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Central Banks Upside Down

Submitted by Tyler Durden on 01/17/2015 23:51 -0400

From Raúl Ilargi Meijer of The Automatic Earth

Central Banks Upside Down

The Swiss have unleashed a pretty wild storm in financial markets. All sorts of companies and people today are licking their wounds, and quite a few will simply have to fold. It’s no exception to be so leveraged in foreign exchange wagers that a move of a few percent can wipe you out, let alone one of 30%. Leverage makes sure that right off the bat a whole bunch of foreign exchange brokers, including FXCM, the biggest, are literally dead in the water – FXCM stock fell 90% -.

We’ll hear about the real losses in the days and weeks to come, but rest assured they’ll be very substantial. Banks like Goldman, Deutsche and Barclays were heavily short the franc, and therefor of course, so were their clients. Many private investors have lost everything and then some. As if the losses from oil’s jump off the cliff weren’t damaging enough yet to the realm of finance. But, you know, the CHF franc was pegged to the slumping euro, so what did everybody really expect? The timing may have been a surprise, but come on ..

There’s number of lessons in this, but I don’t feel confident that they will be learned. If only because we’ve gotten so used to living in an upside down world that it has become a solid new normal, especially for those who’ve made a killing off of it. But everything, says physics, tends back to equilibrium. And we were many miles removed from that.

The world of finance decries the fact that the Swiss central bank didn’t ‘telegraph’ beforehand that they were going to get rid of the euro peg. And that’s completely upside down, right there. Even apart from the fact that the SNB move wouldn’t have worked if it had indicated it beforehand, what’s the idea behind central banks having to tell you anything at all? Just look at this from Bloomberg:

SNB Officials Eating Words Risk Lasting Investor Aches

Switzerland’s central bank officials have just eaten their words, risking lingering indigestion in financial markets. Just three days after Swiss National Bank (SNBN) Vice President Jean-Pierre Danthine called the franc cap a “pillar” of monetary policy, the SNB yesterday dropped the minimum exchange rate of 1.20 per euro. The shock abandonment of the SNB’s primary policy of the past three years may now leave investors warier of taking officials’ words at face value, according to economists including Karsten Junius, chief economist at Bank J. Safra Sarasin. By scrapping one tool, the franc cap, SNB President Thomas Jordan risks blunting the effects of another. “The SNB’s credibility has suffered a bit,” said Junius, a former economist at the International Monetary Fund.

“Statements will get read in the future with a bit more caution. Verbal interventions will hardly work any more.” The central bank’s regular pledge to defend the franc cap with “utmost determination” had become part of the institution’s brand, not least because of the success of that policy in protecting the country’s domestic economy. “They’ve lost part of their credibility, I think, ”Han De Jong, chief economist at ABN Amro told Angie Lau on Bloomberg TV. “Whatever they will say, markets will not trust them very much.” George Buckley at Deutsche also argues the SNB’s words are hard to reconcile with the SNB’s new policy stance. “Their commentary now means nothing,” he said. “This is not utmost determination, is it?”

Bank of England Governor Mark Carney has suffered similar criticism. He was labeled an “unreliable boyfriend” by one U.K. lawmaker last year for giving conflicting messages on the possible timing of interest-rate increases in the U.K. SNB President Jordan yesterday defended his surprise move, saying that a tool like the cap would always need to be abandoned unexpectedly. Anatoli Annenkov at SocGen agrees. “It’s something we aren’t used to anymore because most central banks are talking about warning markets, improving communication, not surprising anymore,” Annenkov said by phone from London. “But in such circumstances, there’s basically no other way to do this. Markets would have speculated, positioned themselves beforehand.”

There’s this sense of entitlement seeping through from this that makes you want to, I don’t know, shout, puke? Traders and journalists that chide a central bank for not giving them what they want, when they want it? On what logical basis? That Greenspan and Bernanke did it for years, and so screwed up the entire US financial system? That information from central banks is now some god-given right for traders and bankers? Are you nuts? Are we all? We now know the Swiss are not, or let’s say that for whatever reason they did what they did, they’re not completely off their rockers.

So how about other central bankers? Everyone seems to be sure now that Draghi at the ECB has more reason than ever, after the SNB move, to launch full tilt QE. And I’m thinking, I don’t know kiddos, perhaps he has less reason now, because the markets’ faith in central banks has taken a jolt, because the effectiveness of that QE, which has been in the works forever, has already been priced in by those markets, and because the Germans are sure to contest it all throughout their court system(s). What use would a Draghi QE be at this point? Close to zero. He might still do it, but that would just expose him as a tool. And he can resign and become Italy’s new president right after. And it’s not just Draghi:

The Swiss Just Made Japan’s Job Harder

Haruhiko Kuroda’s monetary “bazooka” just got outgunned by the Swiss. Since April 2013, Japan’s central banker has been pumping trillions of dollars into the economy in an attempt to generate 2% inflation. But in a mature, aging economy like Japan’s, the effort is 95% about confidence. In order to “drastically convert the deflationary mindset,” as Kuroda puts it, the Bank of Japan must transform sentiment among households and businesses. Kuroda’s massive bond purchases mean little if the Japanese don’t trust that better days lay ahead. The Swiss National Bank’s move to abandon the franc’s cap against the euro may have blown a hole in Kuroda’s strategy.

By reneging on a promise made time and time again that he wouldn’t ditch the policy, SNB President Thomas Jordan “has undermined the credibility of central banks,” says Simon Grose-Hodge of LGT. Now, at central banks around the globe, he adds, “the unthinkable is entirely possible. You can’t rule anything out.” Even if the BOJ issues another blast of quantitative-easing after its two-day policy meeting next week, the question is how effective the move would be. Kuroda’s Oct. 31 shock-and-awe stimulus announcement worked for a time by bolstering perceptions that steady inflation was within reach. But this time, with even Economy Minister Akira Amari admitting “it will probably be difficult” for the BOJ to succeed, markets are likely to be more skeptical of the bank’s staying power.

It’s not really the Swiss, central bank credibility was already shot through the past decade, if not more. You have no credibility as a central banker if you serve the interests of one particular niche. Like traders. You need to serve the interests of the entire nation you ‘serve’, or your time will come. No matter how much Draghi, Kuroda or Bernanke were tempted by the omnipotence narrative, deep down they must have known it wouldn’t last.

And now they have to face a new world, one they’re not used to at all. One in which their credibility is shot. I’m guessing that means they understand their ‘normal’ course of action, QE up the wazoo, no longer works. So what then?

Look, Draghi may well come up with that QE of his, but it’ll be stillborn. It’ll only be yet another transfer of money from the public to the private sector. Let’s buy a trillion worth of bonds! Yeah, that worked great for everyone else… But can Draghi still do that? Yes, it’ll bring down the euro for a bit, but the euro is going down no matter what he does. This is turning into a game of whodunnit. And then, of course, there’s the Fed:

Yellen Signals She Won’t Babysit Markets in Turmoil

Janet Yellen is leaving the Greenspan “put” behind as she charts the first interest-rate increase since 2006 amid growing financial-market volatility. The Federal Reserve chair has signaled she wants to place the economic outlook at the center of policy making, while looking past short-term market fluctuations.

To succeed, she must wean investors from the notion, which gained currency under predecessor Alan Greenspan, that the Fed will bail them out if their bets go bad – just as a put option protects against a drop in stock prices. “The succession of Fed puts over the years has led to a wide range of distortions in financial markets,” said Lawrence Goodman at the Center for Financial Stability. “There have been swollen asset values followed by sharp declines. This is a very good time for the Fed to move away.”

We’re getting back to normal, and though normal’s going to hurt – and far more than you realize yet-, it’s hugely preferable to upside down; you hang uprise down long enough, it makes your brain explode. The price of oil was the first thing to go, central banks are the next. And then the whole edifice follows suit. The Fed has been setting up its yes-no narrative for months now, and that’s not without a reason.

But everyone’s still convinced there won’t be a rate hike until well into this new year. And the Swiss central bank said, a few days before it did, that it wouldn’t. And then it did anyway. The financial sectors’ trust in central banks is gone forever. And none too soon. Now they’ll have to cover their own bets. If anything spells deflation, it’s got to be that. But not even one man in a thousand understands what deflation is.

We have a ways to go before we solve this puzzle. But we are, at least and at last, on our way.

- advertisements -

Sat, 01/17/2015 - 17:03 | 5674529 Otrader

+1 JB. But, those losses will just be passed on to the rest of us. Govn't and Banking are one now. There is zero oppossition to these bankers from the general public. As a previous poster mentioned, most americans do not know what a Central Bank is or know how it really operates. In the last spending bill, congress provided them FDIC insurance on these derivs and YES they will cash those chips. The USA citizenry is clueless and helpless vs these giants.

Sun, 01/18/2015 - 10:16 | 5676227 new game

i can feel your rage, RAGE, RAGE...I WITH YOU IN YOUR THOUGHTS...

Sat, 01/17/2015 - 14:31 | 5674133 ekm1

For how long are we going to read such fantasy?

There was never ever any trust central banks?

There was always trust on Pentagon, nothing else.

White House does voluntary disengagement, hence trust disappears due to fear.

That's it

Sat, 01/17/2015 - 15:08 | 5674241 WillyGroper

ekm1,

I see many of your view points as valid.

Trust in the Pentagram, not so much.

Look up Kay Griggs 1998 on ewetoob. The first 35 minutes could alter your perspective a bit.

They are NOTHING but a bunch of pedophile pigs.

Sat, 01/17/2015 - 14:31 | 5674141 artless

So let's review:

The Swiss were BUYING up ll those Euros to keep there currency in some target zone. The EC is a shit mess of a political system and and even more disastrous financial/economic set up (I'll insert here my standing bet that ITALY leaves the EURO first which starts the domino effect of the world seeing Marks, Lire, Francs, and Pesos once again long before anyone thinks such a thing will occur) and the world economy is tanking (with all the genious Fabian Socialist Utopias of Western Europe leading the way-check those unemployment numbers!) no matter what Barry Sotero reads off his telepromter and his propaganda machine feed the 4th branch of government otherwise referred to as the "media.

So the folks who stood up to Hitler's generals thought it prudent to STOP BUYING WHAT WILL BE A WOrTHLESS CURRENCY and canned the cap.

And people who were supposedly in the know-the smartest guys in the room-were suprised by this? Or do these dumbfucks really believe all this shit they sell?

The flying contraption of the floating currency (thanks uncle Milt-NOT) created the idiocy of the FX market and the carry trade which-and this is IMPORTANT so pay attention- PRODUCES NOTHING and is nothing more than a gambling parlour disguised as international finance albeit with USUALLY more predictable (BECAUSE IT"S A FIXED RACKET) results except when there isn't like recently with the Swiss through which a bunch people at the roulette wheel lost millions.

Doh!

Tell me again why germany wanted their gold back? And Russia, China, et al are buying tons of it?

Sat, 01/17/2015 - 15:50 | 5674351 Monty Burns

And more important, tell me Germany can't get their gold back.

Sat, 01/17/2015 - 16:31 | 5674401 malek

...and seems to have accepted that!

But back to artless' post:
What makes you think Italy will be allowed to leave the Euro? Berlusconi was dealt with in record time when he stated making small hints towards such a possibility.

Sat, 01/17/2015 - 23:41 | 5675556 artless

Good point re: Berlusconi. He may have been "Kaddafied". My thought are that the political history of Italy will be the deciding factor. It will be through referendum or some such rather than a single strong leader. everyone is looking at Greece but they will elect a lefty gov't that will stick it out with the Euro and the EC once they get a look at the books and the swag.

The Italians on the other hand are a little more unpredictable. And as for the Spanish they will break up into 3-4 states since the idea of "Spain" as we know it is kind of a joke. Sorta a made up country like Belgium.

Sun, 01/18/2015 - 00:16 | 5675627 malek

I also thought Italian politics a little more unpredictable - up until Berlusconi was ousted.

Now I have to assume the NWO guys have a pretty good grip on Italy.

Sat, 01/17/2015 - 15:01 | 5674230 bid the soldier...

Aside from a couple dozen obsessive/compulsive, above average I.Q. people wirh a lot of time on their hands to loiter about zh, how many Americans know that the US has a Central bank? An what small percentage of that small number know what a Central banks does?

Sat, 01/17/2015 - 15:37 | 5674313 silentsock

Probably about 15%... (if that)

It AMAZES me how so many people just go along, being totally unaware of most everything, aside from what's on the TV or Facebook...

Sat, 01/17/2015 - 15:45 | 5674344 Monty Burns

That's why there's TV....take the proles' mind off more important stuff.

Sat, 01/17/2015 - 18:28 | 5674749 bid the soldier...

and feed them them false information

Sat, 01/17/2015 - 15:28 | 5674296 bid the soldier...

Yes, I remember

We have a ways to go before we solve this puzzle. But we are, at least and at last, on our way.

Those were the very last words of Lord Fizzywick when he lead the charge of British light cavalry against Russian forces into the Valley Death during the Battle of Balaclava.

It was the Crimean War if I'm not mistaken.

Sat, 01/17/2015 - 15:38 | 5674322 shovelhead

Fed Honey Badger doesn't give a shit.

Earning a solid 6% on hundreds of billions all day, every day.

Who eats any losses?

Wild guess.

Sat, 01/17/2015 - 15:52 | 5674355 Son of Captain Nemo

Bye!... Bye!...

Sat, 01/17/2015 - 15:51 | 5674358 franzpick

This decades old observation should be amended to:

THE DANSE MACABRE OF THE CURRENCIES HAS BEGUN, AGAIN

Sat, 01/17/2015 - 15:57 | 5674371 basho

thanks Raul.

one of the few articles on this subject that makes any sense.

there is now a hole in the dike.

it'll only get bigger.

there will be more jordan-moments coming along the pike.

Sat, 01/17/2015 - 16:03 | 5674384 theyjustcantstop

I think draghi should kiss snb's ass.

if he'd have started the ecb-qe, then the snb pulled it's peg, soros, and friends would've shorted the euro out of existence, and still will if he continues.

I don't know why Swiss importers, exporters, or average citizens would complain, their going to find true pricing on their materials, commodities, and finish product, a lot sooner than most.

I'm assuming the snb will still have some sort of peg, and be buying gold.

Sat, 01/17/2015 - 16:29 | 5674448 RaceToTheBottom

The article points out how far removed the Financial sector has become.
1) I should make millions/billions each year because I am a master of the universe.
2) If you wanted to make money, you should have become like me, if you have the skills.
3) What? You must telegraph your moves to us Masters of the Universe, so we can continue to be Masters of the Universe.

I hope they cordon off sections around the financial firms so that normal people aren't hurt by the flying fuckers of WS.

Sat, 01/17/2015 - 16:48 | 5674492 CHX

I think it will soon dawn on "the market" that only honest money (yellow and white) are true money. And then all hell will break loose if not THE reset comes before that, to frontrun the market's move.

Sat, 01/17/2015 - 16:55 | 5674501 lakecity55

I thought all these banks had private owners.

So, what the fuck do they care?

Besides, ultimately, they all have 1 owner in Basle.

Sat, 01/17/2015 - 16:57 | 5674505 RaceToTheBottom

The article points out how far removed the Financial sector has become.

1) I should make millions/billions each year because I am a master of the universe.
2) If you wanted to make money, you should have become like me, if you have the skills.
3) What? You must telegraph your moves to us Masters of the Universe, so we can continue to be Masters of the Universe.

I hope they cordon off sections around the financial firms so that normal people aren't hurt by the jumping fuckers of WS.

Sat, 01/17/2015 - 16:57 | 5674506 RaceToTheBottom

dupe

Sat, 01/17/2015 - 17:25 | 5674585 RECISION

Well, here is an interesting statement...

But not even one man in a thousand understands what deflation is.

maybe not - depending on which definition is being applied.

Is that the central Banker definition - or the lower costs through greater efficiency definition ?

Sat, 01/17/2015 - 17:54 | 5674666 LoneCapitalist

I look forward to the collapse of the global fiat monetary system. Not that I don't understand how bad things are going to be for so many people, I expect it to be horrific. But, the longer this drags on, the worse it will be. What worries me the most is, when the collapse does happen, will there be enough of us who understand why it happened. With so few who see what's going on today, I'm afraid that the collapse will be blamed on capitalism or some other ridiculous story. If the masses don't understand what happened and why, we may all be duped again and saddled with another centrally planned overlord banker system.

Sat, 01/17/2015 - 18:34 | 5674759 August

>>>If the masses don't understand what happened and why, we may all be duped again...

This process is what is known as "human history". The masses won't understand, and will be duped again.

You can (ahem) bank on it....

Sun, 01/18/2015 - 02:19 | 5675819 dreadnaught

sadly they are dupped over and over again over the millenia-when will they ever learn......

Sat, 01/17/2015 - 18:30 | 5674752 GMadScientist

"Banks like Goldman, Deutsche and Barclays were heavily short the franc, and therefor of course, so were their clients."

Since when do these asshats do that they tell their precious clients to do?

Sat, 01/17/2015 - 18:52 | 5674799 Clesthenes

“The price of oil was the first thing to go, central banks are the next. And then the whole edifice follows suit.”

What this actually means is that, when central banks fail, currencies they issue will hyper-inflate to zero.

Then the world will learn the consequences that followed attempts by governments to guarantee bank deposits from losses.

By these guarantees, when a bank failed, or was seized by the government, all deposits over $250,000, for example, would be protected; all amounts over that limit would be lost.

This immediately created massive problems for depositors with accounts larger than the limit (wealthy individuals, companies and corporations).

It would, for example, be a disaster for a corporation with a cash position of $500,000,000 to be caught in such a bank failure.

This policy of guarantee set in motion mad scrambles by large depositors to protect their “cash”. It led to the creation of so-called zero-balance accounts (which go by many names). By these accounts, positive balances in large checking accounts were swept into US Treasuries at end of each day. Thus, if the bank failed/was-seized after closing that day, the account holder had nothing to lose.

But there was a limit to this remedy: very quickly, there were not enough Treasuries to satisfy demand. This gave rise to the demand for Mortgage Backed Securities (MBS) as a substitute for Treasuries. This demand was world-wide. Now, there are probably $6 to $15 trillion MBS serving as so-called “cash equivalents” on corporate balance sheets world-wide.

And now all these “cash equivalents” are collateralized by US Treasuries (directly or indirectly).

Other “cash equivalents” include all US Treasuries; dollar instruments owned by foreign private or central banks; all MBS owned by the Federal Reserve; all currency issued by the Federal Reserve (the scrip we carry in our pockets); and a whole plethora of fruit-cake debt (such as SBA loans, car-lot loans, student loans, credit card debt et cetera).

When we trace all these “cash equivalents” to their collateral, we arrive at the gold that may or may not be at “Fort Knox.”

It leads to the conclusion that the dollar has already been destroyed… it’s just that no one has issued a press release yet.

Sat, 01/17/2015 - 20:29 | 5675029 gwar5

All Central Banks should be heavily regulated, transparent public utilities with salaried employees, ie., end the Fed. And management of Wall Street banks like GS, JPM, CITI, should be made to pay civil claims for losses out of their own personal assets when they lose money -- like the Swiss do.

Corzine should have lost his $200 million forture and Dimon should have lost every he owns to pay for the Whale, FX rigging, metals rigging, Libor. Neither should Boards of Directors and other relevant management be immunce. This is on top of jail time if convicted for criminal behavior.

If they don't like it we can go back to hanging them like the good old days.

Sun, 01/18/2015 - 01:13 | 5675437 Radical Marijuana

A good article, EXCEPT,

typical understatements,

as well as gross underestimates of how much more diffiucult resolving those problems would therefore be:

"We’re getting back to normal, and though normal’s going to hurt – and far more than you realize yet-, it’s hugely preferable to upside down; you hang uprise down long enough, it makes your brain explode."

HAH! We are NEVER going back to "normal" within our life times. The puzzles to be resolved are many orders of magnitude WORSE than presumed in the conclusion to the article above:

"We have a ways to go before we solve this puzzle. But we are, at least and at last, on our way."

Consider some of the deeper levels of what it means to CORRECTLY state the situation as: "Central Banks Upside Down" ...

We are living in a Bizarro Mirror World, where EVERYTHING appears proportionately backwards, or a Wonderland Matrix, where EVERYTHING appears proportionately absurd. For thousands of years, Neolithic civilizations' social pyramid systems have been based on backing up lies with violence, in which context the biggest bullies' bullshit social stories have been enshrined in the dominate natural languages, as well as the dominate philosophy of science.

The apparent UPSIDE DOWN world of Central Banks is but the tiniest tip of the iceberg of the degree to which the real world operates on the basis of systems of legalized lies, backed by legalized violence, in ways which the vast majority of people are unable to think about coherently, because the basic languages that they use, as basic concepts that they presume are correct, are systemically upside down, inside out, and backwards in the most profound ways possible!

The idea that we are ever going back to "normal" or going to resolve the "puzzles" and get back to "normal," is laughable, because the kinds of paradigm shifts which would be necessary to actually solve the real "puzzles" are so far, far from "normal" that most normal people are even able to understand that!

In the history of science, "normal science" is "puzzle solving," WITHIN the paradigm adopted by the people who regard themselves as the peers at that time.

http://www.zerohedge.com/news/2015-01-14/dear-jamie-dimon-why-us-banks-are-under-assault

The social facts have become blatant enough that Zero Hedge can boldly state them: "the world's banks have now become the world's biggest organized crime syndicate." However, in my view, the primary reason why society so dismally fails to deal with that runaway situation is that people continue to want to rely upon DUALITIES, or false fundamental dichotomies, and the related impossible ideals, as the basis for understanding the social facts that "the world's banks have now become the world's biggest organized crime syndicate."

CENTRAL BANKS are the core of established systems of ENFORCED FRAUDS. Almost everyone else gets screwed by those runaway frauds, while only a few benefit (at least in the short-term), from the frauds of banksters being enforced by governments. Even worse, people end up with profoundly irrational attitudes towards the "real" world, since their social situation is based on "successfully" adapting to live inside of systems of ENFORCED FRAUDS, which appear to blatantly violate the basic laws of nature. ACTUALLY, CENTRAL BANKS ARE THE CORE OF CONTROLLING CIVILIZATION THROUGH THE METHODS OF ORGANIZED CRIME.

In my view, while the social facts are becoming more and more blatant, that governments are the biggest form of organized crime, controlled by the best organized gangsters, which are currently the banksters, those social facts continue to still be interpreted through the same old-fashioned, biggest bullies' bullshit view of the world, which deliberately presents everything in ways which are as backwards as possible. Metaphorically speaking, we are living in a Bizarro Mirror World, and thus, the only genuinely better resolutions to the problems that causes is to go through the looking glass.

It is NOT possible to stop human realities from being entropic pumps of energy flows. However, it IS possible to perceive that differently. Indeed, changes in the basic paradigms of perception that we use to understand politics is what is necessary. As soon as we perceive human beings as being SUBTRACTED from their environment, then across the boundaries thereby defined they MUST TAKE ENERGY, in order to live, which means engage in ROBBERY.

Of course, the biggest banks are engaged in the greatest robberies, through government enforced frauds. However, since we collectively tend to understand the basic concept of SUBTRACTION backwards, because we have subtracted the subtraction, without paying attention to the ways that we have done that, we continue to operate within the biggest bullies' bullshit world view, based on being able to back up lies with violence. Therefore, in the case of the world's biggest banks, OF COURSE, they are "the world's biggest organized crime syndicate."

Naturally, any sufficiently good analysis of the social facts is ALWAYS going to reveal some systems of organized lies operating robberies. However, the prolonged social successes based on backing up deceits with destruction, and enforcing frauds, has resulted in almost everyone being brainwashed to perceive that through the biggest bullies' bullshit language, or, in this case, through the language promoted by the banksters, whereby there was a negation of the negation, which most people continue to not notice, and therefore, they continue to promote bullshit "solutions," which continue to presume they are perceiving things properly, while they are actually always thinking in ways which negate the negation, without noticing that they are doing that.

Paradoxically,

doing that should be described as the processes of

subtracting the subtraction of the subtraction,

and of negating the negation of the negation,

since the world we live in is already based on

subtraction of the subtraction,

or the negation of the negation.

Basic central bank behaviors:

INSIDE JOB DRIVEN CRISES.

NONE of the dictionary definitions of the words that most people use to attempt to discuss the social situations actually apply very well, rather than mislead more. The single best word is "plutocracy," however that is not correct either, because the greatest "wealth" of those plutocrats is to be able to make the public "money" supply out of nothing. The Central Feature of Central Banks is their legal ability to create endless amounts of "money" out of nothing, while that public "money" supply is something that everyone else is forced to work for, and pay taxes with. Moreover, another crucial feature of Central Banks is that they are all effectively under Private Control. The policies of the Central Banks are coordinated through an international system set up by international bankers:

As historian Carroll Quigley wrote:

"powers of financial capitalism
had another far-reaching goal,
nothing less than to create a
world system of financial
control in private hands
able to dominate the
political system of
each country and
the economy of
the world as
a whole ..."

However, that REAL history is more like ancient archeology now, because the successful creation of those ENFORCED FRAUDS, which have become electronics backed by atomic energy, has driven the BIG BANKS to become inconceivably BIG expressions of runaway crazy corruption, to the point where the little lives of flesh and blood people, inside the physical markets are relatively trivial factors, within the virtual reality using "money" made out of nothing to speculate with, since that virtual reality now exceeds the physical reality of physical markets by orders of magnitude, similar to the degree to which electronics and atomic energy exceeds the common sense of the vast majority of people.

After one recognizes that all the "money" that the vast majority of people use to buy food and fuel, etc., is now but a TRIVIAL aspect of the established economic systems, the REAL problems are so BIG that the lives of ordinary flesh and blood people no longer matter to the virtual world of finance based on runaway, triumphantly enforced frauds. Since almost everyone has adapted to living inside of dominating empires based on systems whereby the public "money" supply could be made out of nothing, in order to "pay" for strip-mining the planet's natural resources, there is not any reasonable hope in hell that enough people will ever understand the levels of improbability found in the conclusion to the article above:

"We have a ways to go before we solve this puzzle. But we are, at least and at last, on our way."

The vast majority of people do not have the slightest clue regarding how clueless they are! The Big Picture is that the ability to continue to strip-mine the planet's natural resources, through being able to make the "money" to pay for that out nothing, is reaching real limits of diminishing returns. There are NO good reasons to believe that enough of the masses of muppets that vote for the banksters' puppet politicians are going to be able to face those basic facts. Rather, almost everyone continues to presume that the ways that they perceive the world are not based almost totally on the psychotic bullshit of bullies.

The surreal situation where the "money" made out of nothing to gamble with is orders of magnitude bigger than everything that flesh and blood people ever actually pay for, using the same public "money" supply, requires facing some extremely distressing basic facts. Our fundamentally fraudulent financial accounting systems HAVE enabled us to live AS IF there were more than 10 extra planet Earths, inside of the virtual world created by the banksters' abilities to have their frauds enforced by governments. Anyone who thinks we could fix the problems that exist when everything that operates now is based on pretending there are more than 10 more planet Earths in the virtual world, than in the real world (because that virtual financial world is based on systems of electronic monkey money, backed by apes with atomic bombs), is NOT remotely close to being in the order of magnitude of what those problems ACTUALLY ARE.

There is no rational way to imagine what the possible "market corrections" could be, when the ERROR was based on acting like there were more than 10 more additional planet Earths!

Overall, a good argument can be made that the ratio is more like 100 to 1, rather than merely 10 to 1, while that is headed towards becoming 1,000 to 1 at an exponentially accelerating rate. For example, it appears there is 100 times as much electronic and/or paper "gold" as there is physical gold, and similar situations appear in every area that one more critically examines! The accumulated CONTRADICTIONS between the imaginary, virtual, financial world, based on government enforced bankster frauds, versus the real, physical world, ARE AT LEAST AN ORDER OF MAGNITUDE OFF!

The banksters are surely driving one INSIDE JOB CRISIS after another, in order to advance their agenda. However, their agenda is criminally insane. Of course, it appears to make no significant practical difference to understand that, nor to try to develop a language to describe that which is not totally bullshit, because our social systems are almost totally based on bullshit.

At present, the banksters' bullshit is overwhelmingly dominant. The only publicly significant opposition is controlled, to be reactionary revolutionaries, who are supposed to be waking up the mainstream morons, to understand the social facts, but which never propose realistic solutions consistent with those real facts. THEY NEVER PROMOTE BETTER SYSTEMS OF ARTIFICIAL SELECTION, CONSISTENT WITH NATURAL SELECTION. Instead, the vast majority of the reactionary revolutions stay WITHIN the biggest bullies' bullshit world view, still using the same bullshit language.

The only ways which theoretically could work better would be to understand human realities as manifesting general energy systems, which end up best described by the principles and methods of organized crime. I.e., human realities are ALWAYS organized lies operating robberies, with the banksters operating the most abstract forms of frauds, as symbolic robbery. However, generally, almost everyone continues to think through using DUALITIES based on false fundamental dichotomies, and therefore, propose bogus "solutions" based on impossible ideals. All of the generally understood and used language about politics and economics is almost totally BULLSHIT. There are realities behind that, but practically NO good language, with good labels, to be able to discuss those realities. Instead, we are operating a civilization based on enforced frauds, which are automatically becoming more criminally insane, the more successful they are. ...

THOUSANDS OF YEARS OF SOCIAL "SUCCESS" BASED ON BEING ABLE TO BACK UP LIES WITH VIOLENCE HAVE BECOME THE SYSTEMS OF GOVERNMENT ENFORCED BANKSTER FRAUDS! Hence, the wilder oscillations being observed, which are surely going to get wilder still! However, while there will be plenty of destruction of the lower classes that are being ruled over, the ruling classes do NOT deserve to be referred to as the "elites." They merely have psychological and political habits which enable them to back up lies with violence, while the lower classes have social habits were are used to that happening. Overall, the ruling classes are criminally insane, while those that they rule over are also criminally insane.

The entire human species has become way too good at lying to itself, because within human societies success was achieved by backing up lies with violence, therefore, our political economy is based on enforced frauds, within which systems the central banks and the most obvious symbols, as the Kings of Fraud. However, being the Kings of Fraud actually means that the central banks are the most criminally insane, central components of an overall criminally insane civilization.

There is no good language to discuss relatively more object facts, because the central social facts are the control of society through systems of enforced frauds, as seen by how central banks can make "money" out of nothing, and do so to deliberately drive crises, in order to move forward their overall criminally insane agenda, while those they rule over are similarly too criminally insane to be able to comprehend that, because they have been conditioned to not want to understand that. Therefore, the language that almost everyone used to discuss these situations is almost totally based on bullshit, while even those who try to understand things better tend to still be stuck inside of using bullshit language to explain those social situations. Hence, it is typical for Zero Hedge articles to grossly underestimate the magnitude of the problems that they are discussing, such as to make the kind of statements above.

While I believe it is theoretically possible to develop a better language, and ways of labeling the phenomena, the groups of people who would like that are vanishingly small. Meanwhile, the groups of people who continue to want to believe in bullshit, and use bullshit language. are overwhelmingly dominant, not only in the ruling classes, but also throughout the controlled opposition.

The banksters plan on continuing to deliberately cause crises that enable them to ramp up their ability to control society through systems of legalized lies, backed by legalized violence. However, exactly to the degree that they are successfully able to enforce more and bigger frauds, then civilization as a whole will become more criminally insane. The banksters will surely be able to continue to destroy the lives of the Zombie Sheeple and mainstream morons, or the masses of muppets. However, that does NOT mean that the banksters agenda is not criminally insane, rather, the more successful they are, then the more criminally insane they become, due to the inherent nature of the increasingly severe contradictions that controlling civilization through backing up lies with violence.

In that context, the destruction of the natural world driven by fundamentally fraudulent financial accounting systems is way worse than the social polarization driven by those frauds. There is NO good language which is generally understood, in order for enough people to be able to be more realistic, since there has been thousands of years of dominating society through systems of backing up lies with violence, which have resulted in almost TOTAL DOMINANCE OF ALL NATURAL LANGUAGES, AS WELL AS THE PHILOSOPHY OF SCIENCE, BY BULLSHIT!

The political paradoxes driven by each increment of being able to SUCCESSFULLY enforced frauds have created social systems which are criminally insane, and therefore, headed towards a series of psychotic breakdowns, whose degrees of INSTABILITY are impossible to fully imagine! However, practically nobody who was socially successful operating within those systems in the past is able and willing to understand the deeper levels of the more radical truth about that, and even if they attempted to do that, there is no generally understood language which can be used to communicate those insights with any other significant number of people.

One should not believe in the biggest bullies' bullshit, but one should recognize the real degree to which they CAN back up their bullshit.

That applies to the banksters more than anyone else. The banksters' power is based on ENFORCING FRAUDS, and therefore, understanding that they CAN enforce their frauds is necessary to realistically attempting to cope with the ways that they CAN control the political economy. Understanding systems of organized crime does NOT make them disappear, since one still has to deal with them.

Of course, that gets harder and harder to do, since their basic system of enforced frauds automatically gets worse, faster, due to its inherent structure, which makes the oscillations driven by those processes wilder and wilder. It is extremely difficult to predict unprecedented events. The basic history of recent times has been one new flabbergasting level of enforced frauds, after another!

It is my overall view that is it extremely tragic to "successfully" make "money" within the established systems, since one has to adapt to living in a criminally insane society in order to do that. It is tragic that there is practically no other way to live than through participating in fundamentally fraudulent financial accounting systems. Doing that is a kind of an increasingly paradoxical "sanity:"

They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness.

--- Aldous Huxley

It is no measure of health
to be well adjusted to a
profoundly sick society.

--- Jiddu Krishnamurti

The GREAT PARADOX of our times is the accumulating technological progress through the series of profound paradigm shifts made in basic physical and biological science, while NOTHING remotely like that has happened to political science. The article above illustrates that by correctly pointing out the increasing degree to which it is becoming plainly obvious how UPSIDE-DOWN THE CENTRAL BANKS LOOK. However, there is NOTHING in that kind of article which comes to terms with the PROBLEMS of globalized electronic frauds, backed by the force of atomic bombs, whereby profound paradigm shifts in physics, such as found in quantum mechanics, and the special theory of relatively, HAVE enabled technologies many order of magnitude GREATER to be developed, while NONE of the insights into the basic nature of time and space which were achieved by that progress in physical sciences is in any significant way found in political science. To solve the puzzle of the Central Banks being Upside Down, one has to go through more profound paradigm shifts, in order to come to terms with the degrees to which the dominate natural languages, as well as the dominate philosophy of science, have INVERTED EVERYTHING.

Central banks are operating an Inverted Totalitarianism, that goes far, far beyond anything which can be resolved by "normal puzzle solving." We are NEVER going back to "normal," and we are NEVER going to be able to solve the "puzzles" within the established frame of reference regarding those problems! Recognizing the real nature of financial enforced frauds, in which governments are the biggest form of organized crime, controlled by the best organized gangs of criminals, requires going through profound intellectual scientific revolutions, which apply to political science, in order that we might be able to better resolve the puzzles that those problems present, which achievement can NEVER be accomplished by going back to "normal." The full magnitude of the "new normal" takes profound paradigm shifts in perception in order to put into proper perspective, which changes I have somewhat outlined in my comment above ...

Sun, 01/18/2015 - 01:15 | 5675710 malek

Sorry, but you overshoot here:

the ability to continue to strip-mine the planet's natural resources [...] is reaching real limits of diminishing returns.

That statement was true at least for all of known human history.
So far they were all overcome by either new discoveries or, in the more recent past, new technologies.

Sun, 01/18/2015 - 02:01 | 5675788 Radical Marijuana

Overshoot in a nutshell is that there has yet to be actually demonstrated sufficient basic breakthroughs in science and technology which could be scaled up enough to cope with the problems presented by having ALREADY high-graded ourselves to hell, by acting like there was an infinite planet to strip-mine.

Any and all ACTUAL Alternative Energies & Society Adapted to Them require the development of new systems of death controls, that are the necessary central controls to all other possible systems of alternatives. While I believe that there are plenty of possible creative alternatives, which could be integrated into workable systems, ALL of those require better human and industrial ecologies, which respected the overall principle of natural ecologies.

There is NOTHING like that in our current systems. Rather, the established electronic fiat money frauds, backed by the force of atomic bombs, are based on the maximum possible frauds and deceits, which make any saner integration of systems of alternatives practically impossible. Our biggest problems are the established social pyramid systems, which are an integrated combination of the ruling classes who specialize in being dishonest and violent, in order to control those they rule over, who have adapted by becoming political idiots. Combined, we continue to follow the paths of least morality, and maximum evil deliberate ignorance, because civilization is actually controlled by entrenched systems of legalized lies, backed by legalized violence, whose leading manifestation are the central banks.

In order to resolve the globalized levels of problems that are manifesting at an exponentially accelerating rate, then the "new discoveries" or "new technologies" MUST be able to be applied to political science and the combined money/murder systems. Since every new technology, especially those based on some basic scientific breakthrough, would have applications to make weapons, the flip side of any such advances are that the problems of deceitful death controls get WORSE!

There is nothing in human history to compare to what is happening now! The only abstractly relevant things in the past are deep in the past, such as the development of photosynthesis, and previous eras of the mass extinctions of species. The first generation to be born and live after the development of weapons of mass destruction is still alive today. We have done practically nothing to cope with that, other than maintain the precarious balance of MAD Mutual Assured Destruction, to back up MAD Money As Debt.

That MAD Money As Debt system makes operating an economics which respects the environmental ecology impossible, because that fundamentally fraudulent financial accounting system is based on backing up the debt controls with death controls in ways which depend upon the maximum possible frauds and deceits, which are matched by wide-spread attitudes of evil deliberate ignorance. Our political economy is based on ENFORCED FRAUDS, which flagrantly appear to violate the basic laws of nature, by creating "money" out of nothing, while that is actually consistent with the laws of nature, because those frauds are being enforced. However, practically nobody in our society addresses those problems, since everything in our society is based on the long history of socially successful strategies, by backing up deceits with destruction, in order to continue to enforce frauds.

At the present time, the ONLY connection between the laws of men and the laws of nature is the ability to back up lies with violence, which is how and why we have privately controlled central banks enforced by governments, to make the public "money" supply out of nothing as debts. In that political context, any more progress in basic sciences is going to pump up the social pyramid systems to become even more insane than they already are!

Of course, many old, rich people today may well be able to die naturally, before the consequences of what they are doing are fully manifested. However, the younger and poorer you are, then the more likely it becomes that you will experience the real consequences of previous generations having already strip-mined the planet's natural resources, and thereby high-graded the human species to hell, by wasting most of those natural resources, in ways which only made "sense" within a fundamentally fraudulent financial accounting system.

Therefore, while I believe there could be creative alternatives, the main thing that makes that practically impossible is the established social systems based on controlling civilization through lies, backed by violence. THAT is the problem which is most automatically getting worse, faster, and THAT is therefore the main real reason why any other possible creative alternatives are stillborn. Inside of the current systems, no creative alternative technologies could be developed unless more "money" was made out of nothing as debts, BUT, the world is already drowning in supersaturated debt insanity situations!

The REAL paths we are on are for the current runaway debt insanities to provoke death insanities. Therefore, I expect the total human population after another Century to be less than 1 billion people, rather than more than 10 billion people, because the ONLY way that the currently established civilization could "adapt" is to go through a series of psychotic breakdowns, and crazy collapses into chaos. Any possible creative alternatives are going to have to survive through more genocidal wars, and democidal martial law, IF they are then going to finally provide some realistic basis for some new civilization to recover from THAT afterwards.

Sun, 01/18/2015 - 02:13 | 5675810 dreadnaught

Excellent posts!

Sun, 01/18/2015 - 04:25 | 5675919 malek

I did not doubt that humans are able to bomb themselves back into the stone age.

However as long as we have the sun burning pretty constant (as is forecasted for the next 3 billion years), we have the means to "strip-mine" first the earth and later our waste dumps indefinitely.
If we use those means is a totally different subject.

Sun, 01/18/2015 - 04:38 | 5675924 Radical Marijuana

I AGREE with your summary, malek!

That is why the actual political situation seems like such an extreme tragedy! There is NO doubt that a MUCH, MUCH, MUCH greater use of information is POSSIBLE for human beings. There is NO doubt that there are plenty of creative alternatives, and a steady flow of energy which is orders of magnitude BIGGER than what we are using.

The PROBLEM is that society is ACTUALLY controlled by lies, backed by violence, which makes it practically impossible to make any saner use of information, since the ruling classes deliberately wage a war against the consciousness of those they rule over, and have done so way too successfully, for way too long ...

Sun, 01/18/2015 - 10:51 | 5676266 new game

I WAS THINKING ALONG THESE LINES:look at what china just did with trillions of created money. at least they have something to show for it. they still have the fundamental problem underlying china and all of amnkind-too many humans on a finite earth with not enough forsight to stop consuming at ten times the rate of renewal or exhaustion. create money(the juice) and forage ahead at hockey stick rates. excellent post. thanks. oh and all backed by violence-mom and dad had that stick and you know the rest of the story...

i like how the american indians enforced rules / mores-kicked out of the tribe which meant sure death, hmmm-very selective behavior enforceable w or w/o violence??? w/o...

Sun, 01/18/2015 - 10:52 | 5676276 new game

malek? at what number of humans does the system of these finite resources break down before we get to the promissed land of inovation? we are past due, due for immediate collection by the "laws of nature". but i do like your wishfull thinking...

Sun, 01/18/2015 - 13:55 | 5676767 malek

From a Physical perspective Julian L. Simon calculated already in the late 80's that 20 billion humans with the then existing technology was completely sustainable.
I agreed and still agree with him on that.

A second perspective is the Psychological view.
Other people have shown that humans only thrive if they don't feel boxed in by too many neighbors. What an individual perceives as "too many neighbors" varies quite a bit, but it's pretty clear the more intelligent are more sensitive to that - which is a problem because the more intelligent are the ones that benefit most from being able to thrive. (Note that the typical big-city-lover doesn't love the crowdedness, s/he loves the anonymity and maybe also the bigger number of options.)
So far I have not been able to find any cool-headed (not exasperated) calculation on which number of humans on earth were possible without running into that "too crowded" pinch.

Sun, 01/18/2015 - 16:08 | 5677155 Radical Marijuana

Yes, malek, those were the results of the "Rat Park" kinds of experiments by people like John Calhoun:

http://en.wikipedia.org/wiki/John_B._Calhoun

and later, by Bruce Alexander: Rat Trap

Even when there were abundances of everything physically needed to live, increasing population density drove those rats (as it would people) to become so insane that their populations became extinct, despite still having abundance of food and water, but less and less living space.

As I always assert, the most important things that people do is kill each other. The death controls are the central controls. There are no ways to fix any problems without better death controls. However, THE PROBLEM is that our actual death controls were most successfully done through the maximum possible deceits, and all the controlled opposition groups operate within the same bullshit frame of reference, INSIDE of those deceitful death controls.

My theories are based on better understanding of natural selection, so that we could operate better cultural systems of artificial selection. There are NO genuinely better resolutions to our problems without better death control systems. That is why we are NEVER going back to "normal," and never going to solve the "puzzles," unless we were able to profoundly change the paradigms in militarism, which, as the ideology of the murder system, is the supreme ideology. That would appear to take a prodigious series of political miracles, based on enough people going through enough intellectual scientific revolutions, to develop some sort of Translithic Civilization, which had consciously changed the social pyramid systems into social toroidal vortex systems.

The article above on Zero Hedge was typical in the ways that it grossly understates the problems, and therefore, grossly underestimates how difficult any better solutions would be. There is nothing else than better death controls which are enough to cope, and those are becoming more imperative the more that progress in science enables weapon technologies to advance.

Of course, I have been working on that problem since I was a teenager, and my interest in the monetary systems, and the funding of politics, stem from the ways that those pay for the murder systems, which murder systems then back up the money systems in return. IF human beings are going to survive as a technological civilization, then they MUST make greater use of information, enabling higher consciousness, regarding how to operate the death controls. However, at the present time, it makes sense from a general energy systems perspective that the actual systems of death controls backing up debt controls developed to become the maximum possible enforced frauds. Not only is that the primary obstacle, but also, that includes the ways that the controlled opposition groups stay within the same bullshit frame of reference too.

I find Zero Hedge to be better than any other comparable Web site, that I am aware of, but it nevertheless illustrates the degree to which people who understand the monetary system still promote impossible ideals as the impossible solutions to the problems presented when one understands how the monetary systems actually work. There is NOTHING else than better death controls that could actually work. However, where we are really headed is towards provoking unprecedented levels of death insanities, because of the combination of the ruling classes controlling civilization through backing up lies with violence, while the controlled opposition groups stay within the same bullshit frame of reference regarding that situation.

Mon, 01/19/2015 - 01:08 | 5678756 malek

Thanks for the links, especially the second one.

My belief (because such things will forever remain unprovable) is that lack of empathy, encouragement, and sometimes a bit challenge from the parents are most often the main missing ingredients that forms kids into permanently unhappy adults.
When lack of free space begins to become an overwhelming inhibitor to such (stronger than good parents) would be the question I'm interested in, not when the individuals start killing each other.

On the latter Calcutta/Kolkata shows humans can take quite a bit... http://www.kids-with-cameras.org/bornintobrothels/dvd.php

enabling higher consciousness

Good luck with that.

I have been following some IQ theories for 10+ years and under mile-high bullshit one discovers that most likely higher intelligence over time automatically leads to more violent fights between factions (with the less intelligent only collateral damage and/or cannon fodder.)

I'm now starting to tend towards the opinion that humanity cannot overcome the evolutionary shortcomings of a rational cerebrum propped on top of an emotional cerebellum.
You end up mostly with either emotionless psychopaths or feel-good short-term thinking spontaneists (sheeple), as very few manage to find and hold a balance between those two.

I'm an optimist, but to survive that and some day transform into some higher consciousness humanity would need an unbelievable amount of luck.

Sun, 01/18/2015 - 02:11 | 5675804 dreadnaught

that is the kind of thinking that got us into this mess:"God/Aliens in UFOs/Science/New Technology will save us"

We are taking too much and moving too fast. Science cant save you until eternity

Willing to gamble your life that it can go on forever?

"When the 'truth' is found....to be...LIES

and all the joy within you.....dies" --JA

Sun, 01/18/2015 - 03:47 | 5675898 zebrasquid

Your post is a good reason to doubt that pot does no harm...you just about melted my brain with all that.
Maybe go watch a lava lamp or something?

Sun, 01/18/2015 - 03:49 | 5675899 zebrasquid

Sun, 01/18/2015 - 04:43 | 5675928 Radical Marijuana

Hah, zerbrasquid, I have not seen a lava lamp for 40 years, & I am nostalgic for those good old days!

Sun, 01/18/2015 - 12:47 | 5676577 Clowns on Acid

Rad - Excellent. Enforced frauds, enforced Big Media, enforced untruths in schools ..... the Marxists have developed into enforced capitalists... and you are correct, nothing on the political front has been developed to match the impact and enforced control of technology.

Sat, 01/17/2015 - 23:07 | 5675462 tok1

Maybe all that's happening is simple debt write off .
The Fed bought 4.5 trill mix tres /MBS but basically
it's fungiable so their debt is about 18 trill . Economy is
18 trill ( so 100%) but really the FED had monitized 4.5 tril
So that's 13.5,trill vs 18 till economy, leave 75% debt to GDP.
Give some must be inter Govt ( ie owned by a Govt agency)
so US net debt is prob just 40-60% so actually rate rise won't hurt much.

Japan is same BOJ by the end of 2015 will own 30% of the 10 trill JGB
Market. This leaves 7 trill vs a 5 trill economy. 140% but a lot is inter Govt debt ( only 8% foreign owned ) do net Debt some have estimated 75-90.
Give domestic owned it's manageable . And BOJ might slowly after 2015 go to 40-50%.

This leaves EU which had the least total debt ( only 80% now) but southern EU is too high so they will do the same ECB will take 20-30% of the debt off the banks books ( and it's basically written off)

All centeal banks pay the interest back to treasury, so central bank bonds are free premant loan .

So QE has nothing to do with unemployment ( ie US) or inflation ( ie Japan which has labor shortage ) or both ( or EU).

It's just a way to write off the debt .

The Fed did QE but soon after BOJ began they suddenly tapered . I wounder if BOJ now tappers as ECB begins.

The Swiss were large buyers of EU bonds but the EU countries have to pay the Swiss interest. They were buying when Spain/ Italian debt was 5-7% they are going to make truly huge profit selling to ECB at sub 2% the 14% currency move will be nothing .

This is coordinated debt write off. ECB completes the process .

Sun, 01/18/2015 - 00:37 | 5675661 Goldilocks

Upside Down - Diana Ross (1980)
http://www.youtube.com/watch?v=tauI0GdKcTc (3:39)

Sun, 01/18/2015 - 00:38 | 5675663 Pullmyfinger

Deflation: otherwise known as "price discovery" during the collapse of a pyramid scheme.

Sun, 01/18/2015 - 01:19 | 5675718 Radical Marijuana

A good way to express that, Pullmyfinger!

Too much "money" made out of nothing manifests as inflation, while too little "money" made out of nothing, or too much "money" disappearing back to nothing, manifests as deflation.

During the collapse of a pyramid scheme, more "money" disappears than than the amounts of "money" possible to create out of nothing, that can be injected into the system, in order to counteract that.

Sun, 01/18/2015 - 01:48 | 5675757 Pullmyfinger

Actually, I believe the effect you're referencing is slightly adjacent to mine; however, with respect to your last sentence, for example, I like to contemplate the potential "deflation" when the bill for 1.2 $quadrillion in total derivatives comes due in the course of a domino panic. Now stop bogarting that reefer, and pass it on over.

...then again, when one's counterparty goes broke, you suddenly discover that your asset insurance is suddenly worth zero --and most importantly, whether $1,200,000,000,000 is printed up right quick to fill the void... or not.

Sun, 01/18/2015 - 02:14 | 5675807 Radical Marijuana

While the central banksters have the theoretically ability to create an infinite amount of "money" out of nothing, finding excuses to do that, and sensibly inject that "money" into the physical economy, gets harded and harder! Indeed, most of the articles on Zero Hedge that talk about "malinvestments" are focused on that problem.

My expectation is that there will be wilder and wilder oscillations between inflation and deflation, which will finally end in hyper-inflation, as the banksters' struggles to prevent deflation, and its concatenated effects, finally derail the whole train of events in unprecedented ways.

I expressed those views previously,

in my comments under this article:

http://www.zerohedge.com/news/2014-11-18/why-qe-may-lead-deflation-long-run

Why QE May Lead to DEFLATION In the Long Run

The economic systems whipsaw themselves more and more, because of the wilder and wilder oscillations between too much money made out of nothing, then too much money disappearing back to nothing. That volatility itself can cause more bankruptcies, or business not being done, which causes more money to disappear, which is deflationary. Paradoxically, the systems respond by potentially compounding that by making more money out of nothing, as more debts, through whatever excuses they can find as fit to rationalize (which tend to favour the banksters and their buddies the most, of course.)

Since the established systems can always find more excuses to make more money out of nothing as debts, while many more who previously could and would undertake going more into debt are no longer able and willing to do so, the longer, long term outcome tends to be that the wilder oscillations between inflation versus deflation eventually ends in runaway hyper-inflation, as the last phase of the crazy collapsing into chaos ...

Central Banks Upside Down

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