"Central Bankers Are Killing Capitalism" Odey Warns, Moving Politics "Fast To Extremes"

Tyler Durden's picture

Outspoken billionaire hedge fund manager Crispin Odey had a good June (+3.9%) in his 'Swan Fund' but remains down year-to-date as he continues to refuse to stop fighting The Fed. His latest missive - titled "Doing The Devil's Work" - lashes out at governments, central banks, and Europe for their desire to ‘stop recession at any price’. As ValueWalk's Rupert Hargreaves summarizes, Odey blames this desire for the rise of extreme politicians like Trump, the desire for the UK to leave the EU and the lack of global trade growth. He compares this environment to that of the 1970s, when after a period of rapid growth, governments became obsessed with the fact that nothing should be done to endanger employment, giving trade unions all the power and allowing inflation to get out of hand as productivity fell and wage increases became inflationary in a way they had before. This economic stalemate was only broken down by Reagan and Thatcher — politicians willing to take on the unassailable unions and risk higher unemployment.

The UK decided to join the EEC in 1973, just as today it has decided to exit the European Union. Both were difficult times.


The world had enjoyed continuous economic growth from 1945 to 1973 – what the French called the ‘Trente Glorieuses’. But in the 70s, the world trading platform started to stutter and break up. Productivity fell to low levels and what had driven the impetus for growth – the profound desire, after the thirties, to ensure full employment – meant that wage in- creases now became inflationary in a way they hadn’t before. A system which was collectivist in construction – government and big businesses – started to crack, especially after the oil price rose 400% on the back of the Arab / Israeli conflicts. The problem was that governments were obsessed with the fact that nothing should be done to endanger employment and this gave the trade unions all the power and allowed inflation to continue to rise. Just when the communist revolutionaries were expecting the system to break up, capitalism fought back. The problem behind the lack of productivity was that governments were in charge of the show. Let markets dictate asset allocation and society live under a regime of free markets and all will be better. By 1979, in Reagan and Thatcher, there were politi-cians willing to take on the unassailable unions and risk higher unemployment.


The effect was electric, but what ensured that it was to last for over 30 years was that at the same time that market forces were allowed to act, there was the privatisation of credit. Before 1979, by and large, credit was available to government and big businesses, and with exchange controls in place, savings were largely tortured and torched within their own countries.


The effect of privatising credit was that individuals could become better off, even if their incomes did not rise, from a growing balance sheet. Globalisation followed but with it competition became ever more fierce. Societies were forced to change to compete or risk falling behind – a uniformity and conformity to economies the world over became observable, which has involved great pain.


Now we come onto today. By 2009 we in the developed world were running out of the benefits of credit growth. Asset prices were just too high for incomes – the young could not afford to buy houses – falling interest rates had already created asset bubbles. Productivity was falling and suddenly banks were endangered by over-leveraged unwise lending. Interest rates fell to zero in 2009. Six years later and it is becoming obvious that ‘Houston has a problem’.


Productivity is not only around zero in most developed countries but falling into negative territory. Market forces are no longer driving investment decisions on the allocation of resources – driven out by governments using central bankers as their conduit for extending credit.


Just as in the 70s the unthinkable was rising unemployment and for 6 years governments were willing to watch rising inflation rather than address the issue. So from 2009 onwards, ‘recession’ is the word that is not allowed.


Central banks do their master’s bidding and governments tell them ‘stop recession at any price’.


They can control asset prices by printing money but can they control the economy? ‘No’. So what we have now is a world in which the Have-nots are rising in number and, thanks to the workings of central banks, see the Haves still seemingly enjoying themselves on the back of rising asset prices.


It is no wonder that politics are moving fast to the extremes. The politicians and the central bankers are serving each other but not the common purpose. In such an environment you must expect ‘Brexit’ to win, Trump to succeed.


In such an environment, whither the Euro? Remember the Euro has ensured that Spanish and Italians and Greeks, who before were able to pursue a lifestyle, which was protected by currency devaluation, now, with a fixed exchange rate, the competition is felt immediately and the southern state employees are forced to become ‘German’.

Odey concludes: Why do I write this?

Because capitalism is now being blamed for something that they are not party to. This is etatism and the central bankers are the trade unions of this debacle. No wonder that Trump is determined to get rid of the Fed. Just as in 1979, politicians realised that they had to turn on the unions, so today the central banks with their endless printing of money need to be stopped, or capitalism will be blamed for consequences not of their making.

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Cognitive Dissonance's picture

What am I missing here?

Crispin Odey complains, rightfully so, about the Fed, manipulation, capitalism, markets etc. Yet Odey still tries to make a killing in the manipulated markets.

I don't get it.

<Actually I do. Just being sarcastic.>

bbq on whitehouse lawn's picture

What your missing is S&P in the 70s, government paper in the teens and company paper as much or more.
So let me ask you how many companies do you know that could exist with 17% divs.

Its like this none could.
Would all this chaos work out for the best, only for the children not yet born it would.

Some people are against the 40$ new car that you build yourself.

Ask yourself how many gold coins you could get for your house without a market price to look at. Between zero and none.

rbg81's picture

The Elephant in the room is this:  To get out of this mess, there will have to be real PAIN.  And no one is willing to go through that to see the light at the end of the tunnel.  Not the Haves, not the Have-Nots, and certainly not the Politicians (and their Central Bankers).

Radical Marijuana's picture

Indeed, rbg81, "real PAIN" of unprecedented proportions!

There are no reasonable doubts about the basic history of
the currently established systems of public governments
enforcing frauds by private banks
as described by Carroll Quigley:

"... powers of financial capitalism had another far-reaching goal, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole ... to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements. ... The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. ... It must not be felt that the heads of the world's chief central banks were themselves substantive powers in world finance. They were not. Rather they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up, and who were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks."


"If history shows anything, it is that there’s no better way to justify relations founded on violence, to make such relations seem moral, than by reframing them in the language of debt — above all, because it immediately makes it seem that it’s the victim who’s doing something wrong."

— David Graerber

"Almost everyone was taught that money was invented to replace the messy business of barter. … But ... anthropologist David Graeber, and other experts on the history of money, say that this is a myth. Instead, they say that money was invented to finance war, and to keep score while armies went about pillaging and looting."

MONEY IS MEASUREMENT BACKED BY MURDER. The consensus of the intellectual mercenaries paid to promote the banksters' bullshit is the presentation of professional hypocrisies that money is NOT THAT. Rather, the consensus amongst the intellectual mercenaries manifests in proportion to their incomes being based on promoting the banksters' bullshit.

EVERYTHING that the central banks are ABLE to do was based upon the long history of civilization transforming violence into the language of debt. In that context, the public faces of those central banks are mostly academics, who were picked and promoted because they were the best available professional hypocrites, who could advance the global agenda of trillionaire mass murderers.

For a few Centuries, the overall situation has increasingly become:


All Wars Are Bankers’ Wars

Those realities of violence are never going to disappear. Politics without violence is as impossible as physics without force. As soon as we perceive and define human beings as separated from their environment and each other, then they necessarily live as gangs of robbers. Furthermore, the corollaries to that become the ways that the biggest and best organized gangs of robbers are able to publicly promote their bullshit social stories that they are NOT gangs of robbers.

Banking systems actually work through public governments enforcing frauds by private banks, which frauds are symbolic robberies, while t hose who were the best at doing so have promoted their languages based upon the DUALITIES of false fundamental dichotomies, and the related impossible ideals, while those were were the best at doing so have also made sure that there is no publicly significant opposition which is not controlled to stay within the same frame of reference of the DUALITIES of those fundamental dichotomies, and the related impossible ideals. There is no genuine, publicly significant, opposition that is able to more effectively resist the robberies done through governments enforcing frauds. Rather, those systems automatically continue to drive social polarization towards becoming more UNBALANCED at almost an exponential rate, (which Odey understates as merely Moving Politics "Fast To Extremes.")

The correct label is NOT "etatism," or "state socialism."

There are no good labels for the existing political systems. I sometimes refer to those as a runaway fascist plutocracy juggernaut. However, the source of the "wealth" of those plutocrats is their ability to make the public "money" supplies out of nothing as debts, while governments enforce those frauds. The existing systems are NOT "etatism," or "state socialism," but rather, the supreme achievement of organized crime, which is legalized counterfeiting. That has become a runaway system, because nobody else can compete against those vicious spirals of political funding enforcing frauds. Rather, the established billionaires, operating within those systems, get to spout bullshit about that, while nobody else is able to operate in the same league.

Since there is only ONE energy, there is only ONE political system, and that corresponds to the principles and methods of organized crime, because human beings and civilization necessarily live as entropic pumps of environmental energy flows, which means that they live as gangs of robbers, with murder being the most extreme form of robbery. As soon as human beings perceive the world through SUBTRACTIONS, then those ROBBERIES necessarily follow. However, the development of that has enabled the biggest and best organized gangs of robbers to develop the natural languages and philosophy of science which enables them to operate as better professional hypocrites. Furthermore, that includes that the apparent "opposition" to the established systems also stays within the same overall frame of reference.

Civilization was always based on being able to enforce frauds, while about exponential progress in physical science has enabled those systems based upon enforcing frauds to become about exponentially more fraudulent. The only connections between human laws and natural laws is the ability to back up lies with violence, and therefore, governments operate on the basis of integrated systems of legalized lies, backed by legalization violence, while those systems are run by the people who are the best available professional hypocrites, with the central bankers currently being the All-Star Professional Hypocrites.

The essential political problems have become that the corollaries to the ways that civilization necessarily operates according to the principles and methods of organized crime are that the biggest forms of organized crime, and best organized gangs of criminals, have become the bankster controlled governments, which back up their debt controls with the their death controls. It is NOT possible for money to stop being measurement backed by murder. Although it may be theoretically possible for more people to understand that, it continues to be politically impossible, due to the degree that those systems are almost totally dominated by the best available professional hypocrites.

The biggest and best organized gangs of criminals have been able to publicly present their systems of legalized lies, backed by legalized violence, as if those were not actually based upon lies and violence. Furthermore, everyone tends to be socially successful to the degree that they actually take for granted operating INSIDE ENFORCED FRAUDS, while deliberately ignoring and misunderstanding that as much as humanly possible, despite that those systems continue to become exponentially more FRAUDULENT.

Natural selection pressures have driven the development of artificial selection systems to become based upon the maximum possible deceits and frauds, which have actually become globalized electronic frauds, backed by the threat of force from atomic bombs. MEANWHILE, society continues to be dominated by the best available professional hypocrites, who are most successful by spouting the best bullshit about that, with the central bankers continuing to be the current All-Star Professional Hypocrites, who manage to continue to double down on their systems based upon enforcing frauds, despite that becoming exponentially more fraudulent.

Theoretically speaking, human beings and civilization should go through series of intellectual scientific revolutions and profound paradigm shifts in order to better understand themselves. However, all of the established systems are based, as much as possible, upon NOT understanding themselves, but rather, those systems are based upon the maximum possible bullshit about themselves. Although the laws of nature are never going to stop working, and so, nothing that depends upon those laws of nature are going to stop working, the currently existing political economy has become based upon the excessively successful enforcement of frauds, which therefore have become exponentially more fraudulent. Therefore, those systems are headed towards eventually going through series of psychotic breakdowns, because being able to back up lies with violence never stops those lies from still being false ...

The only things that actually exist are the dynamic equilibria between different systems of more or less organized lies operating robberies. Only that which actually exists can actually evolve. Therefore, the only possible solutions would have to be changing the systems of organized lies operating robberies, and thus, changing their dynamic equilibria. It is NOT possible to stop governments from being the biggest forms of organized crime controlled by the best organized gangs of criminals. It MIGHT be possible for more people to better understand the principles and methods of organized crime, in order to develop better governments, as better forms of organized crime, because of the ways that drove the best organized gangs of criminals to have to adapt to those circumstances.

However, OBVIOUSLY, at the present time, the best available professional hypocrites continue to dominate all of the established sociopolitical systems, and therefore, everything that civilization does continues to become exponentially more psychotic and criminally insane ... The series of psychotic breakdowns of a civilization based upon its own exponentially increasing fraudulence is still NOT going to violate the laws of nature, but rather, continue to be consistent with the laws of nature, despite that resulting in series of crazy collapses into chaos, when the astronomically amplified systems of globalized electronic frauds, backed by atomic bombs, become so extremely fraudulent as to suffer through the consequences of having done that ... as magnified many orders of magnitude greater than anything that previously happened during human history!

The almost total triumph and dominance of sociopolitical systems based upon enforcing frauds has resulted in almost everyone deliberately ignoring the principle of the conservation of energy as much as possible, as well as deliberately misunderstanding the concept of entropy in the most absurdly backward ways. Those figureheads at top of the systems whereby "money" is created out of nothing as debts are the symbolic expressions of systems based upon enforcing frauds, whose successfulness enables those central bankers to continue to be publicly presented as somehow the "good guys," when they are actually the best "bad guys," in the sense of the best available professional hypocrites, who are able to publicly present their bullshit about MAD Money As Debt, still being positive capital, while that is actually NEGATIVE capital, which has effectively destroyed "free market capitalism."









"Central Bankers Are Killing Capitalism"


However, fully appreciating the degree to which that IS so is worse

than what Odey superficially presented as possibly being the case.

outlaw.guru's picture

That's all fine, but this text keeps repeating FRAUD, BANKER WARS, DEBT (as every other radical marijuana post). There is no actual analysis of what the fraud is. Demistify that and you might have an audience.

What the fraud is in my opinion is that the same money treats existing and future energy flows as the same. What exists (a house, a car, a brick) is taken by the bankers/investors for a promise of something that may or may not be. Future influx of energy (debt being payed off) is not guaranteed and therefore it should not be the same currency as that which is already owned. This is how asset inflation occurs, by falsifying the future incomes and creating debt money that can never be repaid.

Radical Marijuana's picture

Fraud is symbolic robbery.

The bankers' frauds are that they can make "money" out of nothing, while, for everyone else, that "money" is something that they have to earn somehow.

Creating a little extra "money" out of nothing drives inflation, which is the greatest stealth tax, (where taxation itself is another form of legalized robbery.)

Wave-Tech's picture



Elephants in the Room         If we simply care enough to look and see what’s hidden in plain sight, each and every one of us - regardless of orientation, will suddenly conclude that it’s time to stop fighting with one another, as the majority of such infighting and divisiveness is fostered by the subversive encouragement of none other than a plainly visible common enemy – our Oligarch’s.
WolfgangCire's picture

capitalism - where you can enslave fellow humans and rape the planet and be praised for your good business sense

PGR88's picture


No, that is not capitalism.  Its the stupid, Marxist, statist cliche of it.

hxc's picture

Upvoted by the three illiterate socialists that peruse this site

outlaw.guru's picture

Ha, do not be silly. There is waaay more than three and most are probably literate in more languages than you know exist. Because socialism is a goal of an enlightened man, while capitalism is the base instinct of a bafoon (and life). And this is why it works, because the world is full of bafoons.

rbg81's picture

Listen Shitbrain:  The "comrades" in a Communist/Marxist state are even more of a slave.  Except they get shot for speaking out and have to stand in long lines for toilet paper & beans.

outlaw.guru's picture

Have you lived in such a state or just saying from what you saw on TV. Sure there is a whole bunch of problems in a communist state. However there are things that are amazing in a communist state. One thing is equality which keeps a society together. Everyone gets a similar paycheck, so the envy goes out the window. The worker is safe and secure. This allows the majority of the people to never experience the evils of capitalism such as petty crime (only state crime allowed :), slums, health and mental disorders. Sure it all exists to some extent, but as a resident of Communist Yugoslavia I can guarantee that life was better than in capitalism. It cannot last long without a new socialist worker. But it was way better while it did.

Niall Of The Nine Hostages's picture

No. They won't. If they give up control of the money supply they'll be giving up their power. If they want to commit suicide, they have plenty of other options. 

Starting a nuclear war and framing Russia comes to mind. 

Hohum's picture

All hail the central bankers!  My wife and I bought a home for 270K in December 2013.  Now, Zillow says it's worth 393K.  A 45% return in about 2 1/2 years.  I have seized the reach for yield and am now a wealth creator!  And doing it by sitting on my ass.

1980XLS's picture

Downgrade to a box and you're a winner.

HRH of Aquitaine's picture
HRH of Aquitaine (not verified) Jul 25, 2016 7:24 PM

I agree. The central banks will continue with their delusional thinking until it fails. When will that happen? Sooner rather than later.

WTFUD's picture

KILLING would suggest there's more to come, Ouch!

WTFUD's picture

Sour grapes, must be getting cut out of the loop after 9 years at the trough.

Ms. Erable's picture

Odey's a bit slow on the uptake if he's just realizing this now.

mvsjcl's picture

Worst than that, he's absolutely deluded if he thinks that central banks are lackeys of the government, and not the other way around.

smartknowledgeu's picture

Let's break this down for Odey so he can understand that Capitalism has been dead for a long time already.

Capitalism: "an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market."

Free market: A market in which buyers and sellers interact until an equilibrium forms, setting market interest rates.

Central Bank: A privately owned monopoly that artificially sets interest rates to deliberately distort market prices to allow a select aristocracy to become wealthy at the expense of an entire nation.

In a classic Venn diagram, Central Bankers and Free Markets never intersect. Therefore Central Banks and Capitalism never intersect. Therefore capitalism is already DEAD and has been dead since the first day Central Bankers cursed a nation with their presence. We've had systemic fraud and controlled markets for a long time, but haven't had any Capitalism in any major global market for a long, long time. Just because bankers and economists call today's system Capitalism doesn't make it so.

JailBanksters's picture

Capitalism died the day Too Big Too Jail was born.

Capitalism will no longer exist as long as there are Central Bankers, printing their own money, for their benefit.

1/4 of the US is actually under socialism, that is their lives are totally dependant on money from the state.  Another big portion relies on Fascism, those companies could not suceed without assistance from the Government. There only small of America that still runs Capitalism, but unless they get help from the Government they will sooner or later be killed off being unable to compete with the Fascist state run enterprises.



Capitalism was a false prophet that died March 10th around 11:00am Bear Stearns time New York shitty right after I did it in for pissing me off.

onmail1's picture

Crony capitalism == The ugly face of money

where ppl are robbed of democracy

and then , everything

It is a monster that gobbles up everything 

& makes ppl jobless or mere slaves

J J Pettigrew's picture

I heard a Socialist on tv say...

"people should not make money on their money"...

then it dawned on me that perhaps this is the Central bank end game....a socialist end game

draego's picture

>> Because capitalism is now being blamed for something that they are not party to.


That won't help you when the investment bankers begin to dance at the end of the hangman's rope. If you see it's a problem, and you are on the inside, then DO SOMETHING ABOUT IT. You are just like those "peace loving" muslims who say that the terrorists aren't practicing "real" islam, but they don't do squat. Police your own clan or else you will be swept out with the rest of the trash.