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Peter Schiff And The Untapering "Waiting for Godot" Era

Tyler Durden's picture


Submitted by Peter Schiff of Euro Pacific Capital,

Tapering the Taper Talk

As usual the Federal Reserve media reaction machine has fallen for a poorly executed head fake. It has been fooled by this move many times in the past and for its efforts it has tackled nothing but air.  Yet right on cue, it took the bait once more. Somehow the takeaway from Wednesday's release of the June Fed statement and the Bernanke press conference is that the Central bank is likely to begin scaling back, or "tapering," it's $85 billion per month quantitative easing program sometime later this year, and that the program may be completely wound down by the middle of next year. 

Although this scenario is about as likely as an NSA-sponsored ticker tape parade for whistle blower Edward Snowden, all of the market segments reacted as if it were a fait accompli. The stock market, convinced that it will lose the support of ultra-low, long-term interest rates, and the added consumer spending that results from a nascent housing bubble, sold off in triple digits. The bond market, sensing that its biggest and busiest customer will be exiting the market, followed a similarly negative trajectory. The sell -off in government and corporate debt pushed yields up to 21 month highs. In foreign exchange markets the dollar rallied off its four-month lows based on the belief that Fed tightening will support the currency.  And lastly, the gold market, sensing that an end of quantitative easing would eliminate the inflationary fears that have partially fueled gold's spectacular rise, sold off nearly five percent to a new two and a half year low. 

All of this came as a result of Bernanke's mild commitments to begin easing back on permanent QE sometime later this year if the economy continued to improve the way he expected. The Chairman did not really elaborate of what types of improvements he had seen, or how much farther those unidentified trends would need to go before he would finally pull the trigger. He was however careful to point out that any policy shift, be it for less or more quantitative easing, would not be dependent on incoming data, but on the Fed's interpretation of that data. By stressing repeatedly that its data goalposts were "thresholds rather than triggers" the Fed gained further latitude to pursue any stance it chooses regardless of the data.  

Yet the mere mention that tapering was even possible, combined with the Chairman's fairly sunny disposition (perhaps caused by the realization that the real mess will likely be his successor's problem to clean up) was enough to convince the market that the post-QE world was at hand. This conclusion is wrong.               

Although many haven't yet realized it, the financial markets are stuck in a "Waiting for Godot" era in which the change in policy that all are straining to see, will never in fact arrive. Most fail to grasp the degree to which the "recovery" will stall without the $85 billion per month that the Fed is currently pumping into the economy. 

What exactly has convinced the Fed that the economy is improving? From what I can tell, the evidence centered on the rise in stock and real estate prices, and the confidence and spending that follow. But inflated asset prices are completely dependent on QE and are likely to reverse course even before it is removed.  And while it is painfully clear that expectations about QE continuance have made a far bigger impact on the stock, bond, and real estate markets than any other economic data points, many must be assuming that this dependency will soon end. 

Those who hold this belief have naively described QE as the economy's "training wheels," (in reality the program is currently our only wheels.) They are convinced that the kindling of QE will inevitably ignite a fire in the larger economy. But the big lumber is still too dampened by debt, government spending, regulation, and high asset prices to catch fire.  So all we have gotten is smoke. A few mirrors supplied by the Fed merely completed the illusion. The larger problem of course, is that even though the stimulus are the only wheels, the Fed must remove them anyway as we are cycling toward the edge of a cliff.  

Although Bernanke dodged the question in his press conference, the Fed has broken the normal market for mortgage backed debt. While it's true that the Fed only owns 14% of all outstanding MBS (the "small fraction" he referred to in the press conference) it is by far the largest purchaser of newly issued mortgage debt. What would happen to the market if the Fed were to stop  buying? There are no longer enough private buyers to soak up the issuance. Those who do remain would certainly expect higher yields if the option of selling to the Fed was of table. Put bluntly, the Fed is the market right now and has been for years. 

A clear-eyed look at the likely consequences of a pull-back in QE should cause an abandonment of the optimistic assumptions behind the Fed's forecast. Interest rates are already rising rapidly based simply on the expectation of tapering.  Image how high they would soar if the Fed actually tried to sell some of the mortgages it already owns.  But the fact is, the mere anticipation of such an event has already sent mortgage rates north of 4%, and without more QE from the Fed in the could soon exceed 5%. Such an increase would deliver a devastating blow to the housing market.  More foreclosure will hit just as higher home prices and mortgage rates price legitimate buyers out of the market. Housing prices will fall to new post bubble lows, sinking the phony recovery in the process.  The wealth effect will work in reverse, spending and confidence will fall, unemployment will rise, and we will be back in recession even before the Fed begins to taper. 

In fact, the back-up in mortgage rates seen over the last month has already produced pain in the financial world, with banks reporting a rapid collapse in refinancing applications.  With personal income and wage growth essentially stagnant, individual buyers are extremely dependent on the affordability that ultra-low rates provide. A 50% increase in mortgage rates (an increase from 3.25% to 5%) would price a great many buyers out of the market. Higher rates would also cool much of the housing demand that has been coming from the private equity funds that have been a huge factor in pushing up real estate prices in recent years. Falling home prices would likely trigger a new wave of defaults and housing related bankruptcies that had plunged the economy into recession five years ago.      

A similar dynamic would occur in the market for U.S. Treasury debt. Despite Bernanke's assurances that the Fed is not monetizing the government's debt, the central bank has been buying nearly 70% of the new issuance in recent years. Already rates on 10 year treasury debt have crept up by more than 50% in less than two months, to over 2.4%. Any actual decrease or cessation in buying (let alone the selling that would be needed to unwind the Fed's multi-trillion dollar balance sheet) would place the Treasury market under extreme pressure. Since low rates are the life blood of our borrow and spend economy, it is highly likely that higher rates will lead directly to lower stock prices, lower GDP growth, and higher unemployment.   Since rising asset prices, and the confidence and spending they produce, are the basis for Bernanke's rosy forecast, new lows in house prices and a bear market in stocks will quickly reverse those forecasts. 

Higher interest rates and a slowing economy will be a a disaster for Federal budget deficits. An increase in unemployment and a decrease in tax will hit just as  rising rates make it more expensive for the Fed to finance new and maturing  debt.  Also the profit checks Fannie and Freddie have been paying the Treasury will turn into bills for losses, as a new wave of foreclosures comes crashing down.  

It's fascinating how the goal posts have moved quickly on the Fed's playing field. Months ago the conversation focused on the "exit strategy" it would use to unwind the trillions of bonds and mortgages that it had accumulated over the last few years. Despite apparent improvements in the economy, those discussions have given way to the more modest expectations for the "tapering" of QE. I believe that we should really be expecting a "tapering" of the tapering conversations.  

I expect that the Fed will continue to pantomime that an Exit Strategy is preparing for a grand entrance, even as their time line and decision criteria become ever more ambiguous. The Fed's next big announcement will likely be to increase, not diminish QE. After all, Bernanke made clear in his press conference that if the economy does not perform up to his expectations, he will simply do more of what has already failed.  

Of course, when the Fed is forced to make this concession, it should be obvious to a critical mass that the recovery is a sham. Investors will realize that yeas of QE have only exacerbated the problems it was meant to solve. When the grim reality of QE infinity sets in, the dollar will tank, gold will soar, and the real crash will finally be upon us. Buckle up.


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Fri, 06/21/2013 - 19:09 | 3680887 JR
JR's picture

The Fed under the most radical leadership in history thought it could play the market for a fool. But the market is not a person; it is the sum total of individuals looking out for their own well being and  for their own futures; in short, it is no fool.

And now for those fellow travelers on the flight called Bernanke the landing lights have been turned off and it’s all darkness because in the end the market will be served.

Wall Street and its government-connected crony capitalists haven’t been able to make money unless Bernanke gave it to them. You don’t have these economic lows and a stock market with record highs unless you’re cheating – unless you are spiking the punch bowl with liquor’s that’s not paid for.  Bernanke is slipping out before the party’s over, and the party goers are going to be stuck for the bill and the bill is so big it will bankrupt them.

All these investors know they are on borrowed time and are ready to head for the exits at just a hint of Bernanke’s bailout because they know that he wants a successor to take part of the blame when the flight crashes. The problem is the landing field is bathed in darkness.

Fri, 06/21/2013 - 19:27 | 3680906 toady
toady's picture

It will be interesting to see what the bernank does in retirement. Does he have a survival retreat by Jackson Hole? Or a private island with an arms cache?

Or will he double down and get an office on wall street so he can jump when the time comes?

Fri, 06/21/2013 - 19:42 | 3680936 noless
noless's picture

The bernank owns property on st croix apparently, lost the article, but yeah, somehow i don't see that going too well for him...

Sat, 06/22/2013 - 10:34 | 3681837 rustymason
rustymason's picture

A couple of the local Cruzans should be happy to talk to the Bernank. They love his type down there.

Fri, 06/21/2013 - 20:18 | 3681028 10mm
10mm's picture

Really,whos going to get him.General Public,bahhhhh bahhhhh bahhhhh.

Fri, 06/21/2013 - 21:26 | 3681206 Spitzer
Spitzer's picture

I was the first caller on Pete's radio show today. Wasn't a very good call. We were stepping on eachother.

I usually try and walk him into freegold

Sat, 06/22/2013 - 08:40 | 3681694 new game
new game's picture

funny how every doomer comes out of the woodwork when things get shitty.

hey skiffy? hows that 1800/oz gold doing? great advice. fuck these fuckers.

did skiffy say keep your powder dry-fuck no. Marc said gold could correct.

he is the only one that nailed it of all the doomers, all else sold a book.

fuck you skiffy- gold cost average all the way to where...

waiting patiently for the bottom of 1k/oz-coming soon as the flight to cash continues.

call it watever you want, but cash is still king in the world i must participate in...

Sat, 06/22/2013 - 14:05 | 3682126 Spitzer
Spitzer's picture

Nobody knows how fucking stupid the majority of people will be.

But Schiff knows how it all will end.

The guys who held cash and not gold in the Asian financial crisis got their heads knocked off.

Sat, 06/22/2013 - 17:11 | 3682403 giggler123
giggler123's picture

Very true, those gold bugs of the ilk of James Turk, Max Keiser and a kin have all been out shouting up 2.5K, 3K/oz when in reality those who bought at even 1600 when told it was cheap have in effect lost money.  If this was any other investment you'd of cut your losses but of course there is the chance it's different this time ;)  It's like the boy who cried wolf; at some point you gonna be right calling a rise in some commodity, then they'll screem blue murder they told you so, blah, blah, blah...  Buy anything when you are happy to take the loss if any, don't let these fools talk you into something you'll regret.  Marc had it right, sure did by telling people they should listen to the people who say don't buy and ask why, not the records that play always saying the samething...

Sun, 06/23/2013 - 07:48 | 3683361 BigJim
BigJim's picture

Yeah, you'll be looking real smart with all that cash in hand if gold doesn't get down to $1000 before it starts heading inexorably north... at which point, all those people who bought (even at $1800) will be watching you desperately waving your FRNs and shouting 'Come back! Come back!'

Fri, 06/21/2013 - 20:03 | 3680994 Silver Bug
Silver Bug's picture

The system Bernanke has create is completely unsustainable. It will collapse.

Sat, 06/22/2013 - 13:40 | 3682085 BorisTheBlade
BorisTheBlade's picture

Bernanke inherited Greenspan's mess and took it to a whole new level, it would take Hercules to clean up these Augean stables of monetary madness.

Sat, 06/22/2013 - 14:02 | 3682118 ejmoosa
ejmoosa's picture

I disagree.  It would just take a man with solid financial principles and the ability to say one word: 



Sun, 06/23/2013 - 00:04 | 3683038 TheSilverJournal
TheSilverJournal's picture

The ponzi dependent central planners won't put someone in charge of the monetary ponzi that's unwilling to defend it at all costs.

Fri, 06/21/2013 - 23:05 | 3681365 not applicable
not applicable's picture

I'm not so sure the market is a collection of individuals. I think it's largely institutional...and I think that algorithmic trading by super computers account for the majority of "volume".  Meanwhile, the precious metals markets are driven by 4 major banks with the help of the CFTC (who hiked margin requirments when metals rose but let the spot price plumet on sell offs.) I can not identiy a single asset class whose price reflects reality.

Sat, 06/22/2013 - 18:04 | 3682498 MrPoopypants
MrPoopypants's picture

"The Market" is bigger than the exchanges and the games they play.

Fri, 06/21/2013 - 19:14 | 3680891 fonzannoon
fonzannoon's picture

I think this makes sense except that the fed will announce the increase in QE. That announcement would cause mass panic. From here on out everything happens behind the curtain.

Fri, 06/21/2013 - 19:19 | 3680894 TheSilverJournal
TheSilverJournal's picture

Why is the word "malinvestment" so hard to understand by so many?

Fri, 06/21/2013 - 19:28 | 3680908 kaiserhoff
kaiserhoff's picture

Good question.  Perhaps because they have no savings, and/or their planning horizon rarely extends past the weekend?

Fri, 06/21/2013 - 19:49 | 3680956 noless
noless's picture

Saw a headline on marketwatch while i was passing through, some greyhair proclaiming that "young adults aren't ready to save," the topic was on raising social security tax; bitch, i have been wiped out twice since i turned 18 due to job loss and general economic uncertainty, fucking spare me your shit. Didn't read the article, headline was enough.

A statement like that is essentially "gimme yo money, cause you know you won't be needing it".

Fri, 06/21/2013 - 20:35 | 3681074 Bobbyrib
Bobbyrib's picture

"A statement like that is essentially "gimme yo money, cause you know retirees need it".


Take a look at the retirement savings by Baby Boomers and the Social Security IOU's. They will be desperate for money and working "saps" (saps because they will be the ones to pay the raise in the Social Security tax rate [just like the '80's.]) will provide it.

Fri, 06/21/2013 - 20:36 | 3681080 AGuy
AGuy's picture

FWIW: That article ticked me off too. My guess is that she is close to retirement and wants others to pay for it since "she" didn't save enough. I have a simple idea: Indeed, raise taxes for SS, but just make those already collecting SS pay the tax increase. Seems fair enough. They want it a tax increase, they pay for it!


Fri, 06/21/2013 - 19:52 | 3680971 They trynna cat...
They trynna catch me ridin dirty's picture

Because people are idiots.  That's why.

Remember Grover Norquist and his Taxpayer Protection Pledge?  There was a column in the Huffington Post--you know, what all the 'educated' and 'hip' young people read--about Norquist's correct statement that government spending does not produce real jobs.  The HuffPo columnist said, and I quote: "When government builds a school, it takes people to build it, and those are real jobs that are created.  So I think Grover realizes he's lost that argument."

These are the sort of 'intellectuals' we have in the media telling the idiot public how an economy works.  Try to wrap your mind around that for a moment.

Sat, 06/22/2013 - 08:27 | 3681684 Almost Solvent
Almost Solvent's picture

Not that I disagree with you, but in a perverse sense HuffPo is correct - Main St. is dead and without free money from the Fed this shit would make the "great" depression look like a fucking walk in the park. The "jobs" right now are coming from BennieBux. 


We need to clear out the deadwood and let Main St. have real growth not based on BennieBux.

Fri, 06/21/2013 - 19:20 | 3680896 Kirk2NCC1701
Kirk2NCC1701's picture

I think we all know where Peter Schiff, ZH and most of us ZH readers and bloggers stand on the Fed, Obama et al, DC, etc. but...

inasmuch as I agree in broad strokes, "You're only as good as your performance last season/year" the saying goes.

So... when do we get some new material?  Something we don't already know?  Something ACTIONABLE for even the next 6 months -- besides financial "Motherhood & Apple Pie for Libertarians"?  More 'meat', less fluff.  Please.  Pretty please.   Otherwise we just have a financial version of The View, if we don't have something "actionable", and the 'Broken Clock Challenge'. 

The rabid fans can junk me if they like, but it's fair question for those of us who are getting bored with "vanilla".

Fri, 06/21/2013 - 19:25 | 3680904 fonzannoon
fonzannoon's picture

What new material do you want?

Do you want him to pitch facebook like Biderman?

Non agency mbs like Kyle Bass?

Bonds like Bill Gross?

What do you want to hear, other than be happy you still have some time to get your shit together, which you seem intent on not listening to.

Fri, 06/21/2013 - 23:02 | 3681362 Kirk2NCC1701
Kirk2NCC1701's picture

Fair enough Fonzie.  Given that I have momentarily forgotten that we are dealing with manipulated and broken markets -- duh, not another 'senior' moment! -- I guess I am/was looking for looking for a "kind of specific" prediction for which Sectors will still perform in the next 1-3 quarters.

I recall from a few years ago that a Smith Blarney broker showed me a color-coded grid of year-end performance of about 10 or 15 sectors, that covered a 10 year period, and ranked (top to bottom) on this grid for performance.

What I have yet to see anyone do, is to at least predict which sectors will be the Top 3 in the coming year.  Surely a pro can pick "win, place & show" better than the rest, you'd think.  Instead, they all give fuzzy, slippery answers.  They typically start off with something like "In the long run...", at which point I tune out.  But maybe my portfolio does not have enough zeros to get the hotshots who do make these predictions and have a high "ERA" score.

I've rolled my 401k over into an IRA, and have all of it in T-Bills, as I'm that nervous and disenchanted.  Have had my share of boating mishaps too.  ;-)


Fri, 06/21/2013 - 23:07 | 3681370 fonzannoon
fonzannoon's picture

Michael Burry's clients were ready to fire him before they hit it big.

It's going to be a lack of patience that takes down a lot of people. This might take a while Kirk.

Fri, 06/21/2013 - 23:16 | 3681382 FEDbuster
FEDbuster's picture

I would pick up some physical silver here at $20.  It won't go to zero, I would be really surprised if it goes much lower.  I like domestic oil and gas MLPs, too.  Great distributions 8%+ with a diversified basket of them.  Buy some long term storage food, too.  You can always eat it, and it will come in handy in the event of any type of collapse (electric grid, economic, etc...)  My advice, worth what you paid for it.

Sat, 06/22/2013 - 10:35 | 3681840 Treason Season
Treason Season's picture

"...When the grim reality of QE infinity sets in, the dollar will tank, gold will soar, and the real crash will finally be upon us... ."

Doesn't sound fuzzy to me.

Fri, 06/21/2013 - 19:29 | 3680911 buzzsaw99
buzzsaw99's picture

Here's a hot tip: Lever up and buy a nazcrack etf. Symbol QQQ.

Fri, 06/21/2013 - 19:40 | 3680931 Cugel
Cugel's picture

Read the Bill Gross posts for actoinable. He top called the bond market for you just a while back

Fri, 06/21/2013 - 19:43 | 3680942 fonzannoon
fonzannoon's picture

I saw Bill Gross on fed day telling me to buy bonds.

Fri, 06/21/2013 - 20:00 | 3680990 JR
JR's picture

Kirk, Jim Quinn nailed the future two days ago -- on ZH. America can only win back her prosperity and investor opportunities when the false picture the other side has painted is exposed, when Americans can challenge the current system with the truth, when the producers who built this nation can check the oligarchs' unlimited financial power by ending the Fed support that gives them the leverage to achieve an uneven playing field and cheaper and cheaper labor in America while leveling her manufacturing base into a worldwide monopoly -- the dream of JD Rockefeller.

Here's Quinn:

“Over the course of decades we have allowed ourselves to be corrupted by the love of material possessions, the lure of a debt based faux wealth, the money for nothing entitlement promises of dishonorable politicians, the evil of currency debasement, the effectiveness of mass media propaganda, and the belief that we could sacrifice freedom and liberty for promises of safety and security made by a cabal of powerful rich men. Power has been concentrated into the hands of the few, who operate in secrecy and despise the people. They don’t want transparency or open debate. Freedom of speech is nothing but a thorn in their side. They believe they are smarter than the serfs and have no morality when it comes to committing illegal acts and disregarding the Constitution. They are not acting in the public interest. Their abuse of power and looting of the national wealth have put us on a path towards a bloody revolution. This is not a time for conformity, obedience or submission. It’s time to stand up and expose the evil doers. It’s time to rally around those who care about this country. Who are the real traitors? You know the answer. What are you going to do about it?

“’The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are being looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care? When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media? Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.’” – Ron Paul

In America, as in Switzerland, the militia is the people. Freedom in America was won with the gun; it looks if she is to keep it, she will have to keep it with the gun.

Fri, 06/21/2013 - 22:45 | 3681334 Kirk2NCC1701
Kirk2NCC1701's picture

+1     I like your response.  Thx.

Sat, 06/22/2013 - 00:06 | 3681376 underman
underman's picture

I personally feel that it'll take a few hundred thousand starving warriors with nothing left to lose to put up this fight.  Much more pain to endure until we discover just who these warriors are.  

It's not about being prepped - as in cabin in the mountains & armed to the teeth - to survive the end game.  Not about sitting on a pile of gold.  And bartering.  Because then what?  You just wait for things to happen and sure, you live longer.   Putting together a Plan B for when TSHF is not nearly enough.  Anyone can do this.  It's not heroic, it's looking out for #1.

It's taking action before the country is reduced to shambles that I think people fail to grasp.  We need to dig deeper.  Primal scream deep.  Balls.  Heroes.  

Fri, 06/21/2013 - 20:36 | 3681081 Bobbyrib
Bobbyrib's picture

The chocolate flavor is feces..enjoy.

Fri, 06/21/2013 - 22:29 | 3681314 ebworthen
ebworthen's picture


In these markets?

Prescription:  Weekend in Vegas putting bets on 00 at the Roulette table and double 6's on the Craps table.

Oh, and buy AAPL and FB.

Fri, 06/21/2013 - 23:04 | 3681363 TheMeatTrapper
TheMeatTrapper's picture

So... when do we get some new material?  Something we don't already know?  Something ACTIONABLE for even the next 6 months -- besides financial "Motherhood & Apple Pie for Libertarians"?  More 'meat', less fluff.  Please.  Pretty please.  

At the risk of shameless self promotion, I believe the goal of this site is to inform us as to what is coming and why. It is up to us to TAKE ACTION and prepare for it. I certainly do not have all the answers, but I do know what works for me. I'm an IT consultant with a six figure salary. I trap my meat. I sell furs. I haven't bought red meat in two years. I trap fish, turtles, squirrels, birds and I smother them in gravy and eat them. 

Food is essential to life. Anyone can grow food and anyone can catch food, as it flies, walks, crawls and swims right by them every day. I don't care if you live in the city, in suburbia or in the backwoods. There is food to be had. 

I catch organic, steroid free, antibiotic free meat behind strip malls and gas stations in a city of a million people while 50 yards away people are standing in line to pay $3 a pound for pink slime laced, outdated "hamburger" that's already turning blue.

I realize that's not the actionable information you are looking for, but it's what I can do now, today, to protect my family from the predation of banksters from another planet. 

Learn to Trap Now!

Fri, 06/21/2013 - 23:14 | 3681378 not applicable
not applicable's picture

Yeah, it's a fair question Kirk2NCC1701.

But I don't think there is an actionable answer. Nothing makes sense, markets are effectively high jacked and alternatives to fiat currency are vilanized....I guess try to own some land that you can grow stuff on...maybe get some bullion in your pocket (great buying opp now) and maybe find some shares that will actually pay some dividends (even if the dividends are paid in reserve notes).

NEXT 6 MONTHS: I'm holding ticker GAUCX. Great, consistent reliable dividends. Not very volatile (relatively speaking).

Fri, 06/21/2013 - 19:24 | 3680900 kaiserhoff
kaiserhoff's picture

Schiff makes several good points.  He usually does.  But Ben has room to ease off a little.

The Euro is at long last kapute, and Japan is nearing a tail spin.  The dollar will remain strong even though it doesn't deserve to. 

Ben is a traitor and a fool, and one lucky son of a bitch.


Fri, 06/21/2013 - 19:58 | 3680982 TheSilverJournal
TheSilverJournal's picture

It's a world fiat monetary ponzi and if Europe or Japan, or Great Britain, Italy, or France, for that matter, go kaput, then the entire ponzi will implode. They will all go down together.

Fri, 06/21/2013 - 20:17 | 3681015 kaiserhoff
kaiserhoff's picture

Eventually yes, and if we had rule of law they would certainly all sink together. 

I think they will find it expedient to cancel all derivative contracts - there go Kyle Basses alleged billions of profits - to give themselves a few more months before the end.  Extend and pretend.  It's all they have.

Look at it this way.  On our worst day, are the States as cluster fucked as Japan?

Fri, 06/21/2013 - 20:32 | 3681067 TheSilverJournal
TheSilverJournal's picture

The US is worse off than Japan. Look at the trade deficit. And don't forget about the unfunded and contingent liabilities.

Besides, Japan still has one move left...stop buying US Treasuries. The US has played its last card and the next addition to QE will start the crackup boom.

Fri, 06/21/2013 - 20:44 | 3681105 AGuy
AGuy's picture

I believe Japan is now running a trade deficit. Japans bigest trading partner was China before the dispute over the islands. Since then sales has plummets double digits and because of Nuke meltdown, Japan is importing more energy. The Demographics in Japan are the worse since the majority of its population is now reaching retirement age. Japan has no Immigration to replace retiring workers with younger workers.

Recall Japan has been doing QE for twenty years. the US is a newcomer, only doing QE for the past 4 years. The US sucks, but Japan is in the crapper for sure, and there is no way Japan is going to dig itself out.


Sat, 06/22/2013 - 09:44 | 3681764 hootowl
hootowl's picture

I agree.  If ALL the debts, contingent liabilities, unfunded liabilities, projected deficits, political promises, bonds, and derivitive gambles,  were listed on the books, the whole world couldn't deal with the mess.  It is over.

Food, shelter, ammo, PMs.


Sat, 06/22/2013 - 09:37 | 3681752 hootowl
hootowl's picture


Let me help you a little here......"WE" will all go down together.  Remember we are all currently in a race to the bottom, as we speak.

Sat, 06/22/2013 - 09:35 | 3681748 hootowl
hootowl's picture

Ben has an open-ended one-way ticket to Tel Aviv tucked into his wallet.......From where he will never be extradited.

Sat, 06/22/2013 - 10:43 | 3681846 thunderchief
thunderchief's picture


Fri, 06/21/2013 - 19:39 | 3680913 sbenard
sbenard's picture

Where's Bubbles Bernanke when we need him? Who does he think he is, letting us down like this! Well of all the NERVE!

Why, if he lets up with the money printing, we might actually have to WORK for a living! We might have to actually PRODUCE something! We might have to do R&D! We might have to become more PRODUCTIVE or something! We might have to SELL something! I didn't retire to couch-potatoship for nothing! He needs to follow Schumer's advise and "get to work" so WE don't HAVE to!

Doesn't he know we have a RIGHT to free money? Doesn't have know it's our ENTITLEMENT? Doesn't he know we can't SURVIVE without endless free money?

Did Bubbles fall asleep in his helicopter or something? How DARE he! He should be ASHAMED of himself! Ugh! I'm so disgusted I can't think straight!

Fri, 06/21/2013 - 21:25 | 3681204 scatterbrains
scatterbrains's picture

Wouldnt that be interesting..  that nigga slung up by his neck high on a lamp post by none other than the wall st. banksters

Fri, 06/21/2013 - 19:32 | 3680914 JuliaS
JuliaS's picture

Schiff - the man that saves investors by leading them out of a burning house into a nearby shack full of gasoline and fireworks.

Try finding statements for his beloved Euro Pacific Capital. He mad them a little difficult to find. How about an annualized return between -14% to -80% between 2009 and 2013.

If he wasn't selling books and hadn't become a mainstream persona, he'd be out of a job. He was right about what was going to happen (preaching the same scenario for over a decade until it came true), he however blew it when it came to the rescue advise. Now he's dodging every interview question that goes into numerics. He equates semantics to quantifiable returns of which he has none.

 Again - right about what's going on. Wrong on what to do about it. Few can time the market and when it comes to being right at least once, Cramer's got better record. He's a broken clock that at least has a hand, unlike Schiff - a bracelet that with a dial scribbled on with a magic marker.

Fri, 06/21/2013 - 19:49 | 3680955 TheSilverJournal
TheSilverJournal's picture

Yes, everything is hunky dory, there's no bond bubble, there's no world fiat monetary ponzi, there is no real estate bubble, and the banks are the safest place to store your wealth...besides 30 year Treasuries.

Fri, 06/21/2013 - 20:03 | 3680995 JuliaS
JuliaS's picture

On the contrary, all those bubbles do exist. Go ahead and put your money into genuinely growing Asia, as Schiff suggested. No problems there. In fact, put your money into any of Schiff's vehicles and see if your solvency can outlive market's irrationality.

 Schiff's right about bad places to put money. If he knew where to put it better, he'd be rich. Oh yeah, and his investment advise costs 4.5-5% by the way, on top of 80% that you would have lost already if you "gambled" with him over the last 5 years.

 Again, if he spoke semantics, he'd be a good speaker. Instead he gambles with other people's money. He tries to time the maket and gets it right once in the last 10 years. Broken clock has better track record.

Fri, 06/21/2013 - 20:13 | 3681014 fonzannoon
fonzannoon's picture

his advice in this column is free. it's up to you to choose where to allocate your money based on it.

Fri, 06/21/2013 - 21:08 | 3681176 aka Gil
aka Gil's picture

Anybody chasing yield in the financial markets these days might as well take their money and chase it at the nearest casino. The only people not getting their asses handed to them right now are the criminally and politically well-connected. If you can't think for yourself, why don't you hitch your wagon to one of those pederasts? Or you could take responsibility for your own life because Schiff is absolutely correct about what's coming.

Sat, 06/22/2013 - 07:42 | 3681652 This just in
This just in's picture

I think that Beanie Babies are poised to make a comeback.  I'm stockpiling.

Fri, 06/21/2013 - 19:54 | 3680978 BurningBetty
BurningBetty's picture

It's the biggest ponzi scheme in the history of humanity. Yes, markets can and WILL stay solvent longer then any of us, but the fact remains that as every ponzi scheme collpases, so will this one. And we are closing in, for every day that passes.

Fri, 06/21/2013 - 20:10 | 3681006 JuliaS
JuliaS's picture

We've had the Fed for 100 years. The "day" has been coming an awfully long time. Direction's not the issue, but timing is. Schiff sells "timing" services and they aren't cheap. Read Euro Pacific Capital statement, track their quarterly returns.

My advise to Schiff - sell books, run for office, influence policy. Don't pretend you can time the market. What you say could have been said at any point in the last century. Why isn't important if you canot explain "why now".

Fri, 06/21/2013 - 20:22 | 3681033 fonzannoon
fonzannoon's picture

First off the people who listened to his predominant advice to buy PM's years ago have not exactly done poorly.

More importantly....would you rather be a few years early of a day late?

Fri, 06/21/2013 - 20:35 | 3681052 JuliaS
JuliaS's picture

I'm a PM junkie myself, no thanks to Schiff. Glad I didn't put money into Asia and glad I didn't trade USD in favor of other currencies, though I might eventually. So far I still believe we're the best looking horse in the glue factory. PM's, USD and oil are my picks for the time being.

Decoupling? Still waiting. So far the only thing Schiff's has decoupled is his clients from their investments.

Again, don't have a problem with Schiff personally. Like his philosophy, but not his timing advise. Decoupling, according to him, would have already happened. So far nada. We're all going down together in a basket. Yesterday was one of those "no place to hide" days. No decoupling here, but if he keeps preaching it for few more years, he'll be right eventually.

Fri, 06/21/2013 - 20:37 | 3681084 fonzannoon
fonzannoon's picture

Unfortunately what we are talking about here is the death of the reserve currency. Even for the people who ultimately get it right, if there is a right...most of us will get crushed before that day comes.

Sat, 06/22/2013 - 01:45 | 3681501 TheSilverJournal
TheSilverJournal's picture

What we're talking about is the death of all currency.

Sat, 06/22/2013 - 11:11 | 3681880 Pareto
Pareto's picture

Unless you are in cash, or, long to volatility (which I don't think you are, so, you are losing money too) you are getting your hat handed to you in this rising interest rate environment.  Oil smacked and oil stocks have been shitting the bed for over a year now.  Miners, same thing - industrials same - staples, same - everything same.  While it is true that Schiff has "lost" on his positions, I think his message that a free market response - that which everybody wishes were possible - is never going to happen.  So, as an investor, wtf do you do?  You criticize Schiff - and if you're going to do that you might as well lump Ron Paul, Jim Rogers, John Hussman and a shitload of others - then exactly what is it your doing?  Peter's timing is always early because trying to quantify the timing of human action is impossible.  And those that are early look like idiots.  Yet look at ALL the ass clowns that said 2008 could NEVER happen - those fuckers destroyed more people's wealth than Schiff has in his entire career.

And to Schiff's point, QE economics, ultiumately ends in disaster.  So, JuliaS, tell us how you trade a market that is both rigged and fucked at the same time.  How do you position yourself in the context of dishonest, disingenuine, destructive, distortionary capital market bungling?  yeah.  I figured.  You offer fuck all.  But you're just like the rest of the arrogant finger pointing dip shits out there.  Its so easy to criticize when you're not the one dancing.  But here's the deal.  NOBODY is going to get this right, and nobody ever does.  Jesse Livermore lost his fortunes twice - all of it.  Every nickel.

Don't confuse Schiff's timing with his message, or his investment group with his client's performance becaquse I know you arent doing ANY  fucking better given the positions you identify above.  Oil has done fuck all since March 2012, and holding the US dollar means you're just sitting in cash - as a shitload of others are on this site are doing as well, and if you're holding PMs they don't even count since their real exchange value doesn't change anyhow.  So, you sure as fuck haven't demonstrated to me or anybody else the source or the direction of your next brilliant move.  Just an arm chair pseudo home gamer pontificating from the bleachers.

Sat, 06/22/2013 - 15:12 | 3682240 Not My Real Name
Not My Real Name's picture

Bravo. +10000

Sat, 06/22/2013 - 12:41 | 3681999 buyingsterling
buyingsterling's picture

Hard to blame Schiff. Show me one advisor who is PM friendly who said two years ago that all the fundamentals would get _dramatically_ better for PMs, but the price would plummet. Everyone vastly underappreciated the ability of the PTB to kick the can and jerk the market.

Fri, 06/21/2013 - 20:25 | 3681044 TheSilverJournal
TheSilverJournal's picture

I have yet to come across anyone who has gotten all of the short term moves right. If you know of someone, please let me know. And please don't waste your time if that person doesn't think gold will eventually hit at least $10,000 in real terms, silver to min. $1,000, the dollar to go worthless, bonds to go worthless, US equities to get crushed in real terms, housing to drop at least 75% in real terms, and a general collapse of 70% US service sector economy. Because if they can't get those long term moves right, which is the easy part, then they definitely won't get the short term right.

Fri, 06/21/2013 - 20:34 | 3681075 JuliaS
JuliaS's picture

I like Mike Shedlock. His outlook is generally similar with Schiff. He doesn't pretend he can time the market. He admits mistakes (unlike Schiif that is never wrong). I am long USD in short term. When has Schiff been long USD? His currency plays were based on perceived strengths outside the US all of which were false, as we are finding out. Turned out the rest of the world was in much bigger trouble than we were. Schiff said we were the first domino. Turned out we might actually be the last. That's a hell of a difference.

 Nobody's right about everything. Some admit it... others are... they're giving interviews on MSM, sell books and waste clients' money.

Fri, 06/21/2013 - 20:38 | 3681087 fonzannoon
fonzannoon's picture

The day you go from being right about the USD to wrong about the USD the exit doors will probably be shut. That's the problem.

Fri, 06/21/2013 - 20:50 | 3681123 post turtle saver
post turtle saver's picture

The point is, no one on this board is going to get the timing right on that one. If they happen to, it will either be unadulterated insider info or pure dumb luck with no skill involved whatsoever.

The insiders are a very small club, and we aren't in it. So, looks like dumb luck or no luck at all.

Fri, 06/21/2013 - 20:56 | 3681146 JuliaS
JuliaS's picture

Those who time the market... who run the timing, don't sell their servies. They profit silently. They're the JPM's, GS', C's and other faceless acronym entities. They don't go on television. They don't run websites or youtube channels. They keep people like Schiff on a leash, letting'em surface and reach masses not ahead of the wave, but after tsunami has passed, only to steer'em deeper into the ocean. When Schiff's advise is good - not a sqeak. He's ridiculed. All of the sudden, when PM's go into a selloff, MSM invites him to pump it some more. He's just a card in their pump-n-dump deck. When Schiff's not ridiculed, you know his timing's gonna be off. When he's laughed at and barely heard, he's probably right.

Fri, 06/21/2013 - 21:01 | 3681162 fonzannoon
fonzannoon's picture

You seem to go beyond debating what Schiff says and just seem to want to attack him.

Good luck with U.S stocks and the U.S dollar and whoever you rely on to nail the timing of getting out.

Fri, 06/21/2013 - 21:17 | 3681188 JuliaS
JuliaS's picture

Nothing wrong with attacking those you disagree with. Good luck with your timing also (which I am yet to hear).

Fri, 06/21/2013 - 21:21 | 3681197 fonzannoon
fonzannoon's picture

You don't disagree with his him, just the timing.

I have no idea about the timing. So I just keep adding little by little. Price means nothing in the end. I doubt there will be an accurate measuring stick anyway.

Fri, 06/21/2013 - 20:51 | 3681128 JuliaS
JuliaS's picture

Diversification is the key. That's why I'm not all in on anything. Of all the piles I'm practically guaranteed to loose one for the sake of not losing everything. I'm concerned with short term goals as well. I have to eat today, pay my rent today. I have to actually make ends meet while waiting for the Schiff's future.

Government intervention is not to be neglected. It will have effects. It will delay the inevitable. Other governments will do what we do, so there is no "better place". If economic singularity is the end game, then even gold won't save you.

 I'm rebalancing constantly. Schiff's too stubborn when it comes to the investment advise. He's inflexible. There is no "... and if I'm wrong" in his analysis. There is no plan B. This is how things are and this is how it's gonna be!

Well, like I said many times already, it's how it was for the last 100 years. Plenty of good investments would've been missed if you were waiting for the collapse since day 1.

Schiff says: sell US. I say, bullshit. Not yet. Not today, not tomorrow and not this year. If all ships go sinking, you'd still might want to be on the one that sinks last.

Fri, 06/21/2013 - 20:53 | 3681134 fonzannoon
fonzannoon's picture

Maybe he is not wrong.

Sat, 06/22/2013 - 14:30 | 3682149 Alexandre Stavisky
Alexandre Stavisky's picture

Time for your secular catechism.  You can't have a mingled approach believing in some free market pricing mechanism of one sector while fully understanding that the FED/Banking cartel OWNS other parts.  Years ago if I'd said, "The Fed will step in to purchase virtually all bonds and agencies".  I'd have been laughed to scorn.

The Fed has unlimited powers to produce the claim upon the nation's wealth.

The supervisory and regulatory powers have been captured and stripped of powers to protect the interests of the individuals.

There is no free-market "double-blind" trading.

It's acknowledged that the NSA has deep pervasive blanket spying activities on the population.  You think your trading practices, portfolio, and risk temperament haven't been sniffed through and used to transfer your savings/capital to the financial sector?

There are no powers to check the price making powers of the cartel.  They can make any physical market zero cents or a trillion dollars.   Thin air money causes them no pain and a bottomless purse can move markets to ANY point they desire.  Talk of loss of control is laughable.  The only constraint would be the repudiation of the currency.

The cold fact is that the global economy is under long term contraction.  The emission of money without sound backing by either a commodity or the true production of the economy can create an illusion of growth that can be funneled into financial prolong the game.  If sound money were the baseline of the economy all principal would be withdrawn from nearly all investment as the only probable return would HAVE TO BE NEGATIVE.

Powerful entities are fighting for their existence.  That they must do so in open sunshine defying all the moral, civil, legal, ethical codes is a testament to the desperation and duress.  The pirates much prefer operating under cloak of darkness and in secrecy.

Pretending that gain can be obtained from the corrupted financial process when you are fully aware how blatantly manipulated all the global markets are is intellectual cowardice.


Fri, 06/21/2013 - 23:35 | 3681405 TheMeatTrapper
TheMeatTrapper's picture

Schiff helped me understand the futility of playing the game. I could give a shit less about "timing" the market that I know is a rigged carnival game. I'm simply done with it. Schiff has saved me tens of thousands of dollars. He's also helped me understand the true nature of our existence, and how we are owned by a criminal elite that is above the law.  

I'm long PM's, ammo, traps and tools. 

It's impossible to 'time' a rigged game. It's easy to cash in your chips and walk away. I'll be forever grateful to Schiff in that regard. 

Fri, 06/21/2013 - 23:47 | 3681424 FEDbuster
FEDbuster's picture

I failed to listen to Schiff when he was calling the end to the real estate bubble (granted he was early on that call, too), but I will not ignore his macro views on the state of our current bubble economy.

Fri, 06/21/2013 - 20:54 | 3681136 TheSilverJournal
TheSilverJournal's picture

As a matter of fact, you kind of sound like Mike Shedlock. Are you Mike Shedlock? His main driver to becoming known wasn't his abilities, it was his slanderous attacks on Schiff. Mish does have some good insights (and plenty of bad ones), but it's quite ironic that you hate on Schiff for saying crap just to sell his business when Mish is miles worse in the shameless category.

Fri, 06/21/2013 - 21:04 | 3681164 JuliaS
JuliaS's picture

I've been following Mish for about 6 years. Pretty happy with his investment advise. Happy with his silver market timing.

When that confrontation between him and Schiff happened years ago, it was Schiff that threatened a lawsuit. When Mish asked for an open debate, Schiff vanished.

Sitka Pacific (Mish's fund) has better returns. It went negative for about a quarter following 2008, but rebalanced quickly. Euro Pacific needs to learn a thing or two about rebalancing. Things change. Short term gain is important. If Euro Pacific charged their fees when they were right, as oppose to quarterly, I'd not have a problem with them.

Once again, Schiff will be right eventually, but he wants to get paid every step on the way there. It might take days, weeks, months, decades.

Oh yeah, and buy his book! Buy all of them! He'll write more, if you ask. That's the thing about "always being right". One book just ain't enough. Rightness requires revisions every 6 months.

Fri, 06/21/2013 - 21:15 | 3681185 aka Gil
aka Gil's picture

Now you're dodging the question: Are you Mike Shedlock?

Fri, 06/21/2013 - 21:16 | 3681186 JuliaS
JuliaS's picture


Fri, 06/21/2013 - 21:49 | 3681254 Stonecold
Stonecold's picture

JuliaS I have had the same bad experience using Euro Pacific capital you write about

Fri, 06/21/2013 - 21:52 | 3681262 fonzannoon
fonzannoon's picture

I will say this. I don't use them. I would not use their brokerage arm. I have seen them using structured cd's lately. No good.

I don't think I would have a problem buying PM's from them. 

Fri, 06/21/2013 - 23:39 | 3681409 Kirk2NCC1701
Kirk2NCC1701's picture

I have no experience with any of these service providers.  Lost enough with Morgan Stanley and Smith Blarney.  But I do recall being quite surprised how few people were at Schiff's table during Simon Black's Offshore Tactics Seminar in early April in Santiago.  Some of the other tables had a long line of people waiting.  If I knew you personally or if I knew that we did not have Fed trolls here, I'd tell you which tables were busy.  If you contact me (e.g. Julia, Fonzie, etc), I'll tell you which tables, as I'm pretty sure you are not 'federales'.

The other thing that made me go "Hmmm" at this workshop (tingled my 'spider sense'), was when Peter was promoting this 50x1 gr gold card, that you can break off into 1 gram pieces.  Nice idea, but the markup was horrendous.  I had zero interest in it (at these margins), and maybe others had an interest, but I my straw poll of the other 500 people during cocktail hour did not have any interest in these gold cards, for the exact same reason.

Pete was also promoting his latest book, and an interesting product:  Gold-backed credit card from his (offshore?) bank.  It sounds cool, but when I started dissecting the concept, it did not measure up:  Why would I pay margin costs in buying the gold, just to liquidate it for a credit card?  Why not just use a regular CC for that?  But I could see how this is good for the bank holding the gold and issuing the card.  What a concept!

Sat, 06/22/2013 - 01:00 | 3681480 Kirk2NCC1701
Kirk2NCC1701's picture

Peter, is that you junking me?  It's not like I said anything untrue or nasty, you know.  Sheesh.

Sat, 06/22/2013 - 06:49 | 3681620 Nostradamus
Nostradamus's picture

Schiff looks solely at fundamentals. He isn't trying to time the market at all. If he is buying as much gold as he claims, when this economy finally collapses, schiff may very well be one of the wealthiest men in the country at that point.

Fri, 06/21/2013 - 19:34 | 3680917 They trynna cat...
They trynna catch me ridin dirty's picture

Peter Schiff is my favorite Jew next to Jesus Christ.

Fri, 06/21/2013 - 19:41 | 3680935 e-recep
e-recep's picture

google bar refaeli.

Sat, 06/22/2013 - 05:08 | 3681580 shutdown
shutdown's picture

Google "The Thirteenth Tribe." Peter is pure Khazar, but he is still okay in my book. 

Fri, 06/21/2013 - 19:42 | 3680938 BurningBetty
BurningBetty's picture

"While it's true that the Fed only owns 14% of all outstanding MBS (the "small fraction" he referred to in the press conference) it is by far the largest purchaser of newly issued mortgage debt. What would happen to the market if the Fed were to stop  buying? There are no longer enough private buyers to soak up the issuance. Those who do remain would certainly expect higher yields if the option of selling to the Fed was of table. Put bluntly, the Fed is the market right now and has been for years. "

Just this alone tells you that our entire monetary system is just a BIG A$$ Ponzi scheme. Where there are no more people to buy, you simply start printing money to keep the system alive. Ofcourse, if this was the case for all other ponzi-schemes, then we'd all be "rich". Ponzis are illegal, we all know that. Though not if you're name is Federal Reserve. Pay for your own slavery and STFU!

Fri, 06/21/2013 - 19:44 | 3680945 edwardo1
edwardo1's picture

On his main point, Mr. Schiff is correct. QE can not stop, because, at this stage of the game, without The Fed acting as market maker of last resort, there is no market save one sporting much higher yields to compensate for what would be a very different risk profile. However, unlike Mr. Schiff and seemingly pretty much every other commentator, yields have not gone straight up over the last month simply because of Bernanke's use of the world "taper." 

The global financial system is as fragile as ever, and events in the far east and emerging markets have, by hook and by crook, put pressure on U.S. sovereign debt as there has been a liquidity crunch/margin call that has required cash to be raised. So, while the timing of the voicing of the word "taper" has been unfortunate, it is not the proximate cause of the levitating action in rates. That is what should have people very concerned. The wheels are coming off the global economic and financial bus, but this time, unlike the last time, the global wealth reserve asset is being adversely effected which has profound implications going forward.

P.S. Schiff's piece needs some editing.

Fri, 06/21/2013 - 20:00 | 3680991 tarsubil
tarsubil's picture

Man, is this it? My spidey sense is failing me completely. It is the end of the world as we know it and I feel fine.

Fri, 06/21/2013 - 20:29 | 3681056 Thisson
Thisson's picture

Ok, so let's accept your premise that QE cannot stop.  So what happens when interest rates start rising despite QE?  It's going to lead to a paradox because gold, the one safe asset in the system, is going to (initially) get crushed when real interest rates rise.  So what do you do when the only safe asset is getting crushed?  It's going to take balls of steel to be buying gold on the way down, knowing that the knife you're catching is an illusion and is actually a life preserver!!

Fri, 06/21/2013 - 21:32 | 3680999 saulysw
saulysw's picture

I am not sure I would like investing with Schiff, but I sure like reading what he has to say. I thought this was a pretty good breakdown of the corner the Fed is now in. It is a choice between fire and ice.

Fri, 06/21/2013 - 20:25 | 3681040 q99x2
q99x2's picture

The FED was transferring wealth to the elites while the military industrial complex prepared to attack the United States of America. That seems to be the consensus. Everything from Obama, NSA, DHS all confirm that is what the FEDs have been preparing.

Expect bombs to fly when they pull the plug on the market indexes.

Fri, 06/21/2013 - 21:32 | 3681219 lakecity55
lakecity55's picture


Most folks have no idea what is going to happen.

Folks who worked in the MIC in compartmentalized units are starting to put the pieces together, hence Snowden and others.

You must accept, without any doubt in your mind, TPTB are  executing individuals dangerous to them right now. Others are being neutralized.

Many people are in fear for their lives.

Be ready to defend yourselves against attack.

It will come upon us suddenly, either due to an event they control, or a random event they take advantage of, or both.

Fri, 06/21/2013 - 20:25 | 3681045 Tombstone
Tombstone's picture

QE is a central planner's dream, and a nightmare for any economy.  When has CP ever worked?  Not even the Kommies could make it work and they were the masters of its use.  Look at China right now; CP is failing as the planners are discovering that they cannot control the various shadow markets that evolve from CP. It's a heck of a mess, but we have the grand master, Uncle Benny, to see us through it all.  Peachy.

Fri, 06/21/2013 - 20:29 | 3681059 BigPerm
BigPerm's picture

Why the poor rating? Has Peter become to mainstream? I agree with all of Peter's points except for the fact it is based on the assumption the TPTB want to keep the system afloat. Much more profitable for them to position for a collapse and buy back everything on the cheap.

Fri, 06/21/2013 - 20:44 | 3681104 Westcoastliberal
Westcoastliberal's picture

I sort of agree with one of the posters who called for something actionable on these pages.  While I enjoy the ideas and antics here, I sure would like to see Tyler, or Reggie, GW, or another of you smart-asses, maybe take us through the steps of what in reality happens when it all blows up (as we know it will).

The one thing I like about this site is there's no pulling punches or candy coated shitballs.  It's all out for all to see sans the heavy moderation of other financial sites. So c'mon, one of you guys do a piece demonstrating step by step of the great meltdown.  Hell there might be some opportunities along the way.

Fri, 06/21/2013 - 20:49 | 3681117 Thisson
Fri, 06/21/2013 - 21:23 | 3681200 OneTinSoldier66
OneTinSoldier66's picture

I think you'd have to define "blows up".



For instance, once money printing out of thin air started, to me, that was a collapse. I don't know what a collapse is to you.

Fri, 06/21/2013 - 22:03 | 3681274 TheSilverJournal
TheSilverJournal's picture

The world monetary fiat ponzi really began with fractional reserve banking in the mid to late 1800's leading to the 1907 dealio and paving the way for the creation of the Fed to expand the ponzi when needed. Once the ponzi started, collapse of the system was inevitible and, from then on out, there were only two choices as there are in all ponzies: expand or collapse. The fiat ponzi has now engulfed the world and since there is nobody left to suck into the ponzi, the end game moves of ZIRP + QE have been implemented to sustain the beast.

QE, or the perceived start of the printing out of thin air, is just the tip of the iceberg. For over a century the banking system has siphoned resouces out of the economy. Prices should have been falling, not rising, as gains in technology lead to increased productivity. The entire rise in prices over the last 100+ years plus the amount that prices should have fallen by is what the government / central banking duo have stolen from Americans and all of humanity.

Fri, 06/21/2013 - 23:28 | 3681396 OneTinSoldier66
OneTinSoldier66's picture

Yes, I agree.


It wasn't until a little later that I learned enough austrian economics and history to understand it the way you just put it. I must say you won't get any argument from me, and I couldn't have said it better myself!


I just point out the money printing as something that is what I think would be quick and easy for someone to relate to as a collapse. Some might say it won't be until/unless we have a bond market crash and interest rates rise somewhat, bringing pressure on interest payments on the national debt. But what is a national debt? What is a dollar?

Fri, 06/21/2013 - 23:07 | 3681369 not applicable
Sat, 06/22/2013 - 00:59 | 3681479 DowTheorist
DowTheorist's picture

Maybe more QE will follow, but in the meantime the primary trend for stocks turned bearish on June 21 for the reasons explained here:


So now the odds favor lousy market action. Primary bear market signals are to be taken seriously.


If more QE comes, then the market will let us know thru a primary bull market signal. In the meantime, the markets cry deflation.

Sat, 06/22/2013 - 06:48 | 3681619 CDNX fan
CDNX fan's picture

Predicting an event and executing to profit if correct represents an artful symbiosis that few have mastered. Have you noticed that the guys that usually "get it right" are rarely interviewed? Self-promoters are usually lousy investors.

Sat, 06/22/2013 - 07:10 | 3681627 Disenchanted
Disenchanted's picture

So Schiff here is saying basically the same thing that Hilsenrath said in the 'hilsenramp' article...


Sat, 06/22/2013 - 09:37 | 3681753 max2205
max2205's picture

Having the head of the fed conduct press conferences and be more transparent is ruining the market

Sat, 06/22/2013 - 09:58 | 3681769 g speed
g speed's picture

at Kirk

-- actionable-----get out of debt----already out, good---- have a little bit of cash--try for 20-30k in the mattress.---It's getting a little late but get into/start a cash business (find a product/service that has constant demand in your area) If your so inclined buy some gold/silver but realize that it will be yours for a long time or you will suffer losses with it.  Develope/become involved in a local tradesman network in your area--get to "know" people with assets and vision ---cull the pack.  buy tools and machines-diggers/lathes/welders/metal working etc. build a garage to do work in and fix your car. buy a toyota/honda 1998----2008 and learn how to fix it and buy spares. get some food in your pantry-a months worth--

You get my drift?  The thing is if every thing tunrs out rosy the you havn't lost a thing but a little work and a small change in life style --if TSHTF then you will have it better than most for the first weeks/months and can move on from there. 

If you're a trader and are putting your "trust" in issues with abritrary value then you are at someones mercy--good luck with that.

edit--if you have a million + in equities/other-- it might be wise to exit somewhat and spread some cash around in different small banks/credit unions. you can always get back into a rising market (trend follow) if things happen like we hope--if not you will get much with pennies on the dollar.

Sat, 06/22/2013 - 12:48 | 3682013 rosiescenario
rosiescenario's picture

If you believed that we are actually having a recovery then you probably believed that Ben is really going to do what he intimated.

Do NOT follow this link or you will be banned from the site!