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Time Is Running Short

Tyler Durden's picture





 

Submitted by Mark J. Grant, author of Out of the Box,

"It is only in silence that one hears the sounds of life."
 
                       -The Wizard
 
From time to time it is necessary to quietly sit down and assess where we are going. This is a significantly different undertaking than listening to those who try to tell us where we are going. Government and the Pastors of Propaganda are always whispering into our ears either offering Heaven or the retribution of Divine Providence so the removal of either from a deliberate consideration is a necessary part of the examination of reality. 
 
I bring a measure of experience to this task. Things that are not counted, liabilities that are excluded from national budgets or their debts, do not mean that they do not have to be paid. This, in fact, is Europe's greatest problem. They have played "extend and pretend." They have played "lie and deny." They have resorted to every trick imaginable when compiling data such as the debt to GDP ratios of the countries and yet; chicanery does not erase the debts.
 
The financial projections of the IMF, the EU and the ECB are never accurate or even close to accurate because they use garbage for their data. It is therefore "garbage in" and "garbage out" as they all make a mockery of themselves. The vast amount of investors continue to believe them as evidenced by the markets but certain events are now about to take place.
 
Greece reported out a -14.2% decline in just one month this morning for retail sales. Greek collapse III is almost at hand as their two major privatizations have failed and as their economy continues to worsen. Soon the Greeks will call for more money but the end of this road is in sight as I do not believe the nations in Europe are willing to roll over again. The IMF is also up against the wall and they have asked, I understand, for Europe to forgive part of the Greek debt which has fallen, so far, on deaf ears.
 
Soon, soon, the Iceman cometh.
 
The Cyprus solution is a failure. It is as clear and as simple as that. Cyprus will have $10.17 left in their banks by the end of the year. They will soon be back asking for more money and we will have another IMF problem and a Euro fiasco as the amount of money they have been given to date is akin to a flyswatter trying to smack down an F-14. A ridiculous incident in both cases.
 
The biggest problem though is going to be France. They have a stated debt to GDP ratio of 90.2%. This is another mockery of the data though as the real number, liabilities included, is somewhere around double this number or just below 200%. They also have an economy that, according to "Trading Economics," is expected to decline in the next quarter by -0.5% while their sovereign debt increases to $366.9 billion which is an increase of 9.5%. This is while their government spending rises 9.9% for the same time period. This, then not only puts them in violation of the EU's current mandates, which is a secondary consideration, but puts them clearly on the road to insolvency.
 
France has run out of road.
 
The real issue here is a question of politics. In France being rich is defiled. That is fine and dandy except this attitude leads to an inescapable end which is with a 75% tax rate, massive amounts of workers in the government, social programs that keep increasing, and no reason to be successful and thereby support the government; those with money are fleeing the country. The drain is enormous.
 
Consequently sovereign revenues cannot, by any stretch of the imagination, support the imbedded costs of the country which must either be drastically cut, think massive protests or where France shows up at the door of the EU asking for help, which would be a disaster for the European Union. I believe the country is at this crossroads now as their fiscal policy, regardless of politics, is just not sustainable.
 
Now the investors of the world are in another reality altogether. They do not want to hear anything about these sorts of things. They are in the state of, "ignore and deplore."
 
You can live there for a while. Government induced fantasies have occupied the center stage before and for some time. Our current denial of reality is fueled by all of the money that the central banks have pumped into the world but that will be diminishing as the Fed and others examine the longer term consequences of their actions. There are always consequences.
 
What has been put off will arrive. It was always just a matter of time.
 
Time is running short.

 


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Fri, 06/28/2013 - 08:38 | Link to Comment achmachat
achmachat's picture

Nothing like a dose of Mark Grant for some taste of reality!

Fri, 06/28/2013 - 08:44 | Link to Comment Stackers
Stackers's picture

Time has been running short for over 3 years ......... sure is going to be one big kaboom when things finally unhinge again.

Fri, 06/28/2013 - 09:11 | Link to Comment Midasking
Midasking's picture

As rates rise the economy will become a smoking hole in the ground. http://tinyurl.com/qhxpkyn

Fri, 06/28/2013 - 11:39 | Link to Comment ATM
ATM's picture

And what of the budget deficits? Rates have gone up 1%. In the US that means as bonds get rolled the debt service costs increase by $100s of billions.

 

Fri, 06/28/2013 - 08:52 | Link to Comment RSloane
RSloane's picture

I started laughing at "sit down and quietly assess where we are going". I really like Mark Grant and appreciate his work, but he maybe expecting children with an inability to delay any type of gratification to act like adults.

Fri, 06/28/2013 - 09:28 | Link to Comment tango
tango's picture

My gripe with the article is the presumption that we are anywhere near the denouement.  Folks on ZH repeatedly underestimate the ability of the FED and the State to obfuscate, confuse, elongate and muddle the situation until something else comes along.  The hope now is that natural gas is the savior - thus we plan to sale the bulk of it to other countries!   LOL 

I agree, the public, the politicians and the intellectual class know no other life than one of instant gratification, debt, keeping up with the Joneses and ceding control of your financial future to others.   We are losing the last folks who remember the days of a strong dollar backed by gold, fiscally sound budgets, saving,  local (not federal) control and peace instead of war.  

Fri, 06/28/2013 - 09:42 | Link to Comment Bad Attitude
Bad Attitude's picture

We are in uncharted territory, and have been for many years. It is not a question of "if," but a question of "when" everything will collapse. Countries are already bankrupt.

Everybody is caught up in a confidence game. At this point, nobody wants to admit the obvious outcome. Something will trigger the collapse.

Fri, 06/28/2013 - 10:58 | Link to Comment creeko
creeko's picture

The dark ones always had war to fall back on when their financial fraud reach epic, unsustainable levels.  That no longer being the case, you will see a much different outcome from what you're used to expecting.

Fri, 06/28/2013 - 12:58 | Link to Comment prains
prains's picture

that's why they invented "private security contractors" a polite euphemism for mercenary

Sat, 06/29/2013 - 02:56 | Link to Comment Real Estate Geek
Real Estate Geek's picture

In France being rich is defiled.

Oh JFC.  It's REVILED, not defiled.

Fri, 06/28/2013 - 08:38 | Link to Comment Bearwagon
Bearwagon's picture

It ain't over, until it's over  -  but if time is up, time is up.

Fri, 06/28/2013 - 08:50 | Link to Comment DormRoom
DormRoom's picture

It's basically a monetary milgram experient [1] in which the authority (big banks | 1%) tell the operator (Central Banks) to keep printing, even though it is harming the patient (the 90% - lost decade (s))

 

[1] http://en.wikipedia.org/wiki/Milgram_experiment

 

If at any time the subject indicated his desire to halt the experiment, he was given a succession of verbal prods by the experimenter, in this order:[1]

  1. Please continue.
  2. The experiment requires that you continue.
  3. It is absolutely essential that you continue.
  4. You have no other choice, you must go on.

 

Essentially, the policy of QE.

Fri, 06/28/2013 - 08:43 | Link to Comment bigdumbnugly
bigdumbnugly's picture

You can live there for a while. Government induced fantasies have occupied the center stage before and for some time. Our current denial of reality is fueled by all of the money that the central banks have pumped into the world but that will be diminishing as the Fed and others examine the longer term consequences of their actions.

odd... my government induced fantasies have always somehow involved sarah palin.

Fri, 06/28/2013 - 10:54 | Link to Comment creeko
creeko's picture

I have no fantasies about a woman who shoots wolves from a helicopter.  Cheerleaders are more my thing.

Fri, 06/28/2013 - 08:47 | Link to Comment Element
Element's picture

This is what you're trying to say marcus:

Dancing On A Highwire - The Alan Parsons Project
https://www.youtube.com/watch?v=Su7iYlJMeZw

Fri, 06/28/2013 - 08:51 | Link to Comment yogibear
yogibear's picture

According to the US and Japanese Central banks more printing solves everthing. 

LOL...Their can print their way to prosperity.

Japan is teathered to US. Fisrt Japan leaps off the cliff, the US then follows sometime later.

Fri, 06/28/2013 - 09:29 | Link to Comment tango
tango's picture

I always ask advocates of such policies why we don't just give everyone a million dollars.  The fact that so many think it's a good idea speaks volumes about the level of ignorance in our society. 

Fri, 06/28/2013 - 08:53 | Link to Comment Schmuck Raker
Schmuck Raker's picture

"Cyprus will have $10.17 left in their banks by the end of the year."

I've always dreamed of having more money than a small country, and now that dream has finally come true!

Fri, 06/28/2013 - 09:13 | Link to Comment Seasmoke
Seasmoke's picture

Careful what you wish for.

Fri, 06/28/2013 - 11:00 | Link to Comment creeko
creeko's picture

I call you King Schmuck Raker now.  :D

Fri, 06/28/2013 - 08:56 | Link to Comment Notarocketscientist
Notarocketscientist's picture

FRACKING OUR WAY TO A TOXIC PLANET

 

Elevated levels of methane, ethane and propane gases were found in drinking water wells in Pennsylvania, close to operations that shake natural gas loose from underground shale formations in a process known as fracking, scientists reported on Monday.  Based on analysis of 141 drinking water wells in northern Pennsylvania that sit atop a natural gas-rich underground formation called the Marcellus shale, Mr. Johnson and his colleagues found 82 per cent of drinking water samples contained methane, with concentrations six times higher for homes within 1 kilometre of natural gas wells than for homes farther away.
Ethane concentrations were 23 times higher for homes close to natural gas wells; propane was detected in 10 drinking water wells, also within 1 km of a natural gas well.
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/methane-found-in-drinking-water-near-natural-gas-wells-study/article12783760/

 

Over the past several decades, U.S. industries have injected more than 30 trillion gallons of toxic liquid deep into the earth, using broad expanses of the nation's geology as an invisible dumping ground.  No company would be allowed to pour such dangerous chemicals into the rivers or onto the soil. But until recently, scientists and environmental officials have assumed that deep layers of rock beneath the earth would safely entomb the waste for millennia.
There are growing signs they were mistaken (or lying of course)
http://www.scientificamerican.com/article.cfm?id=are-fracking-wastewater-wells-poisoning-ground-beneath-our-feeth

 

 

Robert Ayres, a scientist and professor at the Paris-based INSEAD business school, wrote recently that a "mini-bubble" is being inflated by shale gas enthusiasts. “Drilling for oil in the U.S. in 2012 was at the rate of 25,000 new wells per year, just to keep output at the same level as it was in the year 2000, when only 5,000 wells were drilled."  http://www.forbes.com/sites/insead/2013/05/08/shale-oil-and-gas-the-contrarian-view/

 

Shale gas won't stop peak oil, but could create an economic crisis

 

Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years

 

A report released in March by the Berlin-based Energy Watch Group (EWG), a group of European scientists, undertook a comprehensive assessment of the availability and production rates for global oil and gas production, concluding that: "... world oil production has not increased anymore but has entered a plateau since about 2005."  Crude oil production was "already in slight decline since about 2008." This is consistent with the EWG's earlier finding that global conventional oil production had peaked in 2006 - as subsequently corroborated by the International Energy Agency (IEA) in 2010.

 

 http://www.guardian.co.uk/environment/earth-insight/2013/jun/21/shale-gas-peak-oil-economic-crisis

 

 

 

 

 

 

 

Fri, 06/28/2013 - 09:18 | Link to Comment SmallerGovNow2
SmallerGovNow2's picture

Methane in tap water at certain locations has been going on LONG before fracking started...

Fri, 06/28/2013 - 09:31 | Link to Comment tango
tango's picture

By far, the largest component of fracking "breakers" is water.  I simply do not believe millions of folks would knowingly destroy the land and water on which they plan to live with their families.  All new discoveries lead to mini bubbles - the difference is that natural gas is actually a commodity of use. 

Sat, 06/29/2013 - 02:59 | Link to Comment Real Estate Geek
Real Estate Geek's picture

Last I heard, they ain't fracking in Greenwich or Manhatten, tango.

Fri, 06/28/2013 - 09:48 | Link to Comment Mark Urbo
Mark Urbo's picture

In your case its not fracking, but fucking eco-freak disease...

Just stop drinking the green Kool-Aid.

Fri, 06/28/2013 - 09:59 | Link to Comment AGuy
AGuy's picture

NatGas drilling in the US hits an 18yr low:

http://www.nasdaq.com/article/natural-gas-rig-count-a-new-18yr-low-analy...

 

They are no longer drilling since the price of NatGas is below production costs. Shale Gas need between $8 to $20 mmbtu (depending on the formation) to be profitable. When the price of NatGas gets in this price range the US economy is going to have big problems since more than 25% of US electricity comes from Gas fired power plants. Image if the price of electricity more than quadruplied from soaring NatGas prices, how it would effect the US economy.

The US is set for a power crunch, as Nuke Plants are shutting down (ie the CA plants that are going to be closed). and O'bamas War on Coal plants. I think O'bama war on Coal may be a way to send more coal to Asia.

Fri, 06/28/2013 - 09:00 | Link to Comment Rusty Shorts
Rusty Shorts's picture

Today should be interesting...June 28 2013 - Quantum Dawn? 2 - Cyber attack Drill today.

*Cyber Attack Drill On Wall Street 28th June - Drills Have A Habit Of Going Live!!*

Fri, 06/28/2013 - 09:33 | Link to Comment Element
Element's picture

Hope its nerve agent this time, anthrax is boring, we need mucus membrane freak-outs, tongue-lolling, panic attacks, muscles convulsing off the bone, coughing up lung covered in congealed snot ... then ... the bluish tint around the lips ... and the inability to even take another breath, as the eyes widen ... and you see the expression ... "so this is how I die, covered in my own snot? ... this can't be happening!" ... then endless re-runs of the 'footage', on FOX and CNNNNNN ... interspersed by Dianne Sawyer arriving on the scene ... and then getting over-come by her own wet snotty-fit ... ... Justice

</popcorn>

Fri, 06/28/2013 - 09:01 | Link to Comment SheepDog-One
SheepDog-One's picture

What's the big problem? Just add another $1 trillion POMO per month....should be all fine.

Fri, 06/28/2013 - 09:23 | Link to Comment RSloane
RSloane's picture

I sometimes wonder exactly how much Bernanke is spending on Wall Street per month. He has no integrity and certainly is more than capable of adding a few zeros here and there to pad the books. We won't know the number until history 'investigates' this chapter of the US economy. Even so, history maybe rewritten to support whatever fascist regime is in control of the US at that time.

Fri, 06/28/2013 - 09:10 | Link to Comment Clam McCain
Clam McCain's picture

Gold torched again!!

Fri, 06/28/2013 - 09:13 | Link to Comment Seasmoke
Seasmoke's picture

Knock. Knock.

Fri, 06/28/2013 - 09:16 | Link to Comment justamousesquared
justamousesquared's picture

Gold is taking a hammering, TPTB need to shore up their corrupt FIAT for a little while longer by smashing down gold to make it seem like a unwise haven. 

 

Sorry TPTB, do what you like to gold, when the end comes all that will matter is if the space ships you have built will be ready to take you and your like off of this planet.

Fri, 06/28/2013 - 09:23 | Link to Comment Tombstone
Tombstone's picture

The main thesis for central bankers using central planning is to keep interest rates at rock bottom so that the welfare/lazy bum state of existence can be financed with deficits.  As long as debts around the world keep accumulating and the welfare state keeps growing, QE and all its cousins must remain in place.  How could, even the the US, deficits be financed if interest rates were a more normal 4-6%?  The clock may be ticking, but the dynamite isn't hooked up, yet.

Fri, 06/28/2013 - 09:52 | Link to Comment Kiss My Iceland...
Kiss My Icelandic Ass's picture

 

 

"The financial projections of the IMF, the EU and the ECB are never accurate or even close to accurate because they use garbage for their data."

 

These organizations are deliberately lying. It's not a question of using good data. They know what the situation is.

Fri, 06/28/2013 - 10:57 | Link to Comment beaker
beaker's picture

This has to be the millionth article on how stocks and bonds don't jive w/reality.  BORING!  It's about money flows.  Fuck the economy.  Just follow the money flows - in or out - and forget the fundamentals.  That's so 70's!

Fri, 06/28/2013 - 11:14 | Link to Comment creeko
creeko's picture

I sure hope to see a collapse.  My friends and family need to know what a genius I am to have seen it coming.  Anyway, the collapse already happened.  It's just a matter of when you realize it.  And did you ever get the feeling that a financial collapse wouldn't really affect anyone other than some rich bankers?  I feel as if we've been led by them to believe that we would all suffer, just so that we keep going along with their scheme.  Collapse just might turn out to be a joyous event... you never know.

Sat, 06/29/2013 - 22:15 | Link to Comment Promethus
Promethus's picture

Most people (me included) see the coming collapse as a fearful event. Maybe it will be like one of these big forest fires out west – burn off the hundred years of old crap and make way for a new healthy growth. 

Fri, 06/28/2013 - 11:32 | Link to Comment Joebloinvestor
Fri, 06/28/2013 - 11:39 | Link to Comment enloe creek
enloe creek's picture

I'm not sure how it would workout, but I think debt in deflation is much less valuable so banks would be finding it ddifficult to maintain thier asset base without help from fed. as the fed buys debt to counter deflation and keep the asset base of the financial world from imploding from defaults. when the fed runs out of ink it will be over. so it is never going to be over. everything is fine, if you like lower standard of living for everyone except the bankers.

Fri, 06/28/2013 - 12:11 | Link to Comment Seeking Aphids
Seeking Aphids's picture

This is all about the Great Rebalancing........the movement of wealth from West to East......until this is over we will see this delaying action from the Fed and CB's - they know what is happening and are trying to mitigate/lessen the impact but it is like standing in front of the incoming tide with a bailing bucket (QE). Far lower standards of living for those in the West is the ongoing and necessary outcome of this century long process. We are living far, far beyond our means and there is no way we can continue to do so...another war would just make things worse. The multi-nationals (I know, I am a broken record on this) are siphoning all profits that could mitigate the process and paying no taxes via the use of tax havens. Solutions that will never happen: close all tax haven loopholes and start taxing mn's, orchestrate a global write-off of debt to reasonable (payable) levels, coordination globally to wipe out extreme poverty. What will likely happen: continued drifing downward of the West and curtailment of all but the most necessary social services, various small proxy wars over resources, further enrichment of the top 1%, lowering of real income for everyone else to a level which will leave the Western economies moribund, loss of reserve currency status for the $US, increased value of gold/silver as stores of value in a deflationary/inflationary world (West/East).

 

Fri, 06/28/2013 - 12:08 | Link to Comment Colonel Klink
Colonel Klink's picture

I forgot who said it but you gotta love the French, those folks who fight with their feet and fuck with their mouths.

At least they're not Greek......yet!

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