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According To Russell Napier Which World Has No Volume, No Volatility And Rising Prices? The USSR
From Russell Napier of the Electronic Research Interchange
Great Expectations, Pregnant Pandas and Last Wednesday’s Treasury Market
"I must be taken as I have been made. The success is not mine, the failure is not mine, but the two together make me."
- Estella, Great Expectations
What sort of financial world is a world with no volumes, no volatility and steadily rising prices? The only historical example is perhaps the Soviet Union. When the marginal buyer of any product is the state, or its handmaiden the central bank, then simply nothing happens until the state comes out to play.
Across the world the owners of private sector assets sleep under palm trees in Bangkok, relax over mahjong in Beijing, play sudoku in Berlin, read The Sun newspaper in London or take turns to appear on CNBC in New York – all awaiting the arrival of the state. No two private parties will enter a bargain in the absence of the state, for what if the state does not like their price? Then the price will be moved by state fiat and one, or perhaps both, of those parties will look very foolish indeed.
TAKE NOTHING ON ITS LOOKS
As Magwitch, the escaped convict, remarks in Great Expectations, "What larks, Pip!" when a brief flurry of activity stirs the afternoon once the state shows its hand. Then it’s back to talking nostalgically about supply and demand, the way our ancestors spoke affectionately about gas lighting, trams and the taste of saturated fats. Forecasting is difficult, especially about the future, but it is a simple forecast that this state-induced torpor will one day pass. It did just that between 0900 and 0930 EST on Wednesday October 15th.
On the 15th of October 2014, as this analyst celebrated his 50th birthday, volume in the US Treasury market surged, suddenly and without warning, to a record high. Old timers smiled knowingly, as Magwitch did from behind the headstones, and younger members put aside their Angry Birds and wondered what was wrong.
TAKE EVERYTHING ON EVIDENCE
There it was --- a real market come and gone in half an hour, like a pregnant panda at Edinburgh zoo. What did it mean and what should you do? You should pay attention to what happens to the direction of prices when volumes surge and markets work. When the veil is lifted, pay attention to what you see beneath. Last Wednesday, in the space of half an hour of active trading, the Treasury market had one of its most rapid rises ever recorded and equities fell sharply.
There is a very simple lesson that when the markets finally break through the manipulation they move to price in deflation and not inflation. This is key because it means financial repression has failed. Such repression requires the artificial depression of interest rates but, crucially, it must be paired with boosting inflation above such rates. On October 15th 2014, if only for a few short minutes, market forces broke out and the failure of central bankers was briefly evident.
THERE’S NO BETTER RULE
In North Korea today, Kim Jong Un executed ten Workers’ Party officials for watching South Korean soap operas. Meanwhile in the developed world the excitements of October 15th 2014 have passed and financial fiduciaries continue to get paid to both watch and then appear on daytime television. The time will come when you will have to get back to determining prices.
A price is not a diktat but, like Estella in Great Expectations, the product of both a success and a failure. Last Wednesday, just briefly, diktat disappeared and failure outweighed success in the determination of price. Remember, as Yogi Berra sagely advised, "You can learn a lot just from watching." Don’t forget what you saw between 0900 and 0930 EST On Wednesday October 15th.
“Take nothing on its looks; take everything on evidence. There's no better rule.”
- Mr Jaggers, Great Expectations

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take your ball and go home. there is no other way.
Either that.....or go to war.
I never believed for one second the USSR was gone for good.....especially when we imported the whole system into the USA.
Prelude to the real show, buckle up
China is the last place in the world where Capitalism happens.
Who writes this shit
Some douche bag who's really saying "see, I was right for 15 minutes -- buy my newsletter".
I actually lived that system and that is exactly what I've been saying since forever.
Financial repression always fails and it will always fail because suppliers will halt supplies.
Only real repression is under the threat of a gun and it is inevitable, in order to force suppliers provide goods.
Bank lobby is dead.
Pentagon is back.
I beg everybody, please, do not start with the very brainwashed view that "banks fund the military".
Please, learn how finance works. Banks fund nothing. Military does not need the banks. It is the banks which need the military.
Actual price 'discovery'. What a concept.
<A beach ball held underwater will eventually surface. When it does....watch out above.>
A beach ball held underwater will eventually surface
Its the gas that surfaces, the beach ball just goes along for the ride.
A grand piano suspended at a great height will eventually fall. Give me the beach ball any time.
The Kim Kardashian thread was yesterday
EKM, to make that statement you have to explain how the gov spends $1 trillion it doesn't have EVERY YEAR.
Without the fed printing the deficit, the military is defunded along with just about everything else. So, I'd disagree. Banks rule and fund the military... which I agree they need as a sybiotic parasite. Without the military in all it's forms (DHS, etc) we just might see banksters hanging from lamp posts.
The same people (from NYC) who created the mass murdering USSR are the same people in charge of Obola USSA and the EU-SSR. Dual citizen types who roam the world like a f**king plague.
Co-dependency? Even in corruption cooperation between parties is needed for survival. Ultimately what ends us all is the lack of productivity. Military has little power if there is no one to make their weapons and ammo. The disease I see as the imminent threat is lost of productivity. People setting on their asses and eating. What we have is a system that encourages nonproductive behavior. Workplace participation is just the icing on the cake as the real problem is people stacked into jobs, be it in government or private business, that do virtually nothing productive. Those who do actually work are disparaged, minimized and made fun of as the weak and stupid. Smart people are those who get paid to do nothing, or better yet earn through gambling, especially in the markets. Contributing nothing to society, simply skimming off of the productive efforts of those remaining fools willing to still WORK. Our ultimate vulnerability is dependency and there is nothing more dependent than those who produce nothing to sustain themselves.
no objection
Not only that, but it is people that are best at lying and ripping others off that are the ones that get the most reward. Old saying goes ' The fish rots from the head down'. The biggest problem are not so much 'useless eaters', as stupid useless eaters, or worse yet people that just will not process in their little brains what is going on, or even if they do, just keep taking the fucking they are getting and/ or mindlessly and actively participating in the deceit.
The system is now so fucked up, that the only hope we have is for it to completely destroy itself. We are left with the slim hope that we will maybe survive and maybe re- build in a more sane and humane manner. Small wonder I suppose that most people just as rather tune out than actually look and see the mess.
I hope all you leaders and willing participants out there, and you know who you are, wake up and realize what you are perpetrating. Remember: You never know what you've got til it's gone. You are destroying it very rapidly day by day one little bit of morality and truth and life at a time.
"What we have is a system that encourages nonproductive behavior."
Exactly. When those at the top live off of the combined productive efforts of others, those others live off the State. The most lucrative jobs in this country seem to involve the tapping of existing revenue streams, while those jobs that require actual labor pay less and less. Labor is taxed at the full rate, income from 'investments' gets a break.
The message, to anyone paying attention, is clear. What the system rewards is what it will get more of.
Ironically enough, if you hate the system, you will have to accelerate its demise by joining it. Else you're helping to drag things out.
In hunting, a quick kill is always preferred.
Just as I can anticipate my own end, I am intent on "dragging it out". At least until that time when I can no longer function on my own and become completely dependent and a burden on others. I'm in no hurry to reach my final destination. If your personal suffering is so bad, I will not stop you from reaching your endpoint, but I do not see it as my responsibility to accelerate societies ultimate demise, because that's what it is and anyone thinking some great new free society will rise from its ashes is more deluded than those we typically denigrate as sheeple.
Woo Hoo # 1..
Asian markets seem fine
Deflation is what we need.
Clean out the deadwood.
The forest will not be detroyed in the next wildfire.
It's happening everywhere.......http://www.forbes.com/sites/realspin/2014/10/27/lets-uberize-the-entire-...
Deflation is what we're going to get.
Guys, not sure where you're living, but if in the old gut USA, than you should expect the dollar to fall to ground. Your imports will get fucking expensive. I would not expect deflation. If there will be one, it going to be temporary before the great finale.
Buy your precious on the drop. Before they have and excuse to go zimbabwe.
Deflation of luxuries, inflation of necessities.
because I "always" believe what Forbes spins...
(suppressed laughter)
We have Yellen Quantitative Sleazing IV.
I better take the time to explain IV, this is the Roman number four, such as my last name reference that is duly dropped off in public. I loathe having a Roman number behind my official surname. It's called parental stupidity. I did break the tradition with the birth of my son.
;)
US Treasury's Quid Pro Quo Arrangements with Criminal Cabals:
http://winteractionables.com/?p=15986
US Treasury "market" is lawless.
Like taking candy from a retarded babay.
"On October 15th 2014, if only for a few short minutes, market forces broke out and the failure of central bankers was briefly evident."
Oh, is that what that was?
Data? Proof? Meaning? Context?
That line just floats in mid-air, tempting, but not apparently tied to the rest of the article.
I think the Treasury rates moved really fast, didn't look so pretty...
There was always this "WTF" picture to show some kind of exponential disconnect from reality....
http://www.zerohedge.com/news/2014-10-15/wtf-chart-day-treasury-trading-...
http://www.nanex.net/aqck2/4681.html
Thanks ekm. These are the charts that should have gone with that headline.
Today we witness the first 500 point decline dow 30 this year, in honour of the 1929 crash and end of QE.
The gap at 1930 will get filled.
I think it's more likely that the economy is experiencing hidden inflation, not hidden deflation.
More like hidden taxation to hide growth.
Yeah 15 minutes, whoop dee doo! BFD. As long as all the muppets believe in their little strips of colored paper this circus will go on.
There are clues everywhere, every day, be they small or large, to remind us of the fictional existence we lead. People die every day still believing in their delusions. There is no reason to believe society as a whole will not do the same...and we will have never seen it coming. Our very existence now depends on maintaining this delusion and any alternative towards truth will be resisted as vigorously as any religious icon. The more desperate our circumstances become, the stronger our faith becomes, regardless of the facts to prove otherwise. We have been indoctrinated into this delusion, it is who we now are, and until the Jonestown KoolAide is fully ingested and our organs start to shut down, things will appear as optimistic as ever. Looked at consumer confidence numbers lately?
Oldwood, There are no real numbers to look at. Isn't that what your post is saying? The article is not worth reading but it does bring out some good posts.
There are plenty of real numbers to look at, its just that they are routinely dissmissed as irrelevant because they do not fit in our delusional paradigm. Those who speak the truth are destroyed as worse than delusional...dangerous they are. Not to be ignored but done away with, their thoughts never given the light of day. This is how we can tell how fragile our delusions are. As is said so many times before, the debate is over, telling us now we must simply "believe". We all see ourselves as the exception to every rule. We can eat and smoke and do what we want without regard to any statistics or science because all those "bad things" only happen to other people, not us. This makes it so easy for them to sell us our current delusions because really don't want the truth.
Listen to the talking heads. They are telling us another financial collapse can never happen, right? Otherwise you might not buy that new car.
The key is to boil the frog slowly - and the cats running this show are master chefs. As long as purchasing power disappears gradually, and there are distractions, people have nothing to focus on - their small personal misfortunes can be blamed on any number of local conditions, and the systemic collapse isn't seen until it's over, then everybody looks back and says 'how the fuck did that happen?'
barry is not black
barry is a communist pig sold as black
And the brothers are catching on.....
http://www.youtube.com/watch?v=BUSRZo1BE5o
US Treasury
An old friend of mine once said that if the market does not serve the needs of the state, it will be cancelled.
it will be cancelled ?
He meant "altered".
I'm impressed that anybody able to make $7397 in 4 weeks on the computer . this linkwww.swipebuck.com
I don't know which scares me most. The fat, annoying North Korean guy releasing a nuclear missile or the fat, annoying South Korean guy releasing a new single.
That cartoon looks antisemitic.
When a potential President of the US says that 'corporations do not create jobs, that the Government does' one realizes that, indeed, the USSR is being reborned in the US.
Actually, when USSR was by pro-USSR rather than western infiltrators, prices were going down constantly. In early 80s, USSR was infiltrated and policies were made to bankrupt and dissolve USSR. It's no longer a conspiracy theory as was though in the 90s.
Please elaborate or provide links or references.
Prices were not going down. The ruble was devalued peroidically usually 10/1. Look it up in WIKI.
There was literally nothing to buy in the Soviet Union and its communist Eastern Bloc satellites. Rubles in fact piled up in savings accounts at the state-owned bank, as people didn't know what to do with them. I have seen these places with my own eyes when they were still under communist rule, and if there is one word that can best describe them it is "gray". It somehow managed to be the predominant color, everywhere. A more joyless dystopia could hardly be imagined.
Perusing a Playboy magazine from March 1971 the other day, I notice an ad for the new Datsun automobiles. Produced by Nissan the "sporty" two door was under $1800, the four-door sedan was $1895.
That is 43 years ago, my friends, but a short time in the history of the world.
Should we really accept new car prices of $16-20-35,000 as the norm? Auto prices 7-10X what they were when we were in college (OK, I was a senior in HS), but, ask yourself, has your wage or salary or income risen by that much in those 43 years? I made about $14K in 1971, working as a retail store assistant manager. Today's wages may be in the $35-45K range for a similar position, but that's only 3-4X the 1971 wage.
Deflation is on its way, and it should flush the entire fraudulent system and its participants with it. One can only hope.
When the Fed announces the end of QE today, it is my hope (I am not trading this, BTW) that the Dow falls 300-500 points as a message to our "owners" that the serfs are restless.
Stay calm and carry on.