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The Bank Of International Settlements Warns The Monetary Kool-Aid Party Is Over

Tyler Durden's picture


When a month ago the Central Banks' Central Bank, aka the Bank of International Settlements (or BIS) in Basel where the MIT central-planning braintrust meets every few months to decide the fate of the world, warned that the Fed-induced collateral shortage is distorting the markets, few paid attention. That the implication behind said warning was that QE can not continue at the current pace, was just as lost. A few short weeks later following the biggest plunge in markets since 2011 in the aftermath of Bernanke's taper tantrum, some are finally willing to listen.

However, they will certainly not like what the BIS just released as a follow up, both in the form of the BIS' 83rd Annual Report, and the speech by Jaime Caruana to commemorate said annual meeting. For the simple reason that it reads like a run of the mill Sunday morning Zero Hedge sermon, which says, almost verbatim, that the days of kicking the can via flawed monetary policy are now over, and that the time for central banks to end the monetary morphine drip has finally come.

The BIS message, as summarized by the FT, is that "central banks must head for the exit and stop trying to spur a global economic recovery... cheap and plentiful central bank money had merely bought time, warning that more bond buying would retard the global economy’s return to health by delaying adjustments to governments’ and households’ balance sheets."

Here is a better summary of the BIS' unprecedented U-Turn on its 5 year long monetary strategy, in its own selected words:

Can central banks now really do “whatever it takes”? As each day goes by, it seems less and less likely... Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. If there were an easy path to that goal, we would have found it by now.


Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilisation role, allowing others to do the hard but essential work of adjustment.  


Many large corporations are using cheap bond funding to lengthen the duration of their liabilities instead of investing in new production capacity.  


Continued low interest rates and unconventional policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system.


Overindebtedness is one of the major barriers on the path to growth after a financial crisis. Borrowing more year after year is not the some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.

Of course, it would have been more useful for the BIS to reach this commonsensical conclusion some four years ago (or roughly when we started preaching to the choir, which now includes the BIS itself), instead of allowing the global private bank controlled syndicate known as "central banks" to inject $15 trillion into global capital markets in the past 4 years, and nearly $25 trillion (a #Ref! % increase!) since 2000.

Some of the "shocking" and painfully late observations on the chart above:

Since the beginning of the financial crisis almost six years ago, central banks and fiscal authorities have supported the global economy with unprecedented measures. Policy rates have been kept near zero in the largest advanced economies. Central bank balance sheets have doubled from $10 trillion to more than $20 trillion. And fiscal authorities almost everywhere have been piling up debt, which has risen by $23 trillion since 2007. In emerging market economies, public debt has grown more slowly than GDP; but in advanced economies, it has grown much faster, so that it now exceeds one year’s GDP.

Some of the other, just as "shocking" observations: a dramatic surge in artificially low bond yields will result in crippling, systemic losses, amounting to trillions of dollars for bond (and certainly stock) investors around the globe, to the tune of 8% of GDP losses in the US, and a mindblowing 35% of GDP in losses for Japanese investors:

Consider what would happen to holders of US Treasury securities (excluding the Federal Reserve) if yields were to rise by 3 percentage points across the maturity spectrum: they would lose more than $1 trillion, or almost 8% of US GDP (Graph I.3, right-hand panel). The losses for holders of debt issued by France, Italy, Japan and the United Kingdom would range from about 15 to 35% of GDP of the respective countries. Yields are not likely to jump by 300 basis points overnight; but the experience from 1994, when long-term bond yields in a number of advanced economies rose by around 200 basis points in the course of a year, shows that a big upward move can happen relatively fast.


And while sophisticated hedging strategies can protect individual investors, someone must ultimately hold the interest rate risk. Indeed, the potential loss in relation to GDP is at a record high in most advanced economies. As foreign and domestic banks would be among those experiencing the losses, interest rate increases pose risks to the stability of the financial system if not executed with great care.


All of which Japan's "sophisticated", yet joyously cartoonish, "leaders" recently found out when they almost lost all control of the bond (and stock) market.

What's the "wealth effect" solution: why buy stocks but don't sell bonds. Or if selling bonds, do so vewy, vewy quietly. Alas, not even the BIS is dumb enough to fall (or push) for this possibility any longer.

The BIS report goes on, doing all it can to distance itself from those central banks who merely implemented policy that the BIS supported (and encouraged) for the past 5 years, but which has suddenly turned a cold shoulder. It does so by dramatically and rhetorically blasting a litany of questions to which it fully-well knows the answers:

How can central banks encourage those responsible for structural adjustment to implement reforms? How can they avoid making the economy too dependent on monetary stimulus? When is the right time for them to pull back from their expansionary policies? And in pulling back, how can they avoid sparking a sharp rise in bond yields? It is time for monetary policy to begin answering these questions.

Regardless of the politics behind the shift in BIS sentiment, the days of Mario Draghi's "whatever it takes" shriek of desperation are over. Here are some more of the key soundbites from the BIS report:

Originally forged as a description of central bank actions to prevent financial collapse, the phrase “whatever it takes” has become a rallying cry for central banks to continue their extraordinary actions. But we are past the height of the crisis, and the goal of policy has changed – to return still-sluggish economies to strong and sustainable growth. Can central banks now really do “whatever it takes” to achieve that goal? As each day goes by, it seems less and less likely. Central banks cannot repair the balance sheets of households and financial institutions. Central banks cannot ensure the sustainability of fiscal finances. And, most of all, central banks cannot enact the structural economic and financial reforms needed to return economies to the real growth paths authorities and their publics both want and expect.


What central bank accommodation has done during the recovery is to borrow time – time for balance sheet repair, time for fiscal consolidation, and time for reforms to restore productivity growth. But the time has not been well used, as continued low interest rates and unconventional policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system. After all, cheap money makes it easier to borrow than to save, easier to spend than to tax, easier to remain the same than to change.


Yes, in some countries the household sector has made headway with the gruelling task of deleveraging. Some financial institutions are better capitalised. Some fiscal authorities have begun painful but essential consolidation. And yes, much of the difficult work of financial reform has been completed. But overall, progress has been slow, halting and uneven across countries. Households and firms continue to hope that if they wait, asset values and revenues will rise and their balance sheets improve. Governments hope that if they wait, the economy will grow, driving down the ratio of debt to GDP. And politicians hope that if they wait, incomes and profits will start to grow again, making the reform of labour and product markets less urgent. But waiting will not make things any easier, particularly as public support and patience erode.


Alas, central banks cannot do more without compounding the risks they have already created. Instead, they must re-emphasise their traditional focus – albeit expanded to include financial stability – and thereby encourage needed adjustments rather than retard them with near-zero interest rates and purchases of ever larger quantities of government securities. And they must urge authorities to speed up reforms in labour and product markets, reforms that will enhance productivity and encourage employment growth rather than provide the false comfort that it will be easier later.

* * *

As governments responded to the financial crisis with bank bailouts and fiscal stimulus, their indebtedness rose to new highs. And in countries that experienced a housing bubble in the run-up to the crisis, households had already accumulated large debts. In the half-decade since the peak of the crisis, the hope was that significant progress would be made in the necessary deleveraging process, thereby enabling a self-sustaining recovery.

However, that never happened.

Easy financial conditions can do only so much to revitalise long-term growth when balance sheets are impaired and resources are misallocated on a large scale. In many advanced economies, household debt remains very high, as does non-financial corporate debt. With households and firms focused on reducing their debt, a low price for new credit is not terribly relevant for spending. Indeed, many large corporations are using cheap bond funding to lengthen the duration of their liabilities instead of investing in new production capacity. It does not matter how attractive the authorities make it to lend and borrow – households and firms focused on balance sheet repair will not add to their debt, nor should they.

And, most of all, more stimulus cannot revive productivity growth or remove the impediments that block a worker from shifting into a promising sector. Debt-financed growth masked the downward trend in labour productivity and the large-scale distortion of resource allocation in many economies. Adding more debt will not strengthen the financial sector nor will it reallocate resources needed to return economies to the real growth that authorities and the public both want and expect.

* * *

Six years have passed since the eruption of the global financial crisis, yet robust, self-sustaining, well balanced growth still eludes the global economy. If there were an easy path to that goal, we would have found it by now. Monetary stimulus alone cannot provide the answer because the roots of the problem are not monetary. Hence, central banks must manage a return to their stabilisation role, allowing others to do the hard but essential work of adjustment.


Authorities need to hasten labour and product market reforms so that economic resources can shift more easily to high-productivity sectors. Households and firms have to complete the difficult job of repairing their balance sheets, and governments must intensify their efforts to ensure the sustainability of their finances. Regulators have to adapt the rules to a financial system that is becoming increasingly interconnected and complex and ensure that banks have sufficient capital and liquidity buffers to match the associated risks. Each country needs to tailor the reform agenda to maximise its chances of success without endangering the ongoing economic recovery. But, in the end, only a forceful programme of repair and reform will return economies to strong and sustainable real growth.

* * *

Ultimately, outsize public debt reduces sovereign creditworthiness and erodes confidence. By putting their fiscal house in order, governments can help restore the virtuous cycle between the financial system and the real economy. And, with low levels of debt, governments will again have the capacity to respond when the next financial or economic crisis inevitably hits. 

* * *

Continued low interest rates and unconventional policies have made it easy for the private sector to postpone deleveraging, easy for the government to finance deficits, and easy for the authorities to delay needed reforms in the real economy and in the financial system.

The BIS conclusion:

Is this a call for undifferentiated, simultaneous and comprehensive tightening of all policies? The short answer is no. Concrete measures need to be tailored to country-specific circumstances and needs. And the timing need not be simultaneous, although in some places it may be difficult to avoid an overall reduction in accommodation because some policies have clearly hit their limits.


Ours is a call for acting responsibly now to strengthen growth and avoid even costlier adjustment down the road. And it is a call for recognising that returning to stability and prosperity is a shared responsibility. Monetary policy has done its part. Recovery now calls for a different policy mix – with more emphasis on strengthening economic flexibility and dynamism and stabilising public finances.


Finally, today’s large flows of goods, services and capital across borders make economic and financial stability a shared international responsibility. Cross-border effects of domestic policy action are intrinsic to globalisation. Understanding spillovers and finding ways to avoid the unintended effects is central to the work of the BIS. And continued discussions among central banks and supervisors – discussions that the BIS facilitates and promotes – are essential for avoiding national biases in policymaking. Such national bias runs the risk of undermining globalisation and thus blocking the road to sustained growth for the global economy.

And yes, the central banks' central bank really did say all of the above. Unpossible the Keynesian Magic Money Tree growers will say: surely there is an error in the BIS excel model...

Those pressed for time, if unable to read the full 204 page annual report, should at least read the following stunning speech from Jaime Caruana, General Manager of the BIS, titled "Making the most of borrowed time." (only 9 pages - pdf here). Because, if nothing else, it validates everything Zero Hedge has said for the past 4 years.



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Sun, 06/23/2013 - 16:17 | 3684490 buzzsaw99
buzzsaw99's picture

The BIS comes across as childishly naive in this.

I'm shocked, shocked to find that gambling is going on in here! [cap'n renault]

Sun, 06/23/2013 - 16:26 | 3684508 cifo
cifo's picture

I skipped directly to the comments.

Sun, 06/23/2013 - 16:29 | 3684516 jbvtme
jbvtme's picture

Recovery now calls for a different policy mix – with more emphasis on strengthening economic flexibility and dynamism and stabilising public finances.

I too had a fine settlement this morning. 

Sun, 06/23/2013 - 17:09 | 3684652 King_of_simpletons
King_of_simpletons's picture

Dr. Paul Krugman has won the debate. *NOT*

Sun, 06/23/2013 - 17:29 | 3684711 francis_sawyer
francis_sawyer's picture

So does this mean 'Hilary' gets the job?...

Sun, 06/23/2013 - 17:36 | 3684727 Pinto Currency
Pinto Currency's picture


So after coordinating a gold manipulation (and thus artificially low interest rate) campaign for two decades, the BIS now warns us of a credit bubble.


Sun, 06/23/2013 - 18:00 | 3684786 johngaltfla
johngaltfla's picture

There's a bigger problem the BIS and others have been aware of since Q4 2012; what happens when cross border financial activity ceases to expand and in fact contracts? Usually when money and trade stop flying across borders, bullets are exchanged instead.


The End of Global Banking or Worse?

Sun, 06/23/2013 - 21:54 | 3685365 Taku
Taku's picture

O/T: US politicians issue warning to Russia on Snowden.

I wonder if the same US politicians arrested anyone for the financial crisis.

Or the massive, record bonus payouts in 2009, 2010.

Or the spying on American citizens.

Or the...

Sun, 06/23/2013 - 22:30 | 3685441 Bringin It
Bringin It's picture

Chuck Schumer thinks Snowden is a traitor.  Oh the irony...

Traitor to what Chuck?  Your entity???


O/T - The Bank of Israel /Goldman /JPM thread just vanished.???


Sun, 06/23/2013 - 22:34 | 3685455 TwoShortPlanks
TwoShortPlanks's picture

"liquidate labour (sent to China, check!), liquidate stocks (phase 1, check!), liquidate farmers (years ago, check!), liquidate real estate (round 1, check!)... it will purge the rottenness out of the system (soon). High costs of living and high living will come down. People will work harder (soon), live a more moral life (soon). Values will be adjusted (soon), and enterprising people will pick up from less competent people"

Full circle.

Sun, 06/23/2013 - 22:59 | 3685493 zhandax
zhandax's picture

Can we get started tomorrow?

Mon, 06/24/2013 - 00:50 | 3685648 Oh regional Indian
Oh regional Indian's picture

We just might... on all counts.

This is the big signalling they always do, so no one can say they did nto see it coming. It's part of this weird mix of asking for permission 9and getting it) before the raping begins.

Very strange. The whole BIS/CB shitshow needs to come crashing down, but how?

Stop participating. Stop participating in TV, completely. Stop buyng their compromised newspapers. Stop eating their poisoned fast food. Stop shopping at companies that will willingly sell you poison lasquerading as food.

Active resistance by passive means and better health (mental and physical) to boot.


Sun, 06/23/2013 - 23:31 | 3685545 Flagit
Flagit's picture

O/T - The Bank of Israel /Goldman /JPM thread just vanished.???

you mean this thread?

Mon, 06/24/2013 - 01:21 | 3685678 TwoShortPlanks
TwoShortPlanks's picture

No, not that one...the conspiracy looks very similar tho.

Sun, 06/23/2013 - 23:41 | 3685558 El Oregonian
El Oregonian's picture

Chuck Schumer is Anthony Weiner's peckerhead.

Mon, 06/24/2013 - 00:27 | 3685611 chindit13
chindit13's picture

You nailed it, johngaltfla.  And when that cross border activity contracts, or in some cases (within a monetary union) all goes in one direction, a whole lot of markets are left without liquidity.  Bid-asks widen out, which means a fair m-t-m accounting becomes more problematic, which means that in the event of forced liquidations, the weakest hands get hosed.  It is the global equivalent of Blue Mountain vs. Bruno Iksil.  It is a LTCM/Russian Bond deja vu.

Virtually all 'models' used in the economic sphere assume a certain degree of liquidity that may no longer be there.  Actually, it is not there.  Considering that, vol is damn cheap.

I can see the possibility of a massive dollar rally, not because it has great 'value', but because of its size and the size of the US debt market, which is essentially a large parking lot.  Of course, it will be the equivalent (here comes the Titanic yet again), everybody jumping in the same lifeboat.  It looks good for a while, but then that boat sinks, too.  (That is when I'll fall in love with 'barbarous relics' in addition to other "stuff".)

Sun, 06/23/2013 - 22:23 | 3685430 ziggy59
ziggy59's picture

Rewriting history and getting credit for it..

Sun, 06/23/2013 - 18:52 | 3684916 Go Tribe
Go Tribe's picture

I sure hope not. I don't like the thought of rolling out of bed and throwing up each morning for 1,460 days.

Sun, 06/23/2013 - 16:28 | 3684518 kliguy38
kliguy38's picture

what was your first clue to do so? hehehehe

Sun, 06/23/2013 - 17:18 | 3684585 xtop23
xtop23's picture

Monday bloodbath?

I guess we'll find out in short order whether the FED is a political entity or not. 

The market scrubbing in like Wile E. Coyote is going to cause a lot of pressure to be brought to bear. 

Set your stop watches on how long it takes them to cave in and boost overt QE to 150 b/m.

Sun, 06/23/2013 - 17:52 | 3684785 kahunabear
kahunabear's picture

I hope so. 1000 points down will do for a start. '09 feels like a distant memory after all the Bernanke brainwashing. Let the games begin!

Mostly, I want to see Krugman, Bernanke, Goldman, et al. eat their words.

Sun, 06/23/2013 - 18:58 | 3684928 flacon
flacon's picture

I want to see Krugman, Bernanke, Goldman, et al. eat molten gold mixed with molten silver; poured straight down their throat. 

Sun, 06/23/2013 - 20:42 | 3685184 saucy
saucy's picture

Ah, a Roman historian. Crassus in 88 BCE. I assume it was quite painful... but I'm all for a revival of this form of execution. :-) I suppose they weren't in the ground long either!

Sun, 06/23/2013 - 22:13 | 3685208 FEDbuster
FEDbuster's picture

Waste of silver and gold.

Sun, 06/23/2013 - 22:32 | 3685450 Bringin It
Bringin It's picture

Please -I'm sure they got it back.

Guy who assasinated William of Orange - molten silver in the ear.

Sun, 06/23/2013 - 22:22 | 3685427 starman
starman's picture

hm Nikkei is very quiet, did they get their QE shot already?  

Sun, 06/23/2013 - 22:33 | 3685452 Bringin It
Bringin It's picture

SOP - Awaiting herd direction.

Sun, 06/23/2013 - 16:56 | 3684612 Yardfarmer
Yardfarmer's picture

another pile of reeking hypocrisy and misdirection coming from an institution which brought you the Third Reich and serves as the main conduit of international drug money laundering. Google BIS + Nazis. bastards.

Sun, 06/23/2013 - 17:12 | 3684651 RockyRacoon
RockyRacoon's picture

Borrowed time... or wasted time?

"Sometimes to keep it together, we got to leave it alone."

Sun, 06/23/2013 - 18:15 | 3684834 CPL
CPL's picture

Exactly, all that capital, time and resource base pissed away for nothing.  

Sun, 06/23/2013 - 19:02 | 3684945 mademesmile
mademesmile's picture

Better yet, buy and read "Tower of Basel" by Adam Lebor. Someone with a higher intellect than I needs to write then post a book review.

"Tower of Basel is the first investigative history of the world’s most secretive global financial institution. Based on extensive archival research in Switzerland, Britain, and the United States, and in-depth interviews with key decision-makers—including Paul Volcker, the former chairman of the US Federal Reserve; Sir Mervyn King, governor of the Bank of England; and former senior Bank for International Settlements managers and officials—Tower of Basel tells the inside story of the Bank for International Settlements (BIS): the central bankers’ own bank.

Created by the governors of the Bank of England and the Reichsbank in 1930, and protected by an international treaty, the BIS and its assets are legally beyond the reach of any government or jurisdiction. The bank is untouchable. Swiss authorities have no jurisdiction over the bank or its premises. The BIS has just 140 customers but made tax-free profits of $1.17 billion in 2011–2012.

Since its creation, the bank has been at the heart of global events but has often gone unnoticed. Under Thomas McKittrick, the bank’s American president from 1940–1946, the BIS was open for business throughout the Second World War. The BIS accepted looted Nazi gold, conducted foreign exchange deals for the Reichsbank, and was used by both the Allies and the Axis powers as a secret contact point to keep the channels of international finance open."

After 1945 the BIS—still behind the scenes—for decades provided the necessary technical and administrative support for the trans-European currency project, from the first attempts to harmonize exchange rates in the late 1940s to the launch of the Euro in 2002. It now stands at the center of efforts to build a new global financial and regulatory architecture, once again proving that it has the power to shape the financial rules of our world. Yet despite its pivotal role in the financial and political history of the last century and during the economic current crisis, the BIS has remained largely unknown—until now."

Sun, 06/23/2013 - 17:57 | 3684803 GVB
GVB's picture

This is all so funny. The creature of Frankenstein now transcends its creator.Welcome to hell. And in hell, there'll be hell to pay.


This monetary model is irreversibly damaged and not fixable at all. REMEMBER, all these highly leveraged commercial banks have HUGE counterparty liabilities and as a depositor, you are a UNSECURED creditor to that bank. I say again LEVERAGED ! It's insane.


Too Big Too Fail will be remembered in history as the era of insanity.


Pulling the plug on the printing press = revolution

Sun, 06/23/2013 - 16:45 | 3684571 bank guy in Brussels
bank guy in Brussels's picture

Actually it is worse than naive, the BIS is doing downright brutal fascist stuff

That speech by Jaime Caruana, BIS General Manager, which Tyler links above, is pure shite propaganda, parroting the German Bundesbank position against the southern countries and the common people of Europe

Avoids one big elephant in the room, which is that the euro is a giant frigging fascist disaster

And avoids another big elephant, in that tho Caruana accepts this is a 'balance sheet recession' as defined by the great economist Richard Koo, Caruana does not even begin to confront what Koo - the master of that concept - says is the way to handle such a recession

Instead, this oligarch tool Caruana says what needs to be done, is cuts to the workers and common folk ... exactly the opposite of what Koo says. Caruana writes:

« Successful consolidations tend to focus on cuts, especially in government consumption and transfers »

Bullshite. Caruana is ignoring the fact that these policies have all of southern Europe economically collapsing and heading toward revolution.

Caruana wants common people impoverished and committing suicide, for the sake of 'price stabiliteee' and keeping alive the German wet dream of having a cheap currency to export, protecting their own crooked banks, and buying up control of the rest of Europe at fire-sale prices.

Unfortunately, sometimes the ZH 'excess debt' theme is twisted into a plan to let economic oligarchs monopolise and take control while they brutalise.

A revolution is needed, both on the streets and in avoiding simplistic knee-jerk categories.

Sun, 06/23/2013 - 16:54 | 3684599 buzzsaw99
buzzsaw99's picture

In light of this illuminating comment then they are childishly naive if they think the usa &/or fed will play the part they want them to play in this sweaty fascist wet dream of theirs. the bernankinator cannot be bargained with, he can't be reasoned with, he doesn't feel pity, or remorse, or fear...

Mon, 06/24/2013 - 03:16 | 3685752 Dr. Sandi
Dr. Sandi's picture

...he also can't feel his extremities.

But I can. And I'm tired of them.

Sun, 06/23/2013 - 17:00 | 3684625 jmc8888
jmc8888's picture

We need Glass-Steagall before the plug is pulled or else we'll all be Cyprus'd. 

Or Spain'd. Or Britain'd.

Because everywhere you look some form of bail-in is happening.

Guess the BIS is saying they need to sacrifice a few oligarchs so they can crush a few billion peasants.

ROFL ZH used the spilling kool aid pic I've used for years.


Sun, 06/23/2013 - 17:14 | 3684662 RockyRacoon
RockyRacoon's picture


That ain't gonna happen.   Got a Plan B?

Sun, 06/23/2013 - 17:41 | 3684748 Mentaliusanything
Mentaliusanything's picture

No there is no plan B... The separation of "Gambling Banks" from "Savings Bank" is it.

If not prepare to lose as an unsecured creditor

Sun, 06/23/2013 - 17:44 | 3684762 SILVERGEDDON

What manner of butt fuckery is this anyway ?

Banks said " we are too big to fail, so give us money. "

Gooberment gave them money.

The banks pissed it all away on bonuses, and marjin high frequency trading.

Now, BIS says that all that was a bad thing, banks should circle the wagons after raping the world, and hold gooberment's feet to the fire - again ?

And, that it is the fault of all those lazy bastard debt holding ex - middle class folks in each country that things are such a mess ?

Well, fuck me running.

BIS - Big Idiotic Shit heads.


Time for torches and pitch forks.

The monster must be destroyed, before it exterminates all legitimate life on the planet. 

Sun, 06/23/2013 - 18:02 | 3684815 spinone
spinone's picture

Lather, rinse, repeat

Until the .01% has 99% of the wealth, unless they are stopped by popular resistance.

If you are reading this, then you are the resistance.

Sun, 06/23/2013 - 19:01 | 3684942 RockyRacoon
RockyRacoon's picture

You've miscalculated at the current rate of change in wealth retention.  It would be the .001% having 99.9% of the wealth.  They'll stop the money grabbing only when the armed hordes are at the gated community entrances.

Mon, 06/24/2013 - 00:08 | 3685599 Impoverished Ps...
Impoverished Psychologist's picture

Good point,

If 0.1% have 99% of the wealth that means that 99.9% of the people are getting by with 1% of the wealth.

What if the 99.9% were just to declare the 1% that they do possess to be the ONLY legitimate currency/negotiable instruments leaving the tainted 99% as void - like confederate dollars.

This of course would require the complete destruction of the corporate/banking system.....


Sun, 06/23/2013 - 18:18 | 3684838 NoDebt
NoDebt's picture

It's called suddenly realizing you're on the wrong side of history and back-pedaling your ass off in an attempt to realign yourself with what is now obvious to anyone with half a brain is going to go down.

Dr. Paul "whichever way the wind blows" Krugman is good at it, too.

Fire enough lead downrange and you'll eventually hit a bullseye.  Doesn't mean you're any good at it.

6 months from now, if it DOESN'T happen they'll be back to "clarify" their comments or, more likely, ignore the fact they ever made them, substituting new talking point bullshit instead.

And did they really predict the '08 crash?  I'm not so sure.  Seems like there are way too many people being adorned with the "08 crash prediction badge" lately.  In hindsight, everyone predicted it now.  Uh huh.  Sure they did.

Sun, 06/23/2013 - 20:48 | 3685205 centerline
centerline's picture

too late for most..

Sun, 06/23/2013 - 19:03 | 3684946 GVB
GVB's picture

Paging Mario. Paging Mario.

Sun, 06/23/2013 - 18:08 | 3684823 GVB
GVB's picture

Seriously, if they pull the plug on the printing press, we would all be cyprus'd. Actually we already are, but we aren't supposed to know it yet. They actually CANNOT stop printing for if they did, there would be revolution before tomorrow morning. EVERY depositor would lose his money. Remember, commercial banks are LEVERAGED to an extent no person can imagine. 

Mon, 06/24/2013 - 04:40 | 3685819 Debugas
Debugas's picture

there would be no revolution but slaughter and it is coming

Sun, 06/23/2013 - 18:44 | 3684893 dtwn
dtwn's picture

<« Successful consolidations tend to focus on cuts, especially in government consumption and transfers »>

"Bullshite. Caruana is ignoring the fact that these policies have all of southern Europe economically collapsing and heading toward revolution."


Isn't this what needs to happen though?  Governments need to cut spending.  The wealth transfers need to stop.  That is part of why we're here in the first place, excessive gov spending.  $17 trill us debt and $1 tril deficits?  That'll never be paid off.  Gov absolutely needs to cut spending and transfers.

Mon, 06/24/2013 - 09:41 | 3686446 BigJim
BigJim's picture

Exactly. The whole idea that a government is somehow entitled to borrow vast quantities of money 'on behalf' of its citizens, and then their children/grandchildren are somehow morally all on the hook for repaying it, is not only nonsense, but evil.

Greece et al should just declare bankruptcy and go back to their own national currencies (ideally with an eye to either move to a gold standard and no fractional reserve banking, a la Rothbard, or free banking with competing currencies, a la Selgin). Their Northern European creditors - who should never have lent them the money in the first place - can go bankrupt too. Their respective governments can make their depositors whole and the bondholders can take a hike.

This ridiculous notion of non-consenting 'mutual' debt has got to end before it gives our governments the excuse to completely take over our lives via monetary and tax systems. 

But no, the electorate is too stupified by generations of Statist brainwashing to even consider voting for anyone who proposes the above. They get what they deserve... it's just a shame the rest of us have to suffer along with them. Sartre* was right - hell really is other people. 

*Though apparently.. that's not what he meant:


Sun, 06/23/2013 - 19:00 | 3684939 Treason Season
Treason Season's picture

...but...but...but...but I thought FOFOA said the BIS were the good guys! So ain't so!

Sun, 06/23/2013 - 19:56 | 3685078 Central Ohio
Central Ohio's picture

Never heard of Richard Koo.  I'll check it out.

Mon, 06/24/2013 - 02:43 | 3685725 Svendblaaskaeg
Svendblaaskaeg's picture

Ellen Brown - The Tower of Basel: Secretive Plans for the Issuing of a Global Currency

Do we really want the Bank for International Settlements (BIS) issuing our global currency?


Sun, 06/23/2013 - 18:10 | 3684824 Dingleberry
Dingleberry's picture

I'll believe it when I see it.

I don't expect to do either.

Sun, 06/23/2013 - 18:59 | 3684935 sgorem
sgorem's picture

BIS  =  BULLSHIT IN SHEEPSclothing.......................they are a major part of the problem, they know the end result and are preparing their "we forwarned you" bullshit ......WE NEED ABOUT A MILLION GALLOWS BY MY CALCULATIONS.

Sun, 06/23/2013 - 21:57 | 3685370 CheapBastard
CheapBastard's picture

Anyone go to the Mall this weekend?

E-M-P-T-Y. "The Ghost Malls of America" is what they will call them. The handful of heart-healthy, mall-walkers even passed up stuff 90% reduced with "Cash Back" if you splurge over a certain tiny amount. Soon, stores will be paying YOU to even walk in their store.


So I'll be watching how this American Austerity/Sequestration thing looks when it kicks in this July.

Oh, and about that $3,000 in OabamBucks you were promised for Thingamajigs.....

Sun, 06/23/2013 - 22:59 | 3685495 LongBalls
LongBalls's picture

Officially this means game on. Get your crap in gear. WW3 or global depression. Which will be first? I predict war.

Mon, 06/24/2013 - 00:03 | 3685587 Spanky
Spanky's picture

Just a personal observation, but seems Quantum Dawn II is conveniently scheduled... Wonder who will be attacking us, Syria or Iran. How about a two-fer boys?

Tue, 06/25/2013 - 00:36 | 3689963 Infnordz
Infnordz's picture

Naive, more like deliberately lying and evading what 'adjustments' mean i.e. massive bankruptcies and poverty for unproductive debt, and massive bad debts which will have to be written off.

Quite frankly, any financial system which relies upon fractional reserve compound interest debt is a complete Ponzi fraud of embezzling, and blatant theft; synthetic derivatives are just a layer of casino gangsters, leveraged on top, extorting and leaching, and IMO quite insane!

Sun, 06/23/2013 - 16:16 | 3684491 foodstampbarry
foodstampbarry's picture


Sun, 06/23/2013 - 16:24 | 3684505 neidermeyer
neidermeyer's picture

Does anyone have the link to the BIS "treasure chest" story from a while back... Chicago FED chest (supposedly fake) with $7T in booty...

Sun, 06/23/2013 - 17:49 | 3684778 DosZap
DosZap's picture

What they are really saying is BAIL IN's are coming to your hometown SOON.

Sun, 06/23/2013 - 16:19 | 3684494 Divine Wind
Divine Wind's picture



At least for the U.S., the party WILL continue.

Paul Craig Roberts speculates that this type of talk, which in turn leads to definitive, predictable changes in other markets, may be the way they are using to recapitalize banks.

Sun, 06/23/2013 - 16:37 | 3684539 unununium
unununium's picture

Who would down vote that? You need more evidence than trading desks having "perfect quarters" while they are insolvent under long standing FASB rules?

Sun, 06/23/2013 - 17:25 | 3684698 Al Huxley
Al Huxley's picture

I agree.  What more evidence do people need beyond the mountains already available (including, but not limited to: perfect trading quarters, blatant coordinated market moves nanoseconds before information releases, self-congratulatory bonus payouts using money blackmailed out of their government lackeys) to know that nothing any of these guys say, from your local branch manager to the the head of the BIS, can be trusted?

Sun, 06/23/2013 - 16:20 | 3684496 Goldilocks
Goldilocks's picture

Inconceivable! High Quality (0:11)

Sun, 06/23/2013 - 17:40 | 3684745 CH1
CH1's picture

+ 1 for almost any Princess Bride reference. :)

Mon, 06/24/2013 - 00:07 | 3685595 Spanky
Spanky's picture

I'll huff. And I'll puff. And I'll blow... wait! Hold it! Wrong fairy tail. Inconceivable!

Sun, 06/23/2013 - 16:20 | 3684497 tony wilson
tony wilson's picture

 Bank Of International Settlements


many years ago

at an eyes wide shut  satanic beheading baron rothschild told me he ran this settlements outfit.

does this mean the new world 1000 points of light golden dawn will soon be here.

hail satan

hail bush

yo blair

Mon, 06/24/2013 - 01:15 | 3685669 Prometheus418
Prometheus418's picture

That is like a retard mixing up things he heard in a blender.

I'm sure you're a swell guy, Tony- maybe just one too many tonight?

The thing about consipiracy theories is that they're like a sawed-off shotgun.  Eyes Wide Shut was a movie, the Rothschilds are a banking family, the Bush family are in almost diametric opposition to the Rothschilds, as spiritual sucessors to the Rockefellers and Morgans, and the Golden Dawn has it's own agenda that is not connected to any of that.

Though to be fair, I wish it were- I hold a charter for the Golden Dawn in the Cicero lineage, and I could use a big fat Rothschild paycheck.  G.'.D.'.  works like this- it claims lineage as follows: Egyptian rites to Alexander, Alexander to the Roman Eagle, Roman Eagle to the Templars, Templars to Freemasonry (sometimes with a pit-stop in the Illuminati, depending on who you talk to,) Freemasons to the Star and Garter, Star and Garter to the Golden Dawn.  It's not a seamless lineage, and I don't pretend that it is.

G.'.D.'. is a group that practices psychology wrapped up in symbolism towards the goal of freeing mankind from oppressive government, and they are laughably ineffective at that- though I do enjoy their very poetic rhetoric.  They were doing ok, until Crowley caused them to schism and it never really recovered.  They're a syllabus now, not a real group.

The only bankers there were the Templars- but they did more or less invent the concept of traveller's checks when they gave pilgrams paper promises that could be redeemed at Templar strongholds in the Middle East for a fee, so there is that.

Rockefellers had a new world order, and that is the one that is now falling apart- they created the petrodollar and tried to break the hold the Rothschilds were gaining in the US, and did ok with it.  Freemasons helped them implement it- that's why we had a middle class who worked a standard eight-hour day for so long- it's a requirement of Masonry.  If you don't believe that, ask your granddad or wierd uncle, or whomever you may know that attends lodge meetings.  They'll say the same things as myself- it's not a secret, only the specific text of the initiations is.

Rothschilds are a banking family founded during the Napoleonic Wars.  Baron Rothschild is long dead, so get over it.  They're still around, inbred and ranting all kinds of Malthusian garbage.  If you want a Rothschild, you aren't looking for a Bush, you're looking for a Gore.

At this point, the old boogeymen are pretty long in the tooth.  The rituals are outdated and while they still have some power, they are not what they used to be.  What we're seeing today is something a little different- probably a wild offshoot of one of the old groups.  I'm guessing technology created a whole new set of elites- the brains and money are both there, and it makes sense, but I don't have a clear window into that.  

Anyhow, the point is that just name-dropping is stupid and counter-productive, especially when you're mixing your metaphors, and that's why I'm calling you out.  We need to find the real villians and hold thier feet to the fire- not just rant like YouTube nutjobs.

Mon, 06/24/2013 - 09:48 | 3686590 BigJim
BigJim's picture

I have no idea if what you're saying is even remotely true... but +1 for an interesting post.

Sun, 06/23/2013 - 16:22 | 3684500 q99x2
q99x2's picture

They can't continue and afford to squash the revolution against bankers with UN mercinaries.

Impeach Obama.

Sun, 06/23/2013 - 16:36 | 3684530 Goldilocks
Goldilocks's picture

'America Under Siege' (1:08:18)

Sun, 06/23/2013 - 16:23 | 3684503 holgerdanske
holgerdanske's picture

But we are past the height of the crisis, and the goal of policy has changed – to return still-sluggish economies to strong and sustainable growth.

Past the height of the crisis??
Sure, if you say so!

Sun, 06/23/2013 - 16:29 | 3684519 dick cheneys ghost
dick cheneys ghost's picture

growth is a Rothschild word for DEBT

Sun, 06/23/2013 - 17:42 | 3684750 CH1
CH1's picture

On Zero Hedge, Godwin's Law involves "Rothschild," not "Hitler."

Sun, 06/23/2013 - 22:21 | 3685424 NotApplicable
NotApplicable's picture

Why focus on the puppet?

Sun, 06/23/2013 - 18:05 | 3684819 Wave-Tech
Wave-Tech's picture

Good Day Rothschilds....

Sun, 06/23/2013 - 22:10 | 3685391 francis_sawyer
francis_sawyer's picture

Actually, on Zero Hedge, the "Inverse Godwin Reciprocal Theroem" applies...


Which means: the SOONER you get to the root of the problem in a conversation [that otherwise & under normal circumstances be 'Hitlercentric'], the higher the probability a mysterious 'Elephant in the Room' flashes his cloaking powers... So great are the powers of obfuscation that before you can say 'Luciferian Anti-Defamation League' you've flipped the channel over to marvel at Ed Snowden putting his 'Weirding Way' skills on display...

Sun, 06/23/2013 - 22:49 | 3685473 Bringin It
Bringin It's picture

Francis - this thread just vanished

I guess it got a little too hot somehow.

A search for jpmorgan reveals it.

Sun, 06/23/2013 - 22:57 | 3685478 francis_sawyer
francis_sawyer's picture

That's funny...


I actually didn't read many of the comments on that one... I think I just dropped ONE in there that said "Some things speak for themselves"...

Anyway ~ if that's true, it 'bolsters' my 'Inverse Godwin Reciprocal Theorem' [which I presented above]...

As always ~ Non-Stop COMEDY on the Hedge...

Sun, 06/23/2013 - 23:05 | 3685503 Bringin It
Bringin It's picture

Trying to update my comment with more info and I got


Anyways - look around the ZH home page for jpmorgan-out-squids-goldman-frenkel-tentacles-bank-israel.  As of this posting, it's still gone.  A search for bank of israel doesn't return it.

Hitting send to see how much of access is denied.
Francis - this thread just vanished

I guess it got a little too hot somehow.

A search for jpmorgan reveals it.

Note to ZH - I don't think you should be doing this.  I think your approach creates more problems than it solves.

Look what Snowden's going thru for Free Speach.

Stand-up for Free Speach.

Chuck Schumer hates Snowden btw.



Sun, 06/23/2013 - 23:51 | 3685575 francis_sawyer
francis_sawyer's picture

That thread is back now...


It must have done a Snowden [in the eyes of REUTERS] & vanished, & popped back up in Russia, Cuba, Venezuela, & every other country the US is licking it's chops to invade using a military it funds with money printed out of thin air by bankers charging interest for all their hard work...

Mon, 06/24/2013 - 01:27 | 3685681 Prometheus418
Prometheus418's picture

"growth is a Rothschild word for DEBT"

No, it isn't.  The Rothschilds want you dead, end of story.  They don't want more than a billion people on this planet.  And they're rich, but not that strong.

Growth is a Rockefeller word for debt.

Accuracy counts here, people.

Sun, 06/23/2013 - 16:43 | 3684559 HardAssets
HardAssets's picture

Translation:  All you guys are outta control and we need a new economic order with us calling the shots and approving all plans & actions in your home countries.

BIS ?  Hmmmm - - - weren't they the Nazi bank ?

Sun, 06/23/2013 - 16:27 | 3684513 falak pema
falak pema's picture

but but but K said its just around the corner; all we need is MORE QE! 

Sun, 06/23/2013 - 16:27 | 3684515 devo
devo's picture

damn, gold is going to be at 1999 levels soon.

Sun, 06/23/2013 - 16:32 | 3684520 fonzannoon
fonzannoon's picture

it looks like it may be heading there. just let those rates keep rising and  watch what happens

Sun, 06/23/2013 - 17:04 | 3684633 HardAssets
HardAssets's picture

Gold prices can rise with rising nominal interest rates. There needs to be a real positive rate of return on bonds to cause a legit sustained drop in PM prices. (As in 1980 under Volcker)  Of course CPI 'stats' are a sham, as are PM 'prices'.  They might fool Americans, but will they fool the Chinese, Russians, and others around the world ?

Sun, 06/23/2013 - 18:18 | 3684837 BoNeSxxx
BoNeSxxx's picture

Agreed but I don't think we have seen the worst of the downturn in AU yet...

Deflation across all assets will come first as massive unwinding occurs... only when selling quality assets to save 'paper' positions becomes painfully obvious to everyone invloved will the precious take off.  (IMHO)

Sun, 06/23/2013 - 22:17 | 3685416 HardAssets
HardAssets's picture

BoNeSxxx:  "Agreed but I don't think we have seen the worst of the downturn in AU yet...

Deflation across all assets will come first as massive unwinding occurs... only when selling quality assets to save 'paper' positions becomes painfully obvious to everyone invloved will the precious take off.  (IMHO)"

Well, as I read it so far, we're not quite to the pull-back level of 2007-2008. A couple years ago I thought there was NO FREAKIN' WAY we'd ever see this kind of retracement. (I was obviously wrong.)  We could go down a little more, but IMO were getting close to bottoming, IF the pull-back is no worse than 2007-2008. I don't see simliar conditions to 2007-2008 now. IMO the pull backs are fake and orchestrated. If I'm right the PMs should start to improve, likely in the fall.  We'll see.

Sun, 06/23/2013 - 16:30 | 3684517 goldenbuddha454
goldenbuddha454's picture

Back to the gold standard is the only solution to this mess, period.  I know there's not enough gold, but let the chips fall where they may.  The time has come for ending faux-values.

Sun, 06/23/2013 - 17:04 | 3684635 Monedas
Monedas's picture

There is always .... just enough .... gold .... it is what it is .... I agree with you .... on the rest !

Sun, 06/23/2013 - 17:10 | 3684653 HardAssets
HardAssets's picture

Read Murray Rothbard on the gold standard and the myth about there not being enough gold. Websearch and youll find his stuff for free at

BTW - I didnt down arrow you. I don't down arrow folks for not knowing something that I didn't know myself years back till I look further into the subject.

Sun, 06/23/2013 - 17:17 | 3684668 Monedas
Monedas's picture

Gold can be made much thinner .... than thick, coarse paper .... gold is divisible .... I predict the denomination of the future .... will be Atoms of gold .... an Atom will be about par value one USD .... I don't have a clue .... but there IS enough gold to go around !

Sun, 06/23/2013 - 17:30 | 3684714 HardAssets
HardAssets's picture

We have the technology today to use 'gold cards' that would be backed by your physical gold. You could use any fraction of that in your account for purchases.

Sun, 06/23/2013 - 18:02 | 3684814 Totentänzerlied
Totentänzerlied's picture

This is essentially how banks used to operate. You deposit your precious metals, they give you bank scrip proving ownership, eventually people start trading scrip instead of the underlying, and the banks start writing scrip for assets they don't have, which is okay so long as few enough people draw on their accounts in any given period.

Banks are inherently in a position where they stand to gain quite a bit from misrepresenting their deposit base, and other fraud.

Of course it's a better system than fractional reserve + debt-fiat, but you have to beware that bank deposits are not risk free investments, banks will cheat, losses will happen. Trying to hide this risk is how we got into this mess.

Sun, 06/23/2013 - 22:29 | 3685437 HardAssets
HardAssets's picture

You'd make it a 100% gold backed system with the requirement that banks provide gold on demand immediately, as requested. Those who did not do this would be charged with criminal  fraud, and if found guilty would go to jail. There would be no mere 'fines' and no  'corporate' cover for lawbreakers.

Mon, 06/24/2013 - 00:37 | 3685632 FreeMktFisherMN
FreeMktFisherMN's picture

it's actually simpler than that: those institutions in the business of storing one's own gold would lose their business quickly if their trustworthiness/reliability were shattered which would happen if they engaged in frac-reserve banking. That's what happens in a free market, people wise up. Unlike now artificial .gov programs like FDIC such that responsibility has been abdicated from individual to the 'collective.' 


Glass steagall-like expectations would happen in a free market, and there wouldn't be any need for an organized system of theft (government). People wouldn't put up with banks risking their deposits. The market offers the best protection, not bureaucrats.

Mon, 06/24/2013 - 01:34 | 3685686 Prometheus418
Prometheus418's picture

That'd be a good start, but it still allows for fractional reserves.

A decent actuary would be able to crunch the numbers that would allow a bank to fudge things for a long time- the only thing they couldn't control would be a bank run. 

It's still better than what we have now, though- at least a bank run would put an institution out of business instead of just getting them a federal bailout so that they can cut the idiots who ran the car off the road bonus checks.

Mon, 06/24/2013 - 06:00 | 3685891 HardAssets
HardAssets's picture

In China they shoot execs who commit certain kinds of financial fraud. That level of severity may not be required, but if you shut them down and imprisoned the wrong doers (in the same manner as any other bank robber) it would likely have a chilling effect on such crimes. And, you'd set it up so there was no FDIC type insurance, though private companies could offer that. They and 'Consumer Reports' type providers would have a strong incentive to keep people informed on the state of their banks.

Rothbard wrote that such savings type banks could co-exist with loan type banks. The loan banks would loan out your money to others for interest. You would not have the ability to recover your money at any time, but would earn interest. This is similiar to bank CDs that have a particular maturity date.

We could have a sound banking system. It doesn't exist because the banks and their paid off politicians benefit from the current system . . . And, most people are unaware of how banking & money really work.

Sun, 06/23/2013 - 17:35 | 3684730 Abi Normal
Abi Normal's picture

Sure there is enough gold to go $50,000 per ounce!  Isn't that called real world valuation?

Sun, 06/23/2013 - 17:43 | 3684756 WmMcK
WmMcK's picture

And/or we could use Ag and Cu like we used to ...

Sun, 06/23/2013 - 16:32 | 3684522 dolph9
dolph9's picture

In other words:

"Sorry, suckers, the party's over and now you clean up!"

It's the same old bullshit over and over and over again, it's not going to change without an all out collapse in the global system, which we should welcome.

Sun, 06/23/2013 - 18:16 | 3684835 Totentänzerlied
Totentänzerlied's picture

You're too optimistic. Each previous national/regional/continental collapse in modern history has been partly or wholly engineered by these people, after which they swoop in and buy up everything at firesale prices. They blame someone or something else, and then " magnanimously" proffer the solution, which happens to be quite good for their bottom lines. Look at the Fed, they blamed the good and silver standards, brought in the Fed and its fiat system, crashed the economy 17 years later, bought up the whole country, and gave us New Deal Socialism as the "solution" for the problem they quite intentionally created.

I don't see a reason to be optimistic about this particular iteration of the cycle, to me it's just something that's going to happen.

Sun, 06/23/2013 - 16:35 | 3684528 ekm
ekm's picture

Based on my understanding of propaganda, when BIS says it's over, it means that it was over 6 months ago

Sun, 06/23/2013 - 17:32 | 3684723 francis_sawyer
francis_sawyer's picture

But I thot dey were taking their marching orders from 'Chewbacca'?

Sun, 06/23/2013 - 19:26 | 3684995 jon dough
jon dough's picture

Have always enjoyed your rhetoric, Francis, errr, Psycho, but you seem to be confused here.

What point are you trying to make?

Sun, 06/23/2013 - 21:59 | 3685377 ekm
ekm's picture

How are both posts contradictory?

I'm saying that BIS is stating this 6 months or more later, which means that anything they said earlier was propaganda

Sun, 06/23/2013 - 22:49 | 3685461 francis_sawyer
francis_sawyer's picture

Look ~ I'm not going to debate this heavily because I'm too tired... So if you want to... YOU WIN...


My basic contention is this:

1. When we're talking about the BIS, &/or the 'families' who own the [non]Federal [non]Reserve, we're basically talking about the same echelon of 'folks' [vis-a-vis: the ones who live inside that little pyramid with an eye in it, that's detached & above the rest of the pyramid on the back of the $1 bill]...

2. Your contention [in the other thread], was that Bernanke ANSWERS TO: The White House & Congress...

3. By default, you're placing TWH & Congress ABOVE the little eye detached from the pyramid...


Maybe that's not what you were saying at all, but that's the way it read to me... I'm finished debating this, so from here on out, I forefit... [I didn't junk you]...

Sun, 06/23/2013 - 16:44 | 3684565 OutLookingIn
OutLookingIn's picture

The BIS is no more than a control mechanism for the power elite.

Along with the IMF, Fed, TBTF's, LBMA, CME, BoE, = all the same masters.

When one starts to play a familiar tune? They all join in. Dry up the free cash. Let prices crash.

When the prices hit the basement? Walk in with all that free cash and buy up all the remaining assets worth anything, by paying pennies on the dollar for them. What a bargain! Wash and rinse. Repeat. 

Sun, 06/23/2013 - 17:10 | 3684654 Kirk2NCC1701
Kirk2NCC1701's picture

Per the Lords & Masters of the Universe:  The best time to buy is when there's blood in the streets.

Stay liquid.  Stay solvent my friends.

Sun, 06/23/2013 - 18:26 | 3684854 HowardBeale
HowardBeale's picture

This will be the crash that allows "them" to take the profitable companies private. End game.

Sun, 06/23/2013 - 16:44 | 3684566 jomama
jomama's picture

it ain't over till it's over.  and the music is still playing, somehow.

Sun, 06/23/2013 - 16:45 | 3684572 Nue
Nue's picture

The party ain't over til the FED pulls the punch bowl and I don't think they have the guts to do it.

Sun, 06/23/2013 - 17:21 | 3684648 Monedas
Monedas's picture

We are the Ponzi Punchbowl Masters .... we won the war .... we won the peace .... we invented Kool-Aid .... now we are going to "inherit the hurrycane" !

Sun, 06/23/2013 - 17:44 | 3684760 CH1
CH1's picture

The party ain't over til the FED pulls the punch bowl and I don't think they have the guts to do it.

I think the Fed is less concerned with pulling the punchbowl than the politicians are.

Sun, 06/23/2013 - 18:02 | 3684811 Wave-Tech
Wave-Tech's picture

Might the Fed be more concerned about maintaining monopoly control of the fraudulent world reserve fiat rather than worry about the markets taking a massive hit?  Surely, the 1% breakaway-society elites have already protected their multibillion-dollar balance sheets.

Sun, 06/23/2013 - 16:45 | 3684573 cristo
cristo's picture

First a short deflation followed by hyperinflation , do you really think their new plan will fucking work

of course not we'll be right back where we started in 6 moths to a years , how predictable can you get .


Sun, 06/23/2013 - 19:12 | 3684964 RockyRacoon
RockyRacoon's picture

Argentine Inflation 1995 - 2009

See the graph.....    deflation, then inflation

I don't see the arrow for "You are Here" but it should be right about.... now.

Sun, 06/23/2013 - 21:42 | 3685343 francis_sawyer
francis_sawyer's picture

The real problem with inflation/deflation, as it affects the lives of most ordinary folks, is more like there isn't anything to buy [at any price]...

Sun, 06/23/2013 - 21:48 | 3685357 RockyRacoon
RockyRacoon's picture

Direct parallel with the gold markets which will lock up at some point.  There will be none to be had at any price.

Sun, 06/23/2013 - 22:47 | 3685471 francis_sawyer
francis_sawyer's picture

It all works in exactly the same way...


I was down [visting ~ several times] in Argentina during the early 90's... The wealthy, who knew their currency was becoming more worthless by the day were buying anything they could get their hands on... It seemed strange to me, at the time, that these 'wealthy' people were buying beat up old Honda Civics off any cargo ship that would arrive...

For the 'not so' wealthy, it was food...

One of my suitcases never arrived... & I never saw it [or the contents] again...

Sun, 06/23/2013 - 16:48 | 3684577 hooligan2009
hooligan2009's picture

wait a minute..the BIS is talking to itself or is there a rebel in their midst who coached another economist with a PhD in the bleeding obvious!

remember, when you see a government, any government, publish a plan that runs fiscal surpluses equal and opposite to the deficits run up over the last 30 years, you will know that we are on the road to recovery.

until then..its all krugmanite bullshit..and piles of zeros, ones and toilet paper.

Sun, 06/23/2013 - 19:24 | 3684971 notquantumdum
notquantumdum's picture

I'd even be pleased to merely see a growth rate for government debt being smaller than growth in GDP but still growing -- but more slowly than now.  They would still call that simultaneous debt and spending increase a spending cut, and whine endlessly about how much that (smaller) spending increase is constraining the economy!

Sun, 06/23/2013 - 16:51 | 3684592 Colonel Klink
Colonel Klink's picture

BIS, aren't they bankers?  I don't trust a fucking word any of them speak any longer.

Bank of International Scams.

Sun, 06/23/2013 - 16:51 | 3684595 criticalreason
criticalreason's picture

Krugman wont like reading this; in fact he wont like the bit which says:-


Low rates have allowed the public sector to postpone consolidation at the risk of a furtherdeterioration in sovereign credit quality and damage to longer-term growth. There is plenty of evidence that as public debt surpasses about 80% of GDP, it becomes a drag on growth –because it raises debt servicing costs (and uncertainty about the future tax burden); it increasessovereign risk premia; and it  reduces the room available for  countercyclical policy



Sun, 06/23/2013 - 16:53 | 3684597 The Swedish Chef
The Swedish Chef's picture

"As foreign and domestic banks would be among those experiencing the losses"


Plus .gov wants to borrow could rates rise? Who would let them do that?

Sun, 06/23/2013 - 16:55 | 3684600 ebworthen
ebworthen's picture

The enabler of an addict is never quite sure how to stop rescuing the addict, because it would make them irrelevant; which is precisely what the addict needs but the last thing the addict wants - and what the enabler cannot bring themselves to do because they themselves are addicted to rescuing.


Sun, 06/23/2013 - 16:55 | 3684605 debtor of last ...
debtor of last resort's picture

The Bank for Internal Settlements is in 'tapering' also. How about Gold tier-1, or selfdestruct in 3, 2, 1..

Sun, 06/23/2013 - 16:56 | 3684610 Loophole
Loophole's picture

Money printing is nothing but wealth redistribution: real wealth being transferred from those with money holdings to whoever is getting the newly created money. Today, from the middle class to the stock market and to those buying houses.

Why would anyone expect this kind of robbery to bring anything but devastation?

The value of precious metals will go down initially, but expect them to rise when people realize that the Entitlement state will never let them really stop QE.

The present system is doomed.

And we don't need to go back to the gold standard. We need for the govt to get the hell out of dictating what people must use as money and having a central bank. The market will take care of itself.

Sun, 06/23/2013 - 17:00 | 3684620 gdpetti
gdpetti's picture

As expected, first get everyone on the 'carpet' and then pull it out from under them. Classic. NWO=GPS... global police state, which needs be in place before all the cosmic crap arrives next year. Homeland 'Defense' isn't buying all those hollow points for nothing, some people will no doubt complain and cause a ruckous, and will need be 'silenced', if not 'disappeared'.

The usual carpet pull is over a weekend and then the 'bank holiday' enacted, which the Obama regime, when first installed, received assistance in writing from the infamous Jon Corzine. Add the fact that the 'smart money' has been exiting the market for the last few months and the question is exactly when, not if. It is nice to see the BIS follow IMF and World Bank lead in calling for change after years of doing the opposite, and by the article's end we see why... inapproapriate timing in the 'carpet pull', could upset their globalization plans, which must be in place and secured before they go into their hiddie holes come spring '14... or so it looks at present. That 'sleeping giant' isn't this financial farce, but rather the cosmic crap that has many cycles set to converge around then, and those comets are known to bring mayhem to the 'end of the world as we know it' party, as plague is usually not welcome, but unavoidable, along with all the rest. Money is merely the distraction, like our 'war on terrorism', as there is always some war when in empire-building mode, same as there must be an enemy to blame everything on. History is full of these examples, only the cataclsyms destroy most of the evidence, and what it doesn't, mankind does, 'all the better to eat you with' sweetie.

Sun, 06/23/2013 - 17:02 | 3684626 Mongo
Mongo's picture

Paul Krugman's head just exploded!

Sun, 06/23/2013 - 17:05 | 3684638 DaveyJones
DaveyJones's picture

"can central banks really do whatever it takes?"

they do the opposite.

they take whatever

Sun, 06/23/2013 - 17:06 | 3684640 muleskinner
muleskinner's picture

Time to settle up on all of the oil purchased in June, so the price drops. At a burn rate of 80 million barrels per day It's an oil based global economy that needs to cough up some bucks. Without those bucks, the global economy is toast. The money masters lose the legs that keeps them standing.

Debt is like unwanted high numbers of weeds in your garden choking out all of the good plants like corn and potatoes. Once the weeds are there, it takes some work to weed them out, just like debts. Tomatoes are better than Canadian thistle competing with Russian thistle. Then the pigweed comes along, grows 10 feet high and makes all your work for naught, unless you get rid of it.  Some of those green shoots must go and a lot of them.

I would rather grow beets than have pigweed everywhere you look. Carrots and parsnips are edible along with onions. If you can grow carrots, onions, beets, potatoes and parsnips, you can make some vegetable soup.

A cow, some chickens, a couple of pigs and you can have some good eating.  Grill the chicken and throw some barbecue sauce on it; it'll be good. Smoke the bacon, the rack of ribs, cure a ham or two and life is good. A fine meal from your garden is better than a profit you worked so hard to get. The beer is icing on the cake. Try some Crooked Tree IPA from Dark Horse Brewing Company in Marshall, Michigan. It don't get no better. Best to find some today.

Sun, 06/23/2013 - 17:47 | 3684771 Abi Normal
Abi Normal's picture

That IPA kicked my arse after 4 of em...yowser!

Sun, 06/23/2013 - 21:46 | 3685350 francis_sawyer
francis_sawyer's picture

You could be like Forrest Gump & spend your ping pong paddle sponsorship money [after a new suit, & some Dr. Peppers] on a boat & go shrimpin... After about 5 excursions, you might have yourself enough for a cocktail...

Sun, 06/23/2013 - 17:06 | 3684642 Duke Dog
Duke Dog's picture

Sounds to me like they are about to kick off the superwave of deflation - in case you didn't know, that's where "they" end up with everyfvckingthing!

Mon, 06/24/2013 - 00:05 | 3685585 francis_sawyer
francis_sawyer's picture

Deflation isn't the endgame...


Granny isn't going to get rich because her social security check will now buy her a container ship full of catfood & a 'fixer upper' in the Hamptons...

Deflation is a 'trick' to put the next sacrificial lamb, [think Bear & Lehman] out of business & pick over the carcass... On this 'spin of the wheel', it may not just be FINANCIAL entities which are involved... I'm thinking Jr. Gold Miners here [which is why they've been steadily poleaxed for so long]...

Sun, 06/23/2013 - 17:08 | 3684645 impermanence
impermanence's picture

Banking is theft, always has been, always will be. 

The BIS is telling these morons that people are starting to catch-on so its time to crank-up the creative juices and figure out a new way to fleece the peeps.

Sun, 06/23/2013 - 17:11 | 3684656 Fix It Again Timmy
Fix It Again Timmy's picture

Theft has commenced and is in transit to your country.

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Sun, 06/23/2013 - 17:13 | 3684659 FreeBull
FreeBull's picture

The BIS Conclusions, back up the reasons why I hold a "Barbarous Relic" in my Portfolio...

Sun, 06/23/2013 - 17:29 | 3684695 Atomizer
Atomizer's picture

Dear US taxpayer elected officials,



Your window of confession is closing. We’ll provide you with complete immunity should you stand forward. The forthcoming end, you become promised millions of dollars & live contentedly. We already know they've threatened family injury, in case you don’t complete the agenda. The choice is yours, they will likely still kill you in the end. The massive monetary payoff becomes collateral damage. Make your choice wisely!

Sun, 06/23/2013 - 17:35 | 3684729 q99x2
q99x2's picture

If the central banks would build a prison and fill it with all the central bankers of the world then we would have economic recovery. The only thing FRAUD has ever brought into the world is destruction and collapse.

Sun, 06/23/2013 - 17:39 | 3684738 Cacete de Ouro
Cacete de Ouro's picture

not really off topic.. BIS gold swaps 2010...some would say that Portugal swapped gold in a convoluted transaction and then circa 10 commercial banks used the gold to get dollar funding from BIS with BIS holding the gold as collateral.

I say the gold came from Banque de France, and title then passed to the commercial banks including BNP Paribas and SocGen who swapped the gold with the BIS to offset gold liabilities that they had with some central banks that the BIS had been lending gold on behalf of... So the gold despositor central banks 'get' their gold back (as a book entry), and the bullion banks 'get' off the hook for the gold repayment liability. The Banque de France is then involved in the gold lending business. It might be that they the Bank of Portugal did a location swap with the Banque de France so the 346 tonne figure would then be used. Banque de France takes Portugal gold at Boe and FRBNY and Portugal indirectly routes the transaction through Paris.

Sun, 06/23/2013 - 17:44 | 3684759 morning
morning's picture

Era bem visto.

Sun, 06/23/2013 - 18:42 | 3684889 Money 4 Nothing
Money 4 Nothing's picture

Muchos garcias.. my spanglish is a bit rusty. But after Prism and mettadata, you got no secrets.

Sun, 06/23/2013 - 17:59 | 3684808 Cacete de Ouro
Cacete de Ouro's picture

Nobody ever talks about Natixis being a bullion bank but..... it is.......Big Time.... I will reveal my sources sometime soon

Sun, 06/23/2013 - 17:40 | 3684747 spekulatn
spekulatn's picture

Thank you ZH. Well done here.

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