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David Stockman Fears "Panic" When The "Lunatic" Fed "Loses Control"

Tyler Durden's picture


"It's only a question of time before the central banks lose control," David Stockman warns a shocked CNBC anchor, "and a panic sets in when people realize that these values are massively overstated."

The outspoken author of The Great Deformation rages "the Fed is exporting its lunatic policies worldwide," as central banks around the world have followed the Fed's lead, "for either good reasons of defending their own currency and their trade and their exchange rate, or because they're replicating the Fed's erroneous policies."

If one cares to look, Stockman adds, "there are bubbles everywhere," citing Russell 2000 valuations of 75x LTM earnings as an example, "that makes no sense. It's up 43% in the last year, but earnings of the Russell 2000 companies have not increased at all." This is dangerous, he strongly cautions, "I haven't seen too many bubbles in history" that haven't ended violently.

"I'm not drinking the Kool-Aid..."

"Central banks all over the world have been massively expanding their balance sheets, and as a result of that there are bubbles in everything in the world, asset values are exaggerated everywhere." 



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Wed, 11/27/2013 - 16:55 | 4194785 King_of_simpletons
King_of_simpletons's picture

Sheep is getting ready to plunge into the stock market in the new year. The thought is that Yellen Fed will be glorious for the stock market and I say why not !

Wed, 11/27/2013 - 17:03 | 4194823 Pladizow
Pladizow's picture

Not the type of Boo-Ya that CNBS appreciates!

Wed, 11/27/2013 - 17:05 | 4194826 Chris Jusset
Chris Jusset's picture

David Stockman says:

"There are bubbles everywhere!"

BRAVO!  100% correct!

Wed, 11/27/2013 - 17:05 | 4194831 Rainman
Rainman's picture

O The humanity  ..... Happy Fukkin Thanksgiving !!!

Wed, 11/27/2013 - 17:09 | 4194846 Chris Jusset
Chris Jusset's picture

The Fed is intentionally blowing massive bubbles everywhere, with 5+ years of non-stop ZIRP, QE, debt monetization (thanks to massive deficit spending), and bailouts.

Wed, 11/27/2013 - 17:11 | 4194864 smlbizman
smlbizman's picture

have to capture those year end seps and ira could possibly go wrong...30% returns forevere mutha fucka...thats black talk right dar..

Wed, 11/27/2013 - 17:19 | 4194884 Enslavethechild...
EnslavethechildrenforBen's picture

The stock market has never ever gone down.
Gold has never ever gone up.

Anybody with any brains would be tapering out of stock in to metal about now

Wed, 11/27/2013 - 17:30 | 4194927 hedgeless_horseman
hedgeless_horseman's picture



This holiday, I give thanks that I am not a fascist CNBC presstitute.  My soul is worth more than what they are paid.

Wed, 11/27/2013 - 18:09 | 4195049 DaddyO
DaddyO's picture

Being a man of principle in this day and age is quite dangerous, don't you think?


Wed, 11/27/2013 - 20:31 | 4195417 Overfed
Overfed's picture

I don't know about that, but I can say that it sure doesn't pay well.

Wed, 11/27/2013 - 21:18 | 4195584 Oldwood
Oldwood's picture


Wed, 11/27/2013 - 22:43 | 4195796 wisehiney
wisehiney's picture

Dangerous and worth it.

Wed, 11/27/2013 - 18:32 | 4195108 DeadFred
DeadFred's picture

Your soul may be worth more but what is theirs worth? Maybe they're getting the appropriate compensation.

Wed, 11/27/2013 - 20:36 | 4195435 DaveyJones
DaveyJones's picture

Good point Fred. You see, deflation and inflation ARE both occuring

Wed, 11/27/2013 - 18:42 | 4195129 fockewulf190
fockewulf190's picture

"This holiday, I give thanks that I am not a fascist CNBC presstitute.  My soul is worth more than what they are paid."

Please say a prayer for Sarah Eisen, who sold her soul to the Post9 devil and will be joining the CNBS crew come Dec.12th.  

Wed, 11/27/2013 - 18:56 | 4195167 Everybodys All ...
Everybodys All American's picture

Bloomberg is not a helluva lot different than CNBS. If you've ever listened to Tom Keene you know exactly what I mean. So I don't think she's going into this situation blind.

Wed, 11/27/2013 - 17:22 | 4194900 krispkritter
krispkritter's picture

A whole bunch of bubbles in search of a prick, blown by a whole bunch of pricks...

Wed, 11/27/2013 - 17:44 | 4194972 HardlyZero
HardlyZero's picture

Stockman's comment "asset values are exaggerated everywhere"...its not necessary there are bubbles everywhere, or one big bubble.

There are lots of prickly things and any prick can do the trick, and start an avalanche or if 'one bubble' that binds them all.

Matrix Resolutions, coming in 2014 ?

Wed, 11/27/2013 - 23:09 | 4195859 TheReplacement
TheReplacement's picture

Paging Doctor Jarrett.  Paging Doctor Jarrett.

Wed, 11/27/2013 - 17:24 | 4194912 I am Jobe
I am Jobe's picture

nah they will be paying their fucking bills after Black Friday. 

Buy something for 1.99 and pay 20.699 in interest. Never underestimate the power of US Consumers

Wed, 11/27/2013 - 18:25 | 4195088 Clayton Bigsby
Clayton Bigsby's picture

I like Mandy Drury, but I sure wish the interviewers would shut the fuck up for a change and let their guests talk.

Wed, 11/27/2013 - 16:55 | 4194792 Four chan
Four chan's picture

i read stockmans book in the early 90s and he was talking the same shit back then too, not that he is wrong.

hes just not tradable.

Wed, 11/27/2013 - 17:39 | 4194954 atomicwasted
atomicwasted's picture

The Fed can keep stimulating longer than I can remain solvent.

Wed, 11/27/2013 - 17:54 | 4195002 Gringo Viejo
Gringo Viejo's picture

@atomic: Keep stackin' brother. As the platoon sniper said to his buds about the tanks they were facing during the Battle of the Bulge.........."Unless they don't mind sleepin' in their own shit, they gotta climb outta that can sometime."

Wed, 11/27/2013 - 20:38 | 4195440 DaveyJones
DaveyJones's picture

but they can't keep stimulating longer than they can

Wed, 11/27/2013 - 17:42 | 4194966 Kirk2NCC1701
Kirk2NCC1701's picture

"hes just not tradable" totally nails it, and applies to all people who present a permanent-bull, permanent-doom position of the world.

You can't front-run it or trade on it.  Eventually this permanency in optimism or pessimism (especially the latter) is about as useful as the weather man who forecasts eternal sunshine or eternal cloud and rain.

What we really want from these "experts" is info we can act on.  In the next 12 months.  I don't need to pay for a "winter is coming" forecast, and I assume/hope you don't either.

These Bulls/Doom_Bears are reminiscent of a pairing of (Bouncy) Tigger vs. (Downer) Eeyore:

Tigger:  "Eeyore (Tyler), it's gonna be great1"


Wed, 11/27/2013 - 17:59 | 4195016 barroter
barroter's picture

Agree. The "We're all gonna DIE" crowd vs. the "Forever Puppies and Lollipops" types can get tiring.  What I want is rationality and that's not easy to find.

Wed, 11/27/2013 - 18:10 | 4195052 alangreedspank
alangreedspank's picture

It's called technicals. That's what you trade on. Day trade on. Unless you are a long term investor a la Jim Rodgers.

Wed, 11/27/2013 - 19:21 | 4195188 scrappy
scrappy's picture

Who knows but Armstrong says 2015.75 is major.

Volatility between the near future and then.

I like CHS's "stairstep" theory, slow frog boil with added steps to scare the people from doing anything then they offer calming "normalcy" bias, in a series of cycles, until the watershed event.

Could happen at any time if you see what I see.

But this seems to keep going so perhaps Armstong is on to something. His predictions continue from there but get foggy as to what we will decide to do as a society.

(Consensus in Crisis)



Wed, 11/27/2013 - 20:04 | 4195334 Obchelli
Obchelli's picture

He also said marjet would go straight down from aug-sep 2013 to aug 2014.

And although market initialy went down on debt ceiling and gove shut down bs. It retraced all and hitting all time highs on daily basis

Thu, 11/28/2013 - 12:50 | 4196878 BigJim
BigJim's picture

 You can't front-run it or trade on it.  Eventually this permanency in optimism or pessimism (especially the latter) is about as useful as the weather man who forecasts eternal sunshine or eternal cloud and rain.

Damn right! We don't want someone to tell us what's fundamentally wrong with the economy so we can hopefully educate the sheep and elect people who will represent us and stop the ship foundering; no, we want people who can tell us how to win in the on-ship casino so we can be the richest guys on board as we all go down with the ship!

Wed, 11/27/2013 - 18:14 | 4195068 steelhead23
steelhead23's picture

What Mr. Stockman did not say, but likely knows, is that the FED is trapped by its own policy and has no motivation to stop serving its masters - the international banking cartel.  Were the FED to curtail its bond purchases, payments for excess reserves, and ZIRP a rapid, and possibly uncontrollable deflationary sell-off would occur.  The impact would be huge.  So, until Hell freezes over, Yellen and company will continue to pour on the coals.  While I believe asset prices will continue to rise until some event tips the hornet's nest, traders playing in these markets should remain aware that they are playing with hornets - and so is the Fed.

Wed, 11/27/2013 - 19:16 | 4195216 Nick Jihad
Nick Jihad's picture

You're right. All the Fed hopes for now, is not to be perceived as the trigger. So it's ZIRP-on and taper-off, until war in the Middle East, or some similar crisis, provides cover to change policy.

Wed, 11/27/2013 - 22:43 | 4195797 Breaker
Breaker's picture

It has really trapped by the federal deficit combined with it's own policies. The fed would have a lot more playing room if the budget were balanced. That said, the fed has voluntarily become the enabler of Congress addiction. So both are to blame for the corner they have painted themselves into. As well as the people who elected them.

Wed, 11/27/2013 - 16:56 | 4194794 Long-John-Silver
Long-John-Silver's picture

The panic will begin when (Physical) Gold spikes like Bitcoin despite paper gold dumps.

Wed, 11/27/2013 - 17:10 | 4194849 zaphod
zaphod's picture

The panic in gold will be downwards. It will happen as more and more people who have held gold for years as the "end of the FED hedge" start to realize that the Bitcoin just might emerage as the winner this situation, and decide that they should allocate some portion of gold holding into BTC. Anyone paying attention to the Gold/BTC ratio for the past several years can see this.

BTW, I have been a holder of Gold and goldbug for many many years, but am started to see the above.

Wed, 11/27/2013 - 17:21 | 4194897 Enslavethechild...
EnslavethechildrenforBen's picture

Goldbugs don't ever panic. The lower the price goes the more we buy everything in site...

Wed, 11/27/2013 - 18:00 | 4195019 Kirk2NCC1701
Kirk2NCC1701's picture

Normal people buy, hold  and eventually sell their assets, when and as it is profitable to do so.

This does not apply to gold bugs:  No matter the economy, they ALWAYS have a good story for why you should buy gold.  To them... "It's always a good time to buy".  E.g. "Sure it's going up, but this means that you should buy before it goes higher".  Else, it's "Sure it's down, but this is a good time to buy it cheap".

Q: In what other industry and what other agents have we heard that before?  Real Estate!

Never forget that basics of nature, math and human nature, and never forget to determine how your "investment adviser" is making his/her living:  Off you and people like you. 

Plan, invest and gamble accordingly.

Wed, 11/27/2013 - 17:32 | 4194934 Spitzer
Spitzer's picture

BTC is a transaction currency. It doesn't have to have any value at all to work. Just like Jamaican dollars. So when the paper gold market buckles and the bond bubble bursts, your BTC will have as much value as Jamaican dollars.

Wed, 11/27/2013 - 18:03 | 4195036 Dealer
Dealer's picture

The BTC protocol has value in my opinion.

Wed, 11/27/2013 - 20:34 | 4195428 Mudduckk
Mudduckk's picture

Yep its a currency. But it also has value. Let alone it saves people transaction costs in terms of both time and money, it has crisis value.


When the whales hit the BTC ask in a fiat currency crisis ala Cyprus. It has value. Per Jim R, the world is flooded with a sea of liquidity. 12M BTC versus 12TUsd fiat units getting liquidated in a bail in. 


The Bitchcoin has value.

Wed, 11/27/2013 - 21:21 | 4195592 Papasmurf
Papasmurf's picture

You are speculating, there is no evidence that bitcoin is durable through a crisis.

Wed, 11/27/2013 - 23:24 | 4195891 Mudduckk
Mudduckk's picture

ns sherlock. Cyprus is an n of 1. i need a set of 6 to form a statistical basis. But I was never too good at stats.

I can however divide out zeros, the six lieing between 12M and 12T, BTC to USD and a Yellen on deck. thats six zeros. Thats a tail risk option cheaper than anything KBass can buy, and its just lying there for retail to just pickup. i thought it was worth the risk at double digits, n i liked it in the hundreds. some of the juice is traded out at 1000 to be sure, but I can trade the vol. Charts an easy read. its like the SnP on roids. Buy the dip. sell the new all time high. And repeat.

Thing about a low growth world drowning in a sea of liquidity. Another currency crisis is just around the corner. I could see it with Cyprus. And all the ECB denial about bail ins not becoming SOP for crisis, but the IMF confirms bail in on the table. Its all right here on ZH. And just yesterday a story about US Banks needing to charge for deposits. Yep Fiat is dying. The sea is drying up.

Tell you what. Wait until after the sixth isolated currency crisis, and then provide us your sage and scholarly advice, "Papasmurf has determined that currency crisis indeed correlates Bitcoin positive."

Thanks for saving us from our own stupidity.



Wed, 11/27/2013 - 17:43 | 4194973 mt paul
mt paul's picture

when bit coin

strikes a gold or silver coin


i'll invest in bit coins..

Wed, 11/27/2013 - 17:51 | 4194984 HardlyZero
HardlyZero's picture

Like all blowouts it will be good to see weak hands leave Gold. 

Gold is atomic with nothing in-between the atoms, no ether, no net.

Bitcoin is whimsy internet fluff.

How does BitCoin store Wealth, it all requires a modern internet market for pricing ?

Facts ?

Wed, 11/27/2013 - 18:51 | 4195156 Things that go bump
Things that go bump's picture

I recall a few years back some Italian family tried to smuggle their gold hoard into Switzerland and got caught with all that lucre hidden in their car, and it was a lot. The Italian government confiscated it and was going to make them prove ownership. I bet all that gold is still in the hands of the Italian government. The owners have little chance ever prying it from those greedy, grasping increasingly desperate hands. Now, if they had quietly sold it, converting the money into bitcoin they could have crossed with no one the wiser, and converted that bitcoin back into gold on the other side of the border, where it would now be sitting safe in some bank deposit box in Switzerland. In this case, bitcoin would have been a better store of value than the now lost gold.

Wed, 11/27/2013 - 17:58 | 4195001 Bokkenrijder
Bokkenrijder's picture

Completely agree with zaphod. Once the stock/bond/real estate bubbles burst, gold will be slammed down hard by naked short selling from the usual suspects. It will be a field day for them, a slam dunk and as the Germans call it: gefundenes Fressen!

It will be a great day to buy gold hand over fist!

Disagree with his BTC call though, although it might have some legs because it probably will be plugged by the central banks as some sort of new 'newconomy' (reserve) currency status, in order to draw attention away from the imploding fiat system.

Thu, 11/28/2013 - 00:28 | 4196063 harleyjohn45
harleyjohn45's picture

There is a difference in physical gold and paper gold. 

Wed, 11/27/2013 - 18:26 | 4195092 Stuck on Zero
Stuck on Zero's picture

Hmmm.  Bitcoin vs. gold.  Somehow I can imagine a terrified government turning 200 PR people, 700 mathematicians, and 5000 network specialists loose on bitcoin to destroy it , which they would.  Gold is a bit tougher.


Thu, 11/28/2013 - 00:27 | 4196060 harleyjohn45
harleyjohn45's picture

If you hold physical gold, then I don't see how you can believe in bitcoin.

Wed, 11/27/2013 - 17:47 | 4194983 atomicwasted
atomicwasted's picture

The beauty of competing currencies is that there is some competition.  If you like gold, use gold.  If you like BTC, use BTC.  The market will sort it out.

Wed, 11/27/2013 - 18:40 | 4195122 layman_please
layman_please's picture


exactly! it's ironic how we have ardent factions fighting here while the big picture is often missed.

Wed, 11/27/2013 - 19:40 | 4195260 Anusocracy
Anusocracy's picture

Most people can't conceptualize the act of allowing others the freedom to choose.

They have confirmation bias problems and compulsion bias problems.

Wed, 11/27/2013 - 21:24 | 4195603 Papasmurf
Papasmurf's picture

Bias is what makes a market.

Wed, 11/27/2013 - 18:36 | 4195120 tawse57
tawse57's picture

How long have people on here been saying that is about to happen?

Wed, 11/27/2013 - 16:57 | 4194803 wisehiney
wisehiney's picture

Hold me Mandy.

Wed, 11/27/2013 - 17:13 | 4194867 Running On Bing...
Running On Bingo Fuel's picture

Seriously man.

So when nothing happens but an slight inflationary tide, then the FED comes out looking like the big savior.

CNBC is owned by GE(FED darlings).

What the fuck are you guys thinking!?


Wed, 11/27/2013 - 17:41 | 4194963 all-priced-in
all-priced-in's picture

CNBC is now owned by Comcast.


Wed, 11/27/2013 - 17:45 | 4194977 mt paul
mt paul's picture

should be 



with an "n"

Wed, 11/27/2013 - 16:59 | 4194806 comrade rally monkey
comrade rally monkey's picture



Last 12 months?

Wed, 11/27/2013 - 17:01 | 4194814 NoDebt
NoDebt's picture

Well, if the last bubble was any indication we got a year or two to go.

What's different this time is everyone knows when this one blows, it's gonna blow big.  So, they'll prop it up in any way possible, for as long as possible.

Wed, 11/27/2013 - 17:02 | 4194818 insanelysane
insanelysane's picture

Heresay.  Release the Stockman child porn docs in 3-2-1...

Wed, 11/27/2013 - 17:04 | 4194827 Mike in GA
Mike in GA's picture

Panic is a word that is not used in polite professional circles.  This is the equivalent of the turd in the punch bowl. 

Wed, 11/27/2013 - 17:34 | 4194939 Rainman
Rainman's picture

same goes for the word fraud.

Wed, 11/27/2013 - 17:08 | 4194848 gafgroocK
gafgroocK's picture



Heresay.  Release the Stockman child porn docs in 3-2-1...



Wed, 11/27/2013 - 17:50 | 4194995 TheFourthStooge-ing
TheFourthStooge-ing's picture

"Stockman watchez teh poernoh!"
Gen. Keith Alexander, US Head Jackofficer

Wed, 11/27/2013 - 17:35 | 4194943 caribbeanbarry
caribbeanbarry's picture

I bet the WH has him on that evil list. You know, the one that eliminates both due process and the process-ee....

Wed, 11/27/2013 - 17:02 | 4194819 JR
JR's picture

The point to remember, Stockman’s comments are getting stronger... and more urgent.

Wed, 11/27/2013 - 17:10 | 4194856 NoDebt
NoDebt's picture

Meaning what?  He's righter than he was 6 months ago?  Doesn't take a genius to see this thing's a train wreck waiting to happen.  But getting the timing wrong is the same as being wrong.

Wed, 11/27/2013 - 21:31 | 4195625 Oldwood
Oldwood's picture

I can tell you exactly when it comes crashing down. The day all you "investors" decide to get the fuck out. You stay in and just keep playing like someone else will pull the plug, when it is you that ultimately pulls it. This is just silly. You know its broke, you know its fucked but you stay in because you think there may be just a little more profit in it. They play greed better than anyone else.

Wed, 11/27/2013 - 20:57 | 4195528 Blano
Blano's picture

Maybe he's just getting mad that what he thinks will happen ain't happening?  Just speculating a little.

Wed, 11/27/2013 - 17:02 | 4194820 squid427
squid427's picture

king of simpletons

did you forget a /sarc ?

Wed, 11/27/2013 - 17:06 | 4194830 kchrisc
kchrisc's picture

My guillotine won't panic. She's ready.

"Bring it on."

Wed, 11/27/2013 - 17:06 | 4194836 1835jackson
1835jackson's picture

The changes will be quick and without warning. Oh well when is dancing with the stars on?

Wed, 11/27/2013 - 17:06 | 4194839 gafgroocK
gafgroocK's picture




You all had better get out early for the Black Friday Ammo Specials and pick up a couple thousand rounds.

Wed, 11/27/2013 - 17:07 | 4194841 slaughterer
slaughterer's picture

ZH Omnicomments galore in Stockman interview: bubble, no conection to fundamentals, panic coming soon, will end violently.

Ain't nothing of the sort goign to happen until ZH capitulates ... in 2016, maybe.

Wed, 11/27/2013 - 17:17 | 4194883 Running On Bing...
Running On Bingo Fuel's picture

You don't get it man, you just don't get it.

ZH has been making bank since 666, bro. No matter what posts show up. It's all about the juice-bucks.


Wed, 11/27/2013 - 17:08 | 4194842 ToNYC
ToNYC's picture

Deflation ends in Ice, not Fire. Looking for jobs in the mine of exported human costs is investing in paralysis. Opportunity is where you find it, just lying there.

Wed, 11/27/2013 - 17:16 | 4194879 cossack55
cossack55's picture

Don't know if I would make a very good prospector.  Have watched the show a couple of times.  Looks like a lot of climbing.

Wed, 11/27/2013 - 17:11 | 4194865 dwayne elizando
dwayne elizando's picture

Panic? Fuck panic! I'm going to party!

Wed, 11/27/2013 - 18:02 | 4195028 HardlyZero
HardlyZero's picture

Hot Tottie!  Brandy, Honey, Lemon and Yellen.  Goes down so smooth.   It should take at least 50 years to bridge the gap.

Wed, 11/27/2013 - 17:18 | 4194886 delivered
delivered's picture

The world of virtual currencies has gone crazy as just about every type of digital currency is going through the roof. Bitcoin, Litecoin, Peercoin, you name it. Maybe Tyler should create is own virtual currency and name it Zerocoin to get in while the gettin's good. You talk about the wildwest as it would seem that just about any technoid with an idea for a virtual currency can open up shop and ride the digital currency wave to the new promise land. The more I investigate, the more nervous I become as there really don't appear to be any rules in the digital currency world as attempting to locate any sound/solid information such as a prospectus is damn near impossible. About the only thing I came up with was a prospectus for the Windledinks BTC ETF which never materialized. Look through the listing of potential risks in this to get an idea of what digital currencies are all about.

The reason I make this point is to reinforce the concept of violent swings appearing in all types of asset classes which are becoming more and more extreme. Money is moving so fast between asset classes looking for the next ramp to infinity and beyond that it would appear that the Fed may have already lost control. Remember what Dr. Ian Malcom said in the first Jurrisac Park movie. The illusion was that you actually thought you had control at the start of the process (or something to this effect). And when it was lost, all hell broke loose.

- 75x LTM for the Russell 2000.

- Margin debt at all time highs as well as leverage.

- Virtual currencies exploding in a feeding frenzy.

- Tech social media companies valuations based on negative earnings and some, with no real revenue model (think Snapchat).

and the list goes on and on. The point is, the Fed has already lost control

Wed, 11/27/2013 - 18:03 | 4195030 HardlyZero
HardlyZero's picture

Virtual coin index should show the blow off top.

Wed, 11/27/2013 - 18:11 | 4195055 Trimmed Hedge
Trimmed Hedge's picture

Bitcoin is looking toppy..

But Bigcoins™ is just getting warmed up!

Wed, 11/27/2013 - 18:15 | 4195070 Kirk2NCC1701
Kirk2NCC1701's picture

Early adopter reap the (max) benefits, late adopters do not. QED.

Super early adopters (vision + balls) will write about it on their blog site from their yacht, while those who missed out will cry into their beer.

Those who spout on about the virtues of the Free Market, often forget that this market is a real bitch to the late and the scared.

Enough said.  Time to get off here, and spend time where there is fiat-currency to be made.

Wed, 11/27/2013 - 17:21 | 4194892 Troublehoff
Troublehoff's picture

and a panic sets in when people realize that these values are massively overstated

The question is, what is overvalued? Stocks in Dollars, or Dollars? 

I say Dollars.

Wed, 11/27/2013 - 17:24 | 4194908 Enslavethechild...
EnslavethechildrenforBen's picture

Every dollar ever printed has been overvalued. What value do you place on Monopoly money?

Wed, 11/27/2013 - 17:36 | 4194944 graspAU
graspAU's picture

"We can create money by fiat (decree). Our checkbook doesn't have a ledger. So you write out the check, it's (money/currency) just transmogrified out of thin air, which is a nice checkbook to have."
- Jerry Nelson, Federal Reserve Bank of Chicago, Public Relations. May 14, 2008.

Wed, 11/27/2013 - 17:50 | 4194992 mt paul
mt paul's picture

i carry a monoloply 

"get out of jail free" card

in my wallet...

Wed, 11/27/2013 - 17:58 | 4195013 Rainman
Rainman's picture

sorry ... tis worthless

Wed, 11/27/2013 - 17:24 | 4194913 Yen Cross
Yen Cross's picture

   Some other smart posters have stated that this circus will go on for as long as it can. I tend to agree. When this thing goes kerplunk I think It'll be some some external financial bomb that goes off.(probably China) The global markets will fall like dominoes, and central banks will have used all their ammunition feeding the fire over the last 5 years.

    There's no way the world can absorb another $10 trillion in liquidity pumped into the system.The inflation would be epic! At a time when assets should be quietly written down, the ponzi just expands. Welcome to Dante's 10th circle when this thing blows!

Wed, 11/27/2013 - 17:42 | 4194968 Enslavethechild...
EnslavethechildrenforBen's picture

Kids working at Mc Donald's have to pay $2000 a month rent. They will never own a home, they will be enslaved by their own country generation after generation for eternity.

And you say WHEN this thing blows??

We're already there folks.

Wed, 11/27/2013 - 17:25 | 4194914 OneTinSoldier66
OneTinSoldier66's picture

Can anyone explain precisely and exactly, what "cheap debt" is?


This is actually kind of a facetious question.

Wed, 11/27/2013 - 17:41 | 4194964 AGAU
AGAU's picture

I would say that cheap debt is debt which doesn't have to be paid back.

Wed, 11/27/2013 - 17:44 | 4194975 Enslavethechild...
EnslavethechildrenforBen's picture

Bernankes friends will pay him back, but then take out an even larger loan and bid the prices of our survival even higher than before. Fun game.

Wed, 11/27/2013 - 17:54 | 4195004 mt paul
mt paul's picture

cheap debt


when you securitise previouse debt

and use it as collateral

to amase more new and improved debt..

Wed, 11/27/2013 - 18:21 | 4195081 alangreedspank
alangreedspank's picture

If we accept that any good or service in the now has more value than the same good or service in the future (all things being equal), there is a cost to borrowing which allows instant consumption. Cheap debt is when this cost is low, for whatever reason.

Wed, 11/27/2013 - 17:34 | 4194941 TheObsoleteMan
TheObsoleteMan's picture

A Yellen chairpersonship {I guess that is the PC term for it} will usher in what we have all long feared. Our lives will never be the same afterward. According to Dr. Mark Faber, the equity markets here in the US will go into the stratosphere once the printing gets REALLY serious. he has been right so far is the scarry part. BUY METALS NOW! In a few months you will have wished you had.

Wed, 11/27/2013 - 17:35 | 4194942 flow5
flow5's picture

No worries mate.  David Stockman doesn't have a clue about money & central banking.  But his book "The Great Deformation" is a good read.

Wed, 11/27/2013 - 17:48 | 4194976 Jack Burton
Jack Burton's picture

The new bitch in town, MS Yellen, is preparing to up the level of QE. She is mandated by her rulers to keep the wealth transfer machine in high gear. QE, as is well documented, is a means of stripping workers and savers of their interest and income. Nobody can argue otherwise with any chance of being believed.

Stockman knows the Fed is trapped now, 5+ years of QE and nothing but fake economic recovery and record setting assest bubbles. Stocks around the world shoot skyward, while real economies stumble and unemployment rises. Most unemployment is now hidden well by fake statistics, we may see US unemployment soon under 5%, this will be declared functional full employment, and congratulations will go all around. But we know better, labor force participation is at never seen records.

RT has been running a five part series on Child Labor in the EU. Yes, at a time when youth unempoyment is anywhere from 25% at best to well over 50% at worst, cash strapped small business and family business all across Europe has turned to school children as low wage or no wage workers. The small employers and farmers are so up against the wall, they have fired their young workers, in some cases all of them, and gone on the hunt for for children as young as 12. A baker in Italy was shown working a 14 year old school child at near zero wages, after he fired 3 full time workers of young ages. Famers can't afford to hire even the cheapest farm labor, thus they keep kids home from school and work their children and family members children on the farms. In England an unemployed mother sent her 15 year old school kid out 3 night a week for an 8-9 hour milk delivery run all night with the kid's grandfather. The grandfather no longer can be profitable paying a regular scale wage, thus the family's kid works all night for a fraction of a normal wage. This is now seen all across Europe. But we hear Europe is recovering.

QE world wide has made an elite super ultra mega rich, this is a proven fact. While average folks sink deeper and deeper into permanent depression.

Stockman is right, when QE stumbles or is reduced, the market panic will be epic. Did you see the wide eyed panic even the mention of a tapper caused in US equites just a few months ago? That was a preview of the mega panic when money printing finally fails.

Wed, 11/27/2013 - 18:45 | 4194989 Enslavethechild...
EnslavethechildrenforBen's picture

Interest is unpayable in aggregate form. Yet we all make believe interest is normal. For every house you buy, you buy your banker two. Without interest you could just buy yourself three houses. Who the fuck are these people that counterfeit trillions for themselves and their friends, yet force us to pay interest on that same useless counterfeit Monopoly money. Interest used to be punishable by death. It should still be punishable by death today.

Wed, 11/27/2013 - 20:07 | 4195340 Jack Burton
Jack Burton's picture

You know, I have made my life's goal since I was about 25 years old to never pay interest, but to earn interest. No car loans, no credit cards, no home equitu line of credit. I did without things unless I could pay for them, this is not an easy way to live when you are young. But soon you see yourself breaking though to a middle class lifestyle just because you are not paying any interest each month. Soon saving return interest to you, instead of you feeding the fucking bankers.

I will never say this is easy, it is hard. But when you are 40 and owe nothing, save a very modest mortgage, you can save, and as you save, your income rises each month. Your pay + saving and investment returns make you more and more viable.

I hate interest with a passion. I got divorced a decade ago from a woman who swore that borrowing money was a privilige and the key to a better life! Seriously, she told me that! She is gone, because I refused any borrowing. She is gone, and I just built a new modest home, just bought a new RAV4 and visited Sweden for 3 weeks last year. All Cash! But I did have to do a small mortgage, 1/3 of the value of the home. That is falling fast and my equity grows by leaps and bounds, as most of each payment goes for principle.

Student debt, credit cars, car loans, big mortgages, other lines of credit! Every dime you pay a fucking bankers in interest is a dime you just threw in the shitter!

Wed, 11/27/2013 - 22:38 | 4195789 wisehiney
wisehiney's picture

Maybe we will get some deflation, please.

Wed, 11/27/2013 - 18:04 | 4195007 pupdog1
pupdog1's picture

"The Russell 2000 represents Main Street America."


WTF does that mean, David?

Wed, 11/27/2013 - 18:11 | 4195056 jim249
jim249's picture

Small corporations, the ones spread through out the country in many small cities and towns.

Wed, 11/27/2013 - 18:32 | 4195112 alangreedspank
alangreedspank's picture

In so far as market indexes, the Russell 2000 is the most representative of all indexes, more so than the S&P. It includes a lot of small/medium firms.

Wed, 11/27/2013 - 17:57 | 4195014 mt paul
mt paul's picture

first rule of denial club


don't talk about denial club

Wed, 11/27/2013 - 18:02 | 4195031 mt paul
mt paul's picture

have we reached the point..


where interest on all the debt

is calculated at more than

all the assets are worth

bought with said debt....

Wed, 11/27/2013 - 19:47 | 4195279 stormsailor
stormsailor's picture

i believe if a true accounting could be made, we are well past that point.  i believe the debacle in 2008 was where all the huge corporations figured out that their hedge of risk to 0 had created so much counterparty risk that all world assets could not pay them.

the real world assets vs the shadow banking liabilities.


Wed, 11/27/2013 - 20:31 | 4195392 Radical Marijuana
Radical Marijuana's picture

Yeah, stormsailor, my sense is that things are way, way worse than we could calculate. In that context, while I agreed with what Stockman said, I think that it understates how bad things really are by orders of magnitude. The biggest bubble of all is obviously the human population as a whole, which has grown at an exponential rate on the ability to liquidate natural capital as fast as possible. Since we have a fundamentally fraudulent financial accounting system, it is practically impossible to put what is actually happening behind those financial frauds into a more realistic perspective.

For several decades, I have been working towards efforts to change the monetary system, rather than working towards making money within that system, since it was clear that our monetary system was based on the triumph of lies, backed by violence, which deliberately ignored the ecology of the natural environment. I have been forced to admit that I wasted my time doing that, since the real ways that the political processes are funded has made it impossible to fix its problems, other than by it going mad, and destroying itself. In that context, I would add this background concern, in the slightly longer term, behind the financial bubbles everywhere having systemic risks of concatenated global collapses, BECAUSE SOCIAL POLARIZATION AND DESTRUCTION OF THE NATURAL WORLD ARE CONNECTED!

Although I think that there are natural causes
for changing the Earth's climate, that seemed
to actually be bigger, but, are being ignored,
which seem tending to cool things off a bit,

but I also believe that all human activities are
driving global warming, in serious ways, and
if the natural swings go back to warming too,
then all combined effects could be SEVERE!

Of course, those controlling our civilization
will only lie about that, and make it worse!

By Noam Chomsky

"... There’s a major problem that the whole species is facing. A likelihood of serious disaster may be not far off. We are approaching a kind of tipping point, where climate change becomes irreversible. It could be a couple of decades, maybe less, but the predictions are constantly being shown to be too conservative. It is a very serious danger; no sane person can doubt it. The whole species is facing a real threat for the first time in its history of serious disaster, and there are some people trying to do some- thing about it and there are others trying to make it worse. ... The rich societies, like the United States and Canada, are acting in ways to bring about disaster as quickly as possible. That’s what it means, for example, when both political parties and the press talk enthusiastically about “a century of energy independence.” “Energy independence” doesn’t mean a damn thing, but put that aside. A century of “energy independence” means that we make sure that every bit of Earth’s fossil fuels comes out of the ground and we burn it. ... So you have this odd situation where the educated, “advanced” civilized people are trying to cut everyone’s throats as quickly as possible and the indigenous, less educated, poorer populations are trying to prevent the disaster. If somebody was watching this from Mars, they’d think this species was insane. ..."


Wed, 11/27/2013 - 18:22 | 4195085 DOGGONE
DOGGONE's picture

To enable bubbles, real price histories are seldom shown.

Wed, 11/27/2013 - 18:45 | 4195138 tawse57
tawse57's picture

Bitcoin and the DOW/NASDAQ are NOT two separate things - they are the one and the same bubble.

People cannot see this now but when they all crash then, months and years afterwards, people will be looking back and saying "How could we be so dumb?".

It was buying on margin in 1929 - everyone was being told how fabulous it was and then people spent the rest of their lives wishing they had never heard of buying on margin.

The same will happen with Bitcoin and with the DOW/NASDAQ - looking back people will say "Wow, they were huge bubbles - why didn't people see them?".

My fear about gold and silver is that they will be taken down with all the rest.

Wed, 11/27/2013 - 20:45 | 4195474 Things that go bump
Things that go bump's picture

They might go down, but they won't go down to nothing, unlike paper holdings.

Thu, 11/28/2013 - 06:43 | 4196298 Ayr Rand
Ayr Rand's picture

Bitcoin is the perfect currency -- for the state. Every transaction is documented forever in a distributed database, with complete traceability for anybody with a sufficiently large database and access to records of all other monetary transactions leading up to and from the bitcoin transactions. And invented in a series of papers on cryptographic digital currencies in the mid 1990's by, you guessed it, NSA. Quite brilliant. And very ironic for the fools who think Bitcoin actually gives them anonymity when it was designed for the opposite. LOL

Wed, 11/27/2013 - 18:44 | 4195139 Iam Yue2
Iam Yue2's picture

This guy looks so serious, he must be right.

Wed, 11/27/2013 - 19:12 | 4195206 andrewp111
andrewp111's picture

Don't forget China which is doing just massive gov't directed lending instead of QE. 15T in Yuan have been pumped in their economy since the crash. One could argue that the Fed is just following China's lead, within the limits of their powers.

Wed, 11/27/2013 - 20:10 | 4195344 TheRideNeverEnds
TheRideNeverEnds's picture

Sounds good but hes got one major factor incorrect, the FED will never lose control, the only thing they could do it screw it up with their actions.  You see they have no limit to the ammount of money they can create/spend and now neither does the government, they can buy an infinite amount of assets forever and infinity is a pretty big number...

I see one of two things happen:

1- no taper ever, increase in QE some time next year on bad fundamentals and every year till the end of time,  markets to new highs every year forever.

2- taper followed by locked down limit markets, immediate un-taper and increase in QE then and every year till the end of time, markets to new highs every year forever.

Either way it doesn't matter if you buy em here or wait for some token pullback, in a day or so at worst you will be up money and never again take any real heat.  There is absolutely no risk.  Disregard all the BS, all this talk of bubbles is proof we are not in one, buy them now before they are more expensive because we are going extremely higher.

Hell look at bitcoin, people poo-pooed it at the beginning of this year when it was trading $10, now its $1,100 and people still joke about it, next year when its $100,000+ people will wish they got in at 1000.

Same will happen with the market, next year when the S&P is 4,000+ and the dow is 36,000+ you will wish you just bought em here.    

There is a reason the market is doing what it is doing, there is a reason Goldman traders are in the pit buying with both hands, they know whats up.  

As the dumb money tries to keep shorting this they just add fuel to the fire with their innevitable covering be it through sheer pain or margin calls.  you WILL buy them, either on your own or out of force.   





Wed, 11/27/2013 - 20:25 | 4195390 ramacers
ramacers's picture


Wed, 11/27/2013 - 20:26 | 4195398 stormsailor
stormsailor's picture

gold, silver, land.  of all of these land is the most precious however owning it or buying it is extemely risky.  gov can tax you out of it or change your zoning, etc. etc.  and the buying of it right now in some places is part of the same bubble.

gold and silver are manipulated, its a fact. others here can argue for my point,  but i think you really should consider that physical gold and silver unlike conventional investments are a catastrophic hedge not valued in frn.   if you look at them in that light you may feel different.


personally, i physically have both but no matter how high their value i would never sell them until the teotwawki and things get sorted back out.  that is when you want to bring out your gold or silver.  remember they are priced in frn that you know are being created at 80 billion a month or more, yet the price remains the same.  when the next huge event happens, war, losing reserve status, etc.  those frn will become worthless and gold and silver will probably go down in frn as that occurs. (thats when you trade as much frn as you comfortably can for physical)  then the sheep will try to buy it at whatever price they can and it will climb into the stratosphere.  but they will want to pay frn.  

Wed, 11/27/2013 - 20:32 | 4195421 dinkum
dinkum's picture

RE: "hes just not tradable" totally nails it, and applies to all people who present a permanent-bull, permanent-doom position of the world.

You can't front-run it or trade on it.  Eventually this permanency in optimism or pessimism (especially the latter) is about as useful as the weather man who forecasts eternal sunshine or eternal cloud and rain. What we really want from these "experts" is info we can act on.  In the next 12 months.  I don't need to pay for a "winter is coming" forecast, and I assume/hope you don't either. ____________________ I'm a new poster, so I do not know much of anyone's area of expertise. From memory, David Stockman's reputation in the House was the most knowledgeable person re the US Budget. When he became Director of the Office of Management & Budget in 1981 dealing with fiscal policy projections dependent upon monetary policies of the US, he may have had a Coming to Jesus moment. He knew that monetary policy economics had a 2+ year lag in dealing with fiscal policy economics reactions to future phases of business cycles. He knew both monetary and fiscal policies had to be "on the same page" to avoid whiplash leading to "unintended consequences".  What he may not have appreciated is that just about all lawmakers and administrators agreed with this fundamental concept, but did little or the opposite about it. One ZH contributor who has staked out this concept is Noah Smith explaining Modern Monetary Policy (MMT) and its math.
Not Quite Noahpinion, blog of Noah Smith

IMO if you want to front run on inside information you "Better Call Saul" -- Saul Goodman, Attorney at Law in Albuquerque, NM. 

Wed, 11/27/2013 - 20:49 | 4195488 hangemhigh77
hangemhigh77's picture

What's with the Aussie commentator? I wonder who she blew to get her job, or who's carpet she licked.

Thu, 11/28/2013 - 06:41 | 4196296 Ayr Rand
Ayr Rand's picture

Bitcoin is the perfect currency -- for the state. Every transaction is documented forever in a distributed database, with complete traceability for anybody with a sufficiently large database and access to records of all other monetary transactions leading up to and from the bitcoin transactions. And invented in a series of papers on cryptographic digital currencies in the mid 1990's by, you guessed it, NSA. Quite brilliant. And very ironic for the fools who think Bitcoin actually gives them anonymity when it was designed for the opposite. LOL

Thu, 11/28/2013 - 19:27 | 4197909 Notarocketscientist
Notarocketscientist's picture

Well .... nobody watches CNBS any longer .... so no harm done

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