Little By Little, We Went Insane

Tyler Durden's picture

Submitted by Tim Price via Sovereign Man blog,

“Are we finished ? The answer is no.”


- Mario Draghi, President of the European Central Bank, 5th June 2014, having just cut ECB deposit rates to minus 0.1 percent.


“The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”


- Ernest Hemingway.


“The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”


- Vladimir Lenin.

If it looks like insanity, smells like insanity, tastes like insanity, feels like insanity and struts about barking, “This is insanity”, then perhaps it might just be insanity.

“We were in the jungle. We had too much money. We had too much equipment. And little by little, we went insane.”

Not the words of Mario Draghi – yet. They are the words of film director Francis Ford Coppola in relation to his magnum opus, ‘Apocalypse Now’, a film that so outrageously exploded beyond its budget and beyond any reasonable compass that during its making it started being referred to as ‘Apocalypse Later’.

Coppola’s unique vision came at a price. What was expected to be a 14-week shoot in the Philippines ended up taking more than a year. Coppola fired his leading man, Harvey Keitel, after just two weeks. His replacement, Martin Sheen, turned out to be fighting alcohol addiction and suffered a heart attack on set.

Numerous members of the crew went down with tropical diseases. At key points, helicopters hired for pivotal action sequences were suddenly redirected to quell a revolt in the southern Philippines. Then a typhoon hit, the set was destroyed and the production was shut down.

Throughout all of it, Coppola was dealing with increasingly worried money men back in Hollywood as the film’s budget ran dry. As the film’s scriptwriter, John Milius, pointed out: “Studio executives, you know, are not noted for their social courage”.

And then Marlon Brando arrived on set, so hugely overweight as to be almost unrecognisable. He didn’t have the barest knowledge of the script. Then he shaved all his hair off and insisted on improvising all of his scenes.

And there were actual dead bodies on the set, bought to add some ‘atmosphere’ from a local who turned out to be a grave-robber.

Coppola had sunk his own life savings into the film. He faced financial ruin if he couldn’t finish it. He suffered a nervous breakdown and on at least three separate occasions allegedly threatened to commit suicide.

“My movie is not about Vietnam,” he once explained, “my movie is Vietnam.”

The markets are not about Vietnam. They are Vietnam. There’s a difference, of course. When a film studio runs out of capital, the production gets shut down.

Corporate resources can only ever be finite. But when a government runs out of capital, it simply borrows more. Or taxes more. Or both. At least for as long as it has access to credit by way of maintaining the confidence of the bond market.

Practically every western government has got its finances into a desperate mess. In the words of US fund manager Paul Singer of Elliott Management, “America is deeply insolvent, and for that matter, so are most of continental Europe, the UK and Japan.”

For as long as governments can perpetuate the illusion of solvency, they can continue to borrow, and therefore also to spend. But once the illusion is broken…

We all know that Japan is drowning in debt, which makes Japanese Government Bonds about the most dangerous asset in the world right now, especially given the Bank of Japan’s pledge to double its monetary base, ensuring that holders of JGBs will be paid back in ever less valuable currency.

But the vulnerability of the UK’s creditworthiness is less widely appreciated. Pimco’s Bill Gross, still clinging on to the $229 billion remaining in his Total Return bond fund, referred to UK Gilts as “resting on a bed of nitroglycerine” as far back as 2010.

The UK is hardly alone in running its national treasury on empty. Not one single major western government possesses a stable balance sheet. Everybody has thrown caution to the winds, in the illusory hope that ultimately somebody will pay.

If you hold western government bonds, that somebody is likely to be you.

Actions have consequences. Governments are no different from individuals or corporations or film studios in this respect – they can merely perpetuate the myth of solvency for longer, given the credulity of global capital markets and of agency investors with no real skin in the game in their bond portfolios.

But at some point, the piper must be paid. Which is why every major western government is determined to inflate, and pay the piper (bondholders) in ever more worthless paper money.

And this is why Mario Draghi has now driven interest rates to below zero. The natural corollary to universal currency debasement is to own a currency and durable store of value that cannot be printed on demand. If only we could find one.

Comment viewing options

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

i'd already be insane but for the blog ZH and its people who comment the last 5 years

Buckaroo Banzai's picture

Maybe we've always been insane, but we're only just beginning to notice.

BobPaulson's picture

Not an ideal comparison, because the movie turned out amazingly well.

NemoDeNovo's picture

The Rationalization Hamster is #Winning, understand it and the insanity will make sense.......

macholatte's picture



A question that sometimes drives me hazy: am I or are the others crazy?

Albert Einstein


'Crazy' is a term of art; 'Insane' is a term of law. Remember that, and you will save yourself a lot of trouble.

Hunter S. Thompson


My psychiatrist told me I was crazy and I said I want a second opinion. He said okay, you're ugly too.

Rodney Dangerfield


Grant stood by me when I was crazy, and I stood by him when he was drunk, and now we stand by each other.

William Tecumseh Sherman


I hate to advocate drugs, alcohol, violence, or insanity to anyone, but they've always worked for me.

Hunter S. Thompson


Bollixed's picture

My mother did counseling at Saint Elizebeth's Hospital in Wash, DC back in the 1960's. It was a large mental institution. She gave me a good piece of advice back then. I was frustrated over something and she just looked at me and said, "Remember, half the people in Saint Elizebeth's are right..."

Joe Sixpack's picture

Einstein? Cosmology? Insanity.


Top Scientists Freak Out Over New Documentary Questioning Copernican Principle- Which They Appeared In!

medium giraffe's picture

Geocentrism! Lol!

That has to be some of the most ignorant shit I've ever heard. It's possible to demonstrate the Earth's rotation using a fucking pendulum.


The stupid. It burns.

StandardDeviant's picture

If you're ever in Paris, do have a look at the pendulum at the Musée des Arts et Métiers -- the same one that plays a key role in Umberto Eco's eponymous book.  (The museum is well worth the visit too, as is the nearby Métro station; all very steampunk.)

medium giraffe's picture

Oh, very cool.  Love the metro station.  Thanks SD, will certainly make the detour if I'm nearby.

logicalman's picture

Way back when I was a kid (I'm a Brit, for context), my grandfather said to me 'All the world's mad, except for me and thee.

And I'm not so sure about thee!

Obvously, I never forgot it.


Henry Chinaski's picture

I'm not crazy. You're the one that's crazy.


So you're gonna be institutionalized
You'll come out brainwashed with bloodshot eyes
You won't have any say
They'll brainwash you until you see their way.

I'm not crazy - institutionalized
You're the one who's crazy - institutionalized
You're driving me crazy - institutionalized

WhackoWarner's picture

ALWAYS REMEMBER reading Fear and Loathing for the first time.  I did not get past his description of what exactly was "in the trunk of the car".  And that was in the late 60's?? when the stuff in the trunk was not that exotic.


Right now.  What used to be exotic opinion here at ZH  always made sense to me.  So whom, exactly, is crazy?


TheMerryPrankster's picture

Whom is crazy is always at the whim of who defines crazy.

Madness and clarity in equal measure and everyone of us crazy in our own ways.

To be sane in an insane world is madness.

we are who we are whatever that may be.

The paper holds their folded faces to the floor and everyday the paper boy brings more....

Harbanger's picture

Insanity is thinking that an FRN is "worth" anything, or it can be expecting Hope and Change from progressives, or it can be hating authority and expecting the Gov to do something.

Bangin7GramRocks's picture

I may be crazy, but what if the G20 get together in a few years and decide to so a pre-emotive "reset". They jointly announce a world wide debt jubilee. All government debt becomes 0. If you have a bond, tough titty. This would fuck the people, but end the pesky debt mess. Problem solved! And don't worry, the big banks, Warren Buffet and the other billionaires around the world will get advance warning of the action. The rich will get richer and the apocalypse will never come. Same as it ever was.....

Number 156's picture

Im not crazy. Everybody thinks im crazy but IM NOT CRAZY!

pods's picture

People used to see me as nuttier than a shithouse rat.  

Now, well, they still see me as nuttier than a shithouse rat but they ask my opinions on world events and where to buy silver.

Can't win them all I guess?


Headbanger's picture

Sanity is over rated anyway.

It just makes you go crazy!

logicalman's picture

If you live in an insane asylum, being called crazy is a compliment!

SmittyinLA's picture

noticing or mentioning insanity can get you locked up

AlaricBalth's picture

Everyone is entitled to be stupid, but the architects of our current economic quagmire abuse the privilege.

SmittyinLA's picture

Speaking of Architects, "The Architect" made the cut in the CA governors race, I kid you not we get to choose between Jerry Brown and Neel Kashkari, "the Architect" , a choice of 2 Sociailists.



Stackers's picture

If you haven't seen recent documentary movie "Milus" on John Milus yet, it's a must see.

TheMerryPrankster's picture

I found his twerking in bad taste and over the top..

Bear's picture

Definition of Insanity ... 2014 Markets

Caveman93's picture

I asked Dad when I was 5 where does money come from and how to we get more when it's needed. " Son, we'll just print more". Fucking Truth!

Caveman93's picture


(Best Luke Skywalker Impression)

Investor Wizard's picture

Need more trillion dollar coins.

nobodysfool's picture

^ I'll give you $10 bucks for one...

TheMerryPrankster's picture

Obama smoking a joint on the obverse and a middle finger with an all seeing eye on its tip on the reverse

the Trillion dollar coin is waiting to be minted.

Through the rabbit hole, I'm late, I'm late...

hobopants's picture

So that's why Hemingway blew his brains out...Saw where this shit train was headed.

NOTaREALmerican's picture

Re:  Saw where this shit train was headed

But,  the shit train kept on running and running.   

People with Morality OCD alwasy look on the gloomy side.

FishHockers's picture

I have OCD & ADD. Everything has to be perfect, just not for very long.

RafterManFMJ's picture

My nephew has HDADD. High Definition Attention Deficit Disorder. He can barely pay attention, but when he does it's unbelievably clear. -

Steven Wright

oklaboy's picture

price of ammo is falling, time to stock up....

Number 156's picture

I think the politicians in America do know that they're in flames right now. Thus, they need more people to become the new serfdom.
This is why both political parties there want so called "immigration reform" so badly. That, and throw in some class warfare to solidify the positions of both parties. Otherwise people tend to vacillate back and forth. Democracy is an illusion.

They know they cannot recover their economy on a population who refuse to work for wages below the poverty line.


TBT or not TBT's picture

Oh dear, "the poverty line".   The statistically derived income level where you are at or below x% of the average national income.  Sigh.   This average is very high compared to most countries on the planet, and is enormous compared to any time in human history.  And yet, despite the high inactivity rate, a lot of Americans work hard for 0 dollars per hour, and yet produce goods and services for themselves and their families and others too.   This sort of behavior increases the more government taxes incomes and thwarts economic freedom.   Of course, government also incentivizes the choice by many to eschew paid work, giving them an impressive income by world standards and historical standards, while they spend their time on, well, not only leisure.  Depends on the individual.   If we want Americans to do paid work, the first thing to is pare down taxes, regulations, wage price fixing schemes, and WELFARE.  

Number 156's picture

Yes, the poverty line is arbitrary, and keeps getting lower despite prices rising. (CPI is worthless)

It part of the corporate welfare scheme. Large corporations like McDonalds will be able to pay sale wages, and the goerment will pay the other part from your pocket.

I'd say abolish all welfare.

  Less tax liabilities against wages mean we keep more.

  We keep more, we can engage in more economic activity.

  More economic activity, more jobs. 


headhunt's picture

“resting on a bed of nitroglycerine”

If you sip it slowly it only burns a little on the way down.

logicalman's picture

I remember making the stuff on the quiet in school chemistry class.

Some of the shit we did back in the late 60s, early 70s would get you a bed in Guantanamo these days!

Good for some heart problems too, just don't shake the bottle too hard!


NOTaREALmerican's picture

Never underestimate the power of the bullshit, young Tim Price.

Dragon HAwk's picture

Classic Medical Statement...

 If you think you are Crazy... Your Not...


So i guess the Corollary is that if you and your friends think you are the only sane ones left on ZH, ?