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Egon von Greyerz: There Is No Deus Ex Machina Left
From Egon von Greyerz of Gold Switzerland
Deus Ex Machina
With most of the world’s major economies as well as the financial system bankrupt, there is only one solution that can save the world economy. Like in the Greek tragedies, Deus ex Machina is now the only way that the world can avoid a total economic collapse. This would involve God being lowered down onto the world stage and miraculously saving the plot.
For those few who believe in this, may God bless them. But since this is a very unlikely solution most people will instead rely on governments and central banks to save us. But how can anyone possibly believe that totally incompetent and clueless politicians and central bankers could solve anything. They created the problem in the first place and are therefore totally unsuitable to play the role of Deus. The main objective of governments is to stay in power and thus to buy votes. Therefore they are incapable of taking the right decisions. And the opposition, aspiring to power is even less suitable since they will lie through their teeth and promise the earth in order to be elected. (We know that there are exceptions like Ron Paul, but the voters will most probably find his medicine too strong to swallow.)
What about central bankers, can’t they save us? Unfortunately any sensible person who becomes a central banker loses all his senses and becomes a prisoner of the political system.
Solution?
So if there is no Deus ex Machina and if governments or bankers can’t rescue the world, who can and what is the solution. Let us return to the wise von Mises to look at the options available now:
“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS A RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION, OR LATER AS A FINAL OR TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED”
Ludwig von Mises
Mises is absolutely correct: “There is no means of avoiding a final collapse of a boom brought about by credit expansion”. Whatever politicians, bankers, economists or others experts say, there is no solution to this crisis. We have reached the end of the road and are now staring into the abyss.
The credit manufacturing system that started in 1913 when the Fed was founded, began its terminal phase in 1971 when Nixon abolished gold backing of the dollar. It has been clear to us for at least 20 years that the outcome was inevitable. It was never a question of “if” but only “when” it would happen. It is now clear to us that the false prosperity that the world has experienced by printing unlimited amounts of money will very soon come to an end. Thus the “if” and “when” conditions are now satisfied so the remaining question is HOW?
To try to answer this let’s return to Mises: “The alternative is only whether the crisis should come sooner as a result of voluntary abandonment of further credit expansion ….”
To stop the money printing and credit creation would be the only sensible way of ending the failed quasi-capitalist, socialist experiment which is in the process of destroying the structure of the Western world. For almost 100 years we have lived on a system based on debt. This has created a false prosperity as well as false values. The transfer of capital from private enterprise to government by massive taxation is approaching 50% in many countries (see table). The average for 18 industrialised countries is almost 40%. This means that on average 40% of the productive economy is transferred to a non-producing entity (government) which wastes most of the money in the process of redistribution. But not only that, since the state has taken over up to 50% of the economy in these countries, the desire to work, to strive, to take risk and to invent has been taken away from a major part of the population.
For a great many people it is now totally natural to rely on the state for their needs rather than on themselves. And the state needs to borrow/print ever increasing amounts to perpetuate this economy based on an illusion. This situation is totally untenable. Since any additional money printing will only exacerbate the crisis and make the final collapse so much greater, the swiftest solution would be let the financial system implode now. We need to reset the world to a level which is sustainable. The consequences of this implosion would be a collapse of the financial system and a reset of debt to zero. Although this is unthinkable to any government or politician, it would be by far the quickest way to get the world back on its feet with no major debts, minimal government interference, and no central bank that can print money. It would be like a forest fire getting rid of all the dead wood. Out of that would rise masses of green shoots in the form of strong unchequered growth. The transition will of course be traumatic and the current generation will experience enormous hardship. But not voluntarily abandoning the money printing now will just delay the inevitable and the consequences will be dramatically greater and affect many future generations.
Anyone who has followed my articles will know my view that governments worldwide are totally incapable of stopping the money printing. This is their only means of staying in power and buying votes. But not only that, this is the only method they know. This has been their patent solution to all economic problems in the last decades. Not that this is new in history. Most empires have resorted to diluting the value of money by reducing the gold/silver content of coins or printing paper money. But as far as I know it has never before been done by so many countries simultaneously to such an extent.
Since there won’t be any voluntary abandonment of credit creation what will the likely outcome be? Again let’s use Mises words: “…… a final or total catastrophe of the currency system involved”. The problem this time is that we are not talking about one currency or one country. No, we are talking about most of the world’s major currencies. We have been used to measuring currencies and economies on a relative basis i.e. against each other. But this is a total fallacy since all major currencies have been in a race to the bottom for the last 100 years. Most currencies have lost between 97% and 99% against real money –GOLD – since 1913. And since 1999, most currencies have lost 80% or more against gold. So paper money has been a very poor measure of wealth in the last 100 years. Governments are creating credit and paper money and consequently through their fraudulent actions “stealing” from the people whilst at the same time increasing the people’s dependence on the state. And the people does not understand that the value of paper money is declining continuously. But gold reveals the deceitful destruction of paper money. This is why governments do not like gold and try to suppress the gold price.
Endless Money Printing – QE
And how will the currency system collapse? The answer to this question is very simple – through endless money printing. There will be no lasting austerity programmes in any country that can print money. Governments are incapable of sticking to austerity measures since in the end that is a guaranteed way of losing power. As power is the main purpose of all governments, they will use any method to retain it. Within the Eurozone, individual countries can of course not print money but the ECB and the IMF will take care of that. So whilst world leaders are procrastinating and bickering in G8, G20 and all other “summit” meetings, it is absolutely guaranteed that the final outcome will be one QE package after the next. Governments and central banks know that without limitless money printing there would be a deflationary collapse of the banking system and world economy.
The table below shows the financing requirements of the PIGS countries in the next few years. Just Italy and Spain will require €1 trillion in the next 4 years and of that 1/2 trillion Euros in 2012. Only printed money will take care of that.
For many years it has been absolutely crystal clear to some of us (sadly a very small minority) that many major sovereign nations are bankrupt as well as the world financial system. Banks are only surviving because they, with the blessing of governments, are allowed to value trillions of dollars of toxic and worthless assets at full value. And on top of that there are more than $1 quadrillion outstanding in derivatives. These are outside the banks’ balance sheets and there are virtually no reserves against them. The banks are netting the value down to virtually nothing and then applying a miniscule reserve against this net amount. First of all, the netting is only valid when the counterparty pays. When there is a counterparty failure, which is very likely in the coming financial collapse, gross remains gross and the $1 quadrillion remains $1 quadrillion. Secondly, a major part of the derivatives are worthless or not protecting the investors as we have seen with for example Freddie Mac, Fannie Mae, Lehmans and lately MF Global. MF Global had bought CDs to hedge their investment in Greek debt. But they hadn’t understood what they had bought and it turned out it offered no protection at all.
Hyperinflation
The “final or total catastrophe of the currency system” will occur as a result of the QE or unlimited money printing that will very soon start in the EU, USA, UK, Japan and many more countries. And this currency destruction will lead to hyperinflation as I have stated for many years. Throughout history, substantial government deficits leading to money creation or printing have always been the cause of hyperinflation. Because hyperinflation is always the result of a collapsing currency and not of excess demand.
To any thinking individual, it is totally incomprehensible that governments and central banks believe that an insolvent world can be saved by debt issued by bankrupt nations and then bought by the issuers themselves as there is no other buyer. This is the perfect recipe for self-destruction and “total catastrophe of the system.”
IMF, EU and other failed monstrosities
Time and time again, the world creates massive costly, bureaucratic and unaccountable structures that have idealistic and totally unrealistic objectives.
Take the IMF for example. This is what their mission statement states: “The International Monetary Fund (IMF) is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.”
If financial stability, high employment, sustainable economic growth and reducing poverty are the objectives of the IMF, then they have failed on every single point. So here we have an organisation that receives/borrows money from mainly bankrupt states and then lends the money to countries that cannot or will not ever repay the funds. And in order to carry out this totally futile task, the IMF takes a major cut in between to finance its costly and failed operation. The world does not need monstrous and costly structures that totally fail in their mission. Thus, the IMF should be closed.
Turning to the EU, they state on their website: “The main objectives of the Union are now to promote peace, the Union’s values and the well-being of its peoples”. There are other stated objectives such as: “sustainable development, based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment.”
The EU or the EEC as it was first called was created in the late 1950s. This was a prosperous period in the world economy based on real growth (not debt). As often is the case, politicians with illusions of grandeur create superstructures which only function in good times. The EU’s main objective of creating peace and well-being of the people is now being severely tested. If we for example asked Spanish youth (50% unemployed) about their well-being or Greek people or the Portuguese etc, we would get a tirade of abuse and complaints about the EU. Instead of “creating peace”, we are seeing major tension within the EU that could lead to serious conflicts. And as to “balanced economic growth and full employment”, this has all come to an end. The false prosperity, mainly based on debt, has also come to an end and the EU can only survive intact with the aid of endless money printing. But even that would only be a temporary reprieve. The EU is a failed experiment which is extremely costly and inefficient. The economic ruin of Ireland, Greece, Spain, Portugal, Italy, France etc would not have happened to the same extent without the EU. Like all artificial fiat currencies, the Euro was doomed to fail. Without the Euro, countries like for example Ireland, Spain or Greece would have recovered much faster.
Final or total catastrophe
So we are heading to the final stage or as Mises says a “final or total catastrophe of the currency system involved”. I don’t think that even Mises envisaged at the time that this could involve a major part of the world rather than just one country. This is why this catastrophe will be unprecedented in world history and have consequences that will affect the world economically, socially and geopolitically for a very long time.
Wealth Preservation – Gold
Since 2002 we have advised investors to put up to 50% of their assets into physical gold, stored outside the banking system. Gold has appreciated between 15% and 20% per annum since 2002 depending on the base currency. And most stock markets have declined 70-85% against gold in the last ten years. In spite of this most major investor groups (institutional, funds, asset managers or individuals) own no gold. Gold is money and reflects the total destruction of paper money. But most investors do not understand gold. Common arguments I hear is that “you can’t eat gold” or that “gold pays no return.” It seems that these investors prefer to eat paper money. And as to the argument that there is no yield on gold, who needs yield on an asset that has massively outperformed all major asset classes in the last 11 years. And if we look at 2011, gold has greatly outperformed stock markets in most major countries. Whilst stock markets are down between 1% and 24% in 2011, gold is up more than 20% against all major currencies. So in real terms (gold) all stock markets are doing very badly but still investors persist in riding these falling trends.
Stock markets will benefit temporarily from QE but it is still our view that they will fall another 90% against gold in the next few years.
The correction in the precious metals is now likely to be over and we should see the metals going to new highs in 2012. I had the pleasure of becoming acquainted with Alf Field at the recent Gold Symposium in Sydney where we were both speakers together with Eric Sprott, John Embry and Ben Davies amongst others. Alf is one of the few in the world, if not the only one, who knows how to apply the Elliott Wave principle successfully to gold. Alf’s next intermediate target is at least $4,500 and the ascent to this target could be rapid. That would probably mean a silver price of $150. These technical forecasts certainly confirm the fundamentals as outlined in this article.
The world is in a total mess and there is absolutely no solution to this unprecedented crisis. The hyperinflationary depression that we will experience in the next few years will totally destroy the majority of the credit based wealth that has been created in the last few decades.
In order to preserve wealth and keep capital intact, it is critical to keep a major part of investment assets in precious metals held outside the banking system. But for investors who continue to follow conventional wisdom, they will sadly find that their investment strategy was merely conventional and contained no wisdom.
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Let's see. EU to lend to IMF to bypass rules on bailouts. This should end well!
ECB Announces Non-Standard Measures - EU To Lend To IMF ...
http://confoundedinterest.wordpress.com
Lets take a look at those high-tax countries like France. In France the people have great schools, low crime, great transportation, clean streets, three times the vacation of Americans, excellent free medical care, and excellent pensions. What do we get for our tax money? One of the worst medical systems in the developed world that we pay for, Detroit, no public transportation, 2 weeks vacation, high crime, a beyond sick education system, a government that is intent to strip us of basic human rights, and an expensive military set on global conquest. What a deal.
I can accept that TPTB may be intentionally setting up this collapse, but what I don't understand is their ultimate end game and how this gets them to it. Is it a one world government/currency? Is it all about power and control? What do they want to foster - a world running on a better pattern, or a slave world to meet their every need. Don't they already hvae enough to meet their every need?
Anyone have a clue?
Yeah, clue called Paranoia.. What collapse you are talking about?
1.30% down day on DOW? Go get a drink, dude.
Dr. Carroll Quigley, Clinton’s mentor at Georgetown University, in his book Tragedy and Hope, shows how financial control is to be followed by political control – world government.
“The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. “ Dr. Carroll Quigley, Tragedy and Hope, 1966
“In short, the ’house of order’ will have to be built from the bottom up rather than the top down… an end run around national sovereignty, eroding it piece by piece, will accomplish much more than the old-fashioned frontal assault.” – Richard N. Gardner (Council on Foreign Relations and Trilateral Commission)
“…this strategy and structure recognizes that economic ties will determine the strength or weakness of many international linkages in this new era, including security relations. At best, economic interdependence can become a new glue.” – Robert B. Zoellick (CFR, head of World Bank, Goldmanite)
“2009 is also the first year of global governance with the establishment of the G-20 in the middle of a financial crisis.” –Herman Van Rompuy, European Union President
"If you want a picture of the future, imagine a boot stamping on a human face forever." -- George Orwell, Nineteen Eighty-Four
Thanks for the amazing quotes--at least we know who some of these people are who are deciding our destinies.
well, Huxley said they would destroy themselves if left unchecked...or one could draw that inference from Brave New World....there doesn't even need to be a goal....just the game of domination and compeitition for compeititon's sake....
John Williams of ShadowStats in one of his recent newsletters “showed that annual core inflation had risen for 12 straight months, ever since QE2.". In a November 28 interview with The Gold Report, when asked “what would QE3 do to some of the indicators you watch-gold, silver, commodities?,” here are a few of his replies (out of context).
JW: I'm not a day-to-day timer in this. My outlook has been consistent that we're heading into U.S. dollar hyperinflation, and the effective purchasing power of the currency as we know it will disappear. If you're living in a U.S. dollar-denominated world, you don't want to be in dollars-you want to move to protect the purchasing power of your assets, your wealth.
Originally, I was looking for hyperinflation by the end of this decade. I've advanced it to 2014, and it may well come before that. I think we're already in the early stages of going through what has to happen for this to break…
[T]he federal government and the Federal Reserve have backed us into a corner and there's no other way of escaping. There's no political will to address the long-range insolvency, so they kick the proverbial can down the road. They did that in 2008. They did everything they could to prevent a systemic collapse by creating, spending and guaranteeing whatever money they had to.
We're coming to another point where we face risk of systemic collapse, and we're likely going to see another round of quantitative easing (QE) as a result. That also could pull the trigger for massive dollar selling, moving us into much higher inflation. That will start the final process…
TGR: You talked about hyperinflation coming as early as 2014, or even before that. But 2012 is just weeks away. What can people expect next year in terms of the data you watch and maintain versus some of the government-issued statistics?
JW: Gold tends to anticipate the inflation problems…Then as we get into the high inflation, it will start soaring…
As to core inflation, the Fed likes to ignore energy and food prices, using the rationale that those prices are too volatile and don't hold over time. Yet, oil is probably the most important single commodity in terms of domestic inflation. Not only does it hit basic energy costs, but it also affects the cost of transportation of all goods. Beyond what is defined as basic energy costs, oil is also the basic raw material for many products, ranging from chemicals to fertilizers to pharmaceuticals and plastics.
As oil prices rise, the Fed just takes out the energy component in so-called core inflation. But the inflation still spreads to the broader economy… The higher oil prices spiked gasoline prices and broader inflation, which still is boosting consumer inflation in the U.S.
With the next round of Fed easing, the dollar problems will intensify again. That will put new upside pressure on oil and gasoline prices, further intensifying the spreading broad inflation pressures in consumer goods and services.
The Fed's mandate from the government is to try and sustain reasonable economic growth and contain inflation. From the Fed's standpoint, however, those are secondary to maintaining the solvency of the banking system. Nothing in the outlook for the system has changed meaningfully since the crisis in September 2008. The banking system still is in a solvency crisis, the economy continues to worsen and we've had no real recovery. The stopgap measures to prevent collapse of the system did nothing but kick the crisis a little further into the future, and now, we're coming to peak period of crisis again…
http://www.ibtimes.com/articles/257365/20111128/gold-silver-oils-dollar.htm
There is no way of avoiding it. But there is a way of controlling it. Glass-Steagall. You control what's real, and let the shit stink out in the open.
Austrian monetarism, is just as faulty as Keynesian monetarism. Monetarism is bullshit in all forms. It's hard for monetarists to see it though, because we're neck deep in Keynesian bullshit.
People that believe oligarchy cock sucker Mises is the answer, have little more insight into economics than a Keynesian. They're minds like Keynesians, clouded by bullshit.
We don't need to ditch one flavor of monetarism, with another flavor. Using bullshit sophistry to once again fool everybody for the benefit of the oligarchy.
Glass-Steagall helps you control the demolition, by exploding that which is fraud, and leaving the real assets there going forward. Those will remain and don't need to be ceded to anyone via monetarist rules.
It's not a solution per se, if one wants to get technical. It's a step forward out of this shitshow. Some would call THAT step forward a solution, while the fraudsters would call it Armageddon.
It's a solution for the people, it's the endgame for the banksters. There is no solution for the shitshow fraud, and for the anti-american monetary system.
Couple that (Glass-Steagall) with an AMERICAN CREDIT SYSTEM, which can utter credit for useful projects, legitimate business activities, so on and so forth, gets outside the Austrian dogma of things and allows the economy to function. The Austrian way is to make sure that only the oligarchy can restart the economy, and thus remain on top...at the expense of...you.
One dogma says print, and is wrong.
The other dogma says you can't create credit of any sort, and it is wrong.
We don't need another set of bullshit rules that only destroy us in order to follow it. It's bullshit. It's sophistry.
The author is also saying gov't can't do this or that. Both right and wrong. The idiots IN our gov't can't do it. It's not a problem of GOV'T, it's a problem of people IN gov't, and idiots who don't have the mental acuity to elect anyone other than that. Which is temporary and transitory.
But that is past thinking. As this shitshow continues, people learn. The human race is not static. How it acts, what info it knows, how it judges things, constantly change. To say that it is impossible to put the right people into gov't, is flat wrong. It's matter of fact asinine. Now when will it reach a point of actually putting people in that will change the dynamic, is yet unknown. But to say it won't happen, and that thus gov't can't do it, is to forget what the American gov't is capable of when properly staffed.
The answer isn't found in Keynesian-ism or Austrian-ism, the answer is American, because what we founded was specifically outside this shitshow scope. The American Credit System. We merely were drawn back into the shitshow over time. We didn't keep our Republic.
Now will we act in time to prevent much of the damage? Hard to say. We have a shot, but it takes alot of people to get onboard with reality. But people even in this mess where they point to the fault of Keynes, still believing like dogma of Mises and other Austrian's ain't helping. The Austrian viewpoint isn't reality, it's monetarism. The Keynesian viewpoint isn't reality, it's monetarism. The American system trumps both, because it isn't constrained by dogma, it allows the people to do what is needed to survive and build wealth, without getting hung up with all the dogmatic bullshit of Mises, Keynes, etc. American Credit System allows for people (empowers them) to do shit to make life better. The others require the people to adhere to dogma. That's awfully constraining. Especially if that's the approach idiots want to take after a collapse of just about everything. It's genocidal, and will only make things worse. Keynesian on the way up, Austrian on the way (and at) down (bottom), and the oligarchy has all it's bases covered to stay in power.
If you really want to know economics, you have to be OUTSIDE the realm of monetarism. Because monetarists don't understand the economy. They understand dogma.
So just like Keynes can sometimes sorta be right, just like Austrians can sometimes sorta be right, what screws them up is their monetary ideology which twists reality into dogma which ill describes what is actually happening. The decisions from this are destined to fail, because they aren't based on reality. That's why you can say the American Credit System is both Keynesian and Austrian, but actually neither. You have sane regulation, but simple. You have the ability to go outside the bankster funding loop for value and wealth creation (money isn't wealth), but you also have sound money that isn't hyperinflated, nor strictly adhered to in the Austrian way. You can link the currency to gold and have a gold standard, and have fixed exchange rates, and tariffs. We don't need the Goldilocks portage bowl that is too hot (keynes) or too cold (austrian)...we need to one that is just right. American Credit system.
If people actually learned things from a real perspective instead of inundated with dogma, ideology, and sophistry, then we the people would be much better prepared, to keep the republic.
If anything, it should be 1000x easier to do so than it was in the 1700's. Our ability to communicate in the 21st century and all that entails, once the bullshit is thrown out, ensures this. We just need the breathing room to allow sanity to return. We must point out the fraud and let it reverberate around the world in milliseconds. Teach it to our children. Have it in our archives, it's not very hard.
We don't need Mises, just like we don't need Keynes.
It's sad that people actually believe that any form of monetarism is an actual blueprint of economy. It was designed for the masses to believe one thing while the oligarchy benefits from it. It's not about something real, it's about getting someone to believe merely that it is real. The oligarchy created the Keynesian theories just like they created Austrian theories. Our founding fathers fought for a real system, not one that benefits the oligarchy. From Nicholas of Cusa to Massachusetts, to Hamilton, America at its conception and founding was anti-monetarist at it's core. Shame on the Austrians for trying to conflate and glom onto what our founding fathers did to promote an anti-american dogmatic oligarchical ideology. The founding fathers would call Austrian monetarism, just like Keynesian monetarism...anti-american. Just because a few of things line up with what the founding fathers spoke of, doesn't mean the resulting derivative is the same thing. The Keynesians do the same thing, and pull like crap out of their ass to justify their like, oligarchy benefiting ideological dogmatic sophistry.
The monetarist ideologies were only created to create a bullshit system that the plebes would follow, for the benefit of the oligarchy, because they could be controlled and kept stupid from finding out the flaws. We don't need to switch one bullshit game with another.
Of course in the current situation the banksters will try to print, until they are stopped. Thus depending how the future transpires the value of items in numbers can go up or down, and most likely both. But the course we're on is printing for fraud while everything around you crumbles. The depression is already here, and it deepening is guaranteed under monetarism. The question is, how far do people let the printing go, and that will determine how much hyerinflation/hyperdeflation we experience.
Any idiot can tell you of a hyperinflationary depression. One needs not be a monetarist to diagnose it. The tools to diagnose what we are witnessing, don't solely reside within the confines of specific monetary ideologies. You can get to the same conclusion without such bullshit which cloud up the application of that knowledge. Don't mistake everybody being Keynesian, into thinking any idea that sees the flaws of Keynesian, to be solely residual of the tenants of Austrian-ism, or the insights it brings because of devotion to it.
Many have come to the relatively same conclusion of our shitshow worldwide economy without having to be tethered by Austrian bullshit. Monetarism is a scourge in all forms. We will continue to be fucked economically as long as we follow monetarism of any kind. Our economy will then continue to be based on bullshit. If we follow it in our case (Austrian replacing Keynesian), we'll suffer by layering another version of monetarist dogma on top of the collapse of another monetarist dogma, and directly suffer because said new version of monetarism told us we must, not that we actually have to. The answer is to break free from it all, and focus on what is real wealth.
Water, food, energy, the means to produce what we need. These are the things that matter. They do not run on dogma, but can surely be crushed by EITHER dogma positions, as dogma always skews and keeps people from making decisions based on reality. But that was always the point. For the oligarchy to remain in control, their game, whichever version you choose, must be played. Anything outside of their games, allows humans to break that bondage, which the oligarchy must never allow. America's ascension proves it. Even if slowly sullied, our base was so much better, no one could compete. We have become old Europe, instead of exporting to Europe what made America great. A switch to Austrian-ism does nothing to change that. It only cements America as an extension of Europe's oligarchical depravity a little further, rather than freeing the world from the tyranny of the oligarchy, as initially intended and as initially succeeded. (That and the hell we go through needlessly as a result after a credit expansion collapse). We didn't keep our Republic, but we can get it back, the example is there, and it's not contained in any form of monetarism.
Glass-Steagall
American Credit System
...and impeach or vote out anyone that stands in the way...which include idiot Obama.
I have no idea if you are right about the Austrians or not. I'm inclined to believe what you say and I do believe in the pivotal importance of Glass-Steagall. Keynesian doctrine seems to be based on magical thinking--that if you create liquidity confidence will improve and people will spend, thus reviving the economy. This basic idea seems to be a massive failure at the moment. And of course the entire idea is that the megabanks should be at the fulcrum of the economy, whereas it seems more natural to nationalize those banks, break them up, and return to an era of small but sound community banks.
Your basic point is that the twin monetary theories, Austrian and Keynesian, are just propaganda devices to keep the plebs in check and the oligarchy in power--that does seem to be borne out by our present experience.
Interestingly, Steve Keene claims that the dominant school of economics of our era--the neo-classicists--completely neglect money. He quotes Hyman Minsky to the effect that any true model of capitalism should be able to model depressions, and claims that neo-classicism cannot model depressions, so it is invalid.
Your idea of the American Credit System seems to be defined by what it is not, ie, it is not monetarism. However, it could really use some fleshing out--otherwise it is just another belle at the economists' ball, which is probably why you keep repeating your assertions.
I think one profitable area of research would be to really try to analyze the power structure of this world govenment in the making and come up with some names and faces. Who are these people? I can only think they are a bunch of Lucefarians. They too will get dismembered and chewed up by Lucifer himself, eventually. But of course, that's just the paranoid thinking of someone lost in the system. Still, evil seems to be dominant in the world today, especially since 9-11. The evildoers always tip their hand so that they can claim that what they do to you is your fault. Latest hand-tipping is to enact a law that allows indefinite detention of American citizens as "enemy combatants". This has all the hallmarks of evil and will come to haunt us sooner rather than later. The constitution is dead, long live the constitution!
But maybe we should be thinking less about interest rates and more about power on the eve of the coming conflagration. I rest my nut-case.
We had Glass-Steagall from 1932-1999. It fixed nothing ... merely slowed the destruction slightly (if at all).
Deficit spending on social welfare began in earnest under LBJ in the early 1960's ... resulting in Nixon having to close the gold window in 1971. Reagan's spending binge of the 1980's accelerated the decline and continued for 20 years with Glass-Steagall still in place.
The Savings & Loan crisis ($150+ billion wiped out) occured under Glass-Steagall in 1989.
When Clinton repealed Glass-Steagall in 1999, we were already in the farcical dot.com bubble and soon to head into the housing bubble.
Rules don't have any impact when nobody follows the rules and the umpire keeps his whistle in his pocket.
Glass-Steagall merely addresses one tiny aspect of the problem. The other 99% of the problem is government ... and reliance on government!
TSHTF? I'm not really ready yet.
"For a great many people it is now totally natural to rely on the state for their needs rather than on themselves." Since said states are happy-assholing around and destroying most of the even moderately-paying jobs, what the hell else is left for the average person? There's some lazy bastards out there for sure, but there's plenty of poor suckers fucked six ways from Sunday because "democracy" is a load of dingo kidneys.
von Greyerz is right that only an act of God can prevent the slow motion collapse from completing itself now. We ain't seen nothin yet!
Not only is QE endless, having never ceased, but according to Jim Willie- the cartel is now needing to take active measures to prevent COMEX default as well as 20 Lehmans in Europe!
We had a COMEX system failure in November. COMEX was ready to default on gold and silver in November. Rather than honor delivery demands in gold and silver- JP Morgan simply stole the money in the accounts that were going to stand for delivery. They had their pockets picked while they were standing in line at the delivery window. Notices of delivery were replaced at stolen accounts!
JP Morgan averted both a COMEX default and a European sovereign debt implosion, and notice that JP Morgan increased the amount of silver in their registered vaults by precisely the amount that was supposed to be delivered!
This is just another financial 9/11, and THERE WILL BE MORE.
If JP Morgan can steal 140,000 futures accounts, what's to stop 250,000 MUTUAL FUND ACCOUNTS FROM BEING STOLEN!?!
The Fed was staring at 20 Lehmans in Europe!! 20 Lehmans almost happened, and the fed rushed in, lowered interest rates. If there is another big implosion and there is another string of contagion and big banks are dead in the morning, don't expect there to be any money in the accounts in the morning.
I think we're going to see SEVERAL MILLION PRIVATE ACCOUNTS VANISH!
Pension funds, mutual funds- they're all at risk , and people I talk to HAVE NO CLUE. Put your money in GOLD AND SILVER!
http://silverdoctors.blogspot.com/2011/12/jim-willie-jp-morgan-crashed-m...
Wouldn't the world need about 40 trillion dollars worth of gold turning over every month in order to function like it does now or at least function like the USA? That's 40 trillion changing hands every month and does not include the gold that you would have to pry out of a dead person's hands cause they ain't spending it on nothing. If we go back to a gold standard I will be lucky to eat. Maybe we can all borrow some gold from the bankers. At interest which is how we got here in the first place. Asides from Mommy meeting Daddy.
Soon we will all be praying together....or not. And that means everyone in the same pew...same shame...same debt...same. I am not Catholic but I really do believe in the end that we will all be in the same boat, and the Pope will be in the boat with us all. And we will need leadership out of the valley of death. And it won't be easy.
We need leadership and all we currently have is a teleprompter and a group of clowns auditioning for Trump. Ron Paul 2012.
I agree with you and hereby invite down arrows: Get a rosary and a scapular.
I am noob and it is very hard for me to estimate any outcomes of what is going on now in Europe. But I am trying to figure out how small countries in EU, e.g. like my Czech Republic, where we do not use Euro currency (yet?) will be doing. CZE rely on export (especially Skoda cars), we are small country and our debt is around 40% of GDP, iirc.
I believe this is not going to end well, but can you guys give me kindly your opinions how countries where Euro is not main currency can handle it or rather what I can expect from my retarded government to do?
Considering my personal wealth situation... I am just average worm (employed sheep from 99% of sheep:)... what can I expect that will happen with my Czech Koruna savings, pension funds in our local banks (which are of course mostly children of big EU banks - e.g. Erste/Ceska Sporitelna), etc. Should I rather get ready that it does not matter that we do not use Euro because CZE Koruna will fail anyway because of huge failure of Euro? Or...?
Thanks in advance for replies.
US economy grows. Is not bankrupt.