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Marc Faber Warns "We Have Reached The Endgame Of Monetary Policy"
"One day this whole credit bubble will be deflated very badly - you are going to experience a complete implosion of all asset prices and the credit system..."
Marc Faber was in fine form at the CLSA Investor Forum, dispensing his trademark gloom and doom. The final keynote was a tour de force of the history of debt, asset bubbles and financial markets in the 20th and 21st centuries.
"Unlike the '50s and '70s when there was relatively less overall debt, a financial market crash did not inflict great damage on the economy.
Debt levels are significantly higher these days, and so a market crash can inflict serious damage on economies.
We've gone through a period of huge asset inflation, in stocks, bonds, commodities, and real estate, and we essentially now have in the world, a huge asset bubble.
So everything is grossly inflated."
In addition there has since 2007 been:
"colossal asset inflation" in high-end goods...
In thinking about what the next big bubble will be, Faber said:
"The problem is I believe you and I are the bubble... the financial system is just too big, that is the problem.
Maybe we can't see where the next bubble is because we are the bubble - that is something to consider."
Faber thought economists should distinguish between economic growth where credit grows at the same rate as the economy, which he believes is sound compared with a situation where credit grows faster than the economy. Credit used in capital formation is more beneficial to an economy than if used for consumption, as is the case in the US.
"One day this whole credit bubble will be deflated very badly - you are going to experience a complete implosion of all asset prices and the credit system - but as to when -I don't know."
Advanced sign of the cracks in the system are already evident. A dollar of additional credit in the system created significant economic growth, but these days an additional dollar has very little impact.
"That is a sign that we have reached the end of monetary policy."
Another indication is when the US government has to issue treasuries to pay the interest on its maturing debt.
"That will be the end game - then you are dealing with a collapse in the currency."
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Instability increases.
Tic Toc.
Oh wow....that was real deep there Faber.
If I'm the next bubble then......... where's my bailout dude?
Buy my BFDB (Big Fucking Dip Bitches)
The other half of the story is this: when asset prices catastrophically implode like Faber says, the economy will dislocate, and basic necessities will hyperinflate due to shortages. He is exactly right when he says "maybe we are the problem." All that money has to go somewhere.
Note to self: Don't forget that the Derivatives market dwarfs all the other markets and the real-world assets. So... the "unwinding" is best viewed from a safe distance.
Scotty, how are those warp engines coming along?
"We the finance ministers of the worlds largest economies hereby declare all derivative contracts null and void. Proceed with the ponzi and party on!" It's that easy. It's all fake, so they can manipulate it any way they want.
Just for the record, the Canadian Finance Minister was a personal injury lawyer (ambualnce chaser) before he went into politics.
Sleep tight! Your finance ministry is awake!
"But Captain, we've not got enough collateral"
-Scotty to Kirk, final scene, The Debtidian Implosion
Kiptin, we swapped out dilithium for 20x dilithium derivatives! she kinna take i' no moar!
Howzat? Such a catastrophic implosion, if true, suggests discontiuous prices with a corresponding reduction in cash balances and wealth. A stock or bond for example that one day was priced at 90, say, could impode to 40. No one gets the 50 delta in a discontinous event, it simply vanishes in a stroke of electronic bookkeeping.
Exactly how does such vaporization of wealth lead to hyperinflation? What does one use to bid for these basic necessities? (And incidentally, the RE-discovery of lower asset prices does not change the productive capacity of the real economy. There will still be as many factories, tractors, assembly lines, and so on as there were before. Their prices will just be different.)
It is that asset price discontinuity that central bankers worldwide are desperately trying to avert (for their own sakes, not ours). They will, of course, fail....catastrophically so.
Sanction, it looks like you are part of the problem as well. "Money" is created with the same "keystrokes" that make money vanish. The tone of your reply seems to suggest that TPTB will exercise both integrity and restraint during a market pricing "discontinuity." How silly. Government is in bed with the Fed which is in bed with TPTB, and they all lie continuously.
So when is it the truckers plan to go on strike this month?...
They better move it from 10/11 - 10/13 to this week!
You won't see vaporization of wealth, but you will see hyperinflation - which will essentially make that wealth able to buy less. All of this surplus of liquidity must be rebalanced with what is actually being produced. If you can provide a service or produce a product, you can charge more. If you live off your EBT card (or plan too) what you get will also be rebalanced with what is being produced - and that means your EBT card will get you less.
So cash will be king in asset deflation? What about bail-ins using bank deposits and government confiscation of pension accounts? Invest in real estate, but that's a bubble too? Precious metals drop by 50% if only temporarily? But will PMs be available for sale at those hyper-depressed prices? Again, it's back to the old adage of reducing one's debt and general overhead, and becoming as independent of the "system" as you can. Develop a skill set that will have utility in a collapse scenario. Sharp break versus slow burn, who knows what will transpire. While government is still not omnipotent, I'd rather take the hard medicine now.
When this hits, nothing will be king.
Your advice is sound, independence and self-sufficiency will be the only thing than saves you. Hopefully at the local level the more stable towns will pull together and bootstrap rather than things completely falling apart. It's safe to say nothing will resemble normal for a while.
Here's the best link I've clicked on from ZH:
http://ferfal.blogspot.com/2008/10/thoughts-on-urban-survival-2005.html
An essay by an Argentinian about his experience with the economic collapse.
Long fences, flashlights and bullet proof vests.
Guns and ammo, bitches.
Me and mine are coming out of this feudal lords in the new dark age.
Cory C for southwest regional warlord! Your region? No, nevermind, I'll just look for the user icon as your flag.
Or big blue cheese blocks shoved into the mouths of the corpses or something.
The collapse of the House of Saud is probably going to be the trigger. The king has been rumored dead for months. One prince has defected. If Islamists get a hold of that country, the Petro Dollar will probably die, too.
Nice thesis. +1.
I disagree though - ironically because Saudi society has the most intimate knowledge of what actual Islamist rule would look like (since they train and fund so many of them), they will be the most resistant to Islamists taking over.
Unlike Western countries that can't tell a conservative Muslim from a fanatic nutjob, the Saudis can, and do, and have no problem at all being ruthless with the latter.
Or the collapse of Ghawar. And I can't wait! :)
The death of the Petro dollar is appropriate.
With the US fiscal recklessness it will be a sight to see as everyone flees out of dollars.
Actually, Saudi Arabia already is run by hardcore Islamist Fundamentalists of the Wahabi sect. The West have used these usurpers to control the Saudi oil for the Petrodollar scheme. This also benefits the Zionist interests, which are connected with the West's.
I'll see your QE bubble, with a Credit Default Swap bubble, and raise you with a Derivatives smack down bubble !
Now, that ought to fuck up what's left of the world economy - real good.
All them nukes the Rooskies and Yankee Imperialist Running Dogs had will pale in comparison to bubble popping financial destruction.
Start eating pickled eggs, beans, and beer now, and pipe all your methane generated into your SHTF energy storage tank.
Gotta be ready for the new Bartertown economy coming soon to a country near you.
We need to stock up on booze, condoms, and freeze dried food....
Indeed. For a more complete list, go to http://www.survivalblog.com/listoflists.xls
u r welcome
Wow nice resource , doesn't lend well to a fast print out, but pretty complete
Yes to the first two, but I have to have my lamb loin chops.
' "The problem is I believe you and I are the bubble... the financial system is just too big, that is the problem.
Maybe we can't see where the next bubble is because we are the bubble - that is something to consider." '
Isn't that singularity or something?
When the US dollar collapses I want to make sure that little bastard Bernanke knows it's primarily because of his stupid monetary policy. Anyone care to staple the message on his forehead for me?
like any other golem you need to write a note & insert it into his mouth.
I leave it to the reader to conclude what alphabet to use.
The Public Be Suckered
http://patrick.net/forum/?p=1223928
There is absolutely no new arguments in this article, ZH start to miss some ressource and good article. And comments, you guys saying the same stuff over and over, only bearish. I mean ... comon.
"There is absolutely no new arguments in this article."
No, but there are new readers. Thus, the message cannot be repeated often enough. We're dealing with a vast herd of sheeple, after all, who need to understand why they're being sheared, the better for them to join us former sheeple (I was one once, weren't you?) in preparing for the aftermath.
So don't read what you don't need to. Pass it on instead.
Meanwhile, the state can kiss my ass.
Yeah, Yeah, Yeah….Hey!
Life is too fucking short, how about qualifying the Read first? I want more than this bullshit, this is the 2nd Farber thing in a week! I want:
[1] Exact Dates + Hour of the Specific Day
[2] How Low (Exact Point Drop)?
[3] Do I Bring a light Jacket or a CarHart?
[4] Cards & The Good 11.5 gram Chips instead of plastic? Is it $1-$2 or $3-$6?
[5] Should the Girls bring Healthy Snacks + Bottled Water ?
[6] OR do the Boys bring Salami, Honey-Baked, Baby Swiss, Chewy Loafs, Heinekens and Condoms?
[7] A Blanket to Cuddle on or an Aero-Bed to **Do It** on?
[8] The Tripod for the big Digital Camera?
Jeez, WTF, is this too much Specificity to require before we read this stuff?
Carhartts. Totally.
The rest of your list: no clue.
But stick with the Carhartts.
"Rugged as Montana. Comfortable as a broken-in saddle"
Und zis babel vill pop und zis vill end very baaadly. Old goat bleating every day. We get it:
1. We are all fucked
2. Buy gold and hope it doesn't get confiscated. lose in boating accident.
3. Those with bullets will probably see them inserted into their ass by the authorities like suppositories despite their macho demeanor
4. Dollar collapse because of overprinting, lack of faith in the US government and because international oversight should reign supreme
5. Rest of world distancing itself from US because it is acting unilaterally all the time disrupting international co-operation
(actually this is horseshit. The US was used to create the global system and now that the global system has some legs and everyone else is sucked in, they will collapse the USD and induct the US to the global community of globo-euro bux. As a result of being a tool, the US is looking worse and worse as the opponents are fewer and fewer and the real reasons for the actions start to surface. look at china http://finance.yahoo.com/news/china-adjust-loan-deposit-ratios-072927952...)
6. Only international supervision can save us
7. Un laaastly ze vether forecazt: Partly cloudy vith the ocazional droone und I am training to fly zem from a secret control center in Austria
8. Ze end
Same old horseshit every day.......... It ain't that complicated folks.
To state the obvious: The system would be fine if those adminsitering it were more intersted in maintaining a stable and solid system rather than parasitically sucking off of it as a means to power.
Well they obviously don't fucking want to. They will create 3-4 power centers around the world and administer their globo-bucks and health care and whatever else from afar.
They suck, they blow they are this and they are that........ ok so now what?
Wrong. The "system" is debt based money loaned into existence with interest attached. There is nothing about this "system" that could ever be fine. It may apear to be fine for some finite period of time, but the final spectacular collapse is baked in.
Monty Python predicted it years ago.
In hindsite - quite the metaphor...
https://www.youtube.com/watch?v=rXH_12QWWg8
The Crimson Permanent Assurance
1.Almost every serious economic dislocation has been followed by a destructive war somewhere. 2.This is the second time (1929,2008--)that we've been screwed by these people who swore it could never happen,and then screamed for the Gov't to step in when they started losing a pile of chips. 3.Standing armies get pissed off when they aren't paid.Nothing worse that unruly,heavily armed troops grousing about lifes inequities. 4.Re-hypothecation is the ultimate paper chain.When everyone who thinks they "own" the same item (asset),and show up to collect and the doors are closed.... 5.A risk free market is not a free market,and never was.Sometimes you win,sometimes you lose,but one should not expect some innocent third party to shoulder the losses.This is called "moral hazard",and encourages more adventurous risk-taking in the future.
In the event of total collapse it is estimated that one-third of Americas' population will starve in six months.This is conservatively estimated at 100 million people.At some point people may ask what value Wall Street brought to US society,i.e.,was the pain worth it?
1/3 of the US population will starve ... where is this study?
When the Lehman event happened and the financial markets tanked the Federeral Deficit was 9.3 TRILLION dollars. The FED'S balance sheet was at a record high of 837 BILLION dollars. Here we are 5 years later and lets look at the real picture. Any 6th grader taking an economics class can understand the situation we are currently fucked... The current Fereral deficit is close to 17 TRILLION dollars..http://www.usdebtclock.org/ . and the FED'S balance just touched 3 TRILLION dollars? Riddle me this bat bitchez? Can't anybody live on a credit ponzi scheme as long as they can make the interest payments? The answer is yes and that's what the Government has been doing however the FED has been making billions of dollars in profits expanding their balance sheet to finance the government!!! Here lies the problem. As you all know by now the FED owns the market. I'm convinced they now have total control over the Government. They keep hoodwinking hardworking Americans into debt so they can keep their roulette wheel spinning. Bottom line is now our country is 17 TRILLION in debt and is being run by the Federal Reserve... Just wait until all these dollars come home.
Japan.
Most of Japan's debt is held within its borders. We have over 2 TRILLION dollars of debt owned by foreign countries. And the we have a private institution called the Federal Reserve printing our money and lending it out at .0025%. This country is fucked, just face the facts, Wall St. only follows the FED they don't even care about Companies revenue anylonger. It's called Fascism, look it up and the Corporations and the Banks that influence every shit Bernanke takes spell just that!
Oh man are you confused.
Our borders?
You do know that `we` are a puppet? Yes?
Japan is the US Fed's print till you die experiment.
But Joe six pack will tell you everything is OK. The debt can be paid off by printing money. Other countries will continue to fund US deficits so that the US can continue to buy stuff that they make. When the dollars come home there will be more dollars in the USA so everyone will be better off.
Worryingly, a lot of our politicians seem to believe the same thing.
The fact that the world economy is fucked is indisputable if you know how to work a pocket calculator and have a very basic grounding in economics.
The final nail in the coffin was the start of QE. The coffin is now on the slow conveyor into the furnace.
Perhaps I'm wrong, but I rather doubt that other countries are buying our fiat Debt, unless it's at gunpoint.
At this point they are likely either not calling it in, or enjoying spending our Saudi and MIC-backed confetti paper that the Fed is creating. "Membership has its privileges", you might say.
Everybody in this crime syndicate hates the Bernankster Godfather, but no one dares to be the first one to call him out. Much less take him on.
The 17 T is significant but it's the unfunded liabilities, demographics, and deriviatives that spell the real issues. Unfunded liabilities in US approaching 127T with 10,000 retirees a day being added. That's just in US. Japan's demographic issues are much worse. Finally, due to deriviatives there can no defaults....won't happen IMO because the banking system would implode. In US the Dems are either too stupid or too corrupt to admit there is even a debt issue. The Repubs are too stupid or too scared to put the numbers in front of the people because if they really understood how bad it was they would capitulate and you'd see a 30% drop in markets in a matter of weeks.
The US will never pay it back into today's dollars.
It's why Bernake's son has over $400,000 in college and medical school loans.
Bernake and the Fed intend on pounding down the value of the US dollar big time.
40 acres and a Mule = $400
Another indication is when the US government has to issue treasuries to pay the interest on its maturing debt.
Yup. That's it. You can bluff your way through a lot of debt, but when you can't make interest payments, you're screwed.
Let's face it, it is already happening. Treasury issues debt Tuesday, the Fed prints money and buy it all within a week (after a guaranteed profit to Goldman as middle man, of course) and uses the new cash to pay interest and repay the debt. Treasury never needs to resort to paying in kind when the Fed can and does convert Treasury debt to cash which goes right back to Treasury.
Extending loans will open up the faucets of US dollars, now hoarded by big banks. When the lending begins, start your engines. More credit card offers would be a sign. This is my take on it - since the money is being intentionally hoarded while printing continues.
That's exactly right. For the moment... the money remains contained, velocity of money is at historic lows... but... when this tidal wave is unleashed.. it's is going to catch everyone by surprise. That's why it's important to not "play" the metals, but to just own. Buy when you can, and keep buying.
I'll take 40 acres and a mule any day of any week of any year in any state east of the Mississippi. Points west the rainfall can become quite sketchy at best. There may come a day when you wish you had 40 acres and a mule much more than a Mcmansion and that BMW in the driveway. If that day does come by the way, I will probably be up on a farm in Alberta with my Canuck relatives. Your money is and has been monopoly money for years. The only reason it is worth anything at all is merchants still take it in trade. If 20 percent of the population would wake up and accept the fact that every minute of every day 24/7 the Fed is buying up 1.8 milion dollars of fiat debt based currency backed by nothing there may be an awakening. I am done sharing with people who in my business come from all walks of life and all across the socio-econonmic strata. Clueless is a movie that should be made about the Sheeple. Doom and gloom will wear you out if that is all you dwell on but being a realist is probably better at this poing than optimist. Anyway,, I am done venting. You all have a wonderful week out there in the matrix. Side note, any ham radion operators out there? I am looking into it as a hobby.
I agree. I commute 40 minutes a day to my "investment job" and come home to "country"; lots of acreage, free-range chickens, and self-sustainability. Enough game here to live in perpetuity if you like venison. Avoid the coastal high population centers and find jobs in the Midwest or South. AR-15s are nice, but a good old Remington 30-06 for about $300 will work fine if you become an expert with it. Lastly, the rural sense of community is (in my humble opinion), so much stronger that that if the urban community. If there ever was an economic collapse, my neighbor with the milk cows will be much more valuable than a suburbanite's neighbor who is an attorney and a par golfer. So if the shit hits the fan, all I have to do get home. No Bloomberg terminal needed.
Yeah, I get your drift. I figured the govt could eventually censure or limit the internet, and the world would really go to hell in a handbasket in a hurry if people didn't have....GASP! ..THEIR CELLPHONES!!! So I decided to blast through all three levels of ham radio licensing starting with technician, then general, then the extra in 6 months. Bought an Elecraft KX3 (a power packed portable unit that kicks ass and great support) and a deluxe portable Buddipole antenna, waiting for Elecraft's 100 watt portable power amp next month. Will be getting a dual band or triband hand held for the shorter distances. Kind of like being a pilot though. You can pass the written FAA exams, but won't do you a bit of good if you don't know how to fly the airplane. Got to get out there and putter with it.
BTW, my wife thinks I am nuts. When I go out and play with my radio, I hear her telling her friends over her cell phone "Daddy's going to talk to the aliens."
jamming is no problem. The real solution is line-of-sight laser & also fibre-optics that aren't known to those who'd try to control everything.
HAM is a good option but it can't be the only one.
The theatre is on fire!
The theatre is on fire!
Ok. I'll wait. Been waiting 5 years now.
Is Greece going to default?
Where'd my ferret go?
Your economic survival does not depend on your job, it depends on your ability to PRODUCE.
At the end of the day, with all governments printing and debasing their currencies, the last man standing is the one who can PRODUCE the most.
We are in a race with China, no doubt. But at the end of the day, we will win.
In the meltdown: The more problems, the more opportunities to be the provider of solutions....to any problem. No matter how small. Entrepreneurship.
Faber studies history. History is repeating so accurately it's actually embarrassing. As I have said before we are the laughing stock of the cosmos. Like a bad comedy. So, Faber calls massive deflation and debt de-leveraging after inflation/credit inflation etc. He is 100% right. We are doomed and we had it coming. Prediction? Well, i follow the Seneca cliff theory, Rome baby. Shit will fly quick, real quick.
The Fed should be treated as a criminal organization for inflating debt markets (Wall Street profited) and distorting free market pricing.
"Maybe we can't see where the next bubble is because we are the bubble - that is something to consider"
F*ck that's intense.
I have put on a little weight and my wife my think I'm a bubble ... but I don't think I'm the one
we have all become bubbles. and we can't see it.
goes back to that "we are the enemy"
Like i said, tense sh*t
the voters of the U.S. have been trying to correct the U.S. government dysfunction for quite some time. am curious what governmental system would allow voter's views to be reflected in the national government.
If you could simply print enough money so that everyones debt is de-valued to the point they can afford it in a year, well then you simply fixed everything.
The problem is, wages take 200 years to catch up to inflation..... Corporate profits could rise 9000% wages will probably stay the same.
People are earning adjusted for inflation less than they were in the 80's right now.
SOOOO something is obviously going horribly wrong, or horribly right for someone.
Your thesis essentially assumes everyone is equally indebted. It also ignores that group of people who have worked for decades and saved for their old age when they are less able to work. They have loaned that money to others (ie they have foregone consumption of goods and services they could have then bought, allowing others to do that with the money borrowed from them at the time) expecting to have the loaned money returned, together with interest to protect the value against inflation, credit risk and hopefully gain some of the value from actual investment use of the loaned money.
Your solution "fixes" everything by stealing that money from the, largely, elderly, leaving them in penury. Congratulations. You must be a banker.
#1 Bankers don't make money in deflation.
#2 The fed controls inflation/deflation.
#3 Bankers control/own the Fed.
#4 Thus, there will be no taper, no deflation.
-1
#1 bankers make money when they're not in jail
#2 the fed is just one of many central bankers
#3 deflation is an ACTIVE WEAPON not an accident. When it happens it will be an attack by the bankers. it takes mere moments of deflation to buy up EVERYTHING at cheap prices then hike prices right after once they know you have nothing left.
Do not let your friends get smoked out and off onto an attitude with a digital video camera. He might choose some not-so-innocent country to pick on.
http://www.youtube.com/watch?v=p153TH6P7sY
Is this propaganda?
stacking physical silver and gold....
I love these central banks - every day is Xmas!
I understand that those metals were used to pay tribute to the leaders quite a while ago - thats why there were popes, kings, queens ... even cattle ... on it.
What I do not understand is why I would want to stack it now. If the economy goes bust, the only things of value will be food, water, guns, ammo and shelter, none of them is usually made of gold or silver. Well and if the economy does NOT go bust (quite unlikely on the long run), your metals will either be confiscated or their value will be manipulated down to the cost of production. They might manipulate as long as it takes to make people start losing faith in the value of gold/silver.
Those who think that some sort of peaceful barter economy would arise once the fiat economy collapses will be amazed by the rude nature of todays individualistic and materialistic humans once chaos enfolds.
Transportability...
In case of social disorder all your metals are going to change hands at gunpoint if you carry them around.
"Transportability" in temporal terms might be valid. There will - in any case - only be a very short timeframe to make use of your gold/silver. And this usage could be illegal then. OK with you? With your family? - and your hungry neighbours?
Talking about generations? OK, seems legit, however, who cares about generations nowadays?
OK with me. Making food, water & money illegal doesn't stop me from using food, water or money. It just makes me vigilant & cautious.
you will need to migrate & trade to get food, ammo, water, you will not be able to store enough. That's where the gold & silver come in. Same as why every day before the collapse people held & used currency notes (their only money at the moment) instead of all physical supplies.
A barter economy need not be peaceful but a society can not live without some form of money & gold and silver are money.
Even in active war zones this is the case. Even in hyperinflation ravaged Zimbabwe this is the case.
Did I say "reached"? I meant to say "asymptotically approaching". I don't want to lose my job, you know.
Defeatism seems to be the only ideology left to believe in.
deflationary collapse will not happen in current monetary system
it will happen at the moment of a transition to a new monetary system.
In other words - no assets revaluation in dollars will ever happen. You will go on to a new currency and then will find out that assets in new currency are valued differently
Any transition to a "new monetary system" will result in a complete desaster. The economic system (and the society) is intolerant towards changing basic attributes. The monetary system is the very basic attribute! If the oder of this system is destroyed and turns to a chaotic state the whole system dies, because it needs humans to maintain and restore order and humans need the (order of the) system to survive and maintain stability of the society. There is hardly any mechanism left to stabilize the system, hence to stop the "collapse".
Sure, it could be possible to declare martial law and force people to do as they did before the change, however, it is impossible to implement any sort of central control for a very dynamic self-regulating chaoticly, internationally linked economy. I mean, you cannot force people to buy this and that, go here and there for holiday, go to cinema, etc. - that would be socialism. Socialism already collapsed for some reasons and it would immediately collapse if they tried to implement it now, at todays level of (global) complexity.
I do not think the elites are that stupid. They will continue to maintain the status quo as long as possible. They will only REact until the level of complexity hits the turning point. At this point ANY REaction will cause more costs to handle unintended side effects than its primary target yields.
This will be the time for deflation to unfold - but not a deflationary collapse. It will force the (super) rich to get hands on (hard) assets, resulting in hyper inflation, riots, martial law, civil war, revolution, collapse.
#1 socialism hasn't collapsed where it's been used. It's not used in the US. It's used in Canada.
#2 collapse-transition is the intended goal. It's not a side-effect, not an accident.
Faber has only to be right once, those that oppose his view, have to be right forever.
google the term "wealth tax" you can imagine all sorts of common good arguments comming from the populists oops the I made a funny, there are no populists that is the term they use.
The main aim of the political class and the central bankers around the world is to create one bubble after another for the zombie bankers to feed on. The majority of the population who actually work hard to earn their living by engaging in productive work have to pay the price by either loosing a majority of their earnings in the form of taxes, interest on loans or paying the bill for the bailouts.
The true extent of slowdown in the world economy can be judged by the data points which are not subjected to adjustments by the government. Eg. Change in Electricity and Fuel consumption, Ratio of working population to the total population of a country, Miles driven, Baltic Dry Index, Change in commercial Rental Rates etc
The weakness in the democratic process ensures the victory of the Wall Street over the Real Economy for the foreseeable future. Things are definitely going to get much much worse before they get better for the real economy i.e. for more than 90% of the population.
http://www.marketoracle.co.uk/Article40231.html
Radio K.A.O.S. (1987) sleeve notes:
26 years later, we're almost there...
yes, don't tell the Dragon it's tail is on fire quite yet, make sure you wait till it burn's his ass, so we have time to run. "my interp of benny boy"
Once Japan's currency collapses, the dollar will be the only safe haven....for awhile. That's the only way out for US debt IMO but due to loyalty to homeland Japan won't capitulate from Yen until it collapses
I would argue that outside the US the USD will not be a safe haven.
The hardest trade now is to own cash and gold and wait for the correction baked into the currency and the stock and bond markets.
Folks beating inflation with mortgaged real estate saw past appreciation and liquidity vanish in 2008. Ditto for gold unless you owned it forever, say, bought below $400, etc.
Every inflation has ended in a sudden deflation: you can look it up.This time it won't be different, just not widely foreseen.
"They bought their tickets. They knew what they were getting in to. I say Let 'em crash"