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"The Worldwide Credit Boom Is Over, Now Comes The Tidal Wave Of Global Deflation"

Tyler Durden's picture




 

Submitted by David Stockman via Contra Corner blog,

If you want a cogent metaphor for the central bank enabled crack-up boom now underway on a global basis, look no further than today’s scheduled chapter 11 filling of met coal supplier Alpha Natural Resources (ANRZ). After becoming a public company in 2005, its market cap soared from practically nothing to $11 billion exactly four years ago. Now it’s back at the zero bound.

ANRZ Market Cap Chart

ANRZ Market Cap data by YCharts

Yes, bankruptcies happen, and this is most surely a case of horrendous mismanagement. But the mismanagement at issue is that of the world’s central bank cartel.

The latter have insured that there will be thousands of such filings in the years ahead because since the mid-1990s the central banks has engulfed the global economy in an unsustainable credit based spending boom, while utterly disabling and falsifying the financial system that is supposed to price assets honestly, allocate capital efficiently and keep risk and greed in check.

Accordingly, the ANRZ stock bubble depicted above does not merely show that the boys, girls and robo-traders in the casino got way too rambunctious chasing the “BRICs will grow to the sky” tommyrot fed to them by Goldman Sachs. What was actually happening is that the central banks were feeding the world economy with so much phony liquidity and dirt cheap capital that for a time the physical economy seemed to be doing a veritable jack-and-the-beanstalk number.

In fact, the central banks generated a double-pumped boom——first in the form of a credit-fueled consumption spree in the DM economies that energized the great export machine of China and its satellite suppliers; and then after the DM consumption boom crashed in 2008-2009 and threatened to bring the export-mercantilism of China’s red capitalism crashing down on Beijing’s rulers, the PBOC unleashed an even more fantastic investment and infrastructure boom in China and the rest of the EM.

During the interval between 1992 and 1994 the world’s monetary system—–which had grown increasingly unstable since the destruction of Bretton Woods in 1971——took a decided turn for the worst. This was fueled by the bailout of the Wall Street banks during the Mexican peso crisis; Mr. Deng’s ignition of export mercantilism in China and his discovery that communist party power could better by maintained from the end of the central bank’s printing presses, rather than Mao’s proverbial gun;  and Alan Greenspan’s 1994 panic when the bond vigilante’s dumped over-valued government bonds after the Fed finally let money market rates rise from the ridiculously low level where Greenspan had pegged them in the interest of re-electing George Bush Sr. in 1992.

From that inflection point onward, the global central banks were off to the races and what can only be described as a credit supernova exploded throughout the warp and woof of the world’s economy. To wit, there was about $40 trillion of debt outstanding in the worldwide economy during 1994, but this figure reached $85 trillion by the year 2000, and then erupted to $200 trillion by 2014. That is, in hardly two decades the world debt increased by 5X.

To be sure, in the interim a lot of phony GDP was created in the world economy. This came first in the credit-bloated housing and commercial real estate sectors of the DM economies through 2008; and then in the explosion of infrastructure and industrial asset investment in the EM world in the aftermath of the financial crisis and Great Recession. But even then, the growth of unsustainable debt fueled GDP was no match for the tsunami of debt itself.

At the 1994 inflection point, world GDP was about $25 trillion and its nominal value today is in the range of $70 trillion—-including the last gasp of credit fueled spending (fixed asset investment) that continues to deliver iron ore mines, container ships, earthmovers, utility power plants, deep sea drilling platforms and Chinese airports, highways and high rises which have negligible economic value. Still, even counting all the capital assets which were artificially delivered to the spending (GDP) accounts, and which will eventually be written-down or liquidated on balance sheets, GDP grew by only $45 trillion in the last two decades or by just 28% of the $160 trillion debt supernova.

Here is what sound money men have known for decades, if not centuries. Namely, that this kind of runaway credit growth feeds on itself by creating bloated, artificial demand for materials and industrial commodities that, in turn, generate shortages of capital assets like mines, ships, smelters, factories, ports and warehouses that require even more materials to construct. In a word, massive artificial credit sets the world digging, building, constructing, investing and gambling like there is no tomorrow.

In the case of Alpha Natural Resources, for example, the bloated demand for material took the form of met coal. And the price trend shown below is not at all surprising in light of what happened to steel capacity in China alone. At the 1994 inflection point met coal sold for about $35/ton, but at that point the Chinese steel industry amounted to only 100 million tons. By the time of the met coal peak in 2011, the Chinese industry was 11X larger and met coal prices had soared ten-fold to $340 per ton.

And here is where the self-feeding dynamic comes in. That is, how we get monumental waste and malinvestment from a credit boom. In a word, the initial explosion of demand for commodities generates capacity shortages and therefore soaring windfall profits on in-place capacity and resource reserves in the ground.

These false profits, in turn, lead speculators to believe that what are actually destructive and temporary economic rents represents permanent value streams that can be capitalized by equity owners.

But as shown below, eventually the credit bubble stops growing, materials demand flattens-out and begins to rollover, thereby causing windfall prices and profits to disappear. This happens slowly at first and then with a rush toward the drain.

ANRZ is thus rushing toward the drain because it got capitalized as if the insanely uneconomic met coal prices of 2011 would be permanent.

Needless to say, an honest equity market would never have mistaken the peak met coal price of $340/ton in early 2011 as indicative of the true economics of coking coal. After all, freshman engineering students know that the planet is blessed (cursed?) with virtually endless coal reserves including grades suitable for coking.

Yet in markets completely broken and falsified by central bank manipulation and repression, the fast money traders know nothing accept the short-run “price action” and chart points. In the case of ANZR, this led its peak free cash flow of $380 million in early 2011 to be valued at 29X.
ANRZ Free Cash Flow (TTM) Chart

ANRZ Free Cash Flow (TTM) data by YCharts

Self-evidently, a company that had averaged $50 to $75 million of free cash flow in the already booming met coal market of 2005-2008 was hardly worth $1 billion. The subsequent surge of free cash flow was nothing more than windfall rents on ANZR’s existing reserves, and, accordingly, merited no increase in its market capitalization or trading multiple at all.

In fact, even superficial knowledge of the met coal supply curve and production economics at the time would have established that even prices of $100 per ton would be hard  to sustain after the long-term capacity expansion than underway came to fruition.

This means that ANRZ’s sustainable free cash flow never exceeded about $80 million, and that at its peak 2011 capitalization of $11 billion it was being traded at 140X. In a word, that’s how falsified markets go completely haywire in a central bank driven credit boom.

As it happened, the full ANZR story is far worse. During the last 10 years it generated $3.2 billion in cash flow from operations——including the peak cycle profit windfalls embedded in its reported results.   Yet it spent $5 billion on CapEx and acquisitions during the same period, while spending nearly another $750 million that it didn’t have on stock buybacks and dividends.

Yes, it was the magic elixir of debt that made ends appear to meet in its financial statements. Needless to say, the climb of its debt from $635 million in 2005 to $3.3 billion presently was reported in plain sight and made no sense whatsoever for a company dependent upon the volatile margins and cash flows inherent in the global met coal trade.

So when we insist that markets are broken and the equities have been consigned to the gambling casinos, look no farther than today’s filing by Alpha Natural Resources.

Markets which were this wrong on a prominent name like ANRZ at the center of the global credit boom did not make a one-time mistake; they are the mistake.

As it now happens, the global credit boom is over; DM consumers are stranded at peak debt; and the China/EM investment frenzy is winding down rapidly.

Now comes the tidal wave of global deflation. The $11 billion of bottled air that disappeared from the Wall Street casino this morning is just the poster boy—–the foreshock of the thundering collapse of inflated asset values the lies ahead.

 

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Mon, 08/03/2015 - 16:36 | 6386604 LawsofPhysics
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With 7+ billion people, and growing, all competing for a higher standard of living and all the resources that make that possible, there will be no deflation in the cost of anything required decent standard of living, sorry asshat, it's simple math.  Barring a massive decrease in the population of course...

Mon, 08/03/2015 - 16:47 | 6386643 James_Cole
James_Cole's picture

What? A highly leveraged coal company went bankrupt without Obama being directly responsible? How this????

ANRZ is thus rushing toward the drain because it got capitalized as if the insanely uneconomic met coal prices of 2011 would be permanent.

I wonder if any other coal companies did this and are now blaming obozo for their stupid management. Nah, it was obozo. And if not obozo it was the teachers unions definitely. Don't ask me how, but it was - white people on facebook have proof.

http://25.media.tumblr.com/1c34152172fd282843d441acd60f40b3/tumblr_mgs7x...

Mon, 08/03/2015 - 16:48 | 6386669 negative rates
negative rates's picture

MIT and congress.

Mon, 08/03/2015 - 17:01 | 6386741 847328_3527
847328_3527's picture

Moar like Biflation; food, essentials will continue to rise in price while non-essentials will collapse. Some exceptions here and there. Wages, retial, etc will continue to plunge imo as will all the overpriced c-r-a-p like AAPL thingamajigs, houses, cars and so on.

Mon, 08/03/2015 - 19:55 | 6387329 Manthong
Manthong's picture

How could this possibly be problem for anyone over there?

After all, subsequent to a very generous contribution from ass-hat James Riaddy to ass-hat Willie J Clinton, the best low sulfur coal reserves on the planet in the US were turned into a National Monument and eliminated from the market.

Mon, 08/03/2015 - 20:01 | 6387346 Stuck on Zero
Stuck on Zero's picture

That was in response to a very generous donation from Indonesia at the time.  It prevented the U.S. from competing with the Indonesian coal companies. Hillary forever.

Mon, 08/03/2015 - 21:40 | 6387750 Debt-Is-Not-Money
Debt-Is-Not-Money's picture

Clinton's turning over the 250 years of low sulfur coal in the Grand Staicase Escalante in Utah to the U.N. was an act of high treason!

Mon, 08/03/2015 - 20:52 | 6387383 38BWD22
38BWD22's picture

 

 

847328_3527

Let's not forget that deflation often brings default.  One way this could happen would be more "Puerto Ricos".

Or it could be a big Debt Jubilee.

Or hyperinflation...

*   *   *

Your biflation example is often seen as well: necessities have to be bought, luxuries less so.

Mon, 08/03/2015 - 21:01 | 6387585 privateparts501
privateparts501's picture

I'll bet on war. If the smart corporations are really smart, they will liquidate goods before deflations hits and deplete their inventories so as to lessen the effect of deflation.

I don't put much faith in ZH for informing the peasants of anything. Just using the Tyler Durden moniker as a guise for social engineering.

Tue, 08/04/2015 - 01:48 | 6388390 MsCreant
MsCreant's picture

You may be the most over the top conspiracy theorist to post on here. That says a great deal.

Tyler is hypnotizing you. Be afraid, he is after your brain-- mind controlz.

Tue, 08/04/2015 - 13:02 | 6390074 LooseLee
LooseLee's picture

Names, please; of these 'Smart' corporations. First off, ANY borrowing to buy said stock are eliminated by default (e.g. STUPID; not smart).  Well?

Mon, 08/03/2015 - 23:29 | 6388119 averagemong
averagemong's picture

Deflation in the short term as the market sentiment turns negative and everyone attempts to reduce debt. This instrincally contracts the money supply and then leads to defaults. As the defaults are written off the curency elasiticity is broken and the supply stays permenantly expended leading to inflation. Central banks will of course continue trying to avert defaults by purchasing default loans and holding the imaginary book value. This will however over time only have the same effect as a default. Deflation first, then inflation. 

Tue, 08/04/2015 - 01:51 | 6388396 MsCreant
MsCreant's picture

My thesis as well. What is great about playing it this way is that you are ready for most anything to come. You will not be maxed out for a couple of scenarios, but you are prepped for most of it. Hang loose, stay nimble, know it is not sustainable. Supply chains will fail.

Mon, 08/03/2015 - 21:50 | 6387782 DaveyJones
DaveyJones's picture

I vote for ths one too. It could be another factor as well as all the long term money sloshes toward the front end because no one is willing to bet long term.. The immediates necessities go up and up and the long term money items begin to have problems. That said, I have to agree that basic necessities and ones not fucked up by GMOs, pesticides, and politicians indeed may continue to hold their own intrinsic value      

Mon, 08/03/2015 - 22:46 | 6387969 Raging Debate
Raging Debate's picture

847 - Wrong. Bi-flation was yesterdays story. Energy is the primary leader of pretty much everything and other commodities are following. To the consumer this is great AFTER a big wave of bankruptcies and layoffs. In the short term the second leg of correction will be harsh to the general population.

First by inflation then by deflation is how private central banks like the Fed operate. Paid in commissions on the way up in inflation, using that to buy assets at pennies on the dollar during deflation. Government senior politicans love this and make laws around the model to support it like rescinding Glass-Steagall or equal opportunity housing laws that lent to anybody with a SS (remember NINJA loans?) they also have a safe bet on the way up and down.

They love this model while it destroys an entire generation. It is the tool of defitcit spending and a fig leaf for politicians. Fuck them. We had a revolution over this shit a couple hundred years back.

Most people dont even realize the "Fed" is a private business. Think of your own business and goals. Your there to win right at all costs right? Sometimes that includes unscrupulous behavior and why government is supposed to exist in the first place to prevent your from getting gouged and robbed. Government capture is a very old problem. Eventually, laws of attempted bribery of executing those that try come back into vogue. But first, a lot more pain and death in spades will comes first.

Tue, 08/04/2015 - 00:35 | 6388281 macholatte
macholatte's picture

 

 

Bi-flation was yesterdays story.


Well said.  Hava a cigar!

 

You start out giving your hat, then you give your coat, then your shirt, then your skin and finally your soul.

 Charles De Gaulle 

 

Tue, 08/04/2015 - 17:38 | 6391345 mkkby
mkkby's picture

Yep, it's happened over and over throughout history.  Even in recent times.  Yet, few people bother to learn a lesson. 

Instead they waste their labor on big screen TVs, apple products, SUVs and large cable/phone bills.  If they had saved instead, they would have the dry powder to buy those assets for pennies on the dollar.

Awww, forget it.  You can't fix stupid.  Thank the moron masses for giving you zero competition in this game of life.

Mon, 08/03/2015 - 17:03 | 6386754 NoDebt
NoDebt's picture

Deflation.... I love even the sound of that word.  You want to reduce "wealth disparity", deflation is the surest way to do it.  Which means it won't happen.

Mon, 08/03/2015 - 17:06 | 6386769 Bilderberg Member
Bilderberg Member's picture

CRB Commodity Price Index goes below 200 for first time since 2003.

Mon, 08/03/2015 - 17:16 | 6386806 LawsofPhysics
LawsofPhysics's picture

Now let's see who actually gets to take delivery when the prices go even lower...

 

The Soviets saw the "official" price go extremely low for many essentials...

...takeing delivery was something else altogether...

Mon, 08/03/2015 - 17:21 | 6386833 Winston Churchill
Winston Churchill's picture

Queue all you want, you get nothink.

Mon, 08/03/2015 - 17:57 | 6386955 new game
new game's picture

deflation, the main course is about to be served....

Mon, 08/03/2015 - 21:04 | 6387003 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

If you fuck with the bull,  do you get the horns?  If a bear eats you, will he shit you out in the woods?   Long "free" markets

 

http://www.marketwatch.com/story/why-99-of-trading-is-pointless-john-bog...

Tue, 08/04/2015 - 17:46 | 6391366 mkkby
mkkby's picture

Who gives a rat's ass about paper commodites?  I'm taking delivery of $3 a gallon gas, instead of 5 last year.  My food bill is down as long as I choose healthy non-processed. 

What else do I need?  The japs are happy to sell me an excellent $19,000 car, instead of an obama motors $50k SUV that's in the shop every 3 weeks.

Mon, 08/03/2015 - 21:43 | 6387755 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

 

 

I'm of a different opinion, in that those who have large quantities of fiat, can use it to buy hard & distressed assets at firesale prices.

So some poor Schlub who's held on to Great-Great Grand Pappy's pocket watch finds himself bent over the barrel with the banker's breath

on his neck, has to go down to "Pawn 'Murika" to keep his little world from falling apart.  "Pawn 'Murika's" owner Shmuley has a credit line

at the bank that has fiat on reserve with the Fed., who conjured the shit out of thin air.  Fortunately for Schlub he can use part of the proceeds

from the watch to pay the Treasury, who can then pay interest to the Fed., who pays interest to the bank where Shmuley has his credit line.

Sweet action if you can get it.  So essentially Schlub gets sodomized and is then told to get on his knees and to suck the mess off.

(Sorry for the graphic imagery, but that is the best analogy I can come up with for the financial rape of the plebs.)   And to add insult to injury

I don't think these credit boom/bust cycles are happenstance, rather I think they are manufactured solely to reallocate wealth.

(the down arrow didn't come from me)

Mon, 08/03/2015 - 21:49 | 6387783 LawsofPhysics
LawsofPhysics's picture

"I'm of a different opinion, in that those who have large quantities of fiat, can use it to buy hard & distressed assets at firesale prices." 

 

Sure, but only if you can actually access that cash.

How much physical cash do you keep lying around.  I might have 10,000-20,000...

what the fuck would I really buy?

Mon, 08/03/2015 - 22:19 | 6387854 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

 

 

Agreed, but if you read what I said about those who have credit lines.  Don't know about you, but I'm not in the club. 

I guess I'm also talking about a macro theme. Distressed coal mines being bought on the cheap, or going back to the bank etc..

Large Corporations buying up small competitors for pennys on the dollar with their offshored fiat warchests.

Tue, 08/04/2015 - 17:54 | 6391388 mkkby
mkkby's picture

Don't cry for that small farmer in your story.  He got in that predicament by getting levered up, and being a lousy farmer. 

If you stay debt free, you never get under the banker's control.  If you grow the right crops in the right way, you make enough to live on.  If you can't do that, then you should sell out and find a new profession.

Tue, 08/04/2015 - 06:42 | 6388641 Arnold
Arnold's picture

A double Latte Chai Grande.

Mon, 08/03/2015 - 17:10 | 6386790 booboo
booboo's picture

anyway you cut it BIG government had a large hand in it... so yea, if the shoe fits, wear it. Central banks would not exist if were not for a bought and paid for political class and the last time I checked central banks control the flow of the spice.

Mon, 08/03/2015 - 17:36 | 6386866 James_Cole
James_Cole's picture

Yes, the 'personal responsibility' crowd always knows who is at fault for every bad managerial / investment decision - dat big baaaaaaad government!!

Try as they might to convince global governments to lower the price outlook for commodities industry executives arguments fell on deaf ears.

"But but big gov sir, coal prices will not go up forever!!"

"Suck it up you dogs! Increase your capitalization based on absurd growth projections or feel our wrath! Don't make us send the teachers unions after ya'!!"

"Oh God no!! Anything but the teachers unions! Fine! we'll leverage the fuck up and pay ourselves exorbitant compensation, just don't send the teachers union after us!"

Mon, 08/03/2015 - 18:37 | 6387080 steelhead23
steelhead23's picture

For the record, the U.S. Government is too big.  But, the U.S. Government did NOT create this crack-up boom, the global central banks did, primarily the Federal Reserve Bank of the U.S. have caused the boom through QE and ZIRP.  When stock buy-backs, dividends, and mergers and acquisition spending exceed revenues we have truly entered an era of "fictitious capital fetish", the end-game for global capitalism.

Mon, 08/03/2015 - 19:39 | 6387282 gcjohns1971
gcjohns1971's picture

For the record the U.S. Government (and the other governments TOO!) DID CREATE this crack-up boom.

Just as every rose has its thorn, every dollar has its T-bill.

It is double-entry bookeeping.

To a Central Bank a unit of currency is a liability, and a unit of sovereign debt is the asset that balances it.  No dollar (or yen, wan, Yuan, Euro, or Ruble) gets created without one.

So, actually and factually, the Governments of the world (not just the US) and their Central Banks have been JOINED AT THE HIP in producing this Crack-Up boom.

 

Mon, 08/03/2015 - 20:02 | 6387347 38BWD22
38BWD22's picture

 

 

Nice insight.  This subject of a dollar and its related T-Bill is ocmplicated yet fuzzy (for me anyway).  And that ALL countries are doing this (spending & printing), well...

When all countries are doing this, it implies big global problems.

+ $55,000

Tue, 08/04/2015 - 02:38 | 6388458 Al Gophilia
Al Gophilia's picture

I'm changing my name from Al Gophila to ITS THE MONEY, STUPID. No sleight to you intended nor implied. However, the poster below,(Playmoney) sees it properly. The bankers are in cahoots with governments (remember, it's how this all started), who provide the muscle to enable counterfeit money which they force us to use through legal tender laws. One faction are the fraudsters and slick con artists, the other faction consists of boufanted, psychopathic hit men. (Support the Troops!)

Simple as that and yet the biggest flip out is the fact that when you point out the obvious, and it is patently obvious once it is pointed out, the recipient melts down in sometimes extraoardinary ways. Friends will desert you over it, family will deride you (because you're family and they think they've got licence to, wouldn't do it to their friends or aquaintences) and venomous tirades will pour down upon you. It's as if you've turned into some kind of baby sacrificing nut job or politician banker. (My new word to be placed in the urban dictionary; Polanker). I've yet to come up with a descriptive for it, perhaps I can get some input?

Mon, 08/03/2015 - 19:58 | 6387338 PlayMoney
PlayMoney's picture

They are joined at the hip my man. One and the same. The treasury (govt) and the Fed wipe each others collective keysters and hold hands in the hallway.

Mon, 08/03/2015 - 22:11 | 6387853 shovelhead
shovelhead's picture

Wimpy World.

A hamburger today and I'll pay you next Tuesday.

Only Wimpy hands you the bill.

Wimpy don't pay for shit.

Wed, 08/05/2015 - 12:12 | 6393622 LooseLee
LooseLee's picture

"They are joined at the hip my man" And need to be severed at the neck, my man....

Mon, 08/03/2015 - 19:14 | 6387209 sun tzu
sun tzu's picture

Then have big government force the middle class to pay for the banker bailouts. Big government is good

Mon, 08/03/2015 - 20:00 | 6387342 James_Cole
James_Cole's picture

"I had to abandon free market principles to save the free market system" - George W. Bush

Democracy at its finest!

Mon, 08/03/2015 - 20:03 | 6387357 38BWD22
38BWD22's picture

 

 

As time goes by, James, conservatives find their distaste of W's liberal policies increasingly distasteful.

Mon, 08/03/2015 - 20:07 | 6387374 James_Cole
James_Cole's picture

Yes, I've heard this revisionist history before. Soon Reagan will be declared a liberal.

Mon, 08/03/2015 - 20:54 | 6387554 38BWD22
38BWD22's picture

 

 

Reagan DID spend a lot, I'll concede.

Mon, 08/03/2015 - 21:12 | 6387633 Al Gophilia
Al Gophilia's picture

They all did (but then again who put him there?). It's the way the fiat system was designed to work as its advocate (Keynes) intended. Totally against the foundational principles of what the nation's money should be, completely destroying the mechanism that restrained tyrants from coming into power. There has been a coup and we will nationally have to learn the lessons of our predecessors. 

Mon, 08/03/2015 - 21:54 | 6387798 SofaPapa
SofaPapa's picture

Sadly, the majority of people do not have the ability/inclination/energy to understand what "money" means.  They only know they want more of "it".  This then guarantees that politicians and "leaders" who "give" them money are always the ones selected and permitted to rule them.  So it has been for thousands of years.  Until it collapses.  And this particular version of collapse is certainly the record to date.  We're just getting started...

Mon, 08/03/2015 - 22:07 | 6387840 MalteseFalcon
MalteseFalcon's picture

Nixon, there was a true conservative!

Mon, 08/03/2015 - 22:54 | 6388002 TheRicker
TheRicker's picture

Woodrow Wilson started building the trap we currently live under. By the word "trap" I mean policies once instituted were nearly impossible to reverse. That way in the future no matter how conservative a president was he was helpless to undo what the progressives had done to our country. The only way to stop these evil parasites from totally killing the republic and what the founders wanted is to have a States Convention. Washington will never put itself on a diet.

Tue, 08/04/2015 - 12:24 | 6389848 Ace Ventura
Ace Ventura's picture

If by states convention you mean a group of states electing to secede....that was tried once before. The parasites have already killed the republic, with the mortal wound being administered by Wilson in 1913. We've staggered along like a slowly bleeding buck since then, and are about ready to drop to the ground for the final time. The only way to restore the republic is to water Jefferson's tree.

And yes I'm fully aware that such an option means horror unlike anything most of us have ever seen. Still, that is where we are.

Tue, 08/04/2015 - 10:27 | 6389190 DanDaley
DanDaley's picture

James, it's like the sign says:

 

OLIGARCHY: It's a club, and you ain"t in it.

 

(You do know what an oligarchy is, don't you? You might want to rethink that whole R vs D thing.)

Wed, 08/05/2015 - 12:16 | 6393639 LooseLee
LooseLee's picture

Don't know about you, but 'I' would not want to be in such a cowardly, phony, and immoral club. From their deeds they have all earned a front row ticket to Hades! Truth does win in the end fortunately....

Tue, 08/04/2015 - 09:44 | 6389054 BrotherRat
BrotherRat's picture

Liberal by what definition? Like - you're red team so everything you don't like is blue, so if W. is revealed to be shitty then suddenly he is liberal? Or is he exactly as anti-free market as other neo-cons while being consistently a shitty neo-con down the line? When Obama does something shitty I don't say "Ah well he's secretly being a conservative. Makes sense."

Mon, 08/03/2015 - 22:27 | 6387909 sun tzu
sun tzu's picture

I don't think there are many fans of W here, but good attempt at diversion. Either way, the bailouts are the big government you adore, just like in Europe. The politicians and bureaucrats fuck over the people to pay the bankers. It's the all-powerful government stealing the money

Mon, 08/03/2015 - 23:27 | 6388106 Raging Debate
Raging Debate's picture

Sun Tzu - It is both stealing as that is the model but government has the guns so therefore ultimate power. As I said earlier most people dont realize the "Fed" is a private corporation.

To restore a brake in good governance make banking a public utility, an official 4th branch of government. It doesny doesnt solve all corruption but removes the fig leaf and restricts leverage beyond 10-1 of reserves. A PM standard slows down corruption also.

A currency is the lifeblood of a nation. It is one of the very few areas that should fall under public policy not private. The founders knew this. Other Presidents and politicians also know this but they get assasinated or go unfunded in elections when trying to change it.

We're fucked because the central bank model has captured governments globally. Bankers make loans, they are very inept at governance. They dont want the responsibility that should go with power. It really is that simple. Like the golden calf story of Exodus - You centralize all the wealth into a golden calf you have very few trades to make in the middle of the desert. Your people start to starve.

No wonder Moses was so pisssed when Aaron built one and ordered it melted down.

Mon, 08/03/2015 - 21:05 | 6387607 Al Gophilia
Al Gophilia's picture

Your wall must be adorned with the tiniest picture of the world of money.

Tue, 08/04/2015 - 08:30 | 6388833 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

 

 

Considering who is doing the buying and paying for of politicians, and taking into account the revolving door between the private and public sectors;

I think it may be safe to say that Big Gov. & Big Corp. have coupled up to produce Big Gorp.  The bastard child determined to devour all.

Mon, 08/03/2015 - 18:14 | 6387017 nosoeawe
nosoeawe's picture

"We deflated some folks" 

Yours Truly,

Long Legged Mack Daddy 

Mon, 08/03/2015 - 19:05 | 6387176 Consuelo
Consuelo's picture

Gawd bless Pastor Manning...

 

Mon, 08/03/2015 - 22:03 | 6387754 Al Gophilia
Al Gophilia's picture

James, you do realise that all of this debt is a by-product of the DEBT based IOU system, don't you? You must be aware ofthe differences between and the nature of money created by ledger book entry and saved and earned capital being re-invested by someone who has skin in the game, right? By that I infer, the money created by ledger book entry is simply created to create an income stream, a stratagem used to take or skim an income stream on the back of someone else's risk and work without investing anything. There's no capital invested, therefore the "lender" doesn't have to worry about losses, only the loss of an income stream. Mind you, the lender gets to keep the infrastructure created by the worker, if the venture happens to fold.

This is classical corruption and the money system based on gold and silver was seen as the obvious solution to stopping people from lending something they didn't have.

There is a direct link between government and bankers, a symbiotic relationship who have has combined their resources to further their well-being and they are using this corrupt system to enable it. That is an obvious and undeniable statement and history has recorded the fact that governments and rulers, can only exist as long as they are able to pay their enforcing arm. That's why Sir Francis Drake and others, were ordered to become pirates and attack foreign gold carrying ships. The Queen needed money to stay in power. Not being resource rich, the only ploy left was to attack someone and plunder it.

This attack on our property (MONEY) is no different, just surreptitious.

So yes, there is a direct link to Obama, or Clinton, or Bush, or Ike, because none of them recinded that law, therefore all were traitors to the People. Links to this form of government by force , in America's history, go all the way back to Hammilton. It's why a revolution was fought; at the commoner level at least.

The fact that Wilson passed legislation deviously on Christmas eve when all other reps had gone home and through connivence ensuring that congress was still open for business, he kept 4 of his supporters there to rubber-stamp the bankers bill, which was also devised under the cloak of secrecy, shows you how desperate they are for power.

Since 1913 in particular, all of the presidents sworn in have been aware of the coup by the bankers and all of them have willingly participated in this treason against a People's Government. All of them come out of politics much richer than they went in. All of them. They even created laws which allows them to inside trade without prossecution. That applies to ALL of them. Tyrrany.

 

Mon, 08/03/2015 - 22:29 | 6387918 sun tzu
sun tzu's picture

Here's what James understands:

Obama good

Bush bad

He thinks we adore Bush and hate Obama. He's a clueless dolt. 

Mon, 08/03/2015 - 22:56 | 6388009 James_Cole
James_Cole's picture

He thinks we adore Bush and hate Obama. He's a clueless dolt.

Now taht Bush has been outed as a commie liberal (sneaky guy had everyone fooled dead to rights for 8 yrs!) ya'll knows better, but that Trump! he's got some great ideas! And Cruz! A true conservative patriot (canadian birth / GS wife not withstanding)!

Mon, 08/03/2015 - 22:49 | 6387978 James_Cole
James_Cole's picture

James, you do realise that all of this debt is a by-product of the DEBT based IOU system, don't you? You must be aware ofthe differences between and the nature of money created by ledger book entry and saved and earned capital being re-invested by someone who has skin in the game, right?

You can say I've been lightly introduced to your points having come across them on zh a few thousands times thus far.

How your argument relates to an american coal company losing 11B in market cap is anyones guess. I could go out right now, max my corporate credit, pay myself that money or buy lambos or whatever the hell and then what? Declare bankruptcy and whine about the formation of the federal reserve in 1913??

Tue, 08/04/2015 - 03:39 | 6388225 Al Gophilia
Al Gophilia's picture

You can say I've been lightly introduced to your points having come across them on zh a few thousands times thus far.

Then if that's the case, one could surmise that;

A) you are a slow learner.

B) You have a sub-standard ability in understanding simple concepts, which work.

C) You have an oppositional defiance and reality disorder, completely bereft of logic.

D) Have a gravitational strength capable of attracting copious amounts of stupid.

E) Considering your immersion in the field of monetary matters to be light, although the evidence presented to you is quantifably indisputable, broad and deep in measure, as recorded in the annals of monetary history and politics, it seems you have a propensity to avoid or ignore the obvious fire in the house, so discussion with you therefore is  a wasted case of effort meeting an immovable object. Un-teachable, not able to be reached.

Don't get me wrong, I'm not banging on my own drum here. I too lived your dream but the world of finance wasn't of my making, even though I HAD to participate in it, force to by government dictat. No, great men of reading, honor and statesmanship, far superior to mine or yours, shaped my thoughts. They actually took the time to establish a government based on the philosophy of liberty and the sovereignty of the individual as being superior to government, all based on natural laws of fairness. You choose to deny it and are happy to wallow in you quaint beliefs. You've been given an ocean of information but have only been prepared to wade in up tp your ankles.

You're an energy drain and I'm sorry to say and if I spend anymore time on this it will be a waste and will only confirm that old addage that two fools met. 

Al out.

Tue, 08/04/2015 - 09:29 | 6389010 acetinker
acetinker's picture

Al,

Had to log in just to uptick-

D) Have a gravitational strength capable of attracting copious amounts of stupid.

Thanks for that!

Mon, 08/03/2015 - 23:34 | 6388134 Raging Debate
Raging Debate's picture

Al - Way to net out. One of the wealthiest bankers in England that quit in disgust was Lord Acton that said that the issue sweeping down through the centuries was going to be the people versus the banks. This is the seeds of world wars at its root. Most do not know this.

Tue, 08/04/2015 - 00:38 | 6388287 maxwellsdemon
maxwellsdemon's picture

You summed it up eloquently.   I've been pondering this issue since finding out about the banker's ongoing scam since reading that great classic "The Creature from Jekyll Island".   So where do we go from here?  If we want to keep a modern government going, it seems that nationalizing the Fed is the solution and removing the power to create credit money from the private bankers.

Tue, 08/04/2015 - 00:40 | 6388288 maxwellsdemon
maxwellsdemon's picture

Al Gophilia; You summed it up eloquently.   I've been thinking about what to do about this since reading that great hard money classic "The Creature from Jekyll Island".   So where do we go from here?  If we want to keep a modern government going, it seems that nationalizing the Fed is the solution and removing the power to create credit money from the private bankers.

Tue, 08/04/2015 - 03:05 | 6388479 Al Gophilia
Al Gophilia's picture

Where do we go from here? We don't have to reinvent the wheel. Its already been promulgated and enshrined. Trouble is we've had a coup take place with our Representatives being ousted by the Polankers, yet the public recognition of that event in 1913 has yet to dawn.

The avenues available to The People to effect change and wrest back our People's Republic are numerous but I've not done much research into that and it is a topic that in my opinion needs to be addressed sooner rather than later, particularly here on Zero Hedge. I believe that this platform is gaining recognition as an insightful, respected and precient one. I hope that the Tylers appreciate the level of new found respect that they are gaining in the MSM and start thinking on how they can promote change through their page. It will be a revolution but the type is yet to be decided. We either proactively inform the public and our families and friends on the ethos of the Libertarian People's Republic (The first of its kind in the annals of social and political history) before we have to repeat our violent history.

I believe there is also the avenue of holding a State Conference but as I said, I'm not well read in that area of expertise.

Mon, 08/03/2015 - 16:46 | 6386659 Rainman
Rainman's picture

He speaks of ' leveraged asset deflation ' and should be more specific . That's the boogeyman all central bankers fear.

Mon, 08/03/2015 - 16:58 | 6386716 kaiserhoff
kaiserhoff's picture

Yes, I would love to see some real gut wrenching deflation,

  but I won't believe it until real estate tanks, at least 50%.

Mon, 08/03/2015 - 17:00 | 6386731 norecovery
norecovery's picture

Fossil fuels, esp. coal, are soon to become stranded assets, as climate disruption will make our doom abundantly clear.

Mon, 08/03/2015 - 17:17 | 6386808 farmerbraun
farmerbraun's picture

Climate appears to be completely resistant to disruption.

Mon, 08/03/2015 - 17:29 | 6386856 cheech_wizard
cheech_wizard's picture

Did you just wander in from some left wing blog after reading a ZeroHedge article? Tell you what, be a martyr for your cause. For starters, stop using your computer. Then shut off the electricity in your dwelling. Then find a tall building, go to the top floor, climb the stairs to the roof, walk to the ledge, and throw yourself off. Leave a note. "Today, I did my part to save the planet, Sincerely, norecovery".

Mon, 08/03/2015 - 20:02 | 6387349 New_Meat
New_Meat's picture

click on the newbie's name ;-)

Let's see if it can do the right thing as a newbie(?)  Me, I'm betting that it a) is a pussy or b) is candy.

Don't cha' know.

- Ned

Tue, 08/04/2015 - 02:05 | 6388415 MsCreant
MsCreant's picture

To it's credit, the avatar is Humpty, who is already poised to do as you instruct.

Tue, 08/04/2015 - 02:45 | 6388469 Serenity Now
Serenity Now's picture

That made me LOL.

Tue, 08/04/2015 - 03:09 | 6388493 Al Gophilia
Al Gophilia's picture

Education will never succeed through derision. Give him a chance to learn and turn snother one around.

Mon, 08/03/2015 - 18:17 | 6387018 New_Meat
New_Meat's picture

1970s: Global Cooling--Carl Sagan argues for reductions in carbon emissions for some reason or other

1990s: Global Warming--AlGore et al argue for reductions in carbon emissions for some reason or other..

2000s: East Anglia and Penn State get caught in adding "Quality Assurance" to raw data and then "losing" the raw scientific data and only publishing the data that have been through their "Secret" QA process.  Unfortunately, in an uncontrolled data dump, raw FORTRAN code with "secret" adjustments become less than secret.  They keep arguing for reduction  in carbon emissions for some reason or other.

2009: Obama is elected and stops the sea levels from rising.  It IS true!  He said so.

2010s: The jig is up.  We now need to blame human behaviour on "climate change" while attempting to cover all bases.  'cuz the claim that the temperatures are rising is on its face false.  However, we continue to hear arguments against carbon emissions for some reason or other.

August 3, 2015: norecovery introduces "climate distruption" for some reason or other.

Be Scared, BE VERY SCARED!!!! For some reason or other.

- Ned

{u might get me talking to myself at this rate}

Mon, 08/03/2015 - 18:30 | 6387058 James_Cole
James_Cole's picture

1896 - Arrhenius formulates greenhouse law & predicts man-made global warming

2015 - new meat has internet connection yet remains ignorant af

Mon, 08/03/2015 - 19:16 | 6387217 sun tzu
sun tzu's picture

Your lord savior Albert Gore claims the oceans will rise 50 feet unless we buy carbon credits from his Wall Street buddies.

 

Then he goes and buys an oceanfront mansion. You left-wing cretins are such suckers. 

Mon, 08/03/2015 - 20:05 | 6387360 James_Cole
James_Cole's picture

BEDEVERE: Who are you who are so wise in the ways of science?

Mon, 08/03/2015 - 22:37 | 6387944 DanDaley
DanDaley's picture

Where are all of those dozens of devastating hurricanes that Al Gore told us we were absolutely, no dount about it, going to get? I mean, if you can't believe a Climate God like old AL, who can you believe?! Al, you charlatan schmuck, you!

Mon, 08/03/2015 - 20:05 | 6387366 38BWD22
38BWD22's picture

 

 

The ocean has not risen where we live (ocean view) in the 14 years we have been here.

Mon, 08/03/2015 - 20:13 | 6387404 New_Meat
New_Meat's picture

Well, prolly, it rises and sinks approximately 4 times a day, plus those pesky storms 'n' shit.

But 14 years? Why, that is not enough time to establish a true "baseline".  Besides, Our Dear Leader stopped the rise of the seas in '09, so you aren't doing a real experiment here, the control conditions have changed.  You all should be on your knees thanking Our Dear Leader for his munificence. ;-)

- Ned

Tue, 08/04/2015 - 00:13 | 6387807 Al Gophilia
Al Gophilia's picture

That's 2 times a day, unless the world is spinning faster due to climate change.  ;) but I know where u're coming from.

Tue, 08/04/2015 - 00:03 | 6388220 Raging Debate
Raging Debate's picture

38bwd - But where is the water from the north pole going? Oh yeah it's going to the South pole. Now propogandists are saying there is a difference between 'land ice' and 'sea ice'. Kiss my dick.

Archimedes discovered the physics of displacement in his bathtub two thousand years ago.

As I said, I abhor dumping toxins in our air and also oceans which winds up being an indirect tax on others in some form as it makes people sick. We certainly must continue doing better.

Mon, 08/03/2015 - 20:33 | 6387475 ThrowAwayYourTV
ThrowAwayYourTV's picture

I would give you an up arrow sun, but I'm araind that my finger will slip and touch your icon.

Tue, 08/04/2015 - 02:13 | 6388434 MsCreant
MsCreant's picture

I'm a chick. All kinds of tits and ass and even an occasional vag on this site. I have adjusted. I now judge them, are they hot, or not? Some are just crude, no aesthetic value at all. If you have the little finger pointer, you can have a lot of fun.

I for one approve of the avatar (though it is kind of a plastic representation of masculinity), and my little finger pointer cursor can have  a grand time! If you touch it, I don't think it gets hard. But I don't know for sure.

Mon, 08/03/2015 - 22:59 | 6388024 jomama
Mon, 08/03/2015 - 23:54 | 6388196 Raging Debate
Raging Debate's picture

Sun Tzu - Yep, ice is thickening in the south pole as the north loses ice. It is a slight shift in earth axis that is causing this. That said toxic emissions cause cancer and other pulminary disease. It is less of a problem in the US (where did that acid rain go?) since we outsourced our manufacturing to China.

My parents talked of global cooling propoganda in the 1970's. Also Swine Flu where more people died of the vaccine back then. When asked this time around a few years back if Obama or family took the vaccine, he said no. People can eat up all the bullshit they want just dont forcee at gunpoint to lay for it.

Liberals are the most hypocritical of any group and our country including Republicans are now full of them. I had a friend in the Gulf War thay is liberal. After a 1/2 hour heated debate he admitted the ideology was to steal as he laughed.

Liberalism is a mental disorder. Didnt believe Mike Savage at first but now understand completely. Emotionally weak people justify stealing to survive and thrive. Instead of relying on charity government is there solution.

Government is supposed to enforce a level playing field. After all, the ones that win the vagina lottery already have an advantage and must be stopped from stealing by bribing government.

Tue, 08/04/2015 - 12:14 | 6389779 Not My Real Name
Not My Real Name's picture

You're wasting your time with Mr. Cole. His ideology prevents him from recognizing reality/truth.

To him, you're just a "denier."

 

Mon, 08/03/2015 - 20:06 | 6387371 New_Meat
New_Meat's picture

Yo, Jimmie, can you name the atmospheric component that is the most significant (by an order of magnitude) contributor to the so-called greenhouse effect?

If you can succeed in the above most simple task, then please let all of us know.

"Greenhouse Law" lmfao! Next you will be talking about 'settled science'.

And if the "Greenhouse Law" was so important, why was Nobel Prize Physics Lauriat (sp?) Sagan so wrong?  As a bonus points thing, you could take a shot at that too.

- Ned

Mon, 08/03/2015 - 20:29 | 6387457 James_Cole
James_Cole's picture

Yo, Jimmie, can you name the atmospheric component that is the most significant (by an order of magnitude) contributor to the so-called greenhouse effect?

Atmospheric contributor? H2O. Not sure where you're going with that one..

And if the "Greenhouse Law" was so important, why was Nobel Prize Physics Lauriat (sp?) Sagan so wrong?

You'll need to be more specific.

Mon, 08/03/2015 - 21:44 | 6387766 New_Meat
New_Meat's picture

Actually I didn't say water vapour, but you did hit the answer correctly.

I'll be more specific on the second question:  Why was Carl Sagan (a genius I admit and admire) so enthralled about "global cooling".

Hint: it wasn't science, it was another reason.

Specific enough?  Cuz u need 2 discover factz 4 u sef.

- Ned

Mon, 08/03/2015 - 22:01 | 6387827 James_Cole
James_Cole's picture

I'll be more specific on the second question:  Why was Carl Sagan (a genius I admit and admire) so enthralled about "global cooling".

You need to cite something he actually wrote. He wrote about a lot of stuff.

As far as global cooling, Arrhenius was very interested in the topic and he believed the greenhouse effect (in this instance AGW) would save humanity from the coming ice age. Carl Sagan wrote (much later) that humans needed to be especially careful about the greenhouse effect as contributing could be catastrophic.

Mon, 08/03/2015 - 22:23 | 6387895 Tallest Skil
Tallest Skil's picture

There is no warming, there is no sea level rise, there is no glacial melt, there is no increase in violent weather, there is no decrease in ariable land.

Every condition you claim exists doesn't. AGW is a lie, self-admitted by its creators, for the purpose of destroying the industry of the western world.

Mon, 08/03/2015 - 21:39 | 6387753 Zen Master
Zen Master's picture

Year 1...the beginning...

God fired off a volcano loaded with burnt hydrocarbons and greenhouse gasses...and it was good.

Climate always changes...God smiles, sits back and lights up a big cigar!

Mon, 08/03/2015 - 21:28 | 6387712 post turtle saver
post turtle saver's picture

here's what's actually going to happen...

- the Kemper Project will go on line next year

- we'll learn more than we'll ever need to know about using coal for fuel leveraging IGCC tech, and then some

- more and more "Kemper Project" plants will spool up

- CO2 targets will be feasibly met, while still using coal

- the USA, sitting on a current value of ~$17 trillion in coal reserves, will have more electrical power than it can shake a stick at

- Kemper tech will be exported to other coal rich countries that desperately need it (China)

- doom and gloom postponed for the next 300 years as a result q.e.d.

Mon, 08/03/2015 - 23:20 | 6388093 fattail
fattail's picture

The climate is in a constant state of disruption somewhere.  Droughts, floods, ice ages, and heat waves all yinning and yanging throughout time.  Only a narcisstic fool believes he can control the climate.  Only a moron mistakes weather for climate.

Tue, 08/04/2015 - 12:28 | 6389861 Not My Real Name
Not My Real Name's picture

Only a narcisstic fool believes he can control the climate.

Then there are the statists who may not believe they can control the climate, but they peddle their phony global warming "solutions" as a tool to control the masses -- which makes them morrally corrupt and more dangerous than narcisstic fools,

Mon, 08/03/2015 - 17:12 | 6386793 LawsofPhysics
LawsofPhysics's picture

What about all those "leveraged wages"? (for those lucky to actually have a wage).

Do people really think the SNAP program can grow indefinitely?

LOL!!!

Mon, 08/03/2015 - 22:21 | 6387888 shovelhead
shovelhead's picture

Yes it can.

As long as dummies buy Treasury notes, they can print EBT money forever.

The problems begin when T's go bidless.

Tue, 08/04/2015 - 07:11 | 6388679 eddiebe
eddiebe's picture

T's will never go bidless because Belgium will buy them.

Mon, 08/03/2015 - 16:51 | 6386682 Bemused Observer
Bemused Observer's picture

Yes, but I'm not so sure that the 'higher standard of living' they pursue will involve McMansions with granite countertops, SUV's in the driveway, and aggressive home-trading of stocks on their computers, all purchased on credit...

I mean, how is that working out for US? God forbid there should be a better way...all those folks might choose it after watching this shitshow!

Mon, 08/03/2015 - 16:55 | 6386703 LawsofPhysics
LawsofPhysics's picture

"folks" will be concerned about where their next meal comes from and that's about it...

Mon, 08/03/2015 - 20:22 | 6387434 El Vaquero
El Vaquero's picture

We ate some folks...

Mon, 08/03/2015 - 17:04 | 6386761 johnlocke445
johnlocke445's picture

The Earth can EASILY handle 21 billion people if needed, however due to political corruption, resources are never efficiently created and distributed to the people. Get rid of government corruption and everything will change.

Mon, 08/03/2015 - 19:01 | 6387157 crazytechnician
crazytechnician's picture

If 21 billion live in comfort , then are you going to deny them the right to reproduce ? Because 21 million can quickly become 65 million .... At what point do you say , okay this planet has a finite amount of tappable / exploitable resources , how many fleas can live on a dog before it dies from anaemia ? How many locusts eat before the entire crop is gone  ? There is always a mathematical limit. Good luck to the Utopians , I hope it works out , but for me the reality is that this planet's resources are truly rare and finite , and human appetite is virtually infinte....

Mon, 08/03/2015 - 19:55 | 6387328 tarabel
tarabel's picture

 

 

While I agree that the Earth can support 21 billion humanoids, it can only do so as a relatively organized operation entailing a lot of administrative apparatus to regulate the flow of resources-- not as a laissez faire state-of-nature endeavor.

Increasing population inevitably leads to increasing organization and oversight. Visit any city for proof of this regrettable but unavoidable phenomenon.

The price of existence for 21 billion souls is paid in the currency of personal liberty and freewill.

Support space colonization and weapons of mass destruction. They offer the only two credible solutions to the approaching pinch point.

Mon, 08/03/2015 - 20:09 | 6387379 crazytechnician
crazytechnician's picture

I would actually say that the more overisight , administration , organisation that you add , actually creates more imbalances and reduces overall systemic efficiancy resulting in much more waste hence - let the population level and system deal with itself without opinion or manipulaton. All natural systems are self governing , it is the oversight and administration of these systems that are the actual cause of the underlying problem ......

Mon, 08/03/2015 - 20:20 | 6387428 New_Meat
New_Meat's picture

The Soviet Command Economy caused excesses of certain favoured products to be manufactured, caused starvation of other products (and people) because the so-called "rational" approach didn't pan out.  Result: long lines for people trying to buy certain goods (my tovarich talks about scissors and staplers and Jeans).

Then there were (please sit down and put your beverage away in a safe place) the two guys in the Nixon administration who transitioned into the Ford Administration and were part of the "Whip Inflation Now" crowd.  They tried to implement wage and price controls.  The markets (back when we had them, more or less) spanked them severely.

Who were these masked men, attempting with genius and hubris to tame the wild markets?

- Ned

Tue, 08/04/2015 - 14:19 | 6390507 The Boognish
The Boognish's picture

I remember selling my old Levis to buyers who would ship them to Russia and make mad bank on them. I can't remember for sure, but I think a used pair of 501's without any holes would get you $10 and a pair with holes would get you $5. This was in the 80's right after Glasnost. Guys would park by the road in town with a table and a trailer and pay cash. I had several pairs of 28-34's I couldn't wear anymore since I was out of high school and wasn't on swim team. I fattened up to 30-34's

If that event occured today, there wouldn't be any market for American jeans in Russia. Nobody there would be big enough to wear our cast-offs.

Mon, 08/03/2015 - 20:38 | 6387496 new game
new game's picture

21 billion, what? we are pushing the limits of ecosystems at 7.3 billion. wheels are wobbling now.

at 8 billion the bearings over heat. and i will live to see this. but not looking fwd to what happens in just the next 5 years.

looking beyond this is afools errand.

 

Mon, 08/03/2015 - 22:24 | 6387900 Tallest Skil
Tallest Skil's picture

You realize you're lying through your teeth, right? Earth's CC is much higher than right now.

Mon, 08/03/2015 - 23:26 | 6388105 El Vaquero
El Vaquero's picture

Bullshit.  You are not going to get the N, P or K to feed a drastically higher population, and you aren't going to ship the food and pump the water to feed them either.  We're already fucking our oceans up to boot.  

Mon, 08/03/2015 - 20:23 | 6387441 New_Meat
New_Meat's picture

Darlin:

"Increasing population inevitably leads to increasing organization and oversight. Visit any city for proof of this regrettable but unavoidable phenomenon."

OK, so I was in Chicago, Philly, and DC over the past six months.  Didn't see any organization, didn't see any proof, didn't see any inevitability.  Saw actually the opposite of what you posit: 'taint happenin'

- Ned

Mon, 08/03/2015 - 20:38 | 6387497 ThrowAwayYourTV
ThrowAwayYourTV's picture

If there is ever 21 billion people on this planet I'm offing myself because I can barely stand 7 billion.

Mon, 08/03/2015 - 21:25 | 6387695 Ms No
Ms No's picture

Word.  My personal bubble is pretty large, preferably acres.  I want to drive to see people.  If we end up with 21 billion we will be stacked up like cord wood and have to sleep in little cubicle caskets like the Japanese.  I don't hunt but if you do forget about getting a tag, or a fishing license... ever.  21 million would be a nightmare as soon as the air became fetid with sewage you might as well pull a Santha Stark and bequeath to everyone the world of shit. 

 

Mon, 08/03/2015 - 17:19 | 6386821 Straw Dog
Straw Dog's picture

@Lawsof Physics

You can have as many people as you want competing for resources, if majority don't have any money as a result of defaults and bankruptcies, then they do not compete, hence you get deflation.

Mon, 08/03/2015 - 19:18 | 6387226 sun tzu
sun tzu's picture

Yep. There's a wide gap between what people want and what they can actually get. 

Mon, 08/03/2015 - 21:55 | 6387805 DaveyJones
DaveyJones's picture

I've heard it even applies to girlfriends 

Mon, 08/03/2015 - 23:45 | 6388149 DaveyJones
DaveyJones's picture

That is somewhat the position of gail the actuary co-creator of The Oil Drum

http://ourfiniteworld.com/about/ 

 

We have created a crack head credit economy that is exploding away from the physical world at exponential speed.

The results will most likely be chaos and violence.

While the powers that be (read bankers) try to pull their regular shit however

They may be looking at a lot of angry folks.

SO who knows. It will be ugly.     

Mon, 08/03/2015 - 17:49 | 6386926 Crocodile
Crocodile's picture

That is why the superior people sell you on the macro-evolutionary lie; so when they sell you the need to save their and likely yours goddess "Mother Earth" and the need to keep mankind going another million years you will gladly submit to the logical conclusion of the superiors, which is genocide, suicide, infanticide, and eugenics...just as it always has been. 

---------

However, according to the one who always existed and was the only one there when He created everything and the only one who can give life; He says the earth is disposable, man has been around for about 6000 years (which all archeology accounts of first written & spoken language go back almost exactly 6K years) and He will dispose of this planet in warming-fashion that would make a global-warmist envious, and will create the New Heavens & New Earth only for those who repent of their wicked ways and believe in the "foolish" message of salvation via the Lord.  https://www.youtube.com/watch?v=NMlv21zGARM (2 minutes)

-------------

BTW - would you believe anything from a person who spent many summers killing birds with a hammer to the head and tortured puppies for the sheer joy of it?  This same person went on a sea voyage and hope to see cannibals so he could just shoot them for sport.  Who would listen to anything this person would spew?  His name is Charles Darwin.

Mon, 08/03/2015 - 17:55 | 6386947 farmerbraun
farmerbraun's picture

What does the record tell us about human existence in Australia again?
6000 years?
And the rest.

Mon, 08/03/2015 - 19:11 | 6387196 Crocodile
Crocodile's picture

Add 5 days; man was the crowning creature on day 6.

Mon, 08/03/2015 - 22:09 | 6387848 jomama
jomama's picture

Your sad blind faith to a fairy tale that has been proven over and over again to be just that is kind of sad, dude.

I'd ask for your explanation regarding dinosaurs, but I'd probably be too disinterested to read it by the time you get to it anyway.

Tue, 08/04/2015 - 00:58 | 6388325 Chuck Walla
Chuck Walla's picture

And may I hear your factual and provable proof of how the earth and solar system came into being. No violations of the rules of thermodynamics allowed, scientist.

FORWARD SOVIET!

Tue, 08/04/2015 - 01:00 | 6388326 Chuck Walla
Chuck Walla's picture

All Hail Obamus Rex!

FORWARD SOVIET!

Mon, 08/03/2015 - 22:07 | 6387839 jomama
jomama's picture

2/10

Tue, 08/04/2015 - 01:04 | 6388290 Raging Debate
Raging Debate's picture

I read the bible four times cover to cover. The only bible author to even broach evolution was Moses who accurately outlined the sequence of living beings in correct order in evolution.

Your 6,000 years comes from an interpretation (belief) of the writing ofDaniel that said to God a thousand years is like a day to God. Compared to Moses and six periods of creation (that is the original translation of periods NOt days is what Moses said.

What is neat is if you read Daniel and take a calculator Daniel stated to the year when Israel would be reformed as a nation and trampled on in -between by the nations. That year was 1947 or 1948 using modern calenders.

Modern physics tells us time and acceleration are nearly the same thing. Time or acceleration happens faster in other dimensions. The math stayes this and is a basis for quantum computing.

The only people still hung up on evolution are the uneducated. Bible writers didnt consider evolution a debate at all. Carbon testing is sound. Homo Sapiens have been here at least 100,000 years and some of the oldest towns are 20,000 years old.

Moses as accurate as he was in the evolutionary sequence however could not be factually correct on his documentation of families and the years in-between the lineage of Adam and Eve and Abraham. The numbers dont add up if you read it and compare To carbon dating. It doesn't mean he didnt have anything important or useful to say or was inspired somehow.

Christ said he wasnt of this world. He said he was an alien in other words. Far less believable 2000 years ago but now modern science says it is a totally realistic theory. Same with artificial insemination and immaculate conception. Or resurrection (many worlds theory).

Organized religion is metaphysics. It has its place and merits especially correlations to observed solar cycles and behavior, but unfortunately it can promote intellectual laziness. You do know established religion killed Pythagoras, jailed Galileo and mocked Copernicus? All three believed in a Creator. I believe that too but there is more to discovery around that belief.

Charles Darwin pursued our origination. He didnt get into the aspect of god because whether he believed or not facts in proving his theory was his intent. His theory has been proved beyond a reasonable doubt. We collectively are very much interest in our origination. We may meet God someday and ask where we all came from, I wager he shrugs his shoulders and says "I dont know". Christ talked about a recreation in reference to a new heavens and earth. This is in line with 'cyclical' theory of modern physics.

When Paul saw churches arguing over Christs simple teachings he told the churches 'above all use reason.' That means logic my brother.

Mon, 08/03/2015 - 20:28 | 6387455 UggSmash
UggSmash's picture

I dunno, LoP. I hear you with billions of people as demand. 

But another way to look at it is that billions of people are in debt, and will try to pay it back. This means selling whatever they have for whatever they can get (e.g. selling coal for low prices, liquidation sales, selling business segments, etc.). I understand Stockman to be referring to this dynamic as the cause of deflation, as well as the evaporation of currency (in defaults, so balance sheets and future cash flows, and thus, spending power, of creditors are impaired accordingly).

A shorter version I think about: a huge number of people, some using production technology that makes them very productive on a per-individual basis (think of how many individuals a single farmer can feed). So some have jobs, but many others will be unemployed or marginally employed, because many of the basics are cheap due to technological advancement (e.g. food, water, electricity, etc.). We just don't need their labor for necessities. 

Mon, 08/03/2015 - 20:49 | 6387512 maxwellsdemon
maxwellsdemon's picture

This is the deflation phase of the banker created boom bust cycle.   Easy credit creation fuels the boom and bankers make money on floating public companies and raking in interest payments but as the boom continues, oversupply of...fill in the blank...houses, coal, dot com companies, oil ...etc occurs and as prices drop, companies default on the debts.  Then the banks seize the collateral and really clean up because now rather than collecting interest payments in fiat they take over physical assets that were created during the boom.  In the 19th century, the British banks created credit that paid laborers and suppliers to construct US railroads, but the bust that happened in the the post WW1 era led to defaults on the debts owed and the banks seized the assets.   They ended up owning all the railroads all because they have the goverrnment monopoly on the creation of credit. 

 

The answer is to nationalize the Federal reserve and get this private banking cartel out of the creation of our nations money.   The credit is owned by us, and therefore is function of government.  Actual savings can be lent out by banks, but they should not be able to create credit.  That is the goal of the bankers always, not just to control, but to actually own the creation of credit against assets (and our labor is a future asset with a present value to it) and charge interest on it.  Banks have no right to own our own future labor.

 

Ellen Brown explains this really well:

http://www.webofdebt.com/

 

Eventually the clean up phase occurs, usually a massive war, to destroy the oversupply of the boom cycle.  This the Kondratieff cycle and we are in the 'winter phase' of it

 

http://www.kondratieffwavecycle.com/kondratieff-wave/

 

Tue, 08/04/2015 - 01:10 | 6388348 Raging Debate
Raging Debate's picture

Maxwells - Awsome description of the central bank private business model, well done. I posted something very similar and wouldnt have if I saw your commentary first.

Mon, 08/03/2015 - 21:03 | 6387599 MFL8240
MFL8240's picture

I am assuming you are serious despite your incredible ignorance on this matter.  The world is overloaded with debt because the Jewish banking cabal (calling out the truth does not make you anti semetic or a hater of any group) and their friends have stolen the wealth and passed the debt on the working stiffs.  They are the problem, not anyone working or looking for a fair wage.  Privatize their profits nationalize their loses, you didn’t learn anything from 2008 and the great Paulson fraud? This group has been thrown out of 109 countries, has controlled the federal reserve bank of thieves and the IMF for decades and you are looking at the population fighting for a few crumbs as the problem?  Wake up Dude!  If the global wealth was a fair capitalist system without this bullshit of printing money and lying to the public this matter would resolve itself over time! Get rid of the Federal Reserve, get a real President, get rid of these bankers and take their wealth from them and that will be where things will start to turn.  The debt is on overload and needs to be purged and the dollar revalued against real money not faith in a rigged system of criminals.

Mon, 08/03/2015 - 21:06 | 6387610 moneybots
moneybots's picture

"...it's simple math."

 

It is simple math that deflation follows inflation, to complete a cycle.

 

 

Mon, 08/03/2015 - 21:23 | 6387678 RiverRoad
RiverRoad's picture

You can put a $1.00 price tag on an apple, but if all most people have to buy that apple with is 50 cents, then that's exactly what that apple will go for, like it or not.

Mon, 08/03/2015 - 21:57 | 6387813 El Vaquero
El Vaquero's picture

And if it costs 95 cents to produce the apple, nobody gets any apples.  

Mon, 08/03/2015 - 21:37 | 6387722 jameswvu99
jameswvu99's picture

You might want to do some math, yes the population has increased but mainly in southern asia and Africa, where the majority don't have cars or electricty.  How much gas or heating oil does an African need with no car or HVAC.

The fact is the whole concept of QE should be inflatonary but it isn't, we've seen this with Japan.  I can't explain it myself but we are having a huge deflationary spiral down.  If the fed does another round of QE i see more of the same of a initial boost of commodities then more deflation. To expect a different result with the same action is madness.

Mon, 08/03/2015 - 21:59 | 6387817 El Vaquero
El Vaquero's picture

Very little of what was "created" via QE has made it out into the real economy.  Had it made it out, M2 would have more than tripled and we would have experienced hyperinflation already.

Tue, 08/04/2015 - 03:07 | 6388491 Serenity Now
Serenity Now's picture

QE wasn't inflationary (increasing the money supply) because the amount of money going POOF back into thin air was greater.

The 40+ year credit bubble was the hyperinflation.  Just think about the increase in the money supply during that time via credit, and the resulting increase in standard of living.

It's over.  

Tue, 08/04/2015 - 01:04 | 6388340 tdogg
tdogg's picture

No.

I dont care LoP.  In the end everybody is dazeled by the beauty of it all. 

VAPID

You see it's all an end game in & of itself.

 

https://www.youtube.com/watch?v=KKUUuNKv5oA

 

Tue, 08/04/2015 - 02:11 | 6388430 Crusader75
Crusader75's picture

The juvenile language doesn't strengthen your argument, Mr. Poopypants.

Tue, 08/04/2015 - 11:10 | 6389379 DeProgrammed
DeProgrammed's picture

"With 7+ billion people, and growing"

Umm, I thought birth rates are in decline, or will be shortly, in a number of major countries? Much of the financial issues these countries are facing relate to aging populations and their costs for healthcare, pensions, etc.

Mon, 08/03/2015 - 16:38 | 6386615 waterwitch
waterwitch's picture

Can't happen soon enough.

Mon, 08/03/2015 - 16:39 | 6386620 LawsofPhysics
LawsofPhysics's picture

don't hold your breath...

Mon, 08/03/2015 - 16:48 | 6386664 crazytechnician
crazytechnician's picture

It's already happening. Our entire money supply is loaned into existance. Global demand for credit is negative. Quite simply that means deflation. End of.

Mon, 08/03/2015 - 16:54 | 6386689 LawsofPhysics
LawsofPhysics's picture

Yes, end of deflation and beginning of hyperinflation in anything required to live and live well...   ...barring a massive decrease in the human population of course.

correct.

Mon, 08/03/2015 - 16:59 | 6386729 balanced
balanced's picture

Have you seen the commodity markets lately? Everything is down and sinking lower against fiat. I'm not saying it makes sense, but to say it isn't happening is ridiculous.

Mon, 08/03/2015 - 17:14 | 6386799 LawsofPhysics
LawsofPhysics's picture

So, by that logic, how soon before all those commodities are free?  Fuck, the mint cannot keep up with physical silver demand at these prices, what the fuck will they do when silver is back to $5 an ounce?

do tell...

 

there is ALWAYS a "deflationary" collapse (purely a monetary thing) prior to hyperinflation and world war, always...

Mon, 08/03/2015 - 18:30 | 6387037 crazytechnician
crazytechnician's picture

Central banks now (attempt to) balance the amount of monetary expansion in the system with varying levels of QE. If (when) the economy eventually picks up and demand for credit increases (thus money supply increase) they will re-absorb that QE money out of the system , off of their balance sheet thus preventing hyperinflation. This could work for some time..... I don't see the correlation between PM's and money expansion / contraction , this is an outdated system of money - you may as well be talking about rare sea shells. Of vastly more importance are the new Crypto currencies which are appearing , these are far superior to the current fiat system and PM based monetary systems. If the Central bank QE policy is an epic failure then we can expect to see the end of the current fiat system either through deflation - resulting in banking system failure - or hyperinflation - total currency reset. Crypto currency will be the successor in either of these outcomes.

Mon, 08/03/2015 - 19:19 | 6387219 Tinky
Tinky's picture

Yeah, right, I mean given that Central Banks around the world are attempting to repatriate and/or accumulate gold with increasing urgency and at record levels, it's a no-brainer that crypto-currencies will supercede gold post-collapse, and that rare sea shells are analogous to the barbarous relic.

Stick to TV repairs, why don't you.

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