

Whether I agree with an opinion on this site or not is no matter. I come here because people talk about it.  On the streets they avoid it.

The elephant in the living room is not cyprus or the EU. It is us. We won't hold no fucking body accountable. Not even ourselves!  

Sat, 03/23/2013 - 15:13 | 3366304 Creepy Lurker
Creepy Lurker's picture

"Whether I agree with an opinion on this site or not is no matter. I come here because people talk about it.  On the streets they avoid it.

The elephant in the living room is not cyprus or the EU. It is us. We won't hold no fucking body accountable. Not even ourselves!  "

I signed in specifically to upvote you for that statement. So many attribute this to simple stupidity. Not so. I know plenty of people who are intelligent enough to grasp the concepts. The ignorance is willful. Dealing with this would mean dealing with their own BS on a personal level as well a our BS on a collective level. They just don't want to do it.

Sat, 03/23/2013 - 01:15 | 3364890 Dr. Engali
Dr. Engali's picture

It's funny you said said that about being in a depression. I was in Walmart tonight at 8:30 and there was barely a soul there. I got what I needed and the cashiers were standing in the isle waving me in like an airplane on a runway. Meijer was the same way. Hell neither place had their greeters. It's really getting surreal how bad things are.

Sat, 03/23/2013 - 14:11 | 3366089 akarc
akarc's picture

In my neck of the woods the best time to hit Walmart is Fri or Sat night after the bars have closed. Oh my about surreal.

Fri, 03/22/2013 - 23:28 | 3364895 earleflorida
earleflorida's picture

@ gw5

my thoughts exactly. so, the cypriots and greeks were sponging off a system that they truly never thought from the onset would never, ever... benefit them! exactly!  other than, or except... for their european centrist [host or parasite?] counterparts taking liberty as tourist?

what was portugal thinking? ireland thunking?? c'mon!

the 'eu' had no peripheral sovereign integrity regarding these 'bait fish' wannabes from the beginning-- bringing such insignificant members on board with but a gaff-hook handshake and a filet knife readying their petite and virgin dorsal fin for morrows soup du`jour! this is no secret to the brussel crowd... indeed, knowing quite rightly, that the gig had a time-stamp all over this ill-gotten ruse!  the abbatoir is open for business!!!

one point is perfectly clear-- the emerging markets are now the avant garde, and china deserves rightfully so, to be at the head of the table. they've come along way baby, and seem to be on the proper glide path for fair and equitable prosperity!


Fri, 03/22/2013 - 22:38 | 3364816 indygo55
indygo55's picture

All good points. The EU and the politicians are just pissed they didn't get what they thought was their cut of the vig. On the side of course. Sarkozy and Gadaffi, LeGarde, Blair, Holland, etc,. they are all in on it. And so many more that make up the bullwork of the 10% that defend the 1%. The greedy bastards need whats coming. 

Fri, 03/22/2013 - 22:45 | 3364831 nmewn
nmewn's picture

Exactly right...and its been a long time coming.

Its going to be brutal.

Sat, 03/23/2013 - 06:48 | 3365139 Rip van Wrinkle
Rip van Wrinkle's picture

Why not?


Because the criminals are running the asylum, that's why not. See Ppandreou's mother's bank balance for further details,

Fri, 03/22/2013 - 21:51 | 3364714 l1b3rty
l1b3rty's picture

A beautifully civilized world, all dressed up in law n order like fake tits and lips

Fri, 03/22/2013 - 22:11 | 3364762 ramacers
ramacers's picture

the whole world is bankrupt and corrupt. next comes madmaxomics and then the blood. oh what a lustfull mix.

Fri, 03/22/2013 - 22:26 | 3364790 Monedas
Monedas's picture

They took the farmland from productive, thrifty, hard working white farmers .... and gave it to black, subsistence goat herders .... all the the UN money couldn't put it back together again !

Fri, 03/22/2013 - 22:28 | 3364794 buzzsaw99
buzzsaw99's picture

If (mild) Mugabenomics goes along with structural reforms, we can hope to move to a world of greater complexity and evolve. If not, there is still the fragmented scenario, which, unfortunately, has not a zero-probability.


Heh, the author misspelled "devolve".

Fri, 03/22/2013 - 22:30 | 3364798 JR
JR's picture

Fortunately, to explain Mugabenomics, we have a modern day practitioner who can be used for his many examples, himself able to transfer seized largesses from “one social group to give them to another social group” while proclaiming it prosperity and progress.

Here, from his incredibly important book – Where Keynes Went Wrong – Hunter Lewis identifies a few of these Keynesian-style paradoxes from (drum roll)…President of the United States of America, Barack Obama!

A.      Borrowing and spending is actually saving and investing! The President said that his first budget, which sharply ratcheted up borrowing and spending, ‘leads to broad economic growth by moving from an era of borrow and spend to one where we save and invest.’ (This budget is called ‘A New Era of Responsibility.’ It represents a step away from the culture of ‘instant gratification,’ ‘excessive debt,’ and ‘passing…[a] growing debt…on to our children.’ Stepped up spending and borrowing will ‘increase aggregate demand.’ This will ‘rebuild [the] economy, [not] on the same pile of sand, [but]…on a rock.’)

B.      ‘Deficits…helped cause…this crisis, [but bigger deficits will help solve it].’

C.      Government spending programs not deemed affordable prior to a slump become affordable during a slump.

D.     In order to reduce government spending on health care, it is necessary to increase that spending.

E.      More government spending is a reliable way to increase economic demand, but it will not increase demand (and thereby raise prices) in health care.

It should be noted, of course, that black and brown versus white is very much an esssential part of both the Mugabenomic and Obamanomic equations.

Fri, 03/22/2013 - 22:52 | 3364850 knukles
knukles's picture

Ain't it amazing?
And I'm/we're the ones tagged as racists.

"It should be noted, of course, that black and brown versus white is very much an esssential part of both the Mugabenomic and Obamanomic equations."

Sat, 03/23/2013 - 00:01 | 3364937 Joseph Jones
Joseph Jones's picture

Why does it take a (semi) black man to lie and rape you white people for you to notice you are being lied to and raped? 

For over a century these so-called "Jews" claim they descended from the residents of Palestine, and therefor this gives them legal right to Palestine which they renamed Israel.  Meanwhile 3.5M actual proven genetic descendants of Palestine (Abraham) live in a fenced ghetto prison and are barred from living and thriving where they and their forefathers were born.  That was OK. 

Now when a black guy feeds you blatant lies you show righteous indignation.  Suck it up, suckers! 

Sat, 03/23/2013 - 00:19 | 3364951 RSBriggs
RSBriggs's picture

You've got your history a bit wrong.  Israel was formed from Judea.  Jordan was formed from Palestine.  There are no legitimate Palestinians living on the west bank and never have been.  Please don't drink the kool-aide.... 

Sat, 03/23/2013 - 00:38 | 3364958 tickhound
tickhound's picture

"Legitimate" LOL.  Like the world should worry about which stupid human trick can prove he has some GAWD GIVEN GIFT?  gawd's chosen is a joke upon itself no matter who cries it.  I'm going with science.  Call me crazy. 

I think you sip the kool-aide.  Manifest Destiny.  lmfao. 

Sat, 03/23/2013 - 01:42 | 3365010 bunnyswanson
bunnyswanson's picture

Holding a grudge does happen.  Blame it on ADD.  Blacks, Jewish and others have very good reason to want to pound many of us into the ground and never look back. 

Sat, 03/23/2013 - 08:48 | 3365214 shovelhead
shovelhead's picture

Don't forget us blue assed bastards merrily scampering about our little English island when those fucking Italians showed up.

You let a few in and there goes the neighborhood.

Sat, 03/23/2013 - 14:22 | 3366121 akarc
akarc's picture

Pages ripped from the money changers rule book,

Ya see as long as we can keep them fighting each over race and ethnicity they will to busy to see what we are really doing.

(leaked from a secret meeting between Obama, Boehner and Cantor where they dined on russian caviar and smoked some fine weed brought to them with a little green from their banker friends)

Fri, 03/22/2013 - 23:00 | 3364866 nmewn
nmewn's picture

I swear JR, its like economic insanity has taken hold and is now the new normal.

If only we had a few more taxpayer funded meetings, conferences, blue ribbon panels, legislative votes and speeches with strongly worded statements and more hard pivots, combined with the citizenry rending of clothes & gnashing of their teeth, all our problems would be solved.

But thats just crazy talk ;-)

Fri, 03/22/2013 - 23:04 | 3364874 Dr. Engali
Dr. Engali's picture

No that's not crazy talk. In the new normal crazy talk is personal responsibility and fiscal conservatism.

Sat, 03/23/2013 - 01:32 | 3364967 GoinFawr
GoinFawr's picture

I know what you mean, every time I mention T Douglas' CCF (the all time North American champions of Fiscal conservatism), Norway (current worldwide reigning Champs), or call out the meritocrats of convenience that infest this site I get more down arrows than Ayn Rand smoked cigarettes.

Sat, 03/23/2013 - 13:31 | 3365915 akak
akak's picture

No, you get downarrowed for taking a HIGHLY selective, cherry-picked, isolated case such as Norway being currently relatively financially well-off due to their recent and temporary inflow of funds from the exploitation of their (now declining) petroleum reserves as some kind of "proof" of the fiscal prudence and wisdom of government central-planning and statism in general, when it is in fact only the exception which proves the rule.

Sat, 03/23/2013 - 15:51 | 3366226 GoinFawr
GoinFawr's picture

Hahah! truth sux for you and yours soo hard.

'Cherry picked''Highly selective'? So rich since evidence of the ol' glazzies highly suggests that's your dept. The content of my reply to Dr.E's comment was eminently relevant, so let's hear you refute the facts of it; either that or perhaps you ought to sit down, shut up and suck it. Just because most everyone else, including your bunch, has apathetically allowed practically everywhere else to be onerously corrupted doesn't diminish the unparalelled examples of past and present triumphs.

Yeah, and I wouldn't want to select examples that support my points, goodness gracious no; that's highly offensive to a violent zealot like yourself. Points of mine which, of course and as usual, you have entirely failed to grasp. Isn't it simply fascinating that no evidence, no matter how explicit or straightforward, can ever be accepted by you and yours unless it confirms the acute misapprehensions you useful idiots hold so dear as you strive to further empower the status quo?

Norway's SWF is shrinking dramatically? You'll have to pardon me if I don't take your word for it: fucking citation required, pal. Actually don't bother, just let me know when their national balance sheet gets to zero, let alone goes red. I've got money on my flank that says I'll be waiting a long time for that many years has it been since I first offered odds on that wager? Funny, no takers yet!

Yeah doopy, try 'exceptionally successful'; try CONcurrently well-off or improving in everything that matters (to anyone with a shred of decency, anyway); from social mobility to literacy rates to poverty rates to civil liberties to net (that's after taxes) median wage to access to reasonably priced high quality healthcare,etc. et fucking cetera, year after year after year. Consistency like that don't make it some 'one-off' pard, anymore than does the CCF's 17 surplus budgets.

And, let's face it, after all is said and done that's what really butt hurtz you and your malignant ilk: try as you constantly do, I still won't allow you self-serving statist hypocrites to ignore the present and historical facts that you so desperately want to avoid, misrepresent, and/or minimize.

Sat, 03/23/2013 - 15:58 | 3366415 akak
akak's picture

I'm sorry, did you say something?

Arrogant statists shouting bromides while squirming in their malignant hypocrisy always put me to sleep.

It's really a shame that you have nothing to contribute here except your bitter, freedom-hating bile and ragingly pro-Establishment statist nostrums.  "Stockhold Syndrome",almost quite literally.

Make that one more automatic downarrow for GoinNowhere.

Sat, 03/23/2013 - 16:14 | 3366428 GoinFawr
GoinFawr's picture

...and that's all you got, all you've ever had, and probably all you ever will have. Enjoy.

Unwitting capitulation accepted. Again.

Sat, 03/23/2013 - 16:26 | 3366520 akak
akak's picture

You think rather too much of yourself.

Having brushed away the buzzing insect, one does not give it further thought.

Sat, 03/23/2013 - 16:52 | 3366574 GoinFawr
GoinFawr's picture

That's so deep.

Still haven't come with a reason of how 17 surplus budgets is unimpressive? I'm not surprised.

 Or how about that citation confirming your assertion of Norway's imminent demise? 

"You are entitled to your own opinons, but not your own facts".

At least I can say I base my 'pet schemes' on the latter. So how do you sleep at night? On a giant bed of unmitigated 'freedom' or one of your other idiotically vague talking points?

Sat, 03/23/2013 - 17:13 | 3366658 akak
akak's picture


Tue, 03/26/2013 - 02:58 | 3375786 GoinFawr
GoinFawr's picture

Here, the FP has your angle down pat. lol

A mere 700 billion of deficit budgets to go... and they'll be at zero!

Boy yeah, they'd better watch out! I mean, preferring time with their families to work?  When will those crazed Norges ever get anything right?


Sat, 03/23/2013 - 08:54 | 3365218 shovelhead
shovelhead's picture

That has been crazy talk since the 60's Great Society was dropped on our heads.

From FDR onward it was merely wrong-headed thinking, not progressive and scientific.

Sat, 03/23/2013 - 08:51 | 3365215 Temporalist
Temporalist's picture

@nmewn You overcomplicate things.  All we need is Laura Tyson to do what you mention and "all our problems would be solved."  Of course if she had Dr. Paul Krugman at her side it would just reinforce the brilliance.

Sat, 03/23/2013 - 09:06 | 3365230 nmewn
nmewn's picture

lol...yes, I suppose I do. I'm often accused of it.

But clearly, as you say, a few more economists who all think alike is just what the good doctor ordered, I mean its just working out swell so far! ;-)

Sat, 03/23/2013 - 01:07 | 3364988 Professorlocknload
Professorlocknload's picture

Hot damn, now I get it. It wasn't was convolution all along! Progressive convolution. What was I thinking?

And it's like, if Absolute power corrupts absolutely, then sure, more complexity fails more complexly. Then we can convolve.

It'll all be just dandy!


Sat, 03/23/2013 - 05:53 | 3365125 falak pema
falak pema's picture

How to avoid Convoluta...?

By going down the history trail as this guy has brilliantly done in his exposé; its called INVOLUTA!

The past tells us about the present and thus about the current momentum leading us into the future. 

And it ain't GOOD !

Convoluta and Involuta, I wrote all about it three years ago. 

I'll put it in a bottle and ship it out to the sea one day...for those who survive the next Reset.

Fri, 03/22/2013 - 22:33 | 3364805 Atomizer
Atomizer's picture

Why is US health spending so high? 


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Fri, 03/22/2013 - 22:57 | 3364861 knukles
knukles's picture

Because we're charged way the fuck too much for what we gets by the government protected financial enablers of the politicians?

Healthcare Complex
Gooberment Wages and Benefits
Alternative Energy
Assholes like Paul Krugman

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