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The Moment When The Fed Admits It Has Become The Market's Muppet

Tyler Durden's picture


The following exchange between then-Kansas Fed president (and current FDIC director) Thomas Hoenig and the Chairsatan, uttered during the historic Sept 16, 2008 FOMC meeting, is of particular importance for four reasons: 1) it appears to be the first instance in the Fed records, where the phrase "too big to fail" is memorialized; 2) it highlights something that has become all too clear by now: in giving to a culture of moral hazard, the Fed is now being openly "played" by the market (read the big banks); 3) it confirms that the Fed has learned zero lessons from the crisis and 4) the thinking behind the "Bernanke (global) Put" is laid out for all to see.

MR. HOENIG. Mr. Chairman, I have thought about this considerably because I think we have come to a time in our history when we have institutions that clearly ought to be and may in fact be too big to fail. I think we tend to react ad hoc during the crisis, and we have no choice at this point. But as you look at the situation, we ought, instead of having a decade of denying too big to fail, to acknowledge it and have a receivership and intervention program that extends some of the concepts of the FDIC but goes beyond that. That is, if you are insolvent, it is not a central bank issue—we are a liquidity provider—and therefore the government comes in. But unlike the GSEs, everyone has to take some hit—the equity holders, certainly the preferred stockholders, also the subordinated-debt holders, and perhaps the senior ones—by assuming a certain amount of loss. They would have immediate access to—pick a number—80 percent. The research would help us pick that number, and they can have access, but the rest becomes a subordinate-subordinate position after the liquidation so that you have still a sense of market discipline in play and you don’t get the system gaming it in that, if you know there’s a bailout coming, you buy the debt and sell the equity short to make a bundle. I think therein lie the distortions that are absolutely detrimental to the long-run health of the economy.


Regarding how we go forward, I think we are going to have many lessons from this. Part of the problem has been very lax lending and, obviously now, weaknesses in some of the oversight. Also a history of our reacting from a monetary policy point of view to ease quickly to try to take care of the problem and, therefore, to create a sense in the market of our support has raised some real moral hazard issues that we now need to begin to remedy as we look forward in dealing with future receiverships. We are in a world of too big to fail, and as things have become more concentrated in this episode, it will become even more so.


CHAIRMAN BERNANKE. I certainly agree—and the Treasury Secretary and I have said publicly—that we need a strong, well-defined, ex ante, clear regime. But we have the problem now that we don’t have such a regime, and we’re dealing on a daily basis with these very severe consequences. So it is a difficult problem.


MR. HOENIG. I think what we did with Lehman was the right thing because we did have a market beginning to play the Treasury and us, and that has some pretty negative consequences as well, which we are now coming to grips with.

Yes Tom, unfortunately 5 years later, not one lesson has been learned, as for the "market playing" you and the Treasury, we too can't wait for the moment when not even the market can "game" the clueless mandarins at the Marriner Eccles building, and it all comes crashing down...


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Fri, 02/21/2014 - 14:52 | 4462651 insanelysane
insanelysane's picture

New normal is 5 years old.

Fri, 02/21/2014 - 15:03 | 4462687 Oh regional Indian
Oh regional Indian's picture

Bankster speak, as convoluted as legalese....

Dangerous, these policy wonks, because they know how to use the language perfectly for their carefully chosen, sounds lke someone sat and rewrote the real grunts and moans into this crafted wonk talk...


Fri, 02/21/2014 - 15:10 | 4462704 Soul Glow
Soul Glow's picture

Old normal.

Language can be made to pervert.  

Fri, 02/21/2014 - 15:11 | 4462721 TeamDepends
TeamDepends's picture

Ben pulls out "ex ante" and gets several "harumphs" around the table.

Fri, 02/21/2014 - 15:18 | 4462740 Payable on Death
Payable on Death's picture

Sheesh, Tyler. It's Kansas City (Missouri) Fed. This is a repeated error.

Look in your wallet for "J".

Fri, 02/21/2014 - 15:21 | 4462750 Ham-bone
Ham-bone's picture

Who will buy all those Treaury's now the Fed is tapering??? Those Treasury's that allow US to run these deficits and service debt so cheaply???

Given that the pendulum of "foreign" / Fed vs. domestic (US non-Fed) purchases of Treasury debt has become so skewed and so dependent upon these "foreigners" to maintain their purchasing in the wake of the Fed's taper(s), seems a good time to determine who will buy the new issuance and who will rollover all that existing debt.  And why.

US has $17.3 T in Treasury debt. 

$5 T is in intra-government debt (SS and the like).  This portion is barely increasing as SS surpluses have ceased but the government will continue to roll this over without any issues.

That leaves $12 T in public outstanding debt.

Nearly $2 T is in ultra short duration Bills that can be viewed almost as a cash substitute.  These are held by institutions and the like and although yielding nothing to next to nothing (and very vulnerable in an interest rate shock) are likely to continue to find a home as a cash substitute. 

That leaves $10 T in Notes / Bonds (plus TIPS) comprising all the medium to long term (over 1yr to 30yr) Treasury debt.  This debt was primarily held by domestic buyers up to '00 (pensions, insurers, etc.) but since that time to now, this has radically changed.

Reliant on the good will of "Foreigners"

While the public outstanding debt has increased from $3 T in '00 to $12 T+ now, the total amount owned by domestic sources has remained relatively unchanged.  So, if $9 T in debt was added and relatively no more was purchased by American sources, who bought it?  "Foreigners" and the Fed combined to purchase approximately 80%-90% of the increase of Notes / Bonds.  "Foreigners" now hold $5.6 T and the Fed $2.25 T in Notes / Bonds...or in other words, they hold $7.85 T of the $10 T medium/long term US debt. 

The Fed's motivation is clear but why "foreigners" have bought and continue to buy and hold ever greater amounts of ever lower yielding US debt that is sure to be paid back in devalued US currency is a vexing question?

Some may do it to weaken their currency or park large dollar trade surplus'.  However, Luxemboug, Belgium, Ireland, Singapore, etc. etc. are truly mysterious gigantic holders of Treasury debt.

Now that the Fed has begun it's taper and for sake of argument will continue to fully taper to zero monthly purchases and ultimately will stop rolling over the $2.25 T in Treasury's it currently holds (consider this a theoretical exercise...but maybe not).  Who will buy these $10 T and still growing US Treasury Notes/ Bonds?  Domestic buyers have shunned these Treasury's due to their extremely low yields and purchased relatively more attractive options.  Absent yields moving up significantly above inflation, domestic buyers will maintain their boycott.

This leaves "foreigners" to rollover their $5.6 T and buy nearly all new issuance ($500 B + annually @ the minimum) and subsequent to the Fed's taper, begin buying up the $2.25 T of notes/bonds the Fed will not continue rolling over.  What is being suggested is that "foreigners" will grow from the current 50%+ and become 80% to 90% owners of all medium/long term US debt.  And the suggestion is they will continue to buy despite yields remaining low and despite the $ becoming an ever lower % of global trade as Euro and Yuan based trade continues increasing. 

Who are these benevolent "foreigners"?  According to the Treasury's TIC report, ”foreigners” is simply the term TIC applies to Treasury’s purchased / held in “overseas custody accts", the data is provided by US based “custodians”, data “may not be attributed to actual owners”, and ”data may not provide “precise” accounting”… (see TIC FAQ #7 at:…).

In essence, the TIC report explains how many Treasuries are purchased and when and where they were purchased (Belgium, HK, China, Canada, etc.) but does not claim knowledge of "who" (or that who's nationality) purchased the Treasury's.  To wit, a German or Japanese or American can purchase Treasury's in Canada or Luxembourg or the UK and these purchases are attributed to the country where the purchase occurred, not the nation of the purchaser. 

So What???

The “red flag” in this was the Fed tapering. The Fed in it’s recent QE3 were buying nearly all medium term Notes / Bonds issued (up to their 70% limit) plus significant % of rollovers.  But on their stated exit from QE, “Foreigners” who double the Fed’s total holdings, should have seen rates would be rising and prices falling absent this buyer…typical “investors” would have been selling to front run the Fed’s exit. The Fed would have known this taper would cause a rate shock. But no selling…no yields to the moon. Rather “foreign” holdings have hit a new record high as of December.  Seems these “foreigners” are not typical “investors” and upon the exit from the “market” of a buyer of 70% of issuance, they are unconcerned. Typical “investors” would be concerned w/ the likelihood of losses. 

I have a sneaking suspicion that debt ravaged Ireland did not buy $106 B in Treasuries since ’08. And Norway did not add $77 B, nor did Belgium add $244 B since ’08…and on and on. I don’t doubt the Treasury’s were purchased nor that the purchase occurred in these locations…I simply question where the money came from and who actually owns these?

I believe there is a good likelihood of a shadow QE at least as large as the on the books QE and maybe this shadow QE is double the size of “QE”. Whether this is via currency swaps, ESF, Fed authorized agents, or whatever manner…there are likely many more dollars than acknowledged to maintain a “market” for ever more US treasury debt @ ever lower yields. This would also seem consistent w/ collapsing velocity of money since new money isn’t loaned or multiplied…just conjured and retired. 

Tell me why this is crazy, impossible, unlikely, or whatever.  Just don't tell me you agree with me.  Let's try to deconstruct this notion.  Thanks.

Fri, 02/21/2014 - 15:28 | 4462779 Ham-bone
Ham-bone's picture

Cheatsheet to "foreign" Treasury ownership / trends


              $1 T  --->  $1.6 T ---> $5.6 T


China $60 B  --->  $400 B ---> $1.27 T

Japan $315 B --->  $600 B ---> $1.18 T

Taiwan $35 B --->  $38 B  ---> $182 B

HK       $39 B --->  $52 B  ---> $159 B

Singapore $30 B->  $30 B  ---> $86 B

India      <$5 B -->  $15 B  ---> $69 B

Thailand $13 B ->  $16 B  ---> $52 B

TOTAL   $497                         $3 T (600% increase, '00-'13)


Brazil <$5 B  --->  $54 B  ---> $245 B

Canada $15 B  ---> $28 B  ---> $56 B

"Carribean banking centers"

        $      35 B ---> $68 B  ---> $291 B

TOTAL  $55 B                    $592 B  (1100% increase)


"oil exporters" 

        $45 B ---> $112 B ---> $238 B  (500% increase)


Russia <$5 B --->  $9 B   ---> $139 B

Norway  <$5 B ---> $20 B  ---> $97 B

UK    $50 B  --->  $100 B ---> $164 B

Switzerland $18 B> $34 B  ---> $175 B

Turkey <$5 B  ---> $25 B  ---> $52 B

TOTAL    $83 B                       $627 B  (750% increase)


Ireland $5 B --->  $19 B  ---> $125 B

Belgium $28 B -->  $13 B  ---> $257 B

Luxemburg <$5 B-> $60 B --> $134 B

TOTAL    $38 B                         $516 B  (1350% increase)


Germany $54 B ---> $50 B ---> $67 B

Italy      $20 B   ---> $14 B ---> $30 B

Netherland $13 B-> $15 B ---> $37 B

France   $27 B  ---> $10 B ---> $54 B

Spain    $20 B   ---> $<5 B ---> $23 B

TOTAL   $134 B                   $211 B  (57% increase)


"Carribean banking centers"

        $      35 B ---> $68 B  ---> $291 B

Switzerland $18 B> $34 B  ---> $175 B

HK       $39 B --->  $52 B  ---> $159 B

Singapore $30 B->  $30 B  ---> $86 B

Ireland $5 B --->  $19 B  ---> $125 B

Belgium $28 B -->  $13 B  ---> $257 B

Luxemburg <$5 B-> $60 B --> $134 B

TOTAL    $160 B                    $1227 (767% increase)

Fri, 02/21/2014 - 15:40 | 4462816 Stackers
Stackers's picture

"and perhaps the senior ones—by assuming a certain amount of loss."


in other words. Bail-in from account holders.



Fri, 02/21/2014 - 16:05 | 4462890 James_Cole
James_Cole's picture

Part of the problem here is the language, if these guys spoke in plain language I bet it'd be a lot harder to stomach all this bullshit. 

If they just came out and said straight that the banks are far too concentrated, the solution proposed (or at least accepted by the public) wouldn't likely to be to backstop them to infinity. 

Like Greenspan mumbling along incoherently, if he spoke plainly I doubt people would've taken him half as seriously. 

Orwell talked a lot about it well, but Carlin nailed it:

Fri, 02/21/2014 - 16:17 | 4462930 akak
akak's picture

Central bankster Greenspanking means never having to say you're sorry.

Fri, 02/21/2014 - 16:30 | 4462970 NoDebt
NoDebt's picture

Old joke, new twist:  What's green and smells like Miss Piggy?  The Fed.

(If you don't know the original joke this probably doesn't make much sense to you.)

Fri, 02/21/2014 - 16:17 | 4462932 fonzannoon
fonzannoon's picture

Belgium makes sense. They seem like a PD for the ECB

Fri, 02/21/2014 - 16:48 | 4463035 Ham-bone
Ham-bone's picture

Ok - Belgium, bout the rest???  How bout the trend?

Fri, 02/21/2014 - 17:55 | 4463338 Divided States ...
Divided States of America's picture

Well trust me, everyone will be lining up to buy TSYs when a global war is about to break called safe haven securities...i know thats not the case, but many many sheeps out there think they are. Its all about which country's military will be the last man standing...and the USA is the favorite...again, wish that wasnt the case.

Fri, 02/21/2014 - 16:41 | 4463012 LMAOLORI
LMAOLORI's picture



If No Bail Outs then No Bail Ins  

Works for me.

Fri, 02/21/2014 - 16:26 | 4462956 Nobody For President
Nobody For President's picture

Maybe some of that money is from Chinese oligarchs sending their kids to Belgium and Singapore and all the hell over to buy real estate and 'safe' storage of funds - in California they buy real estate (Chinese Wineries anyone?)

But $5 trillion is a lotta bonds, all righty...a shadow Fed is not beyond reasonable doubt.

smokin' hot printers

Sat, 02/22/2014 - 18:05 | 4466231 ThroxxOfVron
ThroxxOfVron's picture

HamBone: I fully agree.

I have been convinced that the FED implemented a full monetization of ALL United States Treasury debt.

The sheer variety and astounding size of even the official publicly reported bailout numbers, and the total lack of accountability, the incredible financial repression unleashed: just never made any fucking sense if the system had not gone critical, kaput...

I would hazard that the policy of full monetization was officially/secretly implemented either as early as the date of the electronic run on the money markets: Sept. 11 2008; or sometime in the spring of 2009 when Kanjorski and Co. suspended mark-to-market account rules and Obama came out to urge the citizenry to buy stocks.

Likely the fix had been in place for months and the banks were playing the FED/Treasury and ( naked ) shorting the shit out of the markets and each other hoping to absorb one another Bear Stearns/Wachovia style in the chaos before the Government got the picture and gave in to a full-on get-out-of-jail-free/presidential cuff-links and reflation/monetization regime to stop the Banksters from running amok.

Fri, 02/21/2014 - 15:46 | 4462826 disabledvet
disabledvet's picture

Put the boot to the neck of Lehman "and that's still not good enough in these here parts."

That's the only "dead muppet" i see.
Just put the word "Lehman" on that thing you morons.

I'm gold and the "bi polar medal" goes to the moon to start the year and i'm supposed to be short treasuries? REALLY?

what's the spread between dollar and yen right now? 20%?
that looks like a funding currency...not a "carry trade."

and the Yuan still is traded only internally?
What if that really is a huge bubble in China..."but it really doesn't matter."
here comes the recovery!

here's Kermit's take:

Fri, 02/21/2014 - 16:17 | 4462934 Fix-ItSilly
Fix-ItSilly's picture

Big foreign Treasury holding increases in money laundering countries and corporate tax evasion countries (with oligarch thievery being a subset).

And what's with the swaps initiated by the Federal Reserve? That is market manipulation. It is also a legal violation of authority and responsibility - The US Treasury is legally responsible for currency exchange and trade.

Fri, 02/21/2014 - 16:32 | 4462981 Mercuryquicksilver
Mercuryquicksilver's picture

There is no way to validate your "theory" until the Fed is audited. Muliple ponzi schemes all in collusion. I can't just tell you that I agree.

Sat, 02/22/2014 - 00:48 | 4464365 lewietheparrot
lewietheparrot's picture

When things get out of control
Lies are told
I don't think that it is necessary to deconstruct your thinking----pretty rational line of thought, to me.
Why would you expect a nation that lies about everything not to lie when they completely lose control of a situation?
You have read today's transcripts of the Fed meetings from 2008---you have noticed all of the laughter-----does this not seem like pure hysteria to you? It does to me---these are not competent human beings----not even adults.
After all, what can be done with leaders who have spent an amount on war equal to the nation's debt? What can be done with that nation?
The Machine lies in ruin----------
Thank you for a great post

Fri, 02/21/2014 - 15:56 | 4462862 Urban Redneck
Urban Redneck's picture

Bankster speak = Matthew 23 + The Book of CYA

Fri, 02/21/2014 - 15:08 | 4462706 Jumbotron
Jumbotron's picture

3 card Monty.  With 1 QUADRILLION DOLLARS at stake.

Fri, 02/21/2014 - 16:30 | 4462969 williambanzai7
williambanzai7's picture

Fri, 02/21/2014 - 14:52 | 4462654 NOTaREALmerican
NOTaREALmerican's picture

What's good for the top 10% is good for Merica!

Fri, 02/21/2014 - 14:53 | 4462655 Shizzmoney
Shizzmoney's picture

We always knew in the end that bitch Miss Piggy (TBTF institutions) kills Kermit (The Fed)


Fri, 02/21/2014 - 15:01 | 4462681 NOTaREALmerican
NOTaREALmerican's picture

There's really no comparing the intellect of those running the Fed and those running the TBTF banks.

The Fed might be run by sociopaths, but they're just another group of dumbasses to the sociopaths running the nation's banks.  

Survival of the fittests, bitchez!

Sat, 02/22/2014 - 00:14 | 4464299 dellievan
dellievan's picture



  what is green and smells like pork  . . . wait for it . . . Kermit's finger

Fri, 02/21/2014 - 14:53 | 4462656 CaptainSpaulding
CaptainSpaulding's picture

Jim Henson attorney on line 2.. Stat!!

Fri, 02/21/2014 - 14:55 | 4462657 LMAOLORI
LMAOLORI's picture



Everyone has to take a hit lol talk is cheap 

Fri, 02/21/2014 - 14:53 | 4462659 El Vaquero
El Vaquero's picture

Because it needs repeating: Fuck The Fed!

Fri, 02/21/2014 - 14:53 | 4462661 Joebloinvestor
Joebloinvestor's picture

They played with it like a fucking schoolyard toy without instructions.

Fri, 02/21/2014 - 14:55 | 4462662 Dr. Richard Head
Dr. Richard Head's picture

Holy shit!!! If the sheep would be able to read, let alone understand what was said on that blessed day, they would be in the streets.  Alas, beer and basketball take precedence.  'sigh'

Fri, 02/21/2014 - 15:37 | 4462805 SDShack
SDShack's picture

When was Glass-Steagall abolished, and by who? The Great Recession was put in motion long before 2008. The sheep have had lots of opportunities to read and learn, but they always fail the test. Their masters have engineered it so.

Fri, 02/21/2014 - 14:55 | 4462664 all-priced-in
all-priced-in's picture

Are they wearing togas? 

Fri, 02/21/2014 - 14:54 | 4462665 Cursive
Cursive's picture

I like the "receivership and intervention" idea, but it looks like LSAP and the BernanQEllen put won.

Fri, 02/21/2014 - 15:03 | 4462688 fonzannoon
fonzannoon's picture

I have a question that no one can seem to answer. What's up with gold? Seriously...we have all sat here for years now and we all agree the market is rigged right? How many more 3:30 ramps do we need to see? How many more nanex illustrations? So fine, the market is rigged. Gold is rigged right? I mean do I even have to get into it? The 8:30am smash downs etc. etc. etc. The paper market is still wagging the physical dog.

So they spent the last two years breaking the correlation of rising gold and rising market and just beat gold to death. They made it (remember I'm talking paper here, it still exists) an asset class that was all risk, no reward, and you were clearly fighting a manipulated market and the fed...

But now all of the sudden gold continues to lead the commodity complex higher, it looks like this is being done on purpose. The move up in gold looks as fake as an 8:30am smashdown to anyone seeing reality. This seems very much against what the tptb would want, and they are still in control.

So seriously, what's up with gold? Is this just a setup for another massive smashdown? Anyone?

Fri, 02/21/2014 - 15:07 | 4462703 Cursive
Cursive's picture


I belong to the group that doesn't view gold as an "investment," but as a store of value when societies are in distress.  But I do think the dollar price of gold is going to fall along with everything else.  Remember, I said "dollar price."

Fri, 02/21/2014 - 15:12 | 4462714 fonzannoon
fonzannoon's picture

I hear you man, I'm just trying to find an explanation for the move that has been and continues to take place. I'm pretty sure i will mush it just by asking the question, but whatever....

edit - I love that someone junked me asking a question, says a lot.

Fri, 02/21/2014 - 15:19 | 4462747 kito
kito's picture

i dont take the view that gold is manipulated to the extent its long term price trend is pulled on strings. i believe the fed and others attempt to pull the reigns one way or another-and that may affect its short term pricing--but gold prices will work its way higher as we head into the next leg of this crisis next year. remember that gold manipulation is a tad more complicated for TPTB because there is the physical aspect to its supply/demand. there is a limit as to what they can do when underlying fundamentals in the physical market completely contradict their attempts to paint it "unwanted". 

Fri, 02/21/2014 - 16:10 | 4462892 Ham-bone
Ham-bone's picture

Seems the price of gold can go down no futher - demand is far in excess of supply (Jan SGE demand @ new records), as follows

ETF's were banged up to offload 40% or 900 tons of their holdings last year (GLD from 1350 to 790 maintain the 560 ton supply to the market, GLD would end '14 @ 230 tons, an additional 70% drawdown...but the price of gold would need to collapse to facilitate this)

Miners are at the marginal cost of production...prices taken down any furrhter only reduce supply from it's current 2300 tons/yr

Scrap supply is falling since '09 now down to 1400 tons/yr (from 1800 + in '09)...lower prices only furhter reduce scrap

That's it...price decreases only reduce supply from here...and create the short covering rally

Fri, 02/21/2014 - 16:10 | 4462910 kito
kito's picture

yes, the tipping point has been reached. that is my belief.

Fri, 02/21/2014 - 16:26 | 4462954 Solon the Destroyer
Solon the Destroyer's picture

Demand for Gold is far in excess of its supply?  I haven't seen any long term backwardation in the Gold Market.

Doubt the miners have little effect on the price of gold either.  The stock of gold overwhelms the annual flow from mines.  And they can adjust their production by grade, and also hedge the price.

For discussion on what affects the price of gold, please read:

Also: A Veil is Lifted in Zurich

According to a recent report by the Neue Zürcher Zeitung (NZZ), the Swiss government has decided to finally publish Switzerland's gold trading data, which have been kept secret for 33 years.

Fri, 02/21/2014 - 16:46 | 4462987 Ham-bone
Ham-bone's picture

Demand for gold @ this price is in excess of supply @ this price.  If global demand was 4500 tons last year and 900 tons were supplied by ETF's off-loading...but ETF's don't seem to be off-loading anymore but demand is still increasing...@ this price there is a shortage of 900 tons/yr.  Stock of gold is not moving @ these prices...price is set on margin of what is sold.  Mining, ETF offloads, scrap seem to be the only supply @ these prices much as the COMEX is showing w/ record low deliverable...not record low gold but just not deliverable at these prices.

However, if CB(s) determine to secretly be net phyzz sellers (although they are openlynow net buyers)...phyzz supply and demand are recoupled @ this price.  But that's a big delta to cover and end game isn't so far off.

Fri, 02/21/2014 - 16:38 | 4463001 kito
kito's picture

solon what makes you think the undercurrents of physical demand issues are going to show up in the paper market until its too late? most physical delivery isnt taking place in paperville.....

Fri, 02/21/2014 - 15:21 | 4462751 NOTaREALmerican
NOTaREALmerican's picture

I think it's the random -1 junker who flys through occasionally.

Fri, 02/21/2014 - 15:23 | 4462763 Winston Churchill
Winston Churchill's picture

Diid you really think they were going to let all the gold in COMEX get liquidated ,by anyone

but them that is. From watching the price action it looks like someone is testing levels they can

get away with to dampen down withdrawls.

Just my $0.02

Fri, 02/21/2014 - 15:33 | 4462792 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

"I love that someone junked me asking a question, says a lot."


It does say a lot about the kind of culture we are living in doesn't it?  In a previous life I used to try to use the technique of asking questions to get people to think for themselves about a statement like "deflation hurts the economy", or "Inflation should be 2%".  I had already given up making the counterarguments and thought I would try leading the horse to water instead.


Didn't work.  I got the kind of result you just got, only the msm sites are frequented by people who get personally offended when you question the bozos running the show or the way the show is structured.

Fri, 02/21/2014 - 21:13 | 4463865 StychoKiller
StychoKiller's picture

Re:  the question you asked.  A person can lie to you that they have an answer, they can even lie to themselves and pretend that they know the answer; but that lie will slowly eat a hole in their cortex until they admit the Truth.  The question becomes like a splinter in your mind!  Keep asking the question(s)!

Fri, 02/21/2014 - 15:23 | 4462761 HyBrasilian
HyBrasilian's picture



You'll RARELY hear me talking about this [because, as you say, it's all a 'rigged PONZI']...

However ~ I actually do believe that a rigged PONZI behaves according to natural laws... I've made MOCKERY [in the past], about 'Elliott Waves' & other such 'TA' bullshit [as ~ in the end ~ it has PROVED to be to be 100% predicated upon a, destined to be, FAILED SYSTEM]...

Notwithstanding ~ [& admitting all that]... It would occur to me that... Even the creators & perpetuators of a PONZI SYSTEM, would, in the end, make a valid attempt to engineer the COLLAPSE of the system according to the same 'PATTERN DESIGNS' that they'd made a RELIGION out of for the past century [& convince the 'sheep' to believe in, as technology permitted the INFORMATION AGE to allow more universal access of]...


Even in a FAKE market... REAL NATURAL RULES would evolve [as 'fractals', or 'FAKE FRACTALS', as the case may be]... IOW2 ~ With nothing left to loot or ponder, they'll simply follow the script...

So ~ How this applies directly to socalled 'COMMODITY MARKETS'... Why not just 'put in a bottom' the way it's always been done...

FIBONACCI will become a household name in the process...


CHEERS! [With a Bloomberg Terminal] :-)

Fri, 02/21/2014 - 15:25 | 4462770 fonzannoon
fonzannoon's picture

Thanks guys

Fri, 02/21/2014 - 15:30 | 4462785 HyBrasilian
HyBrasilian's picture

No problem ~ There's STILL value around here... [or ~ as Mayonnaise might put it]



Fri, 02/21/2014 - 15:52 | 4462848 disabledvet
disabledvet's picture

expiring the whole mining sector has been a pretty impressive feat actually.

"Lord Vader was finally ordered to release the 5 year long choke hold."
I mean everyone here has to it JPM has one hell of a body count.
Now they're long gold but "price not important since Yen Spread and fixed yuan take care of liquidity issues."

I did find the complaints about Korean steel flooding into the USA from X et al an interesting side bar.

Hmmm. "If they can build the world's biggest natural gas processing facility and put it on a ship I wonder what they can do on land?"

(and i expect delivery with that as well please...and thank you.)

Fri, 02/21/2014 - 16:59 | 4463084 KickIce
KickIce's picture

Engineered collapse is a perfect description.  They can easily handle small groups that can be labeled as "terrorists" or some other unpatriotic term but can't handle a full scale rebelion.

Fri, 02/21/2014 - 15:08 | 4462705 NOTaREALmerican
NOTaREALmerican's picture

Re:   the market is rigged right?

What market isn't?  If all markets are actually rigged, then: can it be actually said that all markets are rigged?

Fri, 02/21/2014 - 15:10 | 4462718 fonzannoon
fonzannoon's picture

The market being rigged was not my question. That is a given.

Fri, 02/21/2014 - 15:13 | 4462727 NOTaREALmerican
NOTaREALmerican's picture

Re:  That is a given

BUT, is it.

If all markets are rigged (for a long period of time) can you actually say a particular market IS "rigged"?!  

Define "rigged" when it takes place for 10 years and happens in all markets?   For that matter,  define "market".

Fri, 02/21/2014 - 15:15 | 4462734 fonzannoon
fonzannoon's picture

you are threadjacking my threadjack.

Fri, 02/21/2014 - 15:29 | 4462782 Spastica Rex
Spastica Rex's picture

Canada won!

Fri, 02/21/2014 - 15:56 | 4462864 kito
kito's picture

whatever happened to honor among threadjackers?

Fri, 02/21/2014 - 15:39 | 4462811 RaceToTheBottom
RaceToTheBottom's picture

If you believe that the FED is the manipulator, then the war with Gold is not over.  Indeed how can the FED leave gold standing in its long term war?

If you believe that the manipulator is the IBanks (could even be as a role for the FED), then they could have changed sides and are begining to see the benefit of manipulating up now that they own it.

Have you heard about the physical marketplace planned for Singapore?  That might hasten the separation of the dog from its wagging tail.

Fri, 02/21/2014 - 16:12 | 4462916 CitizenPete
CitizenPete's picture

Not trying to be mean or an asshole, so don't get mad when I say it sounds to me as if your a trader or short term investor that should probably just trade stock and paper gold. Nothing wrong with that, more power to ya, and your question regarding the fixed gold market.

Most (speaking primarily for myself) who accumulate physical don't concern themselves with gold prices (except maybe low prices as an opportunity to accumulate more). It's generational, it's a "gold thing", it's about long term security. My PM hoard and other investments are two independent things. Hmmm, in other words I might be broke and in danger of loosing my house, and I might have to liquidate my investments, but I (and my children) will still have an accumulated hoard of gold.

Fri, 02/21/2014 - 16:18 | 4462937 fonzannoon
fonzannoon's picture

You are not mean or an asshole. I just don't see what I "am" having anything to do with the question.

Fri, 02/21/2014 - 16:33 | 4462983 kito
kito's picture


Fri, 02/21/2014 - 16:59 | 4463081 fuu
fuu's picture

I went looking for an article Jesse had up on Cafe Americain a while back about price bubbles and higher price floors after the pop. Can't seem to find it but the gist was that not every bubble pops back to where it was before the start. Sometimes a new higher base price results and trades on from there. Maybe that is what happened with gold. We are a long way from $300 in 2000. We are not far enough from $1900 to make a solid claim either way in my mind.

Fri, 02/21/2014 - 15:11 | 4462699 LMAOLORI
LMAOLORI's picture



Normally I would think that taking them over isn't a good idea because it socializes the losses. Getting into bed willingly with government however is another story and invites intervention. What kills me is after doing so willingly they think they should be immune to any losses never mind they would have been wiped out had the government not done what it did. The Fannie/Freddie bondholders are a good example of that and the hypocrisy from Nader is stunning.

How Ralph Nader learned to love Fannie and Freddie 




“It is time for [government-sponsored enterprises] to give up ties to the federal government that have made them poster children for corporate welfare. Most of all, Congress needs to look more to the protection of the taxpayers and less to the hyperbole of the GSE lobbyists. –Ralph Nader, testimony before the House Committee on Banking and Financial Services, June 15, 2000

“Fannie Mae and Freddie Mac should be relisted on the NYSE and their conservatorships should, over time, be terminated. –Ralph Nader, letter to Treasury Secretary Jacob Lew, May 23, 2013

People certainly do change.

Right now, one of Ralph Nader’s key projects, Shareholder Respect, is supporting a group called Restore Fannie Mae. They are fighting for “an end to the unconstitutional conservatorship of Fannie Mae and Freddie Mac by the U.S. government.”  

Fri, 02/21/2014 - 15:11 | 4462720 Cursive
Cursive's picture


I don't like socializing the losses either, but we already have that plus the banking oligarchs get to have ALL of the profits.  I agree that the best solution will be true private enterprise, i.e. true private banking without any government intervention.  Alas, I believe the calls for intervention will become increasingly shrill as the "Deflation Monster" rages on and destroys more and more bank balance sheets.

Fri, 02/21/2014 - 15:19 | 4462746 NOTaREALmerican
NOTaREALmerican's picture

Re:  true private banking without any government intervention.

NO, regulation? 

How would you keep them from simply merging to form bigger banks?

Fri, 02/21/2014 - 15:29 | 4462781 Cursive
Cursive's picture


You know what would be great?  If I could issue my own damn currency.  Unfortunately, that's against the laws of the greatest superpower on earth.  I don't normally fly my libertarian flag in my posts, but it's very obvious to any objective observer that regulations only exist to consolidate power into the hands of the nomenklatura.  To have a truly robust society, we need more freedom, more choice and with that comes more personal responsibility to protect those freedoms.

Fri, 02/21/2014 - 15:30 | 4462786 NOTaREALmerican
NOTaREALmerican's picture

Re: To have a truly robust society, we need more freedom, more choice and with that comes more personal responsibility to protect those freedoms.

Yeah,  wonderful fantasy.

But, back in the real world:  How do you keep the sociopaths from screwing the dumbasses?

Fri, 02/21/2014 - 15:35 | 4462797 LMAOLORI
LMAOLORI's picture


@ Cursive

What we really lacked was enforcement and criminal prosecutions full socialization would have been even worse however because we would have had to pay for the whole kit and kaboodle.


The politicians would never allow us to get rid of the Fed. though because that is the only way we can keep functioning with all the debt we have especially since the spending constraint was removed when they took us off the gold standard.  I blame the politicians more than the Fed because they have the power to abolish the ugly creature.

Fri, 02/21/2014 - 14:55 | 4462666 Dr. Engali
Dr. Engali's picture

Duuhhhhhhh...... No freaking shit...... idiots.

Fri, 02/21/2014 - 14:59 | 4462673 seek
seek's picture

Imagine what the next five years of transcripts will look like as they document their descent into sheer madness.

Fri, 02/21/2014 - 15:00 | 4462678 Spungo
Spungo's picture

Interesting. Thomas Hoenig clearly understands how this works. Hopefully he'll be the fed chairman after Mr Yellen successfully destroys what's left of the economy.

Fri, 02/21/2014 - 15:40 | 4462711 Dr. Engali
Dr. Engali's picture

No he doesn't understand. He understands the trade and the fact that investors have to feel pain , but he misses the whole point. We have a too big to fail entities, because the fed wouldn't let them fail to begin with. He blames lax lending which is true, however in a world where institutions are allowed to fail those lending standards would never have taken place.


Personally I hope that when this is all said and done, that there is no fed left after old Yeller get's done.

Fri, 02/21/2014 - 15:12 | 4462722 Frank N. Beans
Frank N. Beans's picture

This may be why Hoenig is now at FDIC.


Fri, 02/21/2014 - 16:50 | 4463042 KickIce
KickIce's picture

Exactly, to pretend ignorance at this point is just another slap in the face.

Lehman was allowed to fail out of spite and to incite fear in the public.

Their shared laughter speaks volumes while their wording is a convoluted mess.

Fri, 02/21/2014 - 15:01 | 4462683 The Proletariat
The Proletariat's picture

That muppet needs a stick in its mouth before helps the taxidermist out when it is time to be thawed, skinned, and tanned....

Fri, 02/21/2014 - 15:43 | 4462823 Doubleguns
Doubleguns's picture

Should be two muppets in the gutter. Fed muppet (Miss piggy works) and sheeple muppet (Kermit).



Fri, 02/21/2014 - 15:10 | 4462716 alfred b.
alfred b.'s picture


       ,,,but, we here all knew that.


Fri, 02/21/2014 - 15:15 | 4462731 NOTaREALmerican
NOTaREALmerican's picture

How many people profited from this knowledge? 

Seems like knowledge doesn't always equal power.

Fri, 02/21/2014 - 15:19 | 4462742 tiger uppercut
tiger uppercut's picture

Thank God we have that airtight Dodd-Frank legislation now

Fri, 02/21/2014 - 15:20 | 4462748 CitizenPete
CitizenPete's picture

Should we END THE FED? Can the FED be ended -- what would we do without it? What would that look like?

Fri, 02/21/2014 - 15:29 | 4462766 NOTaREALmerican
NOTaREALmerican's picture

You can't End the Fed.

If The Fed were to mysteriously disappear tonight, in a month (tops) the sociopaths running things now would create bullshit such that the "conservatives" (Red Team) and "progressives" (Blue Team) would demand it be recreated.

The problem isn't The Fed.   The problem is a society that worships sociopaths & assholes screwing dumbasses. 

Fri, 02/21/2014 - 15:29 | 4462783 LawsofPhysics
LawsofPhysics's picture

Bullshit.  It's much simplier.  There simply has to be real consequences for bad behavior.

Fri, 02/21/2014 - 15:34 | 4462796 NOTaREALmerican
NOTaREALmerican's picture

Re: There simply has to be real consequences for bad behavior.

Ok, the smart-n-savvy people who own and operate the current system - and every other human system on the planet, throughout all of history - will get right on that:  Smart-n-savvy to do list:   make rules to punish the smart-n-savvy people who own and operate the current system.

Fri, 02/21/2014 - 16:01 | 4462880 LawsofPhysics
LawsofPhysics's picture

LMFAO!!  How did that work out for the smart-n-savvy people in France in the late 1700's?

If that's the most intellectual response you have, you will need lots of luck and maybe one or two "smart-n-savvy" friends.



Fri, 02/21/2014 - 16:04 | 4462888 NOTaREALmerican
NOTaREALmerican's picture

Re:  How did that work out for the smart-n-savvy people in France in the late 1700's

That was my point.   Perhaps YOU need some more intellect. 

Fri, 02/21/2014 - 15:21 | 4462752 LawsofPhysics
LawsofPhysics's picture

Several people ask me "what happens next".  The answer is simple, all paper goes to zero.

Fri, 02/21/2014 - 15:24 | 4462753 Soul Glow
Soul Glow's picture

Mr Hoenig was pretty excited about this deal.  He seems to have read the President's Working Group on Financial Markets bylaws, where it is stated the Treasury, SEC, and Federal Reserve - along with insight from Hedge Funds - can be market makers, and in the above statement, market "players".

That is, if you are insolvent, it is not a central bank issue—we are a liquidity provider—and therefore the government comes in. They would have immediate access to—pick a number—80 percent. The research would help us pick that number, and they can have access, but the rest becomes a subordinate-subordinate position after the liquidation so that you have still a sense of market discipline in play and you don’t get the system gaming it in that, if you know there’s a bailout coming, you buy the debt and sell the equity short to make a bundle. I think therein lie the distortions that are absolutely detrimental to the long-run health of the economy.

President's Working Group on Financial Markets:
Fri, 02/21/2014 - 15:27 | 4462774 LawsofPhysics
LawsofPhysics's picture

"Conflicts of interests", what's that?  Another forgotten phrase or term, much like "collateral".

Fri, 02/21/2014 - 15:23 | 4462765 Squiddly Diddly
Squiddly Diddly's picture

"so that you have still a sense of market discipline in play" 


Is there a sitcom laugh track that goes off at this point because for the Fed's Hoenig to use the word market and discipline in the same sentence seems to be an oxymoron.  Sense of is the qualifier. Oh, sorry que Muppets they have no clue of sense of.  Just helping Blankfein to continue "doing God's work".  I wonder if they ask God what he thinks, na probably not.

Fri, 02/21/2014 - 15:27 | 4462775 NOTaREALmerican
NOTaREALmerican's picture

They use the same method the rest of the Diety OCD, ISM OCD & spatter-art OCD people do:   auto-generating duplicity bullshit machine (often called the human brain).

Fri, 02/21/2014 - 15:25 | 4462772 Spungo
Spungo's picture

"He blames lax lending which is true, however in a world where institutions are allowed to fail those lending standards would never have taken place."

That's not true. The money was not being lent out by banks. Much of it was being lent out by regular people like us. The terms "securitization" and "shadow banking" refer to a kind of peer-to-peer lending. A bank would issue mortgages to drug addicts, put a junk rating on the bond, then sell the bond to a third party. The third party could be Fannie Mae or it could be your next door neighbor. As long as the bank is able to sell this garbage to a third party and keep it off their own balance sheet, the bank has no risk. Companies like Lehman Brothers went under because they were caught with too much shit on their balance sheets and not enough people to sell it to. It's not like every bank was destroyed in the 2008 crisis and had to be bailed out. Lots of banks remained solvent without needing a bailout even though they were participating in this scam from the beginning.

They're doing this again btw. Setting the fed rate to 0% leaves baby boomers in a position where they need to take on more risk to get enough yield to retire. Some of them are jumping head first into the stock market. Some of them are jumping head first into junk bonds. There's a huge demand for junk bonds or sub-prime bonds due to the higher yield, so banks can once again securitze a bunch of shit that will go to zero and sell it to retail investors. As long as the banks keep this garbage off their own balance sheet, they can keep this scam going without risking bankruptcy.

Fri, 02/21/2014 - 15:28 | 4462776 LawsofPhysics
LawsofPhysics's picture

Yes, just imagine the "peer-to-peer" lending you and I could do if we could print legal tender.

Fri, 02/21/2014 - 15:34 | 4462777 Chuck Knoblauch
Chuck Knoblauch's picture

Release the AMERO!


A 2 for 1 exchange rate is going to hurt when the USD$ is retired.

Fri, 02/21/2014 - 15:31 | 4462787 2muchtax
2muchtax's picture

i wonder if the algos can handle 5 year old news hitting the wire?

Fri, 02/21/2014 - 15:36 | 4462800 Spungo
Spungo's picture

"Yes, just imagine the "peer-to-peer" lending you and I could do if we could print legal tender."

Being able to print fake money would lower the interest rate. This is why the fed rate is 0% or 1%. It's easy to lend at 1% when the money never existed until the loan was created. People who work to get that money would never lend at 1%. I'm not going to lend anything to you for less than 10%. Idaho Title Loans won't lend to you for less than 200%. Desperate baby boomers might lend to you for 5%. Right now the junk bond index "JNK" yields just under 6%.

Fri, 02/21/2014 - 15:40 | 4462815 greggh99
greggh99's picture

"the Fed is now being openly "played" by the market (read the big banks)"

I thought the writers, and certainly the readers, on ZH aren't clueless enough not to know that the Fed is the big banks. They work for the bankers. Their job is to enrich the bankers.

Fri, 02/21/2014 - 16:02 | 4462879 Chuck Knoblauch
Chuck Knoblauch's picture

The poor FED was duped for all these years. It's not the FED's problem!

Fri, 02/21/2014 - 15:49 | 4462837 buzzsaw99
buzzsaw99's picture

that's why hendry's premises were all wrong in the previous post. there is no market, there is only tbtf.

Fri, 02/21/2014 - 15:55 | 4462858 pot_and_kettle
pot_and_kettle's picture

the puppetmaster is now the puppet?

Fri, 02/21/2014 - 16:02 | 4462881 hangemhigh77
hangemhigh77's picture

Shouldn't this stuff be marked as "evidence"?

Fri, 02/21/2014 - 16:04 | 4462887 hangemhigh77
hangemhigh77's picture

And we actually PAY these people? Where's the video? I bet they're circle jerking.  I wonder who ate the cracker.

Fri, 02/21/2014 - 16:07 | 4462897 Atomizer
Atomizer's picture

Believe the desperation to control is losing kitten grips. Due to the Military, we can clean up the Obama administration in about 24 hours (by US constitution  authority.)

Any new attack on the USA is created by the Obama clan! Do NOT stand down to his demands. When the equity markets bomb, keep your money/ circulate/ or temporary parked into safe interest barring account. Stay out of US Treasuries. IMHO

Fri, 02/21/2014 - 16:12 | 4462915 GoldenDonuts
GoldenDonuts's picture

Why are these banks still here?  Why if they are too big to fail have they not been broken up like railroads, oil companies, and telephone companies have been in the past?  Would that not have been a pain free 2009 solution eliminating the possibility of a 2014 - 2015 crash?



Fri, 02/21/2014 - 16:37 | 4462998 messymerry
messymerry's picture

Well, you would think with all the H'avad educated PhDs liviing in D.C. and environs, somebody would have come up with that idea.  Quite simply, breaking them up does not play well in the Cloward and Piven collapse scenario. 

Fri, 02/21/2014 - 16:34 | 4462985 yogibear
yogibear's picture

The Fed said they will backstop all the big bank failures.

Take and off-shore the profits and fail the banks in the US Fed, backstops, Repeat.

Make trillions  of printed Fed money purposely failing the banks through cooking the books and asking for infinite bailouts.

Like Greece keeps coming back for more and more bailouts. Just keep repeating.

Fri, 02/21/2014 - 16:43 | 4463015 Anonymouse
Anonymouse's picture

I need to remember this the next time my wife complains about me being eating too much junk food.  Indeed I have become "too big to fail".


"I certainly agree—and I have said publicly—that I need a strong, well-defined, ex ante, clear diet regime. But I have the problem now that I don’t have such a regime, and I'm dealing on a daily basis with these very severe consequences. So it is a difficult problem."


She'll understand that I have no choice but to increase my liquidity by drinking more cola, and if I only increase my size by 3 times, I can eventually begin to taper my intake to only 100% increase each year, thus beginning to solve the problem in a scant 5 years

Fri, 02/21/2014 - 18:42 | 4463449 Radical Marijuana
Radical Marijuana's picture

... So, the People find out 5 years after it has already happened ...

It is very common for comments posted on Zero Hedge to curse the banksters, and recommend killing them. The manifest contradictions in such suggestions are almost never noticed or discussed. That such sentiments are relatively popular on Zero Hedge merely demonstrates the degree to which there are NO rational resolutions to these problems possible, since the stupidest and most impossible "solutions" are routinely promoted as being somehow popular.

If there are going to be better resolutions to our problems, then that would require better government operating better death controls, which can NOT be killing off government itself, other than on the actual path we are on, which may result in our criminally insane civilization killing off itself as a whole, which currently looks like the most probable outcome.

That so many people posting comments on Zero Hedge routinely spout their kind of self-contradictory nonsense about killing those who run the government, (which ignores that the government is THERE because it was made by the best organized gangs of killers) is typical of the terminally stupid responses that may well be personally preferred strategies, but could not be the basis of any coherent overall political strategy.

The relationship between the FED and the government of the USA reveals the basic social facts that governments are the biggest form of organized crime, controlled by the best organized gang of criminals. That most people who begin to understand that then spout bullshit "solutions" is why we are incapable to developing better dynamic equilibria between the different systems of organized lies, operating organized robberies. Most of the idiots that oppose the currently existing systems want to promote the impossible ideals that those systems should not exist. Those impossible "solutions" always backfire, and thereby enable the actually existing systems to become even worse.

"Government" emerged out of conflict, as the group that was the best at backing up deceits with destruction. That "government" cannot be replaced by any other group than one which is even better at doing so. Most of the suggested "solutions" promoted by people who comment on Zero Hedge are ridiculous. Governments emerge because they are the best organized gangs of killers. There is nobody else who could displace them but another better organized gang of killers. Recommending that we kill them all, and anyone who wants "government," is completely stupid, since it deliberately ignores the basic nature of the problem, and why it exists! Meanwhile, the almost total dominance of the whole world by lies backed by violence means we approach all of our problems with collective deliberate ignorance. All of those problems are adding on top of each other, and synergistically multiplying each other.


The best theoretical solutions are to make a democratic republic through the rule of law WORK. However, since the overwhelming majority of "citizens" have become Zombie Sheeple, who are exhorted to be led by Black Sheeple promoting impossible "solutions" which can never exist in the real world, what we actually default to is more of the same runaway triumphs of the best organized criminals being ineffectively opposed. People who comment on Zero Hedge by asserting that we kill the banksters, and have no government, are typical of those who do not see their own self-contradictory insanities. Collectively, civilization has become runaway criminal insanity, because of the degree to which people are able to deliberately ignore the basic nature of the chronic political problems, which are inherent to the nature of life, and then spout nonsense about impossible "solutions" which can never exist in the real world, but rather flatly contradict the nature of that reality itself.

Fri, 02/21/2014 - 19:21 | 4463561 Atomizer
Atomizer's picture

Now that you got that off your chest, tell us how you really feel? Paranoid, fearful, looking over your shoulder, or wondering if you’ll become the next banker suicide headline?



Fri, 02/21/2014 - 21:42 | 4463931 Radical Marijuana
Radical Marijuana's picture

Well, atomizer, primarily I feel "resigned."

Fri, 02/21/2014 - 19:13 | 4463533 rustymason
rustymason's picture

So which is it? Is the FED a bunch of morons, or a cabal of evil geniuses?

Fri, 02/21/2014 - 19:28 | 4463587 Atomizer
Atomizer's picture

The Cabal hires a bunch of Federal Reserve moron’s who think they are financial geniuses. The same goes for US geopolitics’. The dumber, the better for Cabal.




Fri, 02/21/2014 - 22:36 | 4464040 Radical Marijuana
Radical Marijuana's picture

Well, rustymason, there has been an historical degeneration of the FED.

The FED was created by a cabal of evil geniuses, but it has degenerated more into a bunch of morons. Overall, the entire bankster system has developed to go out of human control. During that process, the banksters gradually degenerated from being the top predators to become more like parasites. In other words, the original creators of the FED were evil geniuses, operating as top predators, but, as time passed, and generation after generation grew up being taught to believe in bullshit, the FED ended up being run by morons, within a degenerate parasitical system, which is killing its host, because it does not know any better.

The bigger picture was that the FED was made to be able to create the credits out of nothing to finance strip-mining the North American continent, as well as the whole world. However, that strip-mining of the planet has high-graded itself to hell, by being able to develop at an exponential rate, to overshoot debt slavery to become a numerical debt insanity, which is the symbolic expression of also driving social polarization and the destruction of the natural world through to unprecedented extremes.

The original FED was created and operated in a world where making money out of nothing, as debts, to finance strip-mining the planet, while thereby being able to operate as economic hitmen throughout their globalized enterprises was fresh, and appeared to be endlessly successful, within its own frame-of-reference. However, far, far beyond merely the social inequalities, driven by the debt slavery structure which was the foundation of the privatization of the public "money" supply, symbolized by the FED, the destruction of the natural world was WAY MORE IMPORTANT! In that sense, the people who run the monetary system now have not merely degenerated into a bunch of morons, not much like the originally cabal of evil geniuses that built the privatized monetary systems that captured control over almost all national governments, they have also become criminally insane, in the sense of becoming parasites that are not only destroying their host, the American and global economy, but also destroying the basic natural ecologies that everyone used to be able to take for granted.

The consistent theme has been that of triumphant evil, becoming more successful, and therefore more insane, due to its evil deliberate ignorances, and indeed, becoming much more criminally insane overall. The FED now represents the social pyramid system destroying itself, and perhaps the future of human beings generally. It is almost impossible to exaggerate how bad the longer term consequences of operating civilization through fundamentally fraudulent accounting systems are going to become. The runaway social polarization is relatively trivial compared to the destruction of the natural world, which seriously threatens to tip over into runaway feedbacks, that destroy civilization as a whole, as it currently exists.

The FED has degenerated from being built by top predators within the human ecology, setting up the political economy by applying the methods of organized crime in ways which demonstrated that they were a cabal of evil geniuses, through to being now run by a bunch of morons, who are collectively headed through the future phases of more criminal insanities, which are practically impossible to imagine how bad those consequences are finally going to become.

I REPEAT what worries me the most, which is the overall context in which to consider the FED, and the way that it has suffered through a history of degeneration:

If one considers these 2 sites
and multiplies them together:


one gets these two overall impressions:

First, the climate can be an angry beast that human beings are poking with a stick, and second, the people poking that beast with a stick are criminally insane. The problem with the ruling classes' attitudes towards climate change was that everything they promoted publicly had a hidden agenda, which has resulted in backfiring and discrediting the real concerns, like the boy crying wolf, on a global scale. Meanwhile, those ruling classes have not stopped doing every evil thing possible to advance whatever their insane short-term interests were.

At the same time, the overall basic natural feedbacks were constantly threatening to be provoked to go past the point of homeostasis restoring feedbacks, to become runaway feedbacks, instead. For instance, the release of methane in the cold oceans and frozen tundras becoming a runaway, self-amplifying phenomenon. Since the human world is actually dominated by the most dishonest and violent people, who have their own criminally insane agenda, which has made them become the pyramidion people, that can direct all of the lower level compartmentalized people to do what they are told and paid to do, and since nothing is practically possible in the short-term to resist the runaway systems of human lies, backed by human violence, because no evidence or logic can actually change what happens in a world controlled by lies backed by violence, where the main ways that more truth gets exploited is to simply become better at being dishonest, and backing that up with violence, but NOT to change the primarily purposes due to facing more of that radical truth, the sum total outcome is as those two Web sites indicate, when multiplied together.

The world is quite possibly on the path towards provoking extremely serious climate change, which could reach a critical threshold of self-amplifications within decades, while, at the same time, United Nations groups like the IPCC are bankster puppets, whose ulterior agendas dominate what they say, and what they propose should be done. Yet, at the same time, covert, crazy, weather modification measures, as a kind of weather warfare, are being seriously experimented with and deployed. Of course, the mass media act like those things do not exist, and therefore, the vast majority of people act like those things do not exist. However, in fact, both of those things DO EXIST, and are getting worse, faster.

Meanwhile most of us live our little lives, the best we can. There are no practical political means to resist the ruling classes from continuing to do what they do, and no practical ways to prevent the masses of zombie sheeple from continuing to be the way that they are now. Therefore, as a whole, the human species continues to act in criminally insane ways, poking the angry beast of the climate harder and harder with more sticks. Hence, the REAL possibilities of human beings driving mass extinction events to boomerang back onto them make other problems inside the little tempest in a tea pot of political economy become relatively insignificant in comparison. If real climate change DOES become a runaway, that destroys civilization as we know it, that civilization will continue to respond through the ways that are controlled by lies, backed by violence, and thus in ways that only become increasingly insane.

From a practical point of view, I no longer believe that there are any possible ways for human beings to respond more sanely to their problems. My emotional feeling after learning about this for a long time is "resignation." We already live inside of a world which is almost totally dominated by systems of legalized lies, backed by legalized violence, controlled by professional liars and immaculate hypocrites, in which doing anything more scientifically sane with respect to any of our problems is practically impossible. Everyone is doing the best that they can, in order to get along within those established systems, while those systems as a whole appear to be preparing to commit collective suicide, if not almost omnicide.

If one examines those two Web sites linked above, and concludes that they both have substantial scientific merit, then there are NO possible solutions to our problems without some improbable series of political miracles. Humans evolved as bad weather animals, which are now producing their own bad weather. However, the way that human civilization actually works as a social pyramid system means that it functions as the combination of evil rulers, and idiots ruled over, with no means within that context of doing anything overall more sane, within the context of a better scientific understanding of our situation as a whole.

The ruling classes have pumped up a biased view of climate change, and bogus solutions based on those biased views. Meanwhile, those ruling classes have actually been covertly doing things that are way worse than anything that their mouth pieces publicly admit are the problems. Throughout all of that, the vast majority of people being ruled over continue living in the fantasy land constructed by the mass media around them. In that overall context, no more radical scientific truths have any way to actually change human behavior ... until doing that became too little, too late, and too trivial to matter.

Sat, 02/22/2014 - 03:00 | 4464517 MEAN BUSINESS

Paris or Bust    


GeoengineeringWatch: their GMO/frankenfood dog is dying, this is their new pet. 

GuyMacpherson/Nature Bats Last: Yes. Streetheart: "If you can read LOOK AT THIS "

"As Hallor Thorgeirsson, a senior director with the United Nations Framework Convention on Climate Change, said on 17 September 2013: “We are failing as an international community. We are not on track.” These are the people who know about, and presumably could do something about, our ongoing race to disaster (if only to sound the alarm)"

The TRUTH is that the alarm bells have been rung by 'those people' (their ONLY responsibility, framed in) for 25 years or more.  James Burke rued the politicians getting involved back then.

The UNFCCC Conference Of Parties/CMP in Paris 2015 is 21 months away. Now everybody wants to engage in IPCC bashing or remain silent. Awesome. 

RM, you are 100% correct about the evil geniuses turning into morons. Obviously everyone here at Zero Hedge is 'fed up' with them and I would say the entire world is too. As I have said, there is going to be some political muscles flexed in Paris and this time it's not Americans, it's the 'USA' that, if anyone, is going to be thrown under the bus. Let them play the military card if the punks are feeling lucky. Either way they are going to loose and they know it so have no fear. 

Europe, Russia, and China are going to OCCUPY Paris in 2015. It's best ZH show up too.

Tick Tick Tick Tick Tick 

Sat, 02/22/2014 - 16:26 | 4465938 Radical Marijuana
Radical Marijuana's picture

MEAN BUSINESS, you have looked at a lot of the same material as I:

Tick Tick Tick!!!

Sat, 02/22/2014 - 21:23 | 4466739 MEAN BUSINESS

Radical Marijuana, I worked briefly with Streetheart's producer in 1981, I was worried you might take what I wrote last night personally. 


"the writer stares with glassy eyes, defies the empty page

His beard is white his faced is lined

and streaked with tears of rage.

30 years ago how the words would flow

with passion and precision

now his mind is dark and dulled by sickness and indecision" not streetheart LMAO



I find your words not only flow from one line to the next but also from your last comment to the next. I find it remarkable that your posts don't get replied to here more but you are probably used to getting blank stares LOL. To be fair, your comments do have a way of leaving people speechless!

I guess that's why I try to respond even though it's a struggle (I'm soaking in it now! lol). Believe it or not I spent four months hammering at (and briefly a mod for a WG at nycga) and 'resigned' with a +1500 karma score. I met a lot of interesting people there and learned alot, including the greater meaning of free speech, the 'soldier's inquiry', the petition for redress, and what an Article V convention is about. Anyway, the passion was high and the words were flowing pretty well. What motivated me then is the same as what motivates me now and motivated me 25 years ago.

 The morons had their chance in Copenhagen. Too bad so sad. It's most important that we stay focused on the important point because the entire reason for talking is to:

"invoe the law in the creation of an understanding of the vital information from which can come; forgiveness, tolerance, acceptance, respect, trust, friendship and love, protecting life, liberty and the pursuit of happiness."

Here's a little humour from COP15: Quick Recipe for a successful Copenhagen:



Fri, 02/21/2014 - 19:30 | 4463597 mumbo_jumbo
mumbo_jumbo's picture

how the fuck can a truly capitalist economy have any institution that is too big to fail??? isn't that a monopoly? AND that is NOT capitalism!!

we live in opposite world.

Fri, 02/21/2014 - 20:58 | 4463833 JailBanksters
JailBanksters's picture

It was never about saving the economy, saving the country. It was always and still is about saving Zionism. Over 100 years of Zionists rule and takeover would have been lost. These Zions are sill winning and still laughing at the rest of us at every Bilderberg meeting. How just a handful of Jews can hold the entire Planet to ranson over their Money is just beyond me.

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