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"The Heart Of The Economic Disorder Is A World Financial System That Has Gone Rogue"

Tyler Durden's picture




 

By Will Hutton, originally posted in The Guardian

The world economic order is collapsing and this time there seems no way out

Europe has seen nothing like this for 70 years – the visible expression of a world where order is collapsing. The millions of refugees fleeing from ceaseless Middle Eastern war and barbarism are voting with their feet, despairing of their futures. The catalyst for their despair – the shredding of state structures and grip of Islamic fundamentalism on young Muslim minds – shows no sign of disappearing.

Yet there is a parallel collapse in the economic order that is less conspicuous: the hundreds of billions of dollars fleeing emerging economies, from Brazil to China, don’t come with images of women and children on capsizing boats. Nor do banks that have lent trillions that will never be repaid post gruesome videos. However, this collapse threatens our liberal universe as much as certain responses to the refugees. Capital flight and bank fragility are profound dysfunctions in the way the global economy is now organised that will surface as real-world economic dislocation.

The IMF is profoundly concerned, warning at last week’s annual meeting in Peru of $3tn (£1.95tn) of excess credit globally and weakening global economic growth. But while it knows there needs to be an international co-ordinated response, no progress is likely. The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US and UK makes such intervention as probable as a Middle East settlement. Order is crumbling all around and the forces that might save it are politically weak and intellectually ineffective.

The heart of the economic disorder is a world financial system that has gone rogue. Global banks now make profits to a extraordinary degree from doing business with each other. As a result, banking’s power to create money out of nothing has been taken to a whole new level. That banks create credit is nothing new; the system depends on the truth that not all depositors will want their money back simultaneously. So there is a tendency for some of the cash banks lend in one month to be redeposited by borrowers the following month: a part of this cash can be re-lent, again, in a third month – on top of existing lending capacity. Each lending cycle creates more credit, which is why lending has always been carefully regulated by national central banks to ensure loans will, in general, be repaid and sufficient capital reserves are held.

The emergence of a global banking system means central banks are much less able to monitor and control what is going on. And because few countries now limit capital flows, in part because they want access to potential credit, cash generated out of nothing can be lent in countries where the economic prospects look superficially good. This provokes floods of credit, rather like the movements of refugees.

The false boom that follows seems to justify the lending. Property prices rise. Companies and households grow overconfident about their prospects and borrow freely. Economies surge well above their trend growth rates and all seems well until something – a collapse in property or commodity prices – unravels the whole process. The money floods out as quickly as it flooded in, leaving bust banks and governments desperately picking up the pieces.

Andy Haldane, Bank of England chief economist, describes the unfolding pattern of events as a three-part crisis. Act one was in 2007-08 in Britain and the US. Buoyed for the previous decade by absurdly high inflows of globally generated credit that created false booms, they suddenly found their overconfident banks had wildly lent too much. Collateral behind newfangled derivatives was worthless. Money flooded out, leaving Britain’s banking system bust, to be bailed out by more than £1tn of liquidity and special injections of public capital.

Act two was in Europe in 2011-12, when it became obvious that the lending had been made on the incorrect assumption that all eurozone countries were equal. Again, money flooded out and Europe only just held the line with extraordinary printing of money by the European Central Bank and tough belt-tightening measures in overborrowed countries such as Portugal, Greece and Ireland. It might have been unfair, but it worked.

Now act three is beginning, but in countries much less able to devise measures to stop financial contagion and whose banks are more precarious. For global finance next flooded the so-called emerging market economies (EMEs), countries such as Turkey, Brazil, Malaysia, China, all riding high on sky-high commodity prices as the China boom, itself fuelled by wild lending, seemed never-ending. China manufactured more cement from 2010-13 than the US had produced over the entire 20th century. It could not last and so it is proving.

* * *

Not surprisingly, this article concludes with the latest official request for monetary paradrops, just as we have said all along is the endgame, just as Macquarie confirmer last night. Because before the entire financial system collapses, everything will be tried in the one last, very desperate - and ultimately futile - effort to preserve it.

Readers can read the full article here.

 

 

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Sun, 10/11/2015 - 11:13 | 6655193 Soul Glow
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The financial system is built on the lie that fiat money has value.

It doesn't.

Sun, 10/11/2015 - 11:16 | 6655201 Salzburg1756
Salzburg1756's picture

You actually don't need gold or silver as a basis for a monetary system: cf.

http://www.monetary.org/

They recommend the same system as the German NS used. It works fine. The fiat is created by the government, not by privately owned banks.

Sun, 10/11/2015 - 11:26 | 6655220 NotApplicable
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That's just stupid squared.

Sun, 10/11/2015 - 11:35 | 6655235 TongueStun
TongueStun's picture

PORK now banned in the American prison System? Just a coincidence, right?

Sun, 10/11/2015 - 11:47 | 6655265 Mister Ponzi
Mister Ponzi's picture

If only libertarians were the dominating political force of the political right in the US and the UK. Unfortunately, nothing could be further from the truth than this statement.

Sun, 10/11/2015 - 14:53 | 6655772 DetectiveStern
DetectiveStern's picture

I was scratching my head at that one as well.  I can't think of a single Libertarian MP in the UK nor are the ideas ever really mentioned by the the 3 main fascist parties (Tory, Labour and Lib Dems)

Sun, 10/11/2015 - 12:53 | 6655423 gonetogalt
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Yep, all of those criminally insane joos locked up in US prisons...

sarc/off

Sun, 10/11/2015 - 17:51 | 6656195 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

These times seem to demand a regular dose of sarcasm.

Sun, 10/11/2015 - 11:39 | 6655239 38BWD22
38BWD22's picture

 

 

Hutton wrote:

"The catalyst for their despair – the shredding of state structures and grip of Islamic fundamentalism on young Muslim minds – shows no sign of disappearing."

Yes, Europe (now) and the USA (later) will have all kinds of problems dealing with Jihadists.

In addition to our other myriad of financial problems (debt, inequality, envy & resentments, etc.)

Sun, 10/11/2015 - 11:46 | 6655263 ZD1
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"The millions of refugees fleeing from ceaseless Middle Eastern war and barbarism are voting with their feet, despairing of their futures."

 

The millions of mostly young Muslim men of fighting age invading socialist welfare countries of Europe are looking forward to a lifetime on the government dole while raping as many young European virgins as possible.

There fixed it.

 

Sun, 10/11/2015 - 11:35 | 6655232 negative rates
negative rates's picture

The Germans had/have the best ideals, the best designs, but there ability to communicate those were comprimised for some strange reason. So instead they turned to brute force both with their ideals and in some cases their designs, like designing a machine using more brute force to aid in durability rather then capilary pressure which would be more efficient and do the same job, and even last longer than the brute force method, they just need a good interpreter.

Sun, 10/11/2015 - 11:53 | 6655279 Mister Ponzi
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Well, every culture has good and not so good aspects. In the case of the German culture I like their attitude towards monetary policy: a hard money stance, although certainly not perfect, but preferable to the monetary lunatics in charge at the big central banks of the world.

Sun, 10/11/2015 - 12:07 | 6655314 negative rates
negative rates's picture

They conquered the soft economy, then they went on to address Mr. Sugar Daddy in France and instead got forced underground for reasons they did not understand, nailing their progress in it's tracks. So now we have a world full of problems which no one can address because his fiat money became the law of the land, but all is good, because all that is left to pay are the consequences now.

Sun, 10/11/2015 - 12:17 | 6655339 ZD1
ZD1's picture

"In the case of the German culture I like their attitude towards monetary policy: a hard money stance"

Say goodbye to that hard money stance?

It appears that the unexpected cost of looking after the hordes of "refugees" might scupper German Finance Minister Wolfgang Schaeuble's cherished goal of achieving a balanced budget for the next five years.

 

http://www.thefiscaltimes.com/latestnews/2015/09/20/Still-targeting-bala...

 

Sun, 10/11/2015 - 11:59 | 6655291 White Mountains
White Mountains's picture

The reason you use Gold and Silver as money is it forces everyone to be fiscally responsible.  Got no gold or silver - then you cannot spend spend spend to oblivion.  No endless black hole of a welfare state, no endless wars, blah blah blah.

Sun, 10/11/2015 - 11:24 | 6655211 Lysander_Spooner
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Listen to this 12 yearl old school you on Private vs Public Banking 

 

https://www.youtube.com/watch?v=Bx5Sc3vWefE

Sun, 10/11/2015 - 11:37 | 6655234 SofaPapa
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Great first comment.  This is exactly the problem.

Yet there is a parallel collapse in the economic order that is less conspicuous: the hundreds of billions of dollars fleeing emerging economies, from Brazil to China, don’t come with images of women and children on capsizing boats. Nor do banks that have lent trillions that will never be repaid post gruesome videos.

When they say "billions of dollars fleeing emerging economies", it sounds as if value is actually moving.  It's not.  They are just in effect playing Follow-the-Bouncing-Ball.  Until people realize that all these "dollars" chasing assets are meaningless, the game continues.  When people do realize the "money" represents nothing, they are then going to realize that actually there is less and less tangible wealth (particularly food and shelter) each day than the day prior.  Once there is little enough that people begin to hurt, shit gets real.  It's already happened in MENA and Ukraine, and is very close to happening in Europe and China.  The U.S. continues to be able to pretend it is immune, but in time, its time too shall come.

Valueless MOE destroys tangible capital (capital with real value).  It's a slow but steady process.  The end result is impoverishment, with varying degrees of speed.

Sun, 10/11/2015 - 11:38 | 6655243 38BWD22
38BWD22's picture

 

 

10-4

Soul Glow nailed it 100% very succintly.

Sun, 10/11/2015 - 17:45 | 6656181 Sparkey
Sparkey's picture

Everyone 'Knowa' something is going to happen, exactly what, where or when we don't know,,your analysis is as good as any, better than most! TKS.

Sun, 10/11/2015 - 11:40 | 6655248 Welfare Tycoon
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"The heart of the economic disorder is a world financial system that has gone rogue"

The financial system has gone rogue?

Sounds like another way to describe bullish to me!!

Sun, 10/11/2015 - 12:04 | 6655305 yogibear
yogibear's picture

More and more printing by the Federal Reserve until a currency crisis occurs is a certainty.

Sun, 10/11/2015 - 13:52 | 6655573 Dubaibanker
Dubaibanker's picture

I agree Soul glow.

That is why the outflow from Chinese is going into real assets. They sell US Treasuries and invest into real assets.

China invested USD 1.1 trillion overseas in real assets, over the last 10 years, hence have some outflows from their reserves & more loans on their bank's balance sheets. 

These are 'productive' loans unlike other nations who have created 'unproductive' loans but for China these loans will earn returns now & in future.

Most other countries generate no returns when they spend on war, bail out private sector, spend on QE & do other useless spending.

Some 10% of this money has also become slow but not entirely lost. 

If you don't make decisions, how will you progress?

And, some of those decisions may not come out right, but we all learn and move positively into the future.

There are lessons of life, investing and future growth here for all of us to learn and be able to see what China is doing and how it is progressing.

Don't let the Western media corrupt your mind. The facts speak for themselves.

China is actually taking over the world with it's sheer size, economic growth and money power. This power will continue to grow and over the next 5-10 years will be everywhere for us to see.

Here is some evidence:

‘The Chinese are taking over’: Bahamas resistance mounts to massive resort
Mon, 10/12/2015 - 13:53 | 6657258 Radical Marijuana
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Slow Glow, while the banksters' fiat "money" has no intrinsic value, it has value because governments demand payment of taxes with that money, as well as governments deem the banksters' fiat money to be legal tender in general. Therefore, the banksters' fiat money systems operate through governments ENFORCING FRAUDS by privately controlled banks, and thus, the "value" of that "money" is based upon the police and armed forces being paid to back up the rule of law, such as the taxation laws and legal tender laws in general.

Money is measurement backed by murder,

as debt controls backed by death controls.

Generally speaking, many of the comments posted on Zero Hedge are as superficially correct, while simultaneously as profoundly wrong, as the original articles were:

... banking’s power to create money out of nothing has been taken to a whole new level ...

That is relatively true. However, people who already own private property tend to deliberately ignore the ways that all private property was based on backing up claims with coercions, the same as all money was based on backing up measurements with murders. The only things that exist are the dynamic equilibria between different systems of organized lies operating robberies. After sufficient disequilibria develop to be sufficiently unbalanced, then that provokes death insanities to result from the debt insanities. After those eruptions of death insanities, perhaps some new dynamic equilibria emerge.

The article above, as well as most of the comments I have read, tend to be ridiculously superficial regarding the degree to which political economy necessarily exists INSIDE human ecology, and therefore, the debt controls exist INSIDE the death controls. What actually exist are combined money/murder systems. The "value" of the money is the degree to which it can pay for the murders to back it up. The problems we now face are the breakdowns of the previously established globalized dynamic equilibria, whereby the best organized gangs of criminals were able to control the biggest forms of organized crime (i.e., primarily some Western World banksters dominating primarily some Western World countries, that were able to defeat all others.)

Meanwhile, progress in physical science enabled the globalized systems of ENFORCED FRAUDS to become electronic frauds, backed by the threat of atomic bombs. Nobody fully comprehends what it means when those kinds of combined money/murder systems break down! Rather, generally speaking, the vast majority of people continue to want to indulge in false fundamental dichotomies, and the related impossible ideals, in order to promote bogus "solutions" based upon various sorts of old-fashioned bullshit. However, what actually exists is civilization based on the principles and methods of organized crime, which have been magnified many orders of magnitude by progress in physical science, while there has been no progress in political science which has surpassed that. Rather, human history was warfare on larger and larger scales, which developed on the basis that successful warfare worked by backing up deceits with destruction, which then eventually became the currently established systems where financial success is based upon governments ENFORCING FRAUDS by privately controlled banks.

As I elaborated in my comment under  The G-30 Group Of Central Bankers Warn They Can "No Longer Save The World," the established systems of debt slavery have driven their numbers to become debt insanities, which are going to provoke death insanities. Given the current realities, nothing else than astronomically amplified death insanities might enable the eventual emergence of some new combined money/murder systems, as some new form of dynamic equilibria between different systems of organized lies, operating robberies. However, the introduction of technologies which are trillions of times more powerful and capable than anything that previously existed in human history has made the emergence of any new dynamic equilibria between the different systems of lies backed by violence become way more problematic than ever before in known human history.

It is NOT correct to say that "the financial system has gone rogue." Rather, that financial system was always based upon backing up lies with violence, which appeared to become relatively stable only because of the history of warfare that was able to stabilize it, since those eruptions of death insanities finally bolstered the surviving systems of debt controls, despite that those systems of debt slavery backed by wars based on deceits then drove the development of numbers which have become debt insanities.

By and large, the vast majority of articles on Zero Hedge, as well as most of the comments posted under those articles, do not admit and address that human artificial selection systems were made and maintained by natural selection pressures, where the death controls were always central to the life of both. For instance, those comments which recommend various versions or degrees of "killing the banksters" tend to never do so within an overall theory of better death control systems. Similarly, those who promote idealized views of how the monetary system should work tend to never address the murder systems that must back up those alternative monetary systems.

The monetary system has NOT recently gone rogue, because human systems were ALWAYS the manifestations of organized crime on larger and larger scales, while those manifestations which were temporarily stable we able to present themselves as not being based upon organized crime, despite them still necessarily being so. Human beings and civilizations necessarily operate as entropic pumps of environmental energy flows, which were driven by natural selection pressures to be done through the maximum possible deceits and frauds.

By and large, most articles on Zero Hedge superficially perceive some aspects of that situation, while many comments upon those articles provide some more superficial sets of "solutions" to those problems. However, I REPEAT, the banksters' fiat "money" HAS "value" because police and soldiers are paid with that form of money, as well as promised to be paid pensions with that form of money. Therefore, since they provide the death controls to back up the debt controls, and there are deep social habits throughout the rest of society to accept and believe in the currently dominate state religions, which are that monetary system, backed by the national security system, overall that "money" continues to have that "value," to the degree that money continues to be backed by murder, as the most abstract ways that private property claims are backed by coercions.

Generally, human societies are dominated by their biggest bullies, and their bullshit social stories. Therefore, the wide-spread views regarding what "money" is, or should be, tend to be based upon the maximum possible bullshit, which deliberately ignores and denies that money is measurement backed by murder. Money is made by law, as human symbols, while the only connection between human laws and natural laws is the ability to back up lies with violence. The essential problems we now face are the existence of globalized electronic monkey money frauds, backed by the threat of force from apes with atomic bombs.

While the banksters' "money" has been created by the quadrillions of units, which are primarily used in a virtual world to speculate with, the murders that back that up are based upon the threat of weapons of mass destruction. Therefore, there are astronomically amplified amounts of hundreds of trillions of units of "money" being created out of nothing, which are backed by the ability to mass murder hundreds of billions of people.

The degree that "the financial system has gone rogue" is the degree to which being able to back up lies with violence, or ENFORCE FRAUDS, has been magnified by many orders of magnitude by progress in physical science, enabling the use of electronics and atomic energy, etc. ... However, at the same time, political science continues to be an oxymoronic scientific dictatorship, that is based upon becoming BETTER AT ENFORCING FRAUDS, while not being able to admit and address the basic facts that IT IS ENFORCING FRAUDS.

The existing financial system was built on the principles and methods of organized crime, applied through the political processes. The banksters' fiat "money" has "value" due to professional killers being paid to do their jobs with that form of "money," which thereby ENFORCES FRAUDS against everyone else. Meanwhile, most people do not want to understand that, including those who promote impossible idealized versions of what "money should be" where that idealized money will not longer have its measurements backed by murders.

In my view, most of the content published on Zero Hedge is superficial, due to that still wanting to use the same old-fashioned false fundamental dichotomies and related impossible ideals. Therefore, people tend to deliberately not admit and address the ways that governments are the biggest forms of organized crime, controlled by the best organized gangsters, who are currently the banksters ... while the few that do recognize that then promote bogus "solutions" which will somehow stop that from being necessarily the way things work.

There ARE combined money/murder systems, as the most abstract forms of the combinations of private property being based on backing up claims with coercions. NONE of those established systems are able to rationally be amplified to astronomical sizes, by the progress in science and technology becoming trillions of times more capable and powerful. While there now exist globalized electronic frauds, backed by the threat of atomic bombs, which have the proportions of billions and trillions of times BIGGER than ever before in human history, pretty well nothing regarding those emerging systems is fully understood by anybody, but rather are collectively runaway criminal insanities!

It is WRONG to say that the banksters' fiat "money" has no "value," when that "money" is paying for the police and military to back that "money" up. The ways in which the excessive successfulness of ENFORCING FRAUDS has become runaway criminal insanities, with no end in sight of how much more madness those are going to manifest, does NOT change the underlying ways that the only things that exist are dynamic equilibria between different systems of organized lies operating robberies, which the banksters' fiat "money" being symbolic robberies done within that context.

We are stuck with the measurements becoming electronic, while the murders are potentially able to be done with weapons of mass destruction, like atomic bombs. At the present time, it is NOT at all clear that human civilization is going to survive the resulting runaway criminal insanities. But nevertheless, the only theoretically viable solutions continue to be better death controls, to back up better debt controls, within better combined money/murder systems.

Anyone who suggests anything else or anything less continues to be incompetent political idiots ... Tragically, that includes most of the human population at the present time. The banksters are preparing to start more genocidal wars, as well as impose democidal martial law. At the same time, there is no coherent opposition that proposes any better death/debt controls to do what the banksters do better than they now do that. Rather, most people do not recognize what the banksters are actually doing, while the few that do then tend to collapse back to their own favourite bullshit-based "solutions" which do not discuss what sort of realistic murder systems could back up any alternative realistic murder systems.

Of course, fiat "money" made out of nothing as debts never had any intrinsic value. However, it continues to have real value to the degree that it can pay mercenaries to ENFORCE FRAUDS. Furthermore, all human beings necessarily live through some systems of organized lies operating robberies, because all human beings live as entropic pumps of environmental energy flows. However, the intense paradoxes within our current state religions regarding our apparently faith-based fiat money, are still that those mostly get away with deliberately ignoring and denying that those are actually murder based systems.

There can not actually exist any other alternative monetary systems that are not backed by some alternative murder systems. It is merely more bullshit to assert anything else. However, it is quite common on Zero Hedge for its content to more or less do that. There is way more admitting and addressing the ways that the political economy is based upon governments ENFORCING FRAUDS by privately controlled banks found in Zero Hedge than in the more mainstream mass media. However, there is practically ZERO deeper analysis presented upon Zero Hedge regarding how to operate different murder systems, in order to back up different monetary systems, after the already existing systems have become atomic bombs backing up electronic frauds.

Human artificial selection systems have been driven by natural selection pressures to become based on the maximum possible deceits and frauds, and therefore, virtually all public discussions of the political economy deliberately ignore human ecology ... Moreover, I am not holding my breath waiting for that to change, since the most reasonable expectations for the future continue to be runaway debt insanities, provoking runaway death insanities ... Our society is based upon bullshit backed by bullies, which have been magnified many orders of magnitude by progress in physical science, while nothing else regarding society being based upon bullshit has been changed by that progress in physical science. Rather, almost all public discussions of political economy continue to be based upon bullshit, such as being able to correctly point out that the banksters' fiat money has no intrinsic value, while simultaneously ignoring that the measurements made by that money have value due to them being backed by murders.

Hence, the comment posted by Soul Glow, as well as many of the other replies posted previously, are the typically stupid superficiality that one expects to read on Zero Hedge, which only has the relative worth that those are way less stupid superficialities than one will encounter in the most mainstream mass media presentations. The FACTS are that money is measurement backed by murder, and therefore, there are no genuine resolutions of the problems with respect to the financial systems going rogue than for, perhaps, some new dynamic equilibria, within some transformed money/murder systems, to eventually emerge ???

Sun, 10/11/2015 - 11:17 | 6655202 max2205
max2205's picture

The Guardian. .. TPTB source 

Sun, 10/11/2015 - 11:21 | 6655208 tlnzz
tlnzz's picture

"gone rogue"

Lets call it what it really is, Gone Criminal.

Sun, 10/11/2015 - 11:41 | 6655252 chunga
chunga's picture

There was an article here yesterday about being afraid of capitalism that kicked off a big debate. What's better, captialism, socialism, etc. etc...

Those things are all obsolete. What we've got now is global Fraudism.

Sun, 10/11/2015 - 12:29 | 6655366 SDShack
SDShack's picture

No, it's becoming a New Feudal World Order. There are going to be 3 classes... the Ruling Elite, the Security Service the enforces the dictates of the Ruling Elite and is rewarded handsomly by the Ruling Elite, and the Serfs who are slaves who are only barely kept alive to just maintain the system. History is repeating itself.

Sun, 10/11/2015 - 17:51 | 6656193 Sparkey
Sparkey's picture

I kind'a see it that way too SDShack, but what I see is, aruling class that controls the money, I thechnical class who can think objectively and contrlos the machines, the enforcer class who eat regularly and the uneducated class emotionally bonded with their machines.

Sun, 10/11/2015 - 11:24 | 6655212 NotApplicable
NotApplicable's picture

Libertarian??? Whar?

Sun, 10/11/2015 - 11:33 | 6655231 LetThemEatRand
LetThemEatRand's picture

I noticed that too.  All part of the Big Lie, the same one that led to TARP.  "We need MOAR free money to save us all!!!"  Of all things to blame for the current mess that exists in the world, Libertarianism has to be last on the list (and shouldn't be there at all).   And that's coming from someone who sees a ton of flaws in pure Libertarian thinking.  

Sun, 10/11/2015 - 11:38 | 6655245 negative rates
negative rates's picture

TARP was a reactionary response to a nasty problem, it allowed the law to get out of hand without a debate to curb the law.It's all good though, because the only thing left to pay are the consequences now.

Sun, 10/11/2015 - 17:55 | 6656203 Sparkey
Sparkey's picture

Its' all good then, the little people pay the consequences, so no one (important) will be hurt! That's a relief I was worried about Jammie , Lloyd and the other boys!

Sun, 10/11/2015 - 11:25 | 6655219 DOGGONE
DOGGONE's picture

Leading villainy is deceptions by omission, see here.
http://showrealhist.com/yTRIAL.html

Sun, 10/11/2015 - 11:27 | 6655223 Gab Timov
Gab Timov's picture

They are heavily invested in artificiality? layer upon layer of derivative goo.

Sun, 10/11/2015 - 11:32 | 6655229 pFXTim
pFXTim's picture

> The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US and UK makes such intervention as probable as a Middle East settlement.

 

what a load of crap.

 

Sun, 10/11/2015 - 11:43 | 6655256 LetThemEatRand
LetThemEatRand's picture

Consider the source of the article.  Hutton is a former stock broker, and associated with the London School of Economics and the political apparatus in England.  Put simply, he loves bankers.  The fact that the can make the correct observation that the banks got us into this mess, but then argue that "libertarian" politics is at fault for not fixing it by printing more endless money to save the banks, pretty much tells you everything you need to know about this guy.  The only question is whether he believes his own bullshit.

Sun, 10/11/2015 - 12:27 | 6655364 CarpetShag
CarpetShag's picture

He is well paid to.

Sun, 10/11/2015 - 11:37 | 6655242 VW Nerd
VW Nerd's picture

With bond yields around the world holding steady at rediculous premiums, I do not see any major moves in equities.  I'll know the central banks are losing their grip when bond prices/ yields start to move.  I think the PIIGS and Japan will be first to go.  Just my opinion....could very well be wrong.

Sun, 10/11/2015 - 11:55 | 6655244 ZD1
ZD1's picture

"The money floods out as quickly as it flooded in, leaving bust banks and governments desperately picking up the pieces."

 

The money floods out as quickly as it flooded in, leaving people broke and desperately trying to pick up the pieces.

There fixed it.

Sun, 10/11/2015 - 11:41 | 6655253 tarabel
tarabel's picture

 

 

I don't see why a coordinated global response is necessary, nor what such a response could do to ameliorate the onrushing catastrophe. Any individual country is capable of taking steps to protect itself, or at least to mitigate the damage.

Oddly enough, North Korea might come out of this looking pretty good financially-speaking since it has no exposure to anything. Of course it would still be North Korea.

Sun, 10/11/2015 - 12:12 | 6655325 Winston Churchill
Winston Churchill's picture

The 3rd world countries will be just fine, hardly noticing the bump.

The 1st world countries will be a totally different picture, something

only Hironismus Bosch could dream up and paint.

Sun, 10/11/2015 - 18:00 | 6656213 Sparkey
Sparkey's picture

I think North Korea gets a bit of a bum rap Tarabel, I've never been there, and I don't want to go, but they are people who love their children, have you ever seen the NK kids playing music on youtube, people who love their kids can't be all bad!

Sun, 10/11/2015 - 11:43 | 6655257 erikaappleihzyjtyeg
erikaappleihzyjtyeg's picture

"The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US"

I knew it! It's whities' fault.

Sun, 10/11/2015 - 11:43 | 6655258 two hoots
two hoots's picture

We have reached the point in human evolution where the "one thing is for sure" is now "two or even three things are for sure".  see next months issue of Darwin's Economy for the details of this scientific breakthrough.

Bored on Sunday  ("then why ain't you in church"  well,  "why ain't you)

Sun, 10/11/2015 - 11:48 | 6655268 Lea
Lea's picture

"The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US and UK makes such intervention as probable as a Middle East settlement."

 "what a load of crap."

No, that's correct. To understand how liberalization and anti-Statism have led to the current slow-motion financial meltdown and recession, please watch the very knowledgeable and well documented documentary "Princes of the Yen". You'll find it either on its dedicated Website or on Youtube.

http://princesoftheyen.com/

BTW, thanks a million to William Banzai. It's thanks to him I got to know about this brilliant documentary.

Sun, 10/11/2015 - 11:49 | 6655272 smacker
smacker's picture

Hutton: "The grip of libertarian, anti-state philosophies on the dominant Anglo-Saxon political right in the US and UK makes such intervention as probable as a Middle East settlement."

Oh Right. What I see happening is not a political right screw up, it's a political left screw up. Excessive government.

Will Hutton is a socialist who purports to understand economics and blames everything onto the political right, he demands more statism.

In truth he's just another left-wing pontificator who claims to know all the answers.

Sun, 10/11/2015 - 12:10 | 6655324 shovelhead
shovelhead's picture

If they nab a counterfeiting ring making $100 bills, does the judge ask them if they're right wing or left wing during sentencing?

Does it matter if they manufacture trillions?

Politics isn't the problem, legalized counterfeiting is.

Sun, 10/11/2015 - 13:04 | 6655443 smacker
smacker's picture

Legalized counterfeiting is done by the left, statists who believe that .gov is the answer to everything.

The "right" way would have been to allow the markets to clear back in 2008.

Sun, 10/11/2015 - 11:51 | 6655273 elstrom
elstrom's picture

 

+30 years of neoliberalism is going down in a big bang, a tremendous whack. Largest refugee crisis in man time and a financial meltdown that will make a nuclear meltdown look tame. Our liberal friends had put on a great show and now it’s time for clean up by responsible people.

 

Sun, 10/11/2015 - 12:29 | 6655368 Winston Churchill
Winston Churchill's picture

Pol Pot prevented responsible people from cleaning up his mess.

Expect the same solution by the 'liberals'(hate that misnomer).

Same as it ever was.

Sun, 10/11/2015 - 11:56 | 6655282 Wilcox1
Wilcox1's picture

Hmm, if preservation of the current order includes monetary paradrops on the way to its imminent demise, wouldn't it be better to go ahead and look around for something better? Maybe the Anglo Saxon political right of the US and UK would be a pretty good place to look.

Sun, 10/11/2015 - 11:57 | 6655286 shovelhead
shovelhead's picture

Credit turns to zero when when the borrower says "I give up".

Multiply it as many times as you like, the answer is still the same no matter how many buttons you push or levers you wiggle. The smart guys skim the cash up front and load the risk on a "Customer".

Funny money ain't so funny in the long run. Nothing hard to understand here.

Sun, 10/11/2015 - 12:02 | 6655303 yogibear
yogibear's picture

Europe will be nothing like it is today in 10 years.

A head Ayatollah will be in charge.

Go long prayer rubs and Mosques, no joke.

 

Sun, 10/11/2015 - 12:13 | 6655330 shovelhead
shovelhead's picture

Prayer rubs sounds a little creepy to me.

Then again I'm a bit of a fuddy-duddy.

Sun, 10/11/2015 - 12:19 | 6655349 Not if_ But When
Not if_ But When's picture

No chance for change if cobweb cunt is elected :

If Hillary (Wall Street serving cunt) is elected, she will have Gary Gensler as her chief financial advisor.  Gensler was best known for working with Greenspan/Summers/Rubin in the deregulation of derivatives in 2000 - along with adopting the " neither admit or deny guilt " settlement philosophy on Libor/Forex-rigging - fining TBTFs a pittance of profits while CFTC head.  He and the other traitors at DOJ, SEC and other agencies would then release pathetic statements about how much the banks were fined, etc making it sound like they were kick-ass watchdogs and true purveyors of justice.  He also was known for whining about lack of funds all the time.  And the most irritating thing is the mainstream press describe him as a no-nonsense regulator when all he did was implement what he had to under Dodd-Frank and get the little guys while letting the big ones get away with murder.  JUST ANOTHER REASON WHY DEMOCRATS SHOULD VOTE FOR BERNIE SANDERS.

Sun, 10/11/2015 - 12:28 | 6655367 GreatUncle
GreatUncle's picture

the forces that might save it are politically weak and intellectually ineffective.

Not intellectually ineffective, think more a gagging order of the truth that cannot be heard and those of rational minds would likely vote against the current actions if they knew all courtesty of the MSM. Then a supposed democratic system that promises one thing, but then is immediately bribed and does the opposite of what the majority were conned into voting for.

After that forget it, definitely not worth discussing so ...

1.) Never shake the hand of a politician because you are then tainted.

2.) Never try to achieve a diplomatic solution to then be betrayed later.

Can anybody else realise through 1.) & 2.) there is no point to voting except to give them consensus to screw you over.

That is your rogue economic systems all joined up through the global economy and if any do not adopt the previous points will never survive so in the end it is all tainted.

 

Sun, 10/11/2015 - 12:37 | 6655390 MedicalQuack
MedicalQuack's picture

If you have not seen China's "Citizen Score" model, its very scary and we have that building in the US as well.  Do you want to be reduced to having to open a flipping app on a cell phone to show your monetary and community worth?  That's what is going on over there and the duped citizens, about 100k are running all over the place flashing their scores...examples of how this is building in the US.

http://ducknetweb.blogspot.com/2015/10/citizen-score-in-china-huge-warning-for.html

 

Sun, 10/11/2015 - 12:56 | 6655431 GRDguy
GRDguy's picture

Actually, ordinary citizens are just too naive and gullible to understand they're rewarding lyin', stealin' and killin'.  If most of them would simply stop doing business with the top 5 banks and spread their business to the other 99%, most of this nonsense would end. Sometimes The Dragon Wins would become a much rarer event.

Sun, 10/11/2015 - 13:10 | 6655456 Sudden Debt
Sudden Debt's picture

One of the steps that will be taken is to create economic sound quarintine zones that will be shielded from the had economic zones.

That's why we suddenly see all those countries seperate movements popping up. And that's happening because they've been let so.

Off course that will lead to civil wars but before that sticks and teargas will take control for a long time.

And these zones have already been drawn.

Sun, 10/11/2015 - 13:50 | 6655568 Raging Debate
Raging Debate's picture

Sudden Debt - So more gated communities then? The Central Bank model which has captured governments globally has always compelled taking on debt due to rising inflation. Want that good na-na? Better get mortgaged to the hilt, buy the nice car or get a decent degree. What once could be afforded by saving and prudence cannot be any longer.

Of course this isnt ending well. And most younger folks are already priced out of home ownership in big cities even with debt as inflation has far outstripped wages. The real issue is bankers make loans. There can certainly be productive use of debt. But as a global empire model it has all become asset stripping. Bankers dont like to work hard in societal planning, it isnt what they do.

They can certainly assess an individual or countries' health and make fiscal suggestions but if captured governments have gotten lazy and corrupt through monetary model focused policy then it is a disaster we see unfolding with increased velocity. 

 If a paradrop directly to consumers is to be applied and help revive the desd patient, it would have to be targeted stimulus and enforced by well, corrupt and less educated policy makers. My opinion for what it is worth is to let evolution take its course which will drive such governments into waking up the hard way as doing this now will only kick the can a year or so out because of the environment described.

 I agree people should be worried about citizen scoring systems. At the tail end of this empire and modelx compulsion to comply will be replaced by force for those that won't. 

Sun, 10/11/2015 - 13:28 | 6655516 ThanksIwillHave...
ThanksIwillHaveAnother's picture

As long as politicians can control the money unit they will print more and more to keep spending projects going to keep them in power.  Free banking with gold is the only answer for long term stability.  And individual responsibity.

Sun, 10/11/2015 - 13:37 | 6655535 Devon
Devon's picture

Will Hutton is a complete tool. This twat was one of the biggest advocates of the UK joining the euro. He still thinks the UK should! Take every left wing crap he spouts with a large pinch of salt.

Sun, 10/11/2015 - 14:01 | 6655589 SillySalesmanQu...
SillySalesmanQuestion's picture

The finacial system hasn't recently "gone rogue", it's been that way since 1913 or even before that.
It's only been recently, that the finacial system has gotten the average person to go all in on the fantasy that "you too can be rich if you invest with us..."
Such as real estate, mutual funds(an oxymoron), 401K plans, ETF's and a host of other mass weapons of debt to take our money, and then laugh about how gullible we are.
Only because it has been very well pre-planned. It took 70 years for them to skim all the easy money, then crash it, then buy up all the real assets for pennies on the dollar in the 1930's...and it is happening again, right now, 70 years later.
The only difference being, there a small number of us that has been smart enough to see history repeating, and we have been stacking bullets, beans and bullion this time...and praying that we don't have a leaky boat. ;-)

Sun, 10/11/2015 - 14:30 | 6655710 Heyoka
Heyoka's picture

There will be no collapse, only reorganization. The rich will always get richer while a few of the lucky poor will figure out how to get theirs. Sorry to pour cold water on you doom porn addicts but you dont understand that real math and the old paradigm are no longer relevant. Blame the Jews, Islamos, liberals, commies, or conservatives all you want. It wont change a thing.

Sun, 10/11/2015 - 16:14 | 6655978 Midnight Rider
Midnight Rider's picture

Excuse me but there will be an end. Greed will either untimately consume itself or the pitchforks and torches will take their votes which still exist, throw the rulers out of office and take things back. I personally think you are witnessing the final flameout. I don't think technology has yet developed far enough to rig enough ballot boxes to stop the insurrection. One can only hope that is the case as the implosion of what remains of the world's economies into a flaming pit of greed gorging on it's own entrails would be a cruel ending. It's happened before though, so your can't rule out happening again.

Sun, 10/11/2015 - 16:39 | 6656042 Faeriedust
Faeriedust's picture

There is a quick-and-easy solution to capital flight -- capital CONTROLS.  Every nation on earth has imposed them at some time.  China still regulates its banking system heavily, if not always wisely.  When the crisis gets hot enough, Somebody will take "emergency measures" to deal with the emergency.  And once Somebody does, others will follow.  Especially since history has shown that the last nation to do so invariably suffers the worst.

Sooner rather than later, the entire "liberal" system of global trade is going to collapse on its exhausted patootie. We are seeing the beginning now, but when the history books are finally closed, this one will look more like the Long Depression of 1873-1896 (https://en.wikipedia.org/wiki/Long_Depression) than the comparatively mild Great Depression of 1930-1939.  And when it is over, the United States will have permanently lost economic dominance in what remains of world markets (which will be much diminished once the cost of transport has quadrupled and one in five coastal cities is under water).

Welcome to The Future my bonnie lads.

 

Sun, 10/11/2015 - 17:02 | 6656089 PrimalScream
PrimalScream's picture

YES - if you take a look at the REAL state of the world ...

- Middle East refugees flooding into Western Europe

- Emerging market countries headed for outright Depressions in their economies (esp. Brazil)

- Chinese stock market and real estate markets collapsing, consumption dropping dramatically, debt situation at critical levels

- USA completely unable to stem the tide of increasing debts and unable to find any way to restore real manufacturing growth or productive investment

... then it's beyond UNTHINKABLE that the derivatives markets are still playing a roaring game of Financial Chicken.  "He who walks away with the most money wins!"

The current politcial leaders and financial powers have set the World up for a CRASH of epic proportions ... worse than what happened in 1929.

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