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Charting The Death Of The Saver

Tyler Durden's picture


Euthanasia of the rentier appears to be increasingly the modus operandi of the central planning caste of the world.

As we noted previously, Bernanke's (and now Yellen's) plan to exterminate savers is wholly unsustainable, The Fed's insistence that "our savers collectively have to hold all the assets of the economy and a strong economy produces much better returns in general" must be juxtaposed with comments from a money manager that "I don't think that's a fair-trade" for money intended to be invested safely."



By removing the last shred of hope for a rise in savings rates anytime soon, the Fed is once again creating the potential for major unintended consequences as the collapse in interest income for US savers from the 2008 peak forces them to extend duration (TSYs), lower quality (corporate bonds), and/or increase leverage/risk (equities).

No matter how hard they herd the masses, the elderly (and still working) respond, "At our age, we can't be a risk taker anymore."


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Sat, 07/05/2014 - 19:08 | 4927519 rucunus
Sat, 07/05/2014 - 19:53 | 4927624 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

It's essentially the slow death of the middle class. Quite disturbing.

Sat, 07/05/2014 - 20:11 | 4927658 duo
duo's picture

A guy down the street from me is retired, and I think he has a few million in the bank.  5 years ago he was having contractors all over his house, bought a new car every two years, vacationed, pretty much lived it as he should for being successful.  He told me he doesn't do anything anymore but watch TV and burn through his grandkids inheritence.  No work for the contractors, except for the lawn guy.  Way to go Ben.

Sat, 07/05/2014 - 20:35 | 4927708 Grande Tetons
Grande Tetons's picture

My dad is like that....except for the few million in the bank part.

Vacation was car ride to visit old friends from back home. 

New car every two years was trade in 10 year old car for 8 year old car...with all them fucking gadgets. 

Contactor was have a guy come over and make this AC stop making a racket at night. 

Sat, 07/05/2014 - 21:29 | 4927874 Handful of Dust
Handful of Dust's picture

Ditto. Only very essential stuff gets done around here anymore. Zero elective work. I am really surprised how many of those $700k to $1.2 mill houses are sold when the property taxes have risen to over 3.2% in the last few years. Crazy stuff imo. Never seen anything like in before in my lifetime. Precarious. Very precarious. I see more Bailouts...many more Bailouts since no one is responsible for his own mistakes anymore.

Sun, 07/06/2014 - 00:03 | 4928202 J S Bach
J S Bach's picture

The "saver" is never dead... assuming the saver is disciplined enough to have held his savings until they are most readily tradable.  Of course, this moment is never known aforethought, so we can only hope thet our prescience is timely.

Sun, 07/06/2014 - 10:34 | 4928826 MontgomeryScott
MontgomeryScott's picture

Which one of the 'planks' is it, again? 'The abolition of privately-held property', or something.

There is another one talking about setting up a 'Central Bank' that enables the control of the money supply in order that the abolition of personal wealth can be achieved.

Enslavement can only be fully accomplished after the people are destitute and without the resources to survive by themselves, at which point they will BEG and GO FREELY in to their enslavement (if only to live another day).

The 'banks' don't give a shit about the imaginary construct called 'money', actually. It's only one tool in their arsenal. I find it incredible that there aren't more people who can't grasp the bigger reasons behind the 'ZIRP' and now 'NIRP' policies.

Tell the 'savers' in various nations who have been wiped out about how 'saving' is a good thing. Argentina, Weimar Germany, Greece, Zimbabwue,... coming soon to a nation near you...

NOTHING happens by 'chance'.

Sun, 07/06/2014 - 09:23 | 4928691 FredFlintstone
FredFlintstone's picture

Like my dad. Bought a silver anniversary Corvette convertible back in 2003. He and my mom bought matching leather bomber jackets, eating at Outback and Carrabba's so often that they intimately knew the managers. Were working with attorneys on trusts to protect their wealth. Not a worry in the world.

Fast forward 11 years: Corvette collecting duct in the garage, they just sold their winter home in Florida in this window of opportunity, bought an AR-15 and have silver in the gun safe. They be hunkerin' down. They don't need the protection of trusts anymore. I think they are a little worried. They don't have publuc pensions with COLAs, they rely on savings.

Sat, 07/05/2014 - 19:10 | 4927523 buzzsaw99
buzzsaw99's picture

NIRP, the Movie. Coming soon to a bank or credit union near you. The truth is they don't want your deposits.

Sat, 07/05/2014 - 21:14 | 4927819 jaxville
jaxville's picture

  Almost all countries have eliminated reserve requirements for their banks since 2008. They don't need to have a pool of cash in order to lend money into existence.

   This policy will seem to work only as long as they can contain interest rates. We are only months away from the market forcing the issue (and higher rates). Initially they will rise very slowly but inertia will drive them to unimaginable heights very quickly.

  Central banks will make exuses for the higher rates but they will go along with them or face becoming irrelevant.

  Interesting times are upon us.

Sun, 07/06/2014 - 05:47 | 4928494 The Most Intere...
The Most Interesting Frog in the World's picture

I have to laugh all banks now have "wealth management" departments in their branches who's sole purpose is to funnel as much money as possible in to third party annuities where they make substantial commissions. Yep, that's a great use of a bank... Ufb

Sat, 07/05/2014 - 19:21 | 4927548 Miffed Microbio...
Miffed Microbiologist's picture

As former savers we have thrown in the towel. It is over. Any attempt to plan for any semblance of a retirement will be quickly overrun by inflation so why try? With ZIRP the die has been cast and we are the losers. The Fed is like the alien with its tentacle around the scientist's neck in Independence Day. Bill Paxton asks " what do you want us to do?" It's responds "Die". We are only useful as long as we can be milked though taxation.


Sat, 07/05/2014 - 19:41 | 4927589 Grande Tetons
Grande Tetons's picture

Talk to your handlers.  Imagine.....

Miffed Tetons 2016 bumper stickers. 


Sat, 07/05/2014 - 20:05 | 4927644 Miffed Microbio...
Miffed Microbiologist's picture

Agreed. However wouldn't a dictatorship be more effective at this point? I'd love to have the power to restore this country to a Republic and flush the dross. And when all was done, I'd be content to go back to my little farm and resume my quiet life. Funny, this was how the framers originally structured the government until the psychopaths infiltrated it and used it to achieve permanent power over others.


Sat, 07/05/2014 - 20:26 | 4927694 Grande Tetons
Grande Tetons's picture

As a microbiologist it would be your job to invent some sort of anti-sociopath spray that we would spread accross the nation.  I would do nothing...thus revitalizing the true function of the VP...the intelligence of Quayle coupled with the omnipotence of Biden.  

Sat, 07/05/2014 - 21:00 | 4927789 Miffed Microbio...
Miffed Microbiologist's picture

Very wise and thought out. However at this point in my career the only effective spray I could develop would be lethal on contact. Would this be satisfactory? I wish I could construct something more benevolent and nuanced that would change the hearts of those so bent. And I must develop an antidote for the innocent.

Only our wonderful government can come up with a term such as "surgical strike" when it is anything but. Hundreds of dead children are screaming from graves. Though we live in relative comfort and separate from this reality, there is blood on our hands that will never be washed away.


Sat, 07/05/2014 - 21:14 | 4927820 Grande Tetons
Grande Tetons's picture

Compassion is the best stain remover. 

Even gets out blood if you can remove the guilt first. 

Sun, 07/06/2014 - 13:09 | 4929158 sylviasays
sylviasays's picture

"However wouldn't a dictatorship be more effective at this point?"

Many think of Obama as a dictator at this point.  After all, he ignores the Constitution, selectively enforces laws, and makes up his own laws and rules by executive fiat. 

Sat, 07/05/2014 - 19:43 | 4927594 Greenskeeper_Carl
Greenskeeper_Carl's picture

"Bill Pullman"
But ya I feel your pain. That's why I advocate physical gold and silver. Im not really one of those who is convinced that its going to the moon anytime soon, or that it will replace fiat currencies any time soon, but it's real, it has no counterparty risk, and since 'buy and hold' doesn't and won't work with stocks long term anymore, I really don't know what the hell else to do. It's way undervalued right now, and can't suffer from a bail-in.

Sat, 07/05/2014 - 21:15 | 4927821 Miffed Microbio...
Miffed Microbiologist's picture

Thanks, I should have looked that up before I posted that. It's funny. Everyone I work with knows every actor/ actress and every movie or tv series where they have a role. The spend hours a day discussing it like sports fanatics comparing player statistics. It bores me to death and I simply don't understand the attraction. Then I try to bring up a topic discussed here. Their faces glaze over and it's their turn to be bored. It's as if we are in two separate worlds and light years of space between us. Forever apart. That goodness for ZH so I can find some connection.


Sat, 07/05/2014 - 22:29 | 4928021 yogy999
yogy999's picture

You nailed it. Personally I've ben hammered by being on "the wrong side of the fence" in the 2000 and 2007 busts in-so-far as jobs go. Started a new job just before each bust and found myself unemployed/underemplyed for years after. Father of 3 and husband to a stay at home mom we,ve survived by my intolerance to any debt. That, and severe underconsumption let me to mathematically conclude that we could put together a future through compounding interest. Got burned in the 2000 crash, but knew what was coming in July of 2008 and hit the sell botton 12 times, (12 bokerage/401k.IRA etc) within 4 hours. I figured preservation of capital and "renting" it out would/could help us survive the coming years of unemplyment/underemplyment. (I'm in Airline Industry, pilot). Was hoping for deflation as in "cash is king" but Fed wouldn't have that. Just deny any value to all the vacations we never took, all the the DIY work I did for 2 decades, and genaral self-denile for over 2 decades. Cock suckers made that worthless with the stroke of the pen. What depresses me most is that I realize, (after years of financial repression),is that when extrapolated, folks like many of us are FUCKED. We refuse to participate in Ponzi's, but the penalty for not participating is sure "death". That they have made sure of. I know I'm totaly preaching to this audience but I must say that this audience has given me some sanity in an otherwise insane world. I very much appreciate this websight and just as much the great audience via posts which in total I have learned very much from, gotten many laughs, and in general, feel great being around a minority of folks who actually get it. Aside from MDB you are all welcome at my house anytime. Actually MDB is more than welcome becouse I have laughed more from (his?) posts.


Bottom line. I truely appreciate your post!! 

Sun, 07/06/2014 - 03:26 | 4928355 August
August's picture

>>>Was hoping for deflation as in "cash is king" but Fed wouldn't have that. Just deny any value to all the vacations we never took, all the the DIY work I did for 2 decades, and genaral self-denile for over 2 decades. Cock suckers made that worthless with the stroke of the pen.

Try not to think of your life and labours as being "worthless"; just think of past sacrifices as work put in for Jamie, Lloyd 'n' God Himself.

Sun, 07/06/2014 - 09:14 | 4928681 FredFlintstone
FredFlintstone's picture

I hear ya and feel your pain bro.

Sun, 07/06/2014 - 20:47 | 4930257 NickVegas
NickVegas's picture

Rightwous stuff, my man. The USA is a young country. It has become a pawn to the old powers in Europe and Asia, a useful idiot if you will. Slaves are not allowed to save.

Sat, 07/05/2014 - 19:23 | 4927550 hidingfromhelis
hidingfromhelis's picture

Those who say, "At our age we can't be a risk taker anymore."  don't understand that simply holding dollars is also holding a risk asset.  Surprised one can even get a 3.9% CD nowadays too.  Of course that comes with a built-in loss of 6+% if real inflation is factored into the equation.  Must.............keep.........Ponzi.........going.

Sat, 07/05/2014 - 19:40 | 4927582 max2205
max2205's picture


Sat, 07/05/2014 - 20:12 | 4927660 buzzsaw99
buzzsaw99's picture

reminds me of the broker who was telling an elderly client about a great investment opportunity. the client replied: sonny boy, i'm so old i don't even buy green bananas.

Sat, 07/05/2014 - 20:51 | 4927753 Cognitive Dissonance
Cognitive Dissonance's picture

"Surprised one can even get a 3.9% CD nowadays too."

If you are referring to the chart above showing $390 of annual income on the six month $100,000 CD that works out to 0.39% on an annual basis, not 3.9%.

Just sayin'

3.9% would work out to $3,900 of annual income.

Sun, 07/06/2014 - 02:19 | 4928370 hidingfromhelis
hidingfromhelis's picture

Busted for typing while distracted!  I was reading it as a $10,000 CD, which would make absolutely no sense on the chart where it showed the $5,000+ interest previously.  

Sun, 07/06/2014 - 08:07 | 4928595 Cognitive Dissonance
Cognitive Dissonance's picture

If hyperinflation does actually show up when all those overseas dollars wash up on our shores, making $5,000 on a $10,000 CD might make sense when there is 5% inflation per week.

Sat, 07/05/2014 - 19:25 | 4927555 Last of the Mid...
Last of the Middle Class's picture

if the banks go NIRP, Google wallet will take on a whole new meaning. 

Sat, 07/05/2014 - 19:26 | 4927557 divedivedive
divedivedive's picture

We are in our 60's and we are/were savers. Now we live in Mexico where we earn (pre-tax) about 3.5% on a CD. Recently we received notice from our US brokerage (of 29 years) that we can no longer invest in mutual funds but only ETFs and stocks. We are in money market accounts but even then they said - "money market accounts are not affected at the moment - but may be in the near future",

Man I'd love to see the Fed's playbook. Perhaps they are simply herding savers into stocks to unload their own portfolio ?


Sat, 07/05/2014 - 19:48 | 4927612 Greenskeeper_Carl
Greenskeeper_Carl's picture

They do make the libertad down there, which I've always thought was one of the best looking coins in the world. Cash some of that MM out and buy some while silver is still around 20/ounce.

Sat, 07/05/2014 - 20:34 | 4927715 DOGGONE
DOGGONE's picture

Here's the truth, get it in everybody's face!
The Public Be Suckered

Sat, 07/05/2014 - 19:35 | 4927562 XRAYD
XRAYD's picture

The criminals and manipulators who run banks and wall street, also run the Central Bank. And they make the rules! Its how freedom and democracy, and free markets work these days!

The trick is quite simple really and relies on the FIRST magic words uttered by Sec. of State/Treasury James Baker before the first Gulf War to oust Saddam from Kuwait, when the negotiations in Geneva failed: "Jobs, Jobs, Jobs"! And that was the basis for that war.

(And, of course, the invasion of Iraq with fear mongering, and getting rid of Sec. of Treasury Paul O'Neil. ("From the very beginning, there was a conviction, that Saddam Hussein was a bad person and that he needed to go," says O'Neill, who adds that going after Saddam was topic "A" 10 days after the inauguration - eight months before Sept. 11.



And Americans salivate and understand everything is justified, and bend over. Well we know what kind of jobs are being created. And then, of course, there is that other kind of job ...!

Sat, 07/05/2014 - 19:29 | 4927565 syntaxterror
syntaxterror's picture

The Era of Interest is over. It's that simple. 

Sat, 07/05/2014 - 19:46 | 4927605 centerline
centerline's picture

Welcome to the Era of Economic Cannibalism!  Middle class roasting nicely on the spit.

Sat, 07/05/2014 - 19:36 | 4927572 Joebloinvestor
Joebloinvestor's picture

The government has relinquished interest for printing.

Sat, 07/05/2014 - 19:51 | 4927618 TeethVillage88s
TeethVillage88s's picture

Let's look at the Total number of Banks first:

Inverse Curve, TBTF is Quickening, Like "Highlander" (total Banks) Commercial Banks in the U.S. 2014:Q1: 5,743 Number

5,743 total down from 14.400 Total in 1985 (wow)

I like charts: ($3.16 Foreign Investment USA) ($2.69 Private Domestic Investment) (Total Debt as percent of GDP) (Total Federal Debt $17.6 TN) (corporate profits, 1-1-2014)

Corporate Taxes end of 2013 = 273.5 Billion (Treasury data end of Fiscal year Sept 2013)
Corporate Profit end of 2013 = $1.9045 Trillion

$273.5/1,904,5 = 14.4% Corporate Tax (all institution failures) (total Banks) (Median household income, what? discontinued?) (Personal savings) (SNAP Payments, 1-1-2012) (Gini Ratio/Coefficient, what? discontinued?)

Probably should have more charts for People and the Quality of Life of People...But the Truth is Debt is Exponential, Compensation is Down, Jobs have been lost, Medical Costs are up, Pensions are under funded, ...Social Security is under funded and being attacked, Medicare is under funded, Costs are Exponentially Increasing, no on cares about cost, and is being attacked. And the Funding for VA Admin went up (only doubled since 2001 for Medical) despite two wars and Tripling of funding increases for the whole agency. (FDIC Failures) (RTC Failures thou terminated data didn't propagate) (all institution failures) (total Banks)

Oligopoly. Anti-Trust. Control over the Free People. Intrusive governance by Private Corporations.

Sun, 07/06/2014 - 11:52 | 4928999 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

>> what? discontinued?

That's very interesting.  

Do they attempt to provide any 'explanation' at all -- or are they just hoping that folks don't notice the dataset does not cover dates past 2012?

Sat, 07/05/2014 - 19:52 | 4927623 Seasmoke
Seasmoke's picture

Why would anyone hand over 100k for $400 in a year!!!


Corrupt, stupid motherfuckers killed the golden goose. 

Sun, 07/06/2014 - 07:39 | 4928573 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.


Sat, 07/05/2014 - 19:53 | 4927625 seek
seek's picture

Unintended consequences indeed.

Anyone who's sane realizes that there are systemic risks with the current financial system.

They also realize that the current return (especially real return) in the current system is zero or negative.

Ergo, risk management says pull your assets out of the system.

Those same older savers aren't stupid. In the past year, my accountant, who knows I'm well versed in the mechanics of acquiring PMs, has referred a number of his clients to me to walk them through the process of converting USD to physical. No idea if they ever follow through, but they're asking the question, and every single one of them came to the all risk/no reward, time to look elsewhere conclusion independently and then sought professional advice.

The Fed is driving savers out of the system. And as we know, this doesn't end well.

Sat, 07/05/2014 - 20:47 | 4927747 DOGGONE
DOGGONE's picture

Do these look like rational price histories?
Damn right!
SO, get charts in people's faces NOW, to end the deception by omission -- AND undermine shafting the savers!

Sat, 07/05/2014 - 19:57 | 4927631 ToNYC
ToNYC's picture

Invest in yourself  or the cash melts; longing for the return of banking as we knew it in the 20th Century is as dead as precious metal backing the currency. Get over it and get going, not whining.

Sat, 07/05/2014 - 20:28 | 4927702 FredFlintstone
FredFlintstone's picture

Do you mean LASIK surgery, Botox and a facelift for the guys, plus a tummy tuck and breast implants for the ladies?

Actually my eyesight is getting worse and I was thinking of getting LASIK instead of glasses with the idea that my savings will be worthless soon anyhow. Might as well get something I can benefit from.

Sat, 07/05/2014 - 20:38 | 4927724 RafterManFMJ
RafterManFMJ's picture

I had a Glock grafted to the side of my skull last fall. With a toupee on, my head simply looks freakishly misshapen, which has a deterrent value of its own.

Sat, 07/05/2014 - 20:51 | 4927759 Emergency Ward
Emergency Ward's picture

Does it show up on the DHS airport scanners?

Sat, 07/05/2014 - 20:01 | 4927635 I Write Code
I Write Code's picture

This isn't a fair story, you really don't want to encourage ma and pa to put new money into long bonds at 3% when "everybody knows" they will shortly return to 6%.

The question then is, is it better to put them into PG at 3% yield but also 6% total return instead, when that too will be hurt if rates bounce back to normal?  The answer is ambiguous until you also consider the inflationary aspect of ZIRP and QE, assuming PG as a productive asset is more or less insulated against inflation and bonds are not and again "everybody knows" the Fed wants to ignite just a little more inflation as part of their grand plans.

And this is exactly what has happened for the most part over the past five years, a lot of "savings" has gone into the dullest, safest dividend-paying stocks, following the Fed's directives.  If ZIRP was ever a good idea, then this was a necessary move. So, was ZIRP ever a good idea?  Probably not, but for better or worse that's what they did.

But you can still be a "saver" and invest conservatively in equities and the total risk is not all that different from CDs, and in fact there is an upside chance, and anyone who rolled it into equities promptly in 2008 and 2009 is now quite happy that they did.

Sat, 07/05/2014 - 20:02 | 4927638 IridiumRebel
IridiumRebel's picture

Hail the New Abnormal!!!

Sat, 07/05/2014 - 20:13 | 4927664 BlackMagician
BlackMagician's picture

For me in this financial atmosphere it isn't return on's return of investiments...

Sat, 07/05/2014 - 20:22 | 4927696 hooligan2009
hooligan2009's picture

exactly right...draw down your capital to live on when you no longer need to work. 

trouble is, if everyone does actually want their money back in this way, there isn't sufficient uncollateralized capital available.

hence someone better do soemthing about tax advantaging inherited wealth pretty damend quick.

Sat, 07/05/2014 - 20:17 | 4927678 q99x2
q99x2's picture

Heck with savin. We have Yellen printing. Party on bitchez.

Sat, 07/05/2014 - 20:19 | 4927683 hooligan2009
hooligan2009's picture

most excellent perspective... 

ZIRP here (and NIRP in Europe) is a direct attack on ethe elederly and infirm who have already accumulatede capital and cannot afford the risk of volatile equity markets prior to their deaths. 

it is this policital manouvering and shenanigans that a central bank cannot help but engage in when it engages any kind of rate mainpulation.

politics is about the transfer of wealth from one sector to another, now that the fraud being perpetrated on the general populace by the banking system has been exposed, the Fed is unwittingly or not, reducing the wealth of those with money (who demographically older people who have saved money) in favor of those who borrow to live beyond their means either from the government (welfare beneficiaries) or from banks (those who are duped into borrowing money for cars, credit cards payday and student loans amongst other things) with punitively high interest rates.

make no mistake, the Fed is an arm of the government that is engaged in politics without any representation from the people it is taxing. modern fiscal and monetary policy are two sided of the same coin whenever creating money out of thin air is concerned (either via fiscal deficits or money printing).

monetary policy cannot affect GDP growth or unemployment. inflation is a profit phenomenom that cannot be substituted with central bank monetary printing.

Sat, 07/05/2014 - 20:19 | 4927690 Save_America1st
Save_America1st's picture

But can they exterminate a stacker?

Sat, 07/05/2014 - 20:38 | 4927723 JR
JR's picture

Socialism is plunder; it converts plunder into a right; it perverts the law to protect plunder.

“Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”

What Frederic Bastiat wrote more than 150 years ago applies perfectly today: “The law is perverted. And the police powers of the state perverted along with it! ... The law became the weapon of every kind of greed! Instead of checking crime, the law itself guilty of the evils it is supposed to punish!”

A central authority in America today, the Fed in partnership with the federal government, now decides what private property is to be taken – without risk –  exploiting the person, liberty, and property of one group in America while giving it to another. At the same time, GovFed “has converted lawful defense into a crime, in order to punish lawful defense.”

The Federal Reserve, owned by private bankers and using the law, is taking the hard-earned money from retired Americans and savers and transferring it, not even for economic advantage, but to their own bank accounts. And as savers become poorer and poorer, these international bankers and their voting bloc enablers have become rich and richer beyond any vulgar measure.

Professing a democratic ideology, these elite insiders use the enfranchisement of open-border Third World immigrants as a voting bloc to disenfranchise native Americans, voting themselves and the U.S. Treasury America's property. The ultimate aim of this ruling order is destruction of the U.S. and its middle class, to be merged eventually into a one-world World State over which they will have global control.

Ever wonder why George Soros and many of the richest men in the world are financing Communist revolutions and Socialist legislation in the US and the EU, i.e., democracy? It is to manipulate man’s basest appetite – greed -  as a mechanism for ruling-class control. Hans Herman-Hoppe explains “democracy,” i.e., the “will of the people” by majority rule:

“Imagine a world government, democratically elected according to the principle of one-man-one-vote on a worldwide scale. What would the probable outcome of an election be? Most likely, we would get a Chinese-Indian coalition government. And what would this government most likely decide to do in order to satisfy its supporters and be re-elected? The government would probably find that the so-called Western world had far too much wealth and the rest of the world, in particular China and India, had far too little, and hence, that a systematic wealth and income distribution would be called for.”  (Herman-Hoppe, Democracy: The God That Failed)

More than 150 years ago when France was rapidly turning to complete socialism, Bastiat wrote:

Man can live and satisfy his wants only by ceaseless labor; by the ceaseless application of his faculties to natural resources. This process is the origin of property.

“But it is also true that a man may live and satisfy his wants by seizing and consuming the products of the labor of others. This process is the origin of plunder.

“Now since man is naturally inclined to avoid pain—and since labor is pain in itself—it follows that men will resort to plunder whenever plunder is easier than work. History shows this quite clearly. And under these conditions, neither religion nor morality can stop it.

“When, then, does plunder stop? It stops when it becomes more painful and more dangerous than labor.”

To end the plunder, we must end the Fed – the core source of the new world order.

Sat, 07/05/2014 - 22:58 | 4928079 yogy999
yogy999's picture

Great post. Read "The Law" a couple of times and passed it out 100's of times. Kudos to you!!

Sun, 07/06/2014 - 06:41 | 4928525 smacker
smacker's picture

That's an excellent exposé of one of the fault lines of democracy. A strong Constitutional Republic is far superior.

Sun, 07/06/2014 - 10:08 | 4928763 SystemOfaDrown
SystemOfaDrown's picture

Nice write up except we're dealing with [at best] Corporate Fascism; [at worst] Corporate Socialism. Stop drinking the McCarthyism kool-aid!

Sun, 07/06/2014 - 14:46 | 4929386 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture
If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control the wealth, then the seeming paradox of superrich men promoting socialism becomes no paradox at all. Instead it becomes the logical, even the perfect tool of power-seeking megalomaniacs. Communism, or more accurately, socialism, is not a movement of the downtrodden masses, but of the economic elite.

Gary Allen - None Dare Call it Conspiracy

Sat, 07/05/2014 - 20:59 | 4927781 lasvegaspersona
lasvegaspersona's picture

There have been at least 10 headlines in the past year that could easily be interpreted as telling the savers of the world to save in pyhsical gold.

Cyprus, NIRP by the ECB, gold stuck in a narrow price range, Chinese accumulate record gold, plans for bail-ins, ...all these could easily be read as the banks telling savers to go away and use some other vehicle for storing wealth. Clearly they will not say that but it seems clear to me that it is a good thing.

Unless you are a sovereign welth fund or billionaire, holding physical gold is the smartest move for at least 10% of your savings.

Sat, 07/05/2014 - 21:28 | 4927866 The Most Intere...
The Most Interesting Frog in the World's picture

Not sure the Middle Class was ever a sustainable model. When did the Middle Class first exist? What, 1950's or so. Socialist policies, big government, pensions, unions. While businesses generated the spark, it was big government that provided the policies and backbone. Teachers, union workers, police officers, every single person that ever worked at any level of government was minted with millionaire status. Is that sustainable? No! If US citizens had to pay taxes to for all the shit that was promised it would have hit the fan long ago.

The US federal government alone has around $100 trillion in liabilities. I am completely opposed to government and taxes except for military, law enforcement and a court system, but that $100 trillion is, or is going to be, in somebody's pocket. For the $100 trillion we bought this so called Middle Class which, when you look at it objectively is nothing more than creating a bunch of "wealth" for one generation and insurmountable debts for future generations. No new net wealth has been created. Trade deficits for decades will do that. We are the guy that lost his job making $100k, now makes $50k, still living the $100k lifestyle. That's bad enough, but when he dies, his kids will be required to pick up the tab.

In this case, right now In history, I favor an age and wealth based tax. So that the people that ran up the debt and benefitted most pay it down before they die.

Sat, 07/05/2014 - 21:50 | 4927919 Seeking Aphids
Seeking Aphids's picture

 Agreed that the debt is unsustainable and that we have been living a $100K lifestyle on a $50K (or more like $20K?) income. Agreed that the middle class is not sustainable under the current model. Agreed that taxes are too high and that we are passing on humungous debt to our kids. Disagree that taxes should not be used for education, pensions and health care. How to pay for it? Start by taxing the multinationals and the uber rich who park their profits in tax havens.......a trillion here, a trillion there could add up pretty fast....

Sun, 07/06/2014 - 06:38 | 4928522 The Most Intere...
The Most Interesting Frog in the World's picture

I have an idea, gut government down to the bone then no one has to pay taxes.

Sun, 07/06/2014 - 14:50 | 4929398 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

You actually want the government involved in Health Care, huh?  Have you had to deal with the gov't in any way any time recently?

It seems to me the fundamental problem with Health Care is cost.  Do you think the gov't is going to cause the already-insanely-complex system of "Health Care" and payments for service to become cheaper?

Sat, 07/05/2014 - 23:16 | 4928107 JR
JR's picture

America’s stars shine in her middle-class: her traders, small businessmen, professionals, highly-skilled workers, innovators...

Destroy America’s middle-class and you destroy America. 

In John Buchan’s Huntingtower (1922),  a Russian  princess whose country had been brought down by Communism, tells a retired Glasgow grocer, Dickson McCunn, that Bolshevism’s world-wide graft has broken the crust of her civilization—that under Bolshevism unfettered crime has found its headquarters in Russia and broken Russia to pieces; that under Bolshevism’s unchained evil Russia has become a country with “no law in it.”

And what did Princess Saskia believe was the answer to her country’s ills?

A middle-class, the Dickson McCunns, the grocers, "the petit bourgeois, the epicier -- of  the class that does three-quarters of the world’s work and keeps the machine going and the working man in a job--which the world ridicules.

“He is the answer,” says Princess Saskia. “You will not find him in Russia.  He is what we call the middle-class, which we who were foolish used to laugh at.  But he is the staff which above all others makes a great people.  He will endure when aristocracies crack and proletariats crumble.  In our own land (Russia) we have never known him, but till we create him our land will not be a nation.” --- John Buchan, Huntingtower (1922).

According to the Small Business Association:

Small firms accounted for 64 percent of the net new jobs created between 1993 and 2011 (or 11.8 million of the 18.5 million net new jobs). Since the latest recession, from mid-2009 to 2011, small firms, led by the larger ones in the category (20-499 employees), accounted for 67 percent of the net new jobs.

Source: Bureau of Labor Statistics, BED.

Sun, 07/06/2014 - 05:22 | 4928482 The Most Intere...
The Most Interesting Frog in the World's picture

Not sure where you are from but where I am from small businesses under our current communist government are getting completely hammered. Squeezed by taxes and regulation on one end and highly subsidized big business on the other. Small businesses, as a percentage of income, pay much higher rates than larger companies do. People would fall into certain classes, but the winners and losers may be different.

Sun, 07/06/2014 - 12:18 | 4929048 JR
JR's picture

The country’s middle class has been responsible for its economic strength and, there can be no disagreement, it is getting hit hard by an ever dominate government with regulations, taxes and cultural defamation (quotas, corporate lobbying in Congress, political correctness from the homosexuals and femigogues), minimum wage legislation and, of course, the largest of all, Third World immigration taking over every blue collar business in town – landscapers, maid service, small contractors, window washers, janitorial suppliers, roofers, tilers, masons, plumbers… destroying decent pay employment for much of America’s middle class.

A friend of mine in the tech industry lost his sales jobs. He now is a grocery bagger in a Silicon Valley grocery store, earning minimum wage for two years and afraid to ask for a raise. Moving on up to cashier is not necessarily an option (he says) since there are no openings, which might increase his salary from around $22,000 to around 33,000 (median San Jose).

 Cashiers’ salaries have fallen, I understand, due to automation which takes fewer skills. Also, my friend is demoralized from losing his job, which may account for his inaction.

At the same time, "the median sales price for homes in San Jose for Mar 14 to Jun 14 was $662,500. The average listing price for San Jose homes for sale on was $755,524 for the week ending Jun 25, which represents a decline of 2.5%, or $19,266, compared to the prior week and an increase of 1.6%, or $11,918, compared to the week ending Jun 04. Average price per square foot for San Jose CA was $460, an increase of 10.8% compared to the same period last year."

Maybe if my friend saves his money, he can get one of those. /sarc on

Sun, 07/06/2014 - 07:37 | 4928571 AdvancingTime
AdvancingTime's picture

Small business, with two to ten employees, are becoming an  endangered species in America. The family business once the backbone of this country is under attack from the unintended consequences of the many laws and mandates passed in recent years.

Inspections, a plethora of permits, licenses, taxes, insurance requirements, and regulations make it almost impossible for a small business to open, compete, and operate legally. Big government has become toxic for small business. More on this subject in the article below.


Sun, 07/06/2014 - 12:26 | 4929081 JR
JR's picture

Spot on, AT, but I do not consider the consequences "unintended"; I consider them deliberate. A history of Home Depot reveals how it happens. First, the big store moves into a community and emphasizes customer service by hiring the skilled labor and small entrepreneurs it put of business as tech helpers in their respective departments - a plumber in plumbing, a floor contractor in flooring, et cetera.

Then, once the volume of community business has been established, this tech support is moved out and minimum wage employees brought in for the various departments; and, in many cases, the total number of customer service people is reduced dramatically.

Sun, 07/06/2014 - 14:54 | 4929405 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

Big government has become toxic for small business. 

Fully-deliberate.  Government as a protection racket masquerading as the benevolent parent.  FTW.

Sun, 07/06/2014 - 00:19 | 4928226 QQQBall
QQQBall's picture

class and age warfare. LOL

Sun, 07/06/2014 - 05:14 | 4928477 The Most Intere...
The Most Interesting Frog in the World's picture

No, it's deadbeat warfare.

Sun, 07/06/2014 - 10:42 | 4928850 29.5 hours
29.5 hours's picture



"completely opposed to government and taxes except for military, law enforcement and a court system"

wow, there are some crazy people in this forum, but that is the most irrational, mind-blowingly self-contradictory statement I have read here.



Sun, 07/06/2014 - 12:56 | 4929137 The Most Intere...
The Most Interesting Frog in the World's picture

Yeah, returning to the principles the country was founded on would be radical. Lets just keep running up debts for future generations to pay. Fuck 'em!

Sun, 07/06/2014 - 14:58 | 4929414 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

 mind-blowingly self-contradictory

Oh please -- do enlighten me with an explanation of the way in which this is self-contradictory.  

It escapes me.

Sun, 07/06/2014 - 12:44 | 4929110 moneybots
moneybots's picture

"Not sure the Middle Class was ever a sustainable model."


In a world of cycles, nothing is a sustainable model.

Sat, 07/05/2014 - 21:36 | 4927887 Youri Carma
Youri Carma's picture

"The Federal Reserve has keep benchmark borrowing rates near zero since 2008 to help stimulate the U.S. economy.

That’s hurt insurers, which rely on bonds to generate income, and led many carriers to raise prices for coverage."

FROM: Insurers Suffer Like It’s 1965 With Low Portfolio Yields
3 July 2014, by Noah Buhayar (Bloomberg)

Sun, 07/06/2014 - 06:42 | 4928526 The Most Intere...
The Most Interesting Frog in the World's picture

ZIRP, QE, whatever, none of that is designed to do anything other than protect banks. Employment targets, that is all BS...

Sat, 07/05/2014 - 22:22 | 4928008 potato
potato's picture

Keep 50% of your wealth in gold, 50% in land, and 50% in your family.

In other words, just keep making more money.

Sun, 07/06/2014 - 01:13 | 4928309 smacker
smacker's picture

The only effective action for savers is to pull their cash out of banks and hold it securely or, for some, to invest it in to physical assets.

Sun, 07/06/2014 - 07:29 | 4928565 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.  When this happens we are at the end game.

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? 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.

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. More on this subject below.


Sun, 07/06/2014 - 10:31 | 4928818 SMC
SMC's picture

Holding savings in a fiat currency is stupid.

Sun, 07/06/2014 - 11:42 | 4928977 alexcojones
alexcojones's picture

First came ZIRP.

Then came NIRP.

What comes next ? PIRP?

Or is it spelled " PERP?"

Sun, 07/06/2014 - 11:58 | 4929007 razorthin
razorthin's picture

If you are looking for "safe" yield, the current whole life IRR of about 3.5% plus tax shielding in a non-direct recognition mutual is a viable option. One day, should you actually need "credit", you can let that credit be your own.  The wealthy may speculate, but this same strategy is the backbone of their wealth preservation strategy.

Sun, 07/06/2014 - 12:34 | 4929095 moneybots
moneybots's picture

"As we noted previously, Bernanke's (and now Yellen's) plan to exterminate savers is wholly unsustainable"


Eventually, they run out of other people's money.

Sun, 07/06/2014 - 12:54 | 4929136 moneybots
moneybots's picture

"The ultimate aim of this ruling order is destruction of the U.S. and its middle class, to be merged eventually into a one-world World State over which they will have global control."


The one problem with that idea is that people are nationalistic.

Sun, 07/06/2014 - 13:59 | 4929279 JR
JR's picture

Yes, moneybots. Long ago, the despots realized that this nationalism and patriotism would be a hurdle that they would need to overcome before dissolving sovereignties, merging contrasting cultures, or dealing with middle classes opposition to expanding government.

In America, the rulers of the Great Society attacked this problem head-on with the 1965 Immigration Act – a measure so sweeping that it would upend the cohesiveness and nationalism of America’s white, Protestant European demographics.

The waves of Third World immigration it legislated would greatly accelerate illegal immigration as well, overcoming the Founders’ political structures and producing a welfare state that could be controlled from a centralized power structure.

The Third World brought with it to North America its corruption and its socialism. And with its low-skill, low-educated immigrants, the despots could control their loyalties and their dependence on government.

Callfiornia and its loss of its white culture is the poster child for America's future, never again to elect a significant conservative representation that would conserve its past. Its two senators, Feinstein and Boxer kept in power by this immigration wave, fit the socialist model: feminism, moral decay, extreme Democrat partisanship, huge Big-Government promotion, one-worldism, and both Jewish.

The Jewish angle, of course, was the critical ingredient of the 1965 Immigration Act. As Jewish groups proudly declare, America’s European white culture had to be faced off with other opposing strong cultural waves in order for Jews to be "safe in their host country" if their world-government, socialistic, political principles were to culminate in their unending quest for a single, universal, socialistic state.

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