"The End Game: 2012 And 2013 Will Usher In The End" - The Scariest Presentation Ever?

Tyler Durden's picture

If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn't. The founder of Global Macro Investor "previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe... Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes." It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen....

And we see a lot of those.

Consider this:

  • We are here...

  • We don’t know exactly what is to come, but we can all join the very few dots from where we are now, to the collapse of the first major bank…
  • With very limited room for government bailouts, we can very easily join the next dots from the first bank closure to the collapse of the whole European banking system, and then to the bankruptcy of the governments themselves.
  • There are almost no brakes in the system to stop this, and almost no one realises the seriousness of the situation.
  • The problem is not Government debt per se. The real problem is that the $70 trillion in G10 debt is the collateral for $700 trillion in derivatives…
  • Yes, that equates to 1200% of Global GDP and it rests on very, very weak foundations
  • From an EU crisis, we only have to join one dot for a UK crisis of equal magnitude.
  • And then do you think Japan and China would not be next?
  • And then do you think the US would survive unscathed?
  • That is the end of the fractional reserve banking system and of fiat money.
  • It is the big RESET.

It continues:

  • Bonds will be stuck at 1% in the US, Germany, UK and Japan (for this phase).
  • The whole bond market will be dead.
  • Short selling on bonds - banned
  • Short selling stocks – banned
  • CDS – banned
  • Short futures – banned
  • Put options – banned
  • All that is left is the Dollar and Gold

It only gets better. We use the term loosely:

  • We have around 6 months left of trading in Western markets to protect ourselves or make enough money to offset future losses.
  • Spend your time looking at the risks of custody, safekeeping, counterparty etc. Assume that no one and nothing is safe.
  • After that…we put on our tin helmets and hide until the new system emerges

And the punchline

From a timing perspective, I think 2012 and 2013 will usher in the end.



Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GernB's picture

Things don't typically happen like that. Market never travel in a straigt line, even when plunging. The stock market crash of 1929 was only the beginning. The initial decline was from 381 at it's peak on 3/9/1929 to about 199 on 3/11/1929. For the next half a year the market struggled recovering about 1/3 of it's loss before the real decline set in. It did not hit the bottom until the market hit 41 on 8/7/1932. The depression was not thought to have really begun until 1930 a year after the 1929 crash, and things got progressively worse until 1932. Bank closures occurred throughout the 1930s.

The point is it's easy to imagine to imagine such a crash happening fast, and that would be merciful, but it is more typical for the pain to be long and drawn out with many foolish attempts to fix the problems along the way, and a lot of misery. Typically you are right, the initial shock is breathtakingly swift, but the consequences take years to work themselves out completely.

boiltherich's picture

Things don't typically happen like that. Market never travel in a straigt line, even when plunging.


So true GernB, though many scenarios could play out, and none that I foresee is going to be typical, but then I do not claim to have ESP so really what does any poster here know but to use history as a guide even if it means having to exaggerate some of the details.  I think we could be in for a lost generation of flat to down, plunge, flat to down, like Japan since the 90's but rockier.  On the other hand I also can easily imagine a Soviet style collapse and break up.  Or, a world war that absorbs millions and millions of now surplus bodies into the military and war industry, along with the rationing and all. 

And the triggers out there are numerous, which will start it is anyone's guess, I just don't think derivatives have that power unless they sink more than one major Lehman type bank at the same time.  If it were confined to a smaller bank they could sterilize the damage just as they have sterilized all the Fed and ECB PBOC printing, but if more than one major was destroyed it can bring down the whole enchilada and it will happen one day because global finance is a total clusterfuck, a Gordian knot of interconnected markets and contracts that they neither can or will disentangle.

BlandJoe24's picture

possible, but one of the many things that are different these days than in the 1930's is the digital nature of all these transactions - so reactions/responses can cascade much more quickly

the tower's picture

You must be American.

Hollywood has never been good at predicting the future.

If your society would not have been so disjointed you would see that life goes on, just different.

Yes_Questions's picture



Thanks Michael.

I was wondering what to mix up with my next viewing of NETWORK.


BenLightYear's picture

I guess what I can't figure out is the concept of a crisis that goes so far beyond a solution that the world as we know it crumbles. Especially in the USA. I can imagine a few weeks of turmoil, upheaval, complications, and disruptions. I can imagine even short term chaos. What I can't imagine or foresee are the types of sparks that would instigate long term problems.

I find even bank runs in the USA a remote if not improbable possibility. The reason being nobody wants to go home with 100k in cash when their is rioting in the streets. Bank deposits are guaranteed by an entity backed by an entity that can print all the money it needs. That printing is not hyperinflation inducing since the money already exists albeit on a computer instead of physical paper.

The premise of so much of this scaremongering I find wanting. Wanting of reason. I am going to go over a couple things for the purpose of provoking thought and debate. I understand it may be contrary to some hopes and beliefs here however I believe rational thought is important when looking to the foreseeable future.

First I would like to discuss silver. I will first state that I agree with a lot of the reasons to invest in silver, at the right price, under the right conditions, and at the right times. I understand it is rarer than gold, is used and not retrieved, and that in the past it has been a monetary metal. I understand that owning an asset with no counterparty risk, low to no maintenance costs, and a viable marketable use are great positives. I myself have owned large amounts of silver and still do however to a much lower extent given the economic climate.

The issue it seems is not with the reasons to own silver that are well known but the reasons to not own silver at certain times. It seems so many think that during an economic collapse silver would be a great thing to own. I find that to be quite irrational thinking for many reasons. First of all during an economic collapse a lot of businesses are strained, constrained, face hardships, lower demand, and in some cases inability to continue operations. A lot of the industry that uses silver would hardly be immune to such issues during an economic collapse. You would have much lower industrial demand of silver due to less consumer demand of products silver is used for.

Next it would be mindful to think about consumer demand of such an asset during such a crisis. When industry starts to falter and collapse the most immediate effect of such would be mass firings, and layoffs. Not only a reduction of disposable income ( where capital that gets invested comes from) but actual necessary income for survival necessities. At such a time few will be looking for assets to protect money they don't have, won't be recieving on a current basis, or have hopes to recieve in the future. They will be concerned with the staples that allow their family to survive such a crisis. Food, water, protection, and the little things we take for granted today like toilet paper.

Lastly I will address the value of silver at such a time. Currently the value of silver is based on an open market of buyers and sellers ( albeit on paper) that fluctuates daily and is accessible to almost everyone. If the banks close, the military is in the streets, and industry deteriorates, I am at a loss to understand why the commodities markets would still properly function as they do today. So how does one value an asset in an atmosphere that is makes price discovery all but impossible. How could you buy or sell something with so little knowledge of what it may be worth? I understand supply/demand. I understand that over time and equilibrium would be worked out. I just don't see how it would be to silvers benefit in the end.

When you combine those 3 major factors I find silver to be a bad store of wealth in such a climate. I believe the ratio of silver to food, silver to toilet paper, silver to guns, silver to water, and so on would be much to the chagrine of silver owners than it is today. Personally I like bicycles, toilet paper, simple energy suppliers ( solar panels, machines that would turn energy produced from a stationary bicycle into energy, means of protection, duct tape, and so on much better investments. The appreciation of those items would far surpass the appreciation of silver. I guess there in lies the difference between someone who is prepared for whatever may come and those deluded with irrational thought. If you own silver but don't have a stock of toilet paper you would learn shortly after the collapse that toilet paper is intrinsically more valuable.

Gold. Up until maybe 10-15 years ago I would offer very little argument against owning gold even though some reasons against might follow the same as my reasons against silver. I think what a lot of people fail to understand is that silver and gold were at one point money. However that was a couple generations ago. A few generations time is enough for a societal shift in viewing of such. Ask the average person on the street when was the last time money was redeemable for gold or silver was actually minted money and you will get a blank stare. 47 years for silver. 47 years since silver was money. Believe it or not but that small amount of time is enough to condition those who grew up during such a time to not view silver as money. Close to double that long for gold. Society today does not view silver and gold as money.

Between the two I find gold to be a much safer investment under the possibility of a systematic collapse. Once things are put back into order they will do so under one of two conditions. The first being with gold as the underlying asset that all other assets are valued and as the main indicator of economic operations. This is a possibility. The problem is that fiat money is not the reason we find ourselves in dire straits today. It is not the reason we would be facing economic collapse in 6 months. For that reason alone I do not see money reverting back to gold. It is much better as an asset than it is as money.
The second is fiat once again. Maybe a revalue, a slight change, maybe something along the lines of SDR's. I find this too be a much better possibility. Especially for owners of gold. Not in the short run. When things are being put back together I believe they will look too keep the price of gold low to try to direct capital towards economic investment rather than static assets. Long term 20 years after things collapsed I see a very nice return on purchases of gold made today.

I do not mean to judge anyone looking to protect their capital. I do not mean to deride anyone for trying to do what's best for themselves and their loved ones. I do however take issue with this promoting of economic collapse. This idea the world will be better off by collapsing society and starting over. The progress made in the last 50 years is nothing short of extraordinary. I do believe we have erred quite a bit. An unnecessary wasting of valuable resources, a loss of community and the ideals of family, a decline of moral and social values, a hubris in regards to what we believe we deserve and are entitled too. But let their be no mistake the standard of living we enjoy today has steadily increased decade after decade for over 100 years. To look forward to the collapse of such progress is quite saddening. I understand not everyone on this site goes too sleep at night dreaming of collapse but the majority do. It is even evident in the way the articles on this site are written. They are conditioning you in the same way our govt and TPTB have done. Conditioning you too think that we would all be better off with a collapse. I would love too see change as much as most however I for one am not willing to forfeit society, my family, my standard of living in reasonable terms, for said changes. I view it much like I view revolution. A peaceful, reasoned, thought out systemic change is much preferable to a complete collapse just like a peaceful revolution is much preferable to a violent one.

I believe a lot of people have been deluded with the thoughts of becoming the rich after the collapse by owning PM's that they fail too see the ultimate price that would be paid. The sacrifice of so many so a few could enjoy a more wealthy lifestyle. In fact the irony too me is that so many who deride the elite actually promote and ope for a collapse so they can become exactly what it is they say they despise.

If you are not happy with the life you have today then change it. Get a better job, save a bit more money, be more attentative to your nvestments, find things that make you happy like giving back to the community, spending more time with your family, or focus on things that actually make you happy rather than focusing on money, wealth, and material objects.

Harlequin001's picture

Ben, I would like to pen a longer response in reply to this but time is short, so I must be brief. Maybe I'll be back later, maybe not.

'Lastly I will address the value of silver at such a time. Currently the value of silver is based on an open market of buyers and sellers ( albeit on paper) that fluctuates daily and is accessible to almost everyone.'

With so many 'opportunities' available that don't actually allow you to 'own' gold and silver, but paper entitlements to it such as GLD, do you really believe that? If you do it would be good if you can explain the margin hikes which take place every time gold and especially silver start to shoot...

If the banks close, the military is in the streets, and industry deteriorates, I am at a loss to understand why the commodities markets would still properly function as they do today.'

The answer is that they wouldn't. Commodities markets would function based on real prices, not those arbitrarily decided by how much short a bank can be with unlimited funds, and pm's would not function as a commodity at all, but as a money, just like they always have, until recently that is.

I don't belieev that people actually wish for collapse to get rich, they understand that there is nothing they can do to stop it just as there was nothing they could do to prevent it. We buy gold because we can, and because we have bicycles and toilet paper stashed in our pantries. Investment in gold and silver merely represents what's left.

as a store of value...

IMO there is a great deal wrong with what you say. Till later...

BenLightYear's picture

Or the margin cuts when it starts to drop? First you have to remember those contracts are not paid in value. What I mean is you are purchasing a certain amount of contract for a certain amount of money. A contract on 1000$ of silver doesn't cost you 1000$. Since people are buying on margin they have to control the margin so people don't end up owing more than they haven an account. For example 10k in account, a huge loss, and they owe 15k. The other thing to keep in mind is a lot of those contracts are purely for speculation. Not actual demand for ownership. Real demand for ownership is with physical.

First of all remember that for a short contract to exist someone has to own the actual contract. If you took shorts out of the equation you would lower overall demand of the contracts thus lowering price. I am of the opposite opinion than a lot of people on this board. Namely that short contracts over time actually help to increase the price rather than lower it.

I tried to acknowledge that not everyone wishes for the collapse and that not everyone is blinded by the greed of getting rich. I apologize if I did not convey that fully. However if you read this blog daily you are as aware as I am that a lot of folks on this blog do feel that way. Which is their right to do. I just believe it has a tendancy to draw others into irrational behavior. I will give you an example of such.

I rode the crap out of the run up in gold and silver. I was a holder of metals long before the last handful of years of excitement. I studied economics not in school to get a job but at home to learn. To understand. Even as we speak I am a big fan of owning metals as a protection against inflation. I believe short of arable farmland they are the best long term investment you can make. They are safe ie low risk, easy to store with little cost, and easy to buy and sell. The problem is they are not worth 50$ an ounce and 2000$ an ounce. They are not. The demand that is required to place that value on them does not exist. Even today's prices are off the mark. I put today's current value on them at around 20$ and 800-1000$.

So when we almost hit 50$ but couldn't hold I figured the top was in. Same with 2000$ on gold. I unloaded at around 42-45 ( I thought we were gonna go past 50 so I didn't sell in the first couple days of down prices) and 1800-1840. I can today purchase my holdings back today at a much lower price then what I sold them for. Before the end of the year they will be even cheaper. When the market hits 20 and 1000$ I will be buying once again. Or if hubris takes over like it did before I might buy in before.

My example. I was talking to one of my customers about gold/silver when it was on the crazy run up. I saw him about once a week for about a month. I did and still could make such a good case for metals ownership that anyone I talk too either takes a position or strongly considers it. Well it seems he was the former. He allocated about 40k to metals ( much to my chagrine paper not physical) in the mid 40's and just shy of 1850$. I made it clear to him if he decided to make a large move to call me and to stay in touch. He didn't call me too tell me he was going to nor after he did so. I didn't see him til after the big drops. When I saw him again he was quite upset with me. Said I had him so convinced and he lost a good deal of capital. He was even more upset when I informed him I had liquidated. I told him that conditions changed and caused me to greatly lower my holdings. I asked him why he didn't call. He said and i quote " why would I call you". Asked what he meant. He told me that I wasn't an investment guy so why would he call me about his investments. I was shocked. He took my advice, made a large position, felt confident in my knowledge, however decided after his position was made he knew better than I did. I asked him why he kept his positions after it was clear they were losing money. He said he was fonna wait til they came back up and he was at least back to even. It was my first personal experience with the ignorance of the average person when it comes to investing.

In regards to them being money. I applaud you for properly stating what is true. They WERE money. So money argue they are still money. I personally prefer them to be an asset because they work much better as an asset. It gives you more options. Better to hold PM's during inflation but horrible to hold during deflation. I understand that in a sense deflation with fair from debt is technically impossible. However I'm not talking about after use inflation. I'm talking about actual economic velocity inflation. More clearly inflation in regards to assets. When times are tough and people are scraping buy to survive the demand for assets falls because assets are a luxury. Food, clothing, shelter, medical care, schooling, etc are necessities.

perchprism's picture


Do you two boys want to go too?

The Monkey's picture

Ru Paul - basically another guy in the a financial collapse cottage industry aka Robert Prechter. Was featured a couple of years ago in the WSJ.

He's back in the mix because bearishness is the best time to sell services for calamity.

XitSam's picture

Are you FMB from Harvey Organ's blog?

flacon's picture

Governments have god-like power: August 15th, 1971. It can happen again, but this time the other way around. 

mjcOH1's picture

Hmmm..... I think the goal is still to find a currency accepted by the people as legitimate that is even less tangible and is more easily manipulated than its predecessor.   If a piece of paper with an arbitrary amount of 0s on it is too difficult to devalue at will, my bet would be on an all-electronic currency that can be re-based by twiddling a bit rather than a currency based on a rare metal of limited quantity that has to be dug out of the ground.

Note to self - less paper, more barbarous relic.

ChrisFromMorningside's picture

The plans for the all-electronic currency are being discussed as we speak. Feel free to join the e-dollar steering committee at the Westfields Marriott in scenic Chantilly, Virginia. Just don't get too close to Mr. Soros ... the gentlemen manning the machine gun nests don't like it when you approach the VIPs.


flacon's picture

Who will buy the bonds to support such a system? THAT is the question...

XitSam's picture

Your bank account and 401k will be automatically converted to E-fiat bonds. And since no one need more than $20/day to live, than will be your e-spending limit. 

Flying Tiger Comics's picture

Carbon Credits. A fiat currency tied directly to air, water, trees, food, education and "social harmony".

Oh regional Indian's picture

+ 1, definitely part of the Technocratic, Agenda 21 driven mix. Good point, well said.


Go Tribe's picture

Check out his July 2008 report on his web site. That was scary and came true.

lailapa's picture

Global Debt Crisis - The greatest private fraud of human history.

Who are the great fraudsters who are becoming the murderers of the human kind?
How does the economy "illness" threaten Democracy and the freedom of people?


Clashfan's picture

Or simply Atlas Shrugged being used as a script and played out on a global scale.

dirtbagger's picture

I simply hate people who try to upstage the Mayans

The Big Ching-aso's picture



I think things will work out just fine for those that make it to Mars and continue our species.

brady's picture

Forget Mars, I'll be blasting off for Newt's moon colony.

The Big Ching-aso's picture



Wait a sec.   I thought Jerry Brown was starting up that gig.

Cyrano de Bivouac's picture

Jerry Brown is too involved in the Browndoggle for that. The project that will build a railway that will send empty trains from one boonie town to another. 

The Big Ching-aso's picture



Browndoggled again.      And they still reelect him.   Unbelievable.

Phil Free's picture

I quote: " Git 'chore ass to Mahrrhz..!! "

TBT or not TBT's picture

The Mayan version of soccer might do well on post-apocalypse tv networks, running in prime time against the Hunger Games or The Running Man.

Hugh G Rection's picture

transitory... I hope you fucks know how to shoot.

EatersOfTheFed's picture

I am sitting on my helmet so I don't get my balls blown off.

salvadordaly's picture

OK lets get serious I am a newbee I got $20,000. If I am buying physical gold and silver, how would "YOU" split your purchase between the two? Serious advice please!

Chris Jusset's picture

Assuming that we can continue to print money and bailout banks, "the end" can be deferred for another year or two ... which brings us to 2013-14.  YIKES!!!

THX 1178's picture

I don't think it can last that long-- next time bernanke prints it's curtains.

sunaJ's picture



"Print to infinity" is theoretically possible, but infinite belief in printing is not. 

[Clearing throat]

[Curtain rises]

[Cue spotlight]


[Center stage: one giant, juicy turd]

CPL's picture

<Standing Ovation>


"Fantastic" declares the Financial Post.

"I laughed, I cried, it was better than Cats." spews the Economist

"Blockbuster!  Good stuff."  gushes Juggs Magazine.

jus_lite_reading's picture

Does the word "exponential" mean anything to you?

>>Mid June - End of Sept 2012

Shit meets giant global fan

May God have mercy on us<<

The Big Ching-aso's picture



If we revert back 1,500 or 3,000 years we're talking hairy men, clubs, and knocked out women.  It'd be like a global W. Virginia.

The Big Ching-aso's picture



I bet you're kinda anal.  

Jendrzejczyk's picture

He's just kinda W. Virginian.

They don't take kindly to even lighthearted jokes about their state.

I've been punched (hard) and no longer make off hand remarks about that state.

e-recep's picture

so it's true then, you bunch are cave dwellers. :)

the tower's picture

The guy writes "...going back 40, and 1500 and 3000 years..."

First of all... AND? Which is it, 40 OR 1500 OR 3000?

Second... it's BS. Yes a reset will come. But jezus, don't we need it? It will be a LOT better for everyone were it not for the people that caused this mess doing their utmost best to keep it all going.

There's 1%-ers that don't want this BS to go on either you know...

I assure you there's other stuff playing that doesn't get media exposure but is just as influencial.

Bringin It's picture

It's expensive to hold the whole thing together. 

The goal is to maintain the illusion of democratic rule by getting through the elections without the pot going off the boil in the meantime.

Once the elections are over, all the bad news will tumble out.  However, even as the magic election day approaches, some bad news will begin tumbling out because ...

a) it is expensive to supress the horrors that await

b) it takes a while for the shreeples to put 2 and 2 together, so that, by the time they do [put 2 and 2 together], the democracy ritual will be behind us.

Pladizow's picture

Chris Duane doesnt like that term: he calls it "Constitutional Silver".