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"These Are Astonishing Figures, Evidence Of A 1930s-Style Depression"
Just a few numbers, courtesy of the Telegraph's Ambrose-Evans Pritchard:
Barnaby Martin, [Bank of America]'s European credit chief, said world asset markets may face a stress test as the US Federal Reserve starts to tighten afters year of largesse. “Our biggest worry is the end of the liquidity cycle. The Fed is done and it is preparing to raise rates. The reach for yield that we have seen since 2009 is going into reverse”, he said.
Mr Martin flagged warnings by William Dudley, the head of the New York Fed, that the US authorities had tightened too gently in 2004 and might do better to adopt the strategy of 1994 when they raised rates fast and hard, sending tremors through global bond markets.
Bank of America said quantitative easing in Europe and Japan will cover just 35pc of the global stimulus lost as the Fed pulls back, creating a treacherous hiatus for markets. It warned that the full effect of Fed tapering had yet to be felt. From now on the markets cannot expected to be rescued every time there is a squall. “The threshold for the Fed to return to QE will be high. This is why we believe we are entering a phase in which bad news will be bad news and volatility will likely rise,” it said.
What is clear is that the world has become addicted to central bank stimulus. Bank of America said 56pc of global GDP is currently supported by zero interest rates, and so are 83pc of the free-floating equities on global bourses. Half of all government bonds in the world yield less that 1pc. Roughly 1.4bn people are experiencing negative rates in one form or another.
These are astonishing figures, evidence of a 1930s-style depression, albeit one that is still contained. Nobody knows what will happen as the Fed tries break out of the stimulus trap, including Fed officials themselves.
Or, as we showed it recently and far more simply, this:
And in other news, everyone is now bullish because for some inexplicable reason the "experts" continue to mistake the world's biggest equity bubble with the underlying economy.
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You can also hire thousands of government "workers" to sit in a room and do nothing to show increased GDP.
GDP = CIG - Consumption, Investment, and Government. Now which of these can be manipulated? Hmmmmmmm.
There's a number of stops that could bring economic activity back to "pursuing satisfaction from fulfilling existing wants", but they were removed on purpose. Just a simple thing like commodity based money + accountability for stock owners (you own 2% of the corporation, you're just as liable as an owner of normal company) would blow up public concern for stocks. You have the knowlege to play this game, sure come on in, but all the suckers "investing" their pensions there could just keep the money. Than they wouldn't be on the hook, GDP goes one way or the other, stocks rise or fall and none of this would be vital for some guy getting ready to reitre.
GDP growth matters for bonds. Thats how companies make money today, they sell bonds and roll over that debt. It wount end well when GDP falls but thats not their problem thats th chairmans problem so he better get to work.
The entropy began with the freely transferable share of the east India company followed by the destruction of Europe in the 19 the century by the so called sov bond.
For example during this time Paris completely destroyed its regions in the interest of centralization / its bond holders.
https://en.wikipedia.org/wiki/East_India_Company
Their flag sure looks familiar...
It's not entropy imo. The banking mafia have been doing the same thing for thousands of years. After they trash a nation, empire or civilization they move on to the next victim which allows the previous victim to recover. The only difference this time is its global - everywhere all at once.
Making money is not the same as earning money, then.
The money being made will destroy the money that has been earned.
It's as if every Central Banker believes in the Rumpelstiltskin Myth:Paper Edition.
Private sector wages might be under strain but the public sector sails on, collecting their increments every year as usual.
The only reason I see stocks being continually manipulated to remain high, is to keep the retired Baby Boomers and their cushy portfolios (401k's and IRA's) from revolting.
IOW, the Top 5% would lead the revolt, and it would succeed. TPTB can't take that chance with this lot. The Bottom 90% OTOH... "Who cares, they're too weak, disorganized and scared anyway" is the view of the Top 2%. I've also heard it described as: "They (the Bottom 80%) got guns, but are afraid to use them. The Top 5-10%, by contrast, will use them if need be. That's the difference."
I know of plenty such people who are willfully blind to economic reality, because THEIR (retirement) lifestyle would be on the line.
That is indeed what they fear. I guess the boomer greed has a good use after all.
Many of the top 10% are urban/suburban liberals who don't know one end of a gun from another.
how exactly would they revolt? i think you have it the other way around...the top 5% have a lot more to lose than the folks below them. i guess most would think thrice before revolting and would probably just hope TPTB kick the can just long enough.
Boomers Revolt?? Yeah right, they might turn the TEEVEE off, get out of their lazy boys, grab their canes, put in their dentures, and ride their mall scooters downtown, before they ask, "wait, where was I going?"
The fed is not going to substantially raise rates without collapsing the complete system. It's interesting how none of these banks ever mention the $750 trillion in derivatives out there. They always talk about the bond market but never about where the real danger lies. I guess that's why BofA transferred 55 trillion to the bank holding side and threw them on the backs of the tax payer.
Right you are, Doc. Imagine a 1994-like rate hike , which destroyed the derivatives-heavy finances of Orange County CA, multiplied by hundreds of uber-leveraged USSA municipalities.
Paging Meredith Whitney.
They can't raise rates without all hell breaking loose. Far more likely, and this is not unprecedented (Japan) rates fall even further.
Our entire Ponzi is predicated on a debt fueled fiat. They must continually create money through fractional reserve lending or the whole thing collapses.
I have had a mortgage banker calling me and telling me "refinance now or rates will go up"- this has been going on for 18 months. I keep telling him rates will go lower and I'm still not worried about missing the boat. Guess who's been right...
Exactly doc.
This gal says it's all bunk because no one knows how much is really involved. Not even her, so if she doesn't know than how can she say it's all bunk? She says she is a card carrying member of We the People. LOL
She starts out by saying she hates banks like most everyone these days then proceeds to defend them.Claims it MAY just be 54 billion or so. Even if true why should the taxpayer bail out the banksters everytime they make bad investments.
http://crooksandliars.com/karoli/truth-about-bank-americas-derivatives-t...
After we get through bailingout all the banks,,, who's going to bail us out?
Edward Bernays would be proud
All hail the king.
Bellocs definition of capitalism hits the bulleye.
The distributionists have been proven 100. % correct.......yet again.
A forgotten school for very good reasons.
Selfish & highly destructive dynamics lead to only one outcome.
Total collapse of society.
They can't raise rates, as interest payments on the US debt would balloon, making the US a bankrupt enity.
The US already is a bankrupt entity.
True dat.
As long as foreigners keep buying bonds and don't dump the ones they have the Ponzi can go on for ever. As and when the Fed becomes the only meaningful customer the game is up.
this is all well and good but GDP is a meaningless figure. you cannot call changes in GDP evidence of anything on their own; you must know something about the structure of the economy lying behind that GDP figure and you must know from which GDP addend the change came.
one nation with government spending outstripping the entire rest of the economy can have the exact same GDP as another economy that has zero government spending. and if you know anything at all, you would know that the first nation is about to suffer horribly, and the second one is healthier than each and every nation in the entire western world right now.
adding the GDP addends together tells nothing; keynesians are fucking morons for adding them in the first place. you should only care about the addends' changes. has capital investment gone up? has government spending gone down?
if the US cut spending by 50% it would appear, by GDP, to have blown up in everybody's face -- but pretty much every citizen in the US would be better off for it had nothing else changed. especially if those cuts came out of the military budget. no more JSF, for starters.
and, especially, if those citizens had already built some savings, and saw their savings and CDs suddenly accrue interest ten or a hundred times faster. imagine that! rewarding people who actually behave correctly in an economy, for a change.
Which came first the Depression or the 10% correction in the Bio Tech bubble?
I am just wondering how long they keep bemoaning the lack of return on any paper investments until they relealize the only thing they haven't turned to is precious metals.
It is almost like the creationist vs evolutionist dispute. Yet when the scientists, astrophysicists, molecular biologists, quantum theorists, etc dig deeper and deeper, the universe (money) is harder to explain, until one day they reach the end of their discovery and find out what the theologists have been telling us from the beginning. See? God (gold) exists.
Disclosure: agnostic.
Bullshit. Long term versus short term thinking. The truly wealthy know that there is no "end of discovery". they see beyond their, rather short, life and plan fr their future generations.
of course it's contained; free money can keep "things" contained for a long time
Robin - "Holy fuckeroo, Batman - what's that on the horizon?..."
Mr. Bill - "oh NO!!"...
T.C. MITS - "Damn!"...
God - "Take that, Banker Scum!"...
Any news on that banker who ended up impaled on the fence next to John Lennon's old house?
The FED tightening... more delusion. They can talk the talk but it's too late for them to walk the walk.
They will hide it by pumping in various ways but pump they will.
Problem is pumping will not stop the inevitable...
It will be called the Greater Depression by future generations.
if future generations can write
Adding tokens to real people while stopping all conduit credit activities is inherently deflationary.
Certainly since the 1970s inflation GDP is a product of inflation and only inflation.
We can see this in the real world if we observe the amount of capital goods needed for basic distribution.
Social creditors like all rational people see this as waste.
I'm with Hubbs (above) on this. Gold and silver and other hard goods, like seeds, machinery, tools, land, clean water and other assets that are paid for and have no counter-party risk.
If the best you can do for risk-free investing is 2% on a 10-year treasury (not really risk-free, after all), gold and silver and hard assets (not overpriced art and cars) look pretty damn good.
Self-sufficiency and a hard-assed nature to keep the revenue man off you property are also key assets.
Back in the 60's we had a saying, "get government off our backs." We (baby boomers) were right then, and, even though most of my generation sold out to corporatism, fascism, or some other ism, we are still right. Government is a pain in the ass, overly-burdensome and worthless, especially since the top tier (federal) allowed the banksters to control our currency and economy.
Get rid of half or two-thirds of government, and the people who are employed by and/or wards of them - a very large number - and there would be no economic problems.
Honest money and free markets, as usual, are the answers to all the questions.
Gold and silver.
FreeNewEnergy - Ya. I just had to post the Silver and Gold song/vid from Rudolph the Red Nose Reindeer:
https://m.youtube.com/watch?v=7EXCDCXaIkQ
Because the new money (currency) is debt; you must create debt in order to create new money.
Money, can only be exchanged for money on a one for one basis.
A piece of paper (a financial instrument) expressed as money can be given an arbitrary value.
Go to the stationary store and buy a linen sheet of paper for about a dollar and write upon the sheet of paper the following:
Financial Instrument.
Value: To Be Negotiated.
You can now sell that sheet of paper to an honest person for half price as only the back side is unused, or: sell it to Goldman Sachs for whatever debt amount they need to cover a derivative transaction in which they are on the losing side, as an example.
Once that sheet of paper has been transacted at whatever value declared, it bears that value forward for all time. It can be discounted, daisy chained, hypothecated, collateralized, exchanged for UST at some Fed Window or other.
The Shadow Banking system is the banking system. It isn’t called the shadow system because it casts a shadow, because it is invisible: it is because it is dark and scary.
There is no way to judge or evaluate, extrapolate or interpolate hypotheticals because it is currency quicksand.
That is why the horizon of the impending death knell is never breached. It is a mirage, inside a puzzle, wrapped in a conundrum, placed inside a paradox, hidden under a juxtaposition, held down by a contradiction.
Debt equals money.
Debt equals debt.
Snake, tail situation.
In this sense debt is like the human saliva. Saliva is the only thing the human body can produce unlimited quantities of.
Debt is the only thing the shadow banking system can produce unlimited quantities of. No one fears the derivatives because there are unlimited pieces of toilet paper upon which to write financial instruments, which the Fed will gladly flush down the TBTF drain.
fantastic comment
+18 trillion
poem for 2015
This kind of economic depression was unheard of for thousands of years, when money was hard and made a clinking sound in a pocket.
Yet within 100 years of the abandonment of hard currency it has happened twice globally, and countless times in individual nations and regions.
When someone gets money for nothing, someone else gets no money for something.
When someone gets no money for something, you can expect less of it.
Better hope that the 'something' is not a survival item.
Hey, wait, the Federal reserve was suppossed to prevent depressions......oh, that's right, they existed BEFORE the last one also.....
I must disagree, this kind of economic depression was standard operating procedure for most of the last thousand years - the nobility lived well, and the peasants struggled.
"......standard operating procedure for most of the last thousand years....."
'Nuff said'.
concur... history is rife with economic depressions and bankruptcies of countries......
Some from fiat money (France..) most from the consequence of overstretched resources...... and it looks like in our case it will be from both....
Wrong.
What they used to do is melt the silver/gold down and mix it with base metals like tin or lead.
When Rome 1.0 collapsed their "silver" coins were something 0.1% silver.
They have been doing *exactly* the same thing for thousands of years.
We've seen them before. But PMs do NOT protect you from deliberate stupidity in your economy, and gold-backed economies can screw up too. It's just that the finite nature of PMs keeps the mess from getting too far out of hand.
Fiat removes all restraints and makes the collapses HUGE.
There was an article out here recently about the upper quintile of earners in the US paying basically all the Federal taxes in net. While interesting, what would be more interesting would be the REAL % of income taxes actually paid broken down by the top 1%, then next 4%, and in 5% increments after that?
I'm guessing, but have no proof I can find, that the top 1% pays much lower real % of their total incomes, sheltered and not, in taxes than those in the lower income brackets of the top 20%.
Bank of America said 56pc of global GDP is currently supported by zero interest rates.
What could that possibly mean? Some kind of *direct* support, maybe. 100% of global GDP is supported by the aggregate demand, to some extent or another. Maybe 1000% hey right?
But the Fed's "plan", which is barely worthy of the name, is to taper sloooooooowly. It might be ten years before things are returned to ths status quo ante of 2007. Meanwhile they continue to meddle secretly with every fucking market in the US and the world, and who knows what that costs, I'm not sure they're publicly reporting the funds they are magically expending on these activities. It's a race against time, because corruption will certainly drain the effectiveness of that strategy to zero over time - as corruption is certainly consuming some large percentage of it already, Ghu only knows how many billions per year.
corruption thy name is the Vampire Squid
"The Fed is done and it is preparing to raise rates." HAHAHAHA!! LOL!! ROTFLMAO!!!!!
Bring it bitches!
my guess is they'll tighten credit, and let the markets raise interest rates (ie the spread between UST and corporates will widen) and with a little volatility in the stock market investors will chase LOWER yields for the safety and security. the ulitimate solution is that safehaven money goes into treasuries, the government curtails spending, and they actually solve the national debt, and are able to pay higher interest, and things come out in the long long long run.
O'bomber will play the role of modern day Roosevelt and fuck thing up worse... much worse.
Kenyan wants your precious.
maintaining stimulus despite signs of economic recovery proves they know its a depression. we dont know how this depression comes out because the 30s ended in a global war, and you have to ask yourself, without w2 did the depression ever really end?
No. It continued with:
Persecution of blacks.
Enslavement of wogs, wops and spics.
Prohibition and eventual war on drugs, further enslaving blacks, spics and low-class honkeys.
Fledged Israeli outpost in ME.
Conquest of oil.
Cue Ronny Reagan. (First Depression ended circa 1977.)
Raising rates ain't gonna happen, there would be no car sales without subprime. And one main indicator of the economy is where where the gas savings money goes. Shopping or food. You'll soon see how bad things are. The rest is just talkng head jizz in bartiromo's hair.
It was planned a long time ago.....before your grandparents were born.....before WWI
1945 British National Archives Document Calls For New World Order Now
and much more......http://newworldorderg20.wordpress.com/
No shit, Sherlock. However, the collusion you purport is not as collaborative as you believe. Oligarchs will be oligarchs, but not necessarily on the same team.
Yeah, they just build uneasy alliances by marrying a worldly gent to an otherwise unfuckable princess, fast-forward and their chinless inbred spawn goes about ruining my company Christmas picnic. Assholes.
William Dudley, the head of the New York Fed, that the US authorities had tightened too gently in 2004 and might do better to adopt the strategy of 1994 when they raised rates fast and hard, sending tremors through global bond markets.
The only thing fast and hard is the penis and load of semen dropped in his mouth. They dont have the balls to do it
The fact is that the Federal Reserve has held the United States captive in a depression since 2007. This has been done by propping up the big U.S. banks with bailouts known as quantitative easing.
The Fed did something similar in the 1930s and made the Great Depression last 10 years as a result.
The U.S. does not need a central bank. A currency board would suffice. And we certainly don't need banks such as JP Morgan Chase, Bank of America, Wells Fargo, etc. They don't serve the public in any way, shape, or form. In fact, they've resorted to charging customers fees to store fiat money that they don't actually store. They also don't pay an interest on money stored in savings accounts.
Instead, the banks feed off the public like a parasite feeding off a host.
Isn't the logical question to ask now, "Can and will Central Banks attempt permanent Zero interest rates." Look how long it has been already! I know of nobody who dared predict Zero Interest rates here in the USA for this many years. 2008 was a long time ago, yet here we are!
What is different, and may make the 1930's an invalid comparison in every sense, is that 2014 we live in a world of financialization, of FIRE economies, and of totally manipulated markets by more than one entity at the same time. Banks neverr had to powers they have today, or the interest free liquidity.
In short, today bears little relation to the 1930's, then America had a vast industrial and resource extraction economy, America was the world's main oil producer, and was even then beginning to ramp up for mass arms production, the Navy bills passed for warship building, being the start.
We need to consider the ponzi nature of America. Markets, Housing, fracking, bonds. 1930's America built things and sold them, 2014 America imports from China and feeds ponzi bubbles in the financial sector. I don't think the 1930's say much about America today.
It'll be a lot worse than the 1930s. We're in the 1930s part now.
Zirp won't end soon because it doesn't have to. It's really that fucking simple. Explain why it must happen within the next year. You can't.
No one knows whats going to happen? Here's my opinion: Repricing of assets especially paper ones, bondholder and pensioner haircuts along with a fresh round of corporate bankruptcies and layoffs, national bankruptcy recognized and announced by politicos, America 2.0.
Oh yeah, almost forgot. A tiny bunch of guys in expensive places drinking Scotch and slapping each other on the back with congrats on the massive global hive raid and finishing off Republics and leaving swarms of enforcers to stay up everyone's butt so that tiny bunch get a clean getaway. Yuk yuk yuk
This means buckle down and create new opportunities, fellas. We, the entrepreneur, are the vanguard.
Only those who decline to scramble up the career ladder are interesting as human beings. Nothing is more boring than a man with a career. -- Aleksandr Solzhenitsyn
sadly shaking my head..........
But..... as I recall Sol had no use for capitalist vultures..... ie entrepreneurship...
"Untouched by the breath of GOD, unrestricted by human conscience, both capitalism and socialism are repulsive."
Sooner or later, nobody will want anymore credit...
http://www.globaldeflationnews.com/bulls-bears-and-jaguars-a-deflationar...
Bring out the gimp!
-But the gimp is sleepin'
Well I guess you have to wake him up now!
This isnt a recession, this isnt a depression either.
This is an outright fucking robbery, and each one of us idiots is the 'Target'. The banksters want it all my friends, and they will do whatever, whenever, however for as long as it takes to achieve that goal. They want it all folks,
Psychopaths will be psychopaths my friends. Its what they do.
Fuck you, fuck your family, fuck your friends, fuck your neighbours fuck the whole damn lot of you, and thats how these maniacs think. As long as they get theirs with interest added they couldnt give two fucks.
And to think its printed from thin air? Assets receivable upon your bankruptcy bitchez eh?
Till the great unwashed do something about it? No?
;-)
It's over in 2015.
Thanks for the QE Bennie etal. Now go away, and stay away, please.
If they had just let the market clear in 2008 like they should have, the "sharp" 2008-09 recession would be history. Yes, there would have been pain, and the bankers would have been hurt, but it would be nothing like the pain we are about to experience.
The arrogance of central planning on display.
sschu
We can hope that the resulting economic implosion brought about by ivory tower progressivism will vaccinate the US against such idiocy, but probably in vain. I guess it only has to last two more years, so the weight of failure can come to rest on whatever poor Republican sap ends up renting the White House.
Why in 2 years? Explain.
Europe has been this way for 40 years.
This story is a lie. CNBC says everything is great.
https://www.youtube.com/watch?v=vx5n21zHPm8
Back when each banking mafia clan was limited to a city or a region or an individual nation then the banking mafia could only destroy one city, region or nation at a time (and then quickly run away to another one before the mobs came looking for revenge). Now they're global they will cause global destruction.