Paul Singer's "Vision" Of The Coming "Riot Point" And The Fed's "Formula For Destruction"

Tyler Durden's picture




 

We sympathize with traditional stock and bond investors, who are faced with extremely poor choices today. QE has distorted the prices of all traditional asset classes to such an extent that none currently promises a fair return with modest risk.... Because the dominant force in securities-price movements today is government policy, particularly the governmental buying of bonds and stocks, there is a vulnerability to all trading and investing prospects that cannot be assessed or measured with confidence... Since there is no history of Americans losing confidence in the basic soundness of their currency and their government, and since monetary policy today is so manipulative and large, it will be hard to parse the reasons for any particular market moves in 2014.

      - Paul Singer, Elliott Management

As always, perhaps the best periodic commentary on the state of the "markets" (even if such a thing has not existed for the past 5 years) and global economy comes from the person whose opinion has not been swayed by fly-by-night screechers and book-peddling pundits who fit in CNBC's octobox and who come fast and are forgotten even faster, and whose 37 year track record at Elliott Management, whose assets he has grown from $1.3 million to $23 billion, speaks for itself: Paul Singer.

 

 

Below are the key excerpts from his January letter.

VISION

Imagine how mainstream experts would have reacted to the following set of predictions in 2006: “In two years Lehman will be bankrupt; Merrill and Bear will be acquired in distressed takeunders; Citicorp, AIG, Chrysler, GM, Delphi, Fannie and Freddie will be taken over by the government facing possibly hundreds of billions of dollars of losses; and only 13 global megabanks will survive.”

The 2008 crisis had a lasting and profound impact on virtually the entire developed world. The financial system was brought to the brink of collapse; conditions were created for the radical monetary policy of the past five years and a severely distorted recovery; the plans and dreams of hundreds of millions of people were disrupted, in some cases catastrophically; and societal values were significantly twisted away from individual responsibility toward dependency. In fact, the consequences of the bubble, the bust and the policy aftermath are not yet in full historical view. Despite all the pain, policymakers
refuse to take responsibility for the bubble, the distortions of the bubble years, the ensuing failure to lay the groundwork for strong post-bust growth, the continued riskiness and fragility of the major financial institutions, the lack of appropriate policies to deal with the bust, or their total inability to deal with competitive and technological challenges in the labor market.

It is not that the path toward destruction was impossible to see. On the contrary, a number of people saw the disaster coming, even if they did not all see the timing or the shape of it. The strangest part of the whole series of events is that only a few large professional investors noticed the smoke and shouted “fire.” Policymakers, particularly at the Fed and including (importantly) Janet Yellen, paid some small lip service to the building risks, but they were wedded to their primitive “models” and had a completely inadequate grasp of modern financial instruments, leverage and the interconnectivity of financial institutions. Not only did policymakers fail to understand what was happening and how to deal with the crisis and its aftermath, but also many of those same policymakers, and ALL of the structures and assumptions that prevailed pre-crash, are still in place today. No apologies have been issued. There has been a great deal of partisan back-and-forth and successful lobbying, but sadly the financial system is still not sound. This may be impossible to prove until the next crisis, but you could have said the same about conditions leading up to the last one.

Policymakers were and remain asleep at the wheel. The lack of introspection at the Treasury, the Fed, Congress, the White House and other regulatory bodies is astounding. Instead of taking reasonable and conservative steps to strengthen the financial system and to reach consensus on what is necessary to generate growth, there has been a series of cronyist, ideological, punitive steps that have neither catalyzed the growth that this country needs nor made financial institutions safe. At the same time, the Administration has allowed (and encouraged) the Fed to carry the ball all by itself, heaping praise on it for saving the world at the very time that the White House is shirking its own responsibilities. The Fed’s “dual mandate” (to promote “maximum employment” as well as “price stability”) is bunk in today’s context. It seems as if the entire world is acting as if the Fed actually has a “total mandate” and the rest of the federal government gets to stand around and applaud its heroic efforts. In fact, what we have now is a lopsided recovery, gigantic price risk in financial markets because of QE, and unknown but potentially massive risks of inflation and the ultimate loss of confidence in the major paper currencies, all because the federal government is more interested in ideology than in getting the country back on track, and the Europeans are more interested in preserving the euro than promoting the prosperity of the sovereign nations of Europe.

* * *

For private investment firms like hedge funds, leverage in the modern world is a matter of semi-volition. True, it is much more readily available than in the past, but there are credit departments and initial margins limiting the size of positions. The big financial institutions, on the other hand, found themselves in an  environment starting a couple of dozen years ago in which leverage was entirely voluntary, subject to no real constraint because they were not required to post initial margins with each other. Since many of their positions were “hedges” in similar securities, they risk-underwrote those trades using models that projected very little possibility of generating losses. As a result, the entire system has become super-leveraged, super-interconnected and very brittle. Given the benefits of hindsight, we do not have to prove the proposition that the limits of leverage were exceeded in the recent past and that the system was improperly risk-managed by governments and by the managements of financial institutions. It is frustrating, therefore, that no meaningful de-risking of the financial system has occurred since the crisis. You will see a system primed for a rerun of 2008, perhaps even faster and more intense this time.

***

MONETARY POLICY GOING FORWARD

QE has created asset price booms, but historically high excess bank reserves are still generally not being lent, and monetary velocity remains relatively low. But last spring, we witnessed the first tangible sign that the Fed may be trapped in its current posture. The Fed cannot retreat due to excessive debt in the system, the fragility of major financial institutions (still opaque and overleveraged) and the prospect that a collapse of bond prices could lead to a quick, deep recession. This situation may be the early stages of a phase in which the Fed is afraid to act because it has the “tiger by the tail,” and perhaps is beginning to realize that the current situation carries significant risks. QE has not generated a sharp upsurge of sustaining and self-reinforcing growth thus far. What it has done is lift stock and asset prices and exacerbate inequality. If investors lose confidence in paper money, as evidenced by either a hard sell-off in one of the major currencies or a sharp fall in bond prices, the Fed and other major central bankers will be in a pickle. If they stop QE and/or raise short-term rates to deal with the loss of confidence, it could throw global markets into a tailspin and the worldwide economy into a severe new recession. However, if they try to deal with the loss of confidence by stepping up QE or keeping interest rates at zero, there could be an explosion in commodity and other asset prices and a sharp acceleration in inflation. What would be the “exit” from extraordinary Fed policy at that point? The current, benign-looking environment (low inflation and
stable economies) is by no means ordained to be the permanent state of things. At the moment, “tapering” is expected to get underway, but that prospect represents a tentative, slight diminution of bond-buying. It contains no real promise of normalizing monetary conditions. If the economy does not light up, the impact of another year of full-bore QE is impossible to predict. Five years and $4 trillion have created economic and moral distortions but very little sustainable value. Maybe the sixth year will produce the “riot point.” Nobody knows, including the Fed.

 

As we and others have said, the Fed is overly reliant upon models that do not account for real-world elements of instruments, markets and traders in the derivatives age. Models cannot possibly take into account unpredictable interactions among huge positions and traders in new and very complicated instruments. Thus, the Fed should be careful, humble and conservative. Instead, it is just blithely plowing ahead as if it knows exactly what is going on. Intelligent captains sail uncharted waters with extra caution and high alert; only fools think that each mile they sail without sinking the vessel further demonstrates that they are wise and the naysayers were fools. This is a formula for destruction. The crash of 2008 should have been smoking-gun evidence of the folly of this approach, but every mistake leading up to the crash, especially excessive and “invisible” leverage and interest rates that were too low, has been doubled down upon in the years since.

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Sun, 02/02/2014 - 18:23 | 4394226 Millivanilli
Millivanilli's picture

Riot point = no EBT, no SS, no Pension fund, no IRA.

When the trough runs dry, the shit hits the fan.  Pennies on the dollar settlement will wake Americans up.

Sun, 02/02/2014 - 18:30 | 4394248 Kirk2NCC1701
Kirk2NCC1701's picture

'True dat.'. But this won't/can't happen as long as there is King Dollar.

Sun, 02/02/2014 - 18:57 | 4394299 Stackers
Stackers's picture

For some reason I do not think the Fed is oblivious to what it is doing. I think it knows exactly what it is doing and the unvoibable disaster it is creating. They simply know that in a fractional reserve banking system THEY HAVE NO OTHER CHOICE but to continue inflating the bubble to keep the system from a deflation money supply collapse like happened in the early 20th century from all the bank failures and everyone's bank accounts getting Cyprus'd

Sun, 02/02/2014 - 19:10 | 4394326 macholatte
macholatte's picture

 

For some reason I do not think the Fed is oblivious to what it is doing.

 

All war is deception. Be extremely subtle, even to the point of formlessness. Be extremely mysterious, even to the point of soundlessness. Thereby you can be the director of the opponent's fate.

Sun Tzu

 

Sun, 02/02/2014 - 21:37 | 4394534 Soul Glow
Soul Glow's picture

Sun Tzu's advice does fall deaf on many parties.  The Chin themselves against the Mongol hoardes.

There are many theories in economics - as it is studied - that hold no water, yet no one questions these.  An example is the "rational consumer" theory.  The theory states simply that all consumers are rational.  There is nothing further from the truth.

The world has become accustomed to a way of life that is easier than ever before, and this due to cheap oil.  But due to a plataue in production rates and easy money policy this is about to change.  

At best, the Fed was set up to fail and under scope from cliques like Skull and Bones and round table groups like the CFR smart men like Krugman and Bernanke were let to run wild.  Bet at the end of the day, reality bites, and the house with no foundation of sound logic will come crashing down.

Sun, 02/02/2014 - 21:46 | 4394578 satoshi911
satoshi911's picture

Nobody intentionally wants to run a PONZI, or have to tell their grandchildren, "I oversaw the collapse of the USD"

This shit just happened, ... like the Tocqueville quote today ...

"When the USA people discover that they can vote for people to rob other people and make everybody feel rich, the USA will go full retard"

That time is now, ... slowly like the frog boiled the FED went from RATIONAL, to FULLY IRRATIONAL.

WHY? Because if you didn't give the politicians unlimited USD, then you were removed from the game.

 

Sun, 02/02/2014 - 22:33 | 4394670 Soul Glow
Soul Glow's picture

The Rockefellers would want to tell their grandchildren, "Do you know who brought the Untied States of America to its knees?  Not another Nation, it was us little Timmy Rockefeller.  It was us."

Greenspan, Bernanke, Yellen, and even Krugman - maybe especially Krugman - will go down in history as fools, yes.  Yet the monied elite, those with the power to move markets - like JPM, GS et al - they do as they will.  Until the game is over; and then they will need a new game. 

Do they want it to crash?  Let's ask a better question?  Do they have a plan for afterwards?  They likely don't, as Obama Nation will not survive a tax hike while the U-6 rate stays high (it is currently +14%).  Once the dollar gets sheared by gold, and it will, then the MIC will not be able to move rapidly around the oceans and onto land that they don't already occupy.  

And it isn't that the crash is coming - it is here.  Most just don't know because through QE stock prices were elevated, and the status quo only watches for news blips.  When they see the Dow is still rising they relax and go to the store.  They buy wine to go home with.  They drink themselves a new tomorrow.

But tomorrow as in a new day will never come.  Boomers will wake up with sore backs and necks, the youngins will wake up with sore necks and sore stomachs.  No one will see what is coming, because their ignorance, their complacency, got the best of them.

Sun, 02/02/2014 - 23:42 | 4394823 AlaricBalth
AlaricBalth's picture

The Fed clearly suffers from a cognitive expectation bias coupled with an illusion of control. It is a recipe for disaster.

Sun, 02/02/2014 - 23:55 | 4394840 WarriorClass
Mon, 02/03/2014 - 07:57 | 4395270 Supernova Born
Supernova Born's picture

The better the article, the more bizarre the comments.

This was a kick ass thread that deserves forwarding.

Mon, 02/03/2014 - 08:44 | 4395325 Thomas
Thomas's picture

Amazingly clear article. Of course, when it happens nobody will have seen it coming.

Thu, 02/06/2014 - 12:09 | 4407888 forexskin
forexskin's picture

"There has been a great deal of partisan back-and-forth and successful lobbying, but sadly the financial system is still not sound."

the financial coup-d'etat would not have been possible without the conditions created by the 2008 crisis.

the financial system is not intended to be 'sound' in the common sense,  but to have usable instabilities that will precipitate the next 'crisis' and the predictable response - more control, more power for those in power, and a dumber populace.

things are going exactly as planned, including plenty of commentators saying 'all is improving', and the necessary few reality checking, hand wringing critics - who are saying in whispers "things are precarious - there might be another accident". this is bullshit.

the coming 'accident' is no accident, and we will see that when the dust clears. the new world order will be further along... and the rest of us will have been 'rationed' into our new, smaller cages.

Mon, 02/03/2014 - 08:03 | 4395279 GetZeeGold
GetZeeGold's picture

 

 

If we let amnesty go forward....we might as well launch the missiles.

 

The result will be the same.....it's that serious.

Mon, 02/03/2014 - 00:11 | 4394852 satoshi911
satoshi911's picture

Greenspan and Bernanke are professional LIARS, I mean 'trained' like LAWYERS,

Come on they're not proud of shit, ... they did their job, and now they retire in splendor, and you dont'.

 

Mon, 02/03/2014 - 00:17 | 4394884 Soul Glow
Soul Glow's picture

I'm proud to say, and I don't know the cause, because we were burnouts - we were the rough riders - all of my friends own many acres of land and farm it.

Once again, I don't know how it happened, but most of my best friends, guys that I have known since middle school, are farmers and own ariable land.

Everyone else can go fuck themselves.  I personaly told everyone to buy silver.  I personaly told of the ramparts of Krugmantism.  I told you that the dollar is worthless.

And now all my friends and I are farmers.  Now who is confident, and who fucking cares.

Mon, 02/03/2014 - 04:03 | 4395120 satoshi911
satoshi911's picture

Every farm I own in the USA is surounded by METH heads and now they're 3rd generation, ... yep you go live on your farm.

The FARM like everything else ain't what it used to be, the 'work' is now done by seasonal mexican ( by choice ), nobody would hire a white.

Other wise the farming is done by machine.

Rural people were once proud in rural areas, now they're 4th generation welfare, and all meth-heads.

Meth is the cheapest and easiest way to get high, funny all METH came from NAZI germany, and the Nazi's needed it to fight, and the hell's angels got the recipe during WWII and brought it back,

Essentially NAZI METH, was MTN-METH, Meth has been around since the 1880's.

*

Jimmy Rogers can talk about owning the 'farm' but sure as shit jimmy don't live there.

 

Mon, 02/03/2014 - 00:48 | 4394936 ejmoosa
ejmoosa's picture

And you can bet your sweet ass that these fellas have enough physical gold and silver set aside to survive a reboot, if they survive at all.

Mon, 02/03/2014 - 03:57 | 4395119 satoshi911
satoshi911's picture

I have been around these people now and researching this shit for almost 50 years.

I can tell you this,

They all have dual israel passports, and 90% that I have ever know of these types, when they retire they go to Israel, and live in a beach front condo, and then sit around all day with their own.

Seen it for years, now if there is a revolving door, its watching these people sell out the USA, retire to Israel and die, and then AIPAC ship's over new fresh blood to keep the PONZI going,... and this has been going on for a long fucking time, ... since the 1970's clearly before my own eyes.

*

Most politicians that I have peronally known, post retirement spend most of their time back in Israel,... life is better, food is better, they feel safer....

 

Mon, 02/03/2014 - 00:05 | 4394859 willwork4food
willwork4food's picture

Do they have a plan for afterwards?  They likely don't,

 

Bullshit. They employ the top tiers of ivy league schools and many other High IQ sold outs along with the best military (fiat) money can buy. To think this was not included in their strategies is silly, even if they have to resort to plan B. To think they don't have a back up plan in place is the height of folly. Our enemy is not something to be taken lightly, but it is not something to believe is unstopable.

Mon, 02/03/2014 - 00:09 | 4394872 satoshi911
satoshi911's picture

Damn, straight one of my relatives married into one of the richest family's in america,... can't say thier name, lets just say top ten.

I got to know the patricrchs and matriarchs fairly well.

One thing I learned early on is that all grand-children got 1 Million/year for life,.. setup as a trust in the 1930'.

I asked the matriarch, how do you do this?

She said that the family had people in EUROPE that had been doing this for 100's of years, that they always planned out ten generations.

It was fun, this was like early 1980's and I used to ask this old 90 year woman question about 2010, and she would have an answer, she actually read all the reports from the service in EUROPE. They actually wrote predictions for out 200 years and actually invested with such thinking.

*

So yes, the RICH are very different than the POOR, the poor barely even sees himself, or his own  children, and hardly plans a trust for ten generations in the future.

*

Since my relative married this family she had 5 kids, and now there are dozens of grand-kids, and yep, everyone one gets a million bucks a year ( indexed of course ) ...

 

Mon, 02/03/2014 - 00:58 | 4394952 Seize Mars
Seize Mars's picture

Uh, I don't think you know very much about money, do you?

Mon, 02/03/2014 - 03:53 | 4395116 satoshi911
satoshi911's picture

I will tell you what I know about money.

Carnegie the Steel man said it best in the 1800's

"Making money is easy, but keeping it is hard"

I can tell you this I still have my money.

 

Mon, 02/03/2014 - 10:13 | 4395460 Tall Tom
Mon, 02/03/2014 - 00:19 | 4394893 Soul Glow
Soul Glow's picture

My point wasn't that they can't think of some no brain plan - my point was that their next plan won't fall short.  It will.  They are ignorent of real life; the PTB are igonrent of the daily grind.  They will lose control, and we will take it back.

Mon, 02/03/2014 - 00:04 | 4394865 satoshi911
satoshi911's picture

IMHO Rockefeller influence climaxed in the 1970's,

The torch was passed to Bill Clinton & Hillary,

Bill Clinton is the Bastard son of Winthop Rockefeller.

*

Rockefeller Foundation of course lives on and UN,IMF, ... are all ROCKEFLELLER creations.

All NWO instutitions today  have Rockefeller Roots.

All in Carrol Quigleys books if you care to learn about the real history of the rise of white-anglo saxon world power.

I predict that Chelsea Clinton (in her time), will rule the IMF, once the IMF-SDR takes over the USD as reserve-currency.

 

Mon, 02/03/2014 - 01:03 | 4394960 CPL
CPL's picture

"The beard is to the detriment of the Chin."

Sun, 02/02/2014 - 22:02 | 4394607 BandGap
BandGap's picture

Be extremely nonsensical, allowing time for people to point fingers at one another.

Sun, 02/02/2014 - 23:51 | 4394357 KickIce
KickIce's picture

There's a reason they passed the Patriot Act and the NDAA...  there's also a reason several federal agencies are loading up on ammo.  They know and are prepared to deal with it.

When Obama was campaigning he stated we need a national force as fromidable as our traditional forces and we now have Homeland Security.

Mon, 02/03/2014 - 05:41 | 4395179 Disenchanted
Disenchanted's picture

So Obama is/was the President in office when the Department of Homeland Security was created?

Jesus fucking wept!

 

 

Department of Homeland Security (DHS)

 

Formed in 2002 from the combination of 22 departments and agencies, the Department of Homeland Security works to improve the security of the United States. The Department's work includes customs, border, and immigration enforcement; emergency response to natural and manmade disasters; antiterrorism work; and cybersecurity.

 

edit: btw, in the OP it says "the dominant force is. . .government policy" ...well it seems to me that it's all been bankster/money changer's policies masquerading as govt policies, since at least 1913.

But hell I'm just a peon, what do I know...

Mon, 02/03/2014 - 08:24 | 4395290 KickIce
KickIce's picture

No, Bush did.  But for all the left's bitching as well as Obama's protests before gaining office he has done nothing but strengthen the act since being elected.

I agree that monetary policy is at the heart of our problems but I was responding to a post that stated that bankers and politicians were aware of the damage they were causing.  I was merely using legislation and ammo purchases as proof of this.

Sun, 02/02/2014 - 20:20 | 4394366 New World Chaos
New World Chaos's picture

They know exactly what they are doing:  Wrecking America and letting the elite crime families loot the real assets for pennies on the printed dollar.  See this article on how the Fed sold off Ft. Knox gold to the elite crime families at the official price of $42.22/oz when the market price was $175/oz: 

http://www.silverdoctors.com/40-years-of-gold-manipulation-beneath-the-s...

Rockefeller's secretary blew the whistle.  She was suicided three days later.  This is what led to the phony whitewash peek at 5% of Ft. Knox's alleged gold stash.  Thanks in part to Rockefeller's "charitable" efforts with public education, the sheeple were mollified. 

America is the biggest threat to the New World Order.  It must be destroyed.  Even the existential idea of America must be destroyed.  They are planning a slaughter to echo down through the ages.  The DHS Checka is arming itself.  Are you?

Sun, 02/02/2014 - 21:43 | 4394573 satoshi911
satoshi911's picture

The NWO came from ameriKKKA,

Ford, Rockefeller, Hearst, BUSH...

They started all this back in 1910,... and really you could go back to civil war if you wish,...

*

Today the USA is a useful mercenary army to enforce the IMF-SDR onto the world.

The USA population are only viewed as useful parasites, so long as they play along.

*

The goal was always to rule the world, Rome's fault was that there were other countr's to the rich could flee.

The NWO wants to make sure there is no where to flee, but there is,...

IMHO the NWO is too busy with UKRAINE, THAILAND, ARGENTINA, the USA,... its spread too thin, to control the world.

Real world control the ASSHOLES ain't there yet, ... sure if they could have a UNIVERSAL BITCOIN, but they don't just as quick as they created bitcoin, the majority of the world said "FUCK BTC"

*

Eventually the NWO crowd will implode, and they'll be backed up to the USA, where the USA will once again revert to a penal colony.

I still say 100-200 million MUST perish in the USA, there is no way that the penal colony corporations will feed those mouths, when there is nothing left to steal from them, and humans are needed anymore for work,... there is no reason to keep them around.

Sun, 02/02/2014 - 23:46 | 4394740 New World Chaos
New World Chaos's picture

Generally right except for one big thing- This didn't start in America.  It started in Europe with an alliance of elite crime families:  Rothschilds, Lazards, Warburgs, Kuhns, Loebs, Schroeders, Schiffs and a few others.  This part of the crime syndicate is dominated by Ashkenazi Jews, who are actually Khazars.  They may have allied with older families steeped in the dark arts (think ritual abuse, satanism / luciferianism, human sacrifice, Moloch worship, possession, Babylonian money magick, and perverted teachings of ancient mystery schools).  This alliance was the Illuminati.  One of the first things they did was assimilate the Masons, so now they have that knowledge and power structure too.  The American crime families (Rockefellers, Bushes, Morgans, etc.) mainly came from WASP backgrounds.   They never had the wealth or esoteric knowledge of the older families, so for the most part they remained subservient.  The Rockefellers do want America to have a bigger seat at the table, but this is not due to patriotism, it is simply because most of the family's business involves America.

Here is a good description of the insidious tactics of the Illuminati.  A good read for anyone who wants to discover the real reasons for the decay of Western civilization:

http://www.redicecreations.com/specialreports/whoilluminati.html

America isn't even in the drivers' seat today.  It's a puppet state.  Dumb musclehead enforcer / tax donkey for the NWO which will destroy it.  Look at the above silverdoctors article- most of the gold went to Europe.  And look at the whiny, shit-stirring little country that dictates American foreign policy. 

 

 

Sun, 02/02/2014 - 23:56 | 4394845 satoshi911
satoshi911's picture

In a historical context I agree with everything you say.

Yes, the USA don't rule shit, ... its just the designated MERCENARY ARMY to be used by the PTB to rule the world.

If & when the US-MIL quits being a lapdog to the PTB, then the PTB will pull the plug on the US-MIL and it will implode in hours,...

All it takes is a few days of no $$$ and the US-MIL folk will run home with their tails between their legs.

 

Mon, 02/03/2014 - 00:19 | 4394891 willwork4food
willwork4food's picture

I doubt that will happen. If anything, they need a little muscle to get what they need. God help the other 250 million people in the US.

Mon, 02/03/2014 - 03:49 | 4395111 satoshi911
satoshi911's picture

Yep, but PTB can cut the $$$ to the US-MIL and they do have family and it natural for a man to run home and take care of his family.

I'm just pointing out the obvious, the PTB has the US-MIL by the ball's.

Don't kid yourself that they're going to be OUR savior, they're going to save their own ARSE, and they already have, and like cops, they don't care cuz they think the rest of us are all parasites.

If your not cop  or MIL, then your parasite.

 

 

Mon, 02/03/2014 - 08:34 | 4395310 GetZeeGold
GetZeeGold's picture

 

 

Ford, Rockefeller, Hearst, BUSH...

 

You forgot Obama.

Mon, 02/03/2014 - 09:26 | 4395362 satoshi911
satoshi911's picture

Obama is SHIT in the context of NWO

HILLARY is the MAN,

Obama was placed by AIPAC to put a black-face on killing all man, woman, and child in IRAN. Obama has failed.

Now comes HILLARY to do a man's job.

 

Sun, 02/02/2014 - 19:20 | 4394342 Jack Burton
Jack Burton's picture

Captain Kirk, I concur with you. All the monetary policy underpinng the USA  , via the Fed, is based on "King Dollar". The US central bank has printed so many dollars since 2008 that these reserve currency green slips of paper have moved to distort the entire world financial system. Witness the "hint of taper", and the crash of foreign currencies already underway in a number of nations. This is so complex, I can not pretend to understand how this is interconnected, but that does not prevent me from knowing it is interconnected and is massively disruptive to stable currency trading, and foreign central banks policies.

I for one, from reading Mish Shedlock's blog in particular back in 2006-7, was only too welll aware of the giant storm sweeping in from a black horizon, I bailed out of the markets totally by 2006 and sat in T-Bills, Inflation protected Savings Bonds, cash, and invested part of my savings into a new build home designed by me for efficient living in hard times. Thus the house is small, but very nice, designed to take maximum solar heat in winter from the low southern sun. Downsize and remain debt free as the collapse swept in. This worked for me as I took zero losses. BUT, I admit to never ever, nor did Shedlock either, guess at what the Federal Reserve and USG would do in repsonse to collapse.

The giant asset bubble took place with me on the side lines. I never even imagined that such money printing, QE and open market price manipulation, plus ZIRP could happen. So no profits for me from Fed asset bubble blowing.

What I do know, is just what the above article says, "nothing has been corrected, no revaluations have happened, no creative destruction has happened, market forces were deliberately short circuited to prevent the big asset holders, i.e. 1% 'ers, from taking the losses due them."

Main Street economy has continued to fall, especially small business has been ruthlessly gutted and former working class type jobs have been eliminated as a part of the US economy. What survives is the "Big Box Model" for retail and even services now. The last economy standing ,as if it was 1960, is the US Government, State, County and City government units, these have expanded like the "Big Bang Universe", and they survived 2008 largely intact. Even Medical Services is now slipping as the engine that drives the economy. We are left with a fake money printer's dream world economy. The 1% feast off of Fed printing and government has gone insane, becoming a world wide war machine spending US taxpayer's money across the globe to start wars and destablize nations. At home, an unprecidented represssive Police state is in place, cops are armed like Navy Seals, Tens of thousands of Americans take Uncle Sams generous fat paychecks for being big shot spies who track our every thought, word and deed, and dare to say we deserve this treatment because we might threaten the state.

Get real here. Money printing and King Dollar have replaced a former wealth producing economy. King Dollar is the key, it is all we have left. The FIRE economy IS the American economy. Spies, Cops, soldiers and war and repression on a vast scale, all funded by printers of dollars at the fed.

2008? Nothing was fixed, it was in fact all made worse. Next melt down is when society melts with it.

Sun, 02/02/2014 - 21:14 | 4394511 Spanky
Spanky's picture

+1

For... a good rant.

Thanks. Was it good for you too?

Sun, 02/02/2014 - 21:30 | 4394542 satoshi911
satoshi911's picture

What you say is 100% true, and what I have said here all along.

*

Now deal with it,... where do we go from here? What is the goal?

For me, my argument all along, cuz I knew this was the case, was to run far from the fucking police state, cuz soon they'll not let you leave, unless you can prove that your money is ALL in the USA.

IT's only going to get worse,... these things never get better until there is a war, a REAL fucking RESET, but given that they will disarm, and given that the USA public has no balls and have been drugged for 3 generations, and TV pacified, ... there will be no revolution.

*

My personal guess is that like Rome in 500AD eventaully the world quits sending food, and this is why the IMF-SDR is so important, once the currency is IMF-SDR then the WORLD must accept it forever.

The END OF HISTORY.

 

Sun, 02/02/2014 - 23:47 | 4394557 satoshi911
satoshi911's picture

How can wealth producing return?

In an economy when the best paying jobs are cops and prison guards, who can enter a house and rob, and judges will share the loot.

How and why should anybody risk investment?

The USA in this current model will go FEUDAL and quick.

Look no further than Orwellian movies, blade-runner, 1984, ... where city people are forced to the bus and live in box-rooms, and country people are all METH addicts that wander the hills for loot.

*

This model can and will go for a long time.

That said, and ZH folk always say "Its the same everywhere", no its fucking NOT, the world is still full of places where people love family, and work, and saving, and growing there own food over plundering other people.

While the USA is a nation of assholes, ran by assholes; much of the rest of the world, doesn't immitate the USA.

 

Mon, 02/03/2014 - 08:06 | 4395283 Hopeful Skeptic
Hopeful Skeptic's picture

While the USA is a nation of assholes, ran by assholes; much of the rest of the world, doesn't immitate the USA.

 

Your overly broad caricature of all U.S. citizens undercuts your argument and credibility. Where one lives in the U.S., and who one accociates with, will largely dictate how one fares in the context of an economic collapse. Your earlier characterization of all farmers as meth addicts is simply ignorant. I live in the heart of the country, and the majority of folks are fine, hard working, and caring people, who will have each others' backs.

I would also propose that the only reason some of these (apparently uniformly) altruistic people elsewhere in the world that you describe haven't plundered on a grand scale is that they have so far lacked the power and economic drivers to do so.

 

Sun, 02/02/2014 - 21:47 | 4394579 Soul Glow
Soul Glow's picture

"King Dollar" is an oxymoron.  The dollar is the most overused currency in the world.  It is based on the treasuries ability of a promise to pay, and that promise will never be fullfilled.  Everyone knows it too, but the institutions with trillions at stake want to suck the system dry as long as possible.

Watch as the dollar falls from grace, replaced by gold only after a short 50 year reign as "king".

Sun, 02/02/2014 - 21:53 | 4394585 satoshi911
satoshi911's picture

The NWO crowd ( bush, ford, rockefeller ) since 1910 carefully made the USD king, ... by murdering over 100 million people to date.

Dead Men don't lie, ... The dollar is king because it is covered by blood, and monkeys world-over fear the site of blood.

Anybody on earth that doesn't trade black-market in USD is killed, and anybody that doesn't sell their OIL in USD is killed, ... been this way since WWII, and before.

*

The USD is king,... I think those storys that Nigeria is selling OIL in YUAN, is just because there are so many chinese ex-pats in Nigeria.

When SAUDI starts selling its OIL in EURO, then let's talk about the USD not being KING anymore.

Sun, 02/02/2014 - 22:15 | 4394643 Soul Glow
Soul Glow's picture

Don't dictate a conversation.  We will talk about it now.

ALL fiat currencies are created unequal in the face of gold.  Gold moves markets; you may not see it because it doesn't happen in lockstep, but gold moves markets.

When oil is traded in gold, how about you come back to ZH.  Until then, take a break from dictating.

Sun, 02/02/2014 - 22:30 | 4394685 satoshi911
satoshi911's picture

I see for a Bangalore bot your almost there, ready to start the personal attacks, I will not.

Let me just quote MAO "ALL financial power behind all currency in the HISTORY of mankind, came from the barrel of a GUN".

*
GOLD don't have shit to do with anything.

It's been proven all along here on ZH, that since the first day a BANKER had GOLD in his vault to 'back his paper-currency', he was leveraging that gold 10 to 1, probably no time in recorded history has 'Backed by Gold meant anything, other than con-artist BULLSHIT".

Talk GOLD in your hand, but as soon as you mention paper-currency, or FIAT your talking SHIT.

*

This conversation doesn't have shit to do with GOLD, it has to do with WHY the "KING DOLLAR" is IMMORTAL, and he is IMMORTAL cuz he has murdered +100 MILLION people since 1910.

You are BOT, whose only purpose is to distract and drive good people away.  Toss in a little /sarc, and you think that all of a sudden you look 16 instead of 14, but for me /sarc always say's 12.

 

 

Sun, 02/02/2014 - 22:44 | 4394703 Soul Glow
Soul Glow's picture

I made nothing personal.  You tried to dictate conversation and I told you to get fucked.  I'll tell the same to anyone whose ego circumvents their literature.

Gold has everything to do with it.  China was no superpower under Mao.  They became a super power while they were buying massive amounts of gold over the last ten years.  

Once again, gold has everything to do with it.

Sun, 02/02/2014 - 23:53 | 4394837 satoshi911
satoshi911's picture

Gold has nothing to do with why the USA has gone full retard NAZI.

Gold has nohting to do why ameriKKKan's shop at WALMART and buy chinese crap.

Gold has nothing to do with the coming civil war to the USA.

*

The USA is a mercenary army for the IMF/NSA/CIA, its just a pool of warm body's aka cannon fodder, the mercenary army is NOT even paid in gold, they are paid in worthless FIAT.

Those that are not mercenary soldiers or cop's in the USA, are dead men & women, waiting to be sent to CAMP FEMA.

Not a fucking thing to with GOLD, all that could be stolen from the USA left, during the 1980's, today there is nothing left to steal in the USA, .. today its now time to prostitute USA citizens.

I predict that CAMP-FEMA will be full of JAP style "FUCK-CAMPS", where people are fucked to death while awaiting their death.

Mon, 02/03/2014 - 02:34 | 4395057 zer0concerns
zer0concerns's picture

I want to help you my new best friend. The war that started looooong ago was not is not now nor ever will be civil.
I commiserate with you my newest BFF(AND forever b/c when zer0concerns comes to sup with you zer0concerns brings the finest buffet of consequences to an immovable feast of gutter trash and and and the only seasoning is hunger and sweaty ball juice...where was I?....ohhhh yeh)...wait...I forgot what we were talking about. this thing is allllllll bs b/c Their's no f'ing ing way Tyler could fool soooo many dips in the highs. Hey, I respect the comments but I'm never Honda honcho pascal believe Tyler injured humanity by lying soooo frequently and consistently (how does Tyler write such wildly divergent articles one after the other without tiptop approval? Answer me chumps) where was I....ohhhh yeh....I have nooooo worries b/c I learned to stop worrying and live the financial bomb. Has anyone checked the prices for Ukrainians h strictly the cock pleasing ones) lately.
Frankly...whoa...ohhhh yeh. Guys/gals, stop your crying.
Satoshi has no worries. Like...ohhhh right you his/her britches wear the pants that you're handed. Where's let them eat rand? I would be up that dudes asshole following him if he'd quit his day job. Jack Burton to. Others...sure. Hey...lter/jb(not the only ones) why funny when nooooo joke can be got? Tell me where your asshole is and I'll wipe it with my tongue. I'm actually (prolly) older than let them eat rand but I'd follow that guys dump. I would. Jack Burton order me to x,y and let's do done agreed upon things we dint think should ever happen.

You're allllllll bitches. I've no worries. Tell me where you're at. Tell me. I love in a state of nooooo worry. Fuck your money.

Do NOT follow this link or you will be banned from the site!