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Wall Street Heathens: How Their Greed And Gambling Became The Axe Of Statist Policy
Submitted by David Stockman via Contra Corner blog,
One of the most unfortunate acronyms ever invented was BRIC. It supposedly embodied an epoch-defining ignition of capitalist growth and prosperity in Brazil, Russia, India and China. And these leading paragons were held to be emblematic of a general economic awaking in the EM.
But it was no such thing. The BRIC countries were actually economic cripples riven with socialist and statist policy afflictions that had the good fortune to hitch a ride on the central bank fueled credit binge of the last two decades.
Not surprisingly, the term was invented in 2001 by Goldman’s London based stock peddler and propagandist, Jim O’Neill. The latter’s patented slide shows about the awesome BRIC advance were typically bulging with charts and data. But what O’Neill failed to comprehend was that these bounteous curves and soaring CAGRs were tracking a metastasizing monetary bubble, not a miracle of capitalist prosperity.
And there is an unheralded reason for this epic error. O’Neill is economically unchurched, which is to say, a Wall Street heathen. The righteous capitalist doctrines of sound money, fiscal rectitude and markets free of state intervention and bailouts are completely unknown to him. Like his ex-Goldman compatriot, Mario Draghi, his creed is “whatever it takes”. That is, whatever action is required of the state and its central banking branches to keep financial asset markets inflating is deemed to be per se legitimate and urgent.
After all, in the age of central bank driven bubble finance the purpose of Wall Street and its equivalents elsewhere is to scalp profits from the expanding bubble, not to discover honest securities prices, allocate capital or transform real economic savings into productive long-term investments.
These latter functions are what brokers and investment bankers accomplish in a free market. But after two decades of bailouts and gross financial repression by the central banks, these functions have become vestigial. What is left is the machinations of day traders and gamblers who are pleased to have Wall Street “economists” and “strategists” like O’Neill and the legions of copycats rationalize their plunder with pettifoggery like the story of the BRICS
Stated differently, Goldman head Lloyd Blankfein was completely wrong when he declared his firm was doing “god’s work”. That couldn’t be. In fact, Goldman and its principal competitors have become nothing less than the devils workshop during the modern era of Keynesian central banking instigated by Alan Greenspan.
With discretionary petty cash flows in the billions, they have marshaled and financed a small army of economic Mephistopheles who spin theories and narratives which dominate mainstream media and shape and prime the perceptions and worldview of establishment officialdom and elected politicians. The force of their “whatever it takes” propaganda has become overwhelming. As a result, there is no longer any meaningful separation of the state and the market; and there are no principles to govern state action.
If the market is rising, the interventions of the state are deemed good, appropriate and successful. When the market is faltering or falling, more action by the central bank and other agencies of the state is held to be urgent and imperative. The measure of economic success is the height of the S&P 500; and the sign of danger is any policy action which might endanger today’s trading gains.
Should the budget be hammered into balance during the 6th year of an expansion, for example, in order to leave headroom for the next downturn? Forget it—–the “economy” is held to be too weak to chance it.
Should the brutalization of savers—after 72 months on the ZIRP torture racks—–be abated? Not a chance. The “economy” is still too weak to tolerate even a smidgeon of normalization.
Should a super-Glass-Steagall be enacted and a break up of the TBTF mega-banks be undertaken in order to mitigate against another Wall Steet melt-down? Even Obama thoughts so—-that is, until he was over-ruled by Tim Geithner and Larry Summers in their role as conduits for Wall Street’s “whatever it takes” mantra.
Indeed, Wall Street is run by a generation that has thoroughly imbibed this mind-set. You can’t really call it a doctrine, however, because it is based on nothing more consistent than the momentary exigencies of the stock market averages.
Accordingly, Wall Street heathens like O’Neill cannot even recognize the obvious when it comes to the BRICs, as a case in point. In truth, it does not take a great deal of investigation to see that the red capitalists of China, the thieving oligarchs of Russia, the corrupt labor socialists of Brazil and the Fabian apparatchiks of India did virtually nothing during the last two decades to change policy direction or inaugurate free market policies that could unlock true growth and wealth.
Instead, they simply figured out that in a world economy driven by money printing central bankers at the Fed, ECB, BOE and BOJ— the only smart thing to do was join the party. So they commanded their central banks to operate their printing presses in overdrive mode, and this was highly convenient.
In the process of printing massive amounts of the 4Rs— new RMB, real, rubles, and rupees—- the BRIC central banks ignited enormous credit expansions internally, while using their printing press proceeds to peg their currencies down low. That is, to create false demand for the Fed’s proliferating dollars and other DM currencies by accumulating what were euphemistically called monetary “reserves”.
They were no such thing. The effect of continuous and massive currency market intervention by the BRIC central banks was that they pegged their exchange rates at sub-economic levels. Especially in the case of China this permitted explosive growth of exports and the embrace of a variety of other statist tools to facilitate a export-mercantilist model of economic development.
The graph below of China’s staggering 11X expansion of exports since the year 2000 is generally well known. But what O’Neill and the Wall Street heathens totally ignored is that 11X in 14 years is impossible in an honest free market.
No real world economy—even one teeming with hungry peasants desperate to work at quasi-slave wages—-can expand that rapidly for the simple reason that honest, risk-fearing capital could not be accumulated and put into efficient operation on the scale now extant during that short of time span. China’s anomalous explosion of foreign trade was thus enabled not just by the cheap labor that flowed out of China’s rice paddies after Mr. Deng pronounced that it was glorious to be rich; it actually flowed from the endless, cheap, state-distributed credit that flowed out the People Printing Press in Beijing.
And there was a second driver of the BRIC advance that also had nothing to do with honest money and markets. That was central bank generated cheap debt in the US and other DM economies that permitted domestic demand for consumer goods to soar far beyond what could be supported by current domestic incomes. Indeed, the 3.5X expansion of household debt in the US, which occurred after China officially launched its export machine in 1994 by devaluing its currency by 60% and adopting a plethora of additional subsidies and mercantilist policy tools, is the other side of the China export coin shown above.
During this period, Greenspan continuously took bows for his alleged acumen at financial management of the US economy. What he was actually doing, however, was quite destructive. By arbitrarily pegging interest rates at FOMC determined targets, domestic interest rates were prevented from seeking their natural, much higher levels, as was warranted by the global economic circumstances. As a result, income constrained domestic households went on a borrowing binge, supplementing the limited spending power from their earnings with a prodigious increment of consumption from expanding their balance sheet leverage.
On the margin, much of this false buying power went to the purchase of low-cost or “china price” exports from Mr. Deng’s subsidized factories. Accordingly, Greenspan’s “committee to save the world” did no such thing. What it did was bury the American middle class in debt, while massively outsourcing US goods production capacity to China and elsewhere in the EM.
Stated differently, what the US economy needed during the 1990s in response to the vast mobilization of China’s previously inert rural masses was domestic austerity. That would have involved reduced borrowing and more savings for reinvestment in a competitively challenged economy; and not just in the manufacturing sector but, as the explosion of off-shore call centers and computer programming operations would soon show, for outsourced service functions, as well.
Stated differently, under the circumstances extant after 1990 the free market would have driven a deep reduction of US domestic wages, prices and costs to remain competitive in the world economy. What the Maestro delivered, instead, was a cornucopia of credit-fueled false prosperity; an artificial ballooning of demand for BRIC exports; and a lesson to BRIC policy makers that money printing is an endless elixir of growth.
The cascade gathered momentum from there. As China’s export factories grew by leaps and bounds, so did its consumption of petroleum and every kind of industrial raw material. Among other things, this led to a giant pricing anomaly in nearly every resource category. That is, credit fueled demand for petroleum, iron ore, copper, nickel and numerous other raw materials initially, and vastly, outpaced the rise of supply fueled by cheap capital and debt. Accordingly, vast windfall “rents” were captured by companies and countries which were fortunate enough to be sitting on lower cost hitherto unproduced reserves.
That’s Russia in a nutshell. It’s economy is essentially a giant oil and gas patch and open mining pit. It’s now rapidly fading prosperity had nothing to do with O’Neill’s rubbish about the miracle of BRICS; its prosperity was derived almost entirely from the global commodity bubbles fueled by the first round effects of massive money printing.
That much should have been obvious. But what is even more damming is that the BRIC celebrants did not even notice that the crony capitalist financial system superintended by Putin and his inner circle of thieves was every bit as distended, anomalous and unsustainable as that run by the red capitalists in Beijing.
As shown below, for instance, loans outstanding to the private sector in Russia grew by a factor of 6X just during the last 7 years. It cannot be gainsaid: nothing grows by a factor of 6X in seven years under a regime of honest money and functioning free markets.
Accordingly, the “R” in the BRIC had nothing to do with capitalist prosperity; it was ground zero for the monumental plunder of central bank driven windfall rents extracted from what had actually been “god’s work” several hundred million years ago. Undoubtedly, Goldman scalped its share.
And it wasn’t just the rest of the world and its leading central banks pumping the energy/resource bubble on which the Russian economy gorged. Russia’s central bank went all-in on the money printing party, too. Only economic heathens could believe that an economy driven by a central bank balance sheet that has exploded by 26X in the last 14 years represented a miracle in the making.
The same story pertains with respect to all the BRICs. When China’s export explosion came to an abrupt halt in the fall of 2008, did Beijing’s “whatever it takes” infrastructure building and investment spree have anything to do with sustainable capitalist prosperity? Was it really possible to double the amount of private debt outstanding in the course of just 60 months and then call the resulting GDP “spend” actual economic growth and new wealth?
The entire China scam is blatantly obvious. Is there any known principle of sound money and honest markets that would accommodate a 25X growth of total credit outstanding—-that is, from $1 trillion to $25 trillion—–in just 14 years? Needless to say, that can only happen when central banks are running their printing presses at warp speed. And that’s exactly what the People Printing Press of China has been doing every since Mr. Deng launched his export machine.
Indeed, just since the turn of the century, the balance sheet of the PBOC has expanded by 9X. But that should not be surprising. It’s the exact mimic of the Fed’s balance sheet which grew from $500 billion to $4.5 trillion during the same period.
Then there is the Brazilian boom purportedly superintended by outright labor-socialist governments—-regimes that did exactly nothing different than their predecessors have done for decades. Namely, they operated a statist economic system of rampant dirigisme and corruption, fueled by state subsidies, discounted lending and money printing of gargantuan scale.
As shown below, the “B” part of O’Neill’s miracle was just the same old massive credit inflation story. After labor took power in 2004, bank loans grew by a factor of 6X during the following decade.
Needless to say, an ever accommodating printing press at Brazil’s central bank stood in the background.
In all, there was no BRIC miracle of capitalist ignition—just a giant global credit bubble that is now rapidly fracturing. The Wall Street heathens self-evidently got rich scalping the windfalls.
But now, surely, comes their downfall.
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No doubt about it, they are getting rich scalping the plebs. Funny thing is they won't take a damn bit of it with them when they perish.
Storing treasures up in the worst of places.
I agree about bad conditions in the BRICs. Especially Russia. My ZeroHedge pages are lined with ads for Russian brides and Russian dating services.
I'd expect China and Brazil to collapse together as they are tied at the hip.
It is a race between the heavily indebted to the bottom.
Maybe there will be a type of global Jubilee and Bank Holiday to clear all decks ?
Precious Metals may be the only simple exit path.
Blasphemy. Bezel Bub, the Deceiver, Father of Lies, the King of Babylon, the Leviathan.
Thus you call Goldman Sachs, the very same Jesus threw from the Temple?
.... he shall come calling himself God
I have seen all the works of man that are done under the sun; and behold, all is vanity and vexation of spirit, fleeting as the wind
While I admire the sentiment, Baal zebub literally means lord of the flies. Where the flies are annoying but small and irrelevant insects that live on shit. I.e. The common people. Baal was the god of fertility and in competition with El for supporters. Hence the derogatory term "Lord of the Flies" by the priests of El.
http://en.wikipedia.org/wiki/Baal
Here's the unpleasant truth that most Jews, Christians and Muslim people dont want to face. Satan won. The father of lies is the god you worship and you just accept the lies as gospel.
Here's what your up against with lord blankensteins "god"
https://www.youtube.com/watch?v=QH_Bs-pN46s
css, here is the unpleasant truth you don't want to face. You ran your ass in a ditch when you referred to wikipedia for spiritual guidance. If you don't believe me, go edit it to state whatever the fuck you want. Good luck staying on top of it though, because if it doesn't agree with the matrix, it will be edited back to conformity before you wake up tomorrow.
When your god is Satan and you are doing "Gods work"...well
Compared to what? The Bible?
Are you retarded?
Baal is Jupiter, the God of Expansion of wealth and Life. Baal is the Tree of Material Life god. His opposoite is Saturn, Satan, who is the Grim Reaper, the god of the Tree of Knowledge of Good and Evil.
https://www.google.com/search?q=baal+as+jupiter&ie=utf-8&oe=utf-8
As far as Stockman's thesis, that the BRICs are creations of the Fountain of Debt source-gods of Baal's excesses, he has never been more correct -- and he seems to be almost always correct these days.
by the bible, the serpent was the one telling the truth, and yaweh was the one lying.
which is kind of ironic, the god you're supposed to worship starts right out in the holy book by lying to his beloved creation? hahaha yeah.
"they will know good and evil and become like us"
apparently Yaweh isnt the only "God"
That's just gobsmackingly stupid.
Lloyd was talking about the fallen angel, lucifer. because these angels are powerful beyond our understanding, he would not be the first to mistake him for a god.
but anyone with wisdom and faith knows there is only one God, the rest are false, there to deceive us if possible.
No, there are loads of gods. The priests (like Moses) just tell you there is only one god to keep you on their leash.
http://en.wikipedia.org/wiki/Canaanite_religion
The Jewish/Christian/Islamic god is El. But he was just the head god of a pantheon of gods and godesses.
Ridiculous abuse of the term God and totally incomparable to the terms gods and goddesses of pantheon tradition. Only one of these has Omnipotent capabilities such as creating from nothing. The pantheon mob just manipulate that which the Creator creates. They therefore cannot be God or part of God as that is a mathematical nonsense.
css, this has all kinds of historical inaccuracies, but it is funny as shit...
https://www.youtube.com/watch?v=xcJvkAdydnQ
Eh nope. Have you read the Canaanite creation myths?
In the Bible, god (Yahweh) even says he is El. Is that good enough for you?
http://contradictionsinthebible.com/are-yahweh-and-el-the-same-god/
And really... Tryng to apply mathematics to the ravings of lunatics?
There is a Day-God, the Sun, the Lord of the Day-Cycle of growth and evolution. Look outside in the sky. How many gods do you see? By gods I mean planetary bodies. You see one, the Sun. This is the Day-God, and the only god for monotheists. Occasionally a pale moon happens into view. But go outside at night and look at the sky: many gods. The Moon rules the Night, but he/she is surrounded by millions of stars. The Night-Cycle is polytheistic. During the Day-Cycle (...example, 1911-1929; 1947-1965; 1983-2001...) the Sun-God dominates the Earth and turns libido outward, into the objective world. During the Night-Cycle (...1929-1947; 1965-1983; 2001-2019...) this all changes. And the Causal Language spoken by the Sun-God (with his love of technology) becomes the Metaphorical Language spoken by the Night Gods. The Day-Cycle God loves to isolate and reduce and study everything inside a laboratory; the Night-Cycle God loves to connect everything and study the patterns of all these gods as interconnections and as poetic harmony.
The Sun-God disappears or goes to sleep during every Night-Cycle. This is what we call the Deflation Season, for the Ego gets deflated and loses his identity as king of the world. In 2001, this deflation began again. If you take these 36-year cycles back into the 1700's you will find a remarkable pattern. Of course, ALL patterns are the precinct of the Night-Cycle god -- solar worshippers and scientists and rationalists (rationalizers) will not be able to see it, because they can only see what is isolated and cut off from its patterns.
During the Day-Cycle, the wave-function is collapsed intot he object-function. During the Night-Cycle, the object-function is re-collapsed back into the wave-function. The Night-Cycle is lived in the water of Dreams. The Day-Cycle, verily, is the Promised Land (solid earth) promised by God in the Old Testament, when the ocean is shrunk, liquidity reduced. God is promising that the Day-Cycle (Earth, the Promised Land) will return after 18 years of Night-Cycle end. 2019 is the high-water mark of this cycle, the greatest power of material deconstruction: ISIS will peak; EBOLA will peak; natural catastrophes will peak. In 1983, the Forces of Deconstruction were at therir strongest and began to recede: world Commmunism. In 1947 (approx) world Fascism began to recede.
The Day-Cycle builds the world, is the Creation Story of the Old Testament. The Night-Cycle destroys the newly-built world, is the De-Creation Story of the New Testament. Every Night-Cycle is about the Book of Revelation, with its mystical seals opening up, its plagues, its re-birth of the Sun-Hero, Sun-God, Day-Cycle, and re-creation. The cycles of creation and destruction happen every 36 years. We create a New World; we then destroy an Old (corrupt) World, so that we can build a new model of the world. This is evolution.
The creators and the destroyers are actually working for the same God, but don't realize it for the most part. It is because the world is destroyd that we get to build a better model when creation begins again.
One in many; many in One.
insane!
The whole financial system is based on bugger all.
Time to go back to honest exchange with no middle-man.
Government/Banking cause all the problems humanity faces.
Any thoughts on how to fix this would be appreciated.
logicalman
Any thoughts on how to fix this would be appreciated.
Sure!
How about by starting stating the facts more accurately.
By MEFOBILLS: China has State Banks. She FORGIVES loans, and then her former credit as money has lost its credit association.
It becomes debt free money. The West can never beat this type of money as it is inherently efficient as it circulates without a usurious cost.
This makes the Chinese economy permanently efficient.
Wall Street will continue to take wage arbitrage and hence hollow-out the west as wall street cannot let go of their rent-seeking ways.
Zionism and their rent seeking ways, have found their ultimate match, and their end.
When China has protected energy in the form of pipelines, and protected inputs of raw materials, and world class industry and science, and her own sovereign money and trading partners, then China has little in the way of weakness.
http://www.zerohedge.com/news/2014-12-31/guest-post-2014-russian-viewpoint#comment-5612560
Well there is no way for the collective people of the USA to engage in Debate about Banking, where Banking Policy & History comes from, Debt forgiveness, Bankruptcy Policy, Rehypothication of Wall Street Banks, Oversight & Audit of Hedge Funds and TBTF Banks, and Usury... but also about who owns the FED and Creating Money out of thin Air and at What Ratio to Assets or Deposits.
This lack of Debat & National Referendums... We know there are US Socialists, Communists, Libertarians, and other interested people on Main Street...
But it all is obvious repression of the US Political System and the US Free Press.
I hate to use the word Repression. I really DO. Repressing Ideas & Education is part of why people left Europe to come to the USA, why we formed the Idea of the USA, the Dream of the Idea of the USA.
Powerful & Rich people like Politicians and Bankers... need to learn to step back... let debate happen... Let the normalization of ideas reach a balance... Other wise it is like "Let them Eat Cake"... Fascism.
Or like Joe Biden's "Just fire a Warning Shot with a Shotgun".
Or like Hillery Clinton's "We were Poor when we left the White House".
Fascism... because Money & Power do that. Especially like the Mayors of Chicago & New York.
They recently tried to bail out the top 1% (and probably top 5%), that is all. So maybe 95% will collapse and the survivors will build their castles and islands and helipads. It is a plan, but as George Carlin says...we aren't part of the better side of the plan.
It 'worked' for 100 years to grow the population and development, at some point there will be an 'end game'.
Maybe everyone was hoping too much, for another Einstein or Fusion Reactor, or Star Trek.
It might work out, probably not...but it appears close to the end of this epoch.
Another great D. Stockman article.
True, that.
I personally feel alot worse off now economically then I did 10 years ago and one heck of alot more unsafe and uncertain.
But, that's just me ... a worry wart realist at heart.
Dat be da troof ....
Most folks feel exactly the same.
Minus the 5%, minus governmental employees, and I cannot for the life of me even come close to figuring out what a generalized feeling would be amongst the EBT crowd.
Some are happy, other embarrassed and desiring of a productive fulfilling life building self esteem.
They managed to kill the American dream by drowning it in bullshit. They've turned a large part of the country to tribalism "as long as I get mine, fuck you". Unfortunately the barbarians are at the gates and the people who should be defending civilization are in the alley selling it cheap.
do the nypd coming running faster for lloyd (the skim), the black panther party, isis, or all the rest of the pretend enemies?
the nypd is sitting outside (lloyd the skim's) house every night. At taxpayer expense, of course.
I listen to calming ocean waves at night that put me to sleep ... Wall Street Looters listen to the sound of money and/or cash registers clicking ....
Where are Lloyd Blankfein's horns? Surely he's earned them by now.
Welcome to Potterville!
When given the choice between horns and cloven hooves, he chose the latter.
Easier to hide.
"Walkers"... Every single one of them.
One must keep in mind what the Lead Cenobite, Pinhead, said to Kirsty Cotton in "Hellraiser"
Demons to Some, Angels to Others.......
Start at 1:07
My point being, no one asked Mr. Blankenfein which God he served, Mammon perhaps?
We are all travelling on the Titanic knowing full well what will happen, but at the same time we all operate under the illusion that we can disemabrk at one port before the disaster.
There comes a time when the juggler can no longer keep an increasing number of balls in the air and it all falls apart.
The BRICS rode the wave only while they were able to borrow and while the speculators thought they were onto a good thing by investing in these markets.
As I always say, reality can be awfully slow but it always makes a come back.
My, my, someone let the chicken come home to roost. We got a fun filled new years party that will seem to last forever. Milestones
A worldwide reversion to the mean here is going to be biblically brutal.
Interesting concept!
The entropic solution but how far down is a stable condition....
Oh the language...They are not Heathens they are Popes.
God's work has always been done by people WHO SAY ONE THING AND DO THE OPPOSITE...
Mr Stockton needs to read the lives of Popes and catholic ideologues.
Only the poor monks outside the ordained orders did God's work sincerely. But they were alone and exemplary, not in the race for Power. They were in the race for spreading truth by example. Not the same ambition, nor the same ideal.
The scholastics doubted, their searched for truth. They stayed empiricists. The dogmatic said they saw God's light and cheated every day for that fiction never be revealed as the reality it was; inexorably exposed by the Reformers of each age at cost of martyrdom (You don't ride the winds of change unscathed).
The Squid is the Pope of Invisible Handed Free markets; new church mantra of our age. Just as manipulated as those Popes and Papas who fought about the nature of the Holy ghost and about if durinng Mass the bread should have yeast or not during the ritual of the Eucharist.
To think that the Great Schism had that for its origins dividing Byzantium from Rome.
Sounds very much like the sterile game of Austrians and Keynesians played out today; Papal shamans as phony as their religious predecessors.
They are not doing god's work, they are working for themselves.
God is a bullshit concept used (very successfully) as a tool to control the masses in the time tested 'divide and conquer' manner.
Nobody would fight a war over the Easter Bunny, sould they?
When I was a kid my siblings would go to war over my appropriation of their chocolate Easter Bunnies every year. Never say that 'nobody' would fight a war over the Easter Bunny. The Vatican recently jailed
a woman for appropriating a 'baby Jesus' doll in a Christmas display
and they have excommunicated her from Rome as punishment. Frankly,
I think stupid humans would go to war over nothing if it was something to do for profit or gain of any sort. Stupid human tricks extend beyond the David Letterman Show IMHO.
I like the "Wall street heathens" term , but Stockman writes with too much fluff and prose. I'm a "The cat sat on the mat" kind of guy.
Having said that, I guess I agree with his observations/opinions.
David Stockman is my economic hero but it's a hopeless cry in the wilderness I'm afraid.
Stockman is a classy writer and I love to read articles with great english. People need to grow up and expand their vocabulary.
A number of recent articles - in which the completely inane and nonsensical policies (or lack thereof) that have lead us to where we are now have been enumerated and exposed - seem to conclude with things like "surely this must end" and "clearly we are at the end" of whatever yellow brick road we've been kicking the proverbial can down for years and years. Why? Such an affirmative conclusion from a fallacious premise is a bad syllogism. It doesn't follow simply because it doesan't HAVE to follow. Logic, reason, common sense - all have had no place in any recent economic policy or result. Math and numbers are just carried to the next nested tenth. Why is it necessary to draw such a plausible conclusion from such an implausible circumstances? When drowning in a sea of veritable bullshit like we are the answer is easy - it isn't.
2015 - Dow to 30K on handouts. Unemployment to 4.8 with 100 million people sitting at home. GDP of 6%. All bullshit - but just as likely as anything else. Reality lost out to Perception a long, long time ago.
Now if you'll excuse me it's time to take out another HELOC so I can get my fat kids that trampoline they'll use once and my fat wife that hot tub she's always wanted.
"like "surely this must end" and "clearly we are at the end" of whatever yellow brick road we've been kicking the proverbial can down for years and years. Why?"
It's circular but I don't think they'd be risking WWIII unless they thought they weren't going to be able to hold it together much longer.
As far as unfortunate acronyms go, I think PIIGS is the worst...But yeah, these countries screwed up. But we haven't really done much better when you think about it, and we are supposedly the originators of creative finance. We are just shielded from the consequences at the moment.
Everyone who tries the bubble economy thing will get screwed. The BRICS made the mistake of thinking they could make it work...as does every economy that tries it.
It's just too fucking tempting NOT to try. THERE'S your real 'moral hazard' in all of this.
John Paulson was a member of 'The Jesus Club' when he was in High
School so I guess that qualifies as 'doing God's work' before he made
it to Wall Street. Bishop Blankfein sold peanuts & popcorn at a ballpark
before he made it to Wall Street to work for God & Satan Inc.
David Stockman On Bail-Ins, Black Swans, The Next Lehman Moment & The U.S. War With Russia
http://investmentwatchblog.com/david-stockman-on-bail-ins-black-swans-the-next-lehman-moment-the-u-s-war-with-russia/Here's hoping 2015 is the year that some Statists and Banksters get shot in the face.
Wooooohoooooo now comes Lloyd Blankfein's downfall. Jump bankster jump.
The Axe of Satanist Policy. Fixed.
World financial markets enter 2015 with a series of potential triggers for the eruption of instability and turbulence.:
http://investmentwatchblog.com/world-financial-markets-enter-2015-with-a-series-of-potential-triggers-for-the-eruption-of-instability-and-turbulence/
Extra Credit.:
http://www.theorganicprepper.ca/preppernomics-how-to-survive-while-the-dollar-dies-01012015
@Victory garden
the dollar is going a hellof a lot higher given that cash in circulation is a pittance of the dollar denominated debt. It is only after debt has collapsed or defaulted, the politicians may attempt to force the state to monetize all debt. The contraction is going to be ugly given 30 years of global pump priming. The collapse will be nothing like the ones in the past.
The real question is how does one prepare themselves for a downturn of that magnitude?
How do i say this in the nicest way.... (Without encouraging the religous nuts on this site),
Why is it the Jews of Europe did not pack up and escape Germany etc. when it was rather obvious Dear Adolph
had it in for them? The only answer i can come up with is that ITS DAMN HARD TO PACK UP AND LEAVE YOUR HOME ...based on your intellectual asessment of what the future will bring.
And i believe this same issue will leave millions of people unready for the calamity that is approaching. If you can't see the problem, or if you don't trust your asessment of the realities of the problem.....then you will be caught.
We see the problem, we see what the preppers have devised to defend ourselves and family, but if you just can't trust your read on the situation, and prepare adequately ......well you will one day understand why the Jews didn't get out of Germany with the rise of the REICH.
Good luck and god bless.
Oh i don't know GreenFinger would've made an excellent Bond villain! 'sgot ALL the necessary credentials. Blowfeld that's German for BlowMe ( well close ). R.I.P Donald Pleasence.
if you can print money, your going to print money.
have you ever noticed, probably 90% of american economist, financianers, and business, and market writers, (not so much stockman, but msm), always talk about how hard it's hitting the chinese, russians, brazilians, iranians, saudis, the syrians. and ukrainians.
then when speaking about america in this turd bowl, it's always hurting the American banking system, or the markets, or business, Americans don't even factor into the equation.
I think it boils down to one thing, how fast can your govt. steal the assets of the 99%, before causing an uprising.
IS Stockman a Denier of
- Duopolies
- Inverted Totalitarianism, where Corporations push down Policy on Government
- Wall Street Monopoly over US Banking and Monopolistic Power over Municipalities, States, Corporations and Consumers
- Modern, or Post Modern Fascism
I checked out some of David Stockman's Book, Deformation. I agree with him largely. He is smarter than me and has more experience. I just hold back on his conclusions at this Point, but I came to Jesus on FISCAL Spending about 2002.
I mean Money Controls the USA & it's Politics, Capitalism Rules, Anything Goes Economics, Shadow Banking, 2008 Revealed massive fraud which was then ignored due to the power of money.
Question: At what point does Socialism and Statism become more insidious Crony Capitalism of a Fascist Brand?
what is the point of a name or label if they are but different paths that lead to the same goal?
socialism/capitalism/fascism, what if they are all transitory states that will eventually become neo-feudalism? which is exactly the same as old feudalism, which is exactly the same as the social hierachy of other primates, where the strong will always rule over the weak, the few over the many, same as it ever was.
Yeah, sounds right.
I agree with Stockman and know he sees Crony Capitalism, Corporate Welfare, and Federal Corporate Socialism.
There are many kinds of Socialism. Here Stockman seems only concerned with Fiscal or Monetary Socialism if I can invent new terms.
I would pose the idea that Banking as we know it has served the Wealthy, powerful, connected, political Elites, and the people that often are the least to need Credit & Loans. Especially in Latin America (BRICs).
"But it was no such thing. The BRIC countries were actually economic cripples riven with socialist and statist policy afflictions that had the good fortune to hitch a ride on the central bank fueled credit binge of the last two decades."
Jim O'Neal may be a:
- Peddler
- Propagandist
- Shill
- Salesman
- Entertainer
These roles would diminish the idea that he is unchurched in Economics as his Job is to Sell. But I don't know a thing about Jim O'Neal, so thanks for the introduction.
Idea: After Capitalist max out their limit of Credit and Rehypothication... they look for pockets of money to go after: Salary & Bonus Increases, Pension Fund Cuts, Employee Benefit Cut, Labor Cost Cuts, Corporate Tax Cuts, other people's money like Union Retirement & Pensions, Municipal Bonds, Stocks & Bonds, LBOs, Mergers, Outsourcing... Using Slave Labor overseas or non-union workers.
SO, perhaps Capitalism is no longer a nice word. Perhaps we need a new word to describe Profit Making Enterprises that don't commit fraud & try to screw people. Co-Ops are listed under Socialism in Wikipedia... so I Doubt that Fiscal Conservatives, Tea Parties, and Libertarians will ever Embrace Co-Ops... Until we add a new word that describes the Libertarian Idea of Fair Business Practices.
"Fair American Business Practices": that which is auditable with GAAP Rules, uses standard Financial Schemes, Draws most funding from State or Regional Sources outside of Wall Street & Outside of DC, No Federal Funding, is not engaged in Usury, is not a subsidiary of the TBTF Banks...
What do you think? I probably missed a lot.
It's hard to decide whether a system is good or bad when it's infected with parasites. I'm pretty neutral on the socialism vs capitalism thing but while the debt parasite dominates capitalism is it really capitalism? I'd say not.
Sounds fair. I was trying to draw someone to my perspective.
Ideology seems like it would be clearly defined.
After all we get the Conservative Radio & TV people that forget all kinds of stuff:
- Republicans take money, take Lobbies, vote for liberal or socialist or corporate welfare programs, ect.
- Neo-Cons vote for war and are all Rah Rah for War, but don't want to even pay for Reagan's Defense Budget or G.W.B.'s wars and have no Plan, are not worried about spending more money while $18 Trillion sits there languishing
- Political Talking heads always omit history and avoid words like fascist for some reason, don't remember Operation Paper Clip, don't know operation Gladio, Never heard of Covert Military Actions by the USA to overthrow Democratic Nations, have no problem giving deals and money to dictators or Saudi Arabia.
Ideology is spouted by both sides... but both sides are Spending like sailors for big business, war, MIC, and corporate subsidies as they dish out Social Benefits and pump up US Federal Government Programs across the board. No they don't want Audits or the truth.
They want to win, this week, this year, this fight,... so they don't want press, investigations, audits, or it seems ideology.
So yeah, you are Right.
I never thought I'd live long enough to say this, but I long for the days when Richard Ney railed against the blue-blooded New York Stock Exchange specialists as the root-of-all-evil for their privileged positions and market manipulations.
"Accordingly, Greenspan’s “committee to save the world” did no such thing. What it did was bury the American middle class in debt, while massively outsourcing US goods production capacity to China and elsewhere in the EM."
Obama calls that a "diversified economy" when he was bashing Russia recently.
It is fashionable to hate on Wall Street, but they are just playing by the rules. The culprit that is harder to envisage is the dumbfck citizen who keeps voting for bought politicians. It's the scared old ladies and the people engaging in narcissistic masturbation on social media. Those are the people you should blame and hate.
Those people you say we should hate are merely disgusting [to various degrees] for the most part. The people to hate are those who PAY fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-notes to politicians to CREATE THE RULES that favor them at the expense of every honest, ethical, productive, benevolent human being.
To be precise, I refer to Wall Street and the entire predatory financial-government complex.
Sure, it is oh so "virtuous" to "play by the rules"... when you make the rules and avoid punishment when you do break them.
But no... today it goes light years beyond that. If you're part of the elitist Wall Street gang, you can't even GET arrested or thrown in jail for your crimes! Not even if you outright blatantly steal billions of dollars and manipulate entire markets.
Nope. The absolutely worst consequence you pay is a 1% fee to your fellow predators-DBA-government in "fines"... but only to make it appear some negative consequences befall you. Which isn't even true... those "fines" are merely part of the payment for creating those "rules" that favor you, and covering your ass.
And if you're one of the true elite, it also buys you a cushy luxury suite in the Valhalla Sector once you and your ilk destroy everything. All good folks can hope for is a miracle in which reality ends up being like season 2, episode 1 and 2 of Jeremiah.
They bribed the politiicans to change the rules. Half the things they do were illegal 30 years ago.
David: this is fantastic. I'm glad to see you: 1) maintain some focus on GS and its Wall Street brethren rather than just central banks and 2) focus on the extraordinary imbalance of the global economy where China pursues neomercantilist growth at all cost and we "invest" in consumption.
I think this is my favorite of your articles. Now, when you combine the insight of what has happened to CB balance sheets with an understanding of the Cantillion effect (monetary diffusion dynamics), it becomes clear how and why we have distributionally driven demand destruction... We must reestablish sound money, else we will witness societal instability the likes of which no one has seen in our lifetimes... within the United States. The only way out of this mess is to revalue financial assets in real/sound money terms. Ultimately, only good can reliquify an insolvent system and only gold can close the disconnect between value creation and value capture that is eroding our society.
"The righteous capitalist doctrines of sound money, fiscal rectitude and markets free of state intervention and bailouts are completely unknown to him. Like his ex-Goldman compatriot, Mario Draghi, his creed is “whatever it takes”. That is, whatever action is required of the state and its central banking branches to keep financial asset markets inflating is deemed to be per se legitimate and urgent."
David Graeber in his excellent bood "Debt: the first 5'000 years" makes a very cogent point: "free markets" aren't necessarily on the same side as "capitalism". The perfect example he cites is how China was ruled for a long time during various dynasties: pro-markets and anti-capitalist
*** Confucian economic-moral theory, for example, forbids interest to exceed debt principal. ***
*** Islamic economic-moral theory, does something similar by forbidding fixed interest on debt. ***
*** Both are pro-markets, while being "anti-capitalistic" in their treatment of debt arrangements ***
we have several fights going on a bit everywhere: A) for or against "free markets", B) for or against "sound money", C) for or against fiscal rectitude, D) for or against state intervention and E) for or against bailouts
B) even has two sub-themes: B1) gold based, in various schemes and B2) fiat based with or without QEs
since the ECB/EU is always such a mistreated example, in this:
a) the EU is pro-free-markets inside the EU, with restrictions on the outside trade, while regulating (heavily) both
b) the ECB is, for all purposes, not engaging in QE, while engaging in temporary LTROs, neutral in regard of gold, somewhat neutral in regard of USTs
the ECB members, i.e. the national central banks, might though soon engage in market price interventions. but even there, there is two kinds of interventions: those for price stabilization and those meant to shake markets prices. megabanks and other speculators love to do the last sort, a kind of oldfashioned market-making in reverse. so to profit from volatility and special occasions. so perhaps there is some reason to ask: what is a free market? one where prices are stable, or one where they jump up and down like mad, sometimes with rationales attached to it afterwards? are oligopolies or monopolies a sign of healthy "free" markets? do free markets include or not anti-trust activities? Aren't free markets a product of a (classic) liberal state?
c) fiscal rectitude: well, for all their faults, the countries of the eurozone are striving for balanced budgets
d) meanwhile, they do see their national debt as a national asset. so they do respond to so called "speculative attacks". see NCBs in the eurozone
e) well, this includes bailouts, and bail-ins. and again, aren't those political decisions? legitimate ones?
just my two cents, happy new year to all ZHrs in good faith, i.e. searching for facts in this confusing, complex world
Ghordius, free markets are never free..big corps are never for the public good, big .gov like big corps is for big .gov..the USA fed .gov was paid for by tariffs until income tax and the FED were created..
seems tariffs which protect a countries workers could not be used to grow .gov and large international co's and billionaires, so they were dumped and labeled as failed economic policy.
I know you want a strong economy in europe as I want in the USA, but my Friend, that is not what is good for international mega corps and billionaires.
free markets are free when the small and medium players aren't screwed by Big Biz, either through strong market moves or blatantly rigged manipulation
where you do see thriving small and medium biz, you usually find free markets. but usually they don't swing like mad. usually, you even find market makers and beneficial speculators smoothing price fluctuations
those are just indicators, but they are useful ones
Wall St. and the banksters have mortgaged their heads.
The people will soon foreclose.
The banksters need to repay us.