99 Years Of Keynesian-Monetarist "Winning"

Tyler Durden's picture


99 years ago the Fed was born. Then there was a world war. Two decades later, Keynesian economics (in a somewhat mutated form than that envisioned by the author, much like the Taylor rule) became the gold standard (pardon the pun) of the status quo, as it gave the political establishment a "scientific" justification to spend and accumulate gargantuan debt loads without fear of backlash by the public. Then there was another world war. Then the gold standard was obliterated, allowing the same establishment to dilute the instrument used as money and to cross the "gargantuan" barrier in spending and debt issuance. Then the world came to the verge of complete socio-economic and systemic collapse after a ponzi pyramid of $1 quadrillion in credit money nearly imploded in on itself. Then the final chapter of the corporate takeover of the sovereign model established by the Treaty of Westphalia arrived, as private deleveraging at the terminal expense of public debt took place at a record pace. This is a nutshell is the world history of the past century. And to summarize where we currently stand, we present the chart below. In the entire "developed" world, there is only one country that runs a budget surplus, even as the entire "developed" world is now, according to the Reinhart and Rogoff definition of sustainable public leverage, insolvent.

And that, ladies and gentlemen, is Keynesian-Monetarist #winning!


* * *

P.S. Among the list of key events above, we did not mention the following two other majors one: the creation of the Welfare state by Bismarck in 1870 as a German unification ploy, whereby people were promised virtually anything if only they voluntarily agree to participate in a sovereign ponzi scheme which by definition is unsustainable and cede liberty in order to perpetuate a lie subsequently adopted by all "developed" world governments taking advantage of their mathematically-challenged citizens, nor the 16th Amendment ushering the personal income tax (previously ruled unconstitutional), coincidentally the same year the Fed was born, which in turn enabled the creation of the most bloated apparatus (which as a reminder produces nothing) known to homo sapiens - the US government.

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Sat, 09/08/2012 - 17:45 | 2775178 css1971
css1971's picture

You know that the Swedish surplus is mostly Ikea.


Sat, 09/08/2012 - 17:53 | 2775187 vast-dom
vast-dom's picture

allow me to amend "which in turn enabled the creation of the most bloated apparatus (which as a reminder produces nothing) known to homo sapiens - the US government." it in turn enabled the most bloated appartus (which produces NEGATIVE returns on everything when adjusted) to fuck over HOMO SAP - the US gov.

Sat, 09/08/2012 - 18:54 | 2775262 Aziz
Aziz's picture

I like how the US is the nation nearest to Greece on the chart.

"We're not Greece!"

How long 'til Greeks are celebrating not being the USA? 

Sat, 09/08/2012 - 18:58 | 2775272 Cheesy Bastard
Cheesy Bastard's picture

They should already be celebrating not being California.

Sat, 09/08/2012 - 19:03 | 2775280 r3phl0x
r3phl0x's picture

But the Facebook IPO is going to fix everything..

Sat, 09/08/2012 - 20:01 | 2775345 Slack Jack
Slack Jack's picture

"99 years ago the Fed was born. Then there was a world war."

Yeap. the formation of the FED led almost immediately to the first world war.

Yeap. the formation of the FED led directly to the first world war.

Interesting ?? Very Interesting.

Sat, 09/08/2012 - 20:11 | 2775349 Slack Jack
Slack Jack's picture

The FED was created on 23 December 1913.

World war one began 28 July 1914.

So it only took 7 months to get world war one organized???

Sat, 09/08/2012 - 20:24 | 2775362 Manthong
Manthong's picture

Don’t forget that the year the Fed was spawned they made sure to all but eliminate the individual state legislatures influence from the federal government and law making with the 17th Amendment.

Complete, unadulterated evil.

Sat, 09/08/2012 - 20:40 | 2775382 nmewn
nmewn's picture

Plus a quadrillion.

Sun, 09/09/2012 - 08:59 | 2775937 mjcOH1
mjcOH1's picture

"They should already be celebrating not being California."


Not to worry, the good citizens of North Dakota and Texas still contribute tax dollars that can be used for the bailout.

Sun, 09/09/2012 - 13:31 | 2776342 boogerbently
boogerbently's picture




I'm so confused.

Sat, 09/08/2012 - 20:25 | 2775363 New_Meat
New_Meat's picture

Jack, u b talkin' to u-self.

Sat, 09/08/2012 - 21:24 | 2775410 zen0
zen0's picture

Everbody was ready for 2 or three years before. They just had to figure out a funding mechanism to give the green light.


I thought everybody already knew that.


Silly me.

Sat, 09/08/2012 - 22:23 | 2775487 Michael
Michael's picture

They won't report on this on MSM TV, I wonder why?

Unreported World - America - Down and Out


1 Million Homeless Students In US


USA tent 'cities' on rise as US economy crumbles (23Dec11)


Sat, 09/08/2012 - 22:46 | 2775512 Whatta
Whatta's picture

So it only took 7 months to get world war one organized???


PNAC already had the plan worked up.

Reminds me also of the old "Simpson's" line, from Homer: "A presidnet doesn't have to be very smart, all he has to do is point the army and shoot".

Sun, 09/09/2012 - 03:16 | 2775773 AnAnonymous
AnAnonymous's picture

So it only took 7 months to get world war one organized???

'Americans' have this kind of effectiveness when it comes to war and stuff like that...

Sun, 09/09/2012 - 08:47 | 2775931 Doomer
Doomer's picture

"The FED was created on 23 December 1913.

World war one began 28 July 1914.

So it only took 7 months to get world war one organized???"


Don't be silly.  They didn't organize it, they just financed it.  No money, no boom-boom.

Just Google "world war one morgan"

Sun, 09/09/2012 - 09:35 | 2775968 Milton Freewater
Milton Freewater's picture

I bet one could write a best selling book entitled "Sneaky Shit the Government Has Pulled On or Around the Holidays"

Sun, 09/09/2012 - 15:08 | 2776565 malek
malek's picture

I missed your post back in April, thanks for linking to it.

Sat, 09/08/2012 - 19:37 | 2775315 economics9698
economics9698's picture

If anyone here is a fiscal blog I did about Obama/Clinton.



Sat, 09/08/2012 - 18:16 | 2775212 Anglo Hondo
Anglo Hondo's picture

Sweden also has a surplus of blonde babes.  Mostly shopping at Ikea.


Sat, 09/08/2012 - 18:40 | 2775237 ThirdWorldDude
ThirdWorldDude's picture

Oh, they abso-fuckin'-lutely love shopping, which is why Swedish babes run the highest average private deficite in the world (over 140% of disposable income).


I wouldn't recommend you marrying one, unless you're a 1%-er...

Sat, 09/08/2012 - 18:53 | 2775260 Dr Benway
Dr Benway's picture

I would not at all agree that, on average, Swedish girls are comparatively materialistic.


Dunno about your sample

Sat, 09/08/2012 - 19:21 | 2775305 ThirdWorldDude
ThirdWorldDude's picture

That was a parable depicting the general condition of swedish society today. My apologies for hurting your specimen's feelings...

Sat, 09/08/2012 - 21:21 | 2775403 Precious
Precious's picture

Every month I just put a pile on the kitchen table and let the ladies work it out between themselves.

Sun, 09/09/2012 - 04:07 | 2775471 Dr Benway
Dr Benway's picture

I wish it was I who made that comment. Esprit d'escalier.


Anyhoos, check out my report on an Australian ponzi, banned knowledge in Oz:





Sat, 09/08/2012 - 18:45 | 2775245 knukles
knukles's picture

Mayhaps there be jobs available for the unemployedunemployablenolongerlookingforworknolongerinthelaborpool that are not counted as existing except when it comes time to vote without IDs (the very same needed to get on an airplane, cash a check or best produce when the cops snarl "papers") that could become gainfully employed in Sweden  (and thus not place a strain on their social services system while helping relieve ours) at IKEA demonstrating bedding, comforters, down throws, pillows and sex toys and the like to blonde chicklets.
See, everybody wins!
Socialism in Action

(the one thing the tester may never do is be a fluffer, similar to playing Burglars with the Wife...  That's when laying ion bed you cut a humongoliod bubbly smelly, grab the covers, pull them up over her head and yell "Burglars" ...might be deleterious to future sales...)

Sat, 09/08/2012 - 21:21 | 2775405 nmewn
nmewn's picture

At the top of the Swedish "ponzi miracle" appears the Swedish king (and assorted hangers on to the "socialist ideal"...lol)...who also bears a striking resemblance to von Rumpoy.

What are the odds? ;-)

Sat, 09/08/2012 - 18:57 | 2775268 HD
HD's picture

The doctor was going to McDonalds because he "deserved a break today", but after he found out what happened to his patient he decided to go to Taco Bell and "make a run for the border"...

Sat, 09/08/2012 - 19:50 | 2775333 I am on to you
I am on to you's picture

I am Surprised,schooooked,the Kamprads is a swedish surplus????was that why he asked his employers to Fund for his mothers,,,, Cancerfund??

Ingvar Kamprad=Dutch Ingka Holding owned by an other Dutch Fund Stiching Inga,Trademark Ikea is owned by Inter Ikea Luxembourg which again is owned by a company with same name in the Dutch Antilles:Nothing to se here,which made the Economist write about how carefull the Family Kamprad is "Not to pay tax,so Ikea" Sweden" is well spread and  Chineese!

Sat, 09/08/2012 - 22:34 | 2775497 robobbob
robobbob's picture

Interogo Foundation, based in Liechtenstein, holds all of the intellectual property?

Sat, 09/08/2012 - 21:20 | 2775402 thecoloredsky
thecoloredsky's picture

so can someone tell me what happens to all the shit on the feds books when, hypothetically, the fed charter doesnt get renewed?

Sun, 09/09/2012 - 09:05 | 2775943 mjcOH1
mjcOH1's picture

"so can someone tell me what happens to all the shit on the feds books when, hypothetically, the fed charter doesnt get renewed?"


It becomes academic, because gas is $4000/gal and the major cities are burning.

Sun, 09/09/2012 - 01:55 | 2775745 piliage
piliage's picture

Not to be a buzz kill, but IKEA has one of the most opaque tax structures on the planet and virtually none of the money ends up in Sweden, except for the CEOs walking around change. The company is housed in the Netherlands by a non-profit trust that funnels money through a licensing holding company in Luxembourg that is 'owned' by a trust in Curacao. This means it's books are private and the revenues are held by the non-profit trust whose mission is, "research in interior design" which are funneled to the licensing trust in Curacao. The board of the trust is the Kamprad family, probably, but that information is not required to be disclosed under dutch law, neither are the books. It makes GE's tax actions look like amateur hour.


Sun, 09/09/2012 - 05:58 | 2775829 mach777
mach777's picture

No, it mostly comes from the state selling government owned business to private corps to prop up balance sheets. That, plus our property bubble hasnt popped yet.

Dont worry, us swedes are going down with the rest of you.

Sat, 09/08/2012 - 17:47 | 2775180 kevinearick
kevinearick's picture

...capital neutron bomb...right back at ya Marvin

Sat, 09/08/2012 - 17:48 | 2775182 Peter Pan
Peter Pan's picture

And so we end up with politicins that blame their predecessors for everything that has gone wrong and then continue in the steps of their predecessors by lumping the problem onto their successors.

The welfare state is doomed as it has gone from safety net to trampoline and our hybrid version of capitalism/socialism tries to perpetuate the myth that the system can deliver all things to all men while engaging in corruption,war, waste and greed.

Bottom line is we are not going to get what we want but what we deserve.

Sat, 09/08/2012 - 21:21 | 2775406 FreedomGuy
FreedomGuy's picture

Elitists like collectivism because it gives them a claim on power. After all, someone has to run everything for all the little people. Keynes gave them a theory that strengthened their claim on power. While I have heard and read that Keynes was a more reasonable fellow who would not agree with the scope of central planning and debt we have today, he opened Pandora's box for the central planners. Marx probably would not agree with how the practical implementation of his ideas worked out, either.

Until humanity comes to the realization that we are better off with liberty, private contracts and private risk taking this will continue ad infinitum. Even if the whole system crashes the current central planners will not admit error or willingly give up power. They will just say we should have done more of X and less of Y based on graph Z.

Sun, 09/09/2012 - 03:17 | 2775774 AnAnonymous
AnAnonymous's picture

Elitists love 'americanism'. The FFs were elitists themselves...

Sun, 09/09/2012 - 23:30 | 2777499 akak
akak's picture

Who is Eli Tists?

Is he  a fellow proponent of Chinese Shitizenism?

Mon, 09/10/2012 - 00:01 | 2777553 FreedomGuy
FreedomGuy's picture

Yeah, those nasty FF's who often put their lives on the line, lost property, went bankrupt and refused to become kings or leaders for life, like Mao, Stalin, Castro, etc. were really self serving elitist bastards. That's why they wrote a libertarian Constitution limiting the power of the State. What was I thinking?

Sat, 09/08/2012 - 22:23 | 2775486 rambo1028
rambo1028's picture

We are going to get what they deserve.

There..... fixed it for ya.

Sat, 09/08/2012 - 17:49 | 2775184 pdl
pdl's picture

In Sweden it costs $10 for a beer.  They can keep their stinkin' budget surplus!

Sat, 09/08/2012 - 18:21 | 2775218 wagthetails
wagthetails's picture

This could just be the real price of a "beer". Perhaps the rest of us are subsidizing beer to keep it cheap, but when the pozi breaks, beer will be $20 here. We can't look at moment in time prices. We have to pay back the subsidy (debt) eventually. We are living now at the expense of our future We are kidding ourselves. We have fucked our kids.

Sat, 09/08/2012 - 19:08 | 2775285 icanhasbailout
icanhasbailout's picture

I think you're on to something there. In the past I've done rough calculations for how much we are really paying per gallon of gas when you figure the cost of US military commitments that can be reasonably attributed to the security of petroleum supplies... at best, no better than the price Europe pays, at worst we are actually getting gas more expensively!


Sat, 09/08/2012 - 20:52 | 2775388 Doña K
Doña K's picture

Yes! it is $10 but in comparison, the alcohol content is higher and you can get a buzz with one or two rather than a six pack. I am sure some of you need a lot more than six.

The net result is paying about the same for the same buzz but in the US you need to visit the john more often. Let's not talk about the extra calories, the beer belly and the additional burping and farting.


Sat, 09/08/2012 - 21:15 | 2775396 nmewn
nmewn's picture

How much of the price is the tax?...it appears to be the VAT...25%.

I could get an even better buzz with 25% more ;-)

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