"We Are Playing Economic Russian Roulette"

Tyler Durden's picture

Submitted by Brandon Smith of Alt-Market blog,

By any reasonable measure, I think it is safe to say that the last quarter of 2013 has been an insane game of economic Russian Roulette.  Even more unsettling is the fact that most of the American population still has little to no clue that the U.S. was on the verge of a catastrophic catalyst event at least three times in the past three months alone, and that we face an even greater acceleration next year. 

The first near miss was the Federal Reserve's announcement of a possible “taper” of QE stimulus in early fall, which sent shivers through stock markets and proved what we have been saying all along – that the entire recovery is a facade built on an ever thinning balloon of fiat money.  Today, markets function entirely on the expectation that the Fed will continue stimulus forever.  If the Fed does cut QE in any way, the frail psychology of the markets will shatter, and the country will come crashing down with it.

The second near miss was the possible unilateral invasion of Syria demanded by the Obama Administration.  As we have discussed here at Alt-Market for years, any invasion of Syria or Iran will bring detrimental consequences to the U.S. economy and energy markets, not to mention draw heavy opposition from Russia and China.  Though the naïve shrug it off as a minor foreign policy bungle, Syria could have easily become WWIII, and I believe the only reason the establishment has not yet followed through with a strike in the region is because the alternative media has been so effective in warning the masses.  The elites need a certain percentage of support from the general public and the military for any war action to be effective, which they did not receive.  After all, no one wants to fight and die in support of CIA funded Al Qaeda terrorist cells on the other side of the world.  The establishment tried to hide who the rebels were, and failed.  

The third near miss was, of course, the debt ceiling debate, which has been extended to next spring.  America came within a razor's edge of debt default, which many people rightly fear.  What some do not yet grasp, though, is that debt default of the U.S. was NOT avoided last month, it is INEVITABLE.  Debt default will ultimately result in the death of the dollar as the world reserve currency, and the petro-currency.  This final gasp will lead to hyperstagflation within our financial system, and third world status for most of the citizenry.  It is only a matter of time, and timing.

“Timing” is truly what we are all concerned about.  Those of us in the field of alternative media and economics understand well that the U.S. is on a collision course with disaster; it is a mathematical certainty.  We no longer think in terms of “if” it happens - we only question “when” it will happen.  Our fiscal structure now hangs by the thinnest of threads, a thread which for all we know could be cut at a moments notice.  However, economic and political storms appear to be brewing with the year 2014 as a target. 

Globalists have been openly seeking the destabilization of U.S. sovereignty, and they have openly admitted that the destruction of the dollar and our economic foundations will aid them in their goal.  It is important to never forget that international financiers WANT to absorb America into a new global economic structure, and that the U.S. must be debased before this can be accomplished.   Here are a few reasons why I believe 2014 may be the year they make their final move...       

Debt Debate On Steroids

Nothing concrete was decided during the highly publicized “battle” between Democrats and the GOP on what would be done to solve the U.S. debt addiction.  Some people might assume that the fight will go on indefinitely, and that the “can” will be kicked down the road for years to come.  This assumption is a dangerous one.  If you thought the last debt debate was hair raising, the next is likely to give you a coronary.  Think of 2013 as a practice run, a warm up to the main event in 2014.  Why will next year be different?  Because the motivations behind a debt ceiling freeze (and thus debt default) are now supported by the obvious failure of Obamacare.

Funding for Obamacare was the underlying issue that gave strength to the push for new debt ceiling extensions.  The U.S. government has overreached financially in ever way imaginable.  We have long running entitlement programs that have been technically bankrupt for years.  But, Obamacare was so pervasive during the debt debate that we heard nothing of these existing liabilities.  Ultimately, Obamacare is the primary reason why so many Americans on the “left” want unlimited spending and inflation, and why so many Americans on the “right” are actually seeking debt default. 

We all know that at the top of the pyramid the debt debate itself is false left/right theater, but it is still theater with a purpose.

In my articles 'The Socialization Of America Is Economically Impossible' and 'Obamacare: Is It A Divide And Conquer Distraction', I discussed why universal healthcare could not be implemented in America, and I predicted in advance that Obamacare was actually a farce that was designed to fail.  The program's only purpose is to provide a vehicle by which divisions between the fake left and the fake right could be solidified in the minds of the common populace.  A lot of cynicism was directed at the notion that the government might create a socialized healthcare initiative and then allow it to fail.  Of course, we now know that is exactly what they had in mind.

During the last debt debate, Obamacare was just a policy waiting to be implemented; next debate, that policy will be rightly labeled a train wreck.  Obamacare is falling apart at it's very inception, and evidence makes clear that the White House KNEW in advance that this would occur.  In the days before it's launch, performance tests on the Obamacare website showed conclusively that the system could not handle more than 500 users.

Obama promised that preexisting healthcare plans would be retained by Americans and that the Affordable Care Act would not do damage to established insurance models.  He made this promise knowing full well that he could not or would not keep it.  This dishonesty has resulted in rebellion by Democrats who have sided with Republicans to pass a bill which obstructs the erasure of existing health coverage.

States once disturbingly loyal to the White House are now moving to limit the application of the Obamacare structure.

The White House had foreknowledge that the program was nowhere near ready, yet, they moved forward anyway.  Why wouldn't they stall?  Why would Obama knowingly unleash his “opus” before it was finished?  He had it in the bag, right?  He won, right?  All he had to do was build a functioning website and keep his promises at least long enough to sucker the majority of Americans into the system.  Instead, he throws the fight and hits the canvas before he's even punched?  Why?

It all sounds rather insane if you aren't aware of the bigger picture, and I'm sure the average Democrat out there is wide-eyed and bewildered.  Some might blame it on “ego”, or “hubris”, but this makes little sense.  Obamacare is an American socialist's dream.  With a simple working public interaction model, Obama would be worshiped by leftists for decades to come as the next Franklin Delano Roosevelt.  Hubris should have ENSURED that the White House launch of Obamacare would be flawless. 

Once you realize that this is not about Obama, and that Obama is nothing but a middle-man for the globalists, and that the actual implementation of Obamacare never mattered to the establishment, the fog begins to clear.

With Obamacare in shambles, the dynamic of the debt debate theater changes completely.  Some Democrats may well show support for a hold on the debt ceiling, for, what reason do they have to champion more spending?  Obama has already made fools of them all, and the Obamacare motivator is essentially out of the picture.  The GOP will be energized and more unified than the last debate, giving more momentum to a debt ceiling lock.  The argument will be made that a resulting debt default will not be harmful, and that the U.S. can carry the weight of existing liabilities until the budget is balanced.
This is certainly a lie, but it is a fashionable lie that Americans will want to hear. 

Americans do not want to hear that our economy is too far gone and that any motion, to spend, or to cut, will have the same result – currency collapse and fiscal implosion.  They do not want to hear that pain must be suffered before a realistic solution can be applied.  They do not want to hear the the system will have to be brought down before it can be rebuilt.  And, they definitely do not want to hear that the system will be deliberately brought down and replaced with something even worse. 

Will the next debt debate in Spring 2014 end in debt default and the collapse that globalists desire so much?  It's hard to say, but many insiders appear to be preparing for just such a scenario...

The Fed's Buzz Kill

No one, and I mean no one, believes the private Federal Reserve will ever commit to a taper of fiat stimulus.  Hell, I barely believe it's possible, and I'm open to just about any scenario.  That said, I have to ask a question which few analysts seem to be asking – why does the Fed keep pre-injecting the concept of taper into the mainstream if they never intend to implement it?  When has the Fed ever pre-injected a plan into the MSM which it did not eventually implement? 

The banksters have the markets in the palm of their hand, or at least they seem to.  Stocks now rise and fall according to whatever meaningless press release the central bank happens to put out on any given morning.  What do they have to gain by consistently shaking the confidence of investors around the world by suggesting that the fiat party they created will abruptly end?

The impending approval by the Senate of Janet Yellen, a champion of the printing press, would suggest to many that QE-infinity is assured.  We know that the black hole generated by the derivatives implosion cannot be filled (debts still exist in the quadrillions of dollars), and that the Fed will have to print endlessly in order to slow the deterioration of the the banking sector.  We know that none of the currency flows created by the Fed are trickling down to main street, which is why credit remains mostly frozen,  real unemployment counting U-6 measurements remains at around 25%, food stamp recipients have risen to around 50 million, and the only sales boosts to property markets are those caused by big banks buying bankrupt houses and then reissuing them as rentals.

We know that it makes sense for the central bank to continue QE, if only to continue pumping up banks and the stock market and hide the truly dismal state of the overall system.  But let's forget about what we think “makes sense” for just a moment...

What if the Fed no longer WANTS to hide the true state of the system anymore?  What if QE is now giving back diminishing returns, and will soon be no longer effective at hiding economic weakness?Central bankers surely don't want to take the blame for a collapse, but what if the perfect patsy is already lined up?  A patsy so hated and despised that no one would think twice about their guilt?  I am, of course, talking about the Federal Government itself.

Think about it; the failure of Obamacare promises a debt debate in the Spring of 2014 that will rock the very foundations of the global economy.  Both sides, Democrat and Republican, are ready to blame the other fully for any disastrous outcome, though “Tea Party” conservatives have been painted by the mainstream media as the lead culprits behind a financial catastrophe that began before the Tea Party was born.  The idea of “gridlock” leading to impasse and calamity is already built into the country's consciousness.  The general public's opinion of all areas of government has recently hit all time lows.  In fact, our opinion of government could scarcely go any lower than it already has.  Everyone HATES what government is, or what they think it is.  Most Americans would be happy to place the brunt of the blame for an economic disaster on the shoulders of Washington DC.

The genius of it is, they deserve a large part of the blame.  They helped to make possible all of the horrors the citizenry will face in the coming years.  The problem is, the public may become so blinded with rage over the failure of the political system, that they may completely forget about the role of international and central banks and turn on each other instead. 

Why is the Fed now discussing, just before the possible confirmation of Janet Yellen, a stimulus dove, the need for taper measures by 2014?

Is it just coincidence that the taper discussion is taking place parallel to the debt ceiling battle, or are these two things related?  What if the Fed plans to apply QE cuts during or after the renewed debt debate in order to make the market effects even more negative?  What if the Fed is timing the taper to give energy to a debt default?  What if the Fed wants to reduce support, so that later, when all hell breaks loose, we'll come begging them for support?

Whether you believe a debt default will be deliberately induced or not, certain foreign investors have been preparing for such a U.S. breakdown for years, and once again, the apex investor, China, has made plans for dramatic economic policy changes to take place in 2014...              

China Is Ready To File For Divorce

The economic marriage between China and the U.S. has been touted Ad nauseum as an invincible relationship chained in eternity by unassailable interdependency.  I've just never bought this fanciful tale.  For years I've written about the likelihood that China will decouple from the American dollar apparatus, and so far, most of my warnings have come to pass. 

China has pushed forward with massive physical gold purchases despite all arguments by skeptics that gold is no longer necessary or prudent as a safe haven investment.  Apparently, the Chinese know something they do not.  China is on pace to become the largest holder of gold in the world as early as 2014.

China has now issued Yuan denominated bonds and other assets around the globe, and its central bank has expanded its total balance sheet to at least $24 Trillion, outmatching the reported increased balance sheets of all other central banks:

Now, some feel that this Chinese liquidity should be considered a massive bubble on the verge of exploding, and that it will be Chinese instability, not U.S. instability, that triggers renewed crisis.  I would like to offer an alternative view...

I am not shocked at all by this incredible spike in Yuan circulation.  In fact, I expected it.  The fall back argument against China dumping the dollar as the world reserve has always been that there is no alternative currency that boasts as much liquidity as the dollar.  Well, as we now know, China has been raining Yuan down on every continent.  International banks like JP Morgan have been HELPING them do it.

China is not desperately attempting to prop up its own markets like we are in the U.S.  China is DELIBERATELY generating massive liquidity because they seek to aid the IMF in its longtime plan to replace the greenback as the world reserve currency.  These are not the activities of an investor that wants to stick with the U.S. or the dollar.  These are not the activities of a nation that wishes to continue its limited role as a source of cheap industrial labor.    

China, being the largest importer of petroleum surpassing the U.S., is now planning to price its crude oil futures in Yuan, instead of the dollar.

And, the Chinese central bank has announced that it now plans to stop all purchases of U.S. dollars for its reserves.

These decisions are part of a precision strategy, a formula which was finalized during a little discussed and very secretive economic policy meeting which took place in China this past month.

While much of the media was focused on China's call for softer restrictions on its one-child policy, they ignored the thrust of the meeting, which was to establish Chinese consumption over exports, and internationalize the Yuan.  All that is left is for China to “float” the Yuan's value on the open market, which is an action the head of the PBOC, Zhou Xiaochuan, says he plans to expedite.

All of the reforms discussed at China's Third Plenum meeting are supposed to begin taking shape in...that's right...2014.

A Storm Of Septic Proportions

As I have always pointed out, economic collapse is not necessarily an event, it is a process.  The most frightening elements of this process usually do not become visible until it is too late for common people to react in a productive way.  All of the dangers covered in this article could very well set fires tomorrow, that is how close our nation is to the edge.  However, the culmination of events so far seems to be setting the stage for something, an important something, in 2014.  If the worst is possible, assume the worst is probable.  The next leg down, or the next economic carpet bombing.  Maybe slightly painful, maybe mortal.  Sadly, as long as Americans continue to remain dependent on the existing corrupt system, global bankers can pull the plug at their leisure, and determine the depth of the wound with scientific precision.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
I am Jobe's picture

Sheeples have their countdown clock going. Never underestimate Amerikan Consumerism to keep this going.  

flacon's picture

...but we already know where the bullet is. It is in the chamber. We are just hoping that the gunpowder is wet, which it isn't. 

DoChenRollingBearing's picture

It is too late for the R-Team and the D-Team to resolve this, even if they wanted to (which the D-Team does not even say they want to).

It is now up to each of us to protect ourselves and our loved ones.

Gold is part of the answer.  Next up would be survival stuff, just in case.

SafelyGraze's picture

The Last Christmas

by Tyler Durdenz

2013 marked the end of the traditional holiday known as "Christmas."

People bought shit and gave it to each other in a keynesian orgasm of M3 velocity.

Young adults (TM) who couldn't find employment slept all day in mom's basement while they tweeted about their 30k of student debt they were defaulting on.

Their divorced parents had emptied their pockets paying lawyers and mortgage and home equity interest.

The grandparents emptied their savings when their pensions turned to dust.

After defaulting on the credit card debt they piled up during Christmas 2013, they joined the zombie universe where Christmas passes with no stimulative transmission into the retail economy.

or into any economy.

Happy Holidays, ZH!

much love,

novictim's picture

You don't know Keynesian economics.  I'm outing you.

Oracle 911's picture

Actually what he said is neo-Keynesianism, but there is still here thet wrong premise every dept=wealth creation.


Anyway this article confirmed my suspicion, guys up there are playing a Russian roulette, but they are deadly wrong in many things:

1st, it is not normal Russian roulette, it is a reversed one 5 bullets in 6 chambers. :D

2nd, that gun will hit not just us, but them too. I mean the sheeple will go after them to, not just after their muppets. LOL

logicalman's picture

I'd say you are right, but in the wrong  order.

Zero Point's picture

I would put those prioroties the other way 'round Bearing man.

This ride may get biblically bumpy.

Rafferty's picture

Yes, I've been hearing for the last five years that doom and destruction will happen any day now.

I feel I'm being cheated.


NoDebt's picture

Yes, but since everyone knows we are playing with fire and what the stakes are, nobody will rock the boat.  That would be like bankers taking excessive risk on mortgage derivatives just to goose their next bonus.

Insane.  Nobody would ever do that.

AldousHuxley's picture

thus reason why dictatorships never exist.


the top guys always need top 1-5% highest performers to support them thus they give some rewards and the rest will just follow.



Redneck Hippy's picture

Now what? Chinese QE is way bigger than our QE so that means everybody's going to dump the dollar for the watered-down yuan?  No wonder bitcoin is spiking.

Againstthelie's picture

That's an error in the otherwise very interesting article above:

Not the Chinese CB has expanded it's balance sheet to 24 trn, the Chinese commercial banks have.

runningman18's picture

They are the same thing.  The Chinese CB essentially controls all "private banking" in the country.

no life's picture

I was listening to talk radio one day, when I realized the role they are making for politics  in daily life. They are making it become the average person's opportunity to get philosophical, or express their logic capabilities if you want, on something just complex enough for them to feel like they are the ones to come up with the right way of thinking on this or that overrarching societal topic. Their opportunity to "get their philosphy on." 

TheMerryPrankster's picture

Except philosophy attempts to understand the universe and humanities role in it, whereas the shit they spout on talk radio amounts to religous dogma with the political parties representing two wings of the same fucked up insane religion.

Its another distraction, another way of making sure you don't peer behind the curtain and notice the great and powerful Oz is just an old man tring to pull the wool over your eyes.

It will all be fuckin roses and shit if and when the republicans get in office or the democrats, except it won't. politics as a solution to anything died of a head wound in Dallas courtesy of a government trained sniper, 50 years ago.

Mentaliusanything's picture

And it was a hell of a shot! Although it was a moving target it was coming forward at about a 7 deg angle so as to clear the car screen. he held his line from above the target. The range was around 300 - 400 meters. The weapon was of large calibre and the bullet selection destructive no matter what part it hit. But it was a bull , entered the skull just above the right eye, hitting the hard part of the scull where the projectile broke into its desired formation and thus removed most of the left rear of the brain. The initial (single) shot from the rear, that passed low into his neck then exited into the Governor was also a fine shot but the weapon was not of sufficient calibre and the bullet selection a mistake. Grassy knoll my ass. It was well behind the overpass with an elevation of 18- 20 degrees. But still, a Hell of a shot from a rifle that had a prewarmed barrel and used match class hand pressed projectiles. Leopold scope of course.

I didn't need the Warren Commision to obsfucate the figging obvious. 

1835jackson's picture

How many house in Hampton’s conversations will be going on this very evening about "repositioning" themselves? It only takes a few to move the whole market these days.

disabledvet's picture

"manipuflation." where is that guy anyways? "so many roads. so many roads." one red flag is the move higher literally on "Off to Hamptons Day." (Memorial Day weekend.) the pro's leave for summer vaca, the Fed attempts and fails at Taper...the rookies hold down the fort...the pro's return this fall and start buying. the shorts have been ruined. only now are they waking up to said effect? we are in my view well past the point where this market can only be played from the long side. "discipline" is just knowing your risk..."what you can stomach" (while not being bearish) so to speak...and with so much fixed income in the "marketplace" already (Social Security, disability and the like) i would imagine many a person can "stomach" a lot of risk right now. so throw some darts at the dart board...i did. oooops, missed. waited it out...the market has come back to me. equities haven't even batted their eyelashes yet. http://www.youtube.com/watch?v=mXWkIZUPmDY

Obamananke's picture

Sadly i agree with everything this article states.

sschu's picture

The econonmic collapse bogey man is always around the next corner .... or next quarter.

It is coming, but it is a fools game to predict when.


HaroldWang's picture

The "economic collapse" happened in 2008-2009. I still don't understand why people don't get that. 

Againstthelie's picture

What problems have been solved?

How have they been solved?

HaroldWang's picture

Housing has come back to earth. Less people filing for UE claims. GDP growth (admittedly slow, but growing and not contracting). Foreclosures falling rapidly. People with 401ks or investments seeing strong returns. 

Need more? 

Yes, it's not perfect, but it's much, much better. There will be a collapse at some point. There was one in the 20's/30's. There was another one 5 years ago. So maybe sometime in 2050??? Sorry, I can't keep reading about doom until it finally and inevitably happens 40 or 50 years from now.

Againstthelie's picture

Have you heard about the rumor, that the FED is pumping every day more than 2 bn$ freshly printed money into the stock market and 2 bn$ into the housing market?

runningman18's picture

Not even close.  UE claims have dropped because millions of people have been unemployed so long they no longer qualify for welfare benefits.  Official GDP numbers don't take into account all the fiat the fed had to inject in order maintain the appearance of growth.  Foreclosures are falling because far more Americans now rent instead of buy.  People with 401k's are seeing strong returns because the fed has artificially pumped up stocks.  NOTHING HAS CHANGED.  

disabledvet's picture

even better. "what predicament?" our bull market...your problem.

knukles's picture

And is still underway.

Nothing's changed

Oh, symptoms are being addressed but the diseases remain unchecked.

HaroldWang's picture

It's getting difficult to read these types of articles when clearly the economy is improving. Slowly but definitely on the right track. Housing overshot a bit to the upside recently and is now settling into a nice groove. Claims are falling rapidly. Many economic indicators suggest steady improvement. It's hard to argue with that. And when the entire world is in on the game, it will continue until one of them wants it all. But that won't happen while things are getting better, slowly. It's a pretty good scenario we're facing right now. Perhaps they truly have figured it out.

Westcoastliberal's picture

You must be "Million Dollar Bonus" in disguise. "Steady improvement" my ass. I don't call an actual unemployment rate of 25% "improvement".

NoDebt's picture

I'm confused.  Your screen name and your comment don't square.  I'm not your down-vote, but I'm guessing that's why you got one.

I gotta hear this story.

macbone's picture

It's not MDB himself, it's a guy doing MDB. It's a reasonable
Facsimile but original MDB had a slightly more aggressive
Loopiness. Christ, even the trolls are counterfeit currency
These days. God bless everyone on the holidays.

SilverCoinLover's picture

Did you copy & paste this from a post four years ago? Still looking for them green shoots are ya?

kchrisc's picture

"That's funny. I don't care who you are."

Not My Real Name's picture

I know. America is back on track, baby. I can't believe you forgot to mention the miracle of Obamacare.


NeedtoSecede's picture

Gave you a grennie, just for your avatar Not Real.  Yukon Cornelius is a bad ass!

yogy999's picture

When exactly did MillionDollarBonus change his moniker to 'HaroldWang'?. And why would he or she have done so?

I kind of liked the old moniker 'MillionDollarBonus'.

S.N.A.F.U.'s picture

HaroldWang (including the avatar) is an obvious reference to HarryWanger who predates MillionDollarBonus by quite a bit.  Don't know who the current HaroldWang is, but akak had an idea about who HarryWanger was.

To stick with the "conventional naming scheme", variations on MillionDollarBonus shouldn't be used unless it's funny.  Variations on HarryWanger are totally appropriate when the poster is simply a dick (or at least plays one on ZH).

Canoe Driver's picture

Hey Wang, you are right in one regard, that the collapse has already occurred. Where your thinking strays badly is that you assume it is over now, where in truth it continues, and continues to worsen, with masking efforts by the government everywhere you turn. No wealth or money is being created, only currency is being printed. Because currency purports to represent the money stock, the more you print, the LESS the value held in any given amount of currency.  Hard asset holders reap a windfall, while holders of currency and the millions living paycheck-to-paycheck are effectively diluted. In essence, highly regressive taxation is occuring on a massive scale.

Why would even a moron believe such a collapse could be reversed in only five years?

dogfish's picture

HaroldWang is RoboTrader the same M.O.

Nothing but the truth.'s picture

Harold must be a Fed / government propaganda department agent.

rlouis's picture

Those are some pretty compelling edge of the cliff moments for the market.  Would it be wrong to surmise that the market will not crash until they want it to?  Perhaps the plan is not to install to a global modified gold standard, but to transfer to Chinese fiat, and leave the USSA a broken pile of depreciated crap.



Ban KKiller's picture

I like ignoring history. I can sleep at night....

How long does the average fiat currency last?

What is the number of years?


Forty? Oh, yeah. 

rwe2late's picture

per James Joyce

"History ...  is a nightmare from which I am trying to awake"

starman's picture

Harold wang you're high my man ! GM has 2300 less dealerships, 90% of US corporations been running leaner operations by cutting overhead (meaning laying off 15-30% of the work force! 47million people on food stamp and 93million no jobs!

sosoome's picture

People getting fed up with the feds is near meaningless. They get fed up with everyone except their own reps, and encourage them to get as much candy as they can, which just keeps the circle unbroken.