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Seth Klarman: "If The Economy Is So Fragile That Government Can't Allow Failure Then We Are Indeed Close To Collapse"

Tyler Durden's picture





 

Following today's flashback to the most euphoric and irrationally exuberant days of market peaks (and bubbles) gone by, driven entirely by the now constant central-planner dilution of current and future wealth, these selected excerpts from Seth Klarman's latest letter to investors is just the cold water of common sense everyone needs:

From Seth Klarman of Baupost:

Is it possible that the average citizen understands our country's fiscal situation better than many of our politicians or prominent economists?

Most people seem to viscerally recognize that the absence of an immediate crisis does not mean we will not eventually face one. They are wary of believing promises by those who failed to predict previous crises in housing and in highly leveraged financial institutions.

They regard with skepticism those who don't accept that we have a debt problem, or insist that inflation will remain under control. (Indeed, they know inflation is not well under control, for they know how far the purchasing power of a dollar has dropped when they go to the supermarket or service station.)

They are pretty sure they are not getting reasonable value from the taxes they pay.

When an economist tells them that growing the nation's debt over the past 12 years from $6 trillion to $16 trillion is not a problem, and that doubling it again will still not be a problem, this simply does not compute. They know the trajectory we are on.

When politicians claim that this tax increase or that spending cut will generate trillions over the next decade, they are properly skeptical over whether anyone can truly know what will happen next year, let alone a decade or more from now.

They are wary of grand bargains that kick in years down the road, knowing that the failure to make hard decisions is how we got into today's mess. They remember that one of the basic principles of economics is scarcity, which is a powerful force in their own lives.

They know that a society's wealth is not unlimited, and that if the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse. For if you must rescue everything, then ultimately you will be able to rescue nothing.

They also know that the only reason paper money, backed not by anything tangible but only a promise, has any value at all is because it is scarce. With all the printing, the credibility of our entire trust-based monetary system will be increasingly called into question.

And when you tell the populace that we can all enjoy a free lunch of extremely low interest rates, massive Fed purchases of mounting treasury issuance, trillions of dollars of expansion in the Fed's balance sheet, and huge deficits far into the future, they are highly skeptical not because they know precisely what will happen but because they are sure that no one else--even, or perhaps especially, the  policymakers—does either.

 


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Fri, 05/03/2013 - 15:48 | Link to Comment q99x2
q99x2's picture

Billionaire Bankster (Penny Pritzker) Breaks into Obama's Cabinet

Check out Jesse's Cafe

The FED globalists are going to steal everything they can get on the way down.

Fri, 05/03/2013 - 15:55 | Link to Comment AlaricBalth
AlaricBalth's picture

Mr Klarman
The "they" of which you refer to are oblivious.
"They" are not rational agents and "they" are not critical thinkers.
"They" are Pavlovian dogs awaiting their next series of stimuli.

Fri, 05/03/2013 - 16:09 | Link to Comment nope-1004
nope-1004's picture

Been hearing from Bernanke for years about the QE "exit strategy".  The guy is a global fraud, liar, and supreme bullshitter.  But, prove me wrong Ben.  End QE NOW!  Do it.  Stop talking like a dick and do it FFS.

 

But I know you won't.  Cuz you can't.  You're screwed into a corner.... LOL.  All you have is cheap talk, kinda like the guy sitting ringside at a fight.  He ain't in the fight, just chirping loudly with little to back it up.  That's you!!

Fri, 05/03/2013 - 16:11 | Link to Comment redpill
redpill's picture

Happy 100th birthday, Federal Reserve!  A successful century of fucking America over.

Fri, 05/03/2013 - 17:09 | Link to Comment fourchan
fourchan's picture

it would be ironic if all the free money given to the tbtf 
banks under zirp flowed into every stock out there since the 
bottom in 2009 and when the punch bowl is pulled the tbtf 
banks take it in the ass so hard that they all go bankrupt again.

Fri, 05/03/2013 - 17:14 | Link to Comment SWRichmond
SWRichmond's picture

if the economy is so fragile that the government cannot allow failure, then we are indeed close to collapse. For if you must rescue everything, then ultimately you will be able to rescue nothing.

I wish I could learn to be this succinct.

Fri, 05/03/2013 - 17:42 | Link to Comment Radical Marijuana
Radical Marijuana's picture

"For if you must rescue everything, then ultimately you will be able to rescue nothing."

Yeah, that is a succinct summary of the paradox of final failure from too much success ....

It also applies to the paradoxical way that the hedging gimmicks, through various derivatives, were able to justify those doing that sticking their paddles in the flow, to divert a lot into their personal piles, while the cumulative effect was to aggregate overall risks into a monstrously HUGE collection, whose consequences were to create far greater overall risks for everyone!

Another greater paradox is the way that fake democracy has been able to accumulate all the individual stupidities into an enormous aggregation of collective stupidity! Each and every short-term triumph of fraud, which may well benefit those doing that then, tends overall to destroy the entire system in which that is allowed to happen!

However, the real ways that the funding of the political processes take place means that there are no practical solutions to these problems, other than for the established system to runaway to become sufficient mad to destroy themselves. Tragically that madness fits within a global system of MADness, in the sense of the Mutually Assured Destruction strategy, which is the only thing we have been able to do, so far, to cope with the development of weapons of mass destruction.

The combined money/murder systems match each other in this respect, that the ways that they stabilize themselves allow for their overall situation to become more and more unstable!

Fri, 05/03/2013 - 18:27 | Link to Comment The Big Ching-aso
The Big Ching-aso's picture

Hey, whatever happened to the talking teddy bears?    Those two are like ten Seth Klarmans.

Fri, 05/03/2013 - 19:13 | Link to Comment jbvtme
jbvtme's picture

are they porking the equities to convert them later into collapsed dollars?

Fri, 05/03/2013 - 18:45 | Link to Comment francis_sawyer
francis_sawyer's picture

Let's play ball...

~~~

- North of 80% of JEWS in the world descend from ASHKENAZI's... [despite all the rhetoric to deflect the narrative]...

- Most of the rest are 'Sephardic'... Which means to say if you're a 'Sephardic Jew', you're basically tending goats, &/or have your hook nose buried in an old book ( & maybe don't even know who Obama is)...

- The Asheknazis... Though 1.7% in the United States and less than 1% worldwide... Control the greater part [talkin' 70% MSM propaganda. & hefty percents in the political activism, & jurisprudence fields... WALL ST BANKING, IMF, BIS... Trilateral Commission, Club of Rome]... Well ~ let's not KID ourselves...

~~~

So... NOW... Let's talk about 'COLLAPSE'... [which means ~ the ASYMMETRIC DAMAGE that 'collapse' would cause to a certain tribe]...

Umm... I guess I'm not a genius... I really I dunno...

Fri, 05/03/2013 - 19:28 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

They also run the City of London, not just Wall St.  And I reckon they run HK/Singapore/Shanghai financial markets to a large extent as well.  HSBC has been laundering drug money since the time of the Opium Wars (which, by the way, you won't find in Chinese history textbooks)

Thu, 07/11/2013 - 11:53 | Link to Comment MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

or have your hook nose buried in an old book

Did you REALLY post that?  Wow. 

Perhaps you'll post a photo of yourself sometime, maybe for a caption contest or a Friday Afternoon humor piece and allow willing members to 'comment' on their perceptions of your physical appearance. 

Not sure how it will pertain to finance or politics or critical thinking but it will probably be pretty funny -- in a savage, sarcastic sort of way.

 

Fri, 05/03/2013 - 20:28 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

Let's play the racist game then.

Let's assume that unlike most other populations of self-selected cultural / "racial" / geographically located expressions of the genome, "The Jews" have been systematically selected for intelligence and adaptability (through slavery, pogroms, enforced migration into new countries / markets etc) as well as their own "blood purity / inbreeding" laws (check your Bible for the parable of the Samaritans, and then check who they actually were [hint: halfbreeds]), that the matriarchal lines and self-imposed breeding that has lead to some unfortunate genetic ailments but higher intelligence. (I shit you not even Jewish people publish this crap). If I were a racist, I'd be arguing that they're a pretty successful test case for eugenics, just like the USA did before Germany. Since, you know, they "run everything", that's a pretty good racist argument for such policies.

Then, if I were a racist, I'd look over stories such as this:

Billions of people carry sizable chunks of DNA from Neanderthals and other archaic human relatives. Some of those genes may play important roles in our health today.[source]

And start thinking that perhaps only those people with neanderthals DNA were non-human, or that perhaps "The Jews" have neanderthals DNA and we don't and so on... Then I'd get a fucking clue, look at the data, and realize: Caucasians / Asians have the extra DNA, not "the bliks" or "The Jews" and so on, and it's been mildly useful for surviving diseases, nothing more. I'd also notice that the scientist's name is David Reich and understand the joke and do some silent dog whistles to other racists to pile on.

Luckily, I'm not, and I think eugenics is a load of shit[1], because of stuff like epigenetics and the fact that a "white Caucasian" often has a closer set of DNA to an aboriginal than the next honkey one country over. "The Jews" aren't a "race", they're a cultural group that has selected for certain traits, and through inbreeding express certain genetic markers (hint: look up sickle cell anemia in Africa, it helps you survive malaria; chances are if you survived the 15,000 generations to produce you in a malaria rich country, you'll have that mutation). The biggest myth of our times is that "race" exists like the 20th Century taught us, and perversely, this allows a cultural group to claim that their pogrom was special. Horrifying? Yes. "Racially" motivated by crappy science? Yes. Special case?

No. Look up fucking Rwanda - people invent "difference" to justify genocide (thanks Belgium!), it doesn't actually mean you're special snowflakes, despite a cultural heritage telling you you're the "chosen ones". Go ask the Romanies how they felt when an equal % of their populace was killed off. Except no-one does. The fact people buy into the flip side of this coin ("The Jews" did it all!, "The Jews" are running it all!) just strengthens it.

 

"The Jews" are a cultural group with a shared Religion, who interbreed enough to select for certain genetic markers. That's all. By being a racist fucktard you're merely enforcing their cultural isolation / bonding, and thus making it more likely that they'll enact the same exclusionary principles as you do in reverse. Or build a wall. Or justify acting just as badly back.

 

/tired of this 20th Century poor Science narrative.  Fucking monkeys (and note to all: when I use the word "monkeys", it's not the dog whistle you think it is. You probably don't want to know how I'm using it)

 

 

tl;dr

 

An Alsatian and a chihuahua and a cocker-spaniel are all the same damn thing, and can all interbreed. Woof woof woof.

 

[1] Note: again, this is complicated. Obviously, you can select for certain traits (height, hair color etc) if you understand which genes are regressive or not, and 30,000 years of domestication shows us how to modify mammal expression of genes in client species, but selecting for the traits racists want to select for, such as "strength" or "intelligence" simply doesn't occur at this level. If you want a corgi, you can make a corgi (as long as you eradicate all the mutants, which people do to dog species, such as the rhodesian ridge back) but the bottom line is a human is a human is a human no matter the expression of slight cosmetic differences.

 

 

 

p.s. Whoever junked and couldn't argue: well done. Ooook.

Fri, 05/03/2013 - 21:43 | Link to Comment andrewp111
andrewp111's picture

Since Jewishness is passed down a matriarchical line, they should have common Mitochondrial DNA.

Fri, 05/03/2013 - 22:13 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

And if you knew your science, you'd know that every human on the planet shares a similar female expression. It's only male specifics that can vary.

 

In the field of human genetics, Mitochondrial Eve, who is estimated to have lived approximately 190,000–200,000 years ago, refers to the matrilineal most recent common ancestor (MRCA) of all currently living modern humans. In other words, she was the most recent woman from whom all living humans today descend, on their mother's side, and through the mothers of those mothers, and so on, back until all lines converge on one person. Because all mitochondrial DNA (mtDNA) generally is passed from mother to offspring without recombination, all mtDNA in every living person is directly descended from hers by definition, differing only by the mutations that over generations have occurred in the germ cell mtDNA since the conception of the original "Mitochondrial Eve".

Mitochondrial Eve is named after mitochondria and the biblical Eve.[2] Unlike her biblical namesake, she was not the only living human female of her time. However, her female contemporaries failed to produce a direct unbroken female line to any living woman in the present day.

 

Fuck me, are you trolling, or just stupid?

Sat, 05/04/2013 - 01:40 | Link to Comment tip e. canoe
tip e. canoe's picture

not to mention how M.Eve was born in a golden chalice.

baby steps dear, baby steps.

Thu, 07/11/2013 - 13:02 | Link to Comment Manthong
Manthong's picture

tip e canoe..  way cool

golden Mitochondrial..  cool too.

but  we ( they) are commoditizing the women that are supposed to keep the barbarians in check.

figure it out.

Fri, 05/03/2013 - 21:50 | Link to Comment oddjob
oddjob's picture

Or justify acting just as badly back.

Not sure how many palestinian children francis has murdered but am thinkin its pretty small in comparison.

Fri, 05/03/2013 - 22:08 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

You'll note I didn't condone the wall, even though I mentioned it. If we need to do this "on the record stuff" (because it's not really obvious already, right? Especially when I expressly stated that genocide is not a culturally specific horror): the current Israeli government's actions regarding Palestine are not only barbaric, they're dishonest and ethically wrong.

 

This doesn't absolve any other actors in this tragedy, nor does it require labeling anyone "The Jews".

 

See? It's very easy.

Fri, 05/03/2013 - 22:39 | Link to Comment CompassionateFascist
CompassionateFascist's picture

If it behaves like a Race, it is a Race. Jews are a (self-labeled) trans-national subRace, organized to a T genetically, socially, economically, politically. And lethally hostile to all others. "antisemitism"? healthy-minded reaction to subversive, destructive, universalist Jewish phenomena. Such as communism...and its updated face, globalization.   

Sat, 05/04/2013 - 01:42 | Link to Comment tip e. canoe
tip e. canoe's picture

ever wonder why the karma has repeated itself so many fucking times?   and to whose advantage every single fucking time?  tired of repeating the same ol' fucking story again?

if so, then stop writing it.    the rest will take care of itself no?

Sat, 05/04/2013 - 03:10 | Link to Comment lewy14
lewy14's picture

There is a God-shaped hole in the heart of Man.

And a scapegoat shaped hole as well.

Sat, 05/04/2013 - 11:20 | Link to Comment fuu
fuu's picture

Well played.

Fri, 05/10/2013 - 22:49 | Link to Comment GoinFawr
GoinFawr's picture

AEM's a breath of fresh air since blunderdog went AWOL... on the bright side at least you're still here!

Fri, 05/03/2013 - 22:55 | Link to Comment Buck Johnson
Buck Johnson's picture

Your right.  The whole process is becoming more and more unstable and they can't get off this bucking horse without getting killed but yet they can't stay on either so what do they do?  They lie to everybody and whistle through the graveyard and hope not know but hope that the horse will stop and allow you to get off without getting hurt.  But it won't.

Fri, 05/03/2013 - 23:32 | Link to Comment Anusocracy
Anusocracy's picture

The Fed Phantasmagoria will end and the pain of reality will arrive, but the Keynesians will still be incapable of understanding what went wrong.

Fri, 05/03/2013 - 17:20 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

One dump-and-run bankster lap dog..... so far.

Fri, 05/03/2013 - 17:30 | Link to Comment HyperinflatmyNutts
HyperinflatmyNutts's picture

+1000.  Who would down voted?  Also  A big Fuck you Ben Shalom Bernanke!!!

Fri, 05/03/2013 - 17:46 | Link to Comment PiratePawpaw
PiratePawpaw's picture

Some time ago I think it was Boris who made a comment about "hitting the metallic wood fastener solidly on its flat upper surface" maybe I paraphrase, but it seems appropriate now.

Fri, 05/03/2013 - 19:29 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

hammer meet nail

Thu, 07/11/2013 - 14:59 | Link to Comment Manthong
Manthong's picture

let's see.. how does that velocity equation work?

mass.. acceleration..   I forget.

but.. at least we know there are no inconsistencies or incompleteness in the algos

 

hmm.. seems like it might be time to hang up the thong.

 

Fri, 05/03/2013 - 16:33 | Link to Comment SAT 800
SAT 800's picture

I was just thinking a few minutes ago; that perhaps we're just enslaved to the meme of bookeeping. Perhaps Dr. Bernanke will simply declare that all the deposits at the Federal reserve are valueless; better yet, they never really existed, and they've certainly evaporated. So; no problem. ??

Fri, 05/03/2013 - 18:18 | Link to Comment Zodiac
Zodiac's picture

What if they NEVER end QE? 

Fri, 05/03/2013 - 18:24 | Link to Comment DosZap
DosZap's picture

What if they NEVER end QE?

They won't have to, the rest of the world will end it for them.(if it were not for Japan, and China, still buying some US debt,and the Chineee are just doing it till they milk the PM train for all it's worth,and spending fiat US as they go about it),there would be no one else to even help them.That's when the dollar becomes worthLESS.And there is absolutely NADA Bennie n the Jets can do about it.

Fri, 05/03/2013 - 21:38 | Link to Comment andrewp111
andrewp111's picture

No. Japan is now printing nearly as much as the USA is (and it is a much smaller country), and China has been printing mad amounts of Yuan for years in order to peg their exchange rate. Eventually, it just stops working. Even with the flow at max, the stock market will start going down. Once the downtrend accelerates, it reaches the point that the "circuit breakers" are hit milliseconds after the opening. You don't even hear the bell, and only the HFT traders get anything out of the market. The market goes straight down during the short time intervals it is allowed to be open. Once all the primary dealers become insolvent, Treasury auctions stop working. Congress will be forced to mint trillion dollar coins or authorize the Treasury to sell bonds directly to the Fed just to keep the government operating. All the big banks go bust and the FDIC will have to call upon the Treasury to make good on about $5 T of deposits.

Fri, 05/03/2013 - 19:44 | Link to Comment Hacked Economy
Hacked Economy's picture

This is skewing a bit off-topic, but after reading many of the recent comments in several articles/threads, and using the QE topic as a springboard for the point I want to make:

We all know the debacle Bernanke has caused with his "helicopter money" QE policy, and the increasing probability of an economic depression or collapse on the horizon.  But here are some interesting points to add.  One of my friends owns a medical-related business, and is finding it harder and harder to collect the money owed to him by Medicare...he is currently waiting for nearly $100K in delayed payments.  Medicare is fracturing under the strain of its own flawed Ponzi structure, and apparently a lot of doctors and medical suppliers are being screwed.

Add to this the cracks in the Social Security system and the problems coming to light (for the masses, anyway...the rest of us already foresaw the Ponzi criminality of that program many years ago).  Some of my older friends who are collecting SS are now being told that new restrictions are being implemented for those who apply for the benefits.  I'm sure we all agree that the classic Ponzi structure was never fiscally sound to begin with, but in April 2013, for the first time in history, the math hit the point where the average person now pays MORE into the SS program than he/she will withdraw upon retirement.  As this becomes more widely known, the younger generations will also become more incensed at the unfairness of it all.  They'll already be increasingly angry at politicians for the high taxes, but they'll begin to direct their frustration at elderly people as well, since they're the group of people consuming the SS taxes taken out of the younger peoples' paychecks.

So what's my point?  There was a classic 1976 movie called "Logan's Run", and apparently a remake is in the works (which is reportedly going to be closer to the original novel than the first film was).  In the comments sections of those online articles, I was AMAZED at how many people - no doubt younger than 30 - agreed with the idea that older people who are no longer of any further use to the community should be put out to pasture and euthanized, if for no other reason than to ease the financial burden on society.  THE MOST COMMONLY SUGGESTED AGE WAS 55.  Regardless of the age discussed, the scary thing was that the majority of the commenters were on board with the idea of "getting rid of the flotsam in the system".

It sounds stupid to many of us now, but remember that the younger people of today will be the decision-makers of tomorrow, or at least the voters who will put the decision-makers into office.  And as the financial stresses increase, more desperate measures will be suggested.  For those who are old enough to do this, imagine what our lives were like 15 or 20 years ago, and how crazy it would have sounded to suggest any of the myriad things we now deal with.  Now imagine some of today's "crazy" ideas coming to light over the next decade.

Fri, 05/03/2013 - 20:32 | Link to Comment Cloud9.5
Cloud9.5's picture

Given an option, at the end of our days, many of us boomers would off ourselves if there was a legal realtively painless way to do it.

Fri, 05/03/2013 - 21:57 | Link to Comment oddjob
oddjob's picture

kudos

Fri, 05/03/2013 - 23:49 | Link to Comment GoinFawr
GoinFawr's picture

RE:SS

 

Don't fret kids! By the time you're collecting SS the smaller nominal amount won't matter because the USdollar will be worth oh so very much in comparison to the things that you will need to be comfortable in your dotage.

Signed,

A Deflationist

Fri, 05/03/2013 - 21:28 | Link to Comment andrewp111
andrewp111's picture

They will never end QE until it stops working. By then it doesn't matter anyway. Once the Fed buys all the Treasury's and all F/F's bond issuance, they can't do any greater QE. By then, treasury 30 yr rates will be zero, short rates will be negative, and when the stox market starts imploding with the circuit breakers hit after milliseconds of trading, there will be nothing the Fed can do. They will simply be standing by, helpless.

Sun, 05/05/2013 - 05:47 | Link to Comment Kobe Beef
Kobe Beef's picture

Agreed, they will never end QE until it stops working. And then, they will come up with something worse. 

Fri, 05/03/2013 - 16:25 | Link to Comment SAT 800
SAT 800's picture

Yes, this is a problem with Mr. Klarman's article; it's an excellent analysis; but to say, or believe, that "they" are highly skeptical, is to give far too much credit to their mental functioning. Skepticism is part of Rational Thinking, and this they simply do not do. Nor, can they.

Fri, 05/03/2013 - 17:03 | Link to Comment Groundhog Day
Groundhog Day's picture

I think Klarman gives to much credit to the populace.  I speak to doctors, lawyers, executives, business owners on a regular basis.  I explain the situation and get a glaringly confused look on thier face.  The most intelligent of them will state they understand and say that the money printing is lead to ever higher stock prices.  I just say your right.  If they are unwilling to ask questions they diserve to lose all their money

Fri, 05/03/2013 - 17:09 | Link to Comment fonzannoon
fonzannoon's picture

The waitress at my diner said her neighborhood had the "post collapse" meeting already.

Fri, 05/03/2013 - 17:42 | Link to Comment kito
kito's picture

fonz can you get the address of your waitress.................just in case....................

Fri, 05/03/2013 - 17:57 | Link to Comment otto skorzeny
otto skorzeny's picture

I went home with a waitress... the way I always do.

Fri, 05/03/2013 - 18:05 | Link to Comment AlaricBalth
AlaricBalth's picture

Otto
Was she with the Russians too and how is Honduras this time of year?
:-)

Fri, 05/03/2013 - 21:42 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

...and he's down on his luck.

Sat, 05/04/2013 - 13:18 | Link to Comment Dave Thomas
Dave Thomas's picture

Don't worry he'll call dad soon to get him out of that.

Fri, 05/03/2013 - 22:04 | Link to Comment HardAssets
HardAssets's picture

I wonder about the 'they' written about in the article also. I rarely seem to run into them. The eyes of most of the 'theys' that I speak to glaze over when I try to speak to them on the topic of the economy and they actively run away (figuratively or physically) if the subject is even brought up. This includes those with advanced degrees in such subjects as medicine, science, etc.

I'm reading the recently released book "Bunker Hill" which talks about Boston at the time of the American Revolution. What strikes me is how much better the people of that time were than Americans today. We've lost the sense of fierce independence, love of freedom, and practical intelligence of our forefathers.  100 years of public 'education' has done its job, as have t.v. and all sorts of stupid diversions.

Perhaps when 'they' are really squeezed to the point when their comfortable world has been torn apart, 'they' will start to have a clue . . . or at least a little bit of curiosity about the situation they will be in. Most only have apathy.

Sat, 05/04/2013 - 00:15 | Link to Comment Anusocracy
Anusocracy's picture

Obedience to the collective has been the norm for millions of years. It is an attribute of the social mind.

Individualism is a very recent development. It is an attribute of the autistic spectrum mind.

Looking at the makeup of the public, it's apparent why individualists are a small minority.

 

Fri, 05/03/2013 - 15:52 | Link to Comment duo
duo's picture

I was wondering what took her so long.  She made Obama.

Fri, 05/03/2013 - 16:12 | Link to Comment Cult_of_Reason
Cult_of_Reason's picture

Obama is a fraud, bankster's puppet.

 

Americans remind me this drunk guy (the one who picked up the "chick").

 http://www.thedawgpound.com/wp-content/uploads/2013/02/beer_goggles_can_get_you_into_trouble.jpg

 

 

Fri, 05/03/2013 - 16:55 | Link to Comment Big Slick
Big Slick's picture

I resemble that remark.

(the day of the hand is close)

Fri, 05/03/2013 - 16:10 | Link to Comment Croesus
Croesus's picture

With a name like "Pritzker", I wonder what her heritage could be???

Fri, 05/03/2013 - 17:25 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

German, Swiss, Austrian?  A LOT of names with an "er" ending over there.  > 6 Million.

Fri, 05/03/2013 - 17:42 | Link to Comment Kinskian
Kinskian's picture

Didn't you mean minus 6 million?

Fri, 05/03/2013 - 16:25 | Link to Comment reload
reload's picture

Thanks - a sickening story indeed. Must read some more stuff by Palast, although I dont immagine it will cheer me up. Not much does these days, it is just about understanding the enemy as well as possible. That Pritzker woman looks truly bloody evil and if $1.8bln can not make her look presentable she must be.

The collapse: most are asleep at the wheel, the architects of disaster are meanwhile looting what they can -AND worse still, they are preparing for new mechanisms to control mankind after the current methods are toast. Can enough people wake up in time? I am getting less optimistic.

Fri, 05/03/2013 - 16:53 | Link to Comment otto skorzeny
otto skorzeny's picture

if that makes you sick read up on the Crown Family(General Dynamics)- another illustrious Jewish family with their fist up O's ass.

Fri, 05/03/2013 - 18:18 | Link to Comment DosZap
DosZap's picture

Can enough people wake up in time? I am getting less optimistic.

Well,since '08, there have been 79 million new weapons owners,accumulators and the current rate of new sales if 43,xxx per day.Add that to the 200 million PLUS that are known about, (figure double that #), I would say a LOT more folks are getting it.

Fri, 05/03/2013 - 16:30 | Link to Comment SAT 800
SAT 800's picture

How sad. I'm sure they are many important developments in the world of Golf, Basketball, and ice hockey that will effectively prevent any more than 50 or 60 people from even noticing or reflecting on the significance of this watershed event. They are very confident now; their research has proved that no one is paying attention and they can definitely afford to ignore the tiny literate intellectual minority who will comment.

Fri, 05/03/2013 - 17:35 | Link to Comment Sweet Chicken
Sweet Chicken's picture

How fucking dare you mention hockey in the same sentence as basketball and golf. Hockey and the cup are some of the few things that we still have that matter.

 

BTW I still upvoted you 

Fri, 05/03/2013 - 19:38 | Link to Comment Blano
Blano's picture

Go Wings!!!!!!!

Fri, 05/03/2013 - 22:53 | Link to Comment Buck Johnson
Buck Johnson's picture

Just read it, your totally right.  When the party is over they try to take everything on the way out of the country or region.  Then when things get less crazy but real downtrodden for the country or countries, they come back to invest and buy back businesses and infrastructure and land and to be honest politicians to start the game over with them making a killing when things start to get better for them (not the people).

Fri, 05/03/2013 - 15:47 | Link to Comment LFMayor
LFMayor's picture

So saying that this is a lot like people in poor health suddenly getting better, just to up and croak?

Seen that a few times now.  Best days are the last days.

Fri, 05/03/2013 - 15:53 | Link to Comment madcows
madcows's picture

"I'm not dead yet.  I feel happy!"

Fri, 05/03/2013 - 17:48 | Link to Comment PiratePawpaw
PiratePawpaw's picture

"Its just a fleshwound"

Fri, 05/03/2013 - 21:21 | Link to Comment andrewp111
andrewp111's picture

It is just a matter of feeling no pain. Then you can do anything, until you simply drop.

Fri, 05/03/2013 - 15:47 | Link to Comment Aeternus
Aeternus's picture

We are on the precipice of untold world wide monetary chaos and collapse.

 

Stand fast......

 

 

 

http://www.youtube.com/watch?v=deuC8GPr31A

Fri, 05/03/2013 - 17:52 | Link to Comment phoolish
phoolish's picture

Remember, markets acting like this is a prime correlate w/ "hyper-inflation" type regimes.  Weimar and imbabwe markets went up big time.  All the $ going to the banksters - their buying equities with their paper.  CB's themnselves are now buying equities and admitting it.

 

Think my brokerage will take some fiat I create on my printer in exchange for stock?  LOL.

 

Asset prices, especially liquid asset prices, are going much higher.

Fri, 05/03/2013 - 19:34 | Link to Comment FreedomGuy
FreedomGuy's picture

One important difference in the Weimar was that the economy was not systemically wrecked. We have two great forces on opposition, inflationary pressure from central banks versus economy wrecking governments which produces deflation.

I have gone back and forth on which will win out.

Fri, 05/03/2013 - 21:19 | Link to Comment andrewp111
andrewp111's picture

Me thinks deflation. They will do QE until it stops working, then it is game over. The wildcards are Japan and Europe. Japan's government is under unified party control and is committed to wild fiscal stimulus. Fiscal stimulus could create hyperinflation if they do enough of it. If Germany flips to the Socialists this Fall, the EU could start mad fiscal stimulus as well. That will only happen in the US if House control flips in next year's midterms - which seems unlikely now, but who knows?

Fri, 05/03/2013 - 15:47 | Link to Comment Devils Advocate
Devils Advocate's picture

Makes Sense to me!

Fri, 05/03/2013 - 15:48 | Link to Comment IridiumRebel
IridiumRebel's picture

I think I will be hunkering down from here boys. I thought when 15K was eclipsed we would be getting close. Maybe we will hit 16K or higher, but we all know where this heading. GLTA.

Fri, 05/03/2013 - 15:51 | Link to Comment McMolotov
McMolotov's picture

"The future's uncertain, and the end is always near. Let it roll, baby, roll..."

http://www.youtube.com/watch?v=5XWQrt00_NM

Fri, 05/03/2013 - 16:57 | Link to Comment Lukacko
Lukacko's picture

Even our damn music is being inflated away.  There sure as shit isn't music coming out as good as there used to be.

Fri, 05/03/2013 - 17:04 | Link to Comment McMolotov
McMolotov's picture

Gotta sift through all the shit to find the good stuff.

http://www.youtube.com/watch?v=1GV9CYiWJlk

Fri, 05/03/2013 - 18:26 | Link to Comment centerline
centerline's picture

Saw Rush a few nights ago.  Took the kids.  Same crowd as 20+ years ago - lol - just fatter, balder, more grey.  Even my kids were moved by the show.  Rush sounded as good live as they do on album.  Outstanding is all I can say.  

Fri, 05/03/2013 - 17:02 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Ain't that the truth.  Which is why I say:  Define "Close".  A few months, or 1-2 years?  My street sense is "years", my ZH sense is "months". 

Fri, 05/03/2013 - 15:48 | Link to Comment sitenine
sitenine's picture

Promises WILL be broken.

Fri, 05/03/2013 - 16:28 | Link to Comment Unprepared
Unprepared's picture

You promise?

Fri, 05/03/2013 - 16:50 | Link to Comment sitenine
sitenine's picture

Yes, and if you're interested, I can sell you a derivative on that promise as well.

Fri, 05/03/2013 - 15:50 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Seth Klarman writes:

"They are pretty sure they are not getting reasonable value from the taxes they pay."

and

"When an economist tells them that growing the nation's debt over the past 12 years from $6 trillion to $16 trillion is not a problem, and that doubling it again will still not be a problem, this simply does not compute."  

and lots more above...

I think he is correct, we are close to a system failure.  Buy gold.  Prepare.

 

Fri, 05/03/2013 - 15:51 | Link to Comment madcows
madcows's picture

I never underestimate the stupidity or moral corruption of our politicians.

Case in point:  Joe Biden - "I got a 3-letter word for you... jobs... J-O-B-S!"  Fucktard.  Even my 4 year olds can count to 4.   And, He's the God Damned 2nd in Command.  My God!  We are in serious fucking trouble.

Fri, 05/03/2013 - 16:00 | Link to Comment Rusty Shorts
Fri, 05/03/2013 - 16:22 | Link to Comment Divided States ...
Divided States of America's picture

The vice pres is always made to look like a complete moron so it takes away from how much of a real bozo the pres really is.

 

Fri, 05/03/2013 - 16:57 | Link to Comment Big Slick
Big Slick's picture

Love the rough film footage... from 1664

Fri, 05/03/2013 - 17:50 | Link to Comment Rusty Shorts
Rusty Shorts's picture

Biden is,..well here it is straight from the horses mouth.

https://www.youtube.com/watch?v=Uo-UXZ-1ups

Fri, 05/03/2013 - 18:12 | Link to Comment are we there yet
are we there yet's picture

Biden and Obama are not as good a comedy team as laurel and Hardie, whose comedy films were also black and white.

Fri, 05/03/2013 - 18:17 | Link to Comment Tango in the Blight
Tango in the Blight's picture

*cough* Dan Quayle *cough* potatoE

http://www.youtube.com/watch?v=Wdqbi66oNuI

Fri, 05/03/2013 - 17:02 | Link to Comment Big Slick
Big Slick's picture

Madcow's point is really good.  Have you taken a close look at the fractured and flawed people "governing" us... from both sides of the aisle?

It's no wonder Romney lost.  He's doesn't look like an asylumn inmate.

Although I love this picture of him late Thanksgiving morning, the month of his defeat.  http://i2.cdn.turner.com/cnn/dam/assets/121123062145-romney-facebook-sto...

This is a relieved man, genuinely happy, and lucky to have lost!

Fri, 05/03/2013 - 17:06 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

Lets face facts the majority of the population are so fucking stupid they would walk into furnace if the governement told them. I feel so alone.

Fri, 05/03/2013 - 19:08 | Link to Comment Dull Care
Dull Care's picture

Not sure why people expect different from a democracy. The kind of people you would ideally want in power aren't the personality types attracted to politics. Just split the country into 500-600 privately owned countries ASAP.

Fri, 05/03/2013 - 15:52 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

The only failure we should encourage IS the government.

<OK......now all together...........PUSH.>

Thu, 07/11/2013 - 13:55 | Link to Comment Manthong
Manthong's picture

birth.. 

it's a good thing.

oh.. but CD, were you referring to the other channel?

Fri, 05/03/2013 - 15:52 | Link to Comment StarTedStackin'
StarTedStackin&#039;'s picture

So the Obowel Movement lied about this being recovery summer 4?

Fri, 05/03/2013 - 16:38 | Link to Comment SAT 800
SAT 800's picture

The Obowel Movement; !! LOL. I give you thumbs up for making me spit out my tea through my nose !

Fri, 05/03/2013 - 15:52 | Link to Comment Shizzmoney
Shizzmoney's picture

RE:

Is it possible that the average citizen understands our country's fiscal situation better than many of our politicians or prominent economists?

possible?

I'd rather have my bartender run the Federal Reserve than whatever Ivy League jew they put up there during the next 20 years.

Fri, 05/03/2013 - 16:22 | Link to Comment astoriajoe
astoriajoe's picture

WF Buckley said it best:

" I am obliged to confess I should sooner live in a society governed by the first two thousand names in the Boston telephone directory than in a society governed by the two thousand faculty members of Harvard University."

Fri, 05/03/2013 - 16:46 | Link to Comment Canucklehead
Canucklehead's picture

If you wanted the Japanese to run the show, why not say so?

Fri, 05/03/2013 - 19:36 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

William F Buckley, Knight of Malta, member of the Skull and Bones secret society...

Fri, 05/03/2013 - 16:40 | Link to Comment SAT 800
SAT 800's picture

Me too. My bartender is quite a reasonable and hard working man, who owns his establishment as a result of 23 years of hard work and personal savings. More than you can say for the "economic" education of the elite morons in charge.

Fri, 05/03/2013 - 17:11 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

Hey maybe Hitler had a point!!

Fri, 05/03/2013 - 15:54 | Link to Comment slaughterer
slaughterer's picture

How is Baupost performing and how are they currently positioned?

Fri, 05/03/2013 - 15:56 | Link to Comment fonzannoon
fonzannoon's picture

Last I checked he was pitching AIG.

Fri, 05/03/2013 - 17:37 | Link to Comment kito
kito's picture

oh woe to be a fiduciary in these times..................................

Fri, 05/03/2013 - 15:55 | Link to Comment slaughterer
slaughterer's picture

Treasury Secretary Lew in meetings with many different banksters over the last two days.

We should be wary here.

Fri, 05/03/2013 - 15:59 | Link to Comment McMolotov
McMolotov's picture

Gold got whacked the last time all the bankers got together with El Presidente. Wonder what it'll be this time.

Fri, 05/03/2013 - 16:25 | Link to Comment Divided States ...
Divided States of America's picture

I am hoping the bankers get whacked this time....all at once with 'Lack of Jew' present as well.

Fri, 05/03/2013 - 17:09 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

They will keep whacking Gold until it suits them. The cunts want it at a discount.

 

Keep stacking........... we will face them on the other side and then we will hang them.

Fri, 05/03/2013 - 16:09 | Link to Comment Shizzmoney
Shizzmoney's picture

Felix Salmon over at Reuters says Jack Lew is the man in the government to emphasize improving unemployment.

If that is the case....we are so fucked.  I bet he doesn't even tip for dinner.

Fri, 05/03/2013 - 16:29 | Link to Comment Divided States ...
Divided States of America's picture

The only employment Lack Jew cares for are the employment of Jew-infested industries like the Financial system, Legal system, Media and Academics. Obama is stuffing his cabinet with all the jbags he can find....this guy has no shame. Barrack Obamastein.

Fri, 05/03/2013 - 16:55 | Link to Comment otto skorzeny
otto skorzeny's picture

DS-I like your style.

Fri, 05/03/2013 - 17:31 | Link to Comment kito
kito's picture

hey can i invite you guys to my cousins bar mitzvah????............you would be all the rage at the bash....................

Fri, 05/03/2013 - 17:36 | Link to Comment akak
akak's picture

Hey, I'm game, as long as I don't have to wear one of those ridiculous bra cups on my (shaved) head, or ritually throw any Christian babies down a well.

Fri, 05/03/2013 - 17:40 | Link to Comment kito
kito's picture

hahah nice akak...youre in.............you may have to sacrifice a goat....or a federal reserve chairman.................

Fri, 05/03/2013 - 17:52 | Link to Comment akak
akak's picture

I'm assuming BYOB, right?

Fri, 05/03/2013 - 18:23 | Link to Comment kito
kito's picture

no way akak!! open bar!!!!!!!!!!!!!!!

Fri, 05/03/2013 - 17:12 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Lest we get our knickers in a twist...

 

A priest, minister and rabbi were playing their usual Wednesday round of golf, and started discussing their weekly collections.

Specifically, they started to compare how they decided what portion of the collection to keep for themselves and what portion to give to God.

The minister explains: "I draw a circle around myself and toss the money in the air. Whatever lands in the circle I keep for myself. What ever lands outside the circle, I give to God."

The priest then adds: "I use a similar method, except that whatever lands in the circle I give to God, and whatever lands outside the circle I keep for my personal needs."

The rabbi then proclaims: "I use the same method, as well.  Except, that when I toss the money in the air, I figure that whatever God wants he can take."

To which I say:  "Sometimes, how you see the problem, is the problem."  Dominus vobiscum.

Fri, 05/03/2013 - 16:42 | Link to Comment SAT 800
SAT 800's picture

Wary? what good would it do? Buy some more Silver; fuck wary.

Fri, 05/03/2013 - 16:50 | Link to Comment Poetic injustice
Poetic injustice's picture

More interestingly, in meetings with which insurers???

Fri, 05/03/2013 - 17:51 | Link to Comment klockwerks
klockwerks's picture

Slaughterer, how did I miss these meetings. I have not seen this info anywhere.What site will gives us a little info.

Fri, 05/03/2013 - 15:57 | Link to Comment thismarketisrigged
thismarketisrigged's picture

anybody listening to that jackass from morgan stanley on cnbc?

 

he said that all is well, and europe is fucking calming. europe is calming? ya, its also calm many times right before a cat 4 hurricane strikes as well. europe is calming, lol. europe is fucked.

 

he also said that hes been buying aapl all the way down and he would buy here as well, its going to 600, i spit my water out of my mouth,

 

also, he said the market reaction today to the jobs report was the proper one, and that the market was resiliant in april.

Fri, 05/03/2013 - 16:03 | Link to Comment Goggles Pisano
Goggles Pisano's picture

You beat me by 3 minutes. Although I wish you wouldn't insult jackasses like that. All that guy needed was pom-poms. I just finished buying puts on the S&P while I was watching him.

Fri, 05/03/2013 - 16:13 | Link to Comment ebworthen
ebworthen's picture

Exactly the kind of pricks that need a good beating from hungry senior citizens.

Canes and purses, some cans of soup, and some stones for good measure.

Fri, 05/03/2013 - 16:15 | Link to Comment Dineroguru
Dineroguru's picture

One jackass talking to another jackass is just a warm up for the bonanza of Becky humming the great orafice from Omaha next week.  

Fri, 05/03/2013 - 16:54 | Link to Comment Poetic injustice
Poetic injustice's picture

"he said that all is well, and europe is fucking calming. europe is calming? ya, its also calm many times right before a cat 4 hurricane strikes as well. europe is calming, lol. europe is fucked."

 

No, it feels like Europe is in eye of storm. Where everything is perfectly calm, until storm moves on.

Fri, 05/03/2013 - 18:14 | Link to Comment ReactionToClose...
ReactionToClosedMinds's picture

Yo .... Morgan Stanley ....& CNBS .... I write this from a major commerical city of Germany (after a fine meal & bottle of excellent Riesling)  ..... met with experienced successful biz execs & financiers for good chunk of the week ....... to a freakin's man/woman ......anonymously .... they said the same thing .......>>>>> France .... it cannot be solved.....and cannot be bailed (at least by Deutschland) ...... the Italians & Spanish..... they are more wordly than most ... and anyone in biz there  'knows the score' (or knew it long ago)  .... so they might be catalysts but the biz folk ain't gonna take the bait in those  countries ...... but let us take France.   With each passing month of the 'status quo' ...... it increasingly leads to MarioD 'fessing up  ...we have a problem in Euroland.  Not even Merkel with Putin (with the Saudis even) can handle that ...... only your august esteemed Federal Reserve Bank of NY (excuse me, I mentioned the man behind the curtain), er, the Federal Reserve System of the United States of America with maybe some 'support' by the Peoples Republic of China, can get the 'France' job done.    Next ....?

Fri, 05/03/2013 - 15:58 | Link to Comment AldoHux_IV
AldoHux_IV's picture

Wow, I'm more impressed a HBS alumn and chum of Jamie Dimon had the time to give credit to the "average citizen", and understand for themself the scratchings of what's really going on. Perhaps, he should spend less time pontificating and more time frontrunning b/c that's all he's good for.

Fri, 05/03/2013 - 16:04 | Link to Comment nantucket
nantucket's picture

baupost has one of the best long term track records in history, however, that alone doesn't make him worth listening to.    but klarman is worth listening to for many other valid reasons.  klarman is no BS.  his analyses are far more cerebral and fundamentally sound than 99% of the other jackhole pundits out there.  when he speaks/writes, it behooves you to listen.

 

other than that, pay no attention.  it's a 50/50 crap shoot.

Fri, 05/03/2013 - 16:03 | Link to Comment lesamourai
lesamourai's picture

"And when you tell the populace that we can all enjoy a free lunch of extremely low interest rates, massive Fed purchases of mounting treasury issuance, trillions of dollars of expansion in the Fed's balance sheet, and huge deficits far into the future" ...

they rejoice. And promptly ramp up their credit card purchases, student loans, and house buying.

Fri, 05/03/2013 - 16:07 | Link to Comment Westcoastliberal
Westcoastliberal's picture

And those credit card interest rates in way, shape, or form represent "low" anything.

Fri, 05/03/2013 - 16:08 | Link to Comment Shizzmoney
Shizzmoney's picture

"Free lunch"? Like any of us are actually having that money hit our wallets.

Loans are not money.  They are serfdom vehicles.

Fri, 05/03/2013 - 16:48 | Link to Comment SAT 800
SAT 800's picture

On the subject of "free lunch"; I was noticing that both gasolene and hot dogs, (all beef kind), have doubled in price since the beginning of the Obamanation. It gets harder to remember all the time that there's no inflation.

Fri, 05/03/2013 - 16:56 | Link to Comment Poetic injustice
Poetic injustice's picture

Just ask doctor to double the amount of happiness pills on your prescription.

Fri, 05/03/2013 - 16:22 | Link to Comment Things that go bump
Things that go bump's picture

Which will not be paid back.

Fri, 05/03/2013 - 16:05 | Link to Comment Debt Slave
Debt Slave's picture

With all the printing, the credibility of our entire trust-based monetary system will be increasingly called into question.

Except it isn't "trust based". It is debt based. There is a difference.

Fri, 05/03/2013 - 17:07 | Link to Comment Poor Grogman
Poor Grogman's picture

It's actually fear based.

If you don't pay your taxes in FRNs you go to jail. Very simple really.

"trust" and "faith" is promoted to disguise the nasty reality.

You are a slave Neo...

Fri, 05/03/2013 - 19:47 | Link to Comment Herd Redirectio...
Herd Redirection Committee's picture

The thing is, people could keep just enough fiat to pay their annual donation to the Empire, I mean, State. The rest would NOT be kept in banks, it would be converted into hard assets or spent.  If people boycotted the big retailers, your Walmart, for example, it would make a big difference.  

The ongoing price suppression of precious metals is a big deal though, Thomas Gresham is probably spinning in his mausoleum, "Bad money drives out good".  Meaning, precious metals can't be used as currency, while their price is suppressed (because you'd have to be an idiot to sell at the COMEX price)

Fri, 05/03/2013 - 16:09 | Link to Comment ebworthen
ebworthen's picture

If the economy is recovering and housing and employment are improving then stop QE and put FED rates at 4%.

Why don't they do it?  Because they know this is a lie, one of the biggest lies ever told. 

They know without the FED the illusion could not continue.

"We have always been at war with Eurasia."

"Where else you gonna' put ya' money?"

The mattress you assholes!

Fri, 05/03/2013 - 16:11 | Link to Comment pickupthatcan
pickupthatcan's picture

Today, Warren Buffet said he wouldn't buy gold even if it went to $800 or lower.  He said that one share of BRK-A is a much better investment.  So I had to decide if I wanted to sell 110 ounces of Au or by one share of BRK.  I think I'll keep the shiny stuff.  It goes well with all my copper and brass.

Fri, 05/03/2013 - 16:29 | Link to Comment ParkAveFlasher
ParkAveFlasher's picture

I'm gonna make like Warren and buy myself an oil rail transport monopoly.  That'll beat inflation for sure.  Gold shmold.

Fri, 05/03/2013 - 16:32 | Link to Comment Urban Redneck
Urban Redneck's picture

Warren's lyin' out his ass again- his underlings buy more physical gold and other barbarous bling every month then everyone on ZH combined - but buying one share of BRK-A doesn't get you the Chairman's Discount or keys to the supply room at Berkshire subsidiaries like Richline Group, Borsheim's, Ben Bridge Jewelers, or Helzberg Diamonds.

Fri, 05/03/2013 - 16:51 | Link to Comment SAT 800
SAT 800's picture

word. bro. Buffet is wrong on this one.

Fri, 05/03/2013 - 16:13 | Link to Comment polo007
polo007's picture

http://news.goldseek.com/GoldSeek/1367608346.php

Because of excessive government interference with interest rates, those desperate for income—including pension funds—have pushed prices of virtually all secure sources to nosebleed heights. When the Fed eventually does raise interest rates, the bond bubble will be pricked and the stampede to get out of bonds should be like a herd of elephants attempting to exit through a revolving door. What to do in such a bond market crisis? Aside from TDL's blue-chip recommendations, we always recommend dispersing assets in several "friendly" countries. Also, diversifying in golds and silvers, including Saint-Gaudens double-eagle gold coins, rather than just keeping capital entirely in fiat currencies.

The world is in what we call "The Second Great Depression," comparable with the first one, in the 1930s. As laid out in my final business book, "Goldbug!," doubling the money supply in 1922 to pay for World War I caused a great inflation that after 1929 was corrected by the First Great Depression, in the 1930s. The similar printing of enormous quantities of paper money, not backed by anything except more paper, has also resulted in the current Great Deflation, still deepening, worldwide. The soup kitchens of the 1930s have been replaced by food stamps, but the resemblance is not coincidental.

Realizing that Keynesian economics failed to end unemployment after the 1932 crash, until World War II began around 1940, enabled us to predict with specific clarity that it would not work these days either. Indeed. Historically, large quantities of printing-press money has failed to reduce the downward trend of Americans with jobs in recent years. Few believed our prediction of "The Coming End of the Age of Jobs," or that it would lead to "The Coming New Social Order," but it is already unfolding. Unemployment in Europe already ranges between 20% and 50%, depending.

It is difficult for investors to protect themselves in this situation, but we cover it as best we can. We have recommended blue-chip stocks that have a dividend yield higher than that of U.S. Treasury paper, because they are proxies for institutions seeking to park their cash in areas other than overpriced bonds. That should end when the Federal Reserve finally allows interest rates to rise, but its fanaticism in continuing to suppress rates despite the Keynesian method not working represents a triumph of hope over experience—and will not end well.

Especially shocking is the delusion that adding inflation to a deflation would somehow cancel each other out, but is in fact the futile attempt to cure a problem with its cause. Overprinting paper runs at increasing risk of an eructation of "hyperinflation"—please note it is a word not used anywhere in the mainstream press these days. Predicting a hyperinflation is so daring in today's environment that we might be mistaken, so we will have to get closer toward the end game to be more confident of it. We hope we are mistaken.

Fri, 05/03/2013 - 21:08 | Link to Comment andrewp111
andrewp111's picture

I don't think it will ever get to the point that the Fed actually raises rates. QE will slowly stop working as it is running on max for years. Once the Fed and the BOJ (and the ECB???) are completely out of bullets, it will be like a supermassive star that has burned all its nuclear fuel down to iron. Nothing can then stop the collapse. Nothing.

Fri, 05/03/2013 - 16:14 | Link to Comment JR
JR's picture

Free enterprise is dying. And when it’s dead, liberty will be dead as well. The state of the U.S. economy is in deterioration, yes.  But a dying economy is not the only failing characteristic of this once great American society.

This is former Assistant U.S. Treasurer, fromer assistant editor of the Wall Street Journal and distinguished columnist Dr. Paul Craig Roberts:

“Until the George W. Bush Regime, I never thought that it could happen here. I could not imagine law professors and Department of Justice (sic) officials writing legal memos justifying, in the name of a hyped “war on terror,” the termination of civil rights for United States Citizens. We were the land of the free. The Constitution was our bedrock. Yet, the Constitution and Bill of Rights were easily taken away from the inattentive American people.”

And following are a few excerpts from YOU ARE THE HOPE on his web site or Global Research:

Washington has come full circle. Its enemy is now its ally. Washington wasted trillions of dollars and countless lives in eleven years of war and constructed a domestic police state all in order to combat al Qaeda with whom Washington is now allied against the Syrian government.

The public’s response to the Boston Marathon Bombing is even more discouraging. Not even King George and his Redcoats could achieve what Homeland Security just pulled off–locking down 100 square miles of Boston and its suburbs with heavily armed troops tramping through citizens’ homes barking harsh orders, all justified by a hunt for one 19-year old suspect. It was the Third Reich’s Gestapo in operation right here in “freedom and democracy” America. Ron Paul is correct that the suspension of civil liberty is a greater threat than the bombing. Note the government’s euphemism for martial law–”shelter-in-place.”

What was the reason or evidence for naming the brothers suspects? Was any reason given, or was the film of the two walking with backpacks simply shown over and over, hour after hour, day after day, with the media reporting that these are the suspects. In other words, was it beat into your brain that they were suspects because there they are in the film? If not, why was the same film shown repeatedly? Fox “News” was still showing the film on April 26, eleven days after the bombing and might still be showing it. Did you experience: “Here are the suspects. See them. They have backpacks. See. We know that they are suspects, because, see, there they are.”

Where is the evidence of a first shoot-out and a second shoot-out? The second shoot- out consisted of the authorities bombarding a motionless youth bleeding from wounds in a boat with multiple volleys of stun grenades and then multiple gunshots. The unconscious 19 year old was unarmed and unable to respond to the boat owner who discovered him. As he lies there, he is shot many times, including through the throat, and is on life support. But the very next day, according to the presstitute media, he is providing hand-written confessions.

Every time I write a column that is the truth or the truth as I am able to discover it, instead of hawking the propaganda line, I move up on the list of those who are persona non grata in the Empire.

A writer can find himself demonized and declared a kook simply by reporting findings from distinguished scientists, high-rise architects, structural engineers, first responders, and an international collection of high government officials. Not too long ago a writer or reporter for the Huffington Post discovered to his surprise that Pat Buchanan and I disagreed with all the wars that had been launched to protect us from terrorism. He asked me for an interview, and I agreed.

An hour or so after the interview was posted on the Huffington Post, I received an emergency call or email. He had been criticized for interviewing me, “for giving you a forum when you are a 9/11 sceptic.” ...

But, writes Roberts in this piece:

If there is hope, dear readers, you are it.

You are motivated to find truth.

You can think outside the box. You can see through propaganda.

You are the remnant with the common sense that once was a common American virtue. You come to this site, because you get explanations that are not agenda-driven, that are not BS, that are not right-wing or left-wing, conservative or liberal, Republican or Democrat. You get explanations based on my lifetime of unique education and experience. Some of you are young enough to be equipped with the energy and courage to organize whatever resistance there may be to the Gestapo State that is descending on the United States of America.

http://www.globalresearch.ca/you-are-the-hope/5333734

Fri, 05/03/2013 - 18:20 | Link to Comment klockwerks
klockwerks's picture

Thanks for the link. I had many of the same questions. Sad world when you can't believe anything you hear or see

Fri, 05/03/2013 - 19:44 | Link to Comment TNTARG
TNTARG's picture

Fresh air.

Fri, 05/03/2013 - 16:18 | Link to Comment RougeUnderwriter
RougeUnderwriter's picture

Read David Stockman book.

Is American Idol on tonight?

 

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