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Marching In The Wrong Direction
Excerpted from Paul Singer's letter to investors,
MARCHING IN THE WRONG DIRECTION
ZIRP and QE have levitated a number of asset classes without generating sustainable, powerful economic and employment growth in the developed world. The asset price appreciation has delighted investors, and even those who are queasy and concerned about the unsoundness of the post-crisis policy landscape have been coaxed into believing that the low volatility and high asset prices actually have predictive power in suggesting positive economic and financial outcomes for the global economy and financial system. After all, the thinking goes, if ZIRP and QE were going to cause serious generalized consumer price inflation, then it certainly would have appeared by now. The very “discrediting” of the “serious inflation” crowd gives most investors comfort that policymakers are correct and the skeptics are just dyspeptics or partisans.
We cannot possibly make the following statement any more clearly or strongly: Policymakers and pundits, with rare and courageous exceptions, are marching (and looking) in precisely the wrong direction. After the 2008 financial crisis, the developed world has barely experienced positive growth despite six years of zero-percent short-term interest rates and multiple bouts of money-printing that have taken a variety of forms and that have been announced with a plethora of rhetoric and obfuscation. At the start of the crisis, there was also a massive amount of government spending, but it was dominated by political payback and an attempt to maintain the kinds of jobs that had made sense only during the distortionary boom. Of course, the government spending had a supportive effect on the economy (as all spending programs do), but as designed it did not and could not create lasting and catalytic effects on growth.
Over the entire post-crisis period, there have been effectively no significant structural improvements in the basic ability of the developed world to grow faster. We have described pro-growth policies at length and in depth, but sadly they are nowhere to be found.
Thus six years of QE and ZIRP and a few rounds of make-work and benefit payments have failed. At present, only the U.S. can claim something that looks like decent growth, but that is only in comparison with its “peers.” We have argued above that the appearance of growth is fake and delusionary. But globally, it should be beyond debate that the policy mix has failed. Many (if not most) politicians and “experts” refuse to acknowledge this, and en masse seem to believe that the failure of inflation to reach its “targets” is the problem – as if it is inflation, and not growth, that societies need. The mantra they repeat incessantly is that money-printing, ZIRP and stimulus spending have succeeded, and that things would be much worse without those policies, and that the real problem is that governments have not done enough radical monetary easing and deficit spending!
Historically, as monetary debasement gets underway, its superficially-positive effects erode over time. Investors and citizens learn the game and front-run the debasement, bidding up asset prices. The distortions caused by debasement erode the citizenry’s motivation to engage in real sustainable business and consuming activity. The difference between winners and losers gets exacerbated, as speculators increasingly take the prize at the expense of savers and salaried people. Monetary manipulations lead to bad investment decisions, which in turn causes hidden shortfalls in the standard of living, which in turn engenders public resentment, especially because the reported statistics on jobs and income paint too rosy a picture.
At present, the situation in developed countries can be characterized as follows: Asset inflation is roaring, but it is sectoral and skewed. Consumer inflation is understated, and thus growth is overstated. Employment data is misleading. This combination of factors means that ordinary citizens are not doing well, but the owners of high-end everything are doing just fine, with few concerns for the middle-class people who know things are not “all right,” but cannot put their finger on why.
At or near this stage, either because of citizen resentment and distrust or (in the case of Europe) a pronounced weakening of economic activity despite all their efforts and experimentation, monetary authorities may decide that the real problem is that they just haven’t done enough. Historically, this is the point at which the risk rises that central bankers will take monetary actions that destroy their societies. Once the “tiger by the tail” phase of monetary debasement has gotten started, there has never been a good exit. Past that point of no return, the collapse of money and/or asset prices becomes the inevitable denouement, with the only questions being the timing and the severity of the collapse. Our views are formed by an examination of historical episodes of societal monetary collapse. The script is not “baked,” but the common elements are clear and present.
Given that the authorities are so far behind the curve in their understanding of the modern financial system, we have little hope that they can revert in time to the correct mix of policies, preserve the fiat money regime and also get the developed world growing again while whipping into shape the long-term entitlement obligations which are obviously unpayable in their present form. We wish we could report that a counter-movement is afoot, with some cadre of truth-tellers who are making the case for marching in a different direction, but sadly we cannot. The argument for “doing more” or “doing more of the same” is universal. The “risk” case is only being made circumspectly by people who are being ridiculed as clueless Cassandras.
Cassandra was proven right, of course, but we have no need or desire to be right about these views. Societal stability is a good thing for all, including skeptics and pessimists. Societal breakdown and uncontrollable inflation or financial crises are massively destructive, and typically accompanied by very bad policies. No disciplined investment approach can “work” in such an environment, in which preserving the real value of capital becomes difficult if not impossible. In extremis, political governance drifts toward totalitarianism, scapegoating and violence. Let us hope that leaders emerge who understand these realities and have the courage and political skills to reorient their societies toward growth, stability and soundness.
Our belief is that the global economy and financial system are in a kind of artificial stupor in which nobody (including ourselves) has a good picture of what the next environment will look like. The difference between “them” and “us” is that they mostly think that policymakers will muddle through, but we assume that a very surprising and scary environment lies in wait.
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http://www.youtube.com/watch?v=IxaZTc_3B5s
CrossTalk: Stupid Wars
Of course they march, talk and point in the wrong directions, for when one look at the landscape rather clearly, cynically and realistically, most of the "problems" stem form the PTB's very own making.
Duh
To the PTB, there isn't a problem. How else would you expect those in power to behave other than in their own interests? Human nature..
made me think of this claasic scene from Planes, Trains, and Automobiles;
"You're Going the Wrong Way!"
http://www.youtube.com/watch?v=_akwHYMdbsM
Marching In The Wrong Direction
.."But unfortunately for most, it will ultimately prove to be a pyrrhic victory when this long running scheme unwinds, and people start to stand up and say no, and stop acting out of emotions and anger and spite at each other. And when enough of them do it, there will be real change." jca
05 NOVEMBER 2014
Gold Daily and Silver Weekly Chart - Send In the Clowns
http://jessescrossroadscafe.blogspot.com/2014/11/gold-daily-and-silver-w...
Can we at least "talk" about regulating OTC derivatives? Oh, and rating agency compensation?
I want to know how long they can keep the market hovering at ridiculous levels on lower and lower volume.
Rush Limbaugh blasts Jon Stewart over botched CNN appearance:
http://tinyurl.com/pbvddgd
4th Turning Bitchez !!!!!!!!!!!!!!!!!1111111
The lobbying efforts will keep our leaders marching to the tune of corruption. The restoration tune will only come after a full reset or revolution.
How long will the fried chicken last....that's the only real question.
Till the votes run out
At Chik Fil A it lasts a year.....
'direction'. lol
marching straight toward hell in a hand basket
What took you so long? Two-thirds of the American people did not want the bailout of the banking system. But it went ahead anyway. 93% of the American people want GMO labeling. But the serfs can't have that. 6,000,000 cases of mortgage fraud led the financial crisis. Not one bankster arrested. Ordinary people no longer matter in the land of the free. Only the 0.1% matter - like Singer. So all his complaints ring false - like a three dollar bill with Putin's portrait on it.
Preach it, Brother.
This is a main reason we will see little relief from the new Congress. Repeal of Glass-Steagall opened up the crime of the century allowing banks to steal the wealth of people. The heist was pulled off by Reptiles and Dodocrats under the Clinton Administration.
McConnell has long been legislatively allied with Wall Street. He voted to repeal the Glass-Steagall separation between traditional lending and risky securities trading in 1999. He voted to bail out the banks in 2008 and to release an additional round of bailout funds in 2009. The next year, he voted against Dodd-Frank. For the 2014 elections, he raised $6.4 million from the financial sector, more than double what he brought in from any other industry, according to the Center for Responsive Politics. Six of his 10 biggest donors for this election cycle were political action committees tied to large financial institutions, including JPMorgan Chase, Goldman Sachs and Citigroup.
The wrongest of wrong directions has to be Americans looking toward politicos and central banksters as if they were the architects of prosperity, when nothing could be further from the truth.
Agreed. And amazing that the populace looks to them. It has to a form of mass delusion through media.
The Wabbit told me to take a left at Albi-quer-key
I think I will do that!
Not being funny....The fed and the gov has screwed us.....so I drink as much as possible....Every Damn Day
the federal government now serves as an intermediary to
serve up the sovereignty of the people to nameless
and unaccountable international corporations. get it?
research tpp. ("trade agreement"). they are telling
you, right after the election results were in, it is war
and tpp to be shoved down your dead throat by the
"best and the brightest", your authorities who have made
a nice trillion dollar industry out of stealing your privacy,
your expertise and labor. not a bad days work, eh?
.
The Point - Are You Sleeping
http://www.youtube.com/watch?v=At2IIzug0WQ
Reminds me of the Pink Floyd song....Rabbit digs a hole and then digs another one
Remember: It didn't used to be this way.
Is that a profound comment, or what? Not even fucking close, but it does suggest a possible framework here: (1) At one time, things (eg, the economy; the invisibility of Lena Dunham) were OK vis-a-vis the shit we're experiencing today. (2) Something happened (3) Today, things are shit.
How do we progress to a solution? Easy, MFers: By regressing to stage #1. Yes, we progress via regress.
Not true? Then defend whatever happened during stage 2 that turned everything to shit.
We just had an election. People changed direction. Let's see.
No, they just changed one set of bought-and-paid-for goons for another.
"Governments change, the lies stay the same" - Goldeneye, 007.
We have to bomb ISIS because we have to bomb ISIS.
Right. Moving on.
With everything the US had going for it and with all the riches it has stolen from most of the countries in the world, include the prosering privlige of having the worlds reserve currency, you would think they would be way better off as a country.
This is all proof to show that a useless corrupt Gov can piss it all away!!! yes your exceptional!!!
Who can every US citizen blame, Hmm... how about themselves!
When a log rolls over we all drown. It won't be long till one does and then we are all in - poo. ?
"If you want to keep your direction, you can keep your direction."
I'm looking forward to the collection of Barry's Famous Quotes when he retires.
"Policymakers and pundits, with rare and courageous exceptions, are marching (and looking) in precisely the wrong direction."
No, they are marching to the bankster's treason drum.
An American, not US subject.
"Better check yourself, before you wreck yourself!"
Remember that the way we got into this kind of predicament was through the SUCCESSFUL application of the methods of organized crime to the political processes, until the biggest gangsters, the banksters, could control what the government did. The result was ever increasing spheres of legalized crimes, followed by ever increasing domains in which the rule of law would NOT be enforced against the banksters and their buddies.
The foundation of the political economy for more than Century became private banks being legally allowed to create the public "money" supply out of nothing as debts, while the government continued to force everyone else to accept that fraud, and live their whole lives within that context.
The steady pattern from those historical points onwards was that those who had the legal privilege to make the public "money" supply out of nothing as debts constantly found more and more excuses to do so, while gradually, the enforcement of any of the few laws that still remained to prevent them from doing that were more and more deliberately NOT enforced.
A recent article that summarized, yet again, the ways that the financial crises precipitated in 2008 were inside jobs, based on those who warned about that being deliberately ignored, which was since followed up on by the American "Justice" System deliberately NOT enforcing the rule of law against the biggest banks, that most participated in making as much fraudulent "money" out of nothing as possible, is here:
http://www.rollingstone.com/politics/news/the-9-billion-witness-20141106
Meet the woman JPMorgan Chase paid one of the largest fines in American history to keep from talking
By Matt Taibbi, November 6, 2014.
There is nothing surprising in that article to anyone who was already paying attention, suck as to William K. Black, et alia ... The overall tragic trajectory is that the best organized gangs of criminals were able to apply the methods of organized crime to capture control over the government more and more, for at least a Century, at an exponentially accelerating rate, so that the American (and globalized) systems became based on runaway systems of legalized lies, backed by legalized violence, wherein the rule of law was steadily undermined and eroded, to the point that counterfeiting the public "money" supply by privately controlled banks was completely legalized, especially since any laws that still theoretically existed to prevent that being done excessively were deliberately no longer enforced.
Since that is the REAL situation, this article by Paul Singer above is another gross understatement of the problem, on every level, as were these two previously republished articles, that I also commented upon:
http://www.zerohedge.com/news/2014-11-04/paul-singer-slams-fake-world-fa...
Paul Singer Slams The Fake World: "Fake Growth, Fake Money, Fake Jobs, Fake Stability, Fake Inflation Numbers"
http://www.zerohedge.com/news/2014-11-04/brief-note-capitalism
"A Brief Note On Capitalism"
Singer stated: "After the 2008 financial crisis, the developed world has barely experienced positive growth despite six years of zero-percent short-term interest rates and multiple bouts of money-printing that have taken a variety of forms and that have been announced with a plethora of rhetoric and obfuscation."
First of all, the 2008 financial crisis was an INSIDE JOB, done by people who appear to personally be a lot like Paul Singer. His criticisms are those of a reactionary revolutionary, who presents a superficial analysis of the problems, which then results in bogus "solutions" that follow from that kind of superficial analysis.
What appears to be secondary to most people, but should actually be the foremost concern, is that infinite economic growth on a finite planet is absolutely impossible. The TWO ways to see the problems are FIRST, WITHIN THE HUMAN WORLD, and SECOND BETWEEN THE HUMAN WORLD AND THE NATURAL ENVIRONMENT.
The first concern with runaway systems of fundamentally fraudulent financial accounting is that those drive towards an irreconcilable social polarization. The second concern with civilization controlled through enforced frauds is irreparable destruction of the natural world, where not only does the government legalize frauds, but also the government does not enforce the fewer and fewer remaining laws that are supposed to stop the most excessive of those frauds.
The runaway social polarization that was caused by the ways that the public powers of governments were privatized, due to the methods of organized crime, such as bribery, intimidation, and assassination of those who could not otherwise be bribed or intimidated, resulted in systems which became almost inconceivably crazy and corrupt, wherein the government GAVE AWAY the power to make the public "money" supply out of nothing to private banks, and then steadily allowed those banks to do that more and MORE, with less and LESS legal limits, including that eventually the few remaining laws against that fundamental fraud would no longer be applied against the biggest banks.
Paul Singer's articles remain superficial in blaming the politicians, or pundits, or even the public, while the SOURCE of those problems is the same as the SOURCE of the "money," namely private banks which are allowed to make the public "money" supply out of nothing as debts, which form of legalized fraud became more rampant for decade after decade, while, since 2008, it has become much more painfully obvious that the biggest banks, that committed the most outrageous excessive abuses of their power to create more "money" out of nothing as debts, would NEVER be punished for doing so!
However, that kind of deliberate ignorance found in the series of articles by Paul Singer is relatively trivial compared to his more general profound ignorance towards the natural environment, and the real limits of natural resources. All of the "money" made out of nothing as debts has been "paying" to strip-mine the planet. The debt slavery treadmills have been driving human beings to behave in criminally insane ways, which deliberately ignored the ecological and environmental realities, because human civilizations were actually being controlled by enforced frauds, or systems of legalized lies, backed by legalized violence, wherein governments became the enforcers of frauds, while then those governments stopped being the entities that would punish to prevent frauds.
Singer's series of articles are missing the mark by light years. Singer is grossly understating what is wrong, and what the real mechanisms for that are. Most importantly, not only does he not address the real reasons for the runaway social polarization driven by the excessive successes of systems of legalized lies, backed by legalized violence, overthrowing the rule of law, he even more so does NOT address the basic limits to growth, which are actually behind the bigger transformations that Neolithic styles of social pyramid systems are facing. Our civilization is currently responding to those real limits in ways which are becoming more and more criminally insane, due to the social facts that civilization is actually controlled by enforced frauds, since the entire political economy is based on enforced frauds, which are getting worse, faster, as the few remaining laws against those frauds are no longer even being applied anymore.
Singer PRESUMES that the goal SHOULD be a "return to growth." That deliberately ignores the limits of the natural environment of planet Earth, which would require radically different human, industrial and natural ecologies to evolve, to enable any such "growth" to stop acting like a cancer or a parasite killing its host.
Since Singer appears to be unwilling or unable to perceive the fundamentals that governments are the biggest form of organized crime, which are controlled by the best organized gang of criminals, the biggest gangsters, the international banksters, he does not appear to understand anything about the SOURCE of those problems, which is basically the same as the SOURCE of the frauds, which are being enforced as the public "money" supply made out of nothing as debts. Rather, Singer annoys me by looking like a pompous billionaire blaming everyone else than billionaires who have taken the maximum personal advantage from operating inside of the established systems of government enforced financial frauds being perpetrated by the banksters and their buddies.
Singer appears to be even less able and willing to understand the degree to which the entrenched fraudulent accounting systems that dominate our whole civilization at the present time are able to operate with attitudes of evil deliberate ignorance towards their real environment, as those enforced frauds finance the processes of runaway social polarization and destruction of the natural world.
Any deeper analysis of the real problems has to more directly address and deal with how and why our society is being controlled by enforced frauds, as runway systems of legalized lies, backed by legalized violence, which are spinning out of control. Any such deeper analysis then indicates that the only realistic solutions have to face those social facts. Singer appears to me to be merely like a boy skipping stones across the surface of the pond, without thinking about what is beneath the surface.
The basic realities are that money is measurement backed by murder. The ways that we actually operate those combined money/murder systems are through the maximum possible deceits and frauds, which are driving the social polarization and destruction of the natural world over the brink of cliffs far steeper and taller than Singer appears to perceive, which cliffs we are currently headed to go over, after we bounce off the walls of diminishing returns from being able to exponentially increase the strip-mining of the Earth's natural resources, as the only real way to keep the runaway debt slavery systems, which have generated numbers that have become debt insanities, going ...
IT IS SERIOUSLY MARCHING IN THE WRONG DIRECTION TO TRAVEL TOWARDS THE GOAL OF MORE ECONOMIC GROWTH BASED ON MORE STRIP-MINING OF THE PLANET'S RESOURCES. And, it also Marching in the Wrong Direction to continue to go forward on the basis of systems of enforced frauds, which is what we are doing now!
Tragically, billionaires are too politically powerful within the established political systems, while most people are easily able to deliberate ignore what they are doing to their own future, and the future of their children, and children's children even more so, by being somewhat "successful" within the established systems of enforced frauds, strip-mining the planet as fast as possible, in order to keep the debt slavery treadmills turning over. Although not as extreme as the immediate imperatives of militarism, in which short-term survival overwhelms any concerns for longer term survival, the economic systems based on enforced frauds deliver the greatest economic "success" to those who take the maximum short-term advantages from the established systems of enforced financial frauds, which then enables billionaires like Singer to act like unrepentant assholes, who can continue to spout their preferred kinds of bullshit about the economic systems, while they are most able to influence the political systems to make those get even worse. Meanwhile, similarly, all the normal people are still stuck inside their own short-term horizons, even more so. Hence, our civilization as a whole continues to be Marching in the Wrong Direction to the degree which is collectively suicidal, while those participating in that march towards collective suicide continue to personally profit from taking advantage of the fundamentally fraudulent financial accounting systems.
Guys like Singer, who benefit fanatically from having done that, are the most able to project the blame for what is going wrong out onto everybody else, while guys like Singer appear to remain comfortably ensconced inside their bullshit ideologies about what "capitalism" should be, and how the solutions are that we should return to that kind of "capitalism," whereas that use of language was always bullshit, which got exponentially worse, as the realities of the enforced frauds automatically got worse faster.
The current system cannot be sustained nor can it be reversed in a meaningful way to a sustainable level without a political upheaval. So the only possible direction is towards a collapse and emergence of a sustainable system afterwards. All the policies being currently taken while delaying the collapse, also make the collapse comprehensive and a temporary recovery to another unsustainable state less likely, which is a good thing.
So the policy makers are marching in the right direction.
"the policy makers are marching in the right direction."
Look in my binoculars.
You can see Landing Strip One's green and pleasant land.
Proof positive that A. Politicians are corrupt by definition and B. you print enough money you can get even the harshest critic to shut up.
Artificial stupor?
Our 401s have doubled, we got 4% motgages and $2.80 gas. QE came and went and left gold in the fetal position. You want to beat your head against a brick wall for 5 more years?
/s