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Exit Strategy… What Exit Strategy?

Tyler Durden's picture




 

Crash Course creator Chris Martenson explains why it's easier to start than to stop quantitative easing: "A lot of what we hear is the Fed's exit strategy … what most people don't know is that this thing doesn't work in reverse very well at all." In this excellent interview with RT, Martenson explains why Bernanke & Co. found it relatively simple to start their money printing, but why they will have a hell of a time getting off the runaway QE train.

This interview was conducted at the Casey Research Summit held in October (more here).

 

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Wed, 11/06/2013 - 15:35 | 4128004 HedgeAccordingly
HedgeAccordingly's picture

i guess the strategy is.. slow and long.. going to be a long road i would presume.. rates will creep and home prices will plateau 

http://hedge.ly/16DAaWW 

Wed, 11/06/2013 - 15:37 | 4128008 Pladizow
Pladizow's picture

Who will buy when the Fed is selling!

What Hedge fund wont front run?

Wed, 11/06/2013 - 15:48 | 4128043 rubiconsolutions
rubiconsolutions's picture

"You tell the man, Blue Horseshoe loves Bernanke Steal."

Wed, 11/06/2013 - 16:01 | 4128095 knukles
knukles's picture

Exit Strategy?
Here's AmeriKa's New and Improved Anal Cavity Search Exit Strategy!

http://lasvegas.cbslocal.com/2013/11/06/man-claims-he-was-anally-probed-...

 

Jesus H Fucking Christ!

Wed, 11/06/2013 - 16:04 | 4128106 Headbanger
Headbanger's picture

By aliens, no doubt!

Wed, 11/06/2013 - 16:22 | 4128174 Colonel Klink
Colonel Klink's picture

By Pigs!

Wed, 11/06/2013 - 16:26 | 4128191 SWRichmond
SWRichmond's picture

this thing doesn't work in reverse very well at all

Well of course not.  The real economy was (and still is) having numerous, serious very real structural problems.  These problems were responded to with wishful thinking, propaganda and imaginary money, created from nothing. 

What could possibly go wrong?

Wed, 11/06/2013 - 17:16 | 4128366 OutLookingIn
OutLookingIn's picture

Empiracle fact;

Once printing to pay obligations has begun,

IT CANNOT END. Period.

To end it? Is to immediately crash the currency being printed, by way of default on the obligations.

How does it end? With so much of the currency being printed, as to render it worthless.

The end result is the same. Question being, bring the end quickly? Or drag out slowly?

Wed, 11/06/2013 - 18:11 | 4128492 Son of Captain Nemo
Son of Captain Nemo's picture

"Question being, bring the end quickly? Or drag out slowly?"...

Ah yes the dilemma for the last curtain call?...

Well if I had to hazard a guess as to what is going through the mind of the Chairman and the board of governors right about now is how do we crash "it" and get on our "private charter flights" without anybody noticing that we've left the Country?


Wed, 11/06/2013 - 18:25 | 4128533 prodigious_idea
prodigious_idea's picture

Could I please get some feedback on the theory that a roll-up or spike in interest rates will drive down the price of PM's as "investors" rotate into higher yielding investments, thereby creating a buying opportunity for the PM faithful?

Wed, 11/06/2013 - 18:35 | 4128567 akak
akak's picture

It would also increase interest payments on federal debt, hence raise the federal budget deficit, hence put pressure on the US dollar, hence increase the pressure of the Federal Reserve to increasingly monetize that debt, hence further depreciating the US dollar, hence cause a further increase in interest rates ....

At what point does the fiat snake fully swallow his tail?

Wed, 11/06/2013 - 19:36 | 4128806 Seer
Seer's picture

Appearing in another country might be as difficults as disappearing from the US.  As I (and others here) have noted, I wouldn't place any bets on there being any safe-haven out there.

Wed, 11/06/2013 - 22:06 | 4129402 acetinker
acetinker's picture

None of that matters until a critical mass of "average joes" realizes that their medium of exchange has been corrupted. That moment, Nemo, is impossible to predict. Physical location is also irrelevant in this day and age.

Money knows no Motherland, it is without patriotism, it knows no boundary and will always seek (through its administrators) to perpetuate itself by any means possible.

Come to think of it, you could quite nearly say the same of "government".

Is this a coincidence?

Wed, 11/06/2013 - 18:40 | 4128585 sleigher
sleigher's picture

It could never work anyways.  It was always going to fail eventually.  All money created in the US was made from nothing and is debt.  Then there was the interest that accumulated so more money would have to be printed and borrowed into the system to cover that interest.  So on and so forth.  It was designed to fail and all the while extract the wealth (labor and time) from the people for the owners of the Fed.  Can we burn it down now?

Wed, 11/06/2013 - 19:37 | 4128813 Seer
Seer's picture

And when you consider that it all rides on top of the totally improbability of perpetual growth on a finite planet...

Wed, 11/06/2013 - 16:56 | 4128287 Cruel Aid
Cruel Aid's picture

Knuckles

Year ago, cops here dual cavity searched two women without changing gloves... for throwing a ciggy but out the window.

They got justice, but whatever. Upstanding nondescript ladies. Thought they smelled weed.

Don't do anything wrong ever again or you get raped by the man.

Edit, the cops were women btw

Wed, 11/06/2013 - 15:48 | 4128044 disabledvet
disabledvet's picture

I think it's called "the Treasury Department" actually. Hence making "Government Exit" problematical actually. Patton never had the chance to "seal the deal" at the Falaise Gap but these equity traders look like they mean business to me. Some of these trades are indeed "un-exit able." But hey...go ahead and laugh away record low interest rates as "a bubble" and "no biggie."

Wed, 11/06/2013 - 16:02 | 4128096 Headbanger
Headbanger's picture

Dig the yellow power tie dude!  It's sooo Gekko! 

Wed, 11/06/2013 - 16:46 | 4128271 Groundhog Day
Groundhog Day's picture

It's easy to drive a car 70 miles an hour but try driving at the same speed in reverse looking in the rear view mirror, not so easy.

Wed, 11/06/2013 - 19:18 | 4128730 booboo
booboo's picture

Everyone is assuming they don't know what they are doing, they know the math, they have run the numbers, they have computers and have war gamed this shit out. See the trick is making everyone believe they are clueless and obviously have done a pretty good job. Trust me, they know exactly what is coming sans the human response and for that they have the DHS, a billion bullets and pimps with badges. Donut pussy's will be on high anal probing alert come 3rd quarter 2015.

Wed, 11/06/2013 - 22:36 | 4129477 acetinker
acetinker's picture

booboo, I dunno how you came to have forecasting qualities, but the donut pussies are on alert right now.  You ain't lived until you've had a group of donut pussies slam you face-down to the pavement.  Just sayin'.

Wed, 11/06/2013 - 19:39 | 4128822 Seer
Seer's picture

with flat tires

and an inability to see the cliff...

[wondering whether this is going to be caught on video...]

Wed, 11/06/2013 - 15:44 | 4128028 SheepDog-One
SheepDog-One's picture

I believe the actual 'exit strategy plan' will just be 1 morning everyone will have been MF Globalled, everything gone, with a 'try back sometime later' on your trading account login.

Wed, 11/06/2013 - 15:49 | 4128046 Dr. No
Dr. No's picture

We should call it "Exit tactic".  The strategy is to steal everyone's money.  If putting it into reverese accelerates the strategy, its a tactic.

Wed, 11/06/2013 - 16:19 | 4128100 knukles
knukles's picture

Oh, kinda like the ObieDontGiveAFuck healthcare sites?

"Don't work for me!"

Yeah, same as GE closing it's US plant to shift all the X-Ray stuff to China.
Hey, ain't Imelt in charge of Obies jobs team?

 

Wed, 11/06/2013 - 19:40 | 4128831 Seer
Seer's picture

Can conterfeit really be stolen?

I think of it more along the lines of a big recall... you know, a defective product.

Wed, 11/06/2013 - 16:43 | 4128259 SWRichmond
SWRichmond's picture

I believe the actual 'exit strategy plan' will just be 1 morning everyone will have been MF Globalled, everything gone, with a 'try back sometime later' on your trading account login.

And it will all be the Tea Party's fault.

Wed, 11/06/2013 - 19:43 | 4128843 Seer
Seer's picture

Why does everyone have to set themselves up as martyrs?

When the Big Bang comes people will be way too busy trying to survive than in being engaged in political/ideological stuff.  Will there be scapegoating?  Do humans shit?

 

Wed, 11/06/2013 - 15:38 | 4128011 jballz
jballz's picture

fuckin brilliant.

Wed, 11/06/2013 - 15:40 | 4128016 Dr. Engali
Dr. Engali's picture

We knew from the beginning there was never an exit strategy. All talk of exiting is pure b.s. The fed has no choice but to print moar.

Wed, 11/06/2013 - 15:41 | 4128021 fonzannoon
fonzannoon's picture

It drives me crazy that we still discuss an exit strategy. 

Wed, 11/06/2013 - 16:10 | 4128125 Dr. Engali
Dr. Engali's picture

It makes me wonder if they are really that stupid where they believe the fed can exit or if they are just in on the game trying to lend the fed some legitimacy.

The only exit strategy is what it always has been when debt is too high.... War.

Wed, 11/06/2013 - 20:00 | 4128922 Seer
Seer's picture

They're buying time to paint the bullsye.

Wed, 11/06/2013 - 15:55 | 4128073 DaveyJones
DaveyJones's picture

all the world's a stage - Shakespeare

exit, stage right - Snagglepuss

Wed, 11/06/2013 - 16:17 | 4128159 therevolutionwas
therevolutionwas's picture

"We" knew.  They (sheeple) don't.   The sheep will be shorn.

Wed, 11/06/2013 - 15:40 | 4128017 RaceToTheBottom
RaceToTheBottom's picture

Exit strategy :

Look, Squirrel!!!

 

That is the nuts of it....

Wed, 11/06/2013 - 15:43 | 4128025 Dr. No
Dr. No's picture

what most people don't know is that this thing doesn't work in reverse very well at all

 

BS!   Most people know it doesnt work well in reverse.

Wed, 11/06/2013 - 15:50 | 4128054 Dull Which
Dull Which's picture

Most people don't know it doesn't work

Wed, 11/06/2013 - 20:24 | 4129042 Not Goldman Sachs
Not Goldman Sachs's picture

What doesn't work?

Wed, 11/06/2013 - 16:06 | 4128120 therevolutionwas
therevolutionwas's picture

Most people don't know it exists.

Wed, 11/06/2013 - 15:46 | 4128030 moneybots
moneybots's picture

"A lot of what we hear is the Fed's exit strategy … what most people don't know is that this thing doesn't work in reverse very well at all."

 

With 47 million on food stamps and real unemployment over 10%, it doesn't work very well in forward either.

Wed, 11/06/2013 - 16:57 | 4128309 Temporalist
Temporalist's picture

Nation's poor at 49.7M, higher than official rate

"WASHINGTON (AP) -- The number of poor people in America is 3 million higher than the official count, encompassing 1 in 6 residents due to out-of-pocket medical costs and work-related expenses, according to a revised census measure released Wednesday."

http://hosted.ap.org/dynamic/stories/U/US_CENSUS_POVERTY?SITE=AP&SECTION...

Wed, 11/06/2013 - 17:38 | 4128417 Rainman
Rainman's picture

Poor people in Murka ? ...you want po people you go visit Port-au-prince

Wed, 11/06/2013 - 17:44 | 4128434 CrashisOptimistic
CrashisOptimistic's picture

Two steps are required for the poor to matter:

1) They have to pick up rifles and snipe leadership.

2) They have to get to a microphone and tell the people that's what they did.

 

The recent avalanche of shooters are not quite getting there.  They aren't shooting leadership and they are all getting snuffed during the event, pre-microphone.

Note that this does differ from the past.  In the past, general strikes had power over politics.  Now, no one has a job to strike from.

Wed, 11/06/2013 - 18:28 | 4128540 Son of Captain Nemo
Son of Captain Nemo's picture

"The recent avalanche of shooters are not quite getting there."...

Since when have any of these "lone gunmen stories" been thoughtfully concluded in a court of law that didn't withhold evidence that had a jury that wasn't rigged?

Just in the last year alone: Aurora, Sandy Hook, D.C. Navy Yard, Boston Marathon...

Definitely a reason why these will never get resolved!

Wed, 11/06/2013 - 15:46 | 4128034 SheepDog-One
SheepDog-One's picture

The scary part is, everyone has been conditioned to just believe they'll keep it going, and no one suspects they'll just pull the rug out one morning. 

Wed, 11/06/2013 - 15:46 | 4128038 fonzannoon
fonzannoon's picture

"they need to get money into the hands of the people"

So send some fuckin checks out to all of us. Why is it so hard?

Wed, 11/06/2013 - 15:49 | 4128047 SheepDog-One
SheepDog-One's picture

Sure, if they really just wanted to get money in the hands of people, for fucks sake they could have just sent out checks for $1,000,000 to every american adult and that would have been a drop in the bucket compared to what they've done.

'Money into peoples hands'....nonsense.

Wed, 11/06/2013 - 15:54 | 4128068 Dr. No
Dr. No's picture

They sure as hell send out a tax invoice to every adult pretty efficiently.

Wed, 11/06/2013 - 17:48 | 4128442 CrashisOptimistic
CrashisOptimistic's picture

ZH still hasn't accepted the drain.

There is an ongoing drain of money from banks.  The mortgage defaults are destroying money from the money supply.  Ben has to replace it or face crushing deflation and ATMs that stop working.

So he is faced with more than "sending checks to the people".  Doing that won't stop the mortgages more or less already defaulted from being declared as such.  That ends the banks.  That ends the ATMs.

Wed, 11/06/2013 - 15:48 | 4128042 bagehot99
bagehot99's picture

Hey Pimco.

 

Pimco?

 

Bill?

 

Hello?

 

I think we got cut off.

Wed, 11/06/2013 - 16:18 | 4128160 FieldingMellish
FieldingMellish's picture

"The number you dialed is no longer in service."

Wed, 11/06/2013 - 15:51 | 4128058 NOTaREALmerican
NOTaREALmerican's picture

Damn, the growth crank only turns clickwise on this Magic "Keynesian" Perpertual Growth Economic Ponzi Machine.  

How are we unwind if you can't turn the crank the other direction?  

Oh well, who needs to unwinded anyway...

Wed, 11/06/2013 - 17:25 | 4128392 Dr. No
Dr. No's picture

Are you sure that crank they are turing is not a meat grinder?

Wed, 11/06/2013 - 15:54 | 4128070 kchrisc
kchrisc's picture

Always easier to start stealing than to stop.

Wed, 11/06/2013 - 16:03 | 4128101 therevolutionwas
therevolutionwas's picture

And they probably won't stop until there is nothing left.  Hide your gold.

Wed, 11/06/2013 - 16:22 | 4128169 TrumpXVI
TrumpXVI's picture

With global 1% real growth, it's back to a zero sum game. 

The only way to gain wealth is to:

1) kill the other guy, then

2) steal his shit, then

3) rape his wife, then

4) enslave his kids......

.......the same as it always was before the enormous wealth creation machine called the industrial revolution got started two hundred years ago.

Wed, 11/06/2013 - 20:43 | 4129112 Seer
Seer's picture

So, you're saying that life really wan't so great before the Fed and before "the rule of law?"  Naw, I'm not buying it! </sarc>

BTW - Kudos for properly identifying reality.

Wed, 11/06/2013 - 15:56 | 4128074 HardlyZero
HardlyZero's picture

As long as there is road ahead then its a 'can kicking' strategy.

Ancient method.

Now, who builds that road ahead ?  That is the question we must answer every day.

Tough question for the mirror.

Star Trek, Tesla, and Twitter won't do the job.

/waiting

Wed, 11/06/2013 - 15:57 | 4128075 rufusleaking
rufusleaking's picture

Fed never has to sell.  Why would they sell?  Just wash it.  That's what everyone is missing.  Just instilling more fear with exit strategy nonsense. 

Wed, 11/06/2013 - 17:12 | 4128359 yogibear
yogibear's picture

Make the debt disappear. Move it to their off-balance sheet. Plenty of Fed bad debt has gone there.

Wed, 11/06/2013 - 17:54 | 4128457 CrashisOptimistic
CrashisOptimistic's picture

Pretty much that.

Who cares what is on the balance sheet of an entity that can create money effortlessly?  If a treasury instrument matures, just zero it.  Treasury can send a check to redeem the item and the Fed can return the check.  Done.

The exit strategy is to simply do nothing about the balance sheet.  It will fix itself.

The real problem are the underlying forces destroying civilization and forcing continued default of mortgages on bank balance sheets.  It is those that force the Fed to print.  Defaulted mortgages are money that disappears.  That is deflation.  So the Fed must print to replace it.

It is those forces (smashed joules ratio for oil, automation's destruction of low IQ jobs) that are defeating the Fed.  They print to try to offset those, but they are forever.

 

Thu, 11/07/2013 - 10:51 | 4130718 NihilistZero
NihilistZero's picture

 

Damn Crash, you really get it.  As much as people bitch about QE (including myself) The fact is they'd be pretty pissed if they went to the ATM and discovered first hand what "unsecured creditor" really means.  The Bernanke, while quite the cunt, is in effect bailing out the people's savings by clearing the banks bad assets.  He's doing the job the FDIC couldn't do if they had to.  Tapering will come as they've gotten as much traction out of Housing Bubble 2.0 as they can.  When the crash hits Blackstone and the rest will liquidtae in the way the banks couldn't without destroying the people's savings.  The MBS trash gets written of the FEDs balance sheet and life goes on.  We've known for a while the FED is THE Bad Bank now and in hindsight we'll all probably say that (post 2008) it was the only way it could be done without blowing up the entire thing.  The Wall Street run up is the distraction so no one focuses on the continuing bank bailout,  which in reality is a bailout of the muppets saving accounts.

 

 

Wed, 11/06/2013 - 16:00 | 4128090 orangegeek
orangegeek's picture

MOAR MOAR MOAR MOAR!!!!!

 

BUY MOAR!!!!

Wed, 11/06/2013 - 16:01 | 4128093 Rehab Willie
Rehab Willie's picture

Maybe they hope the world will end before the jig is up.

Wed, 11/06/2013 - 16:02 | 4128097 WhiteWolf
WhiteWolf's picture

 Bankers taking swan dives off wall street rooftops.....exit strategy...

Who wants to judge..New Olympic sport

Wed, 11/06/2013 - 16:17 | 4128158 FieldingMellish
FieldingMellish's picture

Combine it with skeet shooting and I'm all in.

Wed, 11/06/2013 - 16:08 | 4128127 WhiteWolf
WhiteWolf's picture

The best will be labels "1929" crash dive. Just wish we could call it the DIMON TRIPLE BACK FLIP

Wed, 11/06/2013 - 16:14 | 4128146 therevolutionwas
therevolutionwas's picture

Yellon belly flop.

Wed, 11/06/2013 - 16:11 | 4128137 WhiteWolf
WhiteWolf's picture

Come on Bandai. I m sure you could come up with a few from that competition.

Wed, 11/06/2013 - 16:16 | 4128156 WhiteWolf
WhiteWolf's picture

Christy cannon ball ......www what a mess

Wed, 11/06/2013 - 16:16 | 4128157 WhiteWolf
WhiteWolf's picture

Christy cannon ball ......www what a mess

Wed, 11/06/2013 - 16:18 | 4128161 Seal
Seal's picture

Bernanke's exit strategy is to leave the Fed with markets at all time highs, gold suppressed, the US dollar as spiffed up as possible and turn the whole mess over to the next guy. 

Bernanke thinks he will not have to live with any consequences of his incompetance - he gets a Govt. pension, health care [no Obamacare here], all paid for by us chumps who are ultimately responsible for the Feds inanity

Wed, 11/06/2013 - 16:26 | 4128192 robertocarlos
robertocarlos's picture

That's right up there with "Playoff?" or "We're talking about a practise". 

Wed, 11/06/2013 - 16:28 | 4128196 thismarketisrigged
thismarketisrigged's picture

exit strategy, ha ha, like these assholes have an exit strategy.

 

then again, these are the same fucks who claim that there are no bubbles in the markets, go figure.

Wed, 11/06/2013 - 16:30 | 4128205 NoTTD
NoTTD's picture

I'd be more impressed if Martenson hadn't been wrong about so many things in the past.

Wed, 11/06/2013 - 16:39 | 4128244 FubarNation
FubarNation's picture

I think Ozzy said it best when he said 'We're going off the rails on a QE train'.

Wed, 11/06/2013 - 16:45 | 4128267 MrBoompi
MrBoompi's picture

Yes, you can rest assured before the "great reset" the financial elite will be placed in position to receive the greatest wealth transfer in the history of the world.  Which means 99.99% will be on the losing end.

Wed, 11/06/2013 - 17:31 | 4128402 NOTaREALmerican
NOTaREALmerican's picture

If the dumbasses are happy it just means the sociopaths haven't taken enough from them.

Survival of the fittest isn't easy to watch, but it's a natural process.   The sociopaths eat the dumbasses alive.

Wed, 11/06/2013 - 16:46 | 4128272 Sufiy
Sufiy's picture


Taper Anyone? China, Interest Expense On The U.S. Debt Outstanding And Gold. 


  US Dollar is running wild today trying to understand the FED's talk. "We will taper at some point data permitting, but will keep ZIRP until 2016 now" - with this kind of double talk from the both sides of the mouth anyone can get confused very soon. What is the best cure from the Taper Impulsive Disorder?  - Higher Interest Rates.ZeroHedge reports that they are moving up fast with the first sign of Taper confusion in the headlines and below you can find the reason why it is impossible to Taper anything now.    Amount of US debt is so huge at 17.1 Trillion, that interest expense is one of the largest on record even with record low interest rates and stands at 415.7 Billion in 2103. Now double it and apply to US Economy general statistics, then do the same after listening to John Williams from shadowstatistics.com about the real numbers. We guess that Chinese have run these numbers long time ago and buying all physical Gold now they can get. http://sufiy.blogspot.co.uk/2013/11/taper-anyone-china-interest-expense-on.html#

Wed, 11/06/2013 - 20:51 | 4129141 Seer
Seer's picture

Wasn't it the French and others who got stiffed the last time the US "defaulted?"  That is, I believe that when Nixon cut the remaining strings on the USD it was because of threats from the French to redeem their USDs.  I figure that the rug will get pulled out from under China: and, it's most likely that there's already backroom talks between higher levels of both governments- it's not that either benefit, but that this is really just a mutual death-dance and that they know it.  How to create the storyline as to how to default without it being called such...

Wed, 11/06/2013 - 21:15 | 4129223 Trampy
Trampy's picture

Wasn't it the French and others who got stiffed the last time the US "defaulted?"  That is, I believe that when Nixon cut the remaining strings on the USD it was because of threats from the French to redeem their USDs.  I figure that the rug will get pulled out from under China:

Yup!  When Nixon closed the gold window in 1971 it was done mainly to pull the rug out from Charles de Gaulle who had pulled out of NATO in 1966.  You don't mess with the biggest bully in the world and not suffer consequences.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/11/AR2009031100547.html

 

Wed, 11/06/2013 - 21:28 | 4129282 robertocarlos
robertocarlos's picture

Watched a video today about this and I am disappointed with Nixon that he did not end the Federal Reserve instead. I used to like Nixon before today. guess he wanted to live a long life and yet he was always ranting about Jews.  I imagine he was not that powerful.

Wed, 11/06/2013 - 17:25 | 4128391 Winston Smith 2009
Winston Smith 2009's picture

Exit strategy:

Roll credits: Dish shuttering its remaining 300 Blockbuster stores

http://blogs.marketwatch.com/behindthestorefront/2013/11/06/roll-credits-dish-shuttering-its-remaining-300-blockbuster-stores/

Wed, 11/06/2013 - 17:29 | 4128401 Goldilocks
Goldilocks's picture

Bon Jovi - Runaway
http://www.youtube.com/watch?v=s86K-p089R8 (4:19)

Wed, 11/06/2013 - 17:36 | 4128410 Jackagain
Jackagain's picture

The sysytem in a large nut shell....

Money as debt and the petro Dollar explained through US history: http://www.youtube.com/watch?v=VSg5yZvnJf8
https://hiddensecretsofmoney.com/blog/the-biggest-scam-in-the-history-of-mankind
https://hiddensecretsofmoney.com/
Wed, 11/06/2013 - 20:53 | 4129149 Seer
Seer's picture

Apriori...

Convincing ourselves that we could model an ecnomic system on perpetual growth on a finite system.  All else only rides on top of this...

Wed, 11/06/2013 - 18:14 | 4128505 devo
devo's picture

this guy costs people millions by telling them to buy pms instead of stocks. just saying.

Thu, 11/07/2013 - 00:26 | 4129739 ricky663
ricky663's picture

He does say he does not know when the reset will occur, our financial system is complex, difficult to predict black swan events, etc.
What can you do if your equities go down 70% overnight (hold protective puts, which lose value due to never-ending "excessive liquidity" I suppose)?
You are correct, being net short is suicide in today's (never ending QE4EVA) markets.
Timing is a bitch, ya know?

BTW.... Man crush. This guy articulates and makes sense better than most. I have positioned my family to survive the upcoming reset / bond market meltdown (whenever that may come).

Wed, 11/06/2013 - 18:18 | 4128514 yogibear
yogibear's picture

Fed lowered it's umemployment taget Their QE surge is coming next. From $85 billion/month to $170 billion/month?

Wed, 11/06/2013 - 18:27 | 4128539 blindman
blindman's picture

real assets can also be a liability,
people can only avoid the discernment
of quality for so long and quality, too, is a
relative and temporal term; so the problem might
be even larger than discussed above would suggest.
it might be different this time?
"keep it out of the mud". steve used to say
that to me all the time as an alternate to
"goodbye" or "see you later".

Wed, 11/06/2013 - 20:57 | 4129166 Seer
Seer's picture

Apparently "steve" wasn't a hog farmer :-)

And speaking of hogs, I'd say that hogs would be a "real asset."  Food, Shelter and Water, all of the practical and functional sort (not garrish).

Wed, 11/06/2013 - 21:05 | 4129183 blindman
blindman's picture

steve was no farmer, i think he was referring
to driving a vehicle on blacktop or other road
surfaces commonly understood to provide traction;
the mud is fine and good but provides no traction.
.
thanks mark.

Wed, 11/06/2013 - 18:46 | 4128607 Zymurguy
Zymurguy's picture

Um, yeah... fractional reserve lending is a bitch going the other way.

Wed, 11/06/2013 - 20:59 | 4129170 Seer
Seer's picture

I've been stating it all as "economies of scale in reverse," though targeting pricing/affordability as pertains to manufacturing costs (things relying on large volumes will have their margins hammered as things become less affordable to most- and it does so in rapid fashion).

Wed, 11/06/2013 - 19:01 | 4128659 blindman
blindman's picture

in the normal course of a bank robbery the
correct term is not "exit strategy", it is
"get away" as in a "get away plan",
for the record.

Wed, 11/06/2013 - 19:22 | 4128744 Goldilocks
Goldilocks's picture

Sesame Street: Gangsters -An Plan
http://www.youtube.com/watch?v=hbJecXQ1Hgk (3:03)

Wed, 11/06/2013 - 19:36 | 4128807 blindman
blindman's picture

The Meters "Cissy Strut"
http://www.youtube.com/watch?v=5X-6_0YqgeI
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CHUCK BERRY Too Much Monkey Business Sep '56
http://www.youtube.com/watch?v=W2nRjGHE620
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thanks, that was funny !

Wed, 11/06/2013 - 19:04 | 4128675 world_debt_slave
world_debt_slave's picture

there's no exit strategy, just can kicking 'till it' can't be kicked no more.

Wed, 11/06/2013 - 20:12 | 4128998 nathan1234
nathan1234's picture

The only exit strategy to be thought is about themselves and their future - The Fed & other Central Bankers.

How to escape being taken into account/jailed and also how not to be lynched by the mobs !

The financial system is beyond redemption.

Wed, 11/06/2013 - 22:50 | 4129509 Wilcox1
Wilcox1's picture

Moar Chris Martenson, Please (Esp the Vids)

Also Druckenmiller, Bass, Faber,,,,

Thu, 11/07/2013 - 03:33 | 4129963 polo007
polo007's picture

http://www.safehaven.com/article/31717/the-ecbs-tough-balancing-act-bubbles-vs-deflation

Today, a small group of central bank chiefs can meet in private and wield unprecedented power over global markets, economies, and wealth distribution. They are held accountable to the ruling politicians that in most cases have no respect for the principle of sound money. Instead, in Europe, the UK, Japan, the US, and elsewhere, central bankers have become intricately linked to monetizing government debts, and financing the expansion of the welfare state. As such, disciplined and independent central banking, a cornerstone to any hope for sound money and credit, has been relegated to the dustbin of history.

Central banking, - ostensibly designed to combat high levels of inflation and promote economic growth, while overseeing the stability of the banking industry, has instead, morphed into technocratic planning boards that are constantly involved in rigging the value of the financial markets. Their principal modus of operandi is to encourage risk taking in the local stock markets, through massive injections of ultra-cheap liquidity. However, the result isn't better economic conditions, but rather the expansion of massive bubbles in various financial markets. In turn, central bankers have widened the wealth gap between the owners of equities, and the rest of the struggling population whose wages are sliding backwards, and is increasingly seeking out assistance through welfare programs.

Historically, the value of the stock market reflected the dynamics of the local economy, and would influence the social mood of the populace. A stock market that is booming would signal an up-and-coming economy that would be followed by increased business investment and the creation of good paying jobs. Rising share prices boost the fortunes of about 10% of households in the country, and triggers a greater propensity to spend for goods and services - otherwise known as the "trickle down" effect. Therefore, keeping a constant vigil on the behavior of the stock market, - has become the raison d'être of central banks.

In earlier times, stocks traded on the local stock exchange used to track or even anticipate the nation's business cycle. But that reliable role as a leading indicator began to seriously break down after the financial crisis of 2008. Since then, because of the hallucinogenic effects of "quantitative easing" (QE), - stock markets are no longer reflections of the health of the local economies or forecasting mechanisms of the business cycles. Instead, they are just slices of ownership in specific companies that are unreliable gauges of anything but the underlying strength of the companies they represent, their dividend payments and buybacks, and the schizophrenic mind-set of the traders who buy and sell the shares.

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