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Babson's Warning
Submitted by Jeff Thomas via Doug Casey's International Man blog,
[A] crash is coming, and it may be terrific. .... The vicious circle will get in full swing and the result will be a serious business depression. There may be a stampede for selling which will exceed anything that the Stock Exchange has ever witnessed. Wise are those investors who now get out of debt.
The above words could easily have been stated by me or another of the (very) few others who currently predict the coming of crashes in the markets.
But they were not. The statements above were made by investor Roger Babson at a speech at the Annual Business Conference in Massachusetts on 5th September, 1929.
Mr. Babson’s prediction was not a sudden one. In fact, he had been making the same prediction for the previous two years, although he, in September of 1929, felt the crash was much closer.
News of his speech reached Wall Street by mid-afternoon, causing the market to retreat about 3%. The sudden decline was named the “Babson Break.”
The reaction from business insiders was immediate. Rather than respond by saying, “Thanks for the warning—we’ll proceed cautiously,” Wall Street vilified him. The Chicago Tribune published numerous rebuffs from a host of economists and Wall Street leaders. Even Mr. Babson’s patriotism was taken into question for making so rash a projection. Noted economist Professor Irving Fisher stated emphatically, “There may be a recession in stock prices, but not anything in the nature of a crash.” He and many others repeatedly soothed investors, advising them that a resumption in the boom was imminent. Financier Bernard Baruch famously cabled Winston Churchill, “Financial storm definitely passed.” Even President Herbert Hoover assured Americans that the market was sound.
But, 55 days after Mr. Babson’s speech, on 29th October, 1929, the market suddenly went into a free-fall, dropping 12% in its first day.
Today, most people have the general impression that on Black Friday, the market crashed and almost immediately, there were breadlines. Not so. In the Great Depression, as in any depression, the market collapsed in stages. The market did not reach its bottom of 89% losses until July of 1932.
Along the way, thousands of banks and lending institutions went belly-up. Thirteen million jobs disappeared.
And of course, the political leaders of the day did their bit. They implemented knee-jerk “solutions” that actually worsened the situation. Restrictive tariffs, gold confiscation, and a more dominant government were employed, just as they will be this time around.
So, as the market tumbled, we would imagine that Babson came to be praised by Wall Street for his insight, but in fact, the opposite occurred. Having accused him of being utterly incorrect in September, they later accused him of having caused the depression.
So, was Babson’s prediction a lucky guess? Did he simply observe the bull market and arbitrarily predict the opposite of the trend of the day to see what would happen? Not at all.
Such predictions are not guesswork, nor are they attributable to a vision seen in some crystal ball. Such crashes are entirely predictable. When any major bull market becomes overbought; when too many investors begin buying on margin because they can’t come up with the purchase price for stocks; when they then become even more obsessive and borrow money to buy on margin, the market has become a house of cards, waiting for the slightest breeze to come along.
So what do we take away from this? First, we can be certain that as the present-day house of cards begins to shake, there will be no warnings from Wall Street. In fact, quite the opposite. Their bread gets buttered by buyers. They will be adamant (and even, in many cases, truly believe) that the sky is the limit and investors should buy, buy, buy, as there are fortunes to be made by doing so. And investors, watching the rise, will fall all over each other, just as in 1929, buying with both hands.
This time around, the crash and its byproducts will be more extreme than in 1929, as the bubble itself is more extreme. And Wall Street can count on television and a media that has a vested interest in keeping the charade going as long as possible. It will also be more extreme, as the governments of much of the world are now broke and can only worsen their respective economies through the customary “solutions” that governments always employ—tariffs, confiscations, greater government control, etc.
Finally, the aftermath will be more extreme, as—unlike in 1929, when most people actually believed in the government—this time around, there will be dramatic unrest.
Just as in 1929, those who are declaring that “the Emperor has no clothes” are few in number, and their viewpoint is most certainly not put forth in the conventional media. For this reason, it’s understandable that the great majority of people invariably ignore the Babsons of the world as Chicken Littles and blithely charge toward the cliff like lemmings.
Those who do think independently and become convinced that history is repeating itself are focusing their attention on finding a way out of being a casualty in the train wreck that’s coming. This is difficult to do, as invariably, the closer the event becomes, the more difficult it is to swim against the tide. For this reason, even many who conclude that the end is near often fail to act to save themselves and their families.
Internationalisation is both time-consuming and costly. Additionally, it’s lonely, as it’s considered foolish and unnecessary by more than 99% of the population.
The great temptation is to decide, “Maybe it won’t be so bad. Maybe I can live with it.” And in fact, for most people, this will be the prevailing view—that although their personal situation will be diminished in many ways, the crashes will be tolerable.
The question is whether we wish to make the pre-emptive effort to create a life that is far better than tolerable, and possibly even improved, whist the opportunity for doing so still exists.
Editor’s Note: Be sure to check out our free resources and guides for the latest on the best international diversification strategies.
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Worry about the bond market - that is the ultimate bubble.
UD/UK have entitlement states and will continue to deplete military so the world is wide open for terrorism, nazism, dictators. France is afraid of muslim riots if it confronts isil. The future is surely dangerous and bleak for the young.
This is correct. The Fed and the government have intentionally blown the biggest bubbles in world history, and the crash will be commensurate. The size of the bubble determines the size of the ensuing crash ... and the current bubbles are gargantuan.
...Crash catalyst will be the Exposure of Obama as a Gay Kenyan.
Why havent we.heard.the.boom yet?
I might buy some popcorn for the fireworks.
BTFD idiot and DONT buy gold and silver and buy shit you don't need...... GOT IT!
Martingale madness via the bottomless pockets of the Fed.
THE bubble is a huge Venn diagram bubble that envelopes and enables every other bubble.
Baseless fiat.
"may" X's 2
even back than they couched their predictions with hedge words
I might buy another junk quarter or two.
To me this is what "it's all about." Forget "the crash that is coming." The US economy has never "unburst" from 2008. That's where I start...and end...all my thinking on this.
Hillary "Stand By Your Man" Clinton pretty much sums the whole Zeitgeist up insofar as the media presentation is concerned. "Stand by this worthless sack of shit recovery. Maybe you'll be President some day!"
Some have said that it has already started. That it is a 10 year cycle that will happen and it started in 2012. Some have said that the last of the tools are being used and once those tools run out, the hard parts of the correction will start.....
military is designed for mass control not ISIS control.
I beg to differ. Stupidity is the ultimate bubble, and I have 7 billion people to back my case.
Who you calling' stupid, OneEye?
Random
Exactly. The dollar/treasury/debt bubble is far bigger. I actually am surprised in many ways at how people on this site often bemoan rising stock markets, because shouldn't it take more US fiat notes to buy equity stake in companies? Obviously some of these companies' 'valuations' are all a product of financial engineering, but there are still good companies, whose profits are not a referendum on the US economy, as long as they have exposure abroad to places where there are savings and a middle class that desires whatever the company produces.
They are in the end game of printing money to 'buy money/future flows of money' to give the illusion of a bid under the dollar. Higher rates won't mean moar growth. It will mean creditors stop accepting low rates and demand higher ones commensurate with the risk of holding US fiat notes. They need low rates to prop up the derivatives bubble so the illusion of 'high quality collateral' continues re: sovereign debt. Wait until people realize that the only real 'chair' in this game of musical chairs is gold--physical and in hand, at that.
It's become very obvious that TLT and SPY are positively correlated. They love this illusion of 'low inflation' but the real economy will be a a referendum on all the Ministry of Truth STATISTics, as inflation has already crept into everyday expenses a ton, even though a lot of it is stowed in, as Stockman says, the 'canyons of Wall Street'. Wait until all the people exit with their paper gains (if they are smart enough to) and then look to redeem the 'paper wealth' with actual goods and services. The dearth of quality supply will get exposed and things of real value will get bid up into the stratosphere. Just like SS and FDIC and all the government programs. They can nominally make people 'whole' but being able to cash all those checks for real 'stuff' is a whole different story.
When the trillions of $US that are out there in the form of paper 'assets' are suddenly viewed as worthless and holders seek to exchange those dollars for tangible hard assets you'll see inflation like no other.
The foreign holders of US debt will gladly exchange it at a 100 to 1 or 1000 to 1 ratio to buy somethign of real value when the alternative is to see those holdings beccome valueless. Better to own a co-op in Manhattan that cost you a few hundred million than to hold a few hundred million in worthless paper. The US will be bought up at record prices if only so holders of US dollars can get SOMETHING of value for all the dollars they hold. Of course the record prices paid for everything by foreigners - and any holders of $US - will drive up prices to record levels.
In past episodes of inflation in Brazil and elsewhere people would exchange the cash they were paid for SOMETHING, ANYTHING of value after buying food and immediate needs. If you had cash left over you bought a washing machine, a toaster, ANYTHING, rather than hold currency. Picture that mindset for holders of US dollars on a grand scale. And after all the dollars held elsewhere have been used to buy up anything and everythign in the US do you think that Americans will be able to pay for ANYTHING coming from the rest of the world? Maybe Saudi princes will take nubile blonde females in payment for barrels of oil......
I will take the other side of that trade. No one will have the cash to drop on assets. Dollars will evap overnight and the mercedes lot will be giving S-Classes away.
Look, I love gold more than a leprechaun, but when the hammer hits, the USD is going to be the cleanest dirty shirt and everyone and their bro overseas will be fireselling anything to get "safe haven" liquidity.
What do you think the Russian midlevel oligarch or Brazilian hitter will be doing? It wont be buying Miami real-estate. There is a tax to be paid on them, while we take care of votes with free junk like we have all along.
Everyone will want to pull the landing gear up and get liquid. It will be a deflation in prices as "everything must go"
I doubt it. The only 'demand' I see for US fiat is that so much of the contracts around the globe are denominated in it. The low rates spur debt being taken on, and then when the rug gets pulled out, people 'need' USD. I don't think this continues. I think they were very lucky people flocked to UST and dollars last decade as stocks crashed. Rates should only be low in a good economy of sound money and high savings. I think creditors will wise up and not make the same mistake of predicating everything on the dollar. Meeting margin calls and liquidating into USD is not genuine demand for a currency as in storing value.
I think there is a lot of normalcy bias built into what you are saying. No matter what, it won't be pretty as the needed liquidations get underway. Gold is a way to get to the other side, or maybe transport wealth and move to places of prosperity and freedom being recognized.
Rates are going to rise not due to a stronger dollar but due to finally investors demanding more interest to compensate for holding debased US fiat. Everything is backwards right now, not surprisingly.
Also, a quick bout of liquidation usually precedes the game theory response of governments throughout history which is to print and attempt to reflate. So looking one step ahead, I don't think all this gold is going to be for sale. The gold is moving into stronger hands, and people aren't going to cough it up so easily.
I agree rates are going to rise, but they will rise because gold will force the matter by rising in price itself. And gold, silver etc. will probably rise in price quite suddenly with enormous premiums as the true physical, un-rehypothecated value of physical metal becomes evident through shortage (watch Asia).
Also, check Exter's pyramid. http://en.wikipedia.org/wiki/John_Exter
When the Treasury/bond panic hits it will be 'everyone into cash' and then simultaneously a tremendous rush will occur to buy anything realizing that the cash is worthless.
At the bottom of Exter's inverted pyramid, below cash, sits gold (I'd say silver too).
That is the end station.
Some might take a Mercedes (agree with cynical) but only if they can't get any more gold.
But then how can you fill it?
"When the Treasury/bond panic hits it will be 'everyone into cash"
But that "cash" will be 1s and 0s on a computer. There's only $1.3T +/- in USD hard currency printed. Physical notes will be scarcer than honest politicians. There's $8-9T just in American savings and checking accounts.
The mad scramble for physical will be wild IMO.
We may wake up one day and it is over.
Reset price. End of story. None offered.
It is coming.
http://sprottglobal.com/thoughts/articles/can-petrodollar-survive-low-interest-rates/
If the digital fiat disappears the paper ("physical" in only the most ethereal way) goes with it.
One way of putting this is to say that 'demand for Zimbabwe dollars went up' as citizens there had to get more to pay for things in their hyperinflation. That is not obviously genuine demand. That is merely a need to bring more of the currency to the table to buy things of real value.
I think he has a point. You have a point. What's to say that there won't be a rush to USD but if there is a counter such as a gold backed currency the rush peters out and doesn't come close to the last crisis. You could see a blip of deflation. The reactions to that and if the counter is successful then you could get whipsawed with inflation.
There is no rule saying we can't have one and then the other. Think of it as the best of both worlds.
"No one will have the cash to drop on assets."
There is no 'need' for USD to facilitate trade. The dollar is a drag on economic activity, actually. So I would say more of a de facto barter situation develops and real wealth is re-valued appropriately.
Barter sounds awesome until you actually try it:
1) You want butter and have fish, your neighbor has butter but wants a hand tool. You need to try and find a 3rd party with the tool that will take butter for it....You end up getting into wampum, big ass rock wheels or whatever passes as "money" like cowrie shells
2) Gold sounds nice until the govt outlaws it. Ok, boating accident...etc. But what will really end up happening is that you will not want to have the risk of having it/trading it because the first jealous cousin that rats you out....you also get into selective prosecution. Dont have an uncle that is a judge? Dont be caught with gold.
3) I have done the mattress cash thing as well as the phyzz, but the problem is what will happen when the SHTF. I dont think any one here can correctly quantify it with any accuracy. Case in point, if you listen 100% zero hedge we should have gone through a dozen or so crashes since 2007
Bottom line: We have no accurate model, but I can tell you as bad as people hate the USA, we have the best chance of weathering the economic collapse and the rest of the world knows it. Thats why they chase the USD. We just dont like it that Yellen can print more and more
If we get to this point, is anyone going to give a shit what the government says about gold?
Maybe that's why I should own a stock of pre-65 dimes and quarters. That's going to fly below the radar better than just about anything else. Heck I was looking at prices of my 1980's/90's comic book collection and in nominal prices, the value has gone up 10X's. Hard to barter in comic books, but when you're desperate...
It may be hard to hide gold from the government, but how hard is to hide a cow (to get the butter)? I've got some cows and I wouldn't want to be the first farm outside of NY or LA with cows in a pasture. It's a sure fire way to get your throat cut by hungry hoards.
I think a guy needs some gold to bribe the bureaucrats and cops, to protect your cows.
Agreed...People don't have cash...even people with money in the bank don't have cash...banks don't even have cash...People have plastic. If you go into a bank and ask for $10,000 cash, you need to give them a few banking days to get it. The fed prints trillions...digits on bank accounts.
So I think when the crash happens and plastic credit dries up over night...a guy with a few hundred bucks or a bit of silver or gold will be able to buy those nubile blondes or a Mercedes.
Like Greenspan said, "We can guarantee payments in any denomination going forward, we just can't guarantee their purchasing power".
my roomate's sister-in-law makes $72 hourly on the laptop . She has been out of a job for 6 months but last month her payment was $18482 just working on the laptop for a few hours. use this link... www.payvalt.com
Debt's a wonderful thing.
(or so they say)
But its different this time
it really is they will print more and more! can't everyone see that the more debt the higher the dollar goes. weeks ago Obamas old left hand said the dollar did not need be the reserve so hey yall let's party it up. no problems socks pump spam dump every day forever and ever
Got Fed?
It's worth repeating, this pig will not crash until TPTB decide it's time to pull the rug out. When they do this no bid market will vaporize in nano-seconds and there will be no escape. It won't be like last time where anybody could make money on the downside before they outlawed shorting. This time it will be a select few who profit from the collapse.
There is no doubt that this thing is being manipulated to extract wealth to the hands of a few. But what they are attempting, in the end is still outside of their control. Lots of potential unintended consequences.
They are also working on closing the exits for money markets. They can control quite a few of the exits.
The only thing "TPTB" have in excess of power is hubris.
The coming event is no more in their control than was the Big Bang.
TPTB will use Mises axiom about credit expansion and currency destruction to create the crisis event that they will not let 'go to waste'. Out of chaos comes order. Even if the crisis is engineered from the beginning.
Not sure there is much sxtracting going on. I think that most retail is no longer in the market in numbers.
I think the music is playing becuase the music is playing. And the few non HFT are there like Chuck Prince saying you gotta dance cause the music is playing....
Algo fueled high frequency crash! Its like quantum trading! They sell it before they even bought it! Fucking brilliant!
Yeah, but we're exceptional now. Back then we weren't.
Stack On
Is Mr Durden for real? He is predicting the end of civilization.
No stack of money or gold is going to save you.
Even cannibalism will be risky, with everybody having Ebola.
I'm supposed to end this with a witty tidbit...
I got nuthin'
Civilization won't end but it is likely to step back a couple of hundred years, the people who know how can survive but the others (and there are a lot of them) won't. Can you shoe a horse or plow a field? These kind of things will be useful.
Internationalisation is both time-consuming and costly.
And energy intensive.
Tyler Babson
0.
Oh no.. a well-meaning gentile espousing views that are contrary to the tribal directive of 'everyone must lever their ass to the hilt for our economy to work'
Have they trampled on his grave yet?
"The California Public Employees' Retirement System is ditching its hedge fund program to reduce costs and complexity in its investment portfolio, it announced in a press release.
As part of the move, CalPERS will exit 24 hedge funds and six hedge fund-of-funds that are part of its Absolute Return Strategies (ARS) program -- investments that are valued at around $4 billion. CalPERS is the largest public pension fund in the U.S.
"We are always examining the portfolio to ensure that we are efficiently and cost-effectively achieving our risk-adjusted return goals," said Ted Eliopoulos, CalPERS Interim Chief Investment Officer. "Hedge funds are certainly a viable strategy for some, but at the end of the day, when judged against their complexity, cost, and the lack of ability to scale at CalPERS' size, the ARS program doesn't merit a continued role."
I hear an underfunded avalanche coming.
That'll be one less chair for when the music stops.
Even a broken clock is right twice a day.
Even the spoils of Babylon can rot. When will it crash? Dunno..I'm guessing mmmmmm October 27th, its got a good ring to it. And if it holds out that long I get to see Doug Stanhope live!
Ready the assholes and brush up on your swallowing skills!
https://www.youtube.com/watch?v=dT1AHDjzcsQ
@trulz4lulz: Hahahahaha, can't say he wasn't lyin though! Makes me love my j-o-b even more! Thx for the laugh!
"Even a broken clock is right twice a day." but only if it's left alone. If it's manipulated by someone without the knowledge to do so, it may never be right.
Alrighty then! Money, debt, and, then repayment
from nothing!
Doug Casey - Biggest douche ever.
Couldn't even finish this drivel/mental masturbation/nonsense. Guy went nowhere with this... More proof nothing gonna happen. BTFD won't stop cause people keep listening to this gaaaabage.
Another bubble crash prediction article. Everything sucks great depression 3.0 coming soon. Buy gold. Bla Bla Bla.
All your paper loses will diminish, everything is going to hell. No work only bots etc etc. Be paranoid Bla Bla Bla. WW3 coming. Ok fine.
No. S&P Target 2024 3571
Doug Casey. Always thinks everyone can jump on a plane and buy land and bury their gold there.
He sure likes to talk about the good life at his spread in Argentina. Wonder what he does.when he walks outside the.gate?
there is no market to crash. there just isn't. in 1929 there was an actual market. in 1929 banks were allowed to fail. in 1929 there was no fdic, no ppt, no working group, no social security, no broad gubbermint conspiracy to rig all markets. the market can't and won't crash because there is no market, there is only the fed. whatever level the s&p is at that is the exact level "they" want it at and it will always be so.
Right, but it is all about having a pressure release valve. Something's got to give. You can print to infinity but that will destroy the currency. You can raise rates, but that will kill the market (what's left) and housing. Like a car salesman, they've got a finite number of variables to work with. They either screw you on the price of the car, the interest rate or what they give you on your trade. We all come here to find out how they will try to screw us.
The only way out in my estimation is cut useless spending, have .gov take about 20 steps back from people's lives, reign in the banks and reingnite the job market/ production.
@buzzsaw99: and you believe the Fed knows what they're doing? Actually they do, they're bringing everyone higher and higher before the ineviatble fall waaaaaaaaaay below! All they can try to do is make the fall slower than expected.
Most investors think that even if things go downhill fast that they will be smart enough to get out of the markets. After the debacle in 2008 where they saw the market do nasty and violent swings they learned a few things, this time they figure they will make the right moves before it is to late. But what if it hits like the flash crash on steroids?
For a long time I have been trying to develop a scenario for a market "super crash" and a reasonable map that would arrive at such a situation. Below you will find more on why this scenario could happen. We know that can't happen because circuit breakers have been put in place to arrest panic style moves, but imagine a market that falls, trade is halted, and the market simply does not reopen for days, or even weeks.
http://brucewilds.blogspot.com/2013/01/flash-crash-on-steroids.html
"Most investors", "The Markets" ...... If you are using those terms you are on the fairy dust too. Its a big fucking broken club cooking the price of eveything, its not a Market and its not "investable.... Speculate or get out and wait for reality and fundementals show a sign of relivance.
Please stop using ZH to pimp your POS blog.
Karlus is Right on Track.......
http://www.talentseekscapital.com/uploads/3/2/6/9/3269986/extraordinary_popular_delusions_c._2014__pv3.pdf
The only "Safety" will be in US Bills.
If choosing between World War, revolution, or deadly wave of disease (like Ebola), would the statists pick Ebola this time, just to try something new?
WW2 redux. On the bright side the mustangs and bison will have plenty of time to make a comeback... and there will be many new species.
What's that on his chin?
How is Babson? The brother of colonel Sander's?
Hurry up and crash before ISIS arrives.
Dollar gets stronger and Joe continues to get squeezed. The vice will continue to tighten. Slow and steady like.
No need for a market crash to wipe out the discretionary income of those who keep this economy moving (or used to)
This is going to be very ugly. Pay down your debt, go without the bullshit trinkets and fancy fish with Beurre Blanc.
GLTA
@vincent: screw paying down debts; just monetize them and buy tangibles bitchezzz
Central banks are colluding to keep Babson's (and countless others') dire warnings from coming true. Instead of beggar thy neighbor, it's fellate thy neighbor. The question is, when the scaffolding falls, will we choose time honored stupidity, culminating in absolute communism or predatory capitalism, or will we evolve?
Consumptive gluttony will save us all - you know 70% of the economy. Like the lizard eating its own tail for food, eventually it runs out of tail.
The Great Depression was a deflationary collapse caused by bad monetary policy in the face of a financial crisis.The crisis was itself one of many boom/bust events that had characterized societies as they bacame more economically open. However, the Roaring Twenties took the boom phase to a new level.
The crash in 1929 and the Smoot-Hawley tariff were minor contributors. International trade was 4%-5% of GDP and there wasn’t deep enough widespread retail participation in the stock market. Bank failures contributed as well since both retail and businesses lost money in absolute terms. Also, a series of major scandals involving highly respected financiers (ex. Ivar Kreuger) added to the perfect psychological storm. But the primary culprit was the lack of understanding of the impact of a rapid deflationary event on REAL interest rates. Cash under a mattress in 1931 had appreciated (in real buying power) by about 2%-3% in 1932. Thus, a nominal rate of about 3.5% was really in the 6% ballpark. This had the effect of making the deflationary collapse much worse.
Rates remained high to stem gold outflows in an era of a gold standard. Competitive interest rate rises occurred internationally to make holding gold-backed currency more attractive (rather than converting it to the gold that underlays it). Roosevelt’s “confiscation” of gold was an attempt to expand the money supply in the face of deflation. Simply put, if the country was to remain on the gold standard and to engage in economic stimulation efforts, the treasury had to have more gold.
No doubt Zerohedgies will have a different view of history.
Hoover also sat industry leaders down and had them "volunteer" to not lower wages. That meant that the value of wages was going up in real terms while nominally, they remained the same. Since a lot of what was going on was monetary in nature, he attacked the symptom, making things worse because industry could no longer afford to pay its employees. This is kind of the opposite side of the same coin as using price controls in a highly inflationary environment, and fails for a similar reason.
Historians accuse Hoover of doing nothing, when if he had done nothing, it probably would have been better. Asshole "leaders" have a tendency to do the equivalent of amputating the left leg when it is the right that is septicemic when it comes to the economy, and it seems to have been that way all the way back into antiquity.
Indeed, do you think that Rahm Emanuel made up the phrase "Never let a crisis go to waste"? He and his brothers were brought up on that phrase.
Kind of a under oversimplification ... but not bad.
Henry Paulson: "The fundamentals are sound". << Now where have I heard that before ?
He tiped off the masses but you had to know the code. Luckily I read this book just before Paulson's famous comments.
http://www.amazon.com/Great-Crash-1929-Kenneth-Galbraith/dp/0547248164/r...
Stocks have reached a permanantly high plateau. << Now where have I heard that one before ?
http://www.zerohedge.com/news/2014-09-14/cliff-edge-permanently-high-pla...
http://en.wikipedia.org/wiki/Irving_Fisher
This one is also covered in the above book. Tip #2 perhaps.
Who needs a sustainable economy. Production now is measured in millions of tweets an hour, porn on demand, pre-orders for i-crap 6. kids fed and vaccinated by the state, pot on EBT cards, and the sickening list goes on forever - bring on the war - Alas Babylon.
So, history rhymes,
At least approximately,
Orange the fruit,
Apple likewise,
Yet language differs, and
Proximate extends to indefinite.
Why is NOW different than BEFORE?
Only because we wish it to be,
To garner, not earn, more and more!
deflation across all asset classes. this time the run to gold may be short lived before a chronic break in all asset classes until such time that Jamie Dimon et ilk, realize they will have to swallow the watermelon this time...
It is not complicated. A debt default will cascade through the system. Got it all assets will drop spirialling down and down til a person is willing to trade a car for a can of tuna. OK somewhere along here the society known as useless eaters will be thrown under the bus and civil unrest breaks out. The government is shattered and helpless with international issues requiring the most attention. Your gold and life are at risk every day as you can't travel or show any valuables so who you gonna call? Best be in a nice nieborhood? Think that neighbor might have something worth taking and doesn' t have a gun, OK then that' s your opportunity get some before it is too late. Brain dead barbaric times are a coming arm up stock up and stay down
@enloe creek: excellent assessment
Hell no don't try to make anything yet. We've been getting in shape and looking forward to the collapse so we can hang the banksters from the lamposts. It happens every so often. No big deal. Think of how well things will work once those parasites are gone.
It will be fine, we have far better coping skills now, we can just print another say 15 trillion dollars, give it all to the Banks or drop the money from helicopters, free cars and houses for everyone, before we know it we will all be rich and its off to the races again....what could go wrong?
If the Federal Resereve can rig the market on the way up they can rig it on the way down. Its within their power to control numbers in all markets. Its not a bubble its manipulation.
I don't understand why there would be a stampede for selling when the Fed is in there propping up demand by buying stocks with freshly printed money. If anything, there will be a stampede for buying as hyperinflation kicks in and people want to buy anything represeting something real.
The problem this time around is that if/when the stox and bond bubble should burst, the credibility of the dollar (and by extension all fiat currency) will die, and this cannot be contained by CBs (except by repricing the metals massively, possibly backing all debts again by Au). This makes this time different IMO. We're in for for real change. Something big is coming down the pike. Interesting times. Good luck to all.
IMF will bail out the world, that's plan after all isn't it?
The new paradigm that allows traditional measures of value to be ignored.
Where have we heard that before:
dot.com bubble
U.S. housing and sub-prime inparticular
Here we go again ........
At least in 1929 some people had a family farm to go back too. That's not the case today. And to think that some people still believe the dust-bowl caused the depression. What will people fall back on this time around? Sounds like a soylent green scenario coming our way. https://www.youtube.com/watch?v=-wa4U6TQlNI
"Wise are those investors who now get out of debt."
This goateed douche thinks he's Yoda
"are focusing their attention on finding a way out of being a casualty in the train wreck that’s coming"
silbur wilbur
The powers in charge of gold and silver manipulation in London and Chicago are totally destroying Canada's mining sector.Wipeout might be a better word.The Canadian Government under Stephen Harper is silent on the issue while thousands end up unemployed.The layoffs are hitting hard now.It started slow but now it's survival for everone.funny how so-called Conservatives are afraid of their own shadows to speak up against corruption south of the border.They're like puppets on strings.Look at Barricks share price as a barometer.They've had the literal shit kicked out of them in the gutter by drunken thugs on Wall Street.I'm still chipping away at junior miners though,they're pretty cheap for us contrarian investors who believe in the next cycle up.Hold long.
This time it IS different. You must know that they have run simulations for every possible outcome. Im sure most will still get screwed, and it will surely end up with MOST of us on ebt cards.
Most sheeple will cooperate..you might be surprised (although you shouldn't be) what people will do for food to survive.
Most people will ask for (and expect) government help.
How can everybody forget that most people are idiots, and feel like they NEED someone to guide them.
Yes , im sure if everone else thought like (some) ZHers and knew what was goin on in the world, it could end up as every man for themselves ..surviving on their own..no help from government /state etc.. But then again if EVERYBODY was smart enough (or even awake enough) to kno what was really going on, we probably wouldnt have gotten this far outa control... right? (YES)
;)
Carry on..
What a coincidence, QE "ends" Octo 29th also!!! Hip Hip Hooraaay!
how can the markets crash when the federal reserve is ready to reliquify every investor. market crash? just cancel the trades and reliquify the sellers (who are getting those nasty margin calls). the market cannot possibly crash. however each moment excludes individual investors, and favors the institutions, shrinks the size of the market. (notice volume is rather pale?) here's the TRUTH, as prices fall, and the fed continues to provide LIQUIDITY, volume disappears. gold prices fall, there is no gold to buy. as stock prices fall there is no stock to buy. and they continue to fall until everyone is sitting fat dumb and stupid on a pile of paper or a pile of gold, take your pick.