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Lenin Was Right...
Submitted by Bill Boner via The Acting-Man blog,
Bear Markets Do Happen
Today… the second of the speech about the end of the world we recently gave at Doug Casey’s La Estancia de Cafayate. (You can catch up on the first part here.) As Yogi Berra would say, America is going to come to a fork in the road… and it’s going to take it.
Right now, the Fed isn’t as aggressive as the European Central Bank (which is set to pump €1.2 trillion into the financial markets by way of its QE program) or as innovative as the Bank of Japan (which is buying stock market funds as well as bonds by way of its QE).
Vladimir Ilyich Ulyanov, a.k.a. Lenin, addresses a crowd in St. Petersburg in April 1917
Valuations are at extreme highs on Wall Street. Take Warren Buffett’s favorite measure – market cap to GDP. With an eight-month exception at the height of the dot-com boom (and you know what happened next), the value of all outstanding S&P 500 shares is the highest it has been relative to US GDP in the last 100 years.
Meanwhile, Deutsche Bank is warning that S&P 500 earnings per share will be flat this year when compared with 2014. Retail sales are down about 9% on an annual basis over the past three months. And the US GDP has slowed to an annual rate of just over 1%… with the possibility of a surprise recession on the horizon. Besides, crashes and bear markets happen. This seems as good a time as any.
Market cap to GDP a.k.a. the “Buffett Indicator”, via Doug Short/Advisor Perspectives. Yes, the market does appear to be slightly overvalued … click to enlarge.
Deeper into the Heart of Darkness
When the next crisis comes, the fork in the road will be a choice. The Fed can either admit its policies have not worked… chuck them out… let interest rates settle where the market wants them to settle and let the free market do its work.
Or it can follow the Europeans and Japanese toward more aggressive intervention – including massive QE and direct stock buying. I don’t think there’s any doubt about what it will do: It will go deeper into that heart of darkness.
In fact, I believe central banks and central governments now have revealed the full madness of their intentions. Well, maybe not the full madness. They haven’t thrown money from helicopters yet … but that will come.
Here’s what’s in the cards for central banks:
- They will set interest rates at preposterously low levels for years and years
- They will finance 100% of government deficits – forever, if it comes to that – with printing-press money.
- They will also pump up the stock market with this same money-from-nowhere by directly buying equities ETFs (as the Bank of Japan is already doing).
You’d have to be brain-dead (or a modern economist) not to be staggered by the audacity… the ballsy mendacity … and the incredibly big lie that undergirds the entire charade: that you can create money out of nothing and use it to pay for wars, schools, highways, and salaries for bureaucrats … and also to acquire real businesses.
Upon journeying deeply enough into the heart of darkness, you will be greeted by a Brando facepalm. It means you have failed in a singularly depressing fashion. He may mumble something like “… are my methods unsound?” to confuse you.
Photo credit: Vittorio Storaro
We’re with Lenin …
I recall Lenin’s quote: “The capitalists will sell us the rope with which we will hang them.”
Today, of course, the capitalists don’t even sell the rope; they give it away, for nothing. But what’s not to like? Stock investors are getting rich. Bondholders are making money. The government can spend as much as it likes. And the voters are bamboozled by it; they think it helps make the economy work better.
This is going to be a hard habit to break. So, here’s the gist of my conclusion: Governments won’t break the habit of getting something for nothing. It will break them. But how?
It looks as though they’ve got the perfect hustle going. They create money to buy their own debt. But this doesn’t cause consumer prices to rise (at least how they’re officially measured). Everybody’s happy.
Obviously, that won’t work forever. I don’t care how many knobs you turn or how many levers you pull. It doesn’t work that way. Ultimately, you’re putting rusty nails on the ground… and you’re going to step on them How? When?
Nobody knows. But I’m going to take a guess …
Rope comes for free these days … or at least the money to pay for it does.
Photo via twitter.com, source unknown
The Weakest Link
And here I’m no longer using my powers of observation to tell you what is going on. I’m using my intuition and guessing. The weakest link in the central bank chain, I believe, is credit. So let’s look at how this link might break.
In our modern economy, when we talk about “money” what we are really talking about is credit. Banks create this credit ex nihilo (out of nothing) when they make a loan. It exists, for the most part, as a digital record on a computer network somewhere…
And unlike even traditional paper money, this credit can vanish as quickly and easily as it got here in the first place.
Because it is purely digital in nature, you can’t hoard credit. You can’t put it in your safe. You can’t take a wheelbarrow full of it to the grocery store for a loaf of bread. Credit depends on trust. (The word “credit” comes from the Latin “credere” – to believe or trust.)
So, when our financial system implodes – which is what always happens when there is too much debt – the machinery of borrowing and lending will seize up. No one will trust that he will get paid. Credit will simply disappear – trillions of dollars of it – overnight.
This is, of course, not the end of the world. Nor even the beginning of the end. But it will be the end of the beginning of the paper money world President Nixon unwittingly created in 1971. Then the end can begin…
Debt components to GDP, G-10 – click to enlarge.
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USSA , USSR, whats the difference?
Have no fear! Obama supports erasing the differences between the US(s)A and USSR:
Saddam Obama Goes off the Deep End: Supports Mandatory Voting in US Elections
I'm pretty sure N. Korea has a 105% voter turnout.
What is this "capitalism" of which you speak?
+100 exactly. We would be hanging collectivists/socialists if we hung those responsible. As far as I can tell there hasn't been capitalism in America since Ford/Edison were alive.
Lenin was, is, and will continue to be wrong.
Was Lenin the good commie or the bad commie?
I always get him and Stalin confused ;-)
I always mix them both up with Obama.
Capitalism??? Where???
As an agent for monopolist/feudalist death merchants in the City of London, showing up in Moscow with so many ready-made nooses...the exact translation is more like:
They will gladly give us the nooses to hang ourselves as useful idiots if we believe this pathetic classist propaganda
Make voting mandatory if you want your food stamps, QE, tax write-offs, or whatever govt support you're getting. Change the voting day from Tuesday to Sunday (like most other countries).
(BTW mandatory contraception for any and all of the above recipeints of govt support).
Lenin was a rothschld biatch
One of Solzhenitsyn's masterpiece :
http://en.wikipedia.org/wiki/Two_Hundred_Years_Together
Read the Tome 2, everything is inside....
in Hong Kong
Oh Bolshevik.
... Was Lenin the good commie or the bad commie?
Lenin was the smart commie ! Way smarter than your average contemporary politician of choice...
Suffice it to say that ordinary intellects do not build something of this magnitude or resonance:
https://youtu.be/_sxTbfeYdO0
But so is my dog.....
Yup! What capitalists?
Lenin also said it isn't the people who vote that count it's the people who count the votes.
No, it was Stalin.
Yup. Lenin said ...well he, among others, offered many warnings which we have failed to heed. Some, albeit un-verified examples.
Socialism wasn't attempted in the USSR, at least not for any reasonable period of time. Neither was communism for that matter.
If you look back at the time, after all the wars had ended Russia was practically in ruins (and isolated, which is in itself a problem since socialism/communism was supposed to be a world wide movement, and many considered a socialist revolution only in 1 state a practical impossibility).
Lenin believed an intermediate state of State Capitalism was needed for the dire situation. Trotsky was against this, but it seems to me he only favored a different flavor of state capitalism on the way to socialism. Anway Lenin hey enacted a mixed private and public economy, with foreign investment allowed, calling it a strategic retreat from socialism. This led to the Scissor Crisis, which led to further dashing of hope for true socialism leading to communism ever being established.
Lenin died, Stalin maneuvered and the rest is history. Next came collectivism, 5 year plans etc etc which is nothing but brutal State Capitalism with murderously oppressive authoritarian government and created an entirely new class: Bureaucrats.
Thank you. +1
Oh, it gets much deeper. Just wait until they lower the 'voting' age to twelve and you can do it by default setting in exchange for a chance to be transported to Washington D.C. central command, with an added bonus of seeing the 'president' in action during one of his increasingly rare public appearances.
It really just gets increasingly more exciting from here.
They're really showing us how 'free-markets' don't work huh???
Farcism + Idiocracy = http://www.zerohedge.com/article/silver-curtain
I am not against mandatory voting as long as "None of the above" is mandatory on all ballots and a majority vote of "None of the above" disqualifies all other running candidates for that election cycle.
One can "hope!"
We have a closet homo for a "leader".
And a first-"lady" with man-junk. Change you can believe in?
Haha! A round of silver to the man, he-she, transgender, quarter-scro', ladyboy, bitch-by-day-man-by-night, chick with dick, hobosexual, closeted closet-queen, gender optional, or woman who can produce a legit, non-photoshopped photo of a pregnant Michael.
"And a first-"lady" with man-junk. Change you can believe in?"
plenty of anti tranny legislation in the pipe line
Sinclair Lewis, is is often cited, was wrong.
Fascism is rising to the USSA in the form of politically correct horseshit. No slander of Jews, government, blacks, gays, indians, or other invented minorities. Meantime, the smallest minority; the individual will be incarcerated for excercising its inate right to speak freely. For we must destroy the rights of individuals, in order to protect individual rights.
Forgotten is the notion that eventually the guns are pointed at you.
no, faggot.
USSR had paper, people and punchcards.
USSA has electronics, electronic networks, intrusive spying and all the old attributes of the USSR (plus some of the same people). The USSA is nukes compared to USSR firecrackers as far as the STASI is concerned.
When you become awash in information, that information becomes an undiscernible noise. Thousands of bureaucrats writing thousands of reports that nobody reads. All that information serves the personal peccadilloes of our watchers. My bet is that millions are spent watching the Kardashians.
Please dont forget the EUSSR, some of us are fighting that battle
Well, if you're wondering who runs Barter Town, well, make the inference.
Commies aren't worth the rope it will take to hang them,
but that won't slow us down.
Please, tell us all: where the HELL are you going to find a Communist these days outside of NK?
We've looked: last high spot was on Easter Island.
Check the White House.
Define communism?
They call themselves "progressives" now.
Berkeley is as good a place as any to start looking.
Down with the real menace to liberty: professional educators.
.....and Hahvahd
Communism is centralized planning. If you are pro-centralized planning you are a communist.
nope at all,ROFL.
No? How so?
Hell, every major nation on the planet is centrally planned. Communism was a wet dream and that's it. Or pipe dream may be more accurate. That is if you are referring to the real definition of communism. Name a country where the people or worker own the means of production? North Korea? Nope, strong man and people don't own shit. Cuba? Same story. China? But China is no longer communist, never really was to begin with if you go by the definition . They are a hybrid system. Of course they all say the people own it, wink wink but that just isn't the case is it. It's the same as it ever was, the power of the few or the one strong man, over the many.
Fascism is the term that fits the current system best - the State as a tool for PRIVATE power (i.e. the end station of capitalism).
You clearly know very little about communism. I'm far from communist myself, but it scares me how ignorant almost all US-citizens are on this subject. Including the majority on this - otherwise well-informed - site.
One example can be found with paid internet trolls.
This is it:
Stop whoring for Wall Street.
http://www.showrealhist.com/yTRIAL.html
http://patrick.net/?p=1223928
Isn't the author Bill Bonner? Because Bill Boner is just too funny.
He's not as funny as his brother, Dick.
Boner copied Bonner's article.
The central bankers don't have a choice. Their only option left is to print moar. With trillions in unfounded liabilities and our current debt level if they dared let the market set the interest rate the whole system would blow up over night. With printing hopefully they can kick the can far enough down the road where it's the next guy's problem.
Correct. Slight rise in interest rate and debt service costs explode.
Most of us won’t be here soon.
Moreover, make sure to plant a U.S. flag in your yard... if your iodide lasts.
Ground Zero burst is my hope...fuck having to die slowly.
Quicquid Plantatur Solo, Solo Cedit
Latin: whatever is planted in the ground, belongs to the ground.
Sutton: Wall Street and the Bolshevik Revolution
https://www.youtube.com/watch?v=7GhPsJCXPqY
http://www.voltairenet.org/IMG/pdf/Sutton_Wall_Street_and_the_bolshevik_...
Lenin would have made a good Capitalist.
He was genius. He created all social architecture for nowadays
He was against usury and fractional reserve banking.
He'd support the Chinese banking system.
Compound usury is evil.
Stalin killed him.
I don't think Stalin have anything with Lenin death
Lenin was a German agent and indeed Stalin killed him. After Lenin's death, his will was revealed where he asked the Bolshevik leaders to remove Stalin from his position as the Communist Party leader.
Chinese banks don't charge interest?
Or have reserve requirements?
Wait a minute. The Chinese banking system is based on usury and fractional reserve banking. So is he for it or against it.
And the only states that actually ban usury are Islamic theocracies.
Don't confuse the commies, they're on a roll now.
Eat your peas! ;-)
usury, like money laundering, smoking pot, and collecting rainwater in a barrel in your backyard, are all made-up "crimes".
the only real crimes are those who use violence or threat thereof, to force their beliefs and wishes on others.
In theory, yes, but they figure the vig into the total price.
He was against capitalism, that's all.
There's a reason why they had to dumbdown the US population first.
you can have more power over less educated population, old as humanity
There is, of course, truth to this, but there is a corollary principle at work in the modern world-- which is that you can have even more power over a properly-educated population that is denied the opportunity of weighing alternative viewpoints.
I enjoy hearing yours, whether you believe that or not, and hope you continue to share your experiences with the international audience that gathers here. Let every voice be heard.
You can't have an education and you can't wanted to be a sheep at the same time. You can deny alternative viewpoints only if you are uneducated
Mr. K, many people become sheep through the crucible of their "education".
it's no an education than, it's simple. Education gives you the logic, the real knowledge and understanding of their place in the world except the professional skills
This redneck autodidact bids you a good evening.
Until the next exchange of ideas.
So Stalin was the bad commie then, glad we got all that sorted out. Who could have known that the Red Terror could have led to a dictatorship.
Yeah that Lenin, he was the good guy ;-)
Define usury, please?
commrade Kowall says so.
Did you read Lenin books in Russian or any Lenin's book> ?no? so shut up
Ukraine was created by Lenin
He gave it to Germany.
he didn't and he never wanted, he loved his country more than anyone else. I can't tell it about other guys in his party.
It was only fair since Germany gave Russia to him.
Can anyone of zh readers open Lenins book and read it? Lenin didn't like Russian Empire,because of social status of ordinary people and because ordinary people didn't have access to knowledge,but he loved his country, people and land. He will rather die than to give something to any other country.
I certainly agree that the Russian Empire was a shambling, rotten, tyrannical wreck. Perhaps Kerensky could have made something out of it.
Lenin was in exile in Switzerland. He was transported across German territory despite being an enemy national so as to inject the virus of Bolshevism into the already tottering Russian war effort.
As soon as he gained power, he signed over parts of the Caucasus to Turkey and ceded Russian ownership of Ukraine and the Baltic States, and effectively abandoned the Congress Kingdom of Poland to the Central Powers as well.
Germany came very close to closing out the Allies due to this Russian treachery before American forces arrived en masse. Had they done so, Germany would have rapidly turned back to Russia and finished off the rest of it. This would have left Russia in the hands of German militarism for decades. The resolute Allied armies that Russia deserted saved Lenin's dream for him.
His platform was "Bread, Peace, Land" and he gave them a long, bloody Civil War followed by the confiscation of all land and the mass starvation of all those Ukrainians he loved so well. You can say that it was all evil old Stalin's fault but he was Lenin's accomplice and successor.
Kerensky was a traitor to the country and british spy.
This is all usa and uk propaganda SHIT, didn't have anything with reality.
Sure, he had his own purposes in mind but he had to agree to be used by the Germans FIRST and destroy their enemies FIRST in order to realize his own dreams for Russia.
Lenin wasn't German agent. You need to read laws signed under Kerensky and under Lenin.
Kerensky signed anti-Russian laws, he leave to Uk after he destroyed all Russian system.
Lenin was building a new system from 0, Stalin continued the work of Lenin
Okay, let's review here...
1) Lenin was in exile in Switzerland.
2) Germany sent him to Russia.
3) Why would they do this unless they expected to get something highly desirable to Germany out of the deal?
Ergo, he was obviously a German agent that was carrying out a German scheme to get a German enemy out of the war so they could concentrate on beating Britain and France before the Americans arrived in force.
Germany didn't care what he did after he got Russia to quit but getting it to quit was the whole point of the German plan to send Lenin back to Russia. He was, therefore, a German agent carrying out a German plan.
No? How do you think he got back to Russia?
Lenin get in the Russia when Russia was already destoryed by Kerensky, something about 6 months.
Kerensky signed the law on elections within the army when making decisions
Can you open signed laws at that time? it's simple, you will stop believe in the USA/uk fairytail.
Hard to talk with people who didn't know real facts... It's like WMD in Iraq...
Germany send to Russia about 100guys, some of them were agents, Lenin wasn't.
Why are you guys can't read real history, not a fake news?
Kerensky was a British spy? Okay.
Lenin was undoubtedly a German agent.
PS-- Okay, that was mean of me. I knew mentioning Kerensky would twist your tail. My apologies.
The Russians almost closed out on the Allies because these same Allies -mainly the Brits- wanted to close out on the Serbs that were fighting for their survival.
This is, in no way a rebuttal of the post to which you were responding.
What kind of commie loving website is this?
You can't tell that all in USSR was bad, as as Russian i can't tell that all in USSA is bad, it's fucking stupid.
commie lovn
ayrab lovn
nazi lovn
jew hatn
God hatn
sodomites
kind of web site
ZH is simply a website against....everything
+1
It’s all about eye candy and some kind of Google click thingy for the ads off on the sides. Doesn’t it make you wonder who the ignorant person is that actually clicks on those pop-ups / ads …. it must work or they wouldn't do it.
I liked the article but I have this comment:
"You’d have to be brain-dead (or a modern economist) not to be staggered by the audacity… the ballsy mendacity … and the incredibly big lie that undergirds the entire charade: that you can create money out of nothing and use it to pay for wars, schools, highways, and salaries for bureaucrats … and also to acquire real businesses."
Or a criminal making a ton of money from it.
This is war, it is being waged against us and not some economic policy. So you should call it what it is. That's my only comment.
Bill Boner? Missing an n somewhere.
Res Ipsa Loquitur
Latin: the thing speaks for itself.
large markets of goods make financial leverage a brain stopping tool for the common man
.
the FED creates value in boom bust cycles "oil, tech, obamacare"
.
they are macro policy engineers of the first grade that support government policy of terraforming the planet red white and blue
.
that doesnt mean you win or "get it", you play the shell game same as everyone else the dollar market is liquid isnt it
I wish to God that one of these contributors knew how to identify the difference between a capitalist system and a fascist system. If we lived in a capitalist world there would be a lot less banks and auto companies standing, and we wouldn't have a central bank tinkering with rates.
Actually in a capitalist system we would hav emore auto companies and banks. Capitalism is decentralism. All forms of collectivization are centralism.
True, good point. My focus was on letting bad business models fail so the good ones could thrive.
No surprise, in the '30s hundreds of INDEPENDENT banks failed, and replaced with Federal Reserve Banks.
Almost as if planned.
fascist system - merge government with business. TTIP is a fascist system.
The government relies on tax payments from the hordes and industry relies on money/credit from the hordes; the problem is that the hordes have neither viable credit nor available money, and in increasing numbers, No JOBS - THAT is the problem and it's a BIG one....
Left is Right, got it.
http://www.counter-currents.com/2013/10/wall-street-and-the-november-191...
Twenty-century marxism (leninism) in Russia proved that the ideology is a failure and unworkable in practice. Why do they (colleges and universities), continue to preach it ?
The current Fed policy is shoveling income and wealth to the top few percent of the country. Essentially the roaring 20s all over again, 100 years later. Call it the Centennial Fed Pump as this was their first act when they were brought into being. We all know how that turned out. I know, this time is different.
Look, the economy is barely keeping it's head above water after 6 years of historic and massive Fed intervention. The real-time Atlanta Fed GDP calculation for Q1 is near zero at this poiint It seems the Fed is not going to admit that their strategy is a flash-in-the-pan, easy-button strategy that does nothing to help promote a long term sustainable economy. If we go Euro/Japan and triple this economy destroying policy, who knows where we'll end up.
This tripled policy would continue to make a few percent richer while those who rely on fixed income will wither into the grave. With the world's largest checkbook this can certainly carry on for a while. But, as all bubbles like this have historically found their pin, I'm doubful this current ponzi scheme will escape it forever.
When credit seizes up in the middle of a crisis, the USA will do what Lincoln did during the Civil War - go to a direct-issue Fiat system. Just as Lincoln issued greenbacks to pay for the war, the US Congress will simply authorize the Treasury to issue the dollars it needs to meet appropriations when tax revenue is insufficient. In effect, the USA will go from a debt-based Fiat system to a MMT system. This will allow a massive torrent of government spending to inflate all debt away to nothing. Since WW III is certain to happen, that will keep the new system going for a long time. After that, who knows?
Isn't this done already as the debt-ceiling is continually and forever raised?
No. It'll never come to helicopter money. That would be giving the proles something for nothing. Only important people get that.
The proles might even pay off their debts. Can't have that...:)
And the US GDP has slowed to an annual rate of just over 1%… with the possibility of a surprise recession on the horizon.
Been waiting 4.5 years for a crash.
Of course credit will freeze up some day. Is everyone on Zerohedge a teenager or an adult living with their parents? I am old enough to have purchased a home with a 11% mortgage in the 1980s and that mortgage was hard to get. 10% down, major verification of income and down payment. Interest rates go up, home and stock prices go down and gold stays the same. Is that hard to understand?
I think Marx also said something like this: that capitalism must run its course and then there will be world socialism.
YAY! Centralize power even more!
They print the rope.
hey guise
this is being done deliberately
the Central banksters arent stupid, theyre trying to crash the world economy to usher in the NWO
all written in this very good book. Good overview about the System.
Lenin?
The name of his grandfather (maternal side) was Israel Blank. This is the same, as if I say the guy, whose name is John Smith, is a russian......
This dirty pig and mass murderer was a member of the tribe.
The financial bozos are on a suicide mission, their first kamikaze strike in 2008 nearly succeeded, next time they will do it.
Who needs nuclear weapons?
The self destructive power of Western finance will do the job for you.
Capitalism is dying, yes, but communism died in 1991 so we won!
this article is full of nonsence
for starters - credit is not based on trust but on brute force to make the borrower to repay it
it is true that issueing new credit may become difficult and even impossible (because there will be no credit-worthy borrowers) but credit outstanding will not dissapear - creditors will continue to insist to get paid back
Both communism and fascism are notions that came out of a century of exponential growth. Neither is relevant to our current situation. We are in the century of decentralization. Exponential contraction is the correct model. Those systems that can shed complexity and remain viable are the ones that will be left standing when the new normal arrives. As this unwinds, city states will replace nation states. Wall Street will be replaced by Main Street. Cash not credit will be king. Commodities will be the real measure of wealth. Local security will be the new power.
Lenin was a Freemason. Nothing is real. All the world's a stage. Well, someone real said that.