Jeff Gundlach: "We Are Drowning In Central Banking"

Tyler Durden's picture




 

Last week, Bill Gross did not mince his words when he said that he now "sees bubbles everywhere" and that "when that stops there will be repercussions" but for now Benny and the Inkjets, not to mention his band of merry statist men, who take from the poor and give to the wealthy, are playing the music on Max, and so one must dance and dance and dance. And after one legacy bond king, it was the turn of that other, ascendant one - Jeff Gundlach - to share his perspectives Bernanke's amazing bubble machine. His response, to nobody's surprise: "there is a bubble in central banking. We are drowning in central banking and quantitative easing.... And it's not ending until there are some negative consequences."

What are those negative consequences? This too should be perfectly expected for regular readers: currency devaluation leads to trade wars (as either is a zero sum game, and in a zero sum game it is very easy to blame someone else for one nation's suffering and economic malaise), trade wars lead to real wars (see the 1930s), and so on.  We are not there just yet: quote Gundlach "With global growth slowing not everyone can increase their imports [indeed: observe just how it was that Spain managed to post its first "trade surplus" since 1971 - hint: not by boosting exports] you're playing a market share game." But it is rapidly approaching: "We are looking at competitive currency devaluations, which causes rancor, causes unhappiness, and fingerpointing and god-forbid tariffs and things that cause even slower economic growth a la the 1930s." Good choice of words, considering it was just a week ago that none other than stagnating metals magnate Lakshmi Mittal, head of ArcelorMittal, who was urging Europe to just go ahead already and declare trade on China asap. For his own selfish reasons of course.

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Sun, 05/19/2013 - 13:16 | 3577972 DaddyO
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Control, bitchez!

DaddyO

Sun, 05/19/2013 - 13:39 | 3577999 freewolf7
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"there is a bubble in central banking. We are drowning in central banking and quantitative easing.... And it's not ending until there are some negative consequences."

I know I'll get junked, but is this news?
Preaching on a slow Sunday to the choir?

Sun, 05/19/2013 - 13:47 | 3578011 Mark Carney
Mark Carney's picture

OT: If you think about the price of silver, Judas betrayed Jesus for 30 pieces of silver (1 Troy ounce = piece).  It is noted that 30 piece was equivalent to 3 months wage, so in todays terms 3 month wages is equal to $10,000.  $10,000/30= $333/ounce.

 

Do you people believe that Judas would have betrayed Jesus for only $24/ounce or $333/ounce.

Sun, 05/19/2013 - 13:51 | 3578014 SafelyGraze
SafelyGraze's picture

sorry to go off topic, but whatever happened to paul krugman?

Sun, 05/19/2013 - 14:01 | 3578030 Zer0head
Zer0head's picture

here's the barrons gold article making the rounds

This Time, Gold Bugs May Have a Point Illogical dumping raises questions about causes of the metal's sharp decline.

https://bitly.com/Z5NXUy

Sun, 05/19/2013 - 15:02 | 3578118 King_of_simpletons
King_of_simpletons's picture

The beauty of Co-ordinated Central Bank QE world wide is that nothing will happen. No negative consequence will be faced by one party in particular since each currency woe is compared to the other. There is no absolute measure. Yeah some may say there is physical Gold, but that is a manipulated, low liqudity market. 

Sun, 05/19/2013 - 15:14 | 3578143 gmrpeabody
gmrpeabody's picture

"I know I'll get junked, but is this news?
Preaching on a slow Sunday to the choir?"

I did not junk you for voicing an opinion..., but if you are already in the known, why not save your time and move on? Otherwise, ZH is the only place where many of us can read the views of successful investors that are not under the employ of TPTB or CNBC. This is one of our very few choices, and a lot of us appreciate getting their views even on slow Sundays, no matter that these same views were posted earlier in the week, month, day, whatever.

Sun, 05/19/2013 - 15:33 | 3578179 freewolf7
freewolf7's picture

Thank you.

Sun, 05/19/2013 - 14:01 | 3578032 fonzannoon
fonzannoon's picture

maybe truthinsunshine kidnapped him.

Sun, 05/19/2013 - 14:13 | 3578051 Yen Cross
Yen Cross's picture

  lol :-)  Where's, 'Long Soup Line'?  I miss his epic rants.

Sun, 05/19/2013 - 14:19 | 3578056 fonzannoon
fonzannoon's picture

Yen by the time this gets where everyone thinks it's going I bet there are only very few of us still around on here.

The last thing I remember TIS talking about was how the market would tank to start the year. I wonder how many people made all in bets and lost their ass. No disrespect to TIS. He, unlike me, could just have a life. But I sometimes see people disappear after discussing a market call.

Sun, 05/19/2013 - 14:32 | 3578063 Yen Cross
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      I've noticed a lot of new avatars on (Z/H) over the last 24 hours Fonz. ;-)  

   I think the strong $ is going to be the 'Red Herring', that takes us down. You can't have your cake and eat it to, without consequences. I realize the Fed. likes the $ strong in a printfest world. (commodities are priced in $)

  Something is going to snap, and it's going to be ugly!

   *no hard feelings TIS

Sun, 05/19/2013 - 14:33 | 3578067 fonzannoon
fonzannoon's picture

Ekm says this week. I don't know that we get the big one, but everythig is wound so tight right now I think a cable snaps this week.

Sun, 05/19/2013 - 14:39 | 3578079 Yen Cross
Yen Cross's picture

    I stocked up on Popcorn and Koolaid this morning Fonz. (I bought a few cases of beer as well)(for bartering purposes)

   EKM has lived it. He knows.

 

 

Sun, 05/19/2013 - 14:59 | 3578115 reload
reload's picture

I listen to what EKM has been saying extremely carefuly. For me the big event which could just grind the world to a screeching halt is a ME conflict resulting in closure of the Straits of Hormuz. Supply lines in Europe would be broken in days then chaos / martial lawn / extended bank hollidays are all a given.

Cameron has been in the US allegedly discussing a European / US trade agreement. No reportage here in the UK about any details - no gurning press shots, almost a black out. Meanwhile we have a frenzy on the media about, will we, should we, could we, must we? hold a refferendum on our membership of the EU......IN 2017 ....2017.

If its a distraction it has worked perfectly, meanwhile Isreal is limbering up for a scrap with a neighbour. Wont be long now. 

Sun, 05/19/2013 - 15:09 | 3578134 Yen Cross
Yen Cross's picture

    I agree with your comment. EKM is hyper-sensitive from first hand experience. I respect his thoughts, knowing full well SHTF moment is coming. I'm not sure what the delivery vehicle will be, but it's coming.

   I can nit-pik EKMs thesis, but the end result is the same...

Sun, 05/19/2013 - 15:12 | 3578140 fonzannoon
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"I can nit-pik EKMs thesis, but the end result is the same..."

Exactly Yen.

I have nitpicked his thesis forever now....and yet my end result is the same.

 

Sun, 05/19/2013 - 15:15 | 3578146 Yen Cross
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 +1 Fonz

Sun, 05/19/2013 - 14:32 | 3578064 Meat Hammer
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InTheMix96 has done a nice job filling in for LSL.  His usage of "cunt" is exemplary.  

Sun, 05/19/2013 - 14:34 | 3578069 fonzannoon
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LOL

Sun, 05/19/2013 - 14:35 | 3578071 Yen Cross
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    Soup is in a league of his own, Meat. I'll keep a mindfull eye on "InTheMix96" though.

Sun, 05/19/2013 - 14:44 | 3578088 earnyermoney
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InTheMix76, I believe. At least his avatar has that 70's style...

Sun, 05/19/2013 - 15:10 | 3578135 Yen Cross
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       Thanks for the correction.

Sun, 05/19/2013 - 15:08 | 3578131 drdolittle
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He was as big a puss as his namesake and couldn't take getting his ass handed to him daily.

Sun, 05/19/2013 - 18:14 | 3578394 RockyRacoon
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Fight Club ain't for everybody.  I've gotten a few black eyes myself... and given a few.

It's all about the staying power derived from belief in one's convictions.

Sun, 05/19/2013 - 13:57 | 3578025 max2205
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Spy is going parabolic so get on the last wild push before we correct to whatever level  Ben wants the index

Sun, 05/19/2013 - 17:11 | 3578326 Monedas
Monedas's picture

Those silver coins Judas got were about the size of a quarter .... the one troy ounce coins are a much newer phenomenomenumanommenum !

Sun, 05/19/2013 - 14:33 | 3578066 MiltonFriedmans...
MiltonFriedmansNightmare's picture

When trade wars arise, the TLC steps in and headlines are made. There are those who believe that Watergate was brought about by Nixon's tariff policy, which Rockefeller saw as a stab in the back. Free global trade is priority number one with the TLC. We wouldn't want to hamper the multinationals's as they rape and pillage the earth, now would we?

Sun, 05/19/2013 - 13:30 | 3577986 Everyman
Everyman's picture

There are going to be a lot of Central Bankers, Financial Criminals and Politicians bullet ridden bodies all over the place when the music stops.  I wouldn't give you a plug nickle for Hank Paulsen, Ben Bernanke, Timmy Geitner, Loyd Blankfiend, and any of the other oligarchs. 

They are all dead men and THAT is why QE has been played and WHY continued money printing is happening.  It is for their physical SURVIVAL. This is what happens when the oligarchies that have been built on fraud and corruption fall, the "little guys" and there are lots of them WANT YOU FUCKING HEADS! Yachts, and other things like expensive autos will be "targets".  Mansions will be raided.  The people will turn to a mob and there is nothing to stop it.  It is the way of things and has been show through history.  Just ask Marc and Mary Antoinette.

We are about there assholes, when it bursts, it will be pain for us, but DEATH for you!  You are enemies of the people and just like terrorists and probably like Qaddafi, your bodies will be torn asunder.

 

People will be angry and hurting and rightly so.

Sun, 05/19/2013 - 13:33 | 3577992 kliguy38
kliguy38's picture

Not to split hairs but they are NOT the oligarchs.......only the minions.....but you are correct...the "identifiable" perps above WILL be targets which is why there will be a very strong attempt to divert/game the peeps before chaos ensues in earnest. The real power is pushing this out for final "preparation"

Sun, 05/19/2013 - 13:38 | 3577998 Duke Dog
Duke Dog's picture

Well said! jd.

Sun, 05/19/2013 - 13:37 | 3577997 Seasmoke
Seasmoke's picture

I really believe Geithner will be first. Something about his face, his attitude and his lies. What a fool.

Sun, 05/19/2013 - 13:42 | 3578003 Curt W
Curt W's picture

But first it has to get bad enough for people to get off the couch, or put down their electronic toys.

Take down the cellular networks, if you want to see riots.

Sun, 05/19/2013 - 13:47 | 3578009 Everyman
Everyman's picture

Very true.  We have "electronic distraction" and an "electronic opiate" if you will and those folks don't care on bit if hey aer loosing liberty.  Hell they could be in a cage as long as they have their cellphone and wifi access.

Sun, 05/19/2013 - 13:53 | 3578017 Skateboarder
Skateboarder's picture

The technological distraction is that only, a distraction. The real power play is in shaping the human body and mind to utter and unquestioning subservience. Do not by any chance underestimate the power bigAgra and bigPharma have over the people. What you see now, is the rise of the age of the Orc.

"They were once humans, but through fucked up synthetic food, drugs, and radiation, they turned into something else entirely."

Sun, 05/19/2013 - 14:43 | 3578085 MiltonFriedmans...
MiltonFriedmansNightmare's picture

SB, you are all over it with big Pharma and agribusiness. It started with IG Farben and the Nazi's in their attempt to remake the power structure of the world. Farben continues to exert it's influence today. It's downright scary.

Sun, 05/19/2013 - 15:41 | 3578192 Skateboarder
Skateboarder's picture

Keen observation my friend.

From CIA's own Wiki:

"IG Farben held the patent for the pesticide Zyklon B[20] (used in Holocaust gas chambers), and owned 42.2 percent (in shares) of Degesch (Deutsche Gesellschaft für Schädlingsbekämpfung) which manufactured it. IG Farben also had managers in Degesch's Managing Committee. Of the 24 directors of IG Farben indicted in the so-called IG Farben Trial (1947–1948) before a U.S. military tribunal at the subsequent Nuremberg Trials, 13 were sentenced to prison terms between one and eight years. Some of those indicted in the trial were subsequently made leaders of the post-war companies that split off from IG Farben, including those who were sentenced at Nuremberg."

The fact that today's people ENJOY (sigh...) eating snythetic foods and taking synthetic drugs from the very folks who want eugenics, controlled mutation/degradation/corruption of the human mind/body/spirit, massive slave populations with inhibited higher brain functions, etc...

Their evil knows no bounds, but neither does the good in us. And so we endure.

Frodo: "What are we holding onto, Sam?"
Sam: "That there's some good in this world, Mr. Frodo, and it's worth fighting for."

https://www.youtube.com/watch?v=Soe8ayi3ScE

Sun, 05/19/2013 - 15:21 | 3578089 The Heart
The Heart's picture

"The technological distraction is that only, a distraction."

Good morning SB. Good comment.

Woke up with distractions going around in the mid-level rem stages. All night long, the word distractions, distractions, distractions kept coming in the dream and then the message: could the closing of the S&P at 1666 be the warning about the immigration bill that is being sneaked through? The one with biometrics for all Americans laced in it? The perverbial mark of the beast, 666?

Everybody knows all these cover ups and distractions are just that, cover-ups and distractions. All hands on deck and alert as this crazy train mess gets worse and worse. Lots of things on the front burners, but lets all keep vigilant about this immigration bill with the biometrics attachment being pushed to pass in the cesspools of govt. We could see a false flag event, or attack somewhere any time to cover up this bill being sneaked under the radar. Stay tuned!

 

Sun, 05/19/2013 - 15:52 | 3578208 Skateboarder
Skateboarder's picture

As a real engineer and scientist (as compared to faux 'engineers' and 'scientists' who are little more than enabled technicians, lackeys, and bitches of some supercorporation, military/defense agency, or the like), I have often wondered how so many of these technically apt people willingly produce to kill. The only explanation I have been able to offer myself (while maintaining the assumption that there is still good in people) is that most of these engineers and scientists are given only portions of the problems to solve but not the entire problem itself. These are the folks developing the very core of the technologies, the gruntworkers. How does an engineer aid in the development of totalitarian surveillance or drone-bombers or HFT algos and still sleep at night?

So many great scientists and engineers, the giants upon whose shoulders we shit, they roll in their graves with utter disgust.

Sun, 05/19/2013 - 16:19 | 3578247 Cathartes Aura
Cathartes Aura's picture

when humans are socialised to compete, encouraged to think in terms of isolated individual units, then it would seem rather easy to assign them pieces of the whole, to perfect and be paid for perfecting. . . the individual units feel satisfaction for playing their part, receive their recognition, and never feel the need to empathise with the whole, with the rest of humanity that might perhaps be on the receiving end of their particular genius cog in the death machinery.

this is the greatest lie, and there really isn't any prize for looking into the Truth behind the lie - the Lie is profit-able, so the lie is prefer-able.  all hail profits, and the stroking of the ego(s).

"When you see something that is technically sweet, you go ahead and do it and you argue about what to do about it only after you have had your technical success. that is the way it was with the atomic bomb."

Sun, 05/19/2013 - 17:17 | 3578311 Lore
Lore's picture

You're right, though it's important to distinguish between the lying psychopathic subspecies and human beings in general.  Your average intellectually disadvantaged family of chumps is getting brainwashed and victimized and broken by so many Big Lies from so many directions that it's hard to know which way is up, hence the rising suicide rate, among other things. Unable to find a place for themselves in an unnaturally segmented, compartmentalised and standardized world, and lacking the tools, time and wherewithal to study, deprogram and understand what's unfolding around them, people self-destruct.

I don't blame an idealistic scientist for trying to understand the atom. I blame those without conscience who worship power, turn ideas into weapons and deliberately allocate capital in the service of Big Lies.  Case in point: Agenda 21 and the origin of "global warming": 

"The common enemy of humanity is man. In searching for a new enemy to unite us, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like would fit the bill. The real enemy then is humanity itself. - Club of Rome, First Global Revolution

WRONG. The common enemy is the scum that weaves this crap and turns it against us.  

Sun, 05/19/2013 - 17:19 | 3578332 Fedaykinx
Fedaykinx's picture

Such people need to be removed from the gene pool.

ftfy

Sun, 05/19/2013 - 21:36 | 3579037 Cathartes Aura
Cathartes Aura's picture

we are in agreement Lore, there is a distinction to be made, and not all those who use their mind-talents mis-use them. . . but for me it's a systemic thing, a system that uses / exploits, and rewards those who provide the information /discoveries, etc.  it's a system that also encourages a lack of empathy via othering anything that might get in the way of the desired outcome, which is usually lethal, intentionally.  the corporate fud-stuffs, the toxic pharma, the poisoned tap water, and more, all designed by someOne(s) who appear to care not about the outcome(s).

there are law enforcers who used to "serve the public" now uni-formed for violence.   there is a volunteer military murdering for who? globally.  someOne is flying toxic payloads in the service of weather manipulations.  I could go on, and usually do. . .

those who weave and turn against us, their numbers appear to be increasing, daily.  and that feels systemic to me.

peace, if you can find it.

Sun, 05/19/2013 - 17:00 | 3578308 The Heart
The Heart's picture

Blessings and thanks for your comments.

A little moar to consider:

http://video.msnbc.msn.com/all-in-/51923226#51923226

Sun, 05/19/2013 - 14:43 | 3578086 Ropingdown
Ropingdown's picture

This "losing liberty" thing:  Does it come with a free iPod?

Sun, 05/19/2013 - 14:07 | 3578042 Haole
Haole's picture

That's a nice fantasy, if it makes you feel better but don't be surprised if we don't get that kind of satisfaction.

 

Sun, 05/19/2013 - 13:28 | 3577988 terex
terex's picture

Wrong order; bitchez, petrol

n cigarettes

Sun, 05/19/2013 - 13:31 | 3577991 HD
HD's picture

Doesn't matter. CNBC has had the Cashin "parabolic" video as its lead story for more than 72 hours already. Nothing else is important. NOTHING.

Sun, 05/19/2013 - 13:41 | 3578002 Peter Pan
Peter Pan's picture

Central banking is just another way of saying central planning and we know that the history of central planning has never ended well.

The only central bank that will be left standing when all is said and done is gold as it always has.

Any paper asset not attaching to a real asset such as farm land, buildings etc is no better than an empty promise and unfortunately there are many of those.

What fascinates though is the FED's insistence at levitating the stock market given that over 80% is owned by the top 10% and which cannot therefore act as any real transmission mechanism, catalyst or multiplier for renewed activity in the rel economy.

In the end two things will "burn" paper and unfortunately people.

Sun, 05/19/2013 - 16:30 | 3578266 lotsoffun
lotsoffun's picture

'trickle down'.  they keep paying for all the totally unneeded junk like getting nails down - redocrating, holidays, restaurants and tipping.  apparently, it does work to some degree.  i saw it 2009 when they stopped spending.  having all that wealth, when they stop spending or mitigate spending and start to think about cost cutting, the bottom 90%  is the first to feel it.

 

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