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The System Is Terminally Broken
Originally posted at Investment Research Dynamics,
This is a world where nothing is solved. Someone once told me, ‘Time is a flat circle.’ Everything we’ve ever done or will do, we’re gonna do over and over and over again. - Nic Pizzalotto, “True Detective”
The Fed has formally “ended” QE, but it hasn’t really. The Fed will continue reinvesting interest on its portfolio in more bonds and it will rollover maturities. We saw what happens to the stock market a few weeks ago when Fed official James Bullard asserted that the Fed needs to start raising rates: the S&P 500 quickly dropped 8%. Right at the bottom of the drop, the very same Bullard issued a statement suggesting that QE should be extended. This triggered an insanely abrupt “V” move back up to a new record high for the S&P 500. Bullard either did this intentionally or is a complete idiot.
The stock market can’t function without Federal Reserve intervention. The stock market lost 8% quickly on just the thought that the Fed might start raising rates. Imagine what would happen if the Fed decided to “experiment” by shutting down its market intervention operations – both verbal and physical – for a month…
As for QE, if the Fed has achieved its objective of stimulating the economy, why doesn’t it start removing the $2.6 trillion of liquidity that it has injected into its member banks (LINK)? This was money that was supposed to be directed at the economy. How come it’s sitting on bank balance sheets earning .25% interest? That’s $6.5 billion in free interest the Fed continues to inject into the Too Big To Fail banks. But why? What would happen if the Fed decided to “experiment” by removing this massive dead-pool of money from the banks? The money isn’t really “dead,” it’s keeping the banks from collapsing.
I’m interested to watch the Government Treasury bond auctions now that the Fed is not there to soak up anywhere from 50-100% of each issue. I wonder if the banks will be moving their $2.6 trillion in Excess Reserves into new Treasury issuance. Obama is going around broadcasting the lie that the Government’s spending deficit in FY 2014 was something like $600 billion. Yet, the amount of new Treasury bonds issued increased by $1 trillion over the same period. Either Obama is lying or the accountants at the Treasury committed a big typo. Either the Fed has found a way to continue opaquely monetizing new Government debt issuance, or the market is soon going to force U.S. interest rates up much higher.
By continuously intervening in all of the markets, the Fed has destroyed the information transmission system that is built into freely trading markets. If the Fed left the gold market alone – instead of hammering away with the naked shorting of Comex paper gold – the price of gold would be significantly higher than where it is now. This would be the market’s signal that our system is indeed terminally broken.
Instead, the Fed keeps interest rates artificially low in hopes of stimulating a recovery in consumption and housing. But if this is working, how come the country’s two largest retailers have begun Black Friday shopping discounts on November 3rd (LINK)? And the Fed keeps pushing stocks higher to new record highs in order to “stimulate” confidence and faith in the system. The fact that the stock market craps its pants when the Fed steps away for a split-second tells us just how broken this transmission mechanism is. That 8% drop 4 weeks ago is the real signal that our system is terminally broken.
And now it’s emerging that the Q3 GDP report was greatly inflated by a statistical error which erroneously boosted the Government spending component. It was this component that juiced the GDP report because residential investment (housing) and personal expenditures (consumption) both tanked. Imagine that – a statistical error artificially boosted the GDP report right before a national election…
A colleague of mine has concluded that the QE infinity policy implemented Friday in Japan is the market’s signal that the entire western fiat system is getting close to imploding. I’m inclined to agree with him. Wall Street, the financial media and politicians are pointing at Europe and Japan as the source of the problems. But the heart and nerve center of the western fiat currency/debt Ponzi scheme is right under our nose in this country. The U.S. financial system is in worse shape than both Japan and Europe. The only difference is that the U.S. officials do a much better job hiding these problems.
Time is starting to run out for ability of the U.S. to keep kicking the can of collapse down the road. I really believe that the full-on intensity of the recent intervention in the precious metals market is the most obvious signal of time expiring. China has been accumulating physical gold at a stunning rate and now some research indicates that China’s Central Bank may have accumulated significantly more gold than anyone previously thought (LINK). China has most likely maneuvered itself into owning the world’s largest stock of gold, which is where the U.S. had positioned itself after WW2. China has done this to a large degree by buying massive quantities of western Central Bank gold.
We’ve come full circle, only with China in the Midas throne this time around. Eventually the world is going to revert back to a gold-backed currency system. When this happens, the U.S. will be required to demonstrate that it possesses the amount of gold that it reports to own. The only caveat here is that I believe that the U.S. will start WW3 before it’s forced to reveal the truth about its empty gold vault. That’s how broken our system really is…
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One can only hope that collapse is close at hand. The absurdity of this world is showing more and more each day. Events are becoming more bizarre as time goes on. For instance, how can a 5 year old be kicked out of his school for the high crime of being related to his uncle who happened to go through a divorce in 2012? https://www.youtube.com/watch?v=u1b8YZXqqRs
Agreed however I would substitute "hope" with "pray." Very serious demonic forces are at work and it will take a miracle to keep the devils from wreaking havoc on the innocents of the world as their unholy system collapses.
And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved. Acts 2:21
Dude, china is just as bad if not worse than us.
The only difference is they have the factories(the bedrock of a stable, functioning, economy)
and we don't.
But on the flip side, when challenged, we have proven ourselves to be a resilient bunch and can rebuild production in a hurry....
All it requires is a War...
Uranium, it's the new gold.
right. since fukushima its been travelling at a greater loss to production costs than has silver
There will be no time to rebuild. It the USA goes to war with China, Russia, or both, then it will go Nuclear.
We are so doomed.
Imagine what would happen if the Fed decided to “experiment” by shutting down its market intervention operations – both verbal and physical – for a month…
Imagine if the Fed decided to experiment and shut down its market interventions in GOLD for a day?
I see what you did there. +1
Nope, it's Thorium.
china has something more.... a population multiplicator by 4.33...
equal extermination = usa 0 - china 3
ho, i forgot to count your drones :)
And why is CNBC so thrilled with this twisted outcome? Because Obama's donor class is fat and happy.
Bill Maher on election results: racist voters getting revenge on 'first black president'
http://tinyurl.com/otphn9r
Time is running out for everything, but as it runs out it seems to slow down. Then it will speed up again just before the collapse.
So? Preaching to the choir here brother.
"The only caveat here is that I believe that the U.S. will start WW3 before it’s forced to reveal the truth about its empty gold vault. That’s how broken our system really is…"
Roger on the "U.S will start WW3". That is the only way to kick the can down the road some more once their bluff is called.
That's when China would be forced to reveal the total gold holdings that the West has handed to them at a huge discount. It'll be hard for the US to finance a war when their money gets neutered. They'll have to steal pension funds to pay for it.
World War III will be rather quick.
World War IV will be fought with stones. (Einstein)
Even if they stole the Pension funds they are worthless FIAT! There is nothing of value left to steal other than Real Estate, and Timber and Minerals!
Pension funds will support the war for 1 day, 2 hours and 21 seconds. At most.
We're about to outlaw war around here.
Hear hear! Finally call out the centre of the rot. Enough with the bullshit bashing of the rest of the world. Let the anglosaxon empire end. We have long since lost the right to rule.
The recent decline in silver from $19 to $15 tells me that the end is nigh. $19-20 silver was the perfect price range to keep the whole PM community depressed and questioning the future. It was the perfect bear-market rut. High enough to try and justify production costs and low enough to suppress any new interest/investing. But $15? Really? This range screams desperation along with shameful rambling price justifications, almost like a criminal caught in the act. Silver at $15 has people excited again.
Dog WILL hunt.
Agreed. But the cartel does not usually make mistakes - especially when they control the price. It may be that the cartel dropped the price in order to shift out of their naked shorts. If the price rebounds quickly we may assume they went long. Watch he USD.
$15/oz is a 6 pack of beer. shitty beer, too, not posh beer. Really? they really think thats comparable value
if ya'll haven't noticed, the price of most hard/petro commodities has fallen as the taper has drawn nigh and as the emerging markets have slowed. as a friendly aside, i would suggest waiting for a risk delevering, which should knock another 40-50% off the price of silver. THEN, and only then, fill your boots.
Man, what sort of overpriced shithole of a megalopolis do you live in? Recently paid 75 for a keg of Rolling Rock and 13 for a 12-pack of Bud.
If he is paying twice as much for his beer, the chance are YOU are living in a shithole compared to him.
Want examples?
Price currently comparable to 20 cigarettes in the UK. TPTB are so desperate. I can smell their dirty sweat from here. FORWARD!
The cheapest silve coin I can find is that of Kitco at $18+ per oz. A 20% rip off.
Woof
The US still has all the IRA's and 401k's that can still be taken. Still have a lot of time left.
The US still has all the IRA's and 401k's that can still be taken. Still have a lot of time left.
?????! Yes but they are all FIAT take all the FIAT you want, the only reason they take it from the peons is to stop them form buying things and to acquire real wealth, they can print more fiat and wont need to piss pensioners off.
The best clue that the fiat system and fiat global economy are near their end games is... the recent babble from Greenspasm.
Why else would Greenspasm jump the Keynsian ship, declare himself an Austrian economist, declare gold to be far and away the best money, and declare "the government made me do it" (meaning, we have to print whatever quantity of fiat the government asks)?
The end is near. And while forecasting time frames accurately is impossible (before the predicted action already gotten totally beyond control), everyone who has been too lazy to prepare for the end... has one last (and quite excellent) chance.
And Greenspasm hopes his "mea culpa" erases his decades of atrocities, and puts him on the right side of history. Now, if that isn't wishful thinking, then humans truly are hopeless.
Deathbed religion?
Everyone is captured by their own economy and even if aware of its hypocrisy will deny it until the end. Greenspan understood reality in his younger years but his employment, his economy, encouraged his Keynesian conversion. Only now in his twilight can he speak his truth.
"the recent babble from Greenspasm."
For him to say that he favored gold was shocking.
He's giving everyone the clue the Fed's game is about to fall apart.
That's kind of my take on it to. The TPTB don't do anything by accident. They don't misspeak or just wing it. There is a reason why Greenspan came out with such a shocking admission. I believe things are boiling over behind the curtain and that we will get a pretty good glimpse by January. Maybe the Swiss gold vote, the German gold theft, Japan going nuclear or a combination of all, some, none ...throwing up hands. Regardless, Greenspan speaking says soon.
Before Greenspan became the FED chairman, he was a goldbug. When he was running the FED, ghold was "bad" and dead "money". Now, he is a goldbug - again. Capiche??
humans are violent as is nature- eat or be eaten. this peacefull fun loving period needs to come to an end with justice as the highest order. instead of putting these so called self proclaimed experts (with the full brain wash support of the msm) on pedastals we should be marching them to the gallows for their autracities to civalization. first offence that imo would require the death penalty would be:theft of anothers labor via printing money... THE LIST IS ENDLESS, SO NO SHORTAGE OF CAPITAL OFFENSE PUNISHABLE CRIMES by these frauds...
start at the federal reserve and watch the roaches scramble for there lives!
anybody read the article about luxemburg? now that the irs is a global beaurocracy and is going after individuals in Switzerland why are they not going after the multinational corps in luxemburg???
how is it the irs isn't auditing the treasury? there are huge shananigans going on. obama is saying the debt for last year is 600 billion??? with over a trillion in bond sales???
the irs investigated paul ryan before it was even known to the public that he would be running. they put an undercover irs agent next to him on his flights to D.C
the irs is still going after u.s citizens who are broke, squeezing every last dime.
the corruption is criminal.
WE NEED A TAX REVOLT NOW !!!
No. Not a revolt. Just MURDER THE IRS! Pass HR25! The house bill is before Ways and Means right now. Don't screw around with these bastards, just dump em all out on the street... all told about 2 million if you include tax preparers, tax attorneys and accountant, tax planners, lobbyists, and of course the double dealing, sick bastard slime who inhabit the nation's capital (however, some 75 have become sponsor's of this legislation and truly deserve your vote).
Learn about it. Talk about it. Write about it. Check out the FairTax website.
Not enough space here to go into it. The income tax is probably the SICKEST piece of crap ever passed by our demented legislature... yet most people don't seem to get it. It needs to be talked about more. The apathy is a sign and symptom of a diseased society.
The disinterest of most ZH's on this subject is a sad thing.
The disinterest in the unFairTax is a good thing!
Under the FairTax proposal, the middle class buying tangible goods and services gets punished by a hefty 23% national sales tax rate, not including the local/state sales tax rate which is about 10% on top of that. Meanwhile the .001%ers are tax exempt on their investments.
Main Street gets crushed, Wall Street wins, as usual.
I can't believe you fell for that gimmick!
Common attack points. The FairTax is pretty simple, but it's not that simplistic. Go here, become informed, then comment.
There are other dimensions to the FairTax: 1) only under a consumption tax can the 4th amendment be restored (that's obvious), and 2) the oppressive complexity of the IRS Code allows the government to throttle your awareness (assuming you aren't brain dead and have a life to begin with, business-wise, meaning you plan ahead, are self-employed, have your own ideas about which activities are business activity and which expenses are business expenses, or etc) by injecting massive quantities of nonsensical and irrelevent considerations,
If most of your time is spent in front of a TV screen or a computer game, these last two considertions may not concern you.
PS, if you are an IRS employee: your way of life will be coming to an end soon. Sorry!
This National Sales Tax is also very unfair. It take no account of land value. Suppose two buskers (nice simple business to understand) have the same ability and put in the same effort. One performs on the best location in town and earns $100, and the the other occupies a less good site and earns $50.
Suppose your the national sales tax is 25%. Under your tax system the first busker is left with £75 and the second is left with £37.50, even though they made the same effort. Very unfair
Tax should be based on location value. The first busker should pay $50 for his location and the second busker pays nothing. They both earn $50 for the same amount of effort and the community effectively collects $50 rent from the first busker for the privilege of benefiting from the community's footfall.
Unfair? How old are you?
Aye mate! Been to the local pub 'ave we? (or ye been ere in the States lately? Perchance to that Buskers Irish Pub and Restaurant in Newport RI?)
Oh, and I didn't know that street performers (aka buskers) took land as a gratuity! I mighta dropped a deed in yer hat one day. So yer a landowner are ye then? Hmmm...
But all kidding aside: we're talking about the FairTax bill introduced into the national legislature here in the States. It's also known as HR25. To learn more, click on the link. It's different, and despiste what various trollsters wouild have you believe, it is indeed a fair tax.
PS: I don't think the FairTax applies to street people ...wherever they perform! And anyway, the FairTax is the only tax I've ever seen that completely unburdens poor people.
Duplicate post
>>>The income tax is probably the SICKEST piece of crap ever passed by our demented legislature...
Dammit, man, someone had to suck it up and stop the Kaiser.
I we hadn't stepped in, all Europe might have fallen under German domination, and the British Empire itself brought under threat.
So what ?? Getting afraid?
Bollocks.
An armistice prolly would have happened sooner without US intervention.
Who can say what else may NOT have happened, ie no Hitler etc., following a peace
on different terms.
Let's pass on a debate over the relevance of a tax on income to WWI (since you obviously haven't done your homework)... I would say the war was used by Marxists and progressives as an excuse to greatly expand the existing income tax which had been passed some years earlier.
But was it necessary to keep expanding it AFTER the war? NO. In its initial passage and its continuation, it was probably the SICKEST piece of crap ever passed by our demented legislature...
PS: for those of you who draw a very handy and hefty income from the workings of the IRS and the misery it inflicts on the average American (or at least on those of us who work for a living and especially on those who run small businesses ), your way of life will be coming to an end soon. But, not to worry. The return to economic health that follows the death of the IRS will create many new jobs. REAL JOBS.
I believe that there may be a saving grace here... our military just might not fight WWIII at the direction of an obviously unbalanced, demented lunatic Commander in Chief. Should he give the orders... I am hoping he will be removed from office quickly... and if "Joke" Biden twiches the wrong way... ditto.
How many glasses of wine did you have for dinner?
He is stoned on the Hopium.
Red Team/Blue Team are the Same Team.
They are all warmongers and will do it if they believe that they have any chance of saving their own necks. (Some chance is better than no chance I guess.)
Maybe red pill/blue pill are the same pill?
The us will pass on some kind of lie that the russians are about to send their nukes and we have to send our ...
don't expect any truths from these people.
Yes. We all know it's broken. All I wanna know is when do we break out the pitchforks???
but you overlooked this difference
The US has 20 aircraft carriers
If you believe that WWI started when the archduke was assassinated, then WWIII has already started.
cant run aircraft carriers without oil !
(or do they have nuclear powered these days?)
10 nuclear 10 not
All of the ELEVEN FLEET CARRIERS are Nuclear Powered.
But they are derelicts as that was used to fight, and emerge as victor, in the LAST WAR.
World War III will be fought with Strategic and Attack Nuclear Powered Submarines with each one armed with enough MIRV Nuclear ICBMs to take out entire continents.
THe Nuclear Winter, resulting from the soot of the carnage and destruction, will starve the rest of the World with the resultant famine caused by a lack of Daylight.
Yeah. We can kill ourselves. It is suicide on a Global Scale.
In the main, World War III (looking at wrist watch) should be over in 11 or 12 minutes from its start. Even if there is some nervous fumbling around punching in the codes to unlock the triggers.
https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF...
http://www.usdebtclock.org/
"It's all one ghetto, man. A giant gutter in outer space."
The system is not broken if you are part of their system.
HIGH PRICED OIL DESTROYS GROWTH
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices. http://www.iea.org/textbase/npsum/high_oil04sum.pdf
THE PERFECT STORM (see p. 59 onwards)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel. http://ftalphaville.ft.com/files/2013/01/Perfect-Storm-LR.pdf
PEAK CHEAP OIL https://www.youtube.com/watch?v=0uKihKkx0eY
Connect the dots..........
What keeps the terminal system going is the resilency of the retards in the markets.
Ouroboros - "Japan has become a snake eating its own tail" - Lance Roberts (I told you in a previous post his logo tells you all you need to know about him)
Predestination Paradox (Represented as Ouroboros) - aka Temporal Causality Loop aka "Everything we’ve ever done or will do, we’re gonna do over and over and over again." - Nic Pizzalotto
Go Green! - It is not about recycling paper and glass to help the earth. It's about killing off the useless eaters and starting the next iteration on this prison planet ruled by satan
How's everyone enjoying their ride on the big electron?
https://www.youtube.com/watch?v=cvz9uSK3zXo
If the world reverts back to a gold standard nobody is going to require the US to demonstrate anything. They may have sold it, leased it, collateralized it, hypothecated it, whatever. But they still have it. And nobody is going to fuck with it whatever the agreements say. Germany already found that out to their dismay.
http://www.safehaven.com/article/35742/the-financial-repression-authority-with-chris-martenson
Dr. Chris Martenson Talks FINANCIAL REPRESSION in clear and simple language that we can all follow. A professional educator, he makes the complex easy to grasp. Elements of Financial Repression require this skill to make clear the stealth game governments are taking against its citizens in the name of preserving the financial stability of the state.
Financial Repression
"When governments get into too much debt there are only so many ways to get themselves out from under the debt." There is:
1. Austerity,
2. Default on the Debt or
3. Financial Repression
In reality, the third is the only politically viable solution. Financial Repression " the cornerstone involves taking a little from everybody and giving it to a couple of favored parties". To do this involves three basic elements:
1. Negative Real Interest Rates,
2. Ring Fencing via Regulatory Controls,
3. Elimination of warning signals such as gold appreciation.
Japan as an Example
Let's consider Japan as an example. The Yen is down 33% over the last year as a stated policy direction of the government's Financial Repression implementation. As a direct consequence, imports are higher therefore making consumption items like energy more expensive for the average person in Japan.
Real wages and savings for the middle class in Japan are falling. However, if you are a corporation like Toyota it is better for business. Chris argues that Financial Repression is nothing more than a transfer from the people to companies such as Toyota . The government effectively believes it knows better through central control and planning where the public's money will be most effectively utilized.
Central planning never worked in Russia and after more than 20 years the proof can once again be confirmed in Japan. This is the stealth game being played against the public, not only in Japan but by countries practicing policies of Financial Repression around the world.
The Coming Crisis
True wealth NEVER gets destroyed, it only gets transferred!"
Chris points out that wealth is never destroyed. but rather it is the claims on wealth which are destroyed during a crisis. "A profound currency accident is coming" according to Chris where he "would not be surprised to see the Yen be completely obliterated just like the the Zimbabwe dollar." His strong recommendations are:
1. Understand the problem,
2. To importantly, take action,
3. Be in Productive Assets,
4. Make sure your money is managed by those who understand the new reality and today's true risks.
Wealth can no longer be stored in paper currency or "paper" claims in a Fiat Currency System.
Price and Value are separating and people forget that price is what you pay, but value is what you get. We soon will see an event where it will be perceived that great wealth is again destroyed. However, what investors MUST fully comprehend is that wealth is not destroyed but rather only transferred.
True wealth is the land, the property, plant & equipment, productive enterprises, raw resources and the people who fashion it all. That is the real wealth. Everything else is nothing more than paper claims on the true wealth. These claims can be made worthless overnight but wealth never is.
http://www.youtube.com/watch?v=V0eSCECnqrw
There is no safe haven....
Third definition of "broken" from Merriam-Webster: : "not kept or honored". Yup.
http://www.merriam-webster.com/dictionary/broken
when it collapses i only fear that we will tear at each other, instead of the guilty parties (BOTH of them in CONGRESS)where hangings should be in order
Even before the FED intervened the market discovered the new Tulips (internet) and went haywire.
The FED didn't invent HFT to stop the market working.
Banks manipulate all markets to ensure they are never true.
The markets don't work - full stop.
What is the cause of global recessions?
Wall Street (Wall street crashes 1929/2008)
How many times has the West been on the brink of collapse?
Once in 2008, courtesy of Wall Street.
Forget Russia and ISIS the enemy is within.
Look. I'm going to say this again for anyone who believes there will be a hard "reset" of the system.
The "reset" will not happen. I speak from experience, what will happen instead is simple currency devaluation.
There may be a market crash in the short term. There may even be a war, but civilisation will not end. Neither will the rule of law. The world will not implode.
What will happen instead is the continual and punctuated erosion of value and the suppression of the masses for the benefit of their masters. This is how it has been over centuries of history.
History trumps your experience
gold is irrelevant
what is relevant is what goods and services US/EU/BRICS economy can offer to the international markets
countries will hold baskets of those currencies they need to buy goods from
Charles Nenner 100 year war cycle. I need to Bunker Hunt!
You can’t have a nuclear war without the resulting EMP. Never before in the history of man has civilization been grid dependent. Should the lights go out, then it is game over. The dark ages will follow and the Georgia Guide Stones will no longer be conjecture. They will be prophesy.
If the economy was healthy and balanced we would not be experiencing slow growth while massive amounts of money are being printed and poured into the system. The crux of our problem remains in the fact that both people and governments have lived beyond their means by taking on debt they cannot repay.
Over the last several decades we have created entitlement societies built on the back of the industrial revolution, technological advantages, capital accumulated from the colonial era, and the domination of global finances. Promises were made on the assumption that the advantages we enjoyed would continue in both Europe and the US. Ever greater prosperity and entitlements were to be sustained through debt financed consumption growth. In that eerie fantasy world, debt fueled consumption was to be the catalyst to bring about evermore growth. Debt does matter and the following article delves deeper into why kicking the can down the road will ultimately fail.
http://brucewilds.blogspot.com/2014/08/modern-monetary-theory-is-wrong-debt.html
It is irrational to expect some people and any government to live within their means, assuredly in a socialist AND mercantilist economy. The best you can do is have a laissez faire free enterprise economy to enforce economic discipline, level the playing field and let the spendthrifts celebrate failure and poverty until consequences are fully realized and the lessons take hold. This in turn requires political liberty, which is also lacking since at least 1865. Time to recenter on the original Constitution and BoR, maybe with some libertarian tweaking, individual rights, states' rights and proportional representation.
In addition we need easy access to the ballot for ALL political parties, open, accessible debates for ALL candidates of ALL political parties, with any candidate requiring inclusion of any question, topic or issue, and convertibility to honest hard money coinage backing of currency, among other things conducive to a healthy, dynamic nation, broad middle class and attainable upward mobility by merit.
The system is collapsing right before our eyes and it's on its last legs here guys.
Time to uh...BTFD ...make sure you have enough toilet paper and spam cause shits gonna git' real!
~DipshitmiddleclassWhitekid
Crazy as she as she now seems, Ann Barnhardt has been pounding the table on this since the MF Global rip-off. http://www.financialsense.com/financial-sense-newshour/guest-expert/2011/12/30/ann-barnhardt/the-futures-options-market-destroyed-by-the-mf-global-collapse
She always stays a million miles away from the Third Rail though in any explnation and professes to believe the official 9/11 fairytale.
This article suffers severely from a misunderstanding what bank reserves at the Fed actually are and what can be done with them. They cannot be "moved around" and banks have very little control over them. They can only be used for interbank lending or be transformed into currency when customers withdraw money from deposit accounts. Credit can be pyramided atop them, but that won't alter the size of bank reserves with the Fed, so even if the bank were lending like crazy, nothing would change about the size of bank reserves (unless the banks were to create so much deposit money that existing bank reserves are no longer in line with reserve requirements, but that is a highly hypothetical possibility in more than one respect - in that case, more reserves would have to be added).
More importantly, it is erroneous to assume that prosperity could be increased if banks were lending more money into existence. Money is not what limits wealth creation, the scarcity of real capital is.
RL Burnside does Bob Dylan's "Everything is Broken"
https://www.youtube.com/watch?v=cI4q5EiNKQU