At Least Now It's Obvious Who's In Charge

Tyler Durden's picture

Submitted by Simon Black of Sovereign Man blog,

It’s clear to everyone by now that the government of the largest country in the world is careening towards default in just over 200 hours.

Yet curiously, even though the US government’s completely ridiculous, untenable fiscal situation is a front page embarrassment for the entire world to see, markets have barely budged.

A few very short-term rates have shot up, but for the most part, stocks are very close to where they were before the shutdown.

The US 10-year yield has actually dropped over the last month, from 2.95% in mid-September to 2.64% today… pretty much where it was a week ago before the shutdown began.

(Bear in mind that the 10-year yield in Italy, Spain, etc. were all over 7% at the most recent peaks of their respective crises…)

Meanwhile, other rates like the 30-year Treasury and 30-year fixed mortgage rates are even a hair lower than they were a week ago.

Where’s the calamity? Where’s the panic?

There’s been almost none.

The conventional wisdom right now is that, since the government shutdown is reducing US GDP growth by approximately 0.1% per week, the Fed is going to keep printing money to the tune of $85 billion per month (or roughly $1 TRILLION annually).

Remember, at the beginning of the global financial crisis, the Fed had less than $500 billion in US Treasury securities and almost zero mortgage backed securities (MBSs).

Today, the Fed owns over $2 trillion of US government debt (a 4-fold increase) and another $1.3 trillion in MBSs.

They’ve completely mopped up every ounce of liquidity. And in doing so, they’ve twisted interest rates and manipulated every asset class from stocks to bonds to real estate to commodities along the way.

Stocks and bonds haven’t moved because nobody cares what’s happening in the US government anymore. And that’s because every serious investor understands that the US government long since abdicated any economic power to the banking sector.

Everyone knows that the Fed is going to keep printing money, ergo they’re going to keep sending markets higher.

The US government and the incompetent elected officials are just giant stooges in this deeply flawed monetary system.

And this debt ceiling charade only proves it. The secret is out there in the open. And now it’s completely obvious who’s really in charge.

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The Gooch's picture

18,000,000,000,000 SERVED!

Since 1913

BlackChicken's picture

Over 300 million screwed over since 1913.

There, fixed it for you.

achmachat's picture

"... the government of the largest
country in the world"

WTF Simon??!!

Arius's picture

this time is different ... we have got Advanced Macro Tools ...

Dareconomics's picture

There will be a deal, because there always is a deal. Except that if there isn't, it will be a disaster.

Frozen IcQb's picture

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
That's how it goes
Everybody knows

Everybody knows that the boat is leaking
Everybody knows that the captain lied
Everybody got this broken feeling
Like their father or their dog just died

Everybody talking to their pockets
Everybody wants a box of chocolates
And a long stem rose
Everybody knows

Steve in Greensboro's picture

Imagine how long it would take Obama to replace Bernanke were he to stop QE.

Frozen IcQb's picture

Sorry to say that you have that backwards:

The bankers that Bernanke answers to decides who the President will be.

The President just rubber stamps the chairman's nomination.

Steve in Greensboro's picture

Which bankers are those oh wise one?

Dick Fuld? Oh wait. His bank went bankrupt and didn't get bailed out. Why was that? Maybe Chairman Fuld forgot to pay his Bilderberg dues. .

How about John Corzine? Oh that's right. MF Global went bankrupt too and it didn't get bailed out either, just like Lehmann. Maybe Chairman Corzine forget to keep up his Trilateral Commission membership.

Here's the short version. Bankers are useful vassals to their Lords, the politicians who run the Total State. Vassals are useful until their masters in the Total State decide they are not and then they get thrown overboard, like Fuld and Corzine.

If you believe that Jewish bankers are running the world, you need to take a break from listening to Alex Jones.

Anasteus's picture

An interesting article on the King World News on how not to let the possible debt ceiling crisis go to waste

Crisismode's picture

King World News is just like Alex Jones.


More BS Hype about the end of the world.


Wahooo's picture

I actually prefer the thesis from the ZH article over the weekend, essentially that this is all horse trader talk as the two sides divvy up the spoils. There will be no default, only another taxpayer fleecing. It's what's for dinner.

King_of_simpletons's picture

Panic and Calamity are so overrated.

These only happen in third-world banana republics.

We are the richest country in the world with exceptional human presence in DC.

Oldwood's picture

What were we fucking thinking??

Save_America1st's picture

@achmachat:   maybe he meant, "largest debt nation" in the history of the universe.

Unprepared's picture

"... the government of the largest
country in the world"

WTF Simon??!!


He was probably referring to the average waist circumference per capita.

Troll Magnet's picture



Arius's picture

Corzi for Fed Governor .. only he can outsmart china ...

DoChenRollingBearing's picture

Corzslime is still free, no?

Troll Magnet's picture


Our Justice Bros (O & Ho) went after him hard and arrested...Oh, wait.

Chupacabra-322's picture

Degenerate Criminals. Many of The courts are also Criminal. The Global Criminal Oligarch Cabal Bankster Intelligence Crime Synicate has installed their "Agent Smiths" on many of the highest levels of the very Criminal institutions they own & established.

There's now, no doubt that Crimes Against Humanity & Crimes Against The American, People/Treason have been committed. Mass Global Arrests are needed & justified. Their Crimes are no longer "hidden in plain view". Their Crimes are all out in the open for all the world to see. How the mass arrests happen effectively is the question.

The Criminals are flaunting their Crimes in our faces. Complete Hurburis & bravado. True Meglomanics, Sociopaths & Psycopaths. Pure Evil.

Oldwood's picture

The are technically only crimials if they are convicted of a crime and as we know that won't happen as they are doing God's work here, trying to save our asses, even though we don't appreciate it one little bit. We are so blessed to have these ah saints looking out for us. As Barney Frank once said, what does the constitution have to do with it, they are only trying to help!

kchrisc's picture

"Cops" is passe. "Gun and badge thugs (GBTs)," or "goons"would be better.

I like to call them "boots," as in Orwell's"...imagine a boot stamping on a human face—for ever."

I like "pigs" too, but it doesn't quite capture their essence.

Son of Captain Nemo's picture


Unbelievable.  Alberta Canada but WTF, the use to have a Jusctice system that worked, but like us no longer.

He could easily be talking about the now famous picture of the National Guardsmen (we think) with his assault rifle loaded and pointed at a someone looking out there window when they locked down Boston.

You only have to imagine what is in our civilian police and military.  This is what will get turned lose from the prisons and put into police and military uniforms (and has been) only in enormous numbers when they want all hell to break lose.

Anthony Burgess predicted all of it when he wrote A Clockwork Orange. Alex is reacquainted with his two partners in crime that now work for the police that turn on him!

Buck Johnson's picture

No kidding, no kidding.  Also try to get to Internal Affairs withought a lawyer and the cop will do everything they can to stop you.  At least in the US.

screw face's picture

.....'Screw everyone, then annihilate self' ~The Fed~.......

Crash Overide's picture

So you are saying he who has the money creation computer makes the rules? I AM SHOCKED!

MeMadMax's picture

Don't shoot em', let em' BURN!

Emergency Ward's picture

"SamBOZO, SamBOZO, SamBOZO the Klown"

edotabin's picture

Now if we can get Ronald McDonald to pay, we'll be all set to go!

TaperProof's picture

What about King Dollar?

TeamDepends's picture

200 hours!  Boy, when you put it like that....

DoChenRollingBearing's picture

To be on the safe side, I suggest buying more gold and taking some $$$ out of the bank.  Some more bullets and water put would not hurt either.

McMolotov's picture

Just make sure you store all that shit on the other side of the world like Mr. Black.

The Gooch's picture

... and when the fed appoints a different goon,

I'll see you on the black side of the moon.

DoChenRollingBearing's picture

Diversification is a key point!


1) Diversification in your asset holdings

2) Diversification in where they are

delacroix's picture

diversification:  100 oz bars  10 oz bars  1 oz bars and coins  junk silver

PacOps's picture

Investing rule taught to me ~60 years ago. "Investments are like manure. Ya gotta spread it around to make it effective."

Save_America1st's picture

@DCRB:  DONE--AND--DONE!!!  thank you :-)

DoChenRollingBearing's picture


It's a wonderful thing while we still have it.

Mr Poopra's picture

Anyone care to venture guesses for gold and silver prices October 18th?  Be ready to get inundated with calls from all the sheep you've been trying to warn for the last few years.

seek's picture

I'll be surprised if it's allowed to go past $1350, and shicked if it breaks $1400. The Bernankinator and fellow traveler banks have been pretty active against gold, and I don't see that changing, especially now.

DoChenRollingBearing's picture

$1350 or $1400 is a gift for anyone who does not have at least 5% of their net assets in gold.  That is, if you take the gift by buying some...

Save_America1st's picture

or if you've got a good amount of gold, then can get 59 ounces of silver for 1 ounce of gold.

...just sayin'...

DoChenRollingBearing's picture


If you really like silver better than gold, and you like to write and would like to "Guest Post" at my blog, gmail me at my moniker.  I really need to have a nice piece on silver.  Something on the order of "The Case for Silver".

it aint easy's picture

The case for silver: it aint paper.

kurzdump's picture

The FED is out of bullets. All thats left is to keep the printing press operating, hoping that global growth remains green and other nations do not turn away from the USD.