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Is This The Diabolical "Master Plan" Behind Crushing Europe's Depositors

Tyler Durden's picture




 

Last week, when we commented on the absolutely idiotic Eurogroup proposal (now voted down and replaced by an equally idiotic "bank resolution" proposal which will see uninsured deposits virtually wiped out) to tax uninsured and insured deposits, we jokingly suggested that this may be merely the latest ploy by the legacy status quo to achieve one simple thing: force depositors across the continent (and soon, world) to pull their money out of a malevolent, hostile banking system and push that money into stocks, or simply to spend it. This would help finally defeat the biggest bogeyman of the centrally-planned reflation attempt in the past 4 years - the absolutely dismal velocity of money which drops every time the G-7 central planners inject liquidity into stocks. 

We were joking, because it would be beyond conspiratorial to suggest that a central bank could go as far as wiping out the wealth and savings of an entire nation in order to promote broken monetary policy. It would be outright idiotic and not to mention criminal. Why purposefully endanger depositors, and thus an entire financial system, just to spook them and their money? Or so we thought until we read the following just as "conspiratorial" take from Deutsche Bank's Jim Reid:

Maybe the lesson from all of this is that if you are fortunate enough to have a fair degree of money you might be better off spending it! Maybe that’s the master plan here? Boosting activity by forcing people to use their money rather than deposit it! Indeed I wonder how long it’ll be before an equity strategist suggests that this is bullish as money might now leave deposit accounts and go into equities!

Sarcastic humor or sad, insolvent reality... You decide.

 

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Tue, 03/26/2013 - 11:10 | 3376955 The Juggernaut
The Juggernaut's picture

Every collapse is going as planned.  Force loans and debt to purposely break down a country then catch them when they fall.

Tue, 03/26/2013 - 11:10 | 3376978 Cdad
Cdad's picture

Indeed...and the cucumber sandwiches are delicious, as well.

Tue, 03/26/2013 - 11:15 | 3377016 BaBaBouy
BaBaBouy's picture

PROTECT YOURSELVES From The DieselBergs ...

 

Run To GOLD !!!

Tue, 03/26/2013 - 11:17 | 3377032 Pladizow
Pladizow's picture

I agree, spend all your bank fiat on gold!

Tue, 03/26/2013 - 11:17 | 3377049 flacon
flacon's picture

Gold is up $1 today. Woo-hoo! 

Tue, 03/26/2013 - 11:28 | 3377133 nope-1004
nope-1004's picture

Being short of cash is never a planned thing.  Stealing is planned, but the bankster bets gone bad in nefarious instruments were definitely not planned.  The result though is the cash grab is on.  Buy gold and silver.... that's all you can do.  Leaving your money in a bank is too risky.

 

 

Tue, 03/26/2013 - 11:34 | 3377175 resurger
resurger's picture

spend your cash on gold and silver

Tue, 03/26/2013 - 11:58 | 3377324 TerminalDebt
TerminalDebt's picture

I prefer to spend my money on blow and strippers.

I guess the next step is to spend it on blow and jobs.

Tue, 03/26/2013 - 12:56 | 3377630 DblAjent
DblAjent's picture

Secret Service Agent (former?)

Tue, 03/26/2013 - 12:58 | 3377643 fourchan
fourchan's picture

I fully intend to address this in far greater detail within days, but ask yourself, with all the law enforcement available in the United States, who the DHS is preparing to declare war on inside the U.S.? With the massive purchases of almost 3,000 new armored vehicles (MRAPs) and 1.6 BILLION rounds of ammunition, with associated weapons, who in the U.S. do they intend to kill? Short answer: You and me! Anyone they think is standing in their way to impose a new Marxist government! Anyone who stands for the U.S. Constitution! We must demand that our representatives (Senators and U.S. Representatives) stand firm and immediately force, by law if necessary, the DHS turn over their arsenal of war making equipment to the Department of Defense. Nothing justifies this massive arms build up of an agency whose jurisdiction is internal within the United States of America! They are preparing to go to war against American citizens! Don't wait on people like John McCain or Lindsey Graham to recognize the threat! Citizens you must demand Congress act to force these weapons, ammunition, and armored vehicles be turned over immediately to the DoD! Then let us dissolve the DHS (or SA, or SS... whatever you call them)! Hear me, America. The DHS can only be preparing to declare war on us with the arsenal of weapons and equipment they are purchasing as they methodically dismantle our legitimate military made up of patriotic Americans! If I live and still have a page to speak out on later this week, I will discuss a proper Constitutional response in a couple of days. Standby. Out. Captain Terry M. Hestilow, United States Army, Retired. TAKE ACTION: Contact your REPS in Congress and demand answers! 202-224-3121 Senate, 202-225-3121 House http://www.house.gov/representatives/find/

Tue, 03/26/2013 - 13:14 | 3377701 Pegasus Muse
Pegasus Muse's picture

"Don't wait on people like John McCain or Lindsey Graham to recognize the threat!"

What makes you think they aren't in on it? 

"It's a Big Club and you ain't in it."  http://www.youtube.com/watch?v=i5dBZDSSky0

 

Tue, 03/26/2013 - 13:26 | 3377774 Lordflin
Lordflin's picture

Well fourchan, I don't think this is news to anyone here... problem with your solution is that there is no relief within the political system.

When folks lose control at the ballot box they resort to the bullet box. This is going to end ugly...

Tue, 03/26/2013 - 13:42 | 3377846 LFMayor
LFMayor's picture

4chan, you get an up arrow for preaching to the choir.  Your ideas about votes would best be summarized in a video comparison of the effects of both votes and  of 7.62x39 cartridges on ballistic gelatin blocks.

There's only one way to fix this mess and be sure.

Tue, 03/26/2013 - 23:37 | 3380156 matrix2012
matrix2012's picture

Re: Department of Homeland Security (DHS) and that agencies preparation for war against citizens of the United States of America

 

The Honorable Senator John Cornyn, State of Texas

United States Senate

517 Hart Senate Office Building

Washington, D.C.  20510

 

Dear Senator Cornyn,

"It is with gravest concern that I write to you today concerning the recent appropriation of weapons by the Department of Homeland Security (DHS) that can only be understood as a bold threat of war by that agency, and the Obama administration, against the citizens of the United States of America.  To date, DHS has been unwilling to provide to you, the elected representatives of the People, justification for recent purchases of almost 3,000 mine-resistant ambush-protected (MRAP) armored personnel carriers, 1.6 billion rounds of ammunition (with associated weapons), and other weapons systems, when, in fact, the DHS has no war mission or war making authority within the limits of the United States of America."

. . .

Captain Terry M. Hestilow

United States Army, Retired

Fort Worth, Texas

March 23, 2013

https://www.facebook.com/notes/terry-michael-hestilow/re-department-of-h...

 

Tue, 03/26/2013 - 11:47 | 3377266 redpill
redpill's picture

They'll just move their cash to a bank outside the EU.  Suddenly Al-Rajhi Bank looks pretty reasonable.

Tue, 03/26/2013 - 12:49 | 3377596 Tortfeasor
Tortfeasor's picture

Problem with banks outside the EU is they are all denominated in fiat.

Tue, 03/26/2013 - 13:04 | 3377670 Handful of Dust
Handful of Dust's picture

Euthanizing EU depositors, one muppet at a time.

Tue, 03/26/2013 - 12:34 | 3377488 deKevelioc
deKevelioc's picture

Performance (%)

 

 

1-year 5-years 10-years

The Relic -4.71 +70.99 +384.4

Tue, 03/26/2013 - 11:36 | 3377191 francis_sawyer
francis_sawyer's picture

Push all savings into the bloated valuations of:

~~~

- equities

- bonds

- paper commodities

Do it fast, so that the holders of all things denominated in joobux can transfer their wealth into hard assets...

Tue, 03/26/2013 - 11:44 | 3377251 BLOTTO
BLOTTO's picture

By the time you finish reading this (30's)...the Federal Reserve just counterfeited/printed off $1,000,000 into the economy...

.

1 minute = $1.96 million

.

Common sense....COMMMOOOONNNN SENSE and MATHEMATICS says - this ends badly...for fuck sakes

Tue, 03/26/2013 - 12:53 | 3377470 francis_sawyer
francis_sawyer's picture

I'm happy to announce that it was not francis_sawyer who was responsible for the abovementioned "counterfeitting" that happens each & every minute of each & every day...

~~~

Nevertheless ~ I'm the one who gets the JUNKS... [Even though everybody agrees with BLOTTO's statement]...

But who am I to argue... If it gives you a warm sense of security to 'beat around the bush' to put on airs that you're civilized & to avoid people hating you [because someone devoted enormous resources into conning you to feel that way]...

Knock yourself out..

Tue, 03/26/2013 - 13:23 | 3377739 Pegasus Muse
Pegasus Muse's picture

"Common sense....COMMMOOOONNNN SENSE and MATHEMATICS says - this ends badly...for fuck sakes"

Hyperbolic -- check it out

======

Money supply accelerating

Alasdair Macleod (GoldMoney.com)

http://www.goldmoney.com/gold-research/alasdair-macleod/money-supply-accelerating.html?gmrefcode=gata

Tue, 03/26/2013 - 13:46 | 3377844 francis_sawyer
francis_sawyer's picture

Money Supply Accelerating =

~~~

Way back in the old days, when banking was more simple [but the swindle was the same]... The banker would take your gold and issue a piece of paper with CREDITS [that you used to run around town to buy your pies & other things with]... The bankers did this with every artisan, engaged in every mode of confecture & commerce that was there... Little by little, the bankers would print up more IOU's than they actually had 'gold', on deposit, in the vault... Inevitably ~ the time came when a critical amount of people demanded their gold back for the IOU's they'd received...

By then, the banker had skipped town...

~~~

I can't really say that much has changed... ESPECIALLY the part that, IN THE PRESENT DAY VERSION... The 'bankers' mostly are cut from the same cloth that they've always been cut from... [the ones that AREN'T, technically, are simply in apprenticeship]...

Even when this society crumbles to the ground, which it will most assuredly do... It will be resurrected again... & the same script will be followed...

Tue, 03/26/2013 - 11:38 | 3377199 TruthInSunshine
TruthInSunshine's picture

Paul "Break Shit & Rebuild It" Krugman just tweeted that:

 

@Paul"WhenMarsAttacks"Krugman-

Should take U.S. deposits above FDIC limits & use monies to build union owned/operated windows/glass breaking device factories to stimulate economy.

Tue, 03/26/2013 - 11:43 | 3377241 Cdad
Cdad's picture

I've read the prospectus.  

Hearing that terrified European capital is flooding in, and Krugman will likely overtake Buffet in personal wealth in the next couple quarters.

Hearing that Ben just crapped out on that $3 billion today, but he's going to the cash machine and will be right back.

Hearing that all is well.

Also hearing that everything is fine.

 

Tue, 03/26/2013 - 12:59 | 3377649 fourchan
fourchan's picture

or ghost citys

Tue, 03/26/2013 - 11:17 | 3377050 notbot
notbot's picture

I HATE PAUL KRUGMAN

Tue, 03/26/2013 - 11:22 | 3377088 McMolotov
McMolotov's picture

I hate Krugman, too, but the absolute worst place on the planet is the comments section of a Krugman column. It's an echo chamber of condescending cunts congratulating each other on their astounding brilliance and moral superiority.

If someone were to invent a machine which made it physically possible to punch another person in the face through the internet, I'd be first in line to buy it so I could beat the living shit out of those pretentious twats.

Tue, 03/26/2013 - 11:25 | 3377122 Salah
Salah's picture

Right there with you, Dude.

Kruggie = "Cliff Claven with a Phd"

Tue, 03/26/2013 - 12:20 | 3377436 Max Hunter
Max Hunter's picture

I'm surprised anyone here even contributes there..

Tue, 03/26/2013 - 12:37 | 3377523 MillionDollarBogus_
MillionDollarBogus_'s picture

I am Paul Krugman.

You want me to just go away, but you can't ignore what I say.

 

Tue, 03/26/2013 - 12:46 | 3377574 deKevelioc
deKevelioc's picture

Grab the trash on your way out, please.

Tue, 03/26/2013 - 13:20 | 3377730 Big Slick
Big Slick's picture

"It's an echo chamber of condescending c>nts congratulating each other on their astounding brilliance and moral superiority."

As I wait interminably for the end, I sometimes wonder if the same could be said about me and my fellow ZH'ers. 

Echo chamber risk.  How to mitigate?

Tue, 03/26/2013 - 13:40 | 3377835 akak
akak's picture

Be a condescending prick instead.

Tue, 03/26/2013 - 12:50 | 3377593 New_Meat
New_Meat's picture

and don't let the door hit you in the ass

Tue, 03/26/2013 - 13:26 | 3377770 Ourrulersknowbest
Ourrulersknowbest's picture

I'm your no1 fan paul

Tue, 03/26/2013 - 12:40 | 3377545 smlbizman
smlbizman's picture

its like the grossest thing ever....you still have to look

Tue, 03/26/2013 - 11:26 | 3377125 morning
morning's picture

A baseball bat and a friend at (insert ISP or backbone provider)

Tue, 03/26/2013 - 11:27 | 3377129 ParkAveFlasher
ParkAveFlasher's picture

I love this comment.  If Dr. Seuss was an Austrian economist with Tourette's (sp), he would write comments like that.

+1

Tue, 03/26/2013 - 15:23 | 3378371 jimmytorpedo
jimmytorpedo's picture

He had me with "condescending cunts" and then, to finish with a flourish pulls out the "pretentious twats".

Very erudite use of anatomical profanity with some good old face punch as the meat.

McMolotov has proven himself as both cosmopolitan (cunt and twat) and a regular plumber joe with the face punch.

Nice poetic antipodality.

Tue, 03/26/2013 - 11:28 | 3377139 derek_vineyard
derek_vineyard's picture

not necessarily equities.....but if cash is not safe, it will be placed to investments of all types from real estate to equities to 'just spending it'.......... what a way to flush out the cash and force it into economy

if you live with no debt and within your means...you may be targeted as the enemy

Tue, 03/26/2013 - 12:57 | 3377639 ATM
ATM's picture

Cue the spark ot the velocity of money problem....

Tue, 03/26/2013 - 11:38 | 3377205 SpiceMustFlow
SpiceMustFlow's picture

Couldn't agree more man, if one needs to either a) boost one's own self esteem (only place better is wal mart) or b) lose all faith in humanity fucking comments on "conscience of a liberal" (puke) is the place to be

Tue, 03/26/2013 - 11:35 | 3377182 resurger
resurger's picture

expect 1 down arrow very soon..

bye

Tue, 03/26/2013 - 11:24 | 3377114 tickhound
tickhound's picture

"Why purposefully endanger depositors, and thus an entire financial system, just to spook them and their money? Or so we thought until we read the following just as "conspiratorial" take from Deutsche Bank's Jim Reid:"

Tylers, Jim Reid is just stealing my material.  

Zerohedge's tickhound explained the SPOOK yesterday without the fluff....

 

"Master Plan" explained in plane-glish,

unintended consequences aside... Seems this message to unsecured deposits (FDIC >250$) is consistent with the "discourage saving encourage borrowing/gambling" systemic hailmary self-preservation theme."

Forcing cash into the safety of equities and bonds.  Sacrifice a few cypriots and money moves.  The world's been milking savers for a while now...

Control the out-flow... seems all on par to me.

Spend or else.  Good for big-banks, consolidation... free plastic pacifiers for the serfs... crush gold, oil... win-win.

EVERY crisis and the invisible fence gets BIGGER.

 

- Wow, Jim, you're a freaking genius.

Tue, 03/26/2013 - 11:29 | 3377156 Meremortal
Meremortal's picture

Well, no. It's very easy to open multiple accounts at multiple banks and stay totally insured. I've done so for many years.

 

 

Tue, 03/26/2013 - 11:35 | 3377188 TheSilverJournal
TheSilverJournal's picture

If you think you're "totally insured," you better think again. The only thing that's sure is that the wealth in your bank account will lose value, either from the inflation tax, or from a sharp devaluation when the nation restructures its debt.

Tue, 03/26/2013 - 12:01 | 3377335 Meremortal
Meremortal's picture

Yes, I understand that. That's why I have a 400 acre farm bugout spot that can operate off the grid if need be.

 

Bank accounts are just one part of a system of personal economic well-being.

Tue, 03/26/2013 - 12:05 | 3377363 TheSilverJournal
TheSilverJournal's picture

I would agree for short term liquidity. For a storage of wealth, though, bank accounts are just one part of the system of central planners siphoning wealth out of the economy.

Tue, 03/26/2013 - 14:35 | 3378090 Crash Overide
Crash Overide's picture

"That's why I have a 400 acre farm bugout spot"

 

Does that include a zombie defense perimeter? For you know, when all the Prozac and iphones are gone...

Tue, 03/26/2013 - 15:20 | 3378348 bagehot99
bagehot99's picture

Will they take our iPhones after the system fails? That sucks....I'll be stuck with some Android POS, knowing my luck.

At least I'll have my TVs.

Wait...what?

Tue, 03/26/2013 - 12:05 | 3377362 Karlus
Karlus's picture

Door number two is to go to your bank and get them to order a Brinks truck to get your cash out.

 

I think the path to less resistance is not buying equities (or dare I say Gold) but to run the bank. Yeah, I know that USD is devalued at 11%/yr and yeah I know they could switch the bills...blah blah.

 

But seems to me being in phyzz cash when the S&P crashes and we bank run it might not be too shabby....

 

Thoughts?

Tue, 03/26/2013 - 12:10 | 3377399 TheSilverJournal
TheSilverJournal's picture

I would rather have phyzz metals than cash when the world fiat monetary ponzi implodes. A bit of phyzz cash may be helpful for liquidity, but I have yet to see a historical example of a nation going bankrupt and its fiat rising in value, much less not having its value be utterly decimated.

Tue, 03/26/2013 - 12:49 | 3377592 Karlus
Karlus's picture

Yeah, I agree. I would say in this case it comes down to timing. If the market melts down, then PM goes on sale in a very big way as everyone barfs everything up to get to cash.

I am not sure I want to ride the PM down when I could buy it for discount.

 

The question is can one get the timing right?

Tue, 03/26/2013 - 13:23 | 3377717 TheSilverJournal
TheSilverJournal's picture

That's assuming another 2008-like reaction occurs.

The environment has changed dramatically since 2008. 2008 was a wake up call for many. At that time, there was uncertainty on if the Fed and Congress would keep the ponzi from imploding. Now, the Fed has a comfortable seat in driving the markets and nobody expects the Fed to do anything but print faster if need be. Likewise, the 0% rates and QE has been going on for 4 years since then. That's a lot of additional cash and credit in the system relative to 2008. The trick is, asset prices can only fall so much before the ponzi implodes, so they can allow assets to fall right up until the breaking point, and then a decision must be made to either pump or implode. My point of all of this is to show that the system is much more fragile and levered now than four years ago, so the breaking point of falling asset prices is much higher now than it was in 2008.

What exactly the breaking point is?...I don't know. We could be almost at it and if prices drop just a little bit, the banks could go kaput. What I do know is that it's impossible for assets to fall to 2008 levels before imploding. In the long run, assets must rise and prices must rise as ponzies have one main commonality: expand or implode..and this ponzi is reaching its end. The short run is just the markets figuring out how fast the ponzi is expanding as well as how long the central planners will keep the ponzi going. I tend to think they will drive it to hyperinflation, all the while blaming the rise in prices on the weather, MENA, OPEC, China, Russia, speculators, capitalists, precious metals horders, preppers and doomsdayers...anything but themselves.

Tue, 03/26/2013 - 13:21 | 3377732 akarc
akarc's picture

My thinking. When the market crashes so will everything else including PM's. Then they will be on sale. Phys dollars will be in demand cause who the hell carries them anymore. Knew a couple folk went through the depression. They always carried cash and didn't trust banks ever again.

Dollars, gold, silver, ammo, whiskey, cigs, sugar, pain killers, gas, etc are all trading vehicles. It's the store that has what the people want that will get the gold.    

Tue, 03/26/2013 - 13:41 | 3377836 jumbo maverick
jumbo maverick's picture

I went this morning and although I did not withdraw all my cash I cashed my paycheck and took all that with me, the bank people all three tellers that I know were overly nice today.

They even gave me one of them vinyl bank bags to carry the loot home for "free" I bet if I pushed it I could have gotten a " free" toaster from them. I got a shitload of nickels from them today too and they didn't even roll their eyes over that

Makes me wonder what the banks internal memos have been like over the last week or so in regards to customer service, etc.

The banks I think are terrified of a bank run.

Tue, 03/26/2013 - 13:45 | 3377860 LFMayor
LFMayor's picture

Those bitches know a sugar daddy when they see one.

Tue, 03/26/2013 - 11:47 | 3377255 tickhound
tickhound's picture

Well, no, serf.  Apparently you couldn't see the message cuz it wasn't SPOON FED enough.  In ADDITION to zirp...

Originally, it was the unsecured/uninsured <100k / <250k that was included in the haircut.  Whether it happened or not, the message is CLEAR.

 

"Totally insured" - meremortal

A quote that will live in infamy. 

Tue, 03/26/2013 - 12:45 | 3377572 TheSilverJournal
TheSilverJournal's picture

Even if you take cash out of the banking system, it is still doomed to worthlessness. The only reasonable option is to store wealth in something other than fiat. As a matter of fact, I would be hesistant to go short or buy a put on anything, because very few assets will fall in price faster than FRNs.

Tue, 03/26/2013 - 13:34 | 3377810 akarc
akarc's picture

If banks shut doors, limit ATM access, give depositers haircuts etc. FRN's will increse in value. Remember most "cash" today is digital or plastic. How many carry the actual cash.  For that matter as a percentage of the population how many have much gold that haven't already sold it to "gold for cash" or whoever. I suspect not enough to create a viable currency.

Of course the "great global reset" porbably/maybe will occur and countries return to the gold standard. However I suspect I will be dead by then.

Will massive inflation occur. I would have expected it already. Either/or you can be sure of one thing, the uber wealthy have both cash and gold. My bet, Bernanke has a bit of a stash of that barbarous relic.

 

Tue, 03/26/2013 - 13:51 | 3377879 TheSilverJournal
TheSilverJournal's picture

If you live by that, you will be so so disappointed that you kind of see what's going on but yet get crushed when it happens. A bank shutdown and limiting access to credit in this uber credit dependent economy will cause an instant implosion and bankruptcy of the US. Countries don't go bankrupt and have an increase in value in their fiat. Ever. Never ever. Doesn't happen. Stop listening to whatever deflationist you're following, read a bit of history, and use some common sense.

You won't be dead when hyperinflation hits. It's very near. This is not something that you're leaving your kids to worry about. This is something that if your parents are still alive, they will live to see it.

Tue, 03/26/2013 - 12:52 | 3377605 Oquities
Oquities's picture

beware - they'll just get Stevie "The Rat" Rattner (GM, BP czar) to track down sneaky multi-bank customers like you and aggregate your accounts.  you cannot be allowed to take advantage of the system like that - we have ways to make you spend, Colonel Hogan.

Tue, 03/26/2013 - 13:16 | 3377710 NotApplicable
NotApplicable's picture

All exits will be sealed when the time comes. They will also paint anyone who was thoughtful enough to spread their money out as a freedom-hating terrorist out to destroy the "American Way."

The more you try and cover your tracks, the more violent their lynch-mob becomes.

Tue, 03/26/2013 - 12:58 | 3377640 Professorlocknload
Professorlocknload's picture

 Now that's confidence! Wish i could share that with you, but;

 Totally insured?

 What does the "C" stand for in FDIC again?

 Where would a good independent actuarial put the risk in that "coverage."

 Not to bring up the fact that cash in a bank is being confiscated by negative rates of return.

Tue, 03/26/2013 - 13:49 | 3377853 akarc
akarc's picture

except in the banks hands that controls interest, fees, rehypothcates, etc.  The wealthy have reached escape velocity and can buy you and I hand over fist. Even the definition of wealth is dictated by who you talk to and so many I talk to can't even imagine the wealth of just a Bill Gates or a Warren Buffet.

Remember when the Occupy wanted to demonstrate around GS, the police shut the streets down so fast. They know which side butters there bread. Constutional Oath or not. It is no longer protect and serve, it is merely serve.

 

 

Tue, 03/26/2013 - 12:10 | 3377397 Urban Redneck
Urban Redneck's picture

Jim Reid isn't a genius, and given that he's being paid big bucks by a big bank- he's being downright idiotic.

 

That big bank (that is paying him big bucks) has to go borrow even bigger bucks from the nearest affiliate of Benny & the Inkjets to make up for the capitalization lost by even small bucks being withdrawn by existing depositors.  The big bank would much prefer its existing depositors to leave their money right where it is at the bank and instead that the depsoitors BORROW new money to cover their State-facilitated iCrap desires...

Tue, 03/26/2013 - 15:00 | 3378232 css1971
css1971's picture

You may have single handedly explained the drop inthe velocity of money over the recent decades.

Money no longer circulates. It is borrowed into existence, spent, then pays off a debt and dies. Round and round it no longer goes.

Tue, 03/26/2013 - 16:46 | 3378847 Urban Redneck
Urban Redneck's picture

Never even though about it actaully- I pay more attention to M1V than MZMV because my "hobby" concern is the financially illilerate, but on the professional side it makes perfect sense-- whether it's a syndicate, structured product, or direct loan, about the one funding mechanism that it isn't is a check cut from petty cash (although syndication sometimes seems like a dying art- perhaps they need a less menacing term).

Tue, 03/26/2013 - 11:28 | 3377147 TheSilverJournal
TheSilverJournal's picture

Driving depositors out of their bank accounts is the last thing the central planners want.

Yes, some of them may say stupid things from time to time because the beast is made up of semi informed power hungry politicians. But the goal of the beast is to keep growing, and that growth depends directly on thriving off the inflation tax and keeping the worldwide fiat monetary ponzi from imploding and from the printing press being rendered worthless. Bank runs would implode the ponzi. Likewise, speeding up the velocity of money would accelerate price inflation giving an additional reason to withdraw deposits.

Politicians talk a lot of nonsense. Them saying this is like yelling at China for not allowing the Yuan to rise. The last thing the central planners want is for China to stop printing and for depositors to lose faith in the banking system and fiat.

Tue, 03/26/2013 - 11:38 | 3377209 duo
duo's picture

So I buy 3 Audi A8s and let them rust in my driveway.  How is that an efficient allocation of capital?

Tue, 03/26/2013 - 11:51 | 3377292 TheSilverJournal
TheSilverJournal's picture

In a normal world, it never would be. But here is an argument of how it may be:

No down payment, fixed 2.9% rate over 7 years, currency collapse is about a year away. In this case, you would eat the first 12 months of payments, but the rest of the payments for the next 6 years would be wiped away by inflation. After currency collapse, sell your car in China and profit from the sale price minus shipping costs minus 12 months of payments.

Tue, 03/26/2013 - 12:46 | 3377577 Big Corked Boots
Big Corked Boots's picture

If that would work, you should be investing in Mahindra tractors instead of Audis.

The truth is, there will be no simple transfer of wealth in any form without someone - governments or bankers or thieves - attempting to skim some or all of it off the top.

I invest in gold and silver because nobody else can come up with a better instrument of wealth preservation.

Tue, 03/26/2013 - 12:56 | 3377637 TheSilverJournal
TheSilverJournal's picture

Clearly, buying cars zero down on long term fixed credit with intentions to sell after currency collapse is not the best way to play the credit bubble / inflation game. It's much better to purchase appreciating assets as opposed to depreciating assets, or productive assets that will perform before and after fiat / credit is no more and government shrinks dramatically.

I can't think of a better asset class with any size whatsoever to invest in than silver, which should outperform gold by at least 5X. This is not to say that gold is not a great investment because it is, as almost nothing will outperform gold. Platinum may give silver a run for its money as platinum has all the qualities of money but basically couldn't be used as money because the technology didn't exist to melt it and by that time, the world was on gold and going under the control of central banks. Platinum also has the added benefit of being able to store a much larger amount of wealth on your person, it's rarer than gold, it's prettier than gold, and it's used more in industry than gold. Overall, though, silver is the surer bet.

Tue, 03/26/2013 - 13:51 | 3377863 akak
akak's picture

Actually, SilverJournal, platinum HAS been used as money --- and not very long after its official discovery as an element.  In the 1830s through the 1850s, Imperial Russian issued 3, 6 and 12 rouble coins made of pure platinum, which did indeed circulate as money.  Interestingly, this was an astounding achievement given the relatively primitive technology of the time, as even today platinum coins are MUCH more difficult and expensive to produce than those made from other metals.

Tue, 03/26/2013 - 13:56 | 3377894 TheSilverJournal
TheSilverJournal's picture

I like your style.

Tue, 03/26/2013 - 14:37 | 3378101 akak
akak's picture

Thanks TSJ.

I certainly do have my share of detractors here as well.

Such is life.

Tue, 03/26/2013 - 12:49 | 3377590 TPTB_r_TBTF
TPTB_r_TBTF's picture

There will be a currency reset,

and your debt will be denominated in the new-and-improved currency.

 

What makes you think an Asian will buy a used car from you?

Tue, 03/26/2013 - 13:26 | 3377776 Ratscam
Ratscam's picture

very true indeed.
That,s what happened in East Germany as well. Those were the rules
Cash: Up to 20K, 1 East Mark = 1 DM
Above 20K, 2 EM = 1 DM
Any debts: 1 EM = 1 DM
so if you had financed your house conservatively with 50% LTV, you suddenly saw a 100% LTV. The government and central bank always win.

Tue, 03/26/2013 - 13:47 | 3377864 Professorlocknload
Professorlocknload's picture

Pick up a Mark III Austin Healey, a 64 AC Cobra and a 67 Aston Martin DBS and you will do just fine.

PM's, Real Estate and Collectables. The stuff of Estate Builders.

Tue, 03/26/2013 - 14:22 | 3378024 de3de8
de3de8's picture

Ha ha, A-8's are all aluminum!

Tue, 03/26/2013 - 12:06 | 3377367 Skateboarder
Skateboarder's picture

True dat, but also consider the perspective of a 1%er who wants, no, NEEDS to maintain the same level of power after the reset.

There will be a new fiat, and the same puppetmasters will want to be pulling the strings. Same puppets, same masters, new strings. So whether the puppetteers decide to continue using the puppets until the old strings break one by one, or the old strings get snipped and replaced in one go... it matters not.

Tue, 03/26/2013 - 12:26 | 3377458 TheSilverJournal
TheSilverJournal's picture

It's one giant world fiat monetary fiat ponzi and when it implodes, all fiat will become worthless. The effects will be utterly devastating and confidence in fiat will be no more. This is not to say that fiat will not reappear some day...because if history shows anything, it probably will because control over the printing press is a central planners dream.

Much more likely is a monetary system with a smokescreen that the central planners are held in check with some speudo back currency and will ultimately lead to complete fiat because once the banking ponzi starts it only has two choices: expand or implode.

With any luck, humans may actually examine the simplest questions about wealth: what is money? and what is an interest rate? And hopefully after asking these questions a conclusion is made that the ONLY roles for government in a monetary system is to protect from fraud and to protect private property. Free markets will never truly exist without free banking, because money is 1/2 of every transaction. If free markets are turned to after the implosion of the fiat ponzi, a recovery could be made in an amazingly short period of time and could be followed by an almost unimagineable boom as markets are actually allowed to allocate resources. However, if central planning is turned to when the cries for the government to "help" grow the loudest, humanity may never recover.

This is the first the entire world will go through fiat collapse and it will be the largest / swiftest transfer of wealth ever. The differences between the two possible paths couldn't be more stark.

Tue, 03/26/2013 - 13:00 | 3377654 kridkrid
kridkrid's picture

Fantastic post! I hope it gets read often and is reasonably well understood. People get frustrated by the position of "there is no solution"... but time spent considering a solution to the current predictament is time taken away from deciding on what should come next... and there is no solution to the current predicament. Well written.

Tue, 03/26/2013 - 12:56 | 3377638 WhiteNight123129
WhiteNight123129's picture

CRACK-UP BOOM BITCHEZ!!!

GET ALL YOU MONEY OUT OF THE BANK AND BUY STUFF!!! ANYTHING, EQUITIES, GOLD, PROPERTIES, ANYTHING!!!

 

Tue, 03/26/2013 - 13:36 | 3377822 TheSilverJournal
TheSilverJournal's picture

It does feel like the crackup boom is forming. Once underway, the speed of the move will be intense as the only way to keep the ponzi going is to put more fuel on the inflationary fire.

The rally in the dollar this last months was sizeable, all while the 10-year yield dropped to only 1.91% and simaltaneously equities rallied. All of this newly created currency has to flow somewhere, and it's like it has nowhere else to flow...

Tue, 03/26/2013 - 11:46 | 3377258 Silver Bully
Silver Bully's picture

'Run To GOLD !!!'

Bullish European mattress companies and safe manufacturers.

Tue, 03/26/2013 - 12:04 | 3377361 Kirk2NCC1701
Kirk2NCC1701's picture

How about leaving their rotting, collapsing jurisdiction altogether?

http://mobile.bloomberg.com/news/2013-03-25/brics-nations-plan-new-bank-to-bypass-world-bank-imf.html

How about moving some or most far away from the coming storm?  The BRICS+ are based on real assets and real work, not this CB-manipulated paper wealth. 

Tue, 03/26/2013 - 12:07 | 3377381 Skateboarder
Skateboarder's picture

If there's any chance of making it to 2030 without complete global totalitarianism down to every aspect of existence, BRICS will play a major role in it.

Tue, 03/26/2013 - 13:02 | 3377661 gaoptimize
gaoptimize's picture

With gold prices where they are, either there is a shortage of physical or those with large deposits in Europe are in the denial phase of Kübler-Ross re Cyprus.

Tue, 03/26/2013 - 11:16 | 3376989 Abraxas
Abraxas's picture

I know it's been overstated here, but why not buy gold and store it yourself, as opposed to get raped by the ATM machine or be forced to spend.

Tue, 03/26/2013 - 11:17 | 3377045 Super Broccoli
Super Broccoli's picture

because gold can be confiscated while no state can force you to give them the joy you had drinking booze or wanking a whore !

Tue, 03/26/2013 - 11:22 | 3377092 Abraxas
Abraxas's picture

OK, I admit that sounds mightily reasonable, although if you have 10 mil, that can buy you so much booze and blow jobs, it might even be bad for you.

Tue, 03/26/2013 - 11:29 | 3377155 shovelhead
shovelhead's picture

My extensive research shows that blowjobs do not cause cirrhosis of the liver.

Tue, 03/26/2013 - 11:33 | 3377165 Schmuck Raker
Schmuck Raker's picture

"...so much booze and blow jobs, it might even be bad for you."

SIR, I demand you retract that statement!

Tue, 03/26/2013 - 11:39 | 3377217 Abraxas
Abraxas's picture

The statement was strictly hypotetical and has not been proven in practice. I rehypothecate it.

Tue, 03/26/2013 - 11:20 | 3377071 morning
morning's picture

Because they can push gold lower longer than you can stay solvent.

Tue, 03/26/2013 - 11:24 | 3377108 gmak
gmak's picture

 If you have gold that maintains its purchasing power, more or less, the price doesn't matter.  No one is saying put all your money in gold - just what isn't insured.  and probably an additional 5 - 25K just to be secure.

Tue, 03/26/2013 - 11:28 | 3377146 morning
morning's picture

I understand the rationale of goldbugs (and the chinese hoarding-cum-headfake) but can we slice an ingot to the point of buying bread?

 

Hard fiat, and when that runs out, land, water, bread, and a safeguard set of skills. Learn to teach, kill, build or farm.

Tue, 03/26/2013 - 11:45 | 3377253 JOYFUL
JOYFUL's picture

... can we slice an ingot to the point of buying bread?

 Why disfigure a pefectly good ingot, when soon enough a handful of Krugs will buy you a bakery?

Tue, 03/26/2013 - 11:59 | 3377325 morning
morning's picture

Because there are two parts to every trade, the buyer and the seller. If the seller won't take gold, you're worse off than a guy with no gold but awesome bricklayer's hands.

Tue, 03/26/2013 - 11:50 | 3377288 Debugas
Debugas's picture

land can be taxed easily - lets say 2% tax and in 50 years your land is gone

Tue, 03/26/2013 - 11:57 | 3377317 morning
morning's picture

I don't mean to sound aggressive but I think you are seeing behind the curve. My timeframe is beyond the point where land is registrated. Fiat will last until it won't, and then it's not gold that will cover your expenses, but trading. 

Tue, 03/26/2013 - 12:21 | 3377431 Citium
Citium's picture

Gold for wealth storage and large purchases.

Silver for medium to small purchases.

Copper for really small purchases.

 

But yes, keep putting anything you have into hard assets. Land, Water, Food, Medicine, Set of Skills..etc.etc.

 

Tue, 03/26/2013 - 13:57 | 3377899 Professorlocknload
Professorlocknload's picture

Can you slice up gold for bread? 'Spose so.

https://www.youtube.com/watch?v=s3LdNxV0yPM

Tue, 03/26/2013 - 11:38 | 3377211 Bangin7GramRocks
Bangin7GramRocks's picture

Good luck buying a house or car with gold. Are you going to stroll into the Lexus dealer holding a small, velvet bag full of gold coins? You may have more luck with Mickey Mantle baseball cards.

Tue, 03/26/2013 - 11:55 | 3377310 Sudden Debt
Sudden Debt's picture

1. I'll take my gold and silver to a country that is solvable and sell it there.

2. Your Mickey Mantly card may be worth a lot in America... Over here in Europe, people will give you 5 cents for it if you're lucky.

NON AMERICANS DON'T GIVE A SHIT ABOUT YOUR BASEBALL CARDS!!!

 

Tue, 03/26/2013 - 17:31 | 3379009 akak
akak's picture

Most rational Americans don't give a shit about baseball cards, either. Give me a Mickey Mantle card (whoever he is), and I will flush it down the toilet, where crap belongs.

Talk about your flouride-drinking mainstream mass brainwashing!  Professional Sports fanaticism = collective insanity.

Tue, 03/26/2013 - 22:20 | 3379998 Miffed Microbio...
Miffed Microbiologist's picture

Please o please don't let ZH devolve into a sport site! This is my greatest fear when so many men are grouped together. Where will we go?

Miffed;-)

Wed, 03/27/2013 - 03:38 | 3380336 akak
akak's picture

That ancient Sanskrit poetry/Amish quilting chatroom is looking more and more inviting all the time ....

Tue, 03/26/2013 - 13:54 | 3377887 LFMayor
LFMayor's picture

it's worth something just like that fiat paper bill in your wallet it worth something

faith and faith alone.

once faith is gone they're just a prettier piece of shitpaper.   Remember, the underwear section of the sears catalog gets used for wiping last.  Have to have something to whack it to.

Tue, 03/26/2013 - 12:39 | 3377530 seek
seek's picture

There are actually dealers that would jump at this. As I recall not too long ago someone did a piece on a dealer in Nevada that did this for select clients using face values -- it let the car be sold at a lower price, reduced license fees, and left the dealer convert to AU.

Once you stop interacting with the mainstream banking establishment, you'll be amazed at what you can buy, sell, and trade.

Tue, 03/26/2013 - 14:05 | 3377946 Professorlocknload
Professorlocknload's picture

Might be possible to find a dealer with an extra Lexus on the back lot, and a wish to unload some fiatskies for something shiny, and more compact.

Tue, 03/26/2013 - 18:29 | 3379198 trader1
trader1's picture

won't need to buy house or car with gold.

Tue, 03/26/2013 - 11:45 | 3377245 Sudden Debt
Sudden Debt's picture

 

I don't really need more convincing to keep my capital in silver and gold.

 

Keep.

Store.

and wait untill the system breaks down.

 

Tue, 03/26/2013 - 12:48 | 3377585 Bangin7GramRocks
Bangin7GramRocks's picture

The only way gold becomes as important as you all think is with a complete and utter breakdown of our society. I hope you are all wrong, even though I think you may be right.

Tue, 03/26/2013 - 14:11 | 3377969 Professorlocknload
Professorlocknload's picture

"The only way gold becomes as important as you all think is with a complete and utter breakdown of our society."

 

Gold 2001= $271

Gold 2013= $1600

Are we there yet?

Tue, 03/26/2013 - 13:09 | 3377688 gaoptimize
gaoptimize's picture

And I think a flexfuel ATV or small tractor with a plough and back hoe, without a chip, might be worth more than a Lexus at that point.

Tue, 03/26/2013 - 14:05 | 3377936 Sudden Debt
Sudden Debt's picture

and who will pull the tractor?

Tue, 03/26/2013 - 14:17 | 3378003 Professorlocknload
Professorlocknload's picture

And who would feed the hay burner?

Got a strong wife?

Tue, 03/26/2013 - 17:00 | 3378909 jimmytorpedo
jimmytorpedo's picture

They won't be called hay burners once the 1000 litres of diesel is gone.

My wife can throw a 50lb bale six high.

Still have to teach her to use a scythe though.

Welcome to the new sexy.

Tue, 03/26/2013 - 11:12 | 3376999 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

For those with a lot of money may just be foolish enough to invest only because they have no where else to put it. When you have millions, it is not as simple as hiding it in the mattress.

 

Tue, 03/26/2013 - 11:24 | 3377115 HoofHearted
HoofHearted's picture

Millions of dollars in gold can be put into the mattress. 

Tue, 03/26/2013 - 11:55 | 3377243 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

I get the whole gold thing but not everyone can just buy millions of dollars of gold in one clip for various reasons. I'm commenting at you specifically but of this the typical one track mind approach. It doesn't apply to a majority of people right now. These sort of moves are targeting just those types of people.You assume these people can protect themselves, they aren't preppers/doomsday types in the sense they can actually do any real physical labor. They are just proverbial golden gooses that pay other people to do that stuff. Once the goose stops laying eggs it is only a matter of time until it dies. Hiding gold or cash in mattresses will guarantee that. You gold types they don't need to go after you until everything else is picked clean. It is not like you are going anywhere since your gold basically is the equivalent to a boat anchor. If I want to steal your gold it is matter of seige tactics at that point.

Tue, 03/26/2013 - 12:31 | 3377472 Creepy Lurker
Creepy Lurker's picture

Look, don't mistake this for anything personal, because I've read this type of thing from many on here. But I'm getting a bit frustrated with posts like this, because you've basically ruled out everything there is to do.

So please tell us all what is it we should do. Or is your solution to lube up and bend over the table and wait?

btw: I'm not the one who junked you.

Tue, 03/26/2013 - 13:14 | 3377700 gaoptimize
gaoptimize's picture

I can't decide who will be my worst enemy: A tyranical state, rougue police, or people like you.  FOAD.  I'm prepared for all 3.

Tue, 03/26/2013 - 13:58 | 3377895 akarc
akarc's picture

"If I want to steal your gold it is matter of seige tactics at that point."

correct. Way back when the recession hit S. Fl if you saw a cement truck going down the road you followed it to see where it was going.

someone sees you spending gold they gonna follow your ass. So the first thing you are going to have to spend gold on is protection.

And believe me a couple of AK's ain't protection against whats coming. 

I myself do not like what I am saying. And that is why I am scared. It will be friend against friend and brother against brother.

And those that caused it will rule from mountaintops, and they will call themselves God and you will be food for the lions. 

Tue, 03/26/2013 - 16:39 | 3378793 Creepy Lurker
Creepy Lurker's picture

Ok, so what are your plans? Are you going to blow your brains out in front of the TV on the big currency collapse day? Are you going to make clothes out of burlap sacks to better blend in with the serfs and hope you're not singled out for the evenings entertainment or what?

Call me a crazy conspiracy theorist, but I'm starting to wonder if the people who post this bleak, utter hopelessness aren't gov't paid shills.

Tue, 03/26/2013 - 11:30 | 3377124 SWCroaker
SWCroaker's picture

Not really true, what with inflation.

$1M / $1,600 = 625 1 oz GAEs.  They store in rolls of 20, kind of like rolls of quarters, only a little larger and a lot heavier.   I could squirrel away 31.5 rolls of GAEs in my mattress and never notice it.    Might actually sleep sounder, if you get my drift...

Tue, 03/26/2013 - 14:40 | 3378116 de3de8
de3de8's picture

For me without the "problem" of having too much money, I started with a whole house generator with several 1k gal propane tanks ( buried). At less than 3G/ hr. consumption under full load, figure can go a long time on timed runs and low load. Propane does not go bad like diesel/gas/eth etc. Of course continue stacking. Now need to convert one tractor to propane. In the meantime life as usual.

Tue, 03/26/2013 - 11:13 | 3377005 kliguy38
kliguy38's picture

Let me get this straight.......you're saying that CRIMINALITY is some type of limiting factor for this????? hehehehehehe........OF COURSE THIS IS WHAT THEY ARE DOING!!!!!!...ITS ALL ABOUT THE VELOCITY OF MONEY.. We are in a collapse....look at the stats over the last quarter.....this is it gang......make no mistake they are pulling out all the stops

Tue, 03/26/2013 - 11:31 | 3377090 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Unless I am misreading the situation they really need all the money to ultimately flow into government bonds to pay off as much debt as possible first before collapsing the whole ponzi so the question is how to get it from equities into bonds?

The other thing as mentioned by others here is it looks they are trying to create a hyperinflation through a controlled crisis. Money velocity increased deficits and debt decrease proportionally to the amount of inflation. Fun fucking times ahead. Buckle in, Hand Job Solo is getting ready to make the jump to hyperinflation speed with the Millenium Falcon.

Tue, 03/26/2013 - 11:53 | 3377300 Silver Bully
Silver Bully's picture

'so the question is how to get it from equities into bonds?'

Oh that's easy.

'We'll need everyone to donate 25% or their 401k, 403b, and IRA to buy our debt. It is their patriotic duty to save our great nation.'

'We'll need to nationalize the banks. Oh, and we're going to restructure them. All depositors will take a mandatory 50% haircut. It is their patriotic duty to save our great nation.'

'We are nationalizing the financial sector . . .'

See where this is going? The only question is when does the government use the carrot (through the Fed) versus the stick (direct confiscation).

 

Tue, 03/26/2013 - 11:16 | 3377031 TeamDepends
TeamDepends's picture

Teller:  "You want to withdraw YOUR money?!?! (guffaws)  If it is YOUR money, then why is it in OUR house?"

Tue, 03/26/2013 - 11:22 | 3377093 THE DORK OF CORK
THE DORK OF CORK's picture

What if your nation is one room in their global house.

Tue, 03/26/2013 - 11:16 | 3377038 Groundhog Day
Groundhog Day's picture

I Think Paul Krugman just blushed

Tue, 03/26/2013 - 11:26 | 3377130 xtop23
xtop23's picture

Well if that's the case, and they're successful in increasing the velocity of money appreciably, hold on to your seats. 

Can you say inflation?

Tue, 03/26/2013 - 12:23 | 3377451 kentfinance
kentfinance's picture

same stunt being pulled on US savers, slightly different method (ZIRP) but only slightly

Tue, 03/26/2013 - 11:10 | 3376961 Jim in MN
Jim in MN's picture

Yuuuuuuuuuuuup.

 

Negative 30-100% interest on cash savings....Beyond ZIRP indeed.

Tue, 03/26/2013 - 11:16 | 3377039 McMolotov
McMolotov's picture

Yeah, now it's basically NIRP if you keep anything in a bank.

Fucking purple NIRPles for everyone.

Tue, 03/26/2013 - 11:20 | 3377069 Super Broccoli
Super Broccoli's picture

wait a minut, if the whole world goes NIRP, what's it gona be in switzerland now ? they'll just take your cash and hit you with a baseball bat ?

Tue, 03/26/2013 - 11:25 | 3377119 TeamDepends
TeamDepends's picture

How about CHIRP:  Changing Hypothetical Interest Rate Plan

Tue, 03/26/2013 - 11:10 | 3376963 Stoploss
Stoploss's picture

This is the critical stage.

The cash HAS TO come out in the open.

 

You aint seen shit yet.

Hang tight, it's coming..

Tue, 03/26/2013 - 11:15 | 3377011 EscapeKey
EscapeKey's picture

Called it!
http://www.zerohedge.com/news/2013-03-25/japan-its-whateverer-it-takes#c...
But I guess it could also just mean they want all deposits in the "right" banks.

Tue, 03/26/2013 - 11:15 | 3377026 mayhem_korner
mayhem_korner's picture

 

 

Inflation...it's what's for dinner.

(the fiat is in the bathroom, for use after dinner...)

Tue, 03/26/2013 - 11:27 | 3377127 LawsofPhysics
LawsofPhysics's picture

Indeed.  This time it will be "the people's" fault and the banks can start raising interest rates for their friends.  win-win for them, not you.  why guillotines are not rolling yet is simply amazing.

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