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Is The Fed Going To Attempt A Controlled Collapse?

Tyler Durden's picture




 

Originally posted at NotQuant.com,

As most Fed watchers know, last week was interesting because Janet Yellen, speaking at IMF came out and said something quite surprising.  In a nutshell, she said “It’s not the Fed’s job to pop bubbles”.   While many market participants immediately took this to mean, “To the moon, Alice!” and started buying equities hand over fist, there’s another possible explanation for Mrs. Yellen’s proclamation of unwillingness:  The Fed could be preparing to do exactly what it said it wouldn’t.

Here’s a quick re-cap of events:  In the recently released Annual Report of the BIS: Bank for International Settlements  (commonly thought of as the “central bank’s central bank”) the BIS made a rather ominous recommendation to it’s member banks: Pop this bubble now.   Their specific language wasn’t quite so direct, but the message was just as clear.

The risk of normalising too late and too gradually should not be underestimated… The trade-off is now between the risk of bringing forward the downward leg of the cycle and that of suffering a bigger bust later on .

 

Few are ready to curb financial booms that make everyone feel illusively richer. Or to hold back on quick fixes for output slowdowns, even if such measures threaten to add fuel to unsustainable financial booms,” …

 

“The road ahead may be a long one. All the more reason, then, to start the journey sooner rather than later.

As we noted last week, there are a couple of fascinating things to note about this recommendation.   First, for anyone who thinks that the concept of intentionally crashing the stock market is the stuff of conspiracy theorists, that notion is now dead and buried. It’s extremely clear from the BIS’ language, that the concept of initiating a collapse is openly discussed as a policy measure.   This was a direct recommendation to bring on the crash – or as they say so colorfully, to “bring forward the downward leg of the cycle”.

More kabuki?

More kabuki?

But what else is fascinating is that just days after the BIS report was released, Janet Yellen seemed to counter the BIS in her presentation to the IMF:

“At this point, it should be clear that I think efforts to build resilience in the financial system are critical to minimizing the chance of financial instability and the potential damage from it. This focus on resilience differs from much of the public discussion, which often concerns whether some particular asset class is experiencing a ‘bubble’ and whether policymakers should attempt to pop the bubble. Because a resilient financial system can withstand unexpected developments, identification of bubbles is less critical.”

What Yellen seemed to be saying — quite possibly in direct response to the BIS’s recommendations —  is that the Fed isn’t in the business of popping bubbles, nor does it see a reason to intervene in their development.

So to summarize:  The BIS publicly recommended popping the bubble now… and Yellen said no.

So what’s going on?

We could take all of this at face value if we chose:  The BIS playing hawk, and the Fed playing dove.  And that might well be the case — as to some extent Yellen is still something of an unknown entity.

But there is one more twist to the puzzle:  Yellen has openly stated that she would not be offering clear guidance to the market as her predecessor had advocated.  The age of Fed-glastnost is apparently coming to an end.

So indulge us for a moment as we present another possibility:

Yellen is going to orchestrate a controlled collapse.  Or, at least one which we hope is controlled.

There are political considerations to be made, however:  The Fed, which has not only come under intense fire for overt market manipulation, but which is also deeply concerned with market perception, simply cannot afford to be perceived as an instrument of the market’s collapse.   To be seen as the instigator of a crash could do irreparable harm to the institution.

Pop bubbles?  Who us?

Pop bubbles? Who us?

So just maybe the Fed fully intends on heeding the advice of the BIS, and is strategically positioning itself as a stalwart dove to shield itself from the public fallout of it’s orchestrated financial calamity.   A particularly sound play from a political perspective in the event that things don’t go as smoothly as planned.

One thing is certain at this point:  An intentionally orchestrated crash is the direct recommendation of the BIS, per it’s annual report.   That this action exists as a potential policy measure is now confirmed.

The remaining question is: Would the Federal Reserve pursue such a policy measure openly, or behind the same curtains from which most of their historic policies were enacted.

As we re-think Mrs. Yellen’s speech to the IMF, we are less certain that the Fed is as unwilling to intervene as Mrs Yellen would have us believe.   Bringing forward the next leg of the cycle, may well be on the Fed’s agenda.

 

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Tue, 07/08/2014 - 17:02 | 4936886 SMG
SMG's picture

"Yellen is going to orchestrate a controlled collapse."

HA! Good luck!

Tue, 07/08/2014 - 17:06 | 4936903 bigdumbnugly
bigdumbnugly's picture

oh, i am sure they'll do a great job with EVERYONE, rich and poor, in mind.

Tue, 07/08/2014 - 17:11 | 4936932 linniepar
linniepar's picture

2014, drop the 0, 14 divided by 2 is 7. Fuck you, IMF!

Tue, 07/08/2014 - 17:23 | 4936963 stant
stant's picture

Lagardes ouiji board is stuck on july

Tue, 07/08/2014 - 17:27 | 4936980 I am more equal...
I am more equal than others's picture

 

 

controlled collapse is gooberment speak for" we are going to crash the market so we can take control of everything."

Tue, 07/08/2014 - 17:28 | 4936986 PAPA ROACH
PAPA ROACH's picture

As long as it's gluten free, it will be great!!!

Tue, 07/08/2014 - 18:04 | 4937083 nope-1004
nope-1004's picture

Dude looks like a lady.

 

They're not going to pop the bubble?  LMAO.  How about "we will not monetize our bond purchases" by Bernocchio.  Or, "increases in food prices are a result of people seeking more sophisticated diets".

All banking scum lie.  When money is your God, lying isn't a mortal sin of lying... it's just another statement.  Damn right they are planning to pop this thing.

 

Tue, 07/08/2014 - 18:06 | 4937117 kaiserhoff
kaiserhoff's picture

Donkey Lady looks rode hard and put away wet.

If it had a brain, Yellen would pop this thing while it can still BLAME BEN.

More or less pushing on a string with QE matters not.  At this point, only interest rates matter.

Follow the Money!

Tue, 07/08/2014 - 18:21 | 4937192 Headbanger
Headbanger's picture

It's what I've been saying that the FEd is up against the dollar becoming worthless as it's losing status as world currency.

There's NO chance of a "controlled crash" now cause they went way too far with the QE bullshit for the sake of Obozo.

Good news is the price of everything will catch down to what real earnings are now.

Tue, 07/08/2014 - 18:31 | 4937249 stant
stant's picture

And the Mack daddy needs to go to Dallas in a convertible

Tue, 07/08/2014 - 18:34 | 4937267 Liberal
Liberal's picture

Can we please stop talking about this economics/finance stuff and talk about things that really matter, like the Hobby Lobby decision and gay marriage?

Tue, 07/08/2014 - 18:37 | 4937284 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Spot on.

Tue, 07/08/2014 - 19:34 | 4937353 remain calm
remain calm's picture

Yellen can't control her bladder. How in the fuck is she going to control the biggest asset bubble ever created that makes even Greenspan envious.

Tue, 07/08/2014 - 20:18 | 4937682 Save_America1st
Save_America1st's picture

Ummmm....has there every really been any doubt what-so-ever?

 

#TREASON

#ENDTHEFED

#IMPEACHMENTISKICKSASS

#GUILLOTINESRULE

#BTFD

#STACKPHYZZ

you get the picture, bitchez...

Wed, 07/09/2014 - 07:49 | 4938779 Vagabond
Vagabond's picture

Are there going to be woman presidents in charge of both the US and the FED during the collapse?  What's that all about?

Tue, 07/08/2014 - 20:24 | 4937708 Stuck on Zero
Stuck on Zero's picture

Yellen can't possibly want a crash now.  There's still more to steal.

 

Tue, 07/08/2014 - 21:54 | 4938052 willwork4food
willwork4food's picture

Agreed. Why would the BIS and Yellen publically comment on this when they don't have to? Something is up. I think they are just marinating the public with 100% pure bad guy/good guy bullshit and wait for a juicy false flag event or natural disaster so they can shift the blame on helping rebuild the country.

Tue, 07/08/2014 - 22:52 | 4938254 CheapBastard
CheapBastard's picture

Greenspan and Bernanke have already controlled the collapse of the Middle Class. What’s left for her?

Wed, 07/09/2014 - 04:00 | 4938622 Squid-puppets a...
Squid-puppets a-go-go's picture

c'mon guys - over 280 comments on this thread as i write, and the essay is on the most vapor thin conjecture

I think its pretty obvious that yellen is just saying 'we wont deliberately pop the bubble, but dont expect us to ride to the rescue if it does burst'

Wed, 07/09/2014 - 07:47 | 4938786 Bindar Dundat
Bindar Dundat's picture

Right on SQUID!  That is exactly what she is saying.  

Wed, 07/09/2014 - 17:54 | 4941102 whyami
whyami's picture

You made me laugh!

Wed, 07/09/2014 - 17:54 | 4941103 whyami
whyami's picture

You made me laugh!

Tue, 07/08/2014 - 20:15 | 4937658 Ben Ghazi
Ben Ghazi's picture

Obummer will once again blame Bush.

 

Fed Fucks like Yellen will hide from this crash like cockroaches hide from light.

Wed, 07/09/2014 - 00:28 | 4938467 disabledvet
disabledvet's picture

Gay people can't shop at Hobby Lobby?

Tue, 07/08/2014 - 18:38 | 4937293 knukles
knukles's picture

Nope... A controlled collapse?
No more than orderly immigration.

Didn't get any better today, did it?

Wed, 07/09/2014 - 06:22 | 4938686 spankfish
spankfish's picture

"orderly immigration"... that is some funny shit.  Man, Yellen is one ugly woman.

Wed, 07/09/2014 - 11:17 | 4939565 SumTing Wong
SumTing Wong's picture

I keep saying it...

TPTB brought in a half-black man as Prez for when the SHTF politically, so why have they delivered a half-woman as Fedhead now???

Tue, 07/08/2014 - 18:41 | 4937306 CClarity
CClarity's picture

That is meant to distract you from the aholes at the top of the new world order.

Bring on ether, bitcoin, and government by proxy, not elected representation.  That model is so yesterday!

Tue, 07/08/2014 - 19:58 | 4937600 Tom Servo
Tom Servo's picture

Any coverage of riots in Brazil following their world cup ass whipping?

LOL

 

Tue, 07/08/2014 - 20:28 | 4937718 Ben Ghazi
Ben Ghazi's picture

Is the "Gay Whopper" available at Burger King yet?

Wed, 07/09/2014 - 00:32 | 4938473 disabledvet
disabledvet's picture

Absolutely. It comes with extra pickle. I've advised the market not to call it the "Gay Whopper" however. So we just call it "Happy Patty with extra pickle." Things are flying off the shelves.

Tue, 07/08/2014 - 21:40 | 4937990 stant
stant's picture

For the one who down voted me it gets cold in nov. he should fear his own more than me.. Keep your friends close and your enemy closer

Wed, 07/09/2014 - 00:33 | 4938474 disabledvet
disabledvet's picture

I hear they have a secret handshake "involving sweaty wads of dough" as well.

Wed, 07/09/2014 - 06:21 | 4938685 zeroheckler
zeroheckler's picture

Mr. Lagarde is just taking the piss out of the extreme conspiracy-theorists!

Wed, 07/09/2014 - 10:20 | 4939337 DanDaley
DanDaley's picture

Don't read too much into this occult business...the French are stupid for all manner of pseudoscience, for example, you can't even get a job there without having your handwriting analyzed! 

Tue, 07/08/2014 - 18:31 | 4937254 NoDebt
NoDebt's picture

This whole article seems a bit like discussing advanced Rock/Paper/Scissors game theory.

Look, are we all invested in the idea that the Fed will print to infinity or aren't we?  Couple months ago, seemed like we were all in lock-step agreement.  Now all the second guessing and third guessing about this.

Tue, 07/08/2014 - 18:39 | 4937298 knukles
knukles's picture

Kinda, maybe and sounds like....

Tue, 07/08/2014 - 18:42 | 4937308 fonzannoon
fonzannoon's picture

I'm invested in the idea that the fed controis the bond market and by extension the stock market. There will be no overthrow of either one anytime soon. I see no reason why the biggest banks etc would blow their brains out or the fed would endorse it. I live 45 mins from the Hamptons and can assure you that they have nothing to gain from that. 

This is currently the biggest problem in the 1% Hamptons world right now

http://nypost.com/2014/06/29/when-socialites-call-sos-these-hamptons-wat...

Tue, 07/08/2014 - 18:51 | 4937347 knukles
knukles's picture

OK Fonz....
You're one of their neighbors, do something about it, for fucks sake!
Bitch, complain, boycott their stores, picket their driveways, shit on their lawns, piss in their pools ...
Wrap dead fishes in their newspapers for fun.
Light paper bags of poop on their front steps,  ring the doorbell and run, hiding behind a bush, laughing maniacally.
Just fucking Do Something!

Denise Rich dies on her boat.  Are we talking the one and only very same Denise Rich wife of Markie Mark "Got My Pardon from Slick Willy, Bitchez" Rich?
I mean fucking seriously.
DO SOMETHING, GODDAMNIT!

Tue, 07/08/2014 - 18:58 | 4937377 kaiserhoff
kaiserhoff's picture

At least, fart in their general direction.

Tue, 07/08/2014 - 19:10 | 4937423 knukles
knukles's picture

Yes.
Didju hear that Fonz?
Every journey begins with the smallest step.

Fart at them.

Better yet, go into a really fancy restaurant and get seated next to a bunch of them and crap your pants, act like nothing's wrong and see how long it takes them to act up like a bunch of immature, problematic, self centered children.

Go for it, bud.
I gotchur "back" (side) on this one!
I'll be there with you in spirit.
You can count on me
And Kaiserhoff, too.
Right Kaiser?

Go for it!
You could be headline news on page 6 of the NY Post.
Even make it to one of them crazy guy's radio shows.

Damn, Fonz, this may be one of my better ideas

 

Tue, 07/08/2014 - 20:31 | 4937732 jbvtme
jbvtme's picture

i still can't fathom how the bottom of the gene pool rises to the top of the food chain...

Tue, 07/08/2014 - 22:42 | 4938231 Yes_Questions
Yes_Questions's picture

 

 

cover.

 

see: G.W. Bush

 

but that just gets to the Why.

 

How?  The well-heeled harvest their stables of ne'er do well inbred offspring to take the helm when the light of day gets close to their shadows if only to rule for another decade.  The OWNERS breed lowers into the mix to keep you and I perplexed.

 

Tue, 07/08/2014 - 19:10 | 4937427 fonzannoon
fonzannoon's picture

I cropdust any chance I can out there.

Wed, 07/09/2014 - 00:42 | 4938486 disabledvet
disabledvet's picture

Show up to social functions wearing only a bow tie.

Ask for "dry martinis" just like the millionaire in Gilligans Island.

Try and "blend in."

Crash weddings while not two, not three but a SOLID four sheets to the wind. And OBJECT to the matrimonial bliss on account of, well...you're allowed to do that.

Then barf on everyone sitting in front of you.
But don't forget to apologize!
Claim you have an illness of some sort that makes not being naked and barfing downright impossible.

And of course while wretching be sure between "puke spits" an exclamation of "I'm good for the thank you not!"

Wed, 07/09/2014 - 06:52 | 4938722 Seer
Seer's picture

You're becoming more and more likeable :-)

Tue, 07/08/2014 - 19:00 | 4937388 booboo
booboo's picture

I see, so living in such close proximity to faux wealth is your qualifier? The Hamptons? By the way, the biggest banks blew their brains out in 07, so what, they are bigger today with less compitition. I'm not sure you know how this really works.

Tue, 07/08/2014 - 19:14 | 4937409 fonzannoon
fonzannoon's picture

the big banks blew their brains out in 2007? wtf are you talking about? Why would they need to do that again?

I'm not so sure you know how this really works.

faux wealth? 

and yes, i feel good letting everyone know that everyone in the hamptons is just fuckin peachy and don't need a collapse to get peachier. They are fine as is.

 

Tue, 07/08/2014 - 19:19 | 4937462 NoDebt
NoDebt's picture

When you start making that much sense, I grow concerned we're both missing something.

Tue, 07/08/2014 - 21:06 | 4937841 Grande Tetons
Grande Tetons's picture

Notice...Fonz used the word Peach twice. The has something to do with peaches or Ty Cobb. 

Georgia Peach...drop the....peel....

Tue, 07/08/2014 - 21:22 | 4937903 fonzannoon
fonzannoon's picture

You ever see the interview with Cobb when when he was really old and the interviewer read him his stats and said "if you were playing today, what do you think you would bat?" and he said ".325". The interviewer said, "really. that is below your career average" and he said "i'm 75 years old". funny stuff.

Tue, 07/08/2014 - 21:32 | 4937957 centerline
centerline's picture

+1 fonz.  The TBTF know they arent getting bailed out again.  Public opinion wont stand for it.  The FED plays a bigger game.  Financial crisis = soveriegn crisis = political crisis = public crisis (currency crisis).  We are somewhere between stages 2 and 3... maybe not even at stage 3.  This crap takes time to run out.  Like a dying business that still has cash flow.  The "robbing Peter to pay Paul" sort of action can go on until cash flow really chokes and there aren't any more checks to kite.  

Wed, 07/09/2014 - 00:15 | 4938448 TrustbutVerify
TrustbutVerify's picture

Public opinion is completely ignored at this point.

Wed, 07/09/2014 - 06:53 | 4938724 Seer
Seer's picture

Problem is that we don't have enough FACTS: we are drowing in a sea of "opinions" (thinking that opinions actually matter).

Wed, 07/09/2014 - 06:27 | 4938693 Seer
Seer's picture

center, thank you for helping provide clarity/logic to this "discussion."

It always amazes me how on one hand folks can talk up about how the Fed/govt can NOT create anything and then on the other hand expect them to do something.  Yes, I get it that we (well, I DO) want them to STOP DOING and to just get out of our lives, BUT, that WON'T "solve" our REAL PROBLEMS!

How much more do we expect these people to do to tell us that growth is dead?  The entire fucking game is predicated on growth and now that growth just cannot happen anymore, well, how difficult is it to figure out that dividing by ZERO gets us ZERO?  Those believing that the Fed/govt are only obstructing us from nrivana need to actually use brain cells to analyze the situation (or fess up that they're being disingenuous- that they're only being deceptive in order to try and bilk out an extra few crumbs for themselves: I get this, and well... FINE! do it, but STFU about slathering it in pure BS about how we can all be saved by some sort of "pure system" that is, of course, predicated on perpetual growth).

The LAST thing that these folks (TPTB) want is to change things.  They KNOW that the entire System is unable to deliver and is therefore unable to provide any semblance of predictability of their future being like their past (maintaining control).  All that they will do is to continue to do what they've been doing until they can no longer.

The world has pretty much been faking growth since the early 70s.  It's the end of the line for the smoke and mirrors game, and with it nearly all of that we see around us.

Wed, 07/09/2014 - 06:51 | 4938719 Escrava Isaura
Escrava Isaura's picture

Centerline,

Taking from Paul to pay Paulette I find it more accurate than to pay Peter. In any event, great comment.

Seer....,

What can I say! You’re in a league of your own. Don’t ever stopping writing.

By the way, do you both comment in any other blog? And, what’s your favorite blogs?  

Wed, 07/09/2014 - 10:52 | 4939418 DanDaley
DanDaley's picture

All that they will do is to continue to do what they've been doing until they can no longer.

 

Usually when people think that they are losing control, they try harder to control things...governments, too.  This is why they are preparing for some sort of armageddon, arming up every conceivable government agency to the teeth.  

 

You're right, though, exponential growth is a fiction, and the only sustainable thing is say, 1 million people per continent...but how do you get to something even remotely close to this? 

Tue, 07/08/2014 - 21:05 | 4937836 whoopsing
whoopsing's picture

Fonz, the bays can be  hairy, all you see is surface and think " oh, I have plenty of room " as you drift out of a channel and BAM drive your skag into bottom mud . I'm a neophyte captain and I have to tell you it is extemely challenging .  I never had to call sea- tow though.

Tue, 07/08/2014 - 21:27 | 4937933 fonzannoon
fonzannoon's picture

yeah man I spent a lot of time on those bays. real muddy so you don't smash up the boat but you only draw a couple of feet and if you wander outside the channels by even a few feet you are done.

Wed, 07/09/2014 - 06:35 | 4938702 Seer
Seer's picture

Oh the sailing stories that I have to tell!  Tip: NEVER trust your gold with me!

Better mud and sand than ROCK! (fortunately it was a only a skim off the top of the rock- boat's owner had once slammed at nearly hull speed dead into one and a haul-out showed no damage- hell-for-stout, quality stuff is nice!)  Or docks! (at some remote place where someone I knew just happened to be there to see it!)

Tue, 07/08/2014 - 21:39 | 4937988 villainvomit
villainvomit's picture

nothing to gain from short selling before a violent or controlled melt down ?

That's a nice trade if you know it's coming ~

Tue, 07/08/2014 - 22:23 | 4938174 lasvegaspersona
lasvegaspersona's picture

Ultimately hyperinflation is the ONLY way a fiat currency has ever died. There seems to be a lot of different types of death rattles to be heard however.

I still believe they will print, print , print.

They definitely have learned from the other 40 or so hyperinflations this century and we will not likley see a repeat of any of the others. 

We will get hyperinflation...with an American flavor.

Fri, 07/11/2014 - 22:55 | 4949207 mkkby
mkkby's picture

Look, people... 

The god damned BIS, Fed and IMF have thousands of little employees who do nothing but write "papers" every day.  NOBODY fucking takes any of them seriously.  The decisions are made at the top, based on gut feelings and not some pseudo science.

The central banks will print and print, then print some more.  They have no choice.  All the govs are deficit spending and they won't ever do even 1% austerity.  So the future is more competitive devaluation, until eventually it hyperventilates.

This probably won't happen for decades.  After Japan and all the socialist European states "go Greece", we can worry about it here.

Tue, 07/08/2014 - 20:23 | 4937703 teslaberry
teslaberry's picture

nonsense. 

 

the dollar becomes worth more once there is a crash. liquidity will come surging back from emerging markets and massive demand for dollars and cash will bring massive amounts of money into bonds for the fed to unload trillions worth of shitty as near zirp bonds onto reitirees and pension funds for decades. After that, they reverse the dump and bring back the pump. 

 

meanwhile ans foreign nations are less likely to buy treasuries, the dollar can weaken and lose status as the international reserve currency slowly----it doesn't have to happen all at once like in some cartoon. 

Wed, 07/09/2014 - 02:29 | 4938566 Welder
Welder's picture

"becomes worth more" against what ? Oil ? Gold ? Euro ?

Wed, 07/09/2014 - 06:42 | 4938712 Seer
Seer's picture

In ever smaller circles...

The world's System relies on VOLUME, large scale participation.  If you have been awake you'd see that more and more people are becoming marginalized, and that this translates to fewer people being engaged in the System.  Eventually people won't see any value in the System.

The next "crash" is likely to be the "Big One."  I highly doubt that there will be anything of a bond market around.

"the dollar can weaken and lose status as the international reserve currency slowly"

Sure, anything is "possible" (Loyds of London has odds for Elvis returning on a space ship!), it's thorugh the lens of PROBABILITY that provides for meaningful analysis.  And with that in mind we'd have to see how history has recorded such events... do we have examples here?

Tue, 07/08/2014 - 21:30 | 4937947 villainvomit
villainvomit's picture

kh, no offense.  May I suggest a better name for Yellen the Felon......A donkey is a quite nice creature with a very nice ass and the ability to transport opium from Afgh to Pak and navigate the tough terrain and jagged cliffs in the mountains.....Yellen is not.

I would suggest a combination of turtle (the head) and turkey (the neck).  Slow to move, able to hide it's head in the shell and smart enough to evade a hunter, but dumb enough to drown in the rain.

TurtleKey....think about it.

Tue, 07/08/2014 - 19:17 | 4937450 Brutlstrudl
Brutlstrudl's picture

Dimon in drag.

Tue, 07/08/2014 - 21:44 | 4938010 gatorboat
gatorboat's picture

"Damn right they are planning to pop this thing."

No, I don't think so.   I think the plan is keep printing dollars, keep QEing, keep the bubble inflated. 

"We'll just kill the dollar."

Remember that statement made to Kyle Bass?  I think it's the plan.  Just kill the dollar.  Best way to kill the dollar is keep printing more of them, keep QE going.  Deny it publicly, say they're tapering, but keep doing it privately.

They won't let Wall Street collapse.  They won't the government collapse.  They will keep printing dollars some how some way.

The only thing collapsing will be the dollar, just like they said.  "We'll just kill the dollar."

Tue, 07/08/2014 - 23:20 | 4938343 hllnwlz
hllnwlz's picture

Okay, hang on though.  Doesn't hyperinflation kill the market anyway? Deflation or hyperinflation: they're both forms of default.

Tue, 07/08/2014 - 23:19 | 4938344 hllnwlz
hllnwlz's picture

Okay, hang on though.  Doesn't hyperinflation kill the market anyway? Deflation or hyperinflation: they're both forms of default.

Wed, 07/09/2014 - 06:45 | 4938717 Seer
Seer's picture

The USD was dead a LONG time ago! (1971)  What will be "killed" is the game-playing; rather, the ABILITY to continue the make-believe game that has been in place will die, and there's nothing that anyone can do about it.  Again, the fundamental premise guarantees for failure: perpetual growth (on a finite planet).

"The secret plan is that we're going to keep doing exactly what we've been doing, for as long as we can."

- Daniel Quinn, in, "What a Way To Go"

Tick, tick, tick...

Tue, 07/08/2014 - 18:57 | 4937372 WillyGroper
WillyGroper's picture

LOL

I cannot fathom the lowest common denominator, but saw GF on a can of tuna the other day.

Tue, 07/08/2014 - 17:29 | 4936990 LawsofPhysics
LawsofPhysics's picture

Then it really isn't a collapse...  Control the language and you control the sheeple...

same as it ever was.

Tue, 07/08/2014 - 17:57 | 4937090 NotApplicable
NotApplicable's picture

Yes and no. Without the last X years of can-kicking, this shit would've collapsed long ago. So what does one do but engineer a collapse to their liking by taking out the false supports.

The only unknown (black swan, to us) is who will be the designated scapegoat.

Tue, 07/08/2014 - 18:20 | 4937185 kaiserhoff
kaiserhoff's picture

Based on recent Jew York media reporting...,

  they will blame Hillary.

Tue, 07/08/2014 - 18:23 | 4937205 LawsofPhysics
LawsofPhysics's picture

optimist.

Tue, 07/08/2014 - 18:31 | 4937241 Chief Wonder Bread
Chief Wonder Bread's picture

Just as important as a scapegoat, who will be the bagholder?

After a stock market 'collapse', the same number of shares outstanding are held by the public, just by different individuals and institutions.

What is a "prudential macrotool"? Is this one?

The ESF may be used to "deal in gold, foreign exchange, and other instruments of credit and securities."

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

In this case, it would be the US taxpayer. Again.

Tue, 07/08/2014 - 18:36 | 4937275 LawsofPhysics
LawsofPhysics's picture

The term "taxpayer" is very important here because it eliminates all non-productive people in America.  Go ahead, follow that scenario through to it's logical conclusion and you quickly see why the "Homeland Security" boys and girls have been purchasing so much ammo.

 

Prepare for war folks, simple as that.

Tue, 07/08/2014 - 19:25 | 4937376 Chief Wonder Bread
Chief Wonder Bread's picture

Since you pointed that out, it won't be "taxpayer" either as it will simply be absorbed into the Black Hole of US govt debt. When that one blows, it will be epic for sure.

The bagholder is us.

Tue, 07/08/2014 - 18:48 | 4937305 Escrava Isaura
Escrava Isaura's picture

LawsofPhysics …… "Control the language and you control the sheeple...’ 

Couldn’t have said it better.

The propaganda machines on the ‘Right’ and on the ‘Left’ are really good.

They are so good indoctrinating the misinformed that I think they could get away without the 'Bread & Circus'.

And you can clearly see by reading some of the comments.

 

Wed, 07/09/2014 - 06:50 | 4938720 Seer
Seer's picture

And that sad part is that it has always been within our own control to NOT participate.

The illusion of freedom will continue as long as it?s profitable to continue the illusion.
At the point where the illusion becomes too expensive to maintain, they will just take down
the scenery, they will pull back the curtains, they will move the tables and chairs out of
the way and you will see the brick wall at the back of the theater.?

- Frank Zappa

The reality is that the brick wall exists even without TPTB.

Wed, 07/09/2014 - 03:02 | 4938595 Gief Gold Plox
Gief Gold Plox's picture

Spot on, Sir. It should be called [an attempt at] "controlled demolition".

For some reason the infamous words "Pull it!" come to mind.

Edit to add: Readin' the comments below, I see I'm not the only one thinking this.

Wed, 07/09/2014 - 07:14 | 4938738 Seer
Seer's picture

In desperate times desperate people (esp those with the most to lose) will do very desperate things.  It's through this lens that I came to see 9/11 and the follow-on "processes."

"The American way of life is not negotiable." - George "It's a New World Order" H. W. Bush (subsequently used by his son and by Death Cheney)

It shall be a duel to the death...

http://www.youtube.com/watch?v=OxPYa5mVlYU

Note the date of George H.W. Bush's speech!  (not that I believe that there could ever be an One World Government, but that's not to say that I don't believe the effort exists out there [and it's always about CONTROL])

Tue, 07/08/2014 - 17:47 | 4937050 Town Crier
Town Crier's picture

Reagan would take charge of the situation: "Mrs. Yellen.  Tear.  Down.  This.  Bubble!"

Tue, 07/08/2014 - 20:52 | 4937796 Miffed Microbio...
Miffed Microbiologist's picture

Bubble sounds so cute and playful. How 'bout pus filled, rotting carbuncle that has festered for 6 years and is straining the skin to its maximum tension. Now there's so imagery that is more apropos.

Miffed;-)

Tue, 07/08/2014 - 23:10 | 4938313 Yes_Questions
Yes_Questions's picture

 

 

 

dammit, I'll take cute bubble burst for $32Trillion

 

(6 years festering?)

Wed, 07/09/2014 - 07:17 | 4938741 Seer
Seer's picture

It's a bubble within a bubble...  Some could be said to more accurate to say that it's existed since 1913; I feel like it started with the "command" of "Go forth and multiply" (no Stop button ever provided- BAD PROGRAMMING!)

Wed, 07/09/2014 - 07:58 | 4938807 shovelhead
shovelhead's picture

I always thought that 'a malevolently glistening supperating pustule' had a nice alliterative ring to it.

I try to use it every chance I get.

Wed, 07/09/2014 - 13:35 | 4940210 RichardParker
RichardParker's picture

Carbuncle is more accurate.  I was thinking maybe more along the lines of an overfilled colostomy bag bulging at the seams.

Tue, 07/08/2014 - 17:53 | 4937081 Kirk2NCC1701
Kirk2NCC1701's picture

Just do a Controlled Collapse -- Brasilian style.

Germany:Brasil = 7:1 World Cup Semi-Final.

Tue, 07/08/2014 - 19:23 | 4937478 Took Red Pill
Took Red Pill's picture

and as painless as a Brasilian wax!

Tue, 07/08/2014 - 21:27 | 4937928 Escrava Isaura
Escrava Isaura's picture

Kirk2NCC1701,

Thomas Müller: “Brazil played too open… the opposite of Ghana.”

Tue, 07/08/2014 - 18:46 | 4937333 Kirk2NCC1701
Kirk2NCC1701's picture

The logo of the BIS reminds me of the logo of the Umbrella Corporation, from the movie series RESIDENT EVIL.

Wed, 07/09/2014 - 04:00 | 4938623 CCanuck
CCanuck's picture

Did the Fed Hire Larry and the Demo team???

 

 

PULL IT........

Tue, 07/08/2014 - 17:29 | 4936989 TeamDepends
TeamDepends's picture

This is Captain Yellen, please fasten your seatbelts as we will likely experience some chop as we accelerate towards the drain.

Tue, 07/08/2014 - 18:29 | 4937243 Headbanger
Headbanger's picture

Moar like accelerating into a black hole..

Tue, 07/08/2014 - 18:56 | 4937370 Keyser
Keyser's picture

Savoy Brown - Hellbound Train....

https://www.youtube.com/watch?v=qlqqeobOJvg

Wed, 07/09/2014 - 05:22 | 4938649 JerseyJoe
JerseyJoe's picture

Lagarde is kinda/pretty hot - in her aging elitist perma-tan way.  Yellen on the other hand...  At least Yellen looks like she is/might be a woman...unlike other famous lib shims where it is hard to guess what they are...like say MooShell. Hitlery?  What was Albright anyway?   (I remember the story of Albright waddling after the terrorist criminal Arafat in the snow after Mr Towel stormed out of a "peace" talk in Stockholm... My mind is seared with that image - not to mention the stupidity of these lib idiots groveling over a criminal like that.  

Wed, 07/09/2014 - 06:21 | 4938684 Brit_Abroad
Brit_Abroad's picture

Hey Joe

seek. professional. help. soon.

Wed, 07/09/2014 - 07:21 | 4938745 Seer
Seer's picture

And here we are talking like we're in high school, playing the game of "who is popular," name-calling and all...

Meanwhile the FACTS of this all being about the end of growth are being missed.

Pretty sad.

Wed, 07/09/2014 - 07:43 | 4938777 JerseyJoe
JerseyJoe's picture

Oh lighten up - I was only joking.  Geez.  You would think the financial world was on the verge of collapse or something.  

Oh wait...  

Wed, 07/09/2014 - 07:50 | 4938792 Seer
Seer's picture

OK, glad that YOU are joking, but... it only feeds those who think that way; and, clearly YOU can see that kind of thinking taking place here?

Yes, I highly dislike all these people (Yellen etc), but ramping up the rage machine does nothing to "fix" our fundamental problems; and, it just continues to breed tools for manipulators.

I'm serious about this because it's going to get REAL serious.  I don't think that most have an inkling of what things are going to be like.

Tue, 07/08/2014 - 17:26 | 4936974 European American
European American's picture

"going" to attempt a controlled collapse?

 

101 years in the making.

Tue, 07/08/2014 - 17:32 | 4936993 XitSam
XitSam's picture

The fed will do whatever makes bankers the most "money".

Tue, 07/08/2014 - 17:58 | 4937094 NotApplicable
NotApplicable's picture

Money? That's a liability. What they want is title to all of the wealth it can obtain (or that you'll have to produce to make good on your liability).

Tue, 07/08/2014 - 22:20 | 4938162 willwork4food
willwork4food's picture

Yes, and when I can't find work to pay for food for my family I'll tell Wells Fargo to go suck a big one and ride it out with every court delay imaginable.

Wed, 07/09/2014 - 07:23 | 4938748 Seer
Seer's picture

"Wealth" is a subjective thing.  It's about CONTROL.  And most miss it that "they" cannot have control unless "we" give it to them.

Tue, 07/08/2014 - 18:00 | 4937101 Kirk2NCC1701
Kirk2NCC1701's picture

Paging Team WTC7 Demolition Team.  Paging WTC7 Demolition Team to Gray Courtesy Phone.

Tue, 07/08/2014 - 18:22 | 4937206 TeamDepends
TeamDepends's picture

Barry Jennings:  Shit man, I'm stepping over dead bodies.  Something ain't right here.

Wed, 07/09/2014 - 07:32 | 4938761 Seer
Seer's picture

Learn something new every day, thank you!

http://barryjenningsmystery.blogspot.com/

Tue, 07/08/2014 - 19:05 | 4937401 Keyser
Keyser's picture

Time to give the order to "pull" the economy, right out from under our feet...

Surprise Gomer!!!!

Tue, 07/08/2014 - 18:01 | 4937099 docmac324
docmac324's picture

I thought it was supposed to add up to 23.

Tue, 07/08/2014 - 18:10 | 4937133 stant
stant's picture

Gots to use that new common core math.

Wed, 07/09/2014 - 07:52 | 4938795 Seer
Seer's picture

The number is 42, 42...

Tue, 07/08/2014 - 18:34 | 4937265 SheepDog-One
SheepDog-One's picture

Try to orchestrate a controlled cattle stampede! Good luck!

Tue, 07/08/2014 - 20:45 | 4937773 MountainsRoam
MountainsRoam's picture

The Fed needs someone to take over buying bonds with QE ending, someone legit like bagholding Americans.. I think we are gonna see a bigger pullback in the markets this week and next, to get people thinking again haha

Tue, 07/08/2014 - 21:58 | 4938078 gatorboat
gatorboat's picture

"The Fed needs someone to take over buying bonds with QE ending"

Next up:  your 401k, IRA, etc.  They'll be confiscated, assets taken by Wall Street, replaced with treasuries.

Or they'll just keep QE going some way. 

I think they'll do both.  Grab all the 401k/IRA assets, then keep QE going.

 

Wed, 07/09/2014 - 07:35 | 4938767 Seer
Seer's picture

Pretty certain that a LOT of 401k/IRA assets have already been pulled into the vacuum.  Any offical declaration could then only be seen as being a statement of the obvious.

It has always been about managing/controlling actual assets.  Paper is a means for the Big Casino operators to distract us from being in competition...

Tue, 07/08/2014 - 17:05 | 4936905 linniepar
linniepar's picture

Are we not in the preamble? 

Tue, 07/08/2014 - 17:07 | 4936916 AccreditedEYE
AccreditedEYE's picture

Exactly. We are crashing upwards. People still can't get this thru their heads. Wait till USD free-falls.

Tue, 07/08/2014 - 17:10 | 4936930 Four chan
Four chan's picture

is woody yellen doing some stand up tomorrow?

Wed, 07/09/2014 - 07:39 | 4938769 Seer
Seer's picture

Um, only if you are a rich, white land owner...  (and "lucky" me, I happened to be born with one of these key attributes, thereby allowing me to be considered under the Founders' "We")

Tue, 07/08/2014 - 17:08 | 4936919 Rainman
Rainman's picture

yeah .... good luck unshitting this bed !

Tue, 07/08/2014 - 18:43 | 4937310 knukles
knukles's picture

His name was Oxy Moron

 

                        "Controlled Collapse"

Wed, 07/09/2014 - 07:40 | 4938773 Seer
Seer's picture

As is:

"Sustainable Growth"

Tue, 07/08/2014 - 17:19 | 4936956 nasdaq99
nasdaq99's picture

the freaking article wasn't worth posting.

you'll slap up anything that agrees with your confirmation bias.

that said, i think the market is bubbleishous but this article is crap.

Tue, 07/08/2014 - 18:06 | 4937113 JeffB
JeffB's picture

I'm curious as to what you think is wrong with it... specifically.

 

Tue, 07/08/2014 - 18:31 | 4937250 Headbanger
Headbanger's picture

Yeah, fundamentally.

Tue, 07/08/2014 - 18:43 | 4937301 knukles
knukles's picture

Or even technically....

Tue, 07/08/2014 - 18:44 | 4937324 knukles
knukles's picture

Or how about just a plian old wild fucking guess?

Tue, 07/08/2014 - 17:23 | 4936965 Greenskeeper_Carl
Greenskeeper_Carl's picture

agreed. not saying Im buying that as the goal, but the idea the you can control a collapse is absurd. Yet, so it the idea the you can infinetly print money and fix everything. My opinion, they have been trying to paper over and lie their way out of the depression we are in for the past decade. They are desperate, and are doing everything in their power to keep the ponzi alive as long as possible because they fear the aftermath of what happens when the consequences of the past bad decisions finally blow up in our faces

Tue, 07/08/2014 - 18:01 | 4937100 NotApplicable
NotApplicable's picture

You're confusing a controlled collapse with a controlled outcome of said collapse (aka "soft landing").

A controlled collapse is nothing more than ensuring the charges are all deployed, and the timer is set correctly. Then they run off somewhere safe, awaiting the chance to steal everything in the aftermath.

Tue, 07/08/2014 - 18:20 | 4937188 Herodotus
Herodotus's picture

The tribe will be nowhere in sight when the rest of the population is standing around looking at the smoking ruins of the economy.

Tue, 07/08/2014 - 18:41 | 4937304 knukles
knukles's picture

     

 

 

                            oh... project mayhem

Wed, 07/09/2014 - 01:21 | 4938523 Tall Tom
Tall Tom's picture

Yes...His name was Oxy Moron.

Tue, 07/08/2014 - 18:16 | 4937161 JeffB
JeffB's picture

That's a plausible explanation of things, but not the only one, of course.

Another possibility is that your scenario is a deliberate illusion they're trying to create to obscure the fact that their true goal is to gut the financial system enough from the inside that a collapse is inevitable... that no one can come in and fix it once they've done enough damage.

Yet another variation could be that the puppets currently in charge are trying to keep the charade going as long as they can, for the reasons you state, but the puppeteers behind the scenes are orchestrating the collapse so they can usher in their "New World Order" from the inevitable chaos from the collapse, which will make any opposition to their evil scheme far far weaker.

In other words, your description of what the useful idiots are doing may be spot on, but still misses the bigger picture.

Perhaps time will tell.

But it isn't a pretty picture either way it appears to be playing out.

 

Tue, 07/08/2014 - 18:55 | 4937362 Greenskeeper_Carl
Greenskeeper_Carl's picture

you may well be correct, although i hope you are not. Im a certified tin-foil hat wearer, but i still think the simplist explanation is usually the most probable- these bumbling idiots have royally fucked us over, and are desperate to keep this charade going as long as possible becuase they fear the consequences. Now, if I am correct, I do believe that the aftermath of such collapse could very well bring about what you speak of, or at the very least an even more authoritarian govt than what we have now. It would be nice if everyone on here, and this entire sight were wrong, but I doubt it. In now way is this shit sustainable

Tue, 07/08/2014 - 22:37 | 4938215 willwork4food
willwork4food's picture

Excellent comments. I tend to believe they know that too many of us smell a rat and a false flag is out of the question-for now. They have time to wait for a natural disaster to occur  whether natural or helped along by the goons and blame it on rebuilding. Think of the Children.

The New Madrid Fault line would be an excellent choice.

Wed, 07/09/2014 - 07:45 | 4938781 Seer
Seer's picture

"Another possibility is that your scenario is a deliberate illusion they're trying to create to obscure the fact that their true goal is to gut the financial system enough from the inside that a collapse is inevitable... that no one can come in and fix it once they've done enough damage."

You CANNOT fix a flawed premise!

If there's any fix on it might be to remove the means for trying to continue the illusion of perpetual growth (on a finite planet).  Sigh, we're not grown up enough to grasp this fact, so we'll continue to lobby for trying to save/fix/"take back" that which is destined to fail.  Perhaps TPTB are going to give "us" what we "want"- they'd just hand over that grenade with the pulled pin...

Tue, 07/08/2014 - 19:50 | 4937536 Exalt
Exalt's picture

Carl I think the real problem in economics is this commitment to the assumption of "an economy". So a controlled collapse is a misleading idea...

There is no "economy". There is only the aggregation of behaviour and consquence of people and this amorphous state of reality need never behave in condcordance with "a rational bias". Psychology and propaganda are much more effective tools of government policy than the issuance of debt or spending programs. Politics and economics have become almost indistinguishable lately and Keynesianism was the unholy conception that sealed the union.

It is a ponzi, an ideological ponzi and it goes well beyond the FED, banks, or the bourses. Ultimately this is about power, political power. Control the agenda, control the language and the frame of reference - you control it all. Despite overwhelming scientific evidence for the failure of socialist policies and the destruction of the price discovery mechanism, politics has always delivered more socialism and found economists willing to overlook their responisbility as a professional for a sure paycheck.

Really, I think all bets are off. It's just down to what people are willing to believe is reality and whether they are willing to be responsible. Given the state of general ignorance and apathy, she could probably do it. Hayek hints of this ability of politics to set the rules of the economic game... "It seems to me that socialists today can preserve their position in academic economics merely by the pretense that the differences are entirely moral ("value") questions about which science cannot decide."

Wed, 07/09/2014 - 08:03 | 4938822 Seer
Seer's picture

+1,000!

We're all playing with an utterly impossible set of beliefs.  Again, "Go forth and multiply" could be said to be the origin of our destiny to slam full force into brick walls.  TPTB, in all their incarnations, understand this and that we are pretty much wired to behave this way, are our "entertainers," they give us the cornicopian feelings, feelings that would otherwise be impossible if the full facts were there staring in our faces; in "return" the get to live higher on the food chain... (and always they are human, they are also "us," no ticket to get out of this alive).

The "behavioral" change isn't likely possible, lest we end the human race.  Japan is a great study here as you can see what full-force cornucopianism brings- fetishism and a decline in reproduction (as the environment's ability to support its population degrades underneath its feet).

Tue, 07/08/2014 - 17:37 | 4937014 doctor10
doctor10's picture

the meme is "controlled collapse" ; the reality for the peasants -may be chaos.

anybody in politics, finance or media who says otherwise gets the full NSA/IRS proctoscopic without KY or sedation

Tue, 07/08/2014 - 17:41 | 4937027 rubiconsolutions
rubiconsolutions's picture

"Yellen is going to orchestrate a controlled collapse."

Yeah, in much the same way the WTC towers had a controlled collapse. 

Tue, 07/08/2014 - 19:01 | 4937389 zerocash
zerocash's picture

Goldman Sucks predicted that Brazil would win the World Cup but Germany utterly trounced them tonight with a score of 7 - 1 (5 goals of which were scored within the first half hour).

Tue, 07/08/2014 - 20:54 | 4937811 Government need...
Government needs you to pay taxes's picture

Dont worry, their prop desks had Germany.

Wed, 07/09/2014 - 11:18 | 4939572 agstacks
agstacks's picture

..awesome..

Tue, 07/08/2014 - 22:53 | 4938261 mt paul
mt paul's picture

a controlled collaspe of the economy

 

what, are they going to do

fly a few planes 

into the fed...

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