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Alan Greenspan To Marc Faber: "I Never Said The Fed Was Independent"

Tyler Durden's picture




 

Marc Faber, editor of "The Gloom, Boom & Doom Report", spoke with Bloomberg TV's Trish Regan today at length on a wide variety of topics. He commented on Bill Gross' remarks about deflation (noting "the concept of inflation and deflation is frequently misunderstood") and explained why he thinks Japan is engaged in a Ponzi Scheme (since "all the government bonds that the Treasury issues are being bought by the Bank of Japan"). He also spoke on oil prices (warning that "if oil prices went lower, it may actually have an adverse impact on the US economy"), gold and Goldman Sachs ("Goldman Sachs is very good at predicting lower prices when they want to buy something") and the midterm elections (adding that "I don’t think it really matters, [both parties] have blown money away.") But it is discussion of the independence of the Fed with Alan Greenspan that will raise the most eyebrows as it seems yet another conspiracy theory dies at the hands of the fact police.

*  *  *

TRISH REGAN: Bond investor Bill Gross is saying deflation is a “growing possibility” as governments worldwide struggle to create inflation and to stimulate growth. In his second investment outlook since joining Janus Capital, Mr. Gross writes, “The real economy needs money printing, yes, but money spending more so. Until then, deflation remains a growing possibility, not the kind that creates prosperity but the kind that’s trouble for prosperity.”  What do you think here about what Bill Gross is saying? Do you think in fact deflation is a real possibility for the United States?
 
MARC FABER: Well, I think the concept of inflation and deflation is frequently misunderstood because in some sectors of the economy you can have inflation and in some sectors deflation. But if the investment implication of Bill Gross is that – and he’s a friend of mine. I have high regard for him. If the implication is that one should be long US treasuries, to some extent I agree. The return on 10-year notes will be miserable, 2.35 percent for the next 10 years if you hold them to maturity in each of the next 10 years. However, if you compare that to French government bonds yielding today 1.21 percent, I think that’s quite a good deal, or Japanese bonds, a country that is engaged in a Ponzi scheme, bankrupt, they have government bond yields yielding 0.43 percent. So –

*  *  *
Faber: Japan Is Engaged in a Ponzi Scheme

 

FABER: Well I think they’re engaged in a Ponzi scheme in the sense that all the government bonds that the Treasury issues are being bought by the Bank of Japan.

 

REGAN: So Japan’s engaged in a Ponzi scheme. What about the US? We’ve done our share of money printing. We’ve had record low interest rates for six years.

 

FABER: I think the good news is – for Japan is that most countries are engaged in a Ponzi scheme and it will not end well. But as Carlo Ponzi proved, it can take a long time until the whole system collapses.

 

REGAN: So all this QE in your view is a form of a Ponzi scheme. It’s going to take some while before it catches up with us, and yet, Marc, you look at the jobs numbers coming out of the US. You look at the GD print (ph). All this has actually been pretty good lately. So isn’t there a case to be made for some economic growth here?

 

FABER: I really have to laugh when I look at the economic statistics because they are published by the Obama administration, and there I would be very careful to take every figure for granted. The fact is simply that first-time home buyers in the US are now at the 30-year low. What does it tell you? That people don’t want to live in homes anymore? No. They can’t afford to live in homes anymore. That is the problem. And the whole exercise with quantitative easing has been to boost asset prices, but the bigger problem is the affordability. A lot of people are being squeezed very badly because the costs of living are rising more than their salaries and wages.

Faber: The US unfunded liabilities are another Ponzi scheme

REGAN: You mentioned the economic numbers out of the US. You said people should take them – to not take them for granted. You also mentioned in the same sentence because they’re coming from the Obama administration. What is your concern there about what they’re telling us?

 

FABER: Well first of all, if we talk about GDP growth, we have to – the figures are adjusted essentially for inflation, the PCE in the case of the US. Now depending on how you weight the basket of goods and services that you take into your inflation measure, you will get completely different results. And if you print money and if you have large budget deficits, and last year up to October 13 of this year the total government debt in the US increased by over a trillion dollars. So I would say that is kind of a deficit figure that makes halfway sense, but it does not include the unfunded liabilities. That’s another Ponzi scheme we’ll have to talk about in a few years’ time.

 

In any event, the point is that (inaudible) improvement in the economy has taken place, there’s no question, from the 2009 lows. The question is more had we had a further decline in home prices, would actually affordability for most people have improved or not? And I would argue why do people rush out when there are sales in department stores? Because they get the bargain. At the present time when young people want to buy something, they buy the stock market at an expensive valuation. They buy bonds at miserable yields.

 

That I didn’t have to do when I started to work in 1970. In the early ‘70 the Dow Jones was yielding 4 to 6 percent. Bonds, they were yielding 6 percent on treasuries and they rose to 15 percent, add (ph) the benefit of a huge compounding effect. Not (inaudible) I’m smart, but $1 invested in 1970 at 100 years at 5 percent grows to $131.

Faber: Doesn't Matter If GOP Gains Control of Senate

 

REGAN: We’ve got midterm elections here in the US tomorrow. Do they matter for the markets? Does the configuration of the US Senate in your view really matter?

 

FABER: Well it will be perceived as positive if the Republicans gain the control, but I don’t think it really matters because on (inaudible) Democrats and Republicans, they’ve blown money away. It’s not that the Democrats – actually under Mr. Obama spending has been relatively muted partly because of the sequester and so forth. But nevertheless, as a percent of the economy it hasn’t grown much. It’s actually contracted.

Faber: Gold has done better than stocks over the last 10 years, Goldman is "very good at predicting lower prices when they want to buy something"

REGAN: I know you have been bullish in gold for – well, pretty much forever, Marc. But now we’re in a situation where gold is at a four-year low. Goldman now predicting 10, 15 down (ph). Soc Gen saying $1,000. Where do you see gold finishing the year?

 

FABER: I would say Goldman Sachs is very good at predicting lower prices when they want to buy something. But that is a (inaudible) I would say, yes, we are down from $1,900 to $1,160 or something like this, and it’s been a miserable performance since 2011. However, from the 1990 lows we’re still up more than four times. So I just looked at performance tables over 10 years and 15 years. Gold hasn’t done that badly, has done actually better than stocks.

 

Now I personally, I think that we may still go lower. It’s possible. I’m not a profit, but I’m telling you I want to own some gold because I don’t trust the financial system anymore. I think the whole thing is going to collapse one day and then I’ll be happy to have some assets. But of course the custody (ph) is important. I wouldn’t hold my gold at the Federal Reserve because they will lend it out. I wouldn’t hold my gold in the US at all.

 

REGAN: Okay. So you want gold even at these levels. Where do you see – you still see it going lower however as we close out the year?

 

FABER: I don’t know whether it will go lower, but I think say – I’m now 68. by the time I die, and I don’t think it will be 100 (inaudible) I’m not that optimistic, but by the time I die it will be meaningfully higher.

Faber: Low Oil Prices May Have Adverse Impact on Economy

 

REGAN: Marc, let’s talk a little bit about crude oil as we talk about some of these commodities here. You just told me you thought gold won’t necessarily be going higher any time soon, but over the long run a good investment. We’ve got crude oil now closing below $80 for the first time since June of 2012. Is there any floor in site here for oil or do you expect the slide to continue?

 

FABER: Well basically if oil falls below $75 to $70, I don’t think it will stay there because a lot of production will be cut and exploration will be cut, and actually some companies will get into serious trouble financially. The oil price decline is not necessarily very good for the United States. It helps the consumer to some extent, but a lot of capital spending has gone into oil and natural gas, and some of these companies are already today cash flow negative. So if oil prices went lower, it may actually have an adverse impact on the US economy.

 

REGAN: Do you think to a certain extent – and I actually wrote about – I wrote about this in – in my column in USA Today this week. I wonder to what extent, Marc, OPEC actually enjoys seeing lower prices right now because of the success of drilling in the US. In other words, it makes it far less attractive for drillers in the US to be investing in that sector.

 

FABER: Except too much of a good thing may not be very good for Saudi Arabia and the other oil producers. You can extract oil in Saudi Arabia at very low cost, but you have to understand the population of Saudi Arabia has now reached I think 25 million. So the social cost is very large. They need an oil price of around $80. If oil prices went down – and let me remind you oil hit a high in July 2008 at $147 and within six months it dropped to $32, but it didn’t stay there. It rebounded. And I think Saudi Arabia and most oil producers would be in trouble if the oil price went below $70 and stayed there.

 

REGAN: But you don’t anticipate that it will stay there. It’s – it’s supply and demand ultimately, and if it goes to $70 you see less investment and drilling and thus less supply here in the US. So $70 is the floor in your view?

 

FABER: Not necessarily the floor, but it won’t stay low for a very long time. I think it’s – at the present time, farmers are by and large losing money because the price of corn, wheat, soybeans has collapsed by around 50 percent from the highs and the costs are up substantially. I don’t think oil would stay down for very long because I live in an emerging economy. I can see one thing. The demand for oil in the regions of the emerging world where 80 perent of the population of the world lives is going up still from very low per capita consumption levels compared to say the European economy or the US.

 

So I think the long-term trend for demand is up, but obviously the decline of oil prices, some people blame it on Saudi Arabia and some other blame it on the US and who knows what, the fact is maybe the decline in oil prices tells you that the global economy is not recovering as all the bullish analysts think, but actually it’s weakening, yes, weakening. But some countries benefit from lower oil prices, particularly India.

 

REGAN: So in fact you see the global recovery as not really happening, that we are in an increasingly weak global environment as you look around. And certainly we see some poor data that indicates that out of Asia and Europe.

 

FABER: Yes. I think that in Europe we have essentially a flat (inaudible) economy. Now maybe a year they will grow at 1 percent and the next year they’ll contract at 1 percent, basically you can’t expect much growth from Europe. In China, we have now obviously – and this is well documented – a meaningful slowdown in economic growth. As a result, China also buys less resources from the resource producers in the world, from Argentina to Brazil, over (inaudible) Asia, central Asia, Russia (inaudible) and so on. And this has all an impact on these countries’ economies, and so they themselves are buying less goods from the Western world and you have the potential of a downside spiral.

Faber: Alan Greenspan told me The Fed is not independent

REGAN: Anything else? A lot of people have made that point that the Fed has been somewhat backed into a corner in terms of having to be aggressive because they haven’t gotten any cooperation from Washington. Is there any truth to that?

 

FABER: Well it’s interesting that you raise this issue because I was on a panel with Alan Greenspan a week ago, and I knew Alan from my days at Y12 in 1970, 1971 when he was the consulting economist. And actually he even recognized me. He said you’re one of the few ones that always came to my presentations. I have to say one thing. I’m critical of him as a Fed chairman, but he’s a highly intelligent man and he’s actually a very nice man. But equally, he’s a diplomat. He’s a politician.

 

And I was allowed to ask him a few questions, so I asked him, Alan, you’ve been Fed chairman since 1987 until 2006. Would you have done anything different if you were again Fed chairman? And then he explained this and that, and then I interrupted him and I said, you mean to say that the Federal Reserve is not independent? He immediately said, Marc, I never said the Fed was independent. That’s what he said. I never said that the Fed was independent. In other words, the Fed and the treasury and the government is basically one and the same.

Faber: Be diversified, Own Gold

REGAN: Okay. Real quick before I let you go, I know you like gold. Anything else you’d be telling investors to buy right now in this uncertain global environment?

 

FABER: Because in this unsettled global environment nobody knows how the world will look like in five years’ time, Alan Greenspan said the same, he doesn’t know, I would be diversified. And my diversification is about a quarter in equities, not in US stocks. I like other equities better. And some bonds and cash and some gold and some real estate.

 

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Mon, 11/03/2014 - 21:09 | 5408964 ninja247
ninja247's picture

Faber #winning

Mon, 11/03/2014 - 21:29 | 5409023 Stoploss
Stoploss's picture

Barry let's the Saudi's bang oil to 70, and your going to see all those newly employed oil workers out of a job...

In a hurry.

If that happens one would be forced to assume their may, or may not be, BBQ'd democrat on every street corner.

Mon, 11/03/2014 - 22:35 | 5409210 Four chan
Four chan's picture

the fed is owned by the bis aka rothschilds. their franchisees the tbtf banks issue the product, debt also known as slavery.

Mon, 11/03/2014 - 22:52 | 5409221 Pinto Currency
Pinto Currency's picture

 

 

The Fed is owned and controlled by its shareholder banks.

Greenspan came from the Board of Directors of JPM because he was known and pliable to their directives.

Blame Congress for not legislating the Fed out of existence - fair enough.

But the banks are in control of both the Fed and Congress.

QE was all about the banks getting free money as was Hank Paulson's bail-out.

Mon, 11/03/2014 - 22:56 | 5409289 TruthInSunshine
TruthInSunshine's picture

Look, this is basic shit, FFS.

All QE is a pure Ponzi play, whomever does it.

If the BOJ buys whatever directly from whomever, it creates the yen to do so electronically, from thin air.

If the Fed buys treasuries (monetizing the US Gov't deficit spending in the process) indirectly on the secondary market, it creates the FRNs to do so electronically, from thin air.

Only a lying piece of shit such as Paul "Douchebag" Krugman would ever even dare attempt to convince his fawning, cult-like fans, otherwise.

Tue, 11/04/2014 - 00:24 | 5409494 AldousHuxley
AldousHuxley's picture

local shipment houses have a central distributor called FEDERAL EXPRESS

They talk with the SENATOR to give a MONOPOLY to this private corporation and get rid of the postal offices and the post master. owners of the shipment houses guarantee good position wih $$$$ after the senator leaves office, so senator approves.

they go around the prestigious universities and and find candidates to be the CHAIRMAN of the federal express. Of course they can't be seen putting him there by themselves, so they have the senator APPROVE THEIR APPOINTMENT. 

 

To the public, it is the chairman orchestrating a necessary government service.

To the owners, they have duped the public.

 

Tue, 11/04/2014 - 03:04 | 5409687 Squid-puppets a...
Squid-puppets a-go-go's picture

Bizarro coincidence - tru dis

Australias biggest horse race today (the Melbourne cup)  had a Japanese horse as the favourite. It came last then keeled over dead in the stables after the race.

the winning horse was german , and it was called 'Protectionist'

life is just too fukkn wierd

Mon, 11/03/2014 - 23:37 | 5409290 TruthInSunshine
TruthInSunshine's picture

And. Here. We. Go.

Currency Wars:

http://headlines.ransquawk.com/headlines/south-korean-finance-minister-c...

News Headline Summary

South Korean finance minister Choi says concerned about weakening JPY and will seek measures for various scenarios

Update details:
- This is a reiteration of comments from South Korean officials who are concerned of the effects of a weak JPY has on the South Korean economy and its exporters which are disadvantaged by a weaker JPY. 

Print 02:40 - Asian News - Source: BBG

Tue, 11/04/2014 - 00:03 | 5409456 Manthong
Manthong's picture

Treasury works for the Fed.

The Fed works for a very few select elite.

Tue, 11/04/2014 - 00:15 | 5409481 palmereldritch
palmereldritch's picture

Better dead than Fed.

Tue, 11/04/2014 - 05:06 | 5409756 Jaspergers
Jaspergers's picture

"Treasury works for the Fed."

We all work for the Fed.

Tue, 11/04/2014 - 10:35 | 5410320 jwoop66
jwoop66's picture

Do the details matter?  The govt is the fulcrum.  The banks would have gone under if not for the govt.   The fed offers the govt plausible deniability.   They work hand in hand.  I have to laugh every time somebody tells me condescendingly, " the Federal Reserve is not federal"     No shit.   But who does it work for?      It is a front.  Banksters. Govt.   one in the same.    The fed is the same thing as a front business for a drug dealer.  "its just a auto body shop! It has nothing to do with dealing drugs!"  just runs all the money through it and gives a taxable facade.      Whatever...

Tue, 11/04/2014 - 00:53 | 5409552 bunnyswanson
bunnyswanson's picture

 

""On June 4, 1963, Executive Order 11110, was signed by Pres. John Kennedy stripping the authority of the Federal Reserve Bank to loan money to the United States Federal Government at interest. The US Treasury Department resumed its Constitutional power to create and issue currency. “United States Notes” were issued, interest-free and debt-free, backed by silver reserves.

President Kennedy was assassinated on November 22, 1963. Immediately the Silver Certificates were taken out of circulation. Federal Reserve Notes resumed and the Fed was back in business."

Connie

http://www.veteranstoday.com/2014/11/02/jfk-en-route-to-parkland-unpacki...

Tue, 11/04/2014 - 05:29 | 5409759 Manthong
Mon, 11/03/2014 - 22:36 | 5409216 Pinto Currency
Pinto Currency's picture

-

Mon, 11/03/2014 - 22:24 | 5409172 RaceToTheBottom
RaceToTheBottom's picture

Did Faber really have a piece of tissue paper attached to his head from a shaving cut (on his right side of his neck)?

Not that it would affect my opinion of his views!!!!

 

Tue, 11/04/2014 - 00:39 | 5409530 putaipan
putaipan's picture

faber says allen is " a highly intelligent man and he’s actually a very nice man. But equally, he’s a diplomat. He’s a politician. "

dr. michael hudson fired his ass. nuff' said ........

Mon, 11/03/2014 - 23:06 | 5409328 ebworthen
ebworthen's picture

Faber's laugh when Trish asks him if the U.S. is a Ponzi Scheme like Japan is priceless.

It's an emphatic "Yes, of course it is!".

Tue, 11/04/2014 - 01:23 | 5409601 Lets Buy The Dip
Lets Buy The Dip's picture

if faber was even right, we would be naked in the forest eating eachother, his prophecies never come true. MEH! :-\

Right now The cut hammered oil prices on Monday as it underscored Saudi efforts to fight for market share in the world's largest oil consumer while raising prices to Asia and Europe!

U.S. December crude declined 41 cents to $78.37 a barrel. It was also down for a fourth consecutive session, after hitting $78.08 on Monday, its lowest level since June 2012.

ANd look at the chart.....OH ....MY.....GOOOOOD!! ===> http://bit.ly/1B4K0wk

Tue, 11/04/2014 - 11:28 | 5410475 Clowns on Acid
Clowns on Acid's picture

you are 1 dumb fuck.

Mon, 11/03/2014 - 21:14 | 5408972 NoDebt
NoDebt's picture

When you're menetizing the government's debts so they can pursue a Keynesian spending frenzy, yeah, it would be tough to proclaim independence with a straght face.

What will be the telling factor is when (if) the interests of Government ever start to run counter to the banks.  Then we'll figure out who the Fed's real master is.  I say "IF" because I have had increasing difficulty determining where banks end and government begins the last few years.  

Tue, 11/04/2014 - 01:23 | 5409600 Harry Dong
Harry Dong's picture

I believe you have struck a nerve. Why did the image of the Vatican suddenly appear with your words?

Mon, 11/03/2014 - 21:13 | 5408973 GOSPLAN HERO
GOSPLAN HERO's picture

We need better cleavage shots of Trish.

Mon, 11/03/2014 - 23:16 | 5409351 Spitzer
Spitzer's picture

Trish always has a neutral look on her face. As does Mellisa who's at fox business now.

 

Not like that daft kunt on CNBS

Mon, 11/03/2014 - 21:19 | 5408981 JenkinsLane
JenkinsLane's picture

Slap a moustache on him and you've got Waldorf.

Mon, 11/03/2014 - 21:30 | 5409025 4 wheel drift
4 wheel drift's picture

LOL  !

 

who would be statler ?  rodgers  ?

 

 

Mon, 11/03/2014 - 21:19 | 5408985 Catullus
Catullus's picture

Look. Alan Greenspan was in New Orleans last week saying the same thing. It's not coming from Faber.

Greenspan is out with this mea culpa of sorts. That he fell into the fed chairman role. There's no independence at the Fed. That he inflated to prevent the federal government welfare state from crowding out private investment (dubious). And that there was no other way. It was either that or risk collapse. He finished with gold and interest rates are going substantially higher.

http://sprottglobal.com/thoughts/articles/what-greenspan-latest-talk-mea...

 

Also... I just find this one interesting. Britain to repay WWI war debt.

http://www.theguardian.com/business/2014/oct/31/uk-first-world-war-bonds...

Mon, 11/03/2014 - 22:16 | 5409148 socalbeach
socalbeach's picture

Bingo.

Greenspan: "Its [Fed's] mission isn’t to keep the currency stable, it’s to help fund the spending of the US government, and to defend the banking system."

Tue, 11/04/2014 - 07:54 | 5409861 Crash N. Burn
Crash N. Burn's picture

"Look. Alan Greenspan was in New Orleans last week saying the same thing."

 

Yes, but Alan Greenspan is a lying sack of shit.

Allen Greenspan Admitting the FED is above the law congress and president

Quote "The Federal Reserve in an independant agency"

 

 

Mon, 11/03/2014 - 21:23 | 5408996 kowalli
kowalli's picture

USA is a done.

Tue, 11/04/2014 - 03:14 | 5409514 Youri Carma
Youri Carma's picture

When I scrolled by I thought for a moment you said 'USA is a drone'. Which to me seems a modern translation of what Gore Vidal once said: "This isn't a country, it's an American aircraft carrier."

End result is the same. It's a done. http://www.independent.co.uk/news/world/americas/gore-vidals-united-stat...

Mon, 11/03/2014 - 21:23 | 5408999 Oldwood
Oldwood's picture

I'm an asshole. I'm just tired of having to work all of these years while the gamblers and thieves skim off the top.

Mon, 11/03/2014 - 21:25 | 5409008 Stoploss
Stoploss's picture

Any mention of how the debt would be serviced?  High rates an all...

Tue, 11/04/2014 - 00:21 | 5409486 yogibear
yogibear's picture

With everyone doing Ponzi he did say it wouldn't end well.

Mon, 11/03/2014 - 21:25 | 5409009 kaiserhoff
kaiserhoff's picture

Faber is an honest man, but he's running out of sane investment ideas.

We all are.

Mon, 11/03/2014 - 23:53 | 5409445 Magooo
Magooo's picture

Mish Shedlock said fuck it all in his daily letter after japan went kamikaze saying :  fuck this - I am just buying gold - this is going to blow sky fucking high

Tue, 11/04/2014 - 08:15 | 5409890 mrpxsytin
mrpxsytin's picture

The most sane investment I make each day is the hour or so I spend with my kid at the park. 

Mon, 11/03/2014 - 21:25 | 5409010 TuesdayBen
TuesdayBen's picture

In a way, the arrangement between the Gubmint, the Treasury, and the Fed is analagous to pachinko in Japan.

Gambling is frowned upon there.  So if you win in the pachinko parlor, ya gotta walk out and around the side of the building, put your chit through a hole in the wall to collect your 'prize'...

Mon, 11/03/2014 - 22:17 | 5409151 homiegot
homiegot's picture

They blur out the money shot too.

Mon, 11/03/2014 - 21:26 | 5409013 4 wheel drift
4 wheel drift's picture

faber....    fresh air needed in american press....

 

democrats and republicans....    fuck off ALL of you

Mon, 11/03/2014 - 21:28 | 5409021 jubber
jubber's picture

Nice to see the man speak for a change without all those CNBC clowns constantly interupting, hats off to Bloomberg

Mon, 11/03/2014 - 21:58 | 5409099 Bangalore Equit...
Bangalore Equity Trader's picture

Listen,

All you goy. Drop to knees and worship Bloomberg!

Mon, 11/03/2014 - 21:36 | 5409041 NeoRandian
NeoRandian's picture

He almost told the truth, which is that the government and the treasury work for the Fed. They aren't equal partners.

Tue, 11/04/2014 - 00:31 | 5409495 TruthInSunshine
TruthInSunshine's picture

You mean:

He almost told the truth, which is that the government and the Treasury and the Fed work for the banks. The banks own it all.

"The bank hath benefit of interest on all moneys which it creates out of nothing."

William Paterson, founder of the Bank of England in 1694, then a privately owned bank.

"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

"The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests." The Rothschild brothers of London writing to associates in New York, 1863.

"Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits." Sir Josiah Stamp, President of the Bank of England in the 1920s, the second richest man in Britain.

"I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people." Reginald McKenna, as Chairman of the Midland Bank, addressing stockholders in 1924.

"The banks do create money. They have been doing it for a long time, but they didn't realise it, and they did not admit it. Very few did. You will find it in all sorts of documents, financial textbooks, etc. But in the intervening years, and we must be perfectly frank about these things, there has been a development of thought, until today I doubt very much whether you would get many prominent bankers to attempt to deny that banks create it." H W White, Chairman of the Associated Banks of New Zealand, to the New Zealand Monetary Commission, 1955.

"I believe that banking institutions are more dangerous to our liberties than standing armies." Thomas Jefferson, US President 1801-9.

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." Napoleon Bonaparte, Emperor of France.

"If the American people ever allow private banks to control issue of their currency, first by inflation, then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." Thomas Jefferson in the debate over The Re-charter of the Bank Bill (1809).

"The government should create, issue and circulate all the currency and credits needed to satisfy the spending power of the government and the buying power of consumers. By adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity." Abraham Lincoln, US President 1861-5. He created government issue money during the American Civil War and was assassinated.

"The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilisation." Otto von Bismark (1815-1898), German Chancellor, after the Lincoln assassination.

"That this House considers that the continued issue of all the means of exchange - be they coin, bank-notes or credit, largely passed on by cheques - by private firms as an interest-bearing debt against the public should cease forthwith; that the Sovereign power and duty of issuing money in all forms should be returned to the Crown, then to be put into circulation free of all debt and interest obligations..." Captain Henry Kerby MP, in an Early Day Motion tabled in 1964.

"Banks lend by creating credit. They create the means of payment out of nothing. " Ralph M Hawtry, former Secretary to the Treasury.

"... our whole monetary system is dishonest, as it is debt-based... We did not vote for it. It grew upon us gradually but markedly since 1971 when the commodity-based system was abandoned." The Earl of Caithness, in a speech to the House of Lords, 1997.

"Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal - that there is no human relation between master and slave." Leo Tolstoy, Russian writer.

"It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford, founder of the Ford Motor Company.

"The modern banking system manufactures money out of nothing. The process is, perhaps, the most astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint and un-mint the modern ledger-entry currency." Major L L B Angus.

"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent." John Kenneth Galbraith (1908- ), former professor of economics at Harvard, writing in 'Money: Whence it came, where it went' (1975).

Tue, 11/04/2014 - 00:56 | 5409559 Harry Dong
Harry Dong's picture

Please check your quotes. Wall of words plus spurious quotes!

Tue, 11/04/2014 - 08:44 | 5409939 Notsobadwlad
Notsobadwlad's picture

It is difficult to take someone with the name Harry Dong seriously. So, if you have any actual knowledge about quotes that may be inaccurate, in substance, please do the kind and courteous thing and elucidate.

Otherwise, please crawl back into your dark hole and stay there.

The fact of it is, that the armies of the world would serve humanity better by bombing the financial capitals of the world and hanging the remaining bankers for crimes against humanity (after a fair trial of course) than doing the bidding of the bankers.

Of course, I would have to believe that Satan would take particular glee in sacrificing his corrupted servants because of the opportunity to corrupt more.

Mon, 11/03/2014 - 21:47 | 5409065 Chupacabra-322
Chupacabra-322's picture

Can't wait unit this Fuck'n Rat Bastard Criminal Psychopath / Sociopath drops dead.

Mon, 11/03/2014 - 22:03 | 5409106 Leraconteur
Leraconteur's picture

I hope that the history that survives the coming debacle shows Greenspan to be a destructive, evil force who ruined society.

When is this guy going to die, already?

Mon, 11/03/2014 - 22:17 | 5409147 homiegot
homiegot's picture

He's got that hot babe Andrea Mitchell to keep him warm at night. Something to live for I guess.

Tue, 11/04/2014 - 00:49 | 5409544 Harry Dong
Harry Dong's picture

Strangely enough, I think they compliment each other well. 

Tue, 11/04/2014 - 00:52 | 5409551 TruthInSunshine
TruthInSunshine's picture

Andrea Mitchell enjoys strapping one on as much as Alan Greenspank
enjoys having her high & hard up his ass.

Mon, 11/03/2014 - 22:50 | 5409254 So It Goes
So It Goes's picture

Greenspan - now claims I was just following orders - what else could I do?

How did that defense work out in Nuremberg?  POS.

 

Word up - Alan - you are here advised to not wander over to Switzerland - they have a populace of sharp shooting riflemen from what I hear.

Tue, 11/04/2014 - 00:26 | 5409499 yogibear
yogibear's picture

How did that defense work out in Nuremberg?  POS.

Same as:

 I was the head guy, everyone on the panel said gas the jews so I went along with it.


Mon, 11/03/2014 - 22:04 | 5409107 usednabused
usednabused's picture

Greenspan never mentioned the govt or treasury at all. I still think the old scumbag was referring to the ties to the Rothschild bankers in London as the reason why the fed is not independent.

Mon, 11/03/2014 - 23:09 | 5409337 NotApplicable
NotApplicable's picture

"Not independent" = "Draw your own conlcusion."

As Faber said, "...he’s a diplomat. He’s a politician."

The Maestro marches on...

Mon, 11/03/2014 - 22:03 | 5409109 kchrisc
kchrisc's picture

The FedRes is about as independent as it gets from the DC US government, being that they own and control the DC US government.

Guillotine the Fed!

An American, not US subject.

Mon, 11/03/2014 - 22:13 | 5409128 Duc888
Duc888's picture

 

 

 

 

24 seconds in....  "Well first of all,  the Federal Reserve is an Independant agency"

https://www.youtube.com/watch?v=CM2vMHx46ww

ALANMUTHAFUKKENGREENSPAN in his own words

Mon, 11/03/2014 - 22:21 | 5409155 usednabused
usednabused's picture

ALANMUTHAFUKKENLIEINGREENSPAN and/or the same for FABER

Mon, 11/03/2014 - 22:24 | 5409168 ebworthen
ebworthen's picture

PONZI!

Don't forget to not vote tomorrow!

Mon, 11/03/2014 - 22:52 | 5409280 kchrisc
kchrisc's picture

Don't forget to go to the polls to pretend to pick the latest crop of ponzi administrators and brutality directors.

An American, not US subject.

Tue, 11/04/2014 - 00:43 | 5409537 Harry Dong
Harry Dong's picture

Point of fact. Ponzi actually exploded and then imploded in about six months total. Did not take a long time.

Madoff had much better results...time and $$$ both.

And Finally, I'm in the same line to cast my white pebble...bet I can make it skip 12 times in the lake!

Mon, 11/03/2014 - 22:29 | 5409182 ebworthen
ebworthen's picture

O.T., sort of:  Donetsk and Luhansk voted yesterday to become independent of the Kiev neo-Nazi putsch.

http://www.ibtimes.com/russian-troops-surge-ukraine-donetsk-luhansk-elections-reveal-winners-1717678

Mon, 11/03/2014 - 22:47 | 5409266 IronShield
IronShield's picture

Let's get the vote out!  Yes we can!  You didn't build that!  The Government creates jobs, not businesses.

Yeah, voting doesn't matter.  Tools, one and all.  #Bitchez

Mon, 11/03/2014 - 23:20 | 5409367 Spitzer
Spitzer's picture

This is going to be a good one after the fact...

Good on you Marc you swaggering sex tourist

Tue, 11/04/2014 - 00:22 | 5409488 Youri Carma
Youri Carma's picture
The whole shebang -- More Americans `Can’t Afford’ to Buy Homes, Faber Says
http://www.bloomberg.com/video/marc-faber-on-japan-bonds-economy-gold-and-oil-c0NjyqEtSV~IzADmzO8Tkg.html

Tue, 11/04/2014 - 00:24 | 5409496 polo007
polo007's picture

According to Sprott Global Resource Investments Limited:

http://sprottglobal.com/thoughts/articles/what-greenspan-latest-talk-means-for-gold/

Friday, October 31, 2014

I traveled last week to the New Orleans Investment Conference, previously known as the ‘Gold Show.’ Jim Blanchard, a man known for promoting the right to own gold during the Nixon era, started the conference in 1974.

Early on, the conference was a gathering place for investors in precious metals. Speakers such as Rick Rule broke out into the investment scene through conferences like this one.

I’ll report later on the many speakers who attended the conference - and try to boil down some of the salient points from the highly valuable conference (attendees took nearly a week away from their regular lives to attend).

For now, I’ll confine myself to the headline speaker of the show – former Fed Chairman Alan Greenspan – and what his comments could mean for gold investors.

We did, though, learn a few important things about the Fed.

First off, Greenspan claims he has always remained true to Austrian economics and the principle of sound money. He fell into his role as Fed Chairman purely by accident, he claimed, and what he did there, he did it because he had to.

He explained that the capital needs of the Federal government were so massive that the only way to prevent disaster for the rest of the economy was to keep feeding the beast with cheap money. If the Fed hadn’t created and circulated new money, the Treasury’s insatiable demand for capital would certainly have ‘crowded out’ the rest of the economy, wrecking the entire private credit system.

Political realities, he explained, in the form of entitlement spending and off-balance sheet obligations of the US government, trump the need for sound money every time. It wasn’t his fault – that’s just how the system works. It’s set up to redistribute income from savers, who lose income because of low interest rates, to spenders.

In other words, Greenspan was a man who was forced by circumstance to go against his beliefs. Coming to the show, I had expected to disagree with Greenspan, but what I found was that the Fed Chairman was saying exactly what we have believed all along. Sound, stable currency is incompatible with the welfare state. Greenspan may have slipped away from the path, but he’s a great spokesperson for our message.

The Fed is unlike any other business in the world. It’s the only one that we know of that literally creates ‘something from nothing.’

The Fed wills new currency into existence, which it can then ‘sell’ by charging interest. Every dollar comes into existence as a debt due to the Fed; the more dollars are out there, the more money the Fed makes. The interest it receives is ‘pure profit.’ So it’s no surprise that as the government’s demand for capital has increased, the Fed has ‘accommodated’ that demand. Even if the Fed has to lend the government the money to pay its interest, that new money costs nothing to create, and it adds to the bottom line.

We did get one striking admission out of Greenspan. The Fed is not independent of the government, he said, calling suggestions to the contrary ‘naïve.’

Greenspan didn’t speak much to role of the Fed. He didn’t talk about inflation targets, or comment on how the Fed could help grow the economy, as he would have if it had been a New York Times interview I’m sure.

Hidden in his answers, however, was a big prediction for how the Fed will likely act in the future.

It’s not about juicing the economy or keeping the currency stable, although those are certainly justifications that are used.

The truth is, the Fed is merely adjusting supply to meet demand. That’s what he meant when he said that the Fed had to increase the supply of debt to avoid the private sector being ‘crowded out’ of the market.

Its mission isn’t to keep the currency stable, it’s to help fund the spending of the US government, and to defend the banking system.

This suggests that as long the US government resort to high levels of debt, the Fed isn’t likely to decrease the supply of money.

Greenspan might have an inkling of something he’s not telling.

Here’s what the former Fed Chairman had to say about the direction of gold and interest rates:

“Gold – measurably higher. Interest rates – measurably higher.”

Tue, 11/04/2014 - 01:00 | 5409569 Schmuck Raker
Schmuck Raker's picture

I met Marc in a bathhouse on Koh Samui, and he told me to buy rice paddies.

That was like 5-10 years ago. I did, and do, think it's a good idea.

I haven't lost money.

 

 

 

I think it was Marc Faber....

Tue, 11/04/2014 - 01:02 | 5409572 Atomizer
Atomizer's picture

Fuck you Al Greenspan. You did say burning down all the primary housing inventory was a secondary fix to the massive NIJA loans released into the market.

We don't hear about Moody's, robosigning or triple A++ debt rating vehicular suicide CDO Santa Claus stocking surprise. Why former FOMC maestro?

Burning down the Federal Reserve should have been the viable option. What a irony. Your words using housing replaced. CNBC Archived feature! 

Tue, 11/04/2014 - 01:47 | 5409630 yepyep
yepyep's picture

Why do my comments keep getting deleted?

Tue, 11/04/2014 - 01:57 | 5409639 tradewithdave
tradewithdave's picture

Uhh... yes you did. 

http://tradewithdave.com/?p=22521

 

(just in case you missed previous links to the video declaration of interdependence)

Tue, 11/04/2014 - 01:59 | 5409641 the grateful un...
the grateful unemployed's picture

sometimes things go wrong, sometimes they go right, and sometimes what you think is important becomes irrelevant. most of the teeth gnashing over economic policy could all be rendered beside the point. one if the currency loses the store of value and is made strictly transactional. then the only thing money is good for is what it was always good for, trading goods and services. the notion of credit still exists without paper.

Tue, 11/04/2014 - 02:15 | 5409656 WTFUD
WTFUD's picture

I would like Woody to play GreenSpam with Spielberg directing. One big cozy circle luvey jerk off. Barry can play a cameo role walking by pulling a golf trolley.
I wonder if behind closed doors they laugh at us; nah , of course they do, even to our face.

Tue, 11/04/2014 - 02:34 | 5409669 hedgiex
hedgiex's picture

Apart from gold, Marc Faber still recommending for diversification into papers. Papers of the Predators ? Stick to physicals that you can control and enjoy the entertainment of preys (not listening) being skinned.

Tue, 11/04/2014 - 02:59 | 5409685 Paracelsus
Paracelsus's picture

No one here ever mentions how the military are going to react when handed the baby with the crappy nappy.

It will be interesting to see who follows whose orders,to open fire on whom (hungry protesting Grannies?).

In order to placate the public there will have to be a blood sacrifice of the Banker elite and their families.

I think many will be taking extended vacations to Latin America or somewhere the hitmen can't find them.

This whole shebang has been patched together with soon to be worthless OTC derivatives contracts.

When the stock market folds there will be a few pissed retirees wondering who lost their IRA accounts.

Can you say "Corzined" mofo?

Tue, 11/04/2014 - 04:09 | 5409718 Notsobadwlad
Notsobadwlad's picture

I am thinking that Marc came to the wrong conclusion.

The Fed is not independent. It is linked globally through the global banking system which is owned by the international banks and the banks are owned by some tightly connected families... and these families are the handmaidens of Lloyd Blankfein's god.

What Alan Greenspan had actually said is that the Fed is not accountable to the US government.

Tue, 11/04/2014 - 07:21 | 5409814 buzzsaw99
buzzsaw99's picture

Welcome aboard the UST-train faber-bitchez. Better late than never.

Tue, 11/04/2014 - 08:44 | 5409947 AdvancingTime
AdvancingTime's picture

We can only pray Japan is called to task and forced to pay for the economic sins it is involved in, it would let the world know this will not work. Japan's public debt, which stands at around 230% of its GDP and is the highest in the industrialized world. They are past the point where they can return to a "free and fair market" interest rate marketing their bonds to the world and still be able to pay the debt service.

The moment the Japaneses stock market fails to rise enough to offset inflation and the people of Japan realize that even a weaker yen will not help we will see a tsunami of money fleeing Japan. This will constitute the end of the line for those left holding both JGBs and the yen. This has been a long time coming and I contend the cross-border flow of money leaving Japan is why some stock markets have remained so resilient . When Japan crumbles it will be felt across the world. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/japan-sliding-towards-abyss.html

Tue, 11/04/2014 - 08:49 | 5409960 smacker
smacker's picture

Greenspin is on TV record recently stating quite clearly that the Fed is not answerable to anyone (ie govenment, regulators and LE and no one can challenge what it does). It is essentially above the law.

If that is not "independent", what is.

Tue, 11/04/2014 - 10:35 | 5410314 Shizzmoney
Shizzmoney's picture

"<INSERT INDEBTED COUNTRY HERE> is engaged in a Ponzi scheme"

Tue, 11/04/2014 - 12:17 | 5410720 messystateofaffairs
messystateofaffairs's picture

I thought the Fed, .gov, the treasury and Greenspan worked for Mr. Rothschild and his exclusive family club. What's this independence talk all about?

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