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Marc Faber Explains The Fed's Dilemma In 15 Words

Tyler Durden's picture




 

For over 5 years we have been explaining the hole that the fed has been digging (most ironically here). This morning's op-ed by Warsh and Druckenmiller highlights many of the problems but we leave it to Marc Faber to succinctly sum up the dilemma that the Fed faces (and by dilemma we mean, the plan) - "The more they print, the more inequality there is, the weaker the economy will become." Simply put, "it's a catastrophe," Faber told CNBC, "what the Fed has done is to lift asset prices, and the cost of living. In the meantime, the cost of living increases are higher than the wage increases. The typical American household income is going down in real terms." Recovery?

 

 

As we noted previously, the greatest irony of the entire "record income inequality" debate...

One can read 696 page neo-Marxist tomes "explaining" inequality in a way only an economist could - by ignoring the untold destruction economists themselves have unleashed on society with their "scientific theories" (and providing a "solution" to the inequality problem which we warned readers was coming back in September of 2011) or one can read the following 139 words by Elliott's Paul Singer which in two short paragraphs explains everything one needs to know about America's record class inequality, including precisely who is the man responsible:

 
 

Inequality in the U.S. today is near its historical highs, largely because the Federal Reserve’s policies have succeeded in achieving their aim: namely, higher asset prices (especially the prices of stocks, bonds and high-end real estate), which are generally owned by taxpayers in the upper-income brackets. The Fed is doing all the work, because the President’s policies are growth-suppressive. In the absence of the Fed’s moneyprinting and ZIRP, the economy would either be softer or actually in a new recession. 

 

The greatest irony is that the President is railing against inequality as one of the most important problems of the day, despite the fact that his policies are squeezing the middle class and causing the Fed – with the President’s encouragement – to engage in the radical monetary policy, which is exacerbating inequality. This simple truth cannot be repeated often enough.

Q.E.D.

 

 

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Fri, 06/20/2014 - 20:42 | 4879623 ATM
ATM's picture

Money printing has always destroyed the middle class.

Fri, 06/20/2014 - 20:54 | 4879645 Da Yooper
Da Yooper's picture

Problem is

 

the middle class is too hung up on their bread & circus's

 

when or IF they WTFU it will be to friggen late

 

ohhhhh well stupid should be painful

Fri, 06/20/2014 - 21:01 | 4879657 onewayticket2
onewayticket2's picture

"when will exit fees on equity funds be imposed...?"

 

not too far away, marc.  not too far away.

 

 

Fri, 06/20/2014 - 22:01 | 4879774 Pladizow
Pladizow's picture

The reason for exit fees on bond funds is to scare assets into equities, as people act in anticipation of penalties.

The Fed wants inflows to equities and therefore has no reason to threaten exit penalties on them.

Fri, 06/20/2014 - 22:39 | 4879850 john39
john39's picture

It wasn't negligence on the part of the fed, but rather malicious intentional evil, with a goal of destroying the middle class.

Fri, 06/20/2014 - 23:12 | 4879914 Da Yooper
Da Yooper's picture

like I said the GDP dont have a clue

 

BUT

 

THEY will be the first to say

 

"IF ONLY SOMEONE HAD TOLD ME"

 

Mark my friggen words

 

you will hear this from EVERY liberal POS you know

Sat, 06/21/2014 - 04:47 | 4880162 mrdenis
mrdenis's picture

"Never saw it coming" .........

Sat, 06/21/2014 - 07:54 | 4880237 Scarlett
Scarlett's picture

Australia starts robbing its people

 

Government grabs $360 million from idle household bank accounts

http://www.news.com.au/finance/business/government-grabs-360-million-fro...

Fri, 06/20/2014 - 23:55 | 4879950 DoChenRollingBearing
DoChenRollingBearing's picture

American Hard Assets, a bi-monthly magazine available at Barnes & Noble, is dedicated to exploring many themes of the fairly large universe of hard assets.  In this newest issue, there are articles on the American Gold Eagle, a history of the US Mint, "Good Delivery" gold bars, Mining News, prepping and even Bitcoin (two articles on this "hard asset").

The below is a review of this issue.

"Review of American Hard Assets -- June/July 2014 Edition"

http://goo.gl/l2FHBC

EDIT: corrected link

Sat, 06/21/2014 - 07:38 | 4880223 kaiserhoff
kaiserhoff's picture

Why would I want to read a queer magazine?

Oh, that kind of bi.  Carry on;)

Sat, 06/21/2014 - 10:13 | 4880371 MeMongo
MeMongo's picture

"Bi-monthly" "hard assets" Ha I see what ya did there!

Sat, 06/21/2014 - 10:49 | 4880429 DoChenRollingBearing
DoChenRollingBearing's picture

I'm innocent, I tellz ya!  Innocent!

Fri, 06/20/2014 - 21:02 | 4879664 DaddyO
DaddyO's picture

I'm more and more convinced that an economic collapse of the FED and US economy is a long way off.

World events are leading me to believe that woar is going to be a better way to clear the balance sheet and debt ledger than hyperinflation or collapse.

Woar accomplishes all things at once, debt destruction due to destroyed countries, complete political collapse and implementation of militarized global governance.

If TPTB wanted economic collapse 2008 would have been ideal, instead they raped the taxpayer and continue to do so to this very minute.

DaddyO

Sat, 06/21/2014 - 00:03 | 4879967 Squid-puppets a...
Squid-puppets a-go-go's picture

oh contrar

war will be the distraction from hyperinflation, not the alternative

and america is collapsing/has collapsed. already. done deal

dont look to the stock market to disprove it. Venezuela's stock index is up, what 450% or something

Sat, 06/21/2014 - 04:46 | 4880160 Luckhasit
Luckhasit's picture

Instead of failing apart from the outside in, America has already collasped from the inside out.

Sat, 06/21/2014 - 07:14 | 4880199 what's that smell
what's that smell's picture

potus is a puppet. the teleprompter tells him what to say.

Those who have the power to print money at will are the powerful.

"it's the welfare queens, the liberals, the tea party, the unions, wall street, potus, scotus, scrotus...."

no. the problem is infinite fiat and usury.

INFINITE FIAT!

USURY!

BITCHES.

Sat, 06/21/2014 - 04:53 | 4880164 Winston Churchill
Winston Churchill's picture

Always has.If you complain about the hyperinflation you are unpatriotic.

Sat, 06/21/2014 - 09:09 | 4880296 Miggy
Miggy's picture

They want economic collapse only when the pillaging is over. Not there quite yet.

 

John 3:16

Fri, 06/20/2014 - 21:04 | 4879669 SuperRay
SuperRay's picture

"…in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying."

—Adolf Hitler , Mein Kampf, vol. I, ch. X[1]

 

How many 'big lies' are out there right now?  Too many to count...

 

the CIA is working to protect American Citizens

The Fed...

The entire two party system..

JFK

RFK

MLK

Waco

Murrah bldg

Boston Marathon

Sandy Hook

9/11

 

It's fucking over, dude..  check, please...

 

So here's this moronic talking head trying to be impartial?

And even though the facts are brought clearly to the entire CNBC audience (all 6 of them), no one can shake themselves out of their trance and see the truth...

 

people get ready, there's a train a comin'

and it's packed with nuclear bombs..

Fri, 06/20/2014 - 22:17 | 4879808 zookeep
zookeep's picture

We still got Orange is the New Black and Game of Thrones. Life is good.

Sat, 06/21/2014 - 05:30 | 4880177 Moe Howard
Moe Howard's picture

GoT ended for the season. The plebes are restless.

 

 

 

 

 

In the midnight hour, she cried moe, moe, moe

Fri, 06/20/2014 - 20:45 | 4879624 kaiserhoff
kaiserhoff's picture

Damn straight.

He even speaks gute Englisch.

Fri, 06/20/2014 - 20:44 | 4879626 Aussiekiwi
Aussiekiwi's picture

Soooo, more of the same, for ever and ever.

Fri, 06/20/2014 - 20:44 | 4879627 BobTheSlob
BobTheSlob's picture

So the HNIC got it wrong. Why does that shock anyone. The Son of Frank Marshall Davis...ripe with error...achieves failure yet again.

I'm (not) shocked!

Fri, 06/20/2014 - 20:44 | 4879628 BlueStreet
BlueStreet's picture

As Fleckenstein said on KWN yesterday, 1+1 always equals 2. 

 

 

Fri, 06/20/2014 - 20:45 | 4879630 BobTheSlob
BobTheSlob's picture

This is the New Amerika where 1+1 = keel the bourgousie!

Fri, 06/20/2014 - 21:07 | 4879675 sunny
sunny's picture

That must be why the markets are setting all time highs, one after another.

Sat, 06/21/2014 - 04:56 | 4880165 Winston Churchill
Winston Churchill's picture

Room 101 is an app for that.

Fri, 06/20/2014 - 20:49 | 4879637 Ward no. 6
Ward no. 6's picture

i like marc faber

Fri, 06/20/2014 - 23:18 | 4879926 CheapBastard
CheapBastard's picture

Interestingly, Bill Gross said the same this week; the inequality is too great and this is serious since buying power decreases and less 'things' will be bought resulting in a slower economy. He seemed to favor increase minimum wage and tax rate on the Uber Rich like himself.

Sat, 06/21/2014 - 00:40 | 4880010 Oldwood
Oldwood's picture

Liberal policies are never wrong, they just seldom work as billed. That must mean that the "unintended consequences" were the plan all along.

Sat, 06/21/2014 - 00:57 | 4880034 Anusocracy
Anusocracy's picture

Government policies are what created the uber rich.

No intelligent person would ask for more .gov to fix that.

Fri, 06/20/2014 - 20:50 | 4879642 Escrava Isaura
Escrava Isaura's picture

Oh boy! Will we ever learn anything?

Rent Seeking….. Stupid!

Bretton Woods:

“The United States would use the convertible financial system to trade at a tremendous profit with developing nations, expanding industry and acquiring raw materials. It would use this surplus to send dollars to Europe, which would then be used to rebuild their economies, and make the United States the market for their products. This would allow the other industrialized nations to purchase products from the Third World, which reinforced the American role as the guarantor of stability. When this triangle became destabilized, Bretton Woods entered a period of crisis that ultimately led to its collapse.”

Fri, 06/20/2014 - 20:51 | 4879643 3rd Pig
3rd Pig's picture

They are starving us to death... this is Genocide.

Janet Yellen is a war criminal.

 

Fri, 06/20/2014 - 21:06 | 4879671 Urban Redneck
Urban Redneck's picture

Since ISIS just announced PM confiscation, I would assume any debate about which war criminals' payroll they're on can be settled.

Sat, 06/21/2014 - 05:32 | 4880178 Moe Howard
Moe Howard's picture

Not only that, but they hate cigarettes. The burn them like the Nazis burned books.

Fri, 06/20/2014 - 20:58 | 4879646 TeethVillage88s
TeethVillage88s's picture

Simplified Fed Mission

Keep people from getting out Pitch Forks

-Sluggish Economy is the best way to do this
-Fewer US Exports is part of the strategy
-Doesn't matter if fewer play stocks
-Wall Street = Our Customer
-Cartels = Control
-Growing Big Corporations = US Growth
-International Borders Do Not Exist
-Unemployment = New Normal
-Rape, Pillage, Plunder, Win

In Other Words: Hyper Inflation is the only worry, when people get out pitch forks.

Fri, 06/20/2014 - 23:45 | 4879952 Da Yooper
Da Yooper's picture

The effen Fed

 

best be real

 

careful

 

it is getting time to play pitchforks & bankers & politicans

Fri, 06/20/2014 - 20:55 | 4879649 seek
seek's picture

I wish they'd stop using "dilemma" like the Fed is facing options that it's somehow been cornered into.

The current situation is by design. It's not a dilemma, it's by intent. What is happening is exactly what they're trying to make happen.

Meanwhile the same thing is going on at the border. There's literally a build-up of thousands, if not tens of thousands of people, mostly children, there because they're being encouraged to come, again by design, specifically to fulfil a Cloward-Piven strategy. You can look at virtually anything that's "broken" in the US and with very little digging find some government type that's intentionally fucking things up.

You can look outside the US and find the same goddamn thing: want to fuck up the global economy? Blow up energy prices. What's happening in the Ukraine and now in Iraq? Starting shit (via US trained and funded proxies) to blow up energy prices. 

There's no dilemma! The fuckers are tryng to blow up the system so they can propose a global replacement that only they control, and that no one can escape, because it's global. And they won't be happy until the standard of living in the US and in Uganda is equal, and there's a lot more of dragging the US down than bringing Uganda up in that little formula.

Fri, 06/20/2014 - 21:20 | 4879691 TeethVillage88s
TeethVillage88s's picture

on Janet's Latest Comments

changing the subject maybe

-Like boss came to her & said "Backoff" you are too specific, be vague
-Lying yes, ignoring facts, disregarding data
-simply show that someone told her to back off
-Previously she was saying things that were too specific about QE Tapering and end of ZIRP

I agree it seem Government & Fed deliberately are damaging programs, wasting money, hiding what they are doing

Fri, 06/20/2014 - 21:44 | 4879731 JuliaS
JuliaS's picture

Correct. The Fed has no dilemmas. The dilemma is ours - that we keep putting up with criminals in power. Here, the civilian population possess enough guns to take out a medium-size country, yet they're all pointed at eachother. The only time crooks get justice served to them, is when a friend higher up the food chain doesn't get his bribes on time.

The Fed does nothing. The system's on autopilot. Sign a deal with the government, lend 1st interest-bearing dollar into existence, sit back and relax for the next 100 years until everything worth owning becomes yours.

Fri, 06/20/2014 - 22:06 | 4879783 OldPhart
OldPhart's picture

And if you think the current border situation wasn't planned, check this out and note the posting date.

Escort Services for Unaccompanied Alien Children

https://www.fbo.gov/index?s=opportunity&mode=form&id=c6d7c0050b912fbc917...

Fri, 06/20/2014 - 22:11 | 4879795 Hayabusa
Hayabusa's picture

Seek is exactly right... nothing in politics happens by accident, it is planned.

Stupid sheeple are being herded like cattle or lemmings and are so into reality

TV, sports, etc., they don't even see it coming.  Of course those driving us off

the cliff will blame us in the end and the sheeple... will accept the blame... out

of sheer idiocy. 

Fri, 06/20/2014 - 22:12 | 4879799 KickIce
KickIce's picture

Absolutely, horrible misspelling of objective.  The only dilemma is keeping the sheep in the game to get fleeced.

Fri, 06/20/2014 - 22:37 | 4879845 IndianaJohn
IndianaJohn's picture

Try a dill-enema.

Fri, 06/20/2014 - 22:14 | 4879803 Hayabusa
Hayabusa's picture

Seek is exactly right... nothing in politics happens by accident, it is planned.

Stupid sheeple are being herded like cattle or lemmings and are so into reality

TV, sports, etc., they don't even see it coming.  Of course those driving us off

the cliff will blame us in the end and the sheeple... will accept the blame... out

of sheer idiocy. 

Fri, 06/20/2014 - 22:39 | 4879854 Not My Real Name
Not My Real Name's picture

Speaking of all those children on the border ... it looks like it was all planned in advance. Homeland Security was soliciting on Federal Biz Ops bids for a company to handle 65,000 unacompanied alien minors back in January.

http://www.americanthinker.com/blog/2014/06/stunning_dhs_solicited_bids_...

Fri, 06/20/2014 - 22:50 | 4879883 Escrava Isaura
Escrava Isaura's picture

Seek...

Agree with you on intent… However,

Have you considered that TPTB can’t tell us straight about oil and natural-gas been finite resources…. That can NO longer grow?

Sat, 06/21/2014 - 08:58 | 4880291 buzzsaw99
buzzsaw99's picture

There's no dilemma!

damn straight. they want higher prices and lower wages.

Sat, 06/21/2014 - 09:40 | 4880311 all-priced-in
all-priced-in's picture

"wish they'd stop - exactly what they're  - The fuckers -  so they can propose a global - And they won't be happy "

 

 

Who exactly are "they"?

I know what you are saying sounds really good - and a big part of my gut "feels" the same thing -

I just don't know who these folks are - hard to believe they can pull all the strings  to control the world and reap vast riches yet no one knows their names.

Plus - it would be hard fucking work controlling all of this shit (if it is in fact being controlled) I doubt anyone with vast wealth would want to spend all day pulling the levers that are required to accomplish "running the world".

So they would have to hire more than a few  people to do the work - and then have them keep it a secret. 

 

 

 

 

Fri, 06/20/2014 - 21:01 | 4879660 Reaper
Reaper's picture

Simple inequality magnifier: The Fed gives its all to the richer, so they get richer. The losers believe there's a future virtuous reward from trusting in their government and its bankers. The gullible are lead by the venal.

Sat, 06/21/2014 - 02:10 | 4880098 Bohm Squad
Bohm Squad's picture

Slavery no longer uses chains to keep people captive - it uses promises...empty promises.

Sat, 06/21/2014 - 07:17 | 4880201 hootowl
hootowl's picture

.......and debt......and moar debt.......and mucho ,moar debt!!!!

Fri, 06/20/2014 - 21:02 | 4879661 i_call_you_my_base
i_call_you_my_base's picture

Faber is right as usual. I've been saying it since the mid-2000s, policies that increase housing prices are insane. The government explicitely wants you to pay more for your housing, and makes absolutely no bones about it. They state it with no reservation or shame. The entire economic policy of the US government is to favor asset holders to the detriment of asset acquirers. It has to be one of the biggest 'fuck yous' to the poor / working class that has ever occured.

Fri, 06/20/2014 - 21:02 | 4879662 ezag
ezag's picture

It is discouraging that the Republicans or the Tea Party are unable to mount a simple campaign against the cost of living.  Repeat: I am opposed to any policy that raises the cost of living.  I am for any policy that lowers the cost of living.

Viritually every Dem policy does the opposite.

Fri, 06/20/2014 - 21:15 | 4879687 Urban Redneck
Urban Redneck's picture

The new Swiss Independence Party (radical libertarian) has a catchy take that translates as "Culture for the few, costs for all"

http://up-schweiz.ch/

Hayek quotes in German I've seen before, but Franklin and Reagan in a German (Swiss) domestic political context is eerie

Fri, 06/20/2014 - 21:04 | 4879668 SilverIsMoney
SilverIsMoney's picture

"IF I was a Central Banker I would Sqqqueeezzee the World like a Lemon!"

 

Faber is 100% right but his accent in English is worth the price of admission.

Fri, 06/20/2014 - 21:11 | 4879679 MATA HAIRY
MATA HAIRY's picture

it is not a catastrophe for yellen and obama and the rest of the governmental elite that have set this thing in motion.

 

When they get out of office they will reap tens of millions in speaking fees. WHo pays those fees? The same corporations and investors that obama and yellen made rich.

 

THis is a boon for them. THey give the rich what they want, and then when they get out of office, they get rich from what the rich give them.

Fri, 06/20/2014 - 21:11 | 4879680 starman
starman's picture

Fed was counting on Corporations to invest that free money. And they did with stock buybacks cose its free money and the economy sucks.

Fri, 06/20/2014 - 21:47 | 4879739 1stepcloser
1stepcloser's picture

The FED was counting on saving the banks @ the expense of entire world!  Job well done!

Fri, 06/20/2014 - 21:11 | 4879682 Miffed Microbio...
Miffed Microbiologist's picture

When I was 10 my dad pulled me into his office in 1971. I had never seen him so shaken and distraught. He told me the world was now on a terrible course and to hold gold and tangible assets above all else. He was very afraid for my future. Ten years later he died still convinced of what he told me. I know he would be shocked as to how long this farce has stayed afloat and many have told me he was an idiot. An anachronism.

I never forgot Dad and I hope you are proud of how hard I tried to do what you advised me. I'm so sorry I did listen to the naysayers for awhile. The serpents guised as " experts" do often spin a convincing tale I'm afraid. I know some day you will be proven correct and I am so thankful to have had a Dad who truly loved me.

Miffed;-)

Fri, 06/20/2014 - 22:30 | 4879835 IndianaJohn
IndianaJohn's picture

A tip of the hat, to all men who have, or had a healthy loving relationship with their Father.

Fri, 06/20/2014 - 22:36 | 4879843 Miffed Microbio...
Miffed Microbiologist's picture

And to the women as well. ;-)

Miffed;-)

Sat, 06/21/2014 - 08:05 | 4880247 falak pema
falak pema's picture

did he teach you how to rock n roll? 

Fri, 06/20/2014 - 22:40 | 4879859 antidisestablis...
antidisestablishmentarianismishness's picture

I know people who've been "shaken and distraught" since 1971 too.  The ones who are still alive have just wasted 43 years in a panic about where the world is headed.  The rest of them spent their entire lives preaching gloom & doom and then they dropped dead before they had the wonderful opportunity to tell everybody, "I told you so!  I told you it all sucked shit! See, I was right all along!" Luckily ZH is cultivating plenty of people to fill the ranks of the disgruntled deceased.

Fri, 06/20/2014 - 23:53 | 4879953 holdbuysell
holdbuysell's picture

dup

Sat, 06/21/2014 - 00:06 | 4879971 Kprime
Kprime's picture

lie down on the couch.  Now lets go back.  tell my when did you first begin to hate your dad........uuuhhh...mmmm

Sat, 06/21/2014 - 00:20 | 4879985 oddball
oddball's picture

Do you have more liberties today, than say 1995?  

 

You sound like an asshole.

Sat, 06/21/2014 - 01:19 | 4880053 Savyindallas
Savyindallas's picture

Go to Hell  -it's your destiny. Why wait. Those you claim are "in a panic" have not wasted their lives  - any more than the Prophet Jeremiah who was persecuted, mocked and ridiculed when he tried to warn the Jews their day of reckoning was to come. History repeats itelf. The day of reckoning will come to the modern day Jews and all the fools who have listened to them. Read your Old Testament. If not biblically or as history, but as the teachings of wise men who knew and understood the ways of the world.    

Sat, 06/21/2014 - 07:34 | 4880216 AdvancingTime
AdvancingTime's picture

I contend the primary reason that inflation has not raised its ugly head or become a major economic issue is because we are pouring such a large  percentage of wealth into intangible products or goods. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas.

 It is important to remember that debts can go unpaid and promises be left unfilled. If this happens where does it  leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

 

Fri, 06/20/2014 - 21:22 | 4879699 Duc888
Duc888's picture

Ezag:

It is discouraging that the Republicans or the Tea Party are unable to mount a simple campaign against the cost of living.  Repeat: I am opposed to any policy that raises the cost of living.  I am for any policy that lowers the cost of living.

Viritually every Dem policy does the opposite.

 

Even more worrisome is the fact that there are people walking about that think the Red team and the Blue team aren't controlled by the same Team owners.

Fri, 06/20/2014 - 21:46 | 4879734 disabledvet
disabledvet's picture

The ultimate middle class City is Chicago...not Detroit.
"Lose that thing and lose the war."

That's my view of Iraq 3.0. "Cold and calculating"...both literally and figuratively. If Illinois or anyone else wants the oil...they'll have to get it out. The only way any of that oil leaves pretty much any region in the world is via the US Navy.

PERIOD.

"There will be no pipelines going West with either the Americans, the Russians or the Iranians running Iraq." Or the Chinese I might add. Or the British.

Did I miss any?

Oran perhaps?

So sure..."an American, an Iranian and a Russian walk into a room and the first one says...

And I'll let the rest of you finish that one off. "The English waited for the Fall of Jerusalem before saving it" comes to mind though. (That's what makes the French cool though. They were still there fighting when the English arrived.)

Where was I? Oh, yeah..."gold." Miners...though not the minters...got crushed today. "Your only hope is Elon Musk." All I have to say to that is "it was worse in the 70's." In short...there still is hope...maybe barely (one look at the launch manifest says only Japan is ready to rock actually)...but hope.

As far as the USA is concerned "he who owns the railroad owns the country." That's why you never throw coal barons under the bus in the USA. "They make those engines roar."

Truckers, vets, coal barons, railroads...Mississippi barge traffic?...I mean "the list is getting kinda long here" whoever you are. Bankers too?

"And an entire War Effort just as War Effort 2.0 is underway"? These matters can become very uncomplicated very quickly. I simply don't understand the politics because quite simply...it's about as understandable as economics right now.

Oh, and the plan at the Fed is almost certainly a bad one...but they will stick to it. By Fed standards that's actually a good thing. "The point of firing is absolutely when these Fed heads suddenly change their mind about things."

"the purpose of propaganda is to guide thought." here's its number one...and still the best if not only...tactic:

http://disinfo.com/

don't be fooled by the internet folks..you only think you're being informed...but this thing is the ultimate in "lie spreading." As someone who has had actually rather than liturgical truth revealed...you'll be shocked!

Still..."word gets around in cyber-space too." Kinda weird actually.
"Truthiness."

http://en.wikipedia.org/wiki/Truthiness

"beware of dialectical reasoning as well." They present arguments as though they are answers. "Putin think."

http://en.wikipedia.org/wiki/Empiricism
"still hated and reviled by academics everywhere."
Logic doesn't dictate a phucking thing. "You still have to interpret it."
That's why i don't understand "thought police." What if your view of thought is wrong?
By definition "thoughts" are "subject" (if not subjected too!) "interpretation."

For example "preventive war."

If I were advising Senator Lindsey Graham of any one thing it's "getting the thought of preventative war out of your head." By definition no one wants to prevent war.

Everyone on the other hand wants to prevent peace. Hillary Clinton, Vladimir Putin...these are all part of the "Peace Prevention Team."

Here's one of history's greatest examples of a "Peace Protector": http://en.wikipedia.org/wiki/George_Marshall "Always one step ahead. Especially when it came to ending war."

but I carry on here.

Fri, 06/20/2014 - 21:56 | 4879763 kchrisc
kchrisc's picture

See, no such thing as a "liquidity trap," only a theft trap.

 

"Caught between their thefts and a guillotine."

Fri, 06/20/2014 - 21:58 | 4879768 Downtoolong
Downtoolong's picture

You can’t change the economy by manipulating traditional indicators of economic health.

That’s like trying to fix a broken air conditioning system by putting a nail through the dial to hold it at the temperature you want.

Fri, 06/20/2014 - 22:18 | 4879812 OldPhart
OldPhart's picture

Shit!  No wonder I'm so hot!

Fri, 06/20/2014 - 22:20 | 4879816 holdbuysell
holdbuysell's picture

ABSOLUTELY SPOT ON, MR. FABER.

Fri, 06/20/2014 - 22:21 | 4879817 Wahooo
Wahooo's picture

The Depression is calling.... They thought they could beat it back, but it's a'coming. You can't create a Depression and then prevent it from happening.

Fri, 06/20/2014 - 22:37 | 4879838 Cabreado
Cabreado's picture

"Despite the fact that his policies..."

"This simple truth cannot be repeated often enough."

The "simple truth" continues to evade those who make that tired argument.

The "President" (this one and the last one and...) has little to do with any of this, other than to provide cover for a defunct Congress and corrupt points of control.

We appear to be ignorant to the point of no return.

(no, not talking about Faber)

Sat, 06/21/2014 - 00:57 | 4880032 Oldwood
Oldwood's picture

So the president doesn't select the head of the Fed, setting fed policy? And he doesn't set EPA policy that decides for us what our fuel costs and if we can mine and burn coal? And he doesn't set immigration policies regarding the enforcement of existing law, and that policy has no effect on jobs and wages? And does he not direct spending and debt of our country. I distinctly recall his threats of shutting down the government if congress attempted to cut spending. And he has no contol of our foreign policy either, I suppose, effecting virtually the whole world's economy. Is it me or are you simply stupid?

Sat, 06/21/2014 - 07:28 | 4880212 AdvancingTime
AdvancingTime's picture

Today a big topic is the huge growth in inequality. Those who look closely understand that it is not the 1% at the top stealing the icing off the cake, but the much smaller .1% or .01% that are skewing the numbers and overreaching.

I contend the biggest problem is the massive growth in crony capitalism and corruption in Washington. Much of this can be attributed to the ability of those in control "changing the rules" and positioning themselves to benefit at every corner. In our busy and complex world we have found it impossible to watch all the moving parts. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/how-empires-collapse.html

Sat, 06/21/2014 - 07:51 | 4880233 messymerry
messymerry's picture

Please don't stop with Washington.  How many governments do we have in the United States?  Do we have one or do we have thousands?  If you subscribe to the idea that we have one government here, then:  Government as a whole functions at the level of the reptile brain.  Thus:  The state governments are simply smaller versions of the Federal government and the local governments are just smaller verions of the State governments. This is clear if you attend any of their public meetings. 

The county cops (we are too small to have  our own police force here in Hooterville where I live) are doing their level best to be just as arrogant and standoffish as the the NY or LAPD.  If you want to know what the mafia bosses are doing watch their "enforcers". 

Sat, 06/21/2014 - 00:03 | 4879968 enloe creek
enloe creek's picture

exit fees might starve bond funds out since new investment would hardly be robust. Then where would capital come from to buy bonds? Certainly this is in the plan as it seems obvious. Perhaps maturing bonds would be rolled over so that would be fine were there less new issuance but how will the fed ever shrink it's balance sheet if bond funds are not recieving new capital. hmm sounds like they might be planning some forced bond buying by retirement accounts which is a leap on my part. Just saying wtf is the point of making bond funds pay an exit fee if it drives away new capital. Unless they can manage to secure new sources somewhere reliably or they intend on letting rates skyrocket and turn the world on it's head it makes no sense

Sat, 06/21/2014 - 01:15 | 4880051 alexcojones
alexcojones's picture

+10 SuperRay.

Thought your use of AH quote referred to 9-11 and WTC-7.

And Newtown. Don't want to go there.

Have a good weekend ZHers. I'm off to coin store and then gun store tomorrow to make a local report.

Sat, 06/21/2014 - 01:26 | 4880062 luckylongshot
luckylongshot's picture

Calling this the Fed's dilemma assumes that the Fed really does want a healthy economy. However the Fed is part of the parasitic private banking entity that is causing the problem and has imposed debt slavery on the middle class. This means the longer they can keep up the raping of the middle class the better they serve their owners and expecting they will act to help is as sensible as expecting a rapist to become a cop and turn himself in.

Sat, 06/21/2014 - 01:43 | 4880080 MX_DOGG
MX_DOGG's picture

Recall  the FED hired Google to monitor how they are perceived in the blogosphere. The irony is sites like ZH will compel them to keep printing  to infinity.  Their arrogance will seal their fate.

Sat, 06/21/2014 - 04:04 | 4880145 bunnyswanson
bunnyswanson's picture

These policies are gutting America.  This is being done intentionally.  These Americans are destroying their own country's economy, the people within it, their fellowo countrymen and placing it on an auction block.  The new world will look at these same people as the scavening scoundrels they are and deal with them accordingly; that is the craziness of it all.  It is as if they are suicidal and are taking the western world with them.  Is this revenge?  Never forget the Evian Conference.  I don't.  And they don't either.  Yes these same people who agreed to the Transfer Agreement.  Inbreeding can create a disposition to a syndrome called Van Hippel Landau which is adrenal adeomas and compress arteriovenous structures and when upset, the increase in blood pressure results in a "rage" that is impulsive.  This is what the McCoy men were determined to have and it was called "The Rage Disease."  He shot 3 guys from the hip after they stole his pig...the Hatfields, eh?  McCoys inbred up in the mountains.  Roads were few and they only had each other.  Cults, religious sects, secret societies (ahem) like to keep it in the family.

https://www.youtube.com/watch?v=p-h-6TtuinA  Greg Hunter with Dr. Jim Willie

Start a committe without conflicts of interest (why bother if there is a skin the game when the decision is made, let's be reasonable, conflict of interest should rule out those who have something to gain from the decision) which assesses this situation would be wise for everyone.  This is going beyond the point of no return and troubleshooting is now the name of the game.  I would not trust these people with my money, let alone my country, and by continuing to do so is self destructive and since no one wants that, the people making the decisions have to be looked at as mentally incapable to continuing to perform their duty. It would be a life-saving matter, life or death.  LIFE OR DEATH.

http://clincancerres.aacrjournals.org/content/10/18/6290S.long

 

Sat, 06/21/2014 - 03:25 | 4880131 pcrs
pcrs's picture

Marc Fabel leaves one imported asset class out:Serfs

When will exit fees be introduced on serfs?

At that point you can speak of a true labor camp. It has to go there.

 

Sat, 06/21/2014 - 06:12 | 4880179 falak pema
falak pema's picture

 Simply put, "it's a catastrophe," Faber told CNBC, "what the Fed has done is to lift asset prices, and the cost of living. In the meantime, the cost of living increases are higher than the wage increases. The typical American household income is going down in real terms." 

Just a reminder from where we are coming.

1° The whole premise of Reaganomics was that salaried inflation in the context of First world welfare state spending was wrong, as it created an "assisted" civilization. The transfer of wealth to the Oligarchs via the deregulated asset class pump of Reaganomics was thus the solution to those who had elected Maggie and Ronnie. "Give the power to the elites and let the markets rip!"

2° For this solution to work you needed to use two basic variables of economic growth that had fueled the WHOLE industrial revolution from 1830 onwards :

a) Cheap labour arbitrage. This was provided by the outsourcing meme, aka using the fall of Berlin Wall collectivist trauma to bring in China into the "slave labour pool"; just like India and the young tigers of SE Asia.

After all, the British Raj and Colonial Europe had built its wealth on Africa's slave labour and Asia's RM/coolie class, under the gunboat diplomacy of Rule Britannia. Ricardo had anointed this in economic theory as "comparative advantage", so it was KOSHER to the new masters of the world post WW2.

b) Cheap Oil as energy was industrial world's Rosetta stone! -- as the FDR/Saud handshake would prove from 1950 onwards ! This was provided by the Saud "open tap" policy and the petrodollar hegemony, all built on USA's unilateral BIG MIC STICK in the Reaganomics age post second oil crisis.

"We tower like a colossus, and beware of us all you rogue states" --- of the Neo-con NWO Samuel Huntington Crusader meme became the bible for this "for us or against us" US admin. mantra that fed the Hubris of Oligarchy USA; now gone global under the aegis of its control of the WTO and IMF instruments of globalisation. The global race was on post 1991 IRaq war and Elstine rise.

It spawned the FIRE assets steroid pumped economy, all  hooked on toxic derivative shadow banking products, aka the financialized  ponzi economy.

It spawned the economic fascism of the Walmart model : Buying centre monopoly of cheap labour arb. production and selling it to consumers doped on US's monopoly of  unlimited and cheap money printing. 

It blew up in the face of the Oligarchs during the Lehman crisis AS A RESULT OF OIL PRICES GOING THROUGH THE SKY. 

Since 2005 the US has lost ONE of its two pillars of this construct : cheap energy and there is no way its gonna get that pillar back in the next thirty years.

In fact its quite the contrary that is now occurring on the peak cheap fossil fuel energy front! 

So... ONE PILLAR DOWN and the FIRE economy is now run by money printing clowns on a false premise of cheap unlimited energy ! 

With the rising tide of consumer and salaried class dis-satisfaction in first world--those countries who are still NOMINAL democracies-- the OTHER PILLAR is also looking fragile.

And, to make matters worse the money printing machine may be about to make the world economy go WEIMAR...status, UNLESS the FED HIKES interest rates to stop monetary collapse...and that...

So, what you sow you then reap.

Goodbye Reaganomics and hello state controls to bring back some regulation to a false global model now taking the world off the cliff ! 

Even Putin is looking like he has more geopolitical savvy than the clowns running the "greatest show on earth" ! 


Sat, 06/21/2014 - 08:40 | 4880274 Oldwood
Oldwood's picture

Control by a large centralized government is what we have always needed, right?

It's always been about using their power for good, to protect the "little" people. Ergo, more power, more little people, more power. It works perfectly. Meanwhile we argue over the specifics of a more perfect "system" of tyranny.

Anyone who thinks any government will save us is the tip of their spear, aimed at freedom's heart.

Sat, 06/21/2014 - 09:01 | 4880288 falak pema
falak pema's picture

Right, since you apparently believe that black and white are the only colours of the rainbow I'll return you the compliment : ANybody who thinks that freedom comes frm bending knee to the Oligarchy sellers of "free markets" is their spear, aimed at freedom's heart.

Its your kind of BINARY logic that creates dogmatic crusaders out of simple people who don't know how to think for themselves and follow blindly the sellers of pipe dreams, the Elmer Gantry's of this world, like Ronnie the great liberator of mankind. "Bring down that wall Mr Gorby so that I can build mine made of optic fibres and run by the NSA!"

Without GOvernment the USA would NEVER have been SPAWNED as a nation; just chew on that. 

Its good governance that we need, those who do what the constitution says, instead of bypassing it. 

Sat, 06/21/2014 - 13:23 | 4880711 Ckierst1
Ckierst1's picture

And if you think the oligarchs waxed fat in "free markets" then you are deluded.  Don't blame this government spawned shit on free markets because we've never had them.  That myth was smoked before the ink was dry on the US Constitution when revenue tariffs morphed into protective tariffs, as applied, among other things. Those were the "good old days" before Dishonest Abe Lincoln really set the course for the fat cats.  Once they could control both political parties and kill upstarts in their cribs, the goose was cooked for any tendency toward truly free markets.  We NEED laissez faire.  It takes a government to preserve a financial oligarchy.

Sat, 06/21/2014 - 14:55 | 4880885 falak pema
falak pema's picture

"we've nEVER had them..." lol, that says it all.

Who is the delusional one? Waiting for the Messiah of free markets? 

Why not the 12th Imam ! 

"Laissez faire" my delusional friend was Jekyll Island 1913 and the FED creation, the essence of Oligarchy laissez faire...hidden from W. Wilson....QED ! 

Thats the ONLY history worth talking about 'cos it happened. ..as for "never happened" ...

thats obscurantism. 

Sat, 06/21/2014 - 07:25 | 4880208 AdvancingTime
AdvancingTime's picture

 It might soon become apparent the economic efficiency of credit is beginning to collapse and the additional money poured into the system coupled with lower rates can no longer drive the economy forward. At some point the return on loaning money is simply not worth the risk!

 Why do you want to loan money if most likely you will never be repaid or repaid with something that is totally worthless? The collapse of credit can pose major problems such as what we saw when many sellers were forced to demand payment up front before shipping goods in 2008.

When this happens the only safe place to store wealth will be in "tangible assets" and the only lenders will be those who print the money that nobody wants. More on this subject below.

http://brucewilds.blogspot.com/2014/06/the-economic-efficiency-of-credit...

Sat, 06/21/2014 - 08:00 | 4880243 A82EBA
A82EBA's picture

Sheep dont care about the stock market, all they'll see is hyper inflation and even then you'll never be able to convince them it was caused by the banking system. Sheep still believe .gov story on 9/11.

Sat, 06/21/2014 - 08:01 | 4880244 GOSPLAN HERO
GOSPLAN HERO's picture

The many thousands of undocumented Democrats are pouring into USSA from Mexico.

We are fucked.

 

Sat, 06/21/2014 - 09:33 | 4880317 philosophers bone
philosophers bone's picture

"President causing Fed".  LOL. 

Sat, 06/21/2014 - 09:54 | 4880350 razorthin
razorthin's picture

The bitch is smirking like she is egging on a crazy uncle.  The best part of of a market crash is seeing those smug faces turn glum.  It couldn't happen often enough.

Sat, 06/21/2014 - 10:57 | 4880443 we built this city
we built this city's picture

Mr fABer has been calling it  a bubble since the S&P touched 1200-1300 points.

I do believe it is a big bubble but timing is everything !

One should have a lot of patience and be able to tolerate this never ending rally....

As i wrote before here- I am 35% percent short of my porrtfolio ....till now lost 5% of total assets

My shorts include :

S&P , Dax index, Indian Index, Russel 2000, Bio tech index, and some individual stocks such as Tesla, Amazon, Netflix, and Herbalife.

I aslo started to buy the Vxx at 34 level and will continue to buy further

Some of my longs include Intel- Csco-Teva - and Potash(gains of 30-100% so far)

I do expect next cycle of market to go far as 1200 in the S&P - about 40% correction at least but this crazy manipulated market may go up to 2400 points...and it  will be a big pain for me

The frustration has been enormous in the last year but i do believe the turn around will be very quick and it will be very difficult to response quickly

However the valuations are so high one cannot be indifferent  in my opinion...

 

Sat, 06/21/2014 - 11:23 | 4880476 NaiLib
NaiLib's picture

Well, the fact is that they have nothing else than to use forced hyper inflation, in order to "solve" the global indebtness. They steal from everybody without debt in order to save those in debt. They will of course never admit it, but they will keep creating enough inflation until "solvency" (sic) comes back.

Sat, 06/21/2014 - 11:46 | 4880523 TVP
TVP's picture

This thing is too far gone to be repaired at this point.

Bring on the collapse and the death of fiat.  

Ending the monetary system will be painful, but people will finally see the world as it really is, once they lose everything - then we can begin again.

When it comes, America won't just bend over and accept a UN-controlled global tyranny.  There are bands of well-armed and trained militia in every corner of this country.  Some civilian, some ex-military.  Not to mention about 400 million guns.

Ever seen the movie Red Dawn?  People are already well-prepared for that scenario in droves.  And they have even less to lose than the fictional movie characters did.  They will fight to the death, even if it's obviously a losing battle.  Why do you think there's such an intense effort to disarm us?  

As for me, if I found myself unable to avoid a mark-of-the-beast style tyranny, I would either retreat to the wilderness or jump off a cliff.  

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