Financial Insanity Grips The World

Tyler Durden's picture


Rare is the person who is a realist. We collectively live in a world of pretend and extend. Every one of us wants our present civilization to continue, though for countless millions the world has already turned upside down as unemployment has soared and war and terrorism proliferate. The very structure of life in our world is threatened because madmen have undermined the financial system through the creation of debt instead of wealth. We have collectively borrowed against our children’s future until their very future is in doubt.

Dr. Paul Craig Roberts, former Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal thinks that insanity grips the western world. I have to agree and no one who reads the news would disagree. In the “The Sane Society” prominent psychotherapist Erich Fromm suggested that Western society as a whole was lacking in sanity; that the inequities and disharmonies of the entire society were pathological, not just the mental illnesses of people therein.

The newest mirror of financial insanity are the negative interest rates. Today if you are a manager of other people’s money, like a pension fund manager, you are forced to lend out hard-earned money at a loss, to buy worthless paper, issued by governments who only pretend they will be in any position to pay back. Bloomberg writes, “Negative interest rates are an odd fish in the world of finance given that they basically wreak havoc on a central tenet of investing; that investors will be compensated in some way for, you know, investing in things.”

The Secular Investor writes about this saying, “Who is going to save money then? Not a single soul, of course. People will start to create debt en masse, because it is the better and cheaper option. The resulting investments will rise in value, moreover, when an increasing amount of people take on debt in search for returns. Things cannot get a lot crazier than this. If this is how the system ends up working, we fear that the effects will be irreversible. It is like a black hole that sucks in more and more matter – read: capital – and never lets go. This financial black hole story will also end with a sudden implosion, a flash of light and a big bang, just like in space, and those who do not own hard assets at that point in time could lose every bit of wealth they’ve ever accumulated.”

“The negative interest rates are oppressing the elderly, robbing them of their dreams. They were told to save for retirement, but now they face negative interest rates after paying a lifetime of taxes……There is so much cash around and nothing to invest in, that we see companies buying back their own stock,” writes Martin Armstrong. “In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them,” writes Jeremy Warner.

Pater Tenebrarum, writing about the new war against cash, says, “As the modern day fiat money system inevitably cruises toward its final denouement, individual rights will come increasingly under attack as the world’s ruling elites and centrally directed banking cartels begin to batten down the hatches.” “There is only one conclusion that can be drawn from such an anti-cash sentiment. Your property is no longer your own. This fundamental attack on the value of money should erupt in national outrage,” writes James Hall.

Many people are worried for good reason. If US inventories, already at record high levels, and with the inventory to sales rising to great financial crisis levels, had not grown by $121.9 billion and merely remained flat, US Q1 GDP would not be 0.2%, but would be negative 2.6%.Things are not looking good for America and the rest of the world economy. Human activity in the real world is deflating (contracting) at an accelerating rate.

The scenario (worst case) that I am betting my money on is presented by Gary Christenson, who writes, “Financial or economic collapse occurs. If credit collapses and businesses aren’t paid for products and services, the distribution system could temporarily shut down. Contemplate empty grocery shelves, empty gasoline stations, electricity and water outages, empty ATM’s, and EBT cards that don’t work.” This is exactly what to expect when our present financial system burns down to the ground.

Ambrose Evans-Pritchard writes, “The slump in the annual growth rate to 0.2pc in the first quarter does not convey the full horror of it. Once you strip out a surge in inventories – often a pre-recession warning – the economy contracted sharply. Investment in business buildings and factories fell 23pc. "A whiff of panic is in the air," said theEconomic Cycle Research Institute.”

Charles Hugh Smith writes, “All the "saves" have done is guarantee the financial system will burn down in a conflagration ignited by a seemingly trivial spark somewhere in the vast global system of phantom collateral.”

From an essay about how debt-addicted world could go the way of the Mayans we read, “The current state of affairs echoes Archaeologist Arthur Demarest’s observation about the Mayan civilization: “Society had evolved too many elites, all demanding exotic baubles…all needed quetzal feathers, jade, obsidian, fine chert, and animal furs. Nobility is expensive, non-productive and parasitic, siphoning away too much of society’s energy to satisfy its frivolous cravings.”


Brandon Smith concludes, “Self-reliance requires preparedness. There is no way around it. There is no such thing as crisis for those who are prepared. This means placing oneself in a position to provide the necessities of life so that one does not become a slave to need. Desperation often leads to moral relativism, and tyrants thrive on the moral weakness of a population. The more prepared an individual is, the more likely he is to fight back against despotism. The more prepared a community is, the less that community will feel inclined to request aid from those who might leverage such aid to oppress that community.”

Martin Armstrong concludes, “It certainly appears that we are complacent as a society and as such, we never act until it is too late. Then everything falls apart. Indeed, government interest rates have moved into negative interest rates on about 30% of Eurozone total debt. This has become an effective tax on money itself, with respect to whatever you have left in your account after paying taxes. We are heading for economic Armageddon and the day of reckoning is rapidly approaching. You better wake up before the coffin is nailed shut.”

"Corrupt and seriously deranged politicians are destroying western civilization."

“The end result of Fed policy appears to be to keep us in perpetual economic malaise, to keep us all confused. There is no solution to the crisis, merely a choice of which roads to choose, a deflationary debt collapse, or a hyperinflationary dollar collapse or World War III. Pick your poison…,” concludes Zero Hedge.

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This is it's picture

That's why I don't have kids.

ShorTed's picture

My kids hate me already (4 teens) and i haven't even told them about this, yet.

Headbanger's picture

I'm so glad I sold my wife and kids into slavery a long time ago while I could still get a good price.

But no bids on the mother in law

This is it's picture

U mean the m-i-l...f?

Keep her, she could be useful

MonetaryApostate's picture

Money is debt which the money printers never intend to repay....

If you don't believe me, just wait till they steal your pensions...

(People are basically working for heavily taxed false promises & it's fucking sad really)

zuuma's picture

And when you're dead, us other kids will split up your gear.


The future is only for those who show up.

tarabel's picture



Makes perfect sense to me.

Thanks, Mom and Dad.

tarabel's picture



That's what you get for not marketing the wife as a BOGO.

DavidC's picture

Is she nice? I'll take her.


williambanzai7's picture

Apparently you and 78% of child bearing aged Americans under 32

drendebe10's picture

Financial madmen is gross descriptor understatement for the bastirds evil sociopathic manipulation of the financial system. And don't forget the elected & nonelected ruling elite political turds who enable them so they can maintain their self aggrandizing power & imperial lifestyles. All the while the serfs & peasants are blissfully unaware.  Fuk.

luckylongshot's picture

"Corrupt and seriously deranged politicians are destroying western civilization."....please don't forget the politicians are just the PR arm of the private bankers running things and the spider at the center of the web is Jacob Rothschild.

BrotherRat's picture

We've created such weird social memes. I'm sure it isn't an accident either.

1) Caring about anyone but yourself is a weakness / something to be embarressed about / inherently socialist/hippie nonsense.

2) Pointing to facts that prove something troubling is wacky conspiracy theory stuff and should be ignored

3) The rich gaining more money at an exponential rate while spending less makes sense economically in the long term (it will trickle down! Stop looking at the one-way syphon of money from the many to the few for what it is you dumb hippie! They earned that money and you want to take it away because you're jealous!)

4) The economy and oppotunities that exist in America are on par with the economy and opportunities of the baby boomer generation and every failure of the youth to succeed is their own fault

5) Monetization is more important than moral/ethical concerns or personal passions


I'm sure any of you could add many more

gaoptimize's picture

Don't expect my kids to support you in your dotage.  Every able and intelligent person of good will needs to be having as many kids as you can afford and prep for.  Teach them to rebuild our civilization.  I reject nihilism that abandons the future in the face of the impending crisis.

msmith9962's picture

My kids are making excellent progress.  Learning to think for themselves and leave things better than they found them.  Uphill battle though when they are surrounded by shitty kids.  Most people shouldnt have kids. I dont think they understand the responsibility.

DutchVisitor's picture

Please no. There are already to many people on this planet fighting for resources. 

XAU XAG's picture

In other words


"where all fucked"..............(WAF)


There you go said it in 3 words


J S Bach's picture

"That's why I don't have kids."


Wrong attitude.  Whether it be a forest fire or a rotten compost pile... once the dust and fetor clear away, seeds are needed for healthy regeneration.  This is the attitude one should have regarding children.  Don't give up on the natural cycles of life just because a few satanic tribesmen have a twisted desire to run and ruin the world.  That attitude in you is part of their protocols against humanity.  Because their dream and our nightmare run totally against the laws of nature, they are doomed to failure.  It will be hard for us and our progeny, but a strong will makes almost anything possible.  Don't let them conquer with a defeatist attitude.  Have faith in truth - it will win in the end.

actionjacksonbrownie's picture

If you have ever spent any time in a 3rd world country, you will know that the poor have plenty of kids, and plenty of "faith". Yet all it ever gets them is a few nice words once they are in the pine box.


The majority of kids born today have nothing to look forward to but a life of misery and depression. Unless you are rich and mobile, just say "no" to kids.

Ghordius's picture

on the other side... it's children that will inherit the Earth. either yours, or someone else's

BrotherRat's picture

Thankfully, I'm not a narcissist.

J S Bach's picture

Yeah... let's just all forego reproduction and give the world back to the cockroaches and banksters.  (Sorry for the redundancy.)

Ham-bone's picture

Still so strange ZH isn't discussing that the proximal cause for the long emergency, a falling population among so many nations, starting from the bottom of the population base and working its way up is tearing apart what was always a ludicrous idea, perpetual growth with perpetual assets.  This is simply the inevitable outcome.  A collapse and reset based on entirely new principles is being delayed...

NikoBellick's picture

Yup, most people do not believe there children will have a better life than they had. I don't have children and I firmly believe this. Besides most people who currently have kids aren't mentally capable of grasping the responsibility nor are they financially equipped to have children.

Lordflin's picture

I have raised my children to be rebuilders... one daughter is on her way to medical school, the other working towards a PhD in biology...unfortunately my son, a stellar individual, was killed in an accident shortly after his 18th birthday. The deal was that I put each of them through their first two years of college and after that they were on their own...

So far as being prepared for a crisis... I agree... but how to prepare. I believe this crisis is spirtual in nature, and I am preparing as a spirtual being... attempting to understand value in its true sense, and to rid myself of the kind of baggage the wears on the soul...

On the otherhand, I purchased a farm some years back, and have spent those years building and learning. If it is practical I, and my family, will have a place in things. Else, I am ready to leave this rock and move on.

Life either has a purpose or it doesn't. From my point of view approaching life as though it means nothing makes no sense as it leaves you with no real options. Beyond that I actually do believe that life has meaning and thence the preparation.

usednabused's picture

Kicking that can down the road... some more, again.

JRobby's picture

The can will be kicked as war rages. Not kicking the can does not occur to these madmen.

Ghordius's picture

perhaps. meanwhile, some kick harder then others

"The Secular Investor writes about this saying, “Who is going to save money then? Not a single soul, of course. People will start to create debt en masse, because it is the better and cheaper option. The resulting investments will rise in value, moreover, when an increasing amount of people take on debt in search for returns. "

depends... where

I was just looking into what Standard & Poors expects/forecasts for 2015 in terms of "export of capital", (i.e. balance of payments) in dollars

from the top, Eurozone: 358 billion; China: 221 billion; South Korea: 86 billion; etc.

from the bottom, US: -351 billion; UK: -110 billion; Brazil: -87 billion; Australia: -58 billion; Canada: -48 billion; etc.

this is in line with other expectations from last year. As a reminder, this is also effecting the EURUSD, then plenty of are being exchanged to $ for that

all this without mentioning the "reverse yankee" bonds, of course

yes, some seem to be "creating debt in masse". but also others seem to be giving them... credit for that

Usurious's picture
Usurious (not verified) May 28, 2015 8:10 AM



'The Future is in Backwardation'.......trav7777

The problem is 'DEBT-MONEY'........francis_sawyer


- System starts

- System expands at the rate needed

- System peaks

- System unable to expand at rate needed

- System collapses

- System liquidates............Mako


zeroaccountability's picture
zeroaccountability (not verified) Usurious Jun 3, 2015 9:28 PM


Panic Mode's picture

I will make sure none of these ignorant retard consumers and investors can drag me down when the collapse comes.

Uchtdorf's picture

As SpongeBob once said to Plankton, "Good luck with that!" Oh, Plankton had just declared that he was going to take over the world.

heisenberg991's picture

All is well, just keep buying.

NoDebt's picture

Now that's the kind of classic Doom Porn I come to ZH for!

Dr. Engali's picture

You're such a I mean realist. 

NoDebt's picture

Let's not start that again.

SillySalesmanQuestion's picture

There's nothing like doom porn in the morning while having my coffee...

Dr. Engali's picture

"It is like a black hole that sucks in more and more matter – read: capital – and never lets go. This financial black hole story will also end with a sudden implosion, a flash of light and a big bang, just like in space, and those who do not own hard assets at that point in time could lose every bit of wealth they’ve ever accumulated.”


This has been my contention since I first started commenting here at the Hedge, and I still believe this is how things will end. When the implosion comes it will happen so fast that people won't know wtf just happened. One minute they are planning their Viagra enhanced retirement at the beach house with their exceptionally beautiful wife and fat 401k and the next minute......poof.... nothing. It's all an illusion, just like their retirement dreams.

hairball48's picture

I'm with you brother. It's gonna happen so fast that heads will spin. And I cannot convince my friends or family. They all shrug and say shit like, "They'll figure something out. You're just being paranoid, etc. blah blah."

It's gonna be ugly.


NoDebt's picture

The old Soviet Union was dissolved over a weekend.  One day they're there, the next.... all gone.  And no, it was NOT by accident.  So its far from being out of the realm of possibility it could happen like that in the world debt system.  Personally, I still think it's going to be a long, slow, multi-generational Japan-like spiral to the bottom.

greenskeeper carl's picture

me too. I think the last generation to actually have it better than their parents are all adults right now. everyone else is screwed. I feel bad for my kids.

bracemaker's picture

I agree also. Everyone must keep playing or else the whole world suffers. We all suffer together slowly and whither away until someone can't take it anymore and decides to go to war or sustain themselves. Then dominoes. 

Trogdor's picture

I still think it's going to be a long, slow, multi-generational Japan-like spiral to the bottom.

I think that's a possibility, but don't you think that the decline is accelerating?  I mean, Japan and the USSR's decline were during times of relative global economic stability.  To me, it feels like a spiral - or circling a drain - where things start to speed up as you reach the point of implosion. Maybe I'm just oversensitive to the current velocity, but to me, it feels like "crazy" just keeps coming harder and faster all the time.  We don't seem to get the "lulls" like we used to....

I have full faith that when things really start to go ragged, the psychopathic fucktards that run things will start a massive war and hope they can distract the sheeple for a while to keep them from realizing who, yet again, fucked up the world.

tarabel's picture



Ugly, yes, but also perhaps strangely satisfying in a sick way. Vindication will help pay for the years of ridicule and dismissal.

Trogdor's picture

Ugly, yes, but also perhaps strangely satisfying in a sick way. Vindication will help pay for the years of ridicule and dismissal.

Kind of like what Noah must have felt like as the Ark was lifted by the flood waters ....

MaxMax's picture

To many of us, a flash would make sense, but then again we have a different point of view than most others.  It could be more of a Atlas Shrugged, Argentina, Venezuela, government intervention sort of thing were activity slowly grinds down.

assistedliving's picture

not so fast coincidence, i happen to be on that beach w/ my exceptionally beautiful wife (and college

aged son), Viagra and reasonable 401k.  Poof?  Illusion?  ...dreams?"  mebbe.  But i trust in my ability that got

me that beachfront condo, beautiful wife, Dean's list son and 401k to get me thru what doompornthrowers hurl my way


Tek Kinkreet's picture

at least you'll get to keep the fake boobs