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The Fed Has A Big Surprise Waiting For You
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Risdon Tillery Greenwich House day care, New York May 1944
The topic of potential interest rate hikes by central banks is no longer ever far from any serious mind interested in finance. Still, the consensus remains that it will take a while longer, it will take place in a very gradual fashion, and it will all be telegraphed through forward guidance to anyone who feels they have a need or a right to know. Sounds like complacency, doesn’t it?
Now, it seems obvious that the Bank of Japan and the ECB are not about to hike rates tomorrow morning. In Europe, dozens of national politicians wouldn’t accept it, and in Japan, it would mean an early end to many things including Shinzo Abe.
But the Bank of England and the Fed are another story. Though if the Yes side wins in Scotland next week, the narrative may change a lot of Mark Carney and the City. That leaves the Fed. And it’s important to realize and remember that, certainly after Greenspan entered the scene, speaking in tongues, the Fed has become a piece of theater. The Fed is about perception. About trying to make people believe something, and make them act a certain way that they choose for them.
That’s why after the Oracle left they pushed first a bearded gnome and then a grandma forward as the public face. The kind of people nobody would perceive as a threat. Putting a guy who looks like second hand car salesman in charge of the Fed wouldn’t work.
Not when a big financial crisis looms, and then continues on for a decade and counting. That makes keeping up appearances the no. 1 priority. That’s when you want a grandma, or you’d lose your credibility real fast. You need grandma for your theater, for the next play you’re going to stage.
That market volatility today is at record lows is part of a big play, or a big scene in a play if you will. And the goal is not to make markets look good, as many people think. Making markets look good, making the economy look good, is just an intermediate step designed to lure everyone in.
You make people believe you got their back. All the big investors. Because they make tons of money, while they thought maybe the crisis could have really hurt them. Even the public at large feels you got their back. Because they don’t understand what the sleight of hand is.
The big investors understand, but you got them believing you will play that hand forever, or let them know well ahead of time when you intend to fold. The big investors think you will skim the public, but not them. They think you’re all on the same side. And the public thinks you’re healing the economy, and saving their jobs and homes and pensions.
When rate hikes are discussed, like I did two weeks ago in This Is Why The Fed Will Raise Interest Rates, most people have similar initial reactions. ‘They can’t do that, it would kill the economy, or at least the recovery’.
But the truth is, there is no recovery. It’s just a scene in a play. And the economy is completely shot, it only appears to be left standing because the Fed poured oodles of money into it. Or rather, into a part of the economy that it can control, that it can get the money out of again easily: Wall Street banks. And Wall Street equals the Fed.
Charles Hugh Smith, in What If the Easy Money Is Now on the Bear Side?, notices that there are hardly any bears left in the market, and that shorts are disappearing as a source of revenue for bulls. Interesting, but he doesn’t yet connect all the dots. CHS thinks big money managers can make ‘the play’, that they can fool the rest of the market and unleash a tsunami that will bury the bulls.
I don’t think so. I think what goes on is that the Wall Street banks, many times bigger than the biggest money managers, see their revenues plunge. As they knew they would, because free money and ultra low rates are not some infinite source of income, since other market participants adapt their tactics to those things as well.
Which is what Charles Hugh Smith points to, but doesn’t fully exploit. And it’s not as Wolf Richter presumes either:
After years of using its scorched-earth monetary policies to engineer the greatest wealth transfer of all times, the Fed seems to be fretting about getting blamed for yet another implosion of the very asset bubbles these policies have purposefully created.
The Fed doesn’t fret. The Fed has known for years that the US economy is dead on arrival. They’ve spent trillions of dollars backed, in the end, by American taxpayers, knowing full well that it would have no effect other than to fool people into believing something else than what reality says loud and clear.
Philip Van Doorn, who I quoted two weeks ago, got quite a bit closer in Big US Banks Prepare To Make Even More Money
For most banks, the extended period of low interest rates has become quite a drag on earnings. Net interest margins – the spread between the average yield on loans and investments and the average cost for deposits and borrowings – are still being squeezed, since banks realized the bulk of the benefit of very low interest rates years ago …
That is the essence, and that is why grandma will announce higher rates, against a backdrop of 4% GDP growth numbers and a plethora of other ‘great’ economic data and military chest thumping abroad.
The US economy is dead. The Fed has known this for a long time, but pumped it up to where it is now to draw in all the greater fools, the so-called big investors who have made money like honey from QE and ZIRP. They are the greater fools. The American real economy ceased being a consideration long ago.
We’re in for big surprises, and they won’t be pretty, they’ll be pretty nasty. There are far too many people who think of themselves as smart who don’t see the difference between a theater play and a reality show. And I don’t mean CHS or Wolf, they’re much more clever than your average investment advisor.
The Fed will raise rates because that will make the biggest banks the most money. There’s nothing else that matters. The Fed can’t revive the US economy, that’s just a foolish notion. But it can suck a lot of wealth out of it.
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The Fed is a FINANCIAL TERRORIST! Decimating the saving masses in favor of SPECULATION ,a Crime vs Humanity !
Listen! WTF!? You are calling the ones who gave you the greatest lifestyle know to mankind Terrorists?
Are you sick? Explain to me why you are so ungrateful!
/s
Haha it isn't a surprise for me. Not is it for anyone who frequents this place. It should have been obvious to anyone other than the most ardent gov worshipers, but, alas, we are few. Thanks to the gubbermint edumacation system.
I'll take this one step further, an LBO of the federal government by wall street through the Fed.
It's not like half of wall street once worked for the government or vice versa.
Not a hostile takeover, mind you, but hike Uncle Sam's interest payments and watch the desperation set in.
I don't see much merit in this. The author doesn't know that the big banks are Investment Banks in all but name. That's how they make money. Not off some piddly spread.
But he is right that the Fed is a completely political creature. Maximum interest rate pain shortly after the election makes sense in that light.
o.k.
i have an honest question for the fight club...
the economy is dead...we know that...
other than digging a bunker and stacking PM's...
where do you invest money??
Apparently, Argentina...
ROTFLMBO!!!! Good shot!
"BUENOS AIRES, Sept 11 (Reuters) - Argentina's government is ramping up state intervention in the economy to try to prevent a new debt default from triggering a balance of payments crisis but its policies are also battering business confidence and may deepen a recession.
In the six weeks since Argentina failed to complete a debt coupon payment and defaulted for the second time in 12 years, the government has restricted the amount of dollars available to importers, boosted subsidies and drawn up proposals to interfere in private companies' output plans..."
http://www.thisismoney.co.uk/wires/reuters/article-2752363/After-default...
No f@cking way the Fed can raise rates to any significant extent.
http://www.planbeconomics.com/2014/09/richard-duncan-on-fiat-money-gold-...
@AUTHOR
You can speak ill of the FED, and you have an audience here ... however, if it was not for the FED there wont be America as we know it today.
The FED is the US Dollar, (before you had greenbacks?) and the US Dollar made America what it is today.
Yes, all good things will come eventually to an end, but while you blame the FED from you lazychair, dont forget to give credit where credit is due !!!
check out the graph:
http://www.globalresearch.ca/has-the-us-dollar-lost-its-credibility-legi...
the fed stealing silently we the peoples savings, savings we traded our lives for. their system is evil to the bone.
@Arius
"and the US Dollar made America what it is today."
WTF?? Not that I disagree with you, but what the fuck do you smoke to think that is a good thing? How about a quick history refresher? How did some little 13-colony podunk republic get to be a world leader in 130 years? The rule of law and hard money. What happened in the next 100 years? Both have been stolen from us. That is the broad prospective. I won't even try to describe what it has done to the people who live here.
"The rule of law and hard money."
Really? do u think the rule of law just falled into your lap, or those founding fathers came up with the idea and voila ...
time to awake up amigo ... the same people who brought you the FED brought you the rule of law ... now it is up to you to work hard and keep it ...
but all you are interested is a FREE RIDE and by you I mean the country ...all you people do is blame the FED ... for what??? for giving you the best times of your lives for over 100 years??? where did you get the strong dollar from??? THE FED and only the FED ... will last forever? IT IS UP TO YOU!
same with English ... look how well will the Scots will do once they are FREE ... they will get their part of the Gold from the UK and establish a NEW currency and be an example of what hard works means ... an example for people in the self reliant states in America ... the people who dont wait for FREE loads from the Federalies ...
kinda off topic, but has anyone noticed the 'relentless downvoting troll' has disappeared?
im seeing plenty of perfectly salient and wise remarks going completely undownvoted. Its not normal!
I noticed that as well a few days ago. It most likely is some crazy bitcoin fanatic.
Arius, time to wake up and smell the tea in the harbor, and I cast no reference to the current tea party. If I can find any fault with the founding fathers, it is that they didn't swing Hamilton from a rope. The rule of law and hard money was written into the Constitution, and the former resident of the house a couple of miles from me (The Hermitage) drove a stake in the heart of the central banking cartel for the next 80 years, and survived their attempt to kill him. Not every ill has started in the last 100 years, but what has left us "rudderless, without a compass, and with guns blazing" most certainly did.
From the trash trenches of So. Cal., belts are tightening in the commercial realm. Sit down food is slowing to sales of pre holiday last year. Grocery have less stockers at night this month also. Maybe it's the hot weather or maybe Joe Six Pack is now once and for all tapped out?
Not the end of the world yet, but managers will be doing the, can't use you this week to some....
It's been hit and miss last quarter but now I would say, miss all the time. 3-10% down depending on industry.
The Fed is not raising rates. The gold market is.
Stand-by for post Sept 29 when the Chinese FTZ gold market goes live.
The Fed is a bystander and it is trying to look like it is in the game with tightening discussion.
The next trend is selling bonds, buying gold and the Fed can do nothing about that.
"The current self destruction of predatory Corporate Capitalism has struck a death blow to the Anglo-American Juggernaut."
I thought it was the "fondling" fathers. But then I'm not american. Must have been a breaking story on CNN.
Financial Institutions and National Economies Implode Worldwide
.
I take note of the downvotes, and took the liberty of downvoting myself
Special Message to the Market Oracles and Money Masters of the Universe
Obama has been extra busy -
So no time to read Zero Hedge.
The system is criminal. They take 35%+ of what I earn through an exchange of my time and labor. They are not allowed to do it but they do. And if I don't give it to them they will seize my accounts or take my house or even put me in jail. They steal from me and everyone else at gunpoint. The system is a slow motion armed robbery. But because some are under the impression that they brought us rule of law, this is ok and allowed to continue. They got rid of rule of law back in 1933 with the Erie railroad decision. Rule of law has not existed in your or my lifetime. Rule of law is a quaint notion that people at university talk about.
Ahem. Few here are looking for a free ride. And the "free ride" you so overlook is the system the fed creates that insulates big money banks and investors from ever suffering the consequences of bad decision making and irresponsibility. All in the name of "saving the little people from a collapse of the financial system". Well, I call bullshit on that threat. Its YOU thats getting the free ride of never having to think about your investments. Just led the Fed bail you out.
hard money and rule of law, lol. USA grew to power through exploitation of both domestic and other nations labor and pillaging natural resources, transforming indentured servitude to glorified wage slave that can "rise through the ranks", and the big arm of the US Military ( see GEN, Butler comment) to enforce these policies on the foriegn resources.Not to mention utilizing the synergies of monopolies,cartels and buying and selling politicians to pass laws that only benefit American capitalist oligarchs..your comments are from a cartoon sunday school version of history.
Cheers
>>>hard money and rule of law, lol. USA grew to power through exploitation...
The US would have "grown to power" anyway, but two smallish items need to be pointed out:
the extermination of the native inhabitants of North America, and the self-immolation of Europe due to London's unwillingness to share Old World hegemony with Germany.
Hey, Presto!
The FED is not US Dollars, the FED is Federal Reserve Notes, something entirely different.
and the difference is ???
One is debt
"The FED is the US Dollar, (before you had greenbacks?) and the US Dollar made America what it is today."
Bullshit, you sound like Krugman who believes the past 150 years of persistent economic growth which is an anomoly in contrast to rest of history is a result of our greater understanding of economics (money out of thin air.)
The past 150 years of persistent economic growth is a result of growth in crude oil, coal, natural gas and the technology that consumes it. Growth comes from the difference between energy return on energy invested not dollar return on dollar invested. My labor is energy, and you are telling me that your money that you can create out of thin air is the most important thing?
Best comment by far.
This conflation of Banking as Business idea is the biggest bunch of bullshit perpetrated on humanity.
Bankers are parasitic scum. They are anathema to actual business and wealth creation -- unacceptable to the old arisotocracy. The forcing of everything through their payment and transfer system is the cancer that we have suffered since 1913 and the continuation of Wilsonian Progressive bullshit.
As soon as we as a global society considered debt as wealth, it was all over.
however, if it was not for the FED there wont be America as we know it today.
It would seem you made my point..
You forgot the /sarc.
Very much depends on whether you think the financial world will end in fire or ice. If by fire (hyperinflation) you want stocks or gold. If by ice (deflation, defaults) you want cash.
As Pat Benatar sang, fire and ice. Deflation of assets and wages, inflation of what you need to survive. That would be a nice way to usher in a new world order (neo -- new -- feudalism).
+10
Which is what has been happening since the crash.
"There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things."
-Niccolo Machiavelli
.
.
.
Fuckin brilliant!(link)
http://www.youtube.com/watch?v=qsMc-IswG3w
One word- Tangibles my dear boy! The future depends on tangibles.
You can be Dustin Hoffman and I'll be Walter Brooke.
While I hold a bit of precious metal, I don't expect that it is my salvation as many here seem to do.
IMHO, you have to possess some type of productive asset. Whether it is arable land, or machinery, or simply the skills to make actual stuff work (not markets, at the end of the day, the marketeers will fail, and there's a shit-ton of marketeers here, they don't wanna hear what I think, anyway).
As long as the sun rises and the sky is blue, tangible, productive assets will have value, and the charlatans who've made you believe that there is value in their casino will fleece you.
Sorry for that, but you asked.
Acetinker
"you have to possess some type of productive asset."
Most excellent response... but if I may improve on it a bit?
You want something that will 1. produce CURRENT INCOME! (ie a continuing income stream - regardless of what is being used as "money".) and 2. To help you decide what to do to produce that current income, look at the bottom of Mazlow's Hierarchy of Needs (generally represented as a pyramid) the contents of which are the things people NEED to live, and put your money and effort into something that is inextricably linked to something on that bottom row. Preferably what you choose will be something that requires a not too common skill or knowledge... thus maximizing the value of your "return on investment".
Yes, but Monsanto and Lockheed-Martin are also active on Maslow's bottom row, so you have to be selective as to who you sleep with. Thanks for the reply!
NEW things will cost a lot more. Used things will depreciate and be sold on Craigslist, but will you trust them to last?
If willwork4food is truly your situation, and I ran across you in my daily travels, I would feel compelled to help you. You can find me in Bell Park. I have given enough hints in previous comments that you should be able to find me.
The grifters call me a "soft touch".
It is so. But I'm also an asshole, so be careful.
Thanks for that Ace! Actually I own my own small company. I see younger people than I all the time on street corners and at Home Depot with those signs, many more since '08.
The future depends on the defense of tangibles.
Mill and Locke agree
Au fond, nous n'avons pas de choix veritable.
Invest your capital in extinguising debt. The rest is gravy baby!
The US economy was MURDERED. (And Congress is driving the getaway car.) WTF? Biggest energy boom in history and ZERO jobs growth...AND a recession basically.
I can't even figure out how this is possible...
Easy to explain -- zirp has pulled so much demand forward that there's nothing left. Expcept for the 1-10% who still have disposable income.
This article is bunk. The fed will try to raise rates, but when they do banks will fail just as fast as they did in 2008. Nothing has been done to reign that in, nor the quadrillions in derivatives.
Raise rates, credit losses spike to scary levels... another bailout and forced to lower rates again. Rinse and repeat for 20 more years. Great depression went from 1928-1942. We have a long way to go.
Gazrom OGZYP
PE 2.28
Dividend >5%
Backed by the Rusky military and several Oligarch billionaires including Putin.
Food for two years, first,
Land, a pleace to grow food later.
Water, This is very important.
Means to protect it.
I think it does come down to basic survival.
JohnG
Land, a pleace to grow food later.
John... for the benefit of the sooo MANY in the country/world who do not understand how things work... the idea of poking a seed in the ground and waiting for "food" to magically spring up is a fantasy. If you don't already KNOW how to grow food (and have experience) when the SHTF, by the time you get enough food cranking to sustain you (through summer AND winter) you'll have eaten your two years of hoard and starved to death.
And is two years enough time? Even if you already have such things as baby grape starts, you won't see your first grape for at least three years, apples and other fruit trees take longer. There are a lot of freebees in the woods, if you have woods, but since you aren't a squirrel, rabbit, turkey or deer, you have to know how to turn that stuff into edible food. If you can catch a swarm of bees, that's gold - but domesticating them takes time.
And "growing" food is only PART of the equation. The rest of it is storing the food so that mice and bugs don't get into it, and so it doesn't kill you with molds, spoilage, & etc., (Can we all say "aflatoxin" boys and girls? It's a nerve agent that just kinda magically appears on and in corn and in other "foods". and if you do see it, and "remove it" from your food, it can still kill you because of the deep parts that you CAN'T see.) The wild animals of the world are very creative when it comes to burgling your stashs of food. Two years ago I had two bushels of black walnuts "safely stored" and "protected" from squirrels. They ate the first bushel even before I knew they were getting into it, then the second bushel quickly followed despite my ramped up "passive security."
And still more of growing and preserving your own food involves being able to save seeds and start new plants through taking slips (cloning), grafting & etc. There is a LOT of information that the average "food grower" will not have, and instead of surviving, many will just slowly die of malnutrition & disease brought on by vitamin deficiencies.
A friend of mine decided to plant some raddishes this last Spring. He asked us about "fertilizer" and we asked him a couple of questions and based our advice on his answers. So he dug up some dirt and poked the raddish seeds into the ground. A while later he sent me a picture of one of his "raddishes" - the green "top" (which is edible - goes well in a salad) was about two feet long, and the "raddish" was about an inch long, and about a quarter of an inch big-around. What happened? We told him, "Too much nitrogen. Follow your raddishes with tomatoes or corn (heavy nitrogen feeders). He should be able to get some nice raddishes next spring.
I am not being critical of your plans. I'm simply letting you know, if you don't already, that there is a lot more to what you plan than many realize... the time to start learning is NOW (if it's not already too late.) If you know someone who already has the knowledge and skills required, perhaps you could volunteer to do some work for them in exchange for an education? Take classes. Attend seminars. It's time to LEARN!!!
To all who plan to take this road... good luck. Even without government interference, nature is a formidible foe...
Cannibalism....
Specific books and type of classes recommended?
General gardening/farming?
Composting?
Food Storage?
Crop/Garden Rotation?
Specific books and type of classes recommended?
For an absolute beginner, or even an intermediate gardener, I'd suggest that these two books would be most helpful in hard times (post industrial?)
"Gardening When It Counts." by Steve Solomon. (Sub-title, "Growing Food In Hard Times.) This book begins with basics such as he whys and basic considerations that you must ... well... consider. For example, the kind of plants you want to grow, how to mix your own complete organic fertilizer (with a flexible recipe.) soil improvement, etc. You get a chart that classifies veggies according to the amount of care required. (Is your favorite veggie a prima donna, or an alley cat?) Chapter 3 is on "tools and tasks" I've been a "gardner" since I was a sprout... but I didn't know how to properly use a hoe until I got this book. Wow! It's LOTS easier when you know how! (Chop chop hack hack is the hard way!) The section on seeds is gold! If you only get one book, it should be this one. (This is the book I give to friends... if they want one.) You can get this one retail new for less than an ounce of silver... ;-D
The other book I strongly recommend is called "Buffalo Bird Woman's Garden" by Gilbert L Wilson. Going to be living in primitive conditions? This is the book for you. The sub-title says it all. "The classic account of Hidatsa American Indian gardening techniques." It explains the "three sisters" (corn, beans, and squash), & how to grow and process sunflowers and tobacco. And here I learned an effective way to keep raccoons out of the corn - without chemicals or guns. Also included is how the Hidatsa stored three years of food and kept it edible, and lots of other important practices and techniques. On Amazon, this one is also available for less than an ounce of silver. ;-D
That should get you started!
Carla Emery's "The Encyclopedia of Country Living, 40th Edition" is a must have for any off-the-gridder. The "Fox Fire" series is good also.
Squirells didn't eat your black walnuts.
They made their own stashes.
Some might grow to new trees.
Yeah, yeah, I know. I didn't make those walnuts!
;-D
Anyone who digs a bunker and stacks PM's is a fucking moron. It's not about the "money". Look, gold is just as bad as fiat. Why would I say such a thing? Because you cannot eat it. Because it's "value" is a figment of the imagination, a mass delusion. Just because everyone agrees on something doesn't make it so.
What do you want? I want to stay aiive as long as possible, as comfortably as possible. That's why I have invested in arable land, primary sourced water, and practical agricultural skills. When you are buying a loaf of moldy bread for 1 (or more) krugerrands, I will have all sorts of food. I'll sell you my fresh, wholesome food for gold, but because your gold is not as useful to me as my food, I'll require a lot of gold for just a little bit of food.
You'd better fucking stack, buddy, cause it spends faster than it saves!
Mcormic no 9. Sir I mean not to be disrespectful but I can see from your comments that you have no idea what it is like to exist in a crisis . Do you think if you have fresh food and water and agricultural land that you will be allowed to sit there when all around you are starving ?
Desperate and starving and roaming gangs will kill you without a second thought and TAKE your food and shelter by any means. Unless you have massive ammounts of weaponary and literally a small army to defend your food and water, it will be lost .Guaranteed . I personally have witnessed this senario, when it occours the law of the jungle kicks in . Regarding precious metals . yes you cannot eat them but they are tradeable and if you survive the calamity thats when their true value becomes obvious .
It has never been any different throughout the history of mankind .Do you think the world has never been in this position before ? Hitlers henchmen stole gold and valuables not to use during the war ,but to use after to be wealthy . History always repeats my friend the lessons are there .
Claymore Garden Gnones, my friend, makes everyone civilized.
we used to worry about running out of bullets before the bad guys ran out of bad guys.
look up germany during weimar.
- Ned
New_Meat
look up germany during weimar.
The best book on this subject is titled "When Money Dies" by Adam Fergusson. Highly detailed about what happened, how, and why.
Gold and silver and valuables were good - until they ran out. Then the formerly "rich" were dumpster diving and sleeping on grates.
and wandering about in the woods, killing cattle, robbing barns, you've got the picture.
Selling off gold chains one link at a time.
- Ned
Claymore Garden Gnomes, LOL, +1000
Guys, this doomsday bullshit is unrealistic unless there is a world war.
This is about wealth transfer, wealth is never destructed, just transferred and its all heading to the east.
You just need to be on the right side of the transfer, keep assets outside of the banking system, make sure you got a few months of food and water, wait for the period of chaos to end before eventually a new system takes place.
We aint going back to the stone age.
Not going back to the stone age? Don't be too sure. Most everything about our civilization is predicated upon an endless supply of free energy. That's how the earth can support such a massive human population. When that resource becomes less available it changes everything. Bacteria in a test tube only need to run low on a single crucial nutrient to die off, regardless of the availability of other nutrients. Oil running low is like, well, blowing up the pillars supporting the world trade center. It collapses, immediately. Right back into the stone age.
Actually, stone age is probably overstating it. Do you know where your nearest accessible flint outcrop is? Obsidian? Good luck finding them. They're gone. As for iron ore, copper, tin...you'll need to dig a few miles down, with a stick. ecycling will last a while, after that, nada.
Toilet Paper
For when the SHTF
Toilet paper? I understand that installing bidets is a growth industry in Argentina...
Smartypotters know to have one in any case.
In things of permanent utility: boxes of leatherman tools, hatchets, hammers, ammo in common calibers, cipro antibiotics (which have along shelf life), water purification tablets, suture kits.
Things that will be useful for a lifetime, or at least get you through the first 30 days.
Q:"o.k. i have an honest question for the fight club...
the economy is dead...we know that...
other than digging a bunker and stacking PM's...
where do you invest money??"
A:You need to understand capital flow and the business cycle. If you have not read Martin Armstrong's research, you should start there. This is not the Uni of Chicago BS that goes back 10 years or starts its study in 1971. Martin goes back to 4000BC on most of his work. He gives answers to all the BS we all learned in business schools, his research is based on how things work and removing human emotion out of the investment decisions. Disclaimer...I like to think of myself as a libertarian. I do not know best for anyone else besides myself and even then I tend to make mistakes. PLEASE DO YOUR OWN RESEARCH and MAKE YOUR OWN DECISIONS. I find him helpful to make my own decisions.
http://armstrongeconomics.com/models/
The Last Link on his page is probably been the most helpful on what not to do and the beginnings of what to do. It is not a quick read.
http://armstrongeconomics.com/wp-content/uploads/2012/05/manual-models.pdf
Go to "Peak Prosperity" for the answer
http://kolinevans.wordpress.com/2014/09/08/answer-to-professor-david-yer...
hedge a small amount to that , then some to CNY , then rest to physical silver etc.
by the way the Chinese are bullish - http://i.imgur.com/pKGEYBR.png?1
this confirms a lot of back date economic thoeries which are in essence quite simple to understand.
I don't want to be an alarmist, but if you live within 500 miles of a major city, it's likely you'll be killed and eaten.
OK, 400 miles.
Before they raise rates, they will get to DDNIRP.
Double Digit Negative Interest rates.
And cities, and counties will start using Bail In's techniques on assets in their reaches/clutches.
@ Kaiserhof: I disagree. The real money has always been in the interest. If the real money was in the market, we wouldn't need interest. besides, interest is a one-way street. Markets can be played by anyone. Well, almost anyone, but certainly they aren't the one way street that interest is.
Go back and re-read that chapter on the time value of money, and come back when you understand that markup and interest are interchangeable; and that historically, the law has allowed more markup than the equivalent interest.
I totally agree with you.The author states that the US economy is dead on arrival (true) but the author is quoting a banking "analyst" I do not even remotely want to know that these banks can reap additional benefits from the stronger economy. They are contradicting themselvers. The worst thing that can happen to a bank is a deteriorating economy because that raises credit risk in all their holdings including capital markets and loan book. The spread is irrelevant.
First of all banks are now all investment banks. Long ago already the interest rate spreads and lack of carry has pushed them in high yield and equities. Besides that anyone that claims to "understand" bank balancesheets is a liar because there is no real disclosure as every apprentice knows. Heaven knows what will come out in the next crises. Even the most "sophisticated" investment banks were surprised by their own downfall in 2008 and had to be bailed out directly or indirectly. Normal banks that try to play this game are even worst because they are run by ordinary greedy pops and moms types that belong working in the townhall library.
What I do know for sure is however that the big money (pension plans and asset managers) is trapped. Asset allocation is on automatic pilot there is a heavy penalty for deviating from the pack. They are trapped but think that they can be dancing elefants. In a world of HFT and algo trading they have no chance for making the turn. They will sit and watch.
"I don't see much merit in this. The author doesn't know that the big banks are Investment Banks in all but name. That's how they make money. Not off some piddly spread."
I Second that and also add that the US gov't can't afford higher rates. Even at rock bottom rates the Federal Gov't stil pays out about $500 Billion in Interest payments per year. If Rates increase, than much more of its revenue is going to pay just interest. FWIW: I think the Feds talk of high rates is just talk and make it appear that the Fed can raise rates to make creditors willing to continue to finance the ever increasing debt.
Yup. Agree Greenskeeper_Carl.
Look at what Greenspan did: after the dot com bubble burst - he lowered rates to 1%, then .gov encouraged everyone to go and take out home equity loans, and for banks to make loans to anybody (and to gamble with MBS's and CDS's).
Then he slowly ramped rates up 2004-2007 to squeeze the sheeple and pop the bubble.
Who made out like bandits? The banks of course!
This time it is housing again, with student and auto debt added.
This is just a redo of that playbook, with different actors.
"The Fed will raise rates..."
Uh, no.
Maybe.
The bubble is going to burst. Guaranteed. Only one way to go from all time highs.
But how can TPTB pop it on their terms? Save themselves, their benjamins and prevent a system wide meltdown that endangers both?
Controlled demolition. If you want something done right you do it yourself.
Happy belated anniversary everyone.
Why does everyone on the raise rates side of the argument ignore the fact that the gov cannot service it's debt at even slightly higher rates than what we have now?
It would be like a guy who can barely afford to put food on the table refinancing his house at a higher rate, No politician is going to end this thing while they are in office, can kicking is the only course of action they have and that's going to be the road we are on until the wheels come off.
What can't be serviced won't be serviced.
I won't say if the Fed will raise rates. I don't know. But the bottom WILL fall out of the market. There's no where else for it to go. So, again, would you let that inevitability come as a chaotic surprise- or in a controlled manner?
It doesn't have to be raised rates. It could be war. It could be Europe or Japan going under. As long as there's a scapegoat. The Fed would do. Europe would be better. Fuck them. Terrorists could work, too. Now, Russia. Russia would be best.
I guess it depends on your view of who is running the show...but I have yet to find a politician that would let the world fall apart on his watch when the possiblity of passing the potato to the next guy exists.
I think you're correct in assuming they are setting up Russia as the fall guy, but I have doubts they would use the Fed, it would turn too many people against central banks.
Good point. But if all the central banks failed we would need a world bank to clean up the mess. ;)
They've had over five years to think something up so it better be impressive whatever it is.
That would be the BIS.
http://www.bis.org/about/history.htm
I think you have to replace "Russia" with BRICs and then the scenario changes. Also, if any of the major players goes down, then contagion will be the word of the day. One thing is clear, the steady grind on PMs purports a tidal change. The downdraft on PMs is too smooth to be driven by market action.
They are driving everyone into the feedlot, and we all know what happens in a feedlot. The sick get weeded out and the rest get slaughtered...
Effing moneychangers! Let God sort them out.
I carry my PM's at booked value, there is no mark to market here, learned that from the banksters.
PM's on sale is a good thing.
Next........
I hope to live long enough to see the Russian Army in a victory parade down Pennsylvania Avenue.
I know it's a longshot, but it's one of the better available outcomes.
The executive doesn't care, they are on the way out any way ... most of the congress critters are morons who can be whipped in the right direction and sacrificed. Ultimately it doesn't really matter which party can feed at the trough more, one or two election cycles and the other side will get it's turn any way. The higher ups see this bigger picture.
I don't think this is about generating profits for the big banks though, banks will go bankrupt with the rest of the economy ... the people who will profit are the top creditors and not in dollar terms but in m2 of land owned terms.
Controlled demoltion yes. But after you set the charges and right before you pull the trigger you get some one with brown skin to fly a plane into it. Then you pull the trigger, watch it collapse, wave the flag, blame the terrorists and voila, mission accomplished but it ain't your fault.
"The Fed will raise rates..."
Uh, no.
Just curious. If the FED raises rates and the government cannot pay its debts, is there a bankruptcy proceeding?
Who gets the government's assets and who values them?
When a soveriegn government defaults, the subjects of that govt (the peons) lose out, the foreign creditors who can't bomb the new govt into submission lose out, and the rest wave their big sticks and take over the valuable real estate and hard assets. Then the broke country mints a new currenty and everything's wonderful in la la land. For a really great example look at one of the BRICS - Brazil. They inflate their debt away, then trash the currency, create a new currency, and OH, LOOK Toto! We found some NEW MONEY!!! Brazil is what I'd call a serial defaulter... which illustrates that there are a lot of really dumb people out there with too much money - as they keep "investing" in the place. (I expect that despite the discovery of megabunches of oil Brazil will always find a way to spend more than they get. Kinda like the modern USA.)
Ahhh... a little light bulb just went off in my head... perhaps this would explain why the last US Admin or three has been shutting down coal mines and gobbling up real estate (adding to the "park system") and such... they are preserving the assets for the new landlords after the default. (See IMF + "austerity")
All the government's assets have already been pledged in the last bankruptcy, if you believe Trafficant (I do).
pods
In a true national default/"bankruptcy", it is not "the government's assets" that are in play (since the government has already dissapated anything of value.) It's everything contained within the recognised boundries of the nation... ie what used to "belong to the people." Utilities, natural resources, capital goods, etc. If a new Socialist State could claim it for "the people" - it's in play.
The US government's greatest asset is the people who happen to be US citizens. Through the 14th amendment trust, that is the most valued asset that is (was) pledged to the bankers who foreclosed on the nation in 1933.
pods
yes, but how do we pay the interest on the debt if we just have to borrow more to pay it? Oh, right, slavery. Sorry, I forgot...
yes, but how do they replenish the herd? Oh, right, convents and whore houses. Sorry, I forgot...
Opportunities abound!
yes this is how the soviet union went down. the ultimate example of when full scale 'public' ownership goes quicly to full scale 'private' ownership.
a hell of a lot of private looting by way of finance and a hell of a lot of gangsterism. if you don't pay back your loans, someone else will pay them back with what was once your money or assets. and possibly get a nice bank accocunt in london or offshore for it.
funny you should ask...in the Argentine example the legal thought that land assets would be given as payment to debt holders has been bandied about Patagonia becomes Singerland and the residents get to pay him their taxes, levies and rents. So maybe Illinois woulod be handd over to Buffet or whoever....fitting disolution to the supposed republic don't you think?
"The Fed Has A Big Surprise Waiting For You"
Reminds me of a line from a Frank Zappa song: "Don't fool yourself, it's going right up your pxxp-chute. I knew you'd be surprised!"
"Wristwatch crisco!"
The song you are thinking of is: Broken Hearts are for Assholes
One of Zappa's finest.
http://youtu.be/oPIoQVL0hOs
"Don't fool yourself, girl, it's winkin' at you..."
mah favorite arab...Shiek Yerbouti!!!
What's the ugliest part of your body? Some say it's your nose, some say it's your toes, but I THINK ITS YOUR MIND! - Frank Zappa
Look!! There is some hair left on Joe's ass!!!
backed in full faith and credit of the baby citizen caught by suprise in the bathwater.
a big surprise? a penis?
Go ahead and put all of your wealth into the Stock market then Bangalore Equity trader. This is the advice of every well meaning ZHer on the site. Do it. Make us proud.
2 million mid-easterners dead. WTCs collapsed. NDAA, Militarization of police, Bankers placed above the law. The Nation of the United States turned into a nation-state. speech free zones. check-points, NSA ongoing constitutional violations. Death of Americans by drone. Kill lists. GMO, Vaccines, elimination of borders, release and transport of undocumented rapists and murders throughout the US. TSA. Obamacare, loss of medical benefits. Ongoing false flag operations against the citizens. zero interest rates. lower wages fewer jobs higher taxes and the arming of the DHS.
You can add thousands of other things but they need not be listed because at this rate it won't be long until we are all F'n Dead Mr or Mrs. Bangalore
Woooo-hoo! "And don't forget to vote in November!"
what the fuck are you talking about? those of us who work and didn't drink from the punch bowl have to pay this shit back ass whipe. so you can get on your knees and thank whomever you want for all this debt and then stick it up your ass and say thanks. unbelievable
he just told you. he is an h1b visa and LOVES being here. and we subsidize him. HE THINKS THE STATE OF THE USA is great! we bring idiots over, pay them a fortune compared to what they know, even show them how to us flush toilets. he doesn't pay very much taxes. and he LOVES US culture, as shown by is avatar of one of the sickest, most perverted people ever holding an american passport. the indians adore michael jackson for some reason. so let the young one praise us. he is here to steal from us, he is being very successful and he isn't going to stop anytime soon.
"we bring idiots over, pay them a fortune compared to what they know, even show them how to us flush toilets."
Cavaet Emptor. If you bring idiots over, you are the bigger idiot!
"he doesn't pay very much taxes."
He pays the same tax rate as any other making the same amount. In fact, he actually pays more since if he were to be laid off from his job, he can not collect unemployment. He has a precious few days to get another employer sponsor his H1B or else he gets deported back.
@notsofun
from your comment it seems like by Place of Birth association or whatever you have been lied to about equality (which in your lazychair makes you feel good) you think like you are part of this decision making process of who you bring into the country or race equality or whatever .... YOU ARE NOT ... if you were, you wouldnt comment over here ...
just continue to be a good citizen and accept the reality of your place which is NOTHING
Bangalore Equit...
He (saveUSsavers) can't explain, because he is an empty sack.
Don't take my word... just wait!
You'll see.
And you're just a troll.
Well, let’s see what the other posters have to contribute.
Then, we will make that judgment.
I second Escrements credentials as a troll.
Raymond K Hessel,
Talking about a ‘most’ empty sack... Because you do have some interesting points, sometime.
Why do you bother posting comments any more? Your comments stink. I've read your comments for weeks, and you stink. Please go away.
USA gave the world freedom.
Fed gave the USA eternal debt.
What do you not understand?
No FED no USA thats the bottom line ... i dont think you can vote on that though
What? The US was doing fine for a long time without the fed. Wasn't the point of the US to get out from under English central banking? How can you say no fed no US? I argue that the US would be doing better without the fed, not worse.
Amen.
You mean the advertisement every 24 seconds telling me I have to buy something from someone and when I do I have a camera on me to protect me from harm at every establishment. INSTEAD THE WORSHIP OF ITEMS WHY THE FUCK IS THERE NOT THE WORSHIP OF HUMANS AND IM NOT TALKING ABOUT CEOS BUT I AM DEMANDING LOVE FOR EVERY FUCKING HUMAN BEING OM THE PLANET. If that's the best lifestyle you can shoot me now because this consumerism shit leaves me hollow and shallow
"they" didnt give us anything....."we" did it. They stole from our spirits, our hearts, our jobs, our children, etc...
If "they" would have stayed in London, the U.S. would be the most beautiful country in the world with people working 30 hours a week instead of 50 hours, we sould be taking 2 month vacations etc....F*&k the "they" ..."they" did nothing but destroy us.
"Explain to me why you are so ungrateful!"
LOL, so you bow down and kiss the feet of the criminal banksters.
Yeah, be grateful that the Federal Reserve stole from the savers and gave to the reckless and irresponsible debtors scam artists.
Bangalore, you forgot to add the /sarc...
You got 10. You could have got 50, but somebody stole 40. Be happy you got 10!
>>Listen! WTF!? You are calling the ones who gave you the greatest lifestyle know to mankind Terrorists?
Are you sick? Explain to me why you are so ungrateful!<<
Actually, there is some truth to this with the attendant poison pill.
The debt bubble is unnatrual, but it does cause real people to make lots of real chit, some of it very useful.
What they don't tell you is that "ownership" under a rigged debt money system equates to "time delayed rental" in the real world.
The incited people to build lots of chit so they could use the debt to enlave them and then take most of their chit!
Sometimes posts are too hurtful to be just sarc....
Bangalore Equit. = TROLL / SHILL
Get the fuck out of these forums douchebag.
The US economy is dead. You know, I've been attempting to explain this to many people, but Americans are either too effing drugged or stoo stupid to comprehend anything anymore.
For instance, just look at the American GDP.
Slightly more than 60% of it is made up by the top banksters (Chase, Citi, BofA, Wells Fargo, etc.), with another 13% made up of the remaining financial services industry.
So that is 73% of the GDP.
Now the healthcare sector makes up around 18% to 20% of the GDP.
So now we've got 91% to 93% of the GDP covered.
So everthing else, that is, everything remaining makes up the remaining 7% of the effing GDP! So where's the economy?
There is none. . .
do you even think?
The Fed creates Financial-WMDs. And has done so, since Aug. 15 1971, when they went off the Gold Standard
and forced on us: Fiat Currency + FRB + QE + Derivatives Market (side bets) that swamps everything else.
Well, weapons of financial destruction is the main deliverable of WS Firms, why not the FED? What is the difference between the FED and WS again?
Kirk2NCC1701,
First: It wasn't the Fed that went off the gold standard
Second: If the US dollar have been remain peg to gold, all US gold would have moved to the Middle East.
Third: US private debt, not including financial totals $42,551.1 trillion dollars (link here, second line). Deflation will only make this worse.
The Fed exists to bail out all the banks and billionaires with their hedge funds and so on.
Quote
If the US dollar have been remain peg to gold, all US gold would have moved to the Middle East.
As opposed to wherever it has actually moved to (who knows where that is?)
Either way, the US doesn't have what it claims to have, IMHO, or else why the German issue?