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David Rosenberg Channels Felix Zulauf

Tyler Durden's picture


From David Rosenberg of Gluskin Sheff

This Felix Is No Cat

Though he does seem to be a furry animal nonetheless ... I'm talking about the legendary Felix Zulauf and his remarkable contribution to the Barron's Roundtable. This is what he had to say — clear, concise and cogent:

There is too much debt in the industrialized world and the financial system is virtually bust. Rea/ disposable personal income is stagnating or declining. Employment participation keeps heading south. This produces a chain reaction: Weaker consumer demand in the West weakens manufacturing in places like Asia, which weakens natural-resource producers such as Australia or Brazil.


As for the euro, it is a misconstruction. As I said in January, I expect the disintegration to begin in the second half of this year. That should lead the world into financial and economic chaos. My two major themes into 2013 are euro disintegration and China weakness, due to the bursting of a real- estate boom.


The global economy is weakening cyclically on top of a highly fragile credit system. It is an explosive cocktail. The tower of debt is compounded by the gigantic over-the-counter derivatives market. In the past 10 years the notional value of derivatives worldwide has grown from $100 trillion to almost $800 trillion. The numbers are mind-boggling. if something goes wrong in the real economy, it could shake the whole credit system dramatically. It is a dangerous situation.


The euro is not the real problem but a trigger and compounder of the structural problems. It could only work if the euro zone entered a fiscal and political union, which won't happen, as Europeans aren't prepared to give up national sovereignty. Politicians therefore will go from one compromise and quick fix to the next, with the crisis deepening until some nations at the periphery won't be able to stand the economic pain anymore. They will want their old national currency back, and devalue to adjust the external accounts.


China won't be able to save us, as it did in 2009. The Chinese will lower interest rates but their actions will be reactive and lag. If my thesis is right, we must assume things will go awfully wrong in the next 12 months and the system will be at risk of collapsing. Most U.S.-focused investors might not understand it as they see corporations doing well.


The potential exists for a broad-based nationalization of the credit system, capital controls and dramatic restrictions on financial markets. Some might even be closed for some time.


We are witnessing the biggest financial-market manipulation of all time. The authorities have intervened more and more, and thereby created this monster. They might change the rules when the game goes against their own interests.


We are in a severe credit crunch. It starts when the weakest links in the system can't finance their activities. Then you have a flight to safety into Treasuries and German bunds, compounded by a quasi-shortage of good collateral. That's why bond yields have fallen so low. This isn't an inflationary environment but a deflationary one.

I like to think I could have said it better, but I don't think I could have. These are just a few excerpts but very hard-hitting stuff and a nice contrast to a lot of the other mush out there. Fred Hickey is worth a read too in this Roundtable discussion, ditto for Marc Faber (disclosure: they are friends of mine, but don't hold that against them!)

The full Zulauf note can be found here


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Wed, 06/13/2012 - 18:03 | 2523637 FoolsAdvice
FoolsAdvice's picture

Gold Bitchez!

Wed, 06/13/2012 - 18:08 | 2523657 BKbroiler
BKbroiler's picture

how bout some good news?  anyone?

Wed, 06/13/2012 - 18:19 | 2523684 q99x2
q99x2's picture

Unless you are a transhumanist you likely have to live less than a 100 years.

Wed, 06/13/2012 - 20:14 | 2523957 lineskis
lineskis's picture

"This isn't an inflationary environment but a deflationary one."

Only until central bankers hit CTRL+P to infinity and beyond, as to them deflation is NOT an option.

Wed, 06/13/2012 - 20:26 | 2523987 trebuchet
trebuchet's picture

i was thinking that too, but started to doubt it will happen immediately, they are keeping their powder dry for Grexit scenario

Wed, 06/13/2012 - 22:43 | 2524347 Lucius Corneliu...
Lucius Cornelius Sulla's picture

They can't hit CTRL+P to infinity because there is a limit to how much they can print before inflation gets out of hand and the bond market collapses.  If the bond market collapses it is game over for the US dollar and the USG.  If borrowing rates go up just a few percentage points, they will not be able to roll the debt over to fund the government.  Most taxes will go towards interest payments.  Therefore, I think it is more likely that the cycle of deflation will happen as described by Felix and outlined by Comstock Partners.


Wed, 06/13/2012 - 20:16 | 2523965 Reese Bobby
Reese Bobby's picture

The kingdom of God is within you.

Wed, 06/13/2012 - 20:26 | 2523988 Bansters-in-my-...
Bansters-in-my- feces's picture

Good news....! Good news.....!!!!

You want "good news".

Well I' am being sprayed daily by american jet tankers with chemtrails,is that "good news".

I guess if i was invested in whatever they are spraying on me it would be good news......

I think.......

Wed, 06/13/2012 - 20:33 | 2524003 Ness.
Ness.'s picture

The Miami Heat lost last night.



Wed, 06/13/2012 - 22:44 | 2524360 Raisuli
Raisuli's picture

The Oklahoma City Thunder won last night.

Wed, 06/13/2012 - 23:32 | 2524485 Stoploss
Stoploss's picture

Yes. It has been proven without a doubt, every single day since '08, that deflation is the most powerful financial force, i don't give a shit what anybody else says, because the mighty FED's 24 -7 -365 incessant injections cannot knock one scale off that beast.

There is only one cure for deflation..

Deflation... Just like the cure for high prices, is high prices, the same goes for low prices.

The "good news" is there's nothing left to throw at it without making it even stronger.

Does Ben know that?  We shall see.

Wed, 06/13/2012 - 18:23 | 2523693 RoadKill
RoadKill's picture

How is DEFLATION a call for "gold bitchez"?

Do you understand deflation vs inflation? Gold is great for inflationary cycles, but show me a single example of gold outperforming in a deflating currency. Seriously, show me one. You can use any period during the last 500 years, but it has to be over a minimum of 1 year, not just the last 5 days.

I understand the arguement that the deflation will be so bad it will lead to inflation, but thats a different trade.

Wed, 06/13/2012 - 18:27 | 2523705 lemonobrien
lemonobrien's picture

cause deflation brings down the system and only golds survives.

Wed, 06/13/2012 - 20:48 | 2524030 flacon
flacon's picture

Has there ever been a time in history where the central planner DIDN'T issue more fiat money to counteract the hyperdeflation? 

Wed, 06/13/2012 - 18:42 | 2523708 BKbroiler
BKbroiler's picture

you're talking to a wall. but yeah, the deflation argument is a little scary, you never know.

Personally, I think we will see deflation, then sudden, rampant inflation, hence the gold position.  We could see $500 then $5000 shortly after.  Physical steadies the hand.

Wed, 06/13/2012 - 19:46 | 2523890 ronaldawg
ronaldawg's picture

I agree regarding the deflation and hyper-inflation scenario - that is why I have my sh!t under my mattress - when deflation hits I will be buying GOLD bitchez!

Wed, 06/13/2012 - 18:32 | 2523718 Tinky
Tinky's picture

Have previous deflationary periods been directly correlated to the rapid degredation of fiat currencies? Has there been a coincidental panic amongst investors, who control enormous sums of money, and a resulting flight to "safety"? And if currencies and sovereign debt are increasingly (and correctly) viewed as being unsafe, to where does the capital flow?

I'm asking those questions because while I am not a student of economic history, the current set of circumstances appears to be unique, and it should be easy to see why gold is likely to fare well.

Wed, 06/13/2012 - 18:47 | 2523758 Poor Grogman
Poor Grogman's picture



Research Exeters Pyramid

the answer to your question lies there...

Wed, 06/13/2012 - 21:50 | 2524162 Pejorative Requiem
Pejorative Requiem's picture

Yes, excellent. Thank you. And the inverted pyramid is a subtle reminder of the motives for a government to make illegal the private ownership of gold.

Wed, 06/13/2012 - 18:44 | 2523751 Spitzer
Spitzer's picture

How is DEFLATION a call for "gold bitchez"?

show me one.

Iceland, Asia in 1997, Russia in 1998, Argentina, South America in the 80's.


Wed, 06/13/2012 - 18:54 | 2523774 Sophist Economicus
Sophist Economicus's picture

Let's not forget the USA right before King FDR declared a bank holiday.    Everything was deflating while gold gained in purchasing power.

Wed, 06/13/2012 - 20:13 | 2523953 trebuchet
trebuchet's picture

Are your examples examples of collapses in ASSET prices? coz in my book that is not deflation. 

Currency collapses in those examples conributed to local inflation there. 

Same wih the Great depression


Wed, 06/13/2012 - 20:20 | 2523973 Spitzer
Spitzer's picture

Are your examples examples of collapses in ASSET prices?

Priced in what ? The USD or the local currency ?

Wed, 06/13/2012 - 20:29 | 2523993 trebuchet
trebuchet's picture

doesnt matter, those exmaples have foreign currency devaluation relative to USD, in whichever currency lOCAL asset prices fell.

in domestic currency, price of daily living increased because of local currency devaluation vs USD.




Wed, 06/13/2012 - 20:29 | 2523994 trebuchet
trebuchet's picture

doesnt matter, those exmaples have foreign currency devaluation relative to USD, in whichever currency lOCAL asset prices fell.

in domestic currency, price of daily living increased because of local currency devaluation vs USD.




Wed, 06/13/2012 - 20:39 | 2524015 disabledvet
disabledvet's picture

Or more recently the USA in 2008. Then both gold and oil collapsed as they are doing this time. Control P is wishful thinking. These have been War Games for some time now.

Thu, 06/21/2012 - 01:09 | 2545961 All Risk No Reward
All Risk No Reward's picture

Deflation or inflation depends on one's moentary perspective.

Big Finance Capital saw Argentina deflate as the citizens of Argentina saw their currency collapse relative to the FRN debt receipt dollars.

Let me explain before getting all upset.

Big Finance Capital effectively impoverished the average Argentinean (after creating a bubble for them!) and that reduced demand in Argentina as the locals were wiped out.

The FRN debt receipt dollars didn't collapse in value, so they were able to buy much more of Argentina for the same amount of FRN debt receipt dollars.

Comparing what is going on now to Argentina is simply to not understand the difference between apples and organges.

1. Big Finance Capital controls the mega banks and the Federal Reserve System - and our money supply.  Our "government" empowers Big Finance Capital's monetary monopoly - so don't think they have your back, they don't.  The bureaucracy is also aligned with Big Finance Capital - the revolving door and all.

2. Big Finance Capital has trillions of dollars in debt instruments and trillions of FRN debt receipt dollars lining their pockets and the pockets of their front mega-corporations.

Now, if you were sitting on all that debt and and FRN debt receipt dollars, would you burn it all up and bail out those indebted to you?

Think long and hard - and apply logic.  The answer is so simple, even Henry Ford got it right...

“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.”
~Henry Ford

Now, the end game is hyperinflation, but it will only used when it profits Big Finance Capital because Big Finance Capital controls the money supply which determines the outcome.  They won't wipe themselves out and bail out debtors no matter how much a debt saturated society dreams of this outcome - ain't gonna happen.  They rip YOUR face off, not their own.

I have no crystal ball, but if I were Dr. Evil and I were them, I'd...

1. Leverage to the hilt and blow the world's largest credit bubble and lie about it so the Muppets didn't know I was breaking Section 2A of the Federal Reserve Act.  Done.

2. When the bubble finally burst, I'd loot the Treasury dry and offload my worst assets off onto the Muppet suckers...  but they might get mad so I'd lie to them and call it "stimulus."  I'd call the operation "Quantitative Easing" because it quantitatively eases the Big Finance Capital losses by using society's FRN debt receipts to prop up the markets so we can front run and then get out at much higher prices.  Muppets will believe anything.  In process.

3. Allow the Debt Money Tyranny to collapse, as it must, and bust out all the debtors so that I can roll up all their hard assets under my front corporations.  Of course, I'd pump hyperinflation ahead so everyone is "all in" in risk assets just before the dumpt.  Suckers!

4. Once I own much of the Earth using the principles of Sun Tzu's Art of War, I'd hyperinflate to "balance my books" and call it "even."

No, this couldn't work.  My banking fronts would have to be Too Big Too Fail so that they would survivie during this collapse that would wipe out all their competititon.

I'd have to set up a police state where I could monitor the Muppets that might catch on...  I'd need to use the military to control people as I asset strip me some Muppets.  I'd need my Presidential Puppet to claim dictatorial powers to disappear anyone I wanted and even kill them...  but no evidence can be presented because we'd be disappearing political dissidents for telling the truth, not for real crimes.  We'd need FEMA camps and we'd need a plan for political "re-education camps."

Naw, not even the Muppets are that stupid to allow me to wield the Central State in this fashion.

Oh....  wait...

BTW, I'd probably incorporate the gold standard somewhere in the process and use it to correlate with the depression that wipes everyone out and conveys society's wealth to me...

Bwahahahahaha, the Muppets will be crying to me for a cashless Debt Money Tyranny system!

We live in interesting times.

Wed, 06/13/2012 - 18:53 | 2523768 Solon the Destroyer
Solon the Destroyer's picture

Do you understand deflation vs inflation? Gold is great for inflationary cycles, but show me a single example of gold outperforming in a deflating currency. Seriously, show me one. You can use any period during the last 500 years, but it has to be over a minimum of 1 year, not just the last 5 days.


Gold is historically a poor inflationary hedge. It is however a very good hedge during deflationary credit crunches.  Inflation all the way from 1985-2000 and nary a budge in gold.  However a great time to buy commodities, real estate, equities, etc.

During the Great Depression, however, Gold popped.  (Keep in mind confiscation is a risk no matter which end of the cycle we are at).

When returns on risk are artificially forced down, when equities are hanging on the edge of the cliff and it is dangerous to put your money in the bank due to the deflationary credit crunch, and the political will to return to sound money becomes a cacophony, what do you do?

Buy Gold.

I buy gold because I'm a deflationist.  If I was betting on inflation, I'd be in the stock market.


Spitzer gets it.

Wed, 06/13/2012 - 19:08 | 2523802 Solon the Destroyer
Solon the Destroyer's picture

For a much more in-depth discussion of gold's behaviour during historical periods of inflation and deflation please read Mish here.

Or anything by Professor Antal Fekete.

Wed, 06/13/2012 - 20:17 | 2523967 unununium
unununium's picture

If I ever wonder what Mish has to say, I'll look myself.

Wed, 06/13/2012 - 20:48 | 2524031 disabledvet
disabledvet's picture

What did gold "pop" in the Great Depression? 5 bucks an ounce? Gimme a break. Deflation means "paper covers rock." if oil prices really crash (as I think they must. France has ordered a halt to drilling off Northern coast of South America for fear of this and the competitive advantage it gives the USA) then transports power ahead in addition to all industry at every level given the rock bottom price for natural gas and the fact that electric utility rates havn't gone up in the USA in two decades.

Wed, 06/13/2012 - 18:54 | 2523775 Rip van Wrinkle
Rip van Wrinkle's picture

Errr...1933? $20 to $35 in one, fell swoop.

Wed, 06/13/2012 - 19:04 | 2523795 jimmyjames
jimmyjames's picture

Do you understand deflation vs inflation? Gold is great for inflationary cycles, but show me a single example of gold outperforming in a deflating currency. Seriously, show me one. You can use any period during the last 500 years, but it has to be over a minimum of 1 year, not just the last 5 days.


I'll show you 3 examples of why you have it wrong-

Gold in inflation 1980-2001


Gold in deflation-


Wed, 06/13/2012 - 20:57 | 2524049 post turtle saver
post turtle saver's picture

+1 - gold is a performer when you have credit stress and deflationary pressure. Too bad when things really fall through the floor it either gets taken away from you or you can't eat it.


Deflation is a net decrease in money supply and credit with credit marked to market - Mish


Mish is right. Look at the daily 10-year US treasury yield curve rates and tell me that's inflation.

Wed, 06/13/2012 - 21:59 | 2524192 mcguire
mcguire's picture

negative real rates on the 10 year.. amazing.  

Wed, 06/13/2012 - 22:03 | 2524212 jimmyjames
jimmyjames's picture

Mish is right. Look at the daily 10-year US treasury yield curve rates and tell me that's inflation.


Yes Mish is right and he's been right all along on the big picture and the eventuality-


Wed, 06/13/2012 - 21:16 | 2524047 BlandJoe24
BlandJoe24's picture

Gold retains intrinsic (though still perceived) value, but the PRICE of gold (how much cash in the reserve currency of the area you are in) will go down in a deflation.  

This is because in a deflation

1. each unit of whatever currency is the de facto reserve in your area becomes worth much more in real terms  (each unit of currency can get you a lot more stuff, ie: real money in hand becomes much rarer and harder to come by, ie: people generally have much less money and aren't able to borrow any either.)  

2.  supply vs. demand.  The number of sellers will increase as people are forced to liquidate hard assets like gold to meet basic needs.  The number of buyers will decrease as people have much less money to spend on anything but basic needs.

In other words, in a deflationary depression the main thing people will need for general economic transactions beyond barter, is cash (in the currency actually of value in your area).  "Cash is King in a deflation" is the  time-tested saying for a reason.  Gold will still hold some value, and certainly when/if hyperinflation kicks in, the price of gold will rise dramatically, but that may be a while from now.

An exception would be areas in which gold/silver become the everyday reserve/in use currency.  Gold bugs feel that will happen everywhere, other people feel differently.

And of course individual resilience/preparation in combination with localism (for resources and basic needs) and a mutually supportive community of friends/family/neighbors, is the most important survival "strategy" in hard times.

Wed, 06/13/2012 - 22:41 | 2524343 web bot
web bot's picture

yoiu're absolutely right and... once the Euro starts coming apart... and you have trillions of dollars sloshing around the globe seeking yield... and when you have the USD collapse... then you'll see PMs moonshot.

Many people like you miss this important point. In a purely delfationary environment, you're right... but there are other factors at play which will be seeking a store of value during the upcoming collapse.

Thu, 06/14/2012 - 08:19 | 2524978 tarsubil
tarsubil's picture

Doesn't this boil down to simply, 'in a credit crunch, cash is king; with the subsequent cash tsunami, gold is king'? The levels of Exter's inverted pyramid are not created equal. While cash can be printed, gold cannot. When cash gains value it will be printed. Just look at the US Fed debt.

Wed, 06/13/2012 - 21:51 | 2524163 Ookspay
Ookspay's picture

There are NO lessons in history for what we are now experiencing, There is no playbook.


"History Will Teach Us Nothing"

If we seek solace in the prisons of the distant past
Security in human systems we're told will always always last
Emotions are the sail and blind faith is the mast
Without a breath of real freedom we're getting nowhere fast

Gordon Sumner

Wed, 06/13/2012 - 22:32 | 2524316 Plumplechook
Plumplechook's picture

Don't quote Sting lyrics at us.   It only weakens your case.

Dahdoodoodoo, Dahdaadaadaa etc.

Wed, 06/13/2012 - 23:53 | 2524521 jez
jez's picture

Quite. Another one who's got it into his head that he's a great artist.

Wed, 06/13/2012 - 21:55 | 2524177 constantine
constantine's picture

Personally, I think that we mistake 'demand destruction' for deflation.  This massive decrease in demand and shifting left of the curve, due to financial meltdown, will cause deflation in countries that are not heavily indebted, such as Chile and Switzerland (though they're tying their best to rectify that with their stupid EURO peg).  However, this decrease in demand (depression) will lead to a currency crisis in the heavily indebted western countries as people finally put 1 and 1 together and realize that there is no chance of ever repaying the debts off with real money and that it really isn't a joke and, no, it won't be their grandchildren who bear the brunt of their profligacy.

So bottom line,

1) real and nominal prices will decrease in countries that aren't in debt - which we can count with one hand.

2) real prices will decrease and nominal prices will increase in countries that are heavily indebted.

There's also the chance that a failure of multiple reserve currencies could just cause a global panic in all paper money - even that which is relatively sound - in other words irrational panic.  I know Tyler will probably think my little synopsis is simple but, frankly, in the end most economics does rest on the simple foundation of a few basic principle, which have been skewed these days with the plethora of exotic financial instruments, which in the end, will only delay the final result and return to the more simple dynamics.

Wed, 06/13/2012 - 22:43 | 2524357 Calmyourself
Calmyourself's picture

Yeah your right, paper only pretty, pretty printed paper will be worth anything shortly..  The more flowers and the prettier the ink the better.  I for one am holding out for the orchid of the valley edition, ten kaziilion bernanke bucks in value, bring it..

Thu, 06/14/2012 - 09:25 | 2525222 Offthebeach
Offthebeach's picture

The local temples( town hall ) , the state temples and fedgov temple will demand temple dues( taxes ) in temple script. Or else. The Muppet class can barter amungst itself with pussy, Meth, pot, housecleaning, property maintenance on estates of temple priest, guards,, e t.. like all regimes, employment / using up testosterone and romantic idealism of young healthy males will be afforded distant wars in resources thieft. This leaves large numbers of young females, unwanted save as domestic and sexual labor to temple staff and enforcement. Obama/Romney care requires yet more temple script, and ceazses the life span of worn out muppets.
Dollars will have value because it is ordered so!

Thu, 06/14/2012 - 20:23 | 2527702 mkkby
mkkby's picture

Roadkill, in the last deflation -- the great depression -- dot gov confiscated the gold and then devalued against their new stash.

Wed, 06/13/2012 - 18:34 | 2523725 kalasend
kalasend's picture

But he said it's deflationary, not inflationary...

Wed, 06/13/2012 - 20:06 | 2523900 ronaldawg
ronaldawg's picture

Just like it is stated in Princess Bride:  "You keep using that word. I do not think it means what you think it means."

Wed, 06/13/2012 - 21:30 | 2524111 WageSlave
WageSlave's picture

Who's the more foolish, the fool or the fool that follows FoolsAdvice?

Wed, 06/13/2012 - 18:03 | 2523638 disabledvet
disabledvet's picture

More like Felix Zoloft. I mean you people have entered a realm of hilarity even I can scarcely imagine now!

Wed, 06/13/2012 - 18:04 | 2523640 ebworthen
ebworthen's picture

"They might change the rules when the game goes against their own interests."

Count on it.

Bank holidays, capital controls, and Roosevelt's ghost revisiting precious metals ownership.

The wicked become more and more lawless when their thievery comes to light and the shell game is exposed.

Daily debit card usage limits, cash withdrawal limits, restriction of visa's, travel, and overseas shipping; coming to the U.S.S.A. sooner than many would believe.

Wed, 06/13/2012 - 18:30 | 2523716 disabledvet
disabledvet's picture

This is your head talking...not your mind. Simple default risk...nothing more. Think it through and you'll realize "we're still paying for things." Not true in Europe now. Transportation itself will seize up over there as border crossings reappear "just to pay for things" at a minimum. Totally human nature. Happened in Iraq during the chaos. Happened in California during the LA riots. I do agree (personal experience speaking) "power of the state needs to be curtailed." but with so much debt I highly doubt even they can escape the Wrath of Bond now.

Wed, 06/13/2012 - 19:52 | 2523910 ronaldawg
ronaldawg's picture

I was in the LA riots - I don't think the LA riots can be compared to the collapse of the Euro.  There were no border crossings or limitations on movement unless you live the the Ghettos of Compton and Watts (even there it wasn't enforced).  Buddy of mine was in National Guard and had to "protect" a 7/11 in Watts.   During the riots we were told not to go to work but of course my lawyer boss made me go in anyways (I worked at night).  Watched the whole city burn from the 40th floor of 2049 Century Park East.

Wed, 06/13/2012 - 19:04 | 2523794 Not Too Important
Not Too Important's picture

We're not the USSA anymore. We are now the USGSJPM.

There, fixed it for 'ya.

Wed, 06/13/2012 - 18:07 | 2523652 InconvenientCou...
InconvenientCounterParty's picture

debt deflation == unencumbered collateral appreciation



Wed, 06/13/2012 - 22:04 | 2524214 mcguire
mcguire's picture


Wed, 06/13/2012 - 18:10 | 2523661 dingoj
dingoj's picture

When Central Bankers realize QE is not the solution, they'll let us go Cold Turkey and tax our gold?

Wed, 06/13/2012 - 18:15 | 2523673 john39
john39's picture

bet on war, to cover the truth.

Wed, 06/13/2012 - 20:21 | 2523978 Harbanger
Harbanger's picture

The msm is already doing that.

Wed, 06/13/2012 - 18:11 | 2523666 holdbuysell
holdbuysell's picture

Well, to pile it on, add Pal's End Game to the mix as well:



Wed, 06/13/2012 - 18:17 | 2523677 Poor Grogman
Poor Grogman's picture


We all know how debt deflation works.

We all know how a printer works.

We have debt deflation and we also have a printer


Now (no cheating) see if you can figure out what happens next?????



Wed, 06/13/2012 - 18:45 | 2523755 Spitzer
Spitzer's picture

Show me one economic collapse where the fiat currency went up in value ?

We dont need any more printing to have hyperiflation

Wed, 06/13/2012 - 18:59 | 2523782 Sophist Economicus
Sophist Economicus's picture

We don't, but we'll get it anyway as the governemnt will step in to 'do something'...

Wed, 06/13/2012 - 20:19 | 2523972 rosiescenario
rosiescenario's picture

Yes...we just need the velocity to accelerate....


Aside....the problem with owning manufacturing stocks during high inflation is that price increases a company can charge do not keep up with those at their raw material end....its called margin squeeze and we are seeing signs of it already.

Wed, 06/13/2012 - 22:47 | 2524371 Calmyourself
Calmyourself's picture

The damn velocity will come like a tornado as the supply chain starts to seize up like a torqueflite 727 at 8,000 rpm with no fluid..

Wed, 06/13/2012 - 20:34 | 2524006 Poor Grogman
Poor Grogman's picture

When that tidal wave of "financial assets" starts flooding out of bonds into "something safer"

Then we will see how zee price stability looketh.

Wed, 06/13/2012 - 18:52 | 2523769 ThirdWorldDude
Wed, 06/13/2012 - 18:19 | 2523683 Bob
Bob's picture

They might change the rules when the game goes against their own interests.

Yeah, I guess ya never know.  LOL. 

Gee, has it ever happened before?

Wed, 06/13/2012 - 18:21 | 2523687 lynnybee
lynnybee's picture

wow .    i know who FELIX ZULAUF is, i've listened to many of his interviews.    i've also sent these interviews to friends & family members two years ago & begged them to get out of the stock market & swap out whatever they could save & plow it into gold & silver & foodstuffs.     they all laughed at me, they got mad at me & told me to "get off the damn computer & lighten up."      last weekend i actually got out the gun & my Grandma Jo's bible.   

Wed, 06/13/2012 - 21:38 | 2524099 slewie the pi-rat
slewie the pi-rat's picture

neither barron's nor gluskin/sheff nor zH nor zulauf mentions gold here

again:  this is a set-up for a political bait-and-switch based on z's reputation and the fear he generates:  the politics of fear in america;  this is it and in realTime, too!

z is writing in barron's for their political agenda and that is why rosie is pushing it:  it is part of the plan and design for theParty he, z, and barron's wants to see take the WH in a november win

mittens is developing a "know-it-all" fear-based economics platform

political neophytes are reacting to it, here, in realTime!

theParty is gonna tune the political 'choice' fools in right here while their paid media lackeys talk openly about doing it...

and nobody notices...   priceless...

Wed, 06/13/2012 - 21:57 | 2524185 Ookspay
Ookspay's picture

Huh? I think you may have had a good point, But I missed it. Would you care to elucidate? With less riddles?

Thu, 06/14/2012 - 00:54 | 2524605 Totentänzerlied
Totentänzerlied's picture

Allusion to the mentioned cast of characters' (alleged) preference for the Romney half of Obamney, interpreting the piece as a (blatant) attempt to wag-the-electorate-dog via economic fear-mongering.

Not sure what the imagined upshot is, but I tired of office politics long ago.

Thu, 06/14/2012 - 04:42 | 2524757 slewie the pi-rat
slewie the pi-rat's picture

hey!  you understood me perfectly!


Thu, 06/14/2012 - 02:12 | 2524672 slewie the pi-rat
slewie the pi-rat's picture

no riddles from me;  you're the only one asking questions

you don't understand me b/c you don't understand rosie's agenda

not my problem, son;  you been around a few months;  he's stated it recently;  we've blogged about it here;  his agenda

it's not rosie's fault or tyler's fault or mine;  he stated it and tyler published and we all blogged about it

several people here were on that string, tho you would never know it from what they have gone to here

i gave him the benefit of the doubt, but this is just low-life "my friend Z can scare you and make you want more security"  see? 

Thu, 06/14/2012 - 05:40 | 2524786 slewie the pi-rat
slewie the pi-rat's picture


trojan horsed by rPaul, party hack;  co-opted;  run to ground on romney

ronPaul delivered the teaParty to the neocons and he did it right here on zeroHedge as people led parade after parade about they now knew this was finally an honest politician!  well, maybe he is, but he wasn't really running for president, was he?  he was running for the rParty nomination, which he could NEVER get and he end-played every hope of the responsible goobermint spectrum and took all their fool money too!

this is the "switch" part of the "bait & switch"; prezCandidatePaul was the "bait" part!

"huh?"  ain't really ready for zH primeTime when we are dealing with a piece by a man who has recently declared himself a political party operative for mittens...  especially when he starts preening the other operatives he is friendly with...from the barrons roundTable! 

Wed, 06/13/2012 - 22:48 | 2524374 Calmyourself
Calmyourself's picture

Put the gun away and stick with the bible you'll know when to get the gun out..

Wed, 06/13/2012 - 18:22 | 2523689 q99x2
q99x2's picture

'My two major themes into 2013 are euro disintegration and China weakness, due to the bursting of a real- estate boom.'

Real-estate Fraud you mean.

And that Greenspan prick was behind it.


Wed, 06/13/2012 - 18:22 | 2523690 Deep79
Deep79's picture

Rosenberg goes from beng bullish on Monday, saying he sees the light at end of tunnel to this, to posting this excert from Felix.

This guy is truly a joke.

Wed, 06/13/2012 - 18:52 | 2523771 NotApplicable
NotApplicable's picture

I think it's called "covering the bases."

Predict everytihing, then highlight the winners in retrospect.

Wed, 06/13/2012 - 22:12 | 2524249 mcguire
mcguire's picture

yeah, whats up with that... 

once you see this shitstorm coming, you cant just un-see it..   

these days, when evaluating current events, it involves much more than just an "outlook"; it is how you define "truth", and ultimately, yourself.

Wed, 06/13/2012 - 18:22 | 2523691 CrashisOptimistic
CrashisOptimistic's picture

Rosenberg's purity of analysis is without peer.  He is wrong, often, because pure analysis cannot see intervention that is essentially whimsical.

But much though one might admire his analysis, behold the real problem with economists in general:

" if something goes wrong in the real economy, it could shake the whole credit system dramatically. It is a dangerous situation."

THAT is why economists should be inventoried for eventual execution.  Look at how backwards that is . . . oh my, if people suffer, it might upset the system I analyse for a living!

Wed, 06/13/2012 - 19:45 | 2523777 Zero Govt
Zero Govt's picture

Economists need shooting because firstly they can't predict anything (ie. are usless) and secondly because they perpetuate the myth the economy can be quantified, analysed and politicised (ie. controlled)

they feed the egos of the most inept people in society to meddle: politicians 

Rosey at least monitors real markets rather than the fantasy of the wider economy and attempts to predict them as a trader would. it's a shame he still carries the delusion Mit Romney will be good for the economy, i fail to see how a debt-spending parasite can be anything but a further drain

maybe Rosey can forward us the maths on that one (you have done the maths haven't you Rosey?)

Wed, 06/13/2012 - 20:50 | 2524037 Poor Grogman
Poor Grogman's picture

Quite right

Thus the "Human Action" part of the analysis is unknowable...

And without that, you're really just guessing like the rest of us plebs.

Wed, 06/13/2012 - 18:32 | 2523721 Rainman
Rainman's picture

The Big Bang will not require that all $800 trillion in derivatives go bad. Just a smidgen will gitterdone .

Wed, 06/13/2012 - 18:43 | 2523752 Bill D. Cat
Bill D. Cat's picture

A smidgen here , a smidgen there , pretty soon you're talking about really fucked up .

Wed, 06/13/2012 - 20:23 | 2523981 rosiescenario
rosiescenario's picture

A nuclear explosion begins with one atom.....

Wed, 06/13/2012 - 18:43 | 2523732 Zero Govt
Zero Govt's picture

"As for the euro, it is a misconstruction."

Not true (ie. bollocks).

The Euro is uber-succesful, it disproves the crap about needing 1 central bank to succeed and 1 Treasury policy. The Euro has 16 CB's and the Euro out-stripped both £Sterling and the US $Dollar over the past 10 years.. it OUT-PERFORMED 1 central bank currencies and 1 central bank policy dimwits

the Euro proved beyond doubt you do not need a central bank (at all)

the Euro proved the only thing you need for a currency to succeed is public acceptance

money can be anything (notches in wood, beeds, coins made of Gold or nickel or lead, it can be pieces of paper, pieces of cotton, virtual digits, money can be A N Y T H I N G ) 

the only issue that'll nobble the Euro is the same issue that'll nobble £GBP and $USD : Debt

Debt is the tipping point for any currency, not how many central banks, not political policies, not any other bloody rubbish in circulation

Wed, 06/13/2012 - 18:51 | 2523763 NotApplicable
NotApplicable's picture

I'd say that 16 CB's can (and have) affect(ed) the debt tipping point in a such a way as to be wholly unmanageable. As for the relative performance between the currencies you provide for justification, well, even rigged games have scores.


Wed, 06/13/2012 - 19:49 | 2523809 Zero Govt
Zero Govt's picture

my point's simple: the Euro is uber-successful (out-performed both the USD and GBP over the decade) 

it has 16 central banks 

GBP and USD both have 1 central bank each

the Euro will be first to implode but that's nothing to do with how many CB's stand behind it. Both GBP and USD have their Day of Reckning to come, having 1 CB, 1 Treasury, 1 fiscal policy won't save them (change anything)


Thu, 06/14/2012 - 06:26 | 2524805 i-dog
i-dog's picture

Spot on. The problem is debt (well... debt^n ... with the fractional reserve 'booster'!).

The Euro is neither a problem nor a solution ... it's just another 'currency' with an arbitrary value assisgned on the basis of 'sentiment', not 'maths'. Gold is also valued by sentiment ... a gold coin is 'worth' one pair of shoes in one location, and twenty pairs of the same shoes in another.

The only problem I have with the Euro is that it is a foot in the door to creeping centralisation by the central planners. Each new member of the ever-expanding EU is expected to have a planned path to the EZ ... not to strengthen the Euro, but to strengthen the longer term aim of the ruling class for fully centralised planning as in the pre-19th century ... where the priests (Vatican) and nobles (land owners, not renters/vassals) bickered and decided among themselves without the annoying upstarts in the middle class interfering in their chess game. They really do consider us to be another [lesser, and therefore disposable] species.

Focussing on the minutiae - like whether there should be one currency or many, or whether one group is getting a better deal than another - is missing the big game of big government (which I know you understand).

Thu, 06/14/2012 - 06:55 | 2524834 Ghordius
Ghordius's picture

i-dog, long time no see! My only problem with the Euro is that the banking cabal has strewn the most incredible propaganda against it.

who are those "central planners"? what I see is a cabal of MegaBankers that are acting as the new "nobles" of this world, together with other MegaCorporations. they push an agenda of total globalization. which is further in the US than in europe, just check on where your shoes were made. mine were made here, not in Indonesia.

The EU as a trading block is not their friend - as seen in the fines against Microsoft, for example

The EZ as a monetary union is not their friend - as seen in their shrill shrieks that the european countries have to decrease their sovereignty so that their bonuses are safe.

just as a reminder, europe is still one of the friends of gold, while other countries made it illegal to own it from time to time. the ecb values it's gold at market values, for example. we europeans were left hanging in the dry when Nixon told us we would not be allowed to get gold for USD anymore, in 1971

again, who and where are those "evil" "central planners"? and don't confuse the role of the UK, they are a bridge

Thu, 06/14/2012 - 10:26 | 2525014 i-dog
i-dog's picture


long time no see!

Be thankful for small mercies! I read, but don't waste my time posting any more ... it's all been said a hundred no avail...

who are those "central planners"?

Read my post again ... all of it this time... :)

what I see is a cabal of MegaBankers

Then you are looking in the wrong place. Step back behind the mask and take a look around. ;)


[edit] After posting the above, I've just listened to this excellent one hour interview -- the second half of which answers part of your question and entirely reflects my own direct knowledge of those truly behind the mask/curtain (though we should not forget your own friends' vital role in the tenuous relationships between the queen, the bishop and the knighted banker in his vested castle, while the pawns are sacrificed at will ... or, in more simple terms, you could think of them as rock, paper and scissors in a game where we, the politicians, and the salaried bankers, are merely observers):

Thu, 06/14/2012 - 17:48 | 2527352 EFNuttin
EFNuttin's picture

"Gold is also valued by sentiment ... a gold coin is 'worth' one pair of shoes in one location, and twenty pairs of the same shoes in another."

Let's begin with an ounce of gold in the Sahara Desert at the same moment as another ounce of gold on Rodeo Drive in Beverly Hills.  In that case, the gold will be valued very differently.  However, if we expand our time window a bit, factor in the rather low costs of exchanging pricing information and transporting the shoes, we will quickly see a convergence between the number of pairs of shoes pegged to that gold coin, in spite of the geographic separation. 

Like uranium, gold has unique, intrinsic properties; ones that make it valuable as jewelry and currency.  Uranium's value comes from emitting radiation and readily deteriorating, yielding a great deal of energy in the process.  The shoes are also tangible, but like the uranium and unlike the gold, they will wear out.  Fiat/paper currencies are far, far more indicative of mere sentiment than the base of Exter's Pyramid - gold.  Gold seems to be like the Sun with other financial instruments moving in elliptical orbits around it, sometimes closer to gold (gold price down) and sometimes far from it (gold price up). Maybe 7 billion idiots are simply sentimental and fond of this durable relic.

The barbaric relic outlived Keynes and will outlive all of us as well.  Leave a legacy. Get some gold.

Thu, 06/14/2012 - 20:36 | 2527743 mkkby
mkkby's picture

Agreed, +1 greenie.  The euro is excellent as a medium of exchange.  They are not printing it (so far) and the ECB reserves are over 1/2 gold at current value.  

The problem is the children (debtor nations) can't control their sugar habit (deficit spending).  The euro will survive, probably with a few less member countries.

Wed, 06/13/2012 - 18:59 | 2523783 BKbroiler
BKbroiler's picture

the Euro proved beyond doubt you do not need a central bank (at all)

The newspapers will say "the Crisis proved beyond doubt you need a cetnral bank", which will adequately justify whatever atrocity comes next as a result of this. 911 gave us 2 wars, the 2nd Depression will give us the Global Fed.

Wed, 06/13/2012 - 19:43 | 2523829 Zero Govt
Zero Govt's picture

the newspapers will pump out whatever garbage/spin they like 

but all those carping about the Euro not having 1 CB, 1 Treasury and 1 fiscal policy will have their heads rammed up their backsides very shortly when their own 1 CB currency train smashes into a brick wall, same as the Euro did

hopefully what comes after all these State monopolist money trainwrecks is a free market in money

after 2,000 years of parasites we humans need a break

Wed, 06/13/2012 - 19:01 | 2523788 Sophist Economicus
Sophist Economicus's picture

I'll buy your car and house for a few sticks and 'beeds'.    Let me know when you wanna do it

Wed, 06/13/2012 - 19:21 | 2523840 Zero Govt
Zero Govt's picture

how many barrels of Oil have you got?

Wed, 06/13/2012 - 19:47 | 2523895 grid-b-gone
grid-b-gone's picture

Time to read The Good Earth to help identify the bottom-fishing deals.

Wed, 06/13/2012 - 19:56 | 2523918 ronaldawg
ronaldawg's picture

Damm - I want whatever you are smoking.....

Wed, 06/13/2012 - 20:51 | 2524036 canardo
canardo's picture

public acceptance? Excuse me? We got that piece of crap rammed down our throat, no questions asked. It's one of the reasons it's now coming apart at the seams. public acceptance, indeed ...

Thu, 06/14/2012 - 00:22 | 2524570 EFNuttin
EFNuttin's picture

The Euro is uber-successful...
This must be a joke/troll bait, but I will bite.
Considering the Euro does not align with any previous currency I have ever heard of in terms of the alignment of government, border, sovereignty, currency control, regulations, or legal structures, is it any wonder it had so many naysayers early and has been on death's door for the last couple of years? The Third Reichmark lasted from 1933-1945, but the Euro may not even last that long.
Seriously, would you feel comfortable putting your life savings into paper Euros, burying them in a place that won't rot the paper, and then digging them up IN FIVE YEARS? About the only paper currencies I would try that with right now are the Swiss Franc and Norwegian Krona. Those both have fantastic assets with strong intrinsic value behind them.
I have been stuck with old Mexican pesos, Polish zloti, and East German marks. When it hits the fan, Marlboros and precious metals prove the other stuff can warm a house by burning it in the stove or wipe your ass, but it won't get you tortillas or sauerkraut. Be prepared for the sight of fecal matter on those silly Euros, US dollars, and the rest of the doomed fiats issued by bankrupt governments ignoring the invoice in their inboxes that says PAY UP, DEADBEAT. Signed, Reality Bitchez

Thu, 06/14/2012 - 20:38 | 2527753 mkkby
mkkby's picture

Fail!  You don't understand the difference between a medium of exchange (currency) and a store of value (money).  Read up and then try agruing again.

Wed, 06/13/2012 - 19:38 | 2523870 Never One Roach
Never One Roach's picture

How much in commissions and bonuses was taken out of the $100 Billion given to Spain before it even reached the Spainish border?

Wed, 06/13/2012 - 20:15 | 2523962 chump666
chump666's picture

No, away from inflation and deflation, the system will just break down and collapse.  Then war.


Wed, 06/13/2012 - 20:21 | 2523975 ronaldawg
ronaldawg's picture

Yeah - we need to build 1,000 F-22 Raptors ASAP.  

Wed, 06/13/2012 - 21:18 | 2524086 chump666
chump666's picture

It will be a navel war, starting in Asia, not the middle east.  That will blow up once Israel gets he green light.  But yeah Asia, with Japan/Philippines and India navy bloc against China. 

Wed, 06/13/2012 - 20:42 | 2524022 BidnessMan
BidnessMan's picture

People keep saying War.  But No Eurozone country has a credible offensive military capability - no transport and would run out of ammo in a month.  Could barely bomb some Libyans for a month.  On the other hand, the US, Russia, Israel, China, India, and maybe Pakistan have at least a regional offensive capability.  

The most likely hot wars in Syria, Iran, Afghanistan, Pakistan/India are not about economics.  

Would be interesting to hear thoughts on just what "war" will be spawned from inflation and deflation, and who will be in it.  Much more likely to be civil war lots of places, to the point where nations will so tied up fighting among their own populations that they will have no ability to wage war outside their borders.

Wed, 06/13/2012 - 22:06 | 2524149 chump666
chump666's picture

First the system breaks sans the inflation/deflation debate.  More concerning is a collapse in asset pricing i.e bonds and derivatives via central bank manipulation.  The ECB and the Fed are now at a danger point hence both CB's quite with what is happening n Europe.  Governments will panic once tax receipts collapse completely.  I think Europe is so f*cked up it is beyond words, I mean you have France now going all out socialist with their new president.  Total mess.  The inflation/re-inflation trade of equities has been disappointing, the ECB has been printing insanely as has the Fed, I would say the Fed is covertly or otherwise directly funding the ECB with USD swaps daily.  Yet stocks are NOT making new highs and are trading down.

Once the market finds it hard to trade with with risk on/off or tail risk - it will just pull money out of the market.  The EU/PIIGS endgame will be the tipping point.  If central bank/goverments  attempt to control ALL trades, the market will find it very difficult to price.  That will lead to absolute liquidation trade.  The bank runs now in Greece/Spain are pr-cursers to overall bank runs globally.

So, Asia is slowing down hard, they are closer to a stagflation wipe-out hence their central banks reluctant to provide extra liquidity.  I think Asia will repatriate (no more Euro/US bond buy ups), but USDs (near term) will be bid, but overall gold will take off as the last safe haven.

War, because China will start to try to dominate the East (energy, strategic) more so India/Philippines and of course Japan.  The Japan navy has been building a lot of battle ready ships with young officers eager to reassert Japanese navy dominance again. Middle East only once Israel attacks Iran, then Iran attacks Saudi Arabia and Russia/China supports strategic countries like Syria.  Straits of Hormuz will be a flashpoint.  Europe, possibly Russia flexing etc

I am going to have a drink.


Wed, 06/13/2012 - 20:18 | 2523971 junkyardjack
junkyardjack's picture

Read Market Wizards, Paul Tudor Jones talks about how the system had too much debt in it and was likely to collapse in 1988, we had a huge bull market instead.  Paul was smart enough to stick with the trends and benefit from it.  The argument of too much debt in the system has been going on for ages this is not new...

Wed, 06/13/2012 - 20:24 | 2523979 junkyardjack
junkyardjack's picture

I assume the roundtable ended something like this

Wed, 06/13/2012 - 20:39 | 2524013 Nostradumbass
Nostradumbass's picture


Wed, 06/13/2012 - 20:41 | 2524018 Plumplechook
Plumplechook's picture

When the hell is Tyler going to stop giving this clown Rosenberg column inches on here?  Monday we have to put up with 'Rosey' getting all bullish on us and predicting a global snap-back in equities and the world economy - 'nek minute' he's endorsing Felix Zulauf's latest apocolyptic ramblings.  

Despite trying to cover all possible bases Rosenberg still manages to get it all wrong, all of the time.  How is that even possible?

Wed, 06/13/2012 - 20:47 | 2524026 Abraxas
Abraxas's picture

Jim S. said that talk about deflation vs. inflation is semantics. Trillions of dollars in debt and potential derivative liabilities is definitely deflationary. The only practical way out is to print until the hole is covered i.e. the debt is paid (inflated). Therefore, whichever way you turn, you end up in the same place; therefore call for buying gold. I'm only afraid that they  (the rule makers) have an ace or two up their sleeves and that they'll confiscate/steal/overtax/ban our precious.

Wed, 06/13/2012 - 20:47 | 2524029 RobotTrader
RobotTrader's picture

Hilarious.  Rosenberg, Biderman, and all the rest are simply angry at themselves for being wrong for so long.


The "Great Economic Collapse" that never seems to happen.

In fact, the worse Europe gets, the U.S. specialty retail stocks seem to go up even faster!

Wed, 06/13/2012 - 20:49 | 2524034 RobotTrader
RobotTrader's picture

More "Astounding" headlines here:

"Any Minute, Now, I Swear!!!"


Thu, 06/14/2012 - 07:23 | 2524878 Element
Element's picture

The thingamajig-backed economy ... tell me that's not a desperation move.

Tell it to Greece and Spain and ...

No collapse ... JFC! ... moron

Wed, 06/13/2012 - 21:09 | 2524071 slewie the pi-rat
slewie the pi-rat's picture

standard fare right-wing fear mongering anyone?

"they" might change the rules equates to "we" can change the rules;  b/c we must protect...?

this is the essence of the political bait&switch

the trolls are off with their umpteenth 'what in/de/flation means for gold bullshit

at 18:04 even eb_worthen falls for the fear bait and plays his 'taped litany' due to the wicked


this is "truth" which is being used by very intelligent people (barrons & gluskin/sheff) to prepare you to respond to a political message later in this election cycle

and rosie is a fuking low-life slimeball;  i'll take off the gloves over this crap, myself!

Wed, 06/13/2012 - 21:24 | 2524081 earleflorida
earleflorida's picture

smoke em if ya got`em and chill to this ---  lyric lines from 'Buffalo Springfield' --- a long yarn spun, way back, when in the far times`past... but seems as if just yesterday ___

"paranoia strikes deep;  into your life it will creep;  it starts when your always afraid;  you step out of line, the man come and take you away"

Wed, 06/13/2012 - 22:38 | 2524334 Calmyourself
Calmyourself's picture

I may have mentioned previously that no law, contract, treaty or guarantee is worth the paper it is written on if it conflicts with the ponzi's next breath..  Hunger only hunger should be the trigger for your final actions of safeguarding life, limb, family etc.  Until then simply watch what they do not what they say, that is all..

Thu, 06/14/2012 - 02:03 | 2524667 dunce
dunce's picture

Deflationary, inflationary, this clusterfark will not end well.

Thu, 06/14/2012 - 02:26 | 2524683 celticgold
celticgold's picture

meanwhile....MFC offers  "interesting " investment options ....

Do NOT follow this link or you will be banned from the site!