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Guest Post: Why The Status Quo Is Doomed

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The wheels have come off the endless growth via expanding debt machine.

Progressives and conservatives have long shared a single agenda: growth. Growth increases prosperity and wealth, and this makes for contented voters who will keep voting for incumbents.

This agenda makes three implicit assumptions:

1. Inflation is OK as long as the economy and household wealth expand at a rate that exceeds inflation

2. Increasing debt is OK as long as income and assets both grow faster than debt

3. Wealth/income inequality is OK as long as the wealth/income of the bottom 90% is expanding at the same rate as the top 10%

In other words, if most of the wealth generated by growth flows to the top 10% (who coincidentally fund 99% of political campaigns) that's OK, as long as enough "trickles down" to the lower 90% to boost their wealth/income by an equivalent percentage. (The top 10% actually own 83% of the wealth, and the top 1% own 43%)

It's important to understand the distinction being made here between relative and absolute wealth: if the top 10% own 90% of the wealth, then $90 of every $100 of new wealth flows to them. This is politically acceptable to the status quo as long as the wealth of the bottom 90% expands by the same percentage.

Should the bottom 90%'s share of the new wealth rise at a faster rate than the top 10%'s, that's actually preferable, as over time that shrinks wealth inequality while leaving the wealth already owned by the top 10% untouched.

In other words, the top 10% do not suffer any decline in wealth if they collect $80 of each $100 of new wealth rather than $90. This slight reduction in the rate of growth makes little difference to the top wealth holders but it has a much larger impact on the bottom 90% because they own so little wealth.

Every one of these implicit assumptions has been turned on its head: growth is barely above the rate of inflation; by some measures, it has already fallen below the real rate of inflation.

Debt is increasing much faster than income or wealth.

Virtually all of the recent expansion of wealth/income is flowing to the top 10%.

This is why the status quo is doomed: there is no Plan B or even conceptual alternative to the "more growth forever" agenda.


Here is a chart which shows household debt has outrun income for decades:

Debt can be expanded at a rate that exceeds the rise in real income in only one way: by lowering interest rates so the same income can support a larger debt.

This is of course the reason the Federal Reserve has lowered interest rates to near-zero with the ZIRP (zero-interest rate policy).

Eventually the buyers of newly issued debt at near-zero (or even negative) yields start to fear they will never get their capital back or they will be paid back in depreciated currency, and so they demand a higher yield. Since income has already been stretched to the limit to support a towering mountain of debt, this rise in yield catapults the borrower into insolvency.

The real financial situation is considerably bleaker than the conventional view maintains. Federal debt is only the tip of the iceberg: the killer liabilities are the unfunded liabilities for Medicare and Social Security which are estimated at $87 trillion--a number I suspect understates reality, but which is larger than all U.S. household wealth.

Assets have risen as a result of reflated bubbles in bonds, stocks and housing:

The Federal Reserve has created these bubbles by creating trillions of dollars out of thin air to buy Treasury bonds and mortgages to lower yields to near-zero, pushing investors into risk assets while injecting "free money" into the banking system:


Does this trajectory of Federal debt look sustainable?

Here is total credit market debt:

Here is GDP, the standard metric of growth:

The oft-touted fantasy is that "we're going to grow our way out of this," but it is abundantly clear that debt is rising far faster than growth or incomes. Financialization has widened the wealth inequality canyon to the point that the 95% on one side can no longer see the other side through the haze of propaganda and political fog.

Financialization = Inequality (June 25, 2013)

Those relative few on the other bank can no longer see the 95%, either; and since the political and financial Elites are on this side, they are rapidly losing touch with the 95% and the real (i.e. unfinancialized) economy.

Meanwhile, back in the real world, fulltime jobs--the foundation of household income for the 95%--have stagnated, registering no real growth in 13 years ago while the the working age population has added millions of new entrants:

The wheels have come off the endless growth via expanding debt machine. Rising interest rates are the final blow to this agenda, and the political and financial classes have no Plan B. They are floundering, clueless, bereft of historical context, creativity and courage. Their failure of imagination is total, complete and catastrophic:

We Have No Other Choice (March 15, 2012)

Questioning "Progress" and the Poverty of our Imagination (June 11, 2010)

How Empires Fall (April 17, 2013)

Why The Debt-Dependent Status Quo Is Doomed in One Chart (June 29, 2012)


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Thu, 06/27/2013 - 20:15 | 3701503 LetThemEatRand
LetThemEatRand's picture

The golden geese lay dying, and Atlas Shrugged.  Let Them Eat Rand.

Thu, 06/27/2013 - 20:29 | 3701566 stocktivity
stocktivity's picture

It's all Bullshit!!!  Japan up tonight, holiday next week here in the states so nobody will care about the can be jerked up on light volume. America will be celebrating their freedom by drinking beer, eating burgers and hot dogs, and getting even fatter. Rally on!

Thu, 06/27/2013 - 21:03 | 3701713 are we there yet
are we there yet's picture

Walmart tailgate parties are fun to watch but eventually come to and end when the beer starts fights and the police show up.

Thu, 06/27/2013 - 21:34 | 3701894 LetThemEatRand
LetThemEatRand's picture

Remember the "ow my balls" episode when the obese bearded WM lady with the orange tights hovering just over the beave beat the shit out of the skinny guy with no pants?  Good times.

Thu, 06/27/2013 - 23:32 | 3702306 starman
starman's picture

yup this Buds for you cose its made in you guessed it, China!! 

Thu, 06/27/2013 - 20:56 | 3701671 tarsubil
tarsubil's picture

Does rand taste like lamb? I love lamb.

Thu, 06/27/2013 - 21:43 | 3701935 LetThemEatRand
LetThemEatRand's picture

Tastes like skinny chicken.

Thu, 06/27/2013 - 20:13 | 3701511 buzzsaw99
buzzsaw99's picture

I fail to see how any of this is a problem for the 1%.

Thu, 06/27/2013 - 20:28 | 3701556 The Thunder Child
The Thunder Child's picture

Agreed, even less so for the 0.1%

Thu, 06/27/2013 - 20:58 | 3701673 buzzsaw99
buzzsaw99's picture

actually i estimate it at 0.001667%

Thu, 06/27/2013 - 20:41 | 3701612 Miffed Microbio...
Miffed Microbiologist's picture

The only possibility of a problem for the 1% would be if the guillotines are rolled out. This happened when the 99% were horrible oppressed and starving. They have learned from their mistake and have dealt with that contingency. Now all they have to do is suppress any rumblings of dissidence with a few drones, keep the sheeple happy with various forms of Soma and slap each other on the back for their deserved brilliance. Fuck them all.


Thu, 06/27/2013 - 21:05 | 3701723 tarsubil
tarsubil's picture

Gold and food aren't digital. They are physical. You can't just create these by clicking a couple keys on a keyboard. The 1% are not prepared for reality. Physical reality, the natural laws will have their day. It didn't have to come to this.

Thu, 06/27/2013 - 23:40 | 3702323 Miffed Microbio...
Miffed Microbiologist's picture

This is my hope as well. However I have come to believe it may be unlikely. The wealthy will use their resources to survive. In the economic collapse in Argentina they hired private people for their protection. If a man had to choose between feeding his family or shooting his neighbor to protect an elite, what would be the most likely outcome? The other scenario was the wealthy elites stole the remaining money from the country and fled under armed escort. The only historical time i can remember when the 99% took out the 1% was the French revolution and that quickly descended into a mass murder of many innocent people. I want physical reality and natural law to prevail again one day in this country. I'm tired living in a world of mirrors, deception and fraud. I'm tired working so hard every day for a few worthless dollars and supporting legions of leaches, pampered government workers and the 1% determined to extract all the wealth I have. I want justice.


Fri, 06/28/2013 - 02:55 | 3702578 Seer
Seer's picture

"It didn't have to come to this."

There was NO other outcome.  The reason why this is so is because we are NOT questioning the premise- we are incapable of facing up to the BIG Question: is it possible to have perpetual growth on a finite planet?  If one were brave enough to investigate this premise one would see that the answer wouldn't lead to any rosy scenarios.  Religions were created to manage this dilemma: answering the question without bringing it up- "it's God's will" or whatever is what decides one's outcome.  And when religions don't work for people there's the secular: the dilemma is skirted by encouraging people to work harder and be more creative, all prompted by the "select few" who ultimately decide one's outcome.

The central banks may dictate when deflation of money happens.  Nature dictates when deflation in human population happens.  We have spent far too long believing that the top level of control is in the hands of the central banks: perhaps it's intended for self-deception, I don't know (though I'm pretty sure that the perpetual ruling class has the minds that can speak to this and present THE formula [I'd rather not know this evil, as it would most certainly demand action, action to either BECOME that evil or action to fight it and therefore BE evil oneself]).

Fri, 06/28/2013 - 05:21 | 3702631 Bearwagon
Bearwagon's picture

I hope to cheer you up a bit, by telling you that there is at least a third way, where you don't have to be or become evil yourself. If all they can get from you would be your cold, dead corpse, but never your obedience, you are doing something right. (And fighting a known evil to defend what's good and true is not an evil deed in and of itself.)

Fri, 06/28/2013 - 02:06 | 3702544 HowardBeale
HowardBeale's picture

"Starving" is the inevitable end of this extraction of productive wealth; the element that the elite criminals don't--and can't--perceive is the armed minority of the educated; i.e., there is a group of Edward Snowden-like People who are smarter, far less arrogant, and infinitely more calculating than the ego-centric thieves that Obama has enabled; and it is those People that will begin and end the revoution: an assassination here, there, anywhere. The criminal elite will disappear from the public world--which will make them more accessible to the Assassins...

Fri, 06/28/2013 - 02:34 | 3702568 Seer
Seer's picture

There's no doubt that blood will be in the pool, that's in the script.  However, it'll then be "rinse and repeat," as we'll pick up and do the very same stupid-human-tricks all over again (striving to maintain perpetual growth on a finite planet).  Oh, and a few of those 1% genes will STILL be there, they'll eventually bubble up to the top.  Heaven on earth is not possible.

Fri, 06/28/2013 - 12:26 | 3703573 Chuck Walla
Chuck Walla's picture

The only possibility of a problem for the 1% would be if the guillotines are rolled out. This happened when the 99% were horrible oppressed and starving. They have learned from their mistake and have dealt with that contingency.

Now you know why Obama is so desperate to kill that stupid 2nd Amendment. It is the fly in the ointment of the statist totalitarians.


Comrade Lenin has shown us the blueprint. Now we must simply follow it, and the glories of Cuba can be ours!

Thu, 06/27/2013 - 20:50 | 3701651 SAT 800
SAT 800's picture

It can be a big problem for the 1%. It just depends on how it plays out. they're not immune to a world wide depression. Well, in a sense, yeah, they are immune, but they will "suffer", if that's the right word, huge paper losses. Runaway inflation is going to get their attention too; One of these fine days a group of wealthy people may decide to buy all the Silver Bullion that's available. It's a tiny market; this is possible. If serious inflation occurs they won't just sit on their thumbs.

Thu, 06/27/2013 - 21:15 | 3701794 kchrisc
kchrisc's picture

Mobs and guillotines, ropes, masonry walls.

Fri, 06/28/2013 - 00:00 | 3702365 FreedomGuy
FreedomGuy's picture

The 1% are the political and Fed cronies nearest to the new or inflated money. If you get your hands on inflated money first you get to buy stuff and invest at the noninflated prices until it works it's way through the economy. That's why the middle class and Joe Sixpack get screwed without ever seeing it or being able to put a finger on it. It also makes them good socialist fodder as they neither understand why it happened or what the proper solutions are.

It is wonderful to be managed by the elite geniuses is it not?

Fri, 06/28/2013 - 01:48 | 3702529 Herd Redirectio...
Herd Redirection Committee's picture

The first spend is the sweetest!

Fri, 06/28/2013 - 08:01 | 3702818 Aaron Burr
Aaron Burr's picture

Inflation is a mild 2.1% or some such thing. Where is the sweetest first spend being spent at? How else would you convert cheap monetary medium into good hard assets to profit from the collapse--you buy high end crap--Ferrari had its best year ever--Sothbey's setting records every auction---record amounts for high-end real estate. They're working that huge float of digital cash up our ass one fucking yacht at a time and when it finally tsunamis the real economy it will make wiemar look like a picnic.

I'm sure I'm wrong---I mean Ben has been on the cover of Time Magazine, right? Our Hero ;-)

Thu, 06/27/2013 - 20:15 | 3701516 youngman
youngman's picture

but do they long as they can show their buddies their big bonus checks ...they don´t care...

Thu, 06/27/2013 - 20:46 | 3701635 SAT 800
SAT 800's picture

You're thinking about the 10%. The one percent don't get bonus checks. they own mines and railroads and steel producers and farmland.

Thu, 06/27/2013 - 21:52 | 3701953 Harbanger
Harbanger's picture

Are there any politicians or people in power in the 1%, or is the guage simply the amount of money they have?  And if it's about wealth, do they get a pass if they give some away and fall to say the 50% level?  Because the people who created this are not necessarily the 1% rich, they just belong to the right club.

Thu, 06/27/2013 - 22:04 | 3702025 LetThemEatRand
LetThemEatRand's picture

Literally all of the people "in power" are in the .1%.  The rest is noise.  You haven't figured that out yet.

Thu, 06/27/2013 - 22:25 | 3702111 Harbanger
Harbanger's picture

So it's about the power had and the damage they've done to the republic right?  Just asking cause there may be a lot of people you like in that 1%.

Thu, 06/27/2013 - 23:02 | 3702217 LetThemEatRand
LetThemEatRand's picture

It's not the 1%.  It's the .1% I'm worried about.  Or if we really must get down to brass tacks, the .01%.   Most of the people in the 1% are okay.  The large majority of that group earned it.  The .01% inherited it and extract it from the rest of us.  And they control the levers.  The 1% go along because they think they're the chosen ones too. They are not.

Fri, 06/28/2013 - 00:02 | 3702372 FreedomGuy
FreedomGuy's picture

I would put a finer point on it. It is the 0.1% with the proper political connections which probably does go hand in hand. It is not purely money but power or powerful connections. We are not invited into this club.

Fri, 06/28/2013 - 05:28 | 3702634 Winston Churchill
Winston Churchill's picture

Money is power.

The quantity is just its measure.

Fri, 06/28/2013 - 06:01 | 3702653 Harbanger
Harbanger's picture

I gave you a -1, respond to me so I can educate you about power and money.

Fri, 06/28/2013 - 06:12 | 3702663 Bearwagon
Bearwagon's picture

Money will always lead you to where the power is - but it's not the power itself.

Fri, 06/28/2013 - 06:32 | 3702688 Harbanger
Harbanger's picture

You choose to "worry" about those who inherited wealth and you want to determine whether or not they deserve it, I focus on the deceivers who propagate selfishness, jealosy and greed.  We're brothers of a different father.

Thu, 06/27/2013 - 20:15 | 3701518 BalanceOrBust
BalanceOrBust's picture

The US recovery is supposedly now well underway. So here is a puzzle that I can't figure out. The Fed has been buying up bonds at a rate of $85 billion a month. I know that Bernanke has hinted that this may come to an end, but not immediately. Now $85 billion a month times 12 months is over $1 trillion. The US GDP is about $16 trillion.

Now, if the Fed had decided to stimulate the economy by using the Treasury Department's freshly printed cash to buy new cars or pencils or houses or televisions or farmland or anything really other than bonds, I figure that this would have made a contribution to US GDP of $1 trillion. On a GDP of $16 trillion, this would have increased GDP by 6.25%. Not bad growth.

Now I know that the Fed can't hold cars or pencils or houses or television or farmland on its balance sheet. So it holds bonds. My point is.... all that money printing could have otherwise generated 6.25% growth -- and all the US has is a paltry 1.8%.

Am I misunderstanding something, or is this US recovery that bad. I mean, even though the Fed bought bonds, in an ideal world those who sold those bonds would now have an extra $1 trillion to spend on cars and pencils and ... (you get the idea).

So all this stimulus and I figure we are still more than 4% behind where we should be in growth.

Can you explain?
Signed, Dumbfounded

Thu, 06/27/2013 - 20:29 | 3701555 Cognitive Dissonance
Cognitive Dissonance's picture

The addict does not wish to withdraw and regain his or her health. The addict only wants MOAR.

After all that is the root dysfunction of addiction and the source of the addict's insanity.

Fri, 06/28/2013 - 11:37 | 3703431 Aaron Burr
Aaron Burr's picture

Hey CD, a question for you have a moment. With fractional banking do primary dealers "loan" themselves the money to buy the treasuries from the fed in the first place? You know, the ten-to-one levered type loan? Then turn around and sell them back to said fed at full face value in return for hot cash? Turn that trick a few times and you've made a buttload of loochey. Is this the primary way the "printing" is being done or am I missing a piece?

Thu, 06/27/2013 - 20:29 | 3701563 Colonel Klink
Colonel Klink's picture

Because they're LYING!!!  They only have 1 tool in their tool chest, and it's no longer working.

Does that help? ;)

Thu, 06/27/2013 - 20:30 | 3701570 g'kar
g'kar's picture

"The Fed has been buying up bonds at a rate of $85 billion a month"


Most of this in one way or another is transfered to that 1%, one sneaky or overt way or another.

Thu, 06/27/2013 - 20:41 | 3701601 JustObserving
JustObserving's picture

 and all the US has is a paltry 1.8%.

US official CPI is 3 to 4% lower than real CPI.  So US growth is 3 to 4% lower than official figures.  So real US GDP growth is -1.2% to -2.2%.

Thu, 06/27/2013 - 20:53 | 3701659 SAT 800
SAT 800's picture

Exactly. And everytime you fail to remember to apply the dis-inflator to the GDP, you commit a grave error. In a similar manner, both interest rate and stock market returns are negative. the growth machine has stopped. I think it's a good article.

Fri, 06/28/2013 - 07:18 | 3702745 Acet
Acet's picture

Going back to BoB's original question: official GDP growth is real GDP growth - i.e. without the effects of inflation. Real GDP is calculated from nominal (dollar amount) GDP by using the official inflation figures to adjust it (the so called GDP deflator). The more the inflation figures, the lower real GDP is compared to nominal GDP.

Money printing should generate an equal and offsetting amount of inflation resulting in 0% direct real GDP growth since it doesn't create any real wealth, it simply reduces how much each dollar represents of that wealth.

In practice, not only is the inflation resulting from money printing delayed (meaning that after a bout of money printing GDP growth will be overstated at first and understated later), but also the actual inflation numbers are under huge political pressure to be made smaller so as to get a higher official (real) GDP growth value.

The results is that the official GDP growth figures that you are seeing in all likellyhood do have a large amount of leakage from money printing, though not the full amount as you were expecting.

Thu, 06/27/2013 - 20:50 | 3701652 game theory
game theory's picture

Actually, the Fed can actually buy any assets it wants...including pencils.  The US gov't has been a big beneficiary of artificially cheap lending...allowing for IRS bonuses, a huge housing bubble in VA/DC, and some NSA domestic well as gov't contracts to the politically connected. You should ask the politicians why their investments lead to so little growth.

Thu, 06/27/2013 - 22:04 | 3702026 FireBrander
FireBrander's picture

The $85 billion in buying was not to increase GDP; it was to recaptilize the banks.


That "missing" 4% went into the hole in banks balance sheet; it was a bank bailout.

Fri, 06/28/2013 - 09:13 | 3702995 indigoboy
indigoboy's picture

FireBrander :

Your post is spot on in explaining the QE shell game. QE was never intended to assist the economy in a direct sense, it was there to fill the (minus) balance sheet that had the banks teetering on the brink.

When Bernanke prints a  +(plus)$1 and gives it to the bank, they put it alongside their -(minus)$1 balance sheet, and poof!! they have a zero. So that would be one bad dollar neutralised then, and only about 44 trillion more bad (minus), dollars to go !

It's easier to understand it if you consider it as Quantum Easing.  (think matter and anti-matter).


Thu, 06/27/2013 - 20:15 | 3701519 zorba THE GREEK
zorba THE GREEK's picture

This just means TPTB are getting desperate, so

we should prepare for desperate measures on their part. Hide your assets, they are coming for them. 

Thu, 06/27/2013 - 20:16 | 3701522 Bear
Bear's picture

The Status Quo is doomed because our leaders are morons who think they are f****** geniuses.

Fri, 06/28/2013 - 00:27 | 3702418 nc551
nc551's picture

I think you mean rulers instead of leaders.  A leader is someone you follow of your own free will.   A ruler is the guy in the back with a gun pushing you forward.

Thu, 06/27/2013 - 20:17 | 3701526 IndicaTive
IndicaTive's picture

If only....


Sheep chase the wolf.....

Thu, 06/27/2013 - 20:23 | 3701527 Cognitive Dissonance
Cognitive Dissonance's picture

While I fully agree that the system is doomed to self destruction please do not underestimate two things. Human beings have an amazing ability to adapt to horrific conditions and denial will often convince people to experience horribly debilitating long term pain in return for short term relief.

The control system does not kick the can down the road. The control system is ALLOWED to kick the can down the road by those who perceive themselves as benefiting from the system. In many ways we are all addicted to the crack laced Kool-Aid. Inflict enough pain and the vast majority of us will scream for relief, thus agreeing to another can kicking. 

Of one thing I am fairly certain. When the rules no longer "work" the rules WILL be changed. And if enough pain comes with the rule changes they will be applauded by those most harmed as needed and necessary. They will be told and will believe that 70% of something (meaning a 30% haircut) is better than a total collapse. And soon after that when that is not enough they will be told and will believe that a 50% haircut of their remaining 70% will be better than nothing. And so on and so on and so on........

Thu, 06/27/2013 - 21:28 | 3701862 Clever Name
Clever Name's picture

This struck me:

The control system is ALLOWED to kick the can down the road by those who perceive themselves as benefiting from the system.

I bet that at least 60-70% of the sheep 'perceive themselves as benefiting from the system', even as they are being steamrolled by it.

Good on ya for using the word 'perceived'. I'm pretty sure it was you who said "Dont believe everything you see, because you only see what you believe". The sheep are so brainwashed into thinking that the 'system' is all there is, without being able to step back from it and see it for what it really is. I didnt really want to bring this into it, but it is much like religion (which is of course part of the system also) in that no true believer can step outside of it to form another viewpoint. Most of the people will accept whats jammed down their throats without question, regardless of its effects on them.

Interesting how a more socialistic system seems to be the goal, after decrying it for so long. Most people inherently want to be taken care of in the psychological sense, and will suffer lots of abuse at the hands of the caretaker to the point of becoming the monster themselves.

Thu, 06/27/2013 - 21:43 | 3701933 Cognitive Dissonance
Cognitive Dissonance's picture

The money meme is THE most powerful religion ever invented simply because no one perceives it as a religion, but rather as the only way the world can work. It is sustained solely by faith and belief regardless of whether it is Gold backed or "just" (paper) fiat.

I've explored this concept in some detail in several of my articles, the latest being "Perhaps a Crumble Rather Than a Collapse."

Thu, 06/27/2013 - 21:49 | 3701955 Clever Name
Clever Name's picture

Oh I read those alright. At the risk of sounding like a suck up, you do great work. Golf clap.

Along the same lines as your comment, the metals bug crowd is pretty damn cult-like, and I am deep in it. At least I can see it though!

Thu, 06/27/2013 - 20:18 | 3701531 USD Long
USD Long's picture

Now is the Precise Moment to Abolish the IRS...Think of it as a by product watering the roots of the tree of Liberty.


Thu, 06/27/2013 - 20:42 | 3701613 CH1
CH1's picture

Now is the Precise Moment to Abolish the IRS

I appreciate your motives, but it ain't gonna happen.

You have money, they want it, and they employ armed men.

Government is a parasite, and parasites don't stop feeding till the host has died.

Thu, 06/27/2013 - 20:58 | 3701678 LetThemEatRand
LetThemEatRand's picture

I agree with your premise to the point that "government" in its current form "is a parasite."   There will always be parasitic humans who feed on the backs of others.  But government in its best form -- the one envisioned by the Founders -- is designed to keep the parasites away.  Granted it failed miserably over the last few decades and maybe even before that, but it worked well for a while and I think it could again.

Thu, 06/27/2013 - 21:10 | 3701766 Cognitive Dissonance
Cognitive Dissonance's picture

(Granted it failed miserably over the last few decades and maybe even before that, but it worked well for a while and I think it could again.)

Did "it" fail or did we fail it? I think the latter. Exactly what did I do over the last 20 years to derail the coming tyranny? Not much it seems and most certainly not enough. We should all ask that question of ourselves.

Thu, 06/27/2013 - 21:25 | 3701839 LetThemEatRand
LetThemEatRand's picture

I take responsibility.  As late as 2008, I was part of the Red Team/Blue Team paradigm.  No more.

Thu, 06/27/2013 - 21:49 | 3701956 Cognitive Dissonance
Cognitive Dissonance's picture

As was I my friend. As was I.

Thu, 06/27/2013 - 21:58 | 3701989 Clever Name
Clever Name's picture

As were we all. Someone has to offer you the red pill first, no? Hard to come by it on your own.

Fri, 06/28/2013 - 00:36 | 3702423 Harbanger
Harbanger's picture

The lying lib LTER is not about red team/ blue team, but yesterday he was celebrating "smack a conservatard day".  All because his liberal agenda was moved a little further Forward.  I have no tolerance for idiots or liars.

Thu, 06/27/2013 - 23:15 | 3702267 Nick Jihad
Nick Jihad's picture

Every day that I go to work, the first two and one half hours are spent working for the state. The only way to avoid this, would be to go Galt.

Thu, 06/27/2013 - 21:55 | 3701974 Clever Name
Clever Name's picture

Pretty funny to think you (may have?) voted for the big O! Once youre out of it, its hard to believe that you were ever in it, huh?

I didnt beat you by that much, but for me it was more the realization that neither of these jokers were telling the truth or cared one whit about the average Joe. Took me a while after that to realize that they were the same.

Thu, 06/27/2013 - 22:06 | 3702034 LetThemEatRand
LetThemEatRand's picture

I voted for O in '08.  Wrote in Ron Paul in 2012.  Both were wasted votes but the second felt good.

Thu, 06/27/2013 - 22:11 | 3702056 Clever Name
Clever Name's picture

Johnson in '12. The girl says all my votes are wasted since I've never voted for a winner in the 10 years weve been together. Hah!

Thu, 06/27/2013 - 22:24 | 3702106 LetThemEatRand
LetThemEatRand's picture

I respect your vote, but I didn't like Johnsen.  I saw him as a corporate guy.  Ron Paul is the only politician I have seen -- ever -- on the national stage who isn't of the belief that multi-nationals are the ticket.  Sadly, I put Rand Paul in that camp.

Thu, 06/27/2013 - 22:47 | 3702187 Clever Name
Clever Name's picture

I agree with you on Rand. I wanted to vote for Ron, but I was hoping to get a third party some votes. My state is so hopelessly Dem that it doesnt matter anyway. If enough people did it, even for the Greens, maybe there would be at least a little hope for the people.


Thu, 06/27/2013 - 23:08 | 3702245 LetThemEatRand
LetThemEatRand's picture

We're a start.

Fri, 06/28/2013 - 00:49 | 3702452 Harbanger
Harbanger's picture

He says he voted for and likes Ron Paul because he's retired.  He knocks his son because he's still running for office.  keep looking for a "little hope for the people" from the statists, you're sure to get it.

Thu, 06/27/2013 - 20:22 | 3701539 FieldingMellish
FieldingMellish's picture

Any and every solution requires a loss of wealth, therefore they will not act.

Thu, 06/27/2013 - 21:14 | 3701786 Cognitive Dissonance
Cognitive Dissonance's picture

The "safety of the herd" mentality universally held by each and every individual within the herd ultimately destroys the herd.

Thu, 06/27/2013 - 20:27 | 3701553 ShrNfr
ShrNfr's picture

The Pareto distribution of anything, be it money, land, athletic talent, or other random object has been pretty robust over time. Pareto did his work in the 1800s in Italy with regards to land ownership. The top 20% own 80%. The top 20% of the 20% own 80% of the 80%. Life is basically fractal and/or exponential, get over it. Having said that, the Fed is fucking the puppy pretty hard and no we cannot print wealth, we can only print paper.

Thu, 06/27/2013 - 20:33 | 3701582 fonzannoon
fonzannoon's picture

pardon my ignroance, but what does that article imply?

Thu, 06/27/2013 - 20:49 | 3701647 WillyGroper
WillyGroper's picture

My take is they're storage facilities that are no longer needed or afforded for global recovery by JPM. Ha.

See Al's post. 3700295

  Metals: AluminiumCopperZincNickelTinLeadAluminium alloy 

Thu, 06/27/2013 - 21:56 | 3701981 Clever Name
Clever Name's picture

Uh, theyre empty? Just a guess.

Thu, 06/27/2013 - 20:30 | 3701572 km4
km4's picture

BEST POINT: The oft-touted fantasy is that "we're going to grow our way out of this," but it is abundantly clear that debt is rising far faster than growth or incomes. Financialization has widened the wealth inequality canyon to the point that the 95% on one side can no longer see the other side through the haze of propaganda and political fog.


Bingo !

Thu, 06/27/2013 - 20:34 | 3701577 Newager23
Newager23's picture

These are excellent charts and show why gold can't stay down for too long. At some point the financial system has to melt down. Our economic policies are insane and unsustainable. You can't print money to pay your debt. This has been tried time after time and it always fails. And you can't print money to maintain economic growth and your standard of living.

Japan has been using debt since 1990 to maintain their standard of living, and the US has been using it since 1980. So you can do it for long periods of time. This lag factor is why so many economists are not worried. They seem to believe that you can delay the inevitable forever.

But the cracks are showing (just look at the charts above). Anyone who thinks that the US, Europe, and Japan are going back to 3% growth are dreaming. The lack of growth will eventually make the house of cards (debt) come tumbling down.

Incredibly, as obvious as this may be, gold prices are crashing. You would think the exact opposite would be happening. Yet, the spinners have been able to convince most people that the US economy is on the mend and will be able to re-ignite global growth -- another fantasy.

Once the reality of the situation begins to dawn, I expect gold prices to explode. Buy GDXJ and sit back and collect large returns. (for mining stocks)


Thu, 06/27/2013 - 20:55 | 3701665 new game
new game's picture

no thanks for the advice. see i have to put my hard earned money in a brokerage account(problem #!).same as a bank basically.

then i have to convert it to a PAPER demoninated thingy called stock or a basket of stocks called etf's.(problem two- it fucking paper).

then i rely on a bunch of insiders to repesent my interests(ha fucking ha) and earn xyz per share. they are the enemy(problem 3)

Then at some point in time after i have been ass raped by these insiders i sell and get the paper converted to cash representation to transfere from bank to bank(problem 4-a FUCKING BANK) AND GET CASH BACK. ask anyone that reads zh if they are interested in your scheme?

take your advice and fuck off...

Thu, 06/27/2013 - 21:02 | 3701704 new game
new game's picture

my advice to you is buy heirlom seeds and plant them-much better returns...

take your juniors and have a nice day when they get squeezed to the point of junk bond defalt...

(think they are there right now-see how 3.68 naty gas worked for gassers-huh?)

bad call dude...

Thu, 06/27/2013 - 20:36 | 3701593 Seasmoke
Seasmoke's picture

i still say all of us on the 3rd floor......will not be hurt as bad as those on the 101st floor


so pull it and let it collapse  

Thu, 06/27/2013 - 20:44 | 3701624 CH1
CH1's picture

pull it and let it collapse 

Good plan, but it requires all of us to stop servicing the beast.

Thu, 06/27/2013 - 20:58 | 3701677 SAT 800
SAT 800's picture

Don't forget to evacuate that 3thd. floor; early.

Thu, 06/27/2013 - 21:11 | 3701768 stocktivity
stocktivity's picture

I'm still trying to jump out the cellar window.

Thu, 06/27/2013 - 22:38 | 3702148 MikeMcGspot
MikeMcGspot's picture

Run the scenario ahead a bit..?

Scenario 1. Building collapses, I'm on 3, it is sqhish time for me.

Scenario 2. Sugar delivery has stopped, you are a prepper and have several hundred pounds to get you and your soon to be toothless family through the next 100 yrs. Floor 101 comes down to ask, "May I borrow a cup of sugar"?

You say yes, the 101 robot directs you to the kitchen, bends you over the sink, fucks you and takes all your suger.

You say "Thank you".

Nobody knows WTF is going o happen, I'm happy about that for it proves we are not in entrophy.

Be safe or dangerous.. As the case calls for.

Write your own scenario!

Thu, 06/27/2013 - 20:36 | 3701595 sunny
sunny's picture

Yet the simple fact remains that all the wonderful data and projections gleaned by technical and fundamental analysis are irrelevant, and some would say counterproductive, in the face of unending printing by virtually every central banskter in the world.  The markets will rally as long as free money is pumped into the system.

Yes the economy is a mess and 90% of the people are suffering, but the economy is not the stock market in this the new abnormal.



Thu, 06/27/2013 - 20:59 | 3701685 SAT 800
SAT 800's picture

The markets may rally for along time; but not forever. they'll rally until they don't. I understand the Zimbabwe Stock Market rallied 30,000%; but it didn't do anyone any good.

Thu, 06/27/2013 - 20:40 | 3701608 fonzannoon
fonzannoon's picture

It's starting to look like Japan's bond crisis and 20% correction was just another example of getting suckers in to short and then roast their balls. This is fascinating.

Fri, 06/28/2013 - 01:59 | 3702537 Herd Redirectio...
Herd Redirection Committee's picture

Rinse and repeat!

Thu, 06/27/2013 - 20:46 | 3701632 blindman
blindman's picture

We’re Going into the Greatest Depression – Gerald Celente
June 27, 2013 By The Doc

Thu, 06/27/2013 - 20:50 | 3701653 shovelhead
shovelhead's picture

None of this bothers guys like me who have leather masks, chainsaws and a plentiful supply of teenagers getting off the freeway.

Thu, 06/27/2013 - 21:04 | 3701705 Tombstone
Tombstone's picture

We have heard this same song and dance for at least 3 years.  While it makes sense on paper, the reality is that gold has blown up, Benny can control bonds and stocks keep rising no matter what is happening.  Japan, China and Europe are all sinking and that leaves no place for all that QE money.  It will flow into the last bastion of least resistence; the US.  On the outside, we still look like the same old country.  Never mind that the Kommies are hollowing out the foundation.  Live long and prosper, Komrade.

Thu, 06/27/2013 - 21:03 | 3701708 janchup
janchup's picture

I'm happy to be old.

Thu, 06/27/2013 - 21:14 | 3701783 stocktivity
stocktivity's picture

That's the attitude. I want to be taking my final breaths and smiling thinking how I had a full life with few regrets.

Fri, 06/28/2013 - 05:29 | 3702635 Bearwagon
Bearwagon's picture

Me too, but what keeps me up at night is that my son ain't ...

Thu, 06/27/2013 - 21:10 | 3701760 Winston Smith 2009
Winston Smith 2009's picture

"debt is rising far faster than growth or incomes"

And that's where massive, widespread bankruptcies are supposed to be allowed reset the debt curve as needed, but they haven't been allowed by the Fed and the private debt of those who should have been allowed to go bankrupt back in 2008 has been transferred to the public tab.

There is no way out of the situation other than via the elimination of debt via widespread bankruptcies, the way malinvestments are supposed to be flushed, or by the devaluation of currency which punishes everyone, not just those who deserve to go bankrupt.

Thu, 06/27/2013 - 21:18 | 3701805 logicalman
logicalman's picture

When I was 12 years old, during the Six Days War (1967) there was a lot of talk about economies struggling to grow.

I asked my father a question...

How can economies grow forever on a finite planet?

His answer?

They can't.

It would appear we are close to this being realized by many.

Thu, 06/27/2013 - 21:32 | 3701884 ramacers
ramacers's picture

some of our younger posters need to get the "Madd Max " videos.

Fri, 06/28/2013 - 05:31 | 3702637 Bearwagon
Bearwagon's picture

Or one or two of the "Fallout" video-games ... (personal opinion: preferrably "Fallout 2"). 

Thu, 06/27/2013 - 22:04 | 3702022 Species8472
Species8472's picture

This situation is geting out of hand, yet another post without mentioning the "Central State"!

Thu, 06/27/2013 - 22:36 | 3702144 Loophole
Loophole's picture

Did the wealthy earn their wealth, get it rightfully from some who did, or steal it?

All these "unequal distribution" discussions ignore this. But it's the only proper question.

Fri, 06/28/2013 - 02:01 | 3702540 Herd Redirectio...
Herd Redirection Committee's picture

The answer is, of course, fraud, theft, coercion, blackmail, usury, insider trading, monopoly...

Thu, 06/27/2013 - 22:42 | 3702168 Loophole
Loophole's picture

They will never be able to stop QE. The entitlement state and our debt demand that we continue to print money.

Until the dollar collapses.

Look for an inflationary depression, the economy going to hell and politicians printing money like hell to prevent it.

You want to be liquid, and you don't want the fiat trash.

That leaves gold and silver.

As people come to see that more and more, its price will soar.

Thu, 06/27/2013 - 22:47 | 3702186 TyrannoSoros Wrecks
TyrannoSoros Wrecks's picture

Progressive's agenda is growth?

I stopped reading it right there.
The progressive's agenda for the last hundred years has been to destroy the economy in order to eliminate the middle-class.
Why, you might ask? Because you can't have a communist revolution with a strong middle-class.

Thu, 06/27/2013 - 23:05 | 3702238 The Invisible Foot
The Invisible Foot's picture


Fri, 06/28/2013 - 00:17 | 3702400 HowardBeale
HowardBeale's picture

Glancing Off Topic: How do you know the end is near? 

When the criminal cabal posing as the DOJ goes after the ex-vice chairman of The Joint Chiefs of Staff:

This is known as eating your own; the result will inevitably be a total military coup, as those who embrace danger and offer their lives for an ideal don't have a great deal of respect for the lesser beings that believe in nothing other than their own [misperceived] status. 

Obama, Nobel Peace Prize recipient? The military will shoot him just for that particular absurdity--not needing to document his crimes against Humanity and his aiding and abetting of the greatest criminals of all time.


Fri, 06/28/2013 - 00:19 | 3702404 WTFUD
WTFUD's picture

Fearful of a youthful backlash the EU are discussing setting aside €6 billion to thwart 35 million unemployed. By my calculations that's an approximate investment of €170 per person. Good luck with that!

Sat, 06/29/2013 - 07:25 | 3705760 andrewp111
andrewp111's picture

The EU should simply draft its unemployed youth into an EU Federal Army.

Fri, 06/28/2013 - 00:54 | 3702459 ptolemy_newit
ptolemy_newit's picture

You can change the USA problems tomorrow, it is so easy!

Stand at each end of K street and........

Fri, 06/28/2013 - 01:08 | 3702477 HowardBeale
HowardBeale's picture

"...and"...depress trigger...

Fri, 06/28/2013 - 01:26 | 3702504 WTFUD
WTFUD's picture

Frightning i say frightning how Blankfein&Co are determined to get their paws on the muppets PHYZ. Basic law of psychology DON'T TRY TOO HARD as you reek of desperation!!!!

Fri, 06/28/2013 - 01:56 | 3702536 HowardBeale
HowardBeale's picture

Given the absurd movements in world markets (Japan up 4% as I type), I would say Bernanke is a dead man; i.e., a violent collapse can be the only resolution to the absurd "market" movements in play now; "when People lose everything, and have nothing left to lose, they lose it"; and losing it, IMO, will be rifle sites trained on Bernanke.

Fri, 06/28/2013 - 02:06 | 3702545 Herd Redirectio...
Herd Redirection Committee's picture

The USD is the worlds biggest bubble.  So its not so much market movements that you should be worried about. IMO

Fri, 06/28/2013 - 02:33 | 3702566 dunce
dunce's picture

Part of the growth plan is an expanding population and more income producers. Abortion and birth control have reduced  our natural growth so they are pushing immigration to keep the growth going. With no growth, the pension bomb timer ticks louder and faster.

Fri, 06/28/2013 - 04:43 | 3702615 falak pema
falak pema's picture

you forget the other option : permanent war; our most important export products of first world are arms and now surveillance.

Big market out there to create permanent tension around those RM/cheap labour resource enclaves.

Keep chipping away on people's freedom oligarchy, its the right road to civilization regression.

Next time you visit Dubai or Doha you'll know the role model for this first world morph; Oh to be like them in our five star ghettos, cut off from teaming dystopia, the price paid for splendid isolation.

What the subhumans need is more debt what we need is more profit while we look at summer skies and drink martini dry and plan the next Google architectured tech revolution to sell what nobody needs but everybody yearns for.

The amazing thing is that MSM sells this dream to first world shills and their children and like moths circling around the proverbial ligh bulb they lap it up dreaming of Apple and Dolce Cabana trinkets! 

Sat, 06/29/2013 - 07:23 | 3705758 andrewp111
andrewp111's picture

It is no longer true that Progressives seek growth. A big part of the Obama coalition are  the well-off no-growthers. These people are the ones pushing global warming regulations, and yet are against nuclear power. Environmentalism is their religion. They don't want growth because they have enough already. They want shrinkage. But they want to stay on top of the heap during that time of economic and population shrinkage.

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