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Erik Townsend: Expect a US Price Shock as Black Swans Come Home to Roost

Tyler Durden's picture





 

Submitted by ChrisMartenson.com

Erik Townsend: Expect a US Price Shock as Black Swans Come Home to Roost

American investor (and longtime CM.com member) Erik Townsend has spent the past several years living internationally, with an eye to which countries may be good alternatives if economic crisis and/or Peak Oil start to materially impact life in the US. 

His main observation as an expat? Through its misguided policies, the US has been exporting inflation to the rest of the world, raising prices all over the globe (as an example, he cites a $57 chicken pot pie from the menu at a 'working class' restaurant in Australia). 

This inflation is affecting the rest of the world harshly, but is not yet being felt in the US due to our ability to export it as the issuer of the world's reserve currency. Our immunity will not last forever though, and when it ends, a massive upwards spike in prices is going to hit US markets.

On the Global Economy

As far as I can tell, this whole economy is being propped up by stimulus and money printing, really since 2009. And I think that what is going on is we have forgotten that we are literally changing the—I do not know if you want to call it changing the terminology or changing the paradigm—but what is going on here is, we used to use words like “solution” fairly accurately. Now as we are just creating these Band-Aid fixes to temporarily put symptoms of problems at bay.

 

We are calling those solutions, and we are actually behaving -- and when I say “we”, I mean collectively market participants -- are behaving now as if the ECB printing money in order to buy some more Greek bonds and put a bid under that market was a solution to the European sovereign debt crisis. And it is obviously nonsense. The ECB printing money just dilutes the value of the Euro and causes more reason in the long term for people to flee away from making investments in Euro-denominated sovereign debt. So it does not solve anything.

 

But we have gotten to the point where we are so overwhelmed that the market is thinking in terms of these Band-Aid patches as being actual solutions to problems. And I think as long as that is the case, we are going to continue to apply these Band-Aid patches, which are things like printing more money, until it all comes to a head. When it comes to a head and how it comes to a head, I do not think anybody is smart enough to predict accurately.

 

At some point, though, we are going to get to a point where we cannot handle any more printed money and I think that the black swans that have been leaving the market alone for several years are going to come in force.

 On The Market's Willfull Blindness

I do not think that we have ever seen a larger basket of major macro structural risks that everybody is aware of. It is not like nobody sees these things. But we have just somehow put them all on the back burner. Do not worry about China. Do not worry about Europe blowing up. Do not worry about Iran. Do not worry about the carry trade unwind in Japan that you have just written about recently. Do not worry about Peak Oil. Do not worry about the domino effect of China and Japan going down, taking out other economies that depend on them.

 

It is all fine. The LEIs are looking up. And we just seem to be in this cyclical trading mindset

 

that it is going to continue to last until something breaks. And I think that when something breaks, it is going to break big.

On The China Wildcard

I think China has quite a bit of pull here. In that as QE3 happens—and I am convinced it is going to happen sometime this year, I do not know when—it is going to export so much inflation to China that it is going to be almost intolerable for them.

 

And I think that we are forgetting that if China says, “Okay, guys, we have had enough of this. If you do any more QE-ing we are going to dump the US Treasury bonds that we are holding and we are going to use the money to save our own economy.” If we see that kind of reaction from China, it really could put a monkey wrench into the plans of the central banks to inflate this all away.

 

I think that whether it is that mechanism or another one, at some point we are going to get to a hard wall here where you cannot just print money forever without the unintended consequences coming back and biting you.

Click the play button below to listen to Chris' interview with Ben Davies (runtime 51m:56s):

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Or click here to read the full transcript.  

 


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Sat, 03/03/2012 - 12:30 | Link to Comment viahj
viahj's picture

free medical?  pretty sure it's not "free" but paid through taxes.

with regards to the sheeple not preparing and going on as usual up until the zero hour, most will simply lay on the ground and put paper bags over their heads.  not that it will help.

Fri, 03/02/2012 - 22:28 | Link to Comment selectricity
selectricity's picture

BAML MBS strategists are saying today based on cap rate spreads to Treasuries, commercial real estate is set to outperform no matter what the Fed does:

http://www.dailycollateral.com/2012/03/03/baml-cap-spreads-indicate-a-hi...

Fri, 03/02/2012 - 23:14 | Link to Comment Seer
Seer's picture

"commercial real estate is set to outperform"

When can I stop laughing?

Fri, 03/02/2012 - 23:26 | Link to Comment engineertheeconomy
engineertheeconomy's picture

man they're really pushing the envelope on this "greater fool ' thing...

Sat, 03/03/2012 - 10:08 | Link to Comment GMadScientist
GMadScientist's picture

I'm reminded of the state of the "mall" in my town during Volcker shock. Man, that place was gonna rock. 3 out of every 4 spaces were something that was "coming soon!"

Good thing I only needed the arcade and bookstore.

Fri, 03/02/2012 - 22:29 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Inflationista! Deflationista!

Ya no puede caminar

porque no tiene, porque le falta

marihuana pa fumar

And don't forget: It's gonna be BIflation in this country for a long time

Sat, 03/03/2012 - 00:23 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 for La Cucaracha!

Fri, 03/02/2012 - 22:29 | Link to Comment nmewn
nmewn's picture

Da chickenzzzah...are a comin hooomah...ta rooostahhh!!!

Fri, 03/02/2012 - 22:41 | Link to Comment Caviar Emptor
Caviar Emptor's picture

I been warning about dem chickens here for a while. My version of it: part of exporting inflation involved decades worth of placing deficit dollars in the hands of strategic trading partners around the world: petrodollars, Eurodollars, Sinodollars. Despite the fact that the cash has been "sterilized" that can all go in reverse if the stars are aligned correctly. Note this week thta Tyler reported here on ZH that China is dumping treasuries. Where do you suppose the proceeds from those sales are going? There are many risks to the strategy that was put in place once the gold window was slammed shut. The unwind will be very painful for everyone

Fri, 03/02/2012 - 23:39 | Link to Comment nmewn
nmewn's picture

Very much so...the offloading of the valueless for value in some cases.

I've often conducted the thought experiment...if I were wanting to hide untold amounts of debt "assets"...lol...(debt as an asset, that can always be defaulted on, has always short circuited my brain) where would I hide it from view?

Why, myself, I would hide it in closed societies of course.

Which brings up the larger point, who are the Chinese dumping it on?...this is never stated fully that I have read, the assumption is the sovereign who issued it.

It's a lot like a snake eating it's own tail or hot potato isn't it?

Fri, 03/02/2012 - 23:46 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Xactly. The debt (and dollars backing it) are becoming a hot potato. What I'm also saying is that when the Chinese (and others) start cashing that debt, that propels inflationary forces that end up propagating throughout the world

Sat, 03/03/2012 - 10:06 | Link to Comment disabledvet
disabledvet's picture

you mean "the chicken pot pie" is coming home to roost

Fri, 03/02/2012 - 22:30 | Link to Comment earleflorida
earleflorida's picture

ya know,... throughout my life i've unwillingly [being an optimist that wears his heart on his sleeve?] / reluctantly have tried not to pay homage to negativity, and cynicism. Unfortunately, as the years fly by, i've gotten tired of getting beaten-over-the-head. now, noticing that when things go bad, they go down-hill really fast for a long, very long, lengthy period of time. we are at that crossroad in america,... where at anytime because of our leaders paying so much attention to geopolitical events, threaded with every imaginable diversion, we've  set ourselves-up for the perfect storm. yes,... we have taken our eye's off the ball! what happens when california gets that unthinkable earthquake that takes half the west-coast into the pacific ocean, or when and if we get long overdue droughts or floods in the countries breadbasket. please don't say these events can't happen, or some similar event takes precedent like the gulf-coast hurricanes making their way up the east coast into virginia, n.y., new england and the tornadoes that rip your electric grids to shreds. 

think it can't happen?

just a warning from an outspoken realist, now a foreboding cassandra 

jmo

Ps. our leaders have left our country broke, powerless, neglected, and most importantly vulnerable to any of the above 

Fri, 03/02/2012 - 23:20 | Link to Comment Seer
Seer's picture

"reluctantly have tried not to pay homage to negativity, and cynicism"

Yeah, pay no attention to the man sneaking up behind you who is going to "off" you.  I mean, That's pretty negative! </sarc>

People need to quit putting simple qualifiers on shit.  "Positive" wouldn't exist without "Negative."  What we'll soon experience is a correction to the "Positive;" one could call this "Negative," but a correction is for a purpose: to bring things into equilibrium, and I don't think that that's a "Negative" thing.

Fri, 03/02/2012 - 23:53 | Link to Comment Doña K
Doña K's picture

And as all corrections overcorrect, dark times will be here. I hope that the culpirts get what they deserve for the sake of history, for future generations

Sat, 03/03/2012 - 10:15 | Link to Comment VelvetHog
VelvetHog's picture

The culprits will definitely get what they deserve, but we the unwashed will get what they deserve first.

Sat, 03/03/2012 - 10:02 | Link to Comment VelvetHog
VelvetHog's picture

Agreed.  In Amerika there are no realists.  Only pessimists and optomists.  Pessimists are Satan and Optomists are the chosen ones.  The o's and p's are equally deluded.

Party on.

Fri, 03/02/2012 - 22:37 | Link to Comment monopoly
monopoly's picture

No matter what any of us think or know, it is just going to continue the way it is, with a flash crash or two until after November. Too many in power know how to hold it together. Just put up with it. Trading this market is insanity. Prepare, just continue to prepare. We know it will not hold together indefinitely. But we do not know when this 3 ring circus ends. When it ends, just watch the tents come down, all at once.

Sat, 03/03/2012 - 00:29 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

+1

I would concur with your timing.  TPTB will do ALL in their power to maintain the status quo.  After November, whichever one wins (probably Obama...) can do whatever he wants.

I agree 100% re preparing more.

Fri, 03/02/2012 - 22:37 | Link to Comment non_anon
non_anon's picture

I've been waiting for this since 10/1/2008 when Hank Paulson said the end of the world was here.

Fri, 03/02/2012 - 22:40 | Link to Comment kito
kito's picture

China is not collapsing
There will absolutely be NO qe3 this year
The fun doesn't start until the u.s. faces the debt monster...Europe is just an appetizer

Fri, 03/02/2012 - 22:46 | Link to Comment Caviar Emptor
Caviar Emptor's picture

The US (or anyone else) will never "face their debt monster" unless forced. Ever. Like a burnt out druggie. It's the unwind of the debt arrangements throughout the world that threaten stability. And we ain't seen nothin yet as these may only just be starting to happen. But the rabbit hole is very deep 

Fri, 03/02/2012 - 22:56 | Link to Comment EvlTheCat
EvlTheCat's picture

Who the hell down voted you?  I would say all three of these statements are perfectly correct.  However, we will reassess in 2013.

Fri, 03/02/2012 - 23:06 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I didn't down vote him, but who needs QE 3 when the Fed holds ZIRP, works OT2, and swaps trillions to the ECB right when they do the LTRO.  You didn't think it ironic the FX swap is coming due right around the LTRO?

Also, anyone know if we are still doing POMO ops, because I have not heard about them in awhile.  If so, isn't POMO QE?  So if we are doing POMO, then QE is continuing?  Or are POMO ops for OT2 now? 

Fri, 03/02/2012 - 23:18 | Link to Comment EvlTheCat
EvlTheCat's picture

Maybe I am wrong, but I think that was part of his point.  Never said The Bureaucracy is not goosing the system, by any means possible.  I don't even think kito thinks that.  It's all BS, Mr. Hendrix, but as far as "quantitative easing" goes by name, it won't happen until after 2012.  Don't need those pesky tea party activists to start thinking until after the election.

You are completely correct as unusual.

Fri, 03/02/2012 - 23:33 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Why would they do it by name at all at this point if they can do it behind closed doors?

As unusual.  Is that an insult?

Sat, 03/03/2012 - 00:04 | Link to Comment EvlTheCat
EvlTheCat's picture

One word: theater.  What do they care about insulting the proletariat? The Bureaucracy is fucking them in the ass every day without them understanding it!  Quantitative Easing has become a buzz word to the unwashed masses.  Try some of your other equivalent acronyms on them and they will think you are speaking Chinese.

Some of us get it.  Most don't.  I have been shoving this shit in front of as many of my family members as I can, and they still think that red or blue will save the day.  They think I am nutz.

I don't insult people, unless they deserve it.  You are fighting a just cause.  Do I think you are right all the time?  No.  But I would not insult you, because you speak the truth.

Fri, 03/02/2012 - 23:35 | Link to Comment kito
kito's picture

The virus must run its course before the host is healthy. The fever is still low grade with some chills. 104 with vomiting won't occur till it hits u.s. shores. Right now it's all NyQuil and theraflu. Only masks the symptoms. The u.s. will have no choice but to succumb......

Open a renminbi account before its too late....

Fri, 03/02/2012 - 22:42 | Link to Comment gwar5
gwar5's picture

A $57 chicken pot pie?

I think the money changers know full well it is all going to collapse. They are trying their hardest to make sure everything collapses at once. No safe havens allowed. When the collapse happens TPTB will be holding the hard assets from the money printing frenzy and will introduce a global currency solution.

 

Fri, 03/02/2012 - 22:50 | Link to Comment DosZap
DosZap's picture

Through its misguided policies, the US has been exporting inflation to the rest of the world, raising prices all over the globe (as an example, he cites a $57 chicken pot pie from the menu at a 'working class' restaurant in Australia). 

 Those who think these are MISGUIDED policies, I have a newsflash for you.............by design, is far closer to the truth.

Folks need to remember this is a Global goal, not just a US goal.Where do you start tearing something down?, at its weakest points.

Fri, 03/02/2012 - 23:25 | Link to Comment Seer
Seer's picture

Yes, it's been by design for a LONG time.  It's really the result of over-production, of pushing exports on everyone because your local market is over-saturated; and now, since the markets are global, it's all LOCAL, it's now no longer going to be able to be a controlled shifting around of this "problem."

Fri, 03/02/2012 - 22:57 | Link to Comment JohnG
JohnG's picture

 

 

OT: But....my brother's house was just demolished in a tornado.  Roof...gone.

He did remember when we were kids and my dad tossed us in a bathtub, so he's safe.  In shock, but safe.

The beer is OK though, he needs a light....

Quite a night here in GA.

Fri, 03/02/2012 - 23:03 | Link to Comment EvlTheCat
EvlTheCat's picture

Take care!  Sympathies from Florida.

Fri, 03/02/2012 - 23:16 | Link to Comment Yen Cross
Yen Cross's picture

Good posts. I like smart people.

 

    Get your ass out of bed earlier. YEN

Fri, 03/02/2012 - 23:32 | Link to Comment EvlTheCat
EvlTheCat's picture

Usually up by 6:30 EST, but that is when I am out in the garden.  Zerohedge has to take a back seat, for a little bit, to putting food on the table.  That, or I drank to much alcohol trying to numb my brain from reality.  In either case I am here stalking the forums reading your good works!

Sat, 03/03/2012 - 00:05 | Link to Comment Yen Cross
Yen Cross's picture

I'm Asia time. But I use Sydney time minus 5 for San Francisco. March 11 we move forward 1. In any case , I'm 2.30 west coast time. Or London time/ GMT time. Day before  London fix.

Sat, 03/03/2012 - 00:43 | Link to Comment EvlTheCat
EvlTheCat's picture

:)  Ok, I am 7 minus a 12 pack of beer into my posts.  So I will assume we are speaking the same language at this point!

Sat, 03/03/2012 - 01:17 | Link to Comment Yen Cross
Yen Cross's picture

 A gift http://www.forexpros.com/economic-calendar/

   Thanks for hanging out tonight!

Fri, 03/02/2012 - 23:04 | Link to Comment Eally Ucked
Eally Ucked's picture

I'm still wondering how they keep this game going, currencies compared to each other are ok so nobody will notice what is going on. All those third world countries, or maybe second world too, delivering goods to western countries producing almost nothing, except Germany, and paying with freshly printed shit, are they crazy?

Fri, 03/02/2012 - 23:04 | Link to Comment TheObsoleteMan
TheObsoleteMan's picture

No QE3 this year? News Flash: They are doing it covertly already. Have been since last year.

Fri, 03/02/2012 - 23:43 | Link to Comment kito
kito's picture

Right, gold hits new dollar highs at 1900 because the fed is printing ( logical) but drops down to the 1600-1700 range for the past 8 months because......massive printing is still ongoing by Ben? ...not buying it....face it.....Ben has eased off the print button since the end of qe2. He's not going to risk a blow up going into elections........

Sat, 03/03/2012 - 09:53 | Link to Comment eddiebe
eddiebe's picture

No, gold is down because it got shorted probably naked shorted by unlimited dollars produced by Ben. I guess by your handle that you listen to Nadlers Bs.? Good luck with that mindset.

Fri, 03/02/2012 - 23:08 | Link to Comment PolishHammer
PolishHammer's picture

Free pie is best pie

Fri, 03/02/2012 - 23:17 | Link to Comment engineertheeconomy
engineertheeconomy's picture

It's no coincidence that the oil shortage of 1971 coincided with our captors taking us off the Gold standard also in 1971.

 Has any one besides myself made the connection?

They were buying petro with Gold until the Gold ran out. Since then we have been using our military to force oil producing countries to accept our paper for their crude.

Except now the gig is up.

Get out of assets valued in dollars and get in to physical if you haven't already...

Fri, 03/02/2012 - 23:30 | Link to Comment Seer
Seer's picture

Yes, there's a big correlation here.  In 1971 US oil production also peaked: maybe the ME oil producers were aware of this?  From that point on it became a matter of physical resources battling imaginary wealth.

Fri, 03/02/2012 - 23:27 | Link to Comment Atomizer
Atomizer's picture

 

 

Central Bankers haven't won.  rather are nerved over exposure of a 1913 frail Ponzi system implemented to skim money and create new taxes by keeping the monopoly money flowing. This is not how capitalism was ever designed to work. You’ve been spun a series of stories to convince you into jumping on the Communist bandwagon. There’s Gold at the end of the rainbow is what the Media has been handing down to you.

 

I often tell Progs, if you want to know your future, just watch what unfolds in the UK during a 3-6 month time span.

 

Returning to childhood memories. Click expand tab for a non-speaking British translation.

Public Image Ltd.- The Suit

 

Fri, 03/02/2012 - 23:32 | Link to Comment Seer
Seer's picture

"This is not how capitalism was ever designed to work."

So, capitalism WASN'T "designed" to operate on interest, on infinite growth?

Fri, 03/02/2012 - 23:46 | Link to Comment Atomizer
Atomizer's picture

Study history fuckstick & present your facts before creating a debate on a given baited marxist question.

Sat, 03/03/2012 - 11:22 | Link to Comment WonderDawg
WonderDawg's picture

Fuckstick is a great word that just doesn't get enough use in our society today.

Sat, 03/03/2012 - 00:08 | Link to Comment Yen Cross
Yen Cross's picture

 Capitalism wasn't meant to be skewed. The French are about to learn this lesson. Massive GDP underpinnings. Italy looks worse on paper, but the French are the canary in the coal mine.

Sat, 03/03/2012 - 00:37 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

When FRANCE goes, we all go.

+ 1

Sat, 03/03/2012 - 00:12 | Link to Comment Yen Cross
Yen Cross's picture

 Sarkozy can't stand Merkel. The German employment numbers are Bull Shit! I'm digging deep as we speak!

   The default was in need of a pro! posed backstop.  Greece is toast!

Sat, 03/03/2012 - 00:19 | Link to Comment ISEEIT
ISEEIT's picture

#1 favorite reason I love and respect what the Tyler crew does for us? Let's us have Liberty. We can say anything. We can be free on this site and not be cowed into submission. Tyler stays above the fight. He (she), HER according to my Granddaughter, doesn't get in our way. Tyler understands freedom and Liberty as it was meant to be.

Fucking real.

I'm so sick that this country has become such a cesspool of noxious human waste. So much bullshit, lies so twisted and tied into knots of hellish falseness. A Government class ( your true 1%, were you to take the time to actually consider the truth) that has achieved the dubious distinction of having an overtly criminal gang of soulless sociopaths consuming a nation of perfectly decent, but intentionally, deliberately, disabled human beings.

Blaming us for this was an idea I once entertained.

Not any more.

We have been raped.

It's all about the lies, the lies.

And in the spirit of 'bi-partisanship'.....

FUCK YOU BARACK 'SHITHEAD' oBAMA.

AND FUCK YOU 'BURN IN HELL WITH YOUR DADDY' G.W. BUSH!

I hope you lose.

Sat, 03/03/2012 - 00:54 | Link to Comment Westcoastliberal
Westcoastliberal's picture

You see it like I do.  We've been lied to countless times going all the way back to FDR and it's gotten progressively worse.  What we can do about it, I don't know, but I do know I'll not stand idly by much longer.

Sat, 03/03/2012 - 02:54 | Link to Comment the tower
the tower's picture

What you can do is start a movement to bring production of Apple products back to the USA.

How?

Facebook/Twitter it, make the movement grow, stop buying Apple products, iTunes tracks, AppStore Apps, till Apple caves in...

Why Apple? As it's the ultimate icon of wasted American success.

It will send the strongest signal to TPTB that the American people are taking rights in their own hands.

THAT is what you can do.

Question: Why is it that Americans sit on their couches till the sky falls down?

Sat, 03/03/2012 - 08:17 | Link to Comment The Alarmist
The Alarmist's picture

But ... But ... But my iPhone would cost $65 more! I would get another month of data service for that! Keep those Chinese slaves working, dammit!

Sat, 03/03/2012 - 14:20 | Link to Comment Abitdodgie
Abitdodgie's picture

I think an armed march on the white house should be organised, then they will listen .

Sat, 03/03/2012 - 09:51 | Link to Comment VelvetHog
VelvetHog's picture

After a world-class rant like that I might have you have your name tatooed on me left leg.  ...maybe not, but I really liked the part about BSo.

+1

Sat, 03/03/2012 - 00:30 | Link to Comment meatball
meatball's picture

If you have a lot of money in the stock market, you have been doing very well, well enough to more than offset the inflation at the pump and the grocery stores. The problem is the poor and the middle class don't have much if anything in the market.

Sat, 03/03/2012 - 14:21 | Link to Comment Calmyourself
Calmyourself's picture

Yes you have been doing well you also have more blind courage (aka stupidity) than any thinking man ought to possess..  That sombitch is going to roll over on you one day and dive and you will not be let out of the cage.  In fact it will have slammed shut behind you that will be the almost inaudible noise you hear right before you hear yourself screaming.

Sat, 03/03/2012 - 00:50 | Link to Comment Westcoastliberal
Westcoastliberal's picture

But don'tcha know, NOW's a great time to purchase a NEW HOME!

(a word from the NAR)

Sat, 03/03/2012 - 00:51 | Link to Comment blindman
blindman's picture

in 71 the gold standard was scrapped. the long bond and
many residential mortgages matured in 30 years, 2001.
derivatives and a housing bubble were inserted as a means
of continuing the feral reserve note fiat system of debt.
speculative leverage paper derivative nominal fantasy in
need of a main plot and function.
three high rises collapsed mysteriously in new york city, not two.
open lawless accounting and finance were embraced to sustain
the global financial system to a mind numbed global population
recently exposed to the internet. shadow systems emerged
exercising power unmatched since the splitting of the atom
or the establishment of the first empire. money as debt has
been the tool of leverage that empowers the shadow empire that
uses non-shadow sovereigns and that "legitimacy" to control
the flows of human energy from the shadows, the problem is the
people can see the difference. ( they will not denounce leverage and debt willingly,
it is their ONLY source of control/power)
the main plot. mind control, control of energy and its applications.
indenturing the many in servitude from the perspective of depression
and cowering recession.
.
cross talk... the 24 year olds making 2 million a year, knowing nothing, while the
elderly were losing their nest eggs and their capacity to read
the quarterly statements, this going uncorrected and rewarded will
only end badly and unexpectedly but for the good. many will just close
their eyes and even the loss of virtue will serve the greater good
after it has served something else for so long it is only balance that
would dictate that it must go the other way.
.
rain is still rain and roses remain roses.
tangential derivatives require a main plot and function
and there is the rub. they did not figure the durability
of the human spirit.
.
more random ... when there is union in purpose words, symbols
and expressions will not be required. just presence and breath.
those things self evident will be known, again. a new generation
realizing the self evident in a new environment, a new time,
a new paradigm, time to realize what is now self evident.

as has been said it has all been said.

Sat, 03/03/2012 - 01:03 | Link to Comment SHRAGS
SHRAGS's picture

 

I haven't listen to the interview, but from Tylers summary, $57 Pot pie in a "working man's restaurant" is not the norm.  Prices are high in Aus, but not that bad yet.  I suspect he visited the tourist & business area's, but get outside of them there is a noticeable increase in prepared food, but not that outrageous. In the regional mining area's price are high, but so are the wages - 150K for a basic job, but a room at a pub will set you back ~$280 per night.

I live in a regional area outside Sydney, on the more expensive end of the spectrum. All prices in USD at and exchange rate of 1.07 AUDUSD & include the GST (Goods and Service Tax at a rate of 10%)

Gas - I paid $1.45 per litre for premium today ($US5.54 per gallon), a big chunk of the difference is because of our excise tax.  

Electricity up 20% last year, and another 20% each year for the next two years thank to the Gillard carbon tax & forcing the utilities to use renewable (solar rebate scheme).

My local Thai restaurant has stir fried dishes of beef chicken or pork for $15.70. most dishes are between $15 and $20

Supermarket, half a celery $2.32, potato's $2.78Kg ($1.26lb), prime mince $13.07Kg ($5.94lb).

Probably higher prices than the US, but our wages are also higher, especially at the lower end. The average wage is ~65K. The main expense for most working people is the mortgage. This is where we have all ready had our inflation for 25+ years. Property is outrageous overpriced and the mortgage sucks up a significant component of peoples pay.

 

Sat, 03/03/2012 - 08:06 | Link to Comment Antipodeus
Antipodeus's picture

Pretty good summary, and your prices are generally accurate.

 

$57 Pot pie in a "working man's restaurant" (whatever that's supposed to be) is BullShit.

 

Someone above likened Oz to living in a penitentary -- w/out anything specific,  Sounds like BS as well.

 

You don't like it, don't come/stay here -- all the more room for the rest of us.


Sat, 03/03/2012 - 08:29 | Link to Comment The Alarmist
The Alarmist's picture

Must have been Daniel's in Sydney ... not exactly working class.

Tip: order the rib-eye and tell them you don't want any sauces and watch the otherwise chatty wait-staff go speechless.

Sat, 03/03/2012 - 01:04 | Link to Comment q99x2
q99x2's picture

Oh Boy two non-GMO thinkers. What a treat.

Sat, 03/03/2012 - 01:19 | Link to Comment Atomizer
Atomizer's picture

 

 


Hello Seer.

Your attempts to disguise central planners bourgeoisie wet dreams where publicized before I was even born.

Socialism Explained - Abbott & Costello Explain The Stimulus Plan

Tag, your it. :P

Sat, 03/03/2012 - 01:15 | Link to Comment canuck
canuck's picture

What I like about this site is that it is not exclusively a roost for europe hating yanks with a lot of understanding of markets. In fact most of us are concerned about world events and are providing each other with very keen observations about how this is all going to pan out. And very self-critical, so the focus is on the problems in America.

Why am I here then. I too think I may have observations from a very self-critical European context. I've never worked in the markets, just read about them for 30 years. Kind of an armchair economist. Probably not worth listening to, hey but left alone and respected or guided along, it all works out.

I agree that the euro is a bizarre monetary experiment never attempted and that its days are probably numbered. We may be underestimating politic will when push comes to shove, but even then, it is too complex for the average politician to understand and they are fed whatever by their advisors, each with their own interests. And those interests may be in a break up of the euro while presenting them as not being so. And that politicians are even bright enough to look into that, and to look at the commulative effect of the advice they're getting from all partners they listen to is well beyond anyones capacity. We are all locked into the big system. I think looking at it, the euro in the context of the rest of the world is about as weak an instrument as was ever considered. It adds an incredibly complex political story over monetary affairs in a monetary system that has no illusions about being tied to gold. So I think any big financial bang in the system will likely erupt here. I could go on and will do so in further posts of course.

 

 

Sat, 03/03/2012 - 01:27 | Link to Comment Yen Cross
Yen Cross's picture

I love Europeans ya Canuck! I love your "Molsen" brewing ass to. That's NOT the point.

  Your country is divided, and in Perma Frost. Europe is Cluster Fucked!   Any Questions?

  I hope I can afford to answer them, as The United States is Fucked beyond all Fiscal Recognition!

Sat, 03/03/2012 - 01:31 | Link to Comment Atomizer
Atomizer's picture

 

 

After you collect data mining information, you change laws to create jobs and begin collecting new revenue fines. Don't just focus on the US, global plans are emerging worldwide.

http://blogs.wsj.com/law/2012/02/27/oh-canada-northern-neighbor-becoming-new-hot-spot-for-big-securities-claims/

Sat, 03/03/2012 - 01:26 | Link to Comment q99x2
q99x2's picture

The last line was great too. "You better hope the economy doesn't recover or we are really in trouble then."

The fact that Corzine was not prosecuted is symptomatic of the NWO that may be planning to allow Governments to redefine rules and laws to move all wealth to them during a transition to a world currency.

Holy Crapola wonder if DHS is hiring.

Sat, 03/03/2012 - 01:31 | Link to Comment canuck
canuck's picture

And Merkel and many other may think that they must ensure that world inflation must be counteracted by this very weak instrument is just a political story and has the potential to turn Europe into a version or worse of America in a very short time. The story for the average joe has to be that their is willpower to save the euro. It will be difficult of course. If too many people realise the sacrifice either way, at least in the way things are going, you will get an incredible demand contraction and then things are going to get really ugly. So as much as politics is always about confidence, I wonder how long the current confidence about things like LTRO etc and all these new instruments they have that people have never imagined necessary (so is impossible for them to assess except by the illusory size of the operation) will evaporate.

 

What does this do with all the contracts written in euros? I'd like to get some insights into that from others.

Sat, 03/03/2012 - 01:31 | Link to Comment bahaar
bahaar's picture

So US prints with the intetion of devaluing it's currency.  Exports inflation.  China gets mad that value of its dollar reserves are plummeting.  So China dumps US treasury/ dollar to teach US a lesson.  Result?  Massive devaluation of US dollar.  Mission (United States') accomplished.

Sat, 03/03/2012 - 02:49 | Link to Comment the tower
the tower's picture

Ermm... NO. The point of exporting inflation is to export it. When China dumps US treasuries/dollar, inflation hits home and the reserve currency will collapse. Result? Empty shops, poverty, hunger, homelessless... Think your average third world country...

Sat, 03/03/2012 - 01:33 | Link to Comment canuck
canuck's picture

Well, Yen Cross, I've never studied financial law, so is the euro breaking up going to cost about 100 billion dollars if we even had the lawyers to arrange it? Or is the break up going to lead directly to financial armagedon? Something has to give somewhere and it's too damn complex for me to even approach let alone get to grips with.

Sat, 03/03/2012 - 01:49 | Link to Comment Yen Cross
Yen Cross's picture

Hence CAC's and 75% participation?

    A safe estimate is 7-9 Trillion Euros, based on " Lack of mark to market " costs,. Hedge funds are drooling!

Sat, 03/03/2012 - 01:55 | Link to Comment Clowns on Acid
Clowns on Acid's picture

Canuck...figure it out...financial law? Geta grip dude...there is no law right now!!

Criminals are printing helter skelter, Jon Corzine is strealing a billion. The Fed is prointing to bail out the well heeled leveragers of paper money that were caught way too feckin' long...

It's not complex...  once there is no law....

Sat, 03/03/2012 - 01:58 | Link to Comment Yen Cross
Yen Cross's picture

Who is John Corzine? Oh that MF Global ass hat that is living in the Amazon.

Sat, 03/03/2012 - 01:39 | Link to Comment Bartanist
Bartanist's picture

As long as money continues to leave the US and is accepted globally there will not be an excess of money here at home to cause hyper-inflation. Trouble comes when the US dollar becomes a second rate currency overseas or money starts making its way back to the US.

Sat, 03/03/2012 - 01:46 | Link to Comment canuck
canuck's picture

So I've thought for months that what will happen is a version of the euro break up. The Germans are principled enough to leave, arrange it with maximum efficiency under the impossible circumstances and leave the rest scratching their heads with how to support the euro from there. Which leaves us here in the Netherlands very very confused (underneath the political rhetoric then). For us to arrange to join Germany directly is once again a complex problem involving sovereignty and solutions going forward.

Sat, 03/03/2012 - 02:00 | Link to Comment Yen Cross
Yen Cross's picture

The Germans are in a catch "22".  Are you dyslexic? Short the Euro and hand out life preservers on the Titanic!

  If the PiGGs default all at once the Deutchmark would go Ape Shit , Japan style. A 100k 3 series BMW? Ya right!

Sat, 03/03/2012 - 01:52 | Link to Comment Clowns on Acid
Clowns on Acid's picture

No shiite Dick Tracy. I mean its n0ot obvious to anyone who has studied Economics 1 feckin' 01?

"Money is a commodity used as a medium of exchange.

Like all commodities, it has an existing stock, it faces demands by people to buy and hold it. Like all commodities, its “price” in terms of other goods is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it. People “buy” money by selling their goods and services for it, just as they “sell” money when they buy goods and services.

Money is not an abstract unit of account. It is not a useless token only good for exchanging. It is not a “claim on society”. It is not a guarantee of a fixed price level. It is simply a commodity."

So...if the Fed, for dfeckin example, creates more paper money...what the feck do yopu think is going to happen? 

Yaysu feckin christie....

Beranke, Greenspan, Giethner...must be held accountable...

Sat, 03/03/2012 - 02:04 | Link to Comment Yen Cross
Yen Cross's picture

No Merve the Swerve, or Colony speak? Personally I think the BoE is ahead of the curve, and am buying the DEEP dips. The mainland has screwed the Pound, and I'm glad they kept it Sovereign.

Sat, 03/03/2012 - 02:04 | Link to Comment TheObsoleteMan
TheObsoleteMan's picture

Kito; What makes you think Election years matter anymore? Sure, they still do in some particulars, but by and large they mean little, other than to distract the fools who still think they matter. You speak as if Ben can prevent a blow up whenever he wants. This is no longer the case. All he can do is manage the decline. He is like a pilot who is pulling back on the yoke with all of his might as the aircraft goes into a inverted roll. Sure, it buys a little time, but the end result will still be VERY bad.

Sat, 03/03/2012 - 02:06 | Link to Comment Below Zero
Below Zero's picture

A man tried to sell me a cow pie for $10 once but it did not have any pot in it. I was able to restrain myself and say no deal. I wonder how many chicken pot pies were actually sold at that price if any and to what idiots? I would like their names so I can sell them some MBS at face value. Only a fool would believe this tale of pot pies. There appears to be plenty of them here, buying into this story.

Sat, 03/03/2012 - 21:09 | Link to Comment Cathartes Aura
Cathartes Aura's picture

cow pies have more affinity to mushrooms, than pot.

just sayin'

Sat, 03/03/2012 - 02:11 | Link to Comment canuck
canuck's picture

I am well aware, if you look at derivatives for instance, that any semblance of law or necessary and minimal transparency in the system is non-existent. Only to the degree the great unwashed still believe we have people to figure it out and all will be well, impossibly difficult, but well.

Sat, 03/03/2012 - 02:24 | Link to Comment Yen Cross
Yen Cross's picture

Derivitives? You are Loonie!   We are talking tangible GDP! Those pine cones are scuffing your lips!

Sat, 03/03/2012 - 02:20 | Link to Comment canuck
canuck's picture

And to expect real financial solutions (other than together trying to hold back either inflationary or deflationary madness breaking out tomorrow) coming by way of the dollar is also illusory. So the madness of the inevitable crisis will break out here first and have Americans left with a wry grin that they don't have it as bad. I am not one to put much faith on some Master Plan involving Global Government even existing or being even remotely sustainable. You will never ever have a world currency. Ever. So that these currencies will remain in existence, and all of our banks levered up with each others garbage, stock ownership dispersed worldwide, no capital controls, yes it is all a matter of time before the crisis comes. As an individual you can buy as much gold as you want and become rich in the new world and protect yourself with guns. However, I am more interested to see what will happen in the time we have left before that kind of an outcome. We can all decide to take a last trip somewhere and do a heroin overdose if that reality hits. I don't know how interested I will be in living in a Mad Max world.

Sat, 03/03/2012 - 09:24 | Link to Comment engineertheeconomy
engineertheeconomy's picture

We are already living in a mad Max world. Where the hell have you been? In an underground concrete bunker?

Sat, 03/03/2012 - 02:22 | Link to Comment Heyoka Bianco
Heyoka Bianco's picture

"And I think that we are forgetting that if China says, “Okay, guys, we have had enough of this. If you do any more QE-ing we are going to dump the US Treasury bonds that we are holding and we are going to use the money to save our own economy.” If we see that kind of reaction from China, it really could put a monkey wrench into the plans of the central banks to inflate this all away."

 

This tard clearly has no real market experience. If China 'dumps' its Treasury, what kind of money do you think they're going to make? The primary reason they haven't unloaded them already is because it would be slitting their own throats: devaluing their single largest asset in a market that's already overloaded with worthless paper.

And if reports are to be believed, China's banksare already laboring mightily under bad loans and the endles and huge losses incurred by holding those very same Treasuries.If they try to get out, then what do you think happens to they're already sketchy capital reserves? China's balls are in the fire on this whole mess too.

Sat, 03/03/2012 - 02:30 | Link to Comment Yen Cross
Yen Cross's picture

China finances their Exports Via the fed. If China dumps their tresuries the yuan would go PARABOLIC!

Sat, 03/03/2012 - 02:32 | Link to Comment mess nonster
mess nonster's picture

Right-O. China's loans to us are China's problems, not ours. Finally, we hold the madman card- "If you all don't play by our rules, we'll attack Iran, and thus set fire to not only our own ass-hairs, but the entire world! HA-HAHAHAHAHA!!!

Oh, wait a minute, that was Israel speaking.

Sat, 03/03/2012 - 11:53 | Link to Comment ltsgt1
ltsgt1's picture

Hey, the madman card works very well for the North Korean. We should definitely try to play that card. Come to think of it, if the money printing card were no longer effective, what other card do we have up our sleeves?

Sat, 03/03/2012 - 02:27 | Link to Comment Yen Cross
Yen Cross's picture

 Ok, now I have a direction. The Keystone , Lower hub from CUSHING to the Gulf. It all makes sense now.

 

Sat, 03/03/2012 - 02:28 | Link to Comment mess nonster
mess nonster's picture

You ARE the great unwashed- how well do you feel now?

 

Sat, 03/03/2012 - 02:31 | Link to Comment Yen Cross
Yen Cross's picture

Time zones do matter.

Sat, 03/03/2012 - 02:34 | Link to Comment mt paul
mt paul's picture

let them

eat pie...

Sat, 03/03/2012 - 09:25 | Link to Comment VelvetHog
VelvetHog's picture

chicken pot pie

Sat, 03/03/2012 - 11:26 | Link to Comment lakecity55
lakecity55's picture

Fur pie is my fave.

Bald Beaver #2

Sat, 03/03/2012 - 02:36 | Link to Comment canuck
canuck's picture

So Yen Cross, you think a euro break up will not be considered WHATEVER the cost? That kind of comforts me somewhere, but I don't believe it.

Sat, 03/03/2012 - 04:31 | Link to Comment Yen Cross
Yen Cross's picture

I stated that the deutschmark/ northern euro, would be tough on German exports. Nothing more and nothing less. I think there will be some defaults, but the break up you are suggesting is something I can't quantify yet. There is a meltdown coming though.

Sat, 03/03/2012 - 02:41 | Link to Comment canuck
canuck's picture

And while I can appreciate jokes about jumping into a boat and paddling to an island or wherever, yes I like my dark humour, I am also a little boring and would like to consider scenarios of the future of Europe.

Sat, 03/03/2012 - 02:42 | Link to Comment peterh101
peterh101's picture

I laugh in your face silly knit-wits. You guys have no idea about Australia. You have a totally distorted picture of your own country (MSM), what liberty is....hahaha, what freedom is......hahaha, and where you will be in 20 years time. We can look out at the world from where we are in Australia and what a joke it is. In Australia we have never ridden kangaroos down the street, and we certainly don't pay any more than $13.50 for chicken pie with a load of veges and gravy at the local working mans club. Last night I paid $6.99 for a full sized family roasted chicken. I don't know where the author ate out , maybe the 'Versace' (but certainly not a working mans restaurant). We have an unemployment rate of only 5.3%, the only street sleepers we have in this country are those who choose the lifestyle, we can walk into any public hospital in Australia and receive A1 healthcare and treatment for free, and we don't have a dozen departments of 'Big Brother' watching our every move (yet). I'm sorry, but you guys and girls have a totally distorted picture of our country. 

Sat, 03/03/2012 - 07:12 | Link to Comment Gatts
Gatts's picture

Nice one Peterh, insult everyones intelligence over the cost of a chicken pie. No one really gives a shit about a working mans chicken pie with vegetables. You have managed to miss the entire point of the article about exported inflation of which Oztralia is soaking up with glee. There is nothing like adding zeros to the price of your home to make you feel wealthy enough to go out and leverage your new found 'equity' on a brand new SUV. Have you looked at personal debt levels in Australia and where all those over inflated house prices are going rather than chicken pie.
Please continue with your ever so commonly reproduced Aussie nationalism, your govt. salutes your obedience.
As for sledging yanks over their MSM brainwashing, where did you get your unemployment figures from pray tell? Your dream machine govt. considers 1 hour of work per week as employed, and have you stopped to think about the countless masses that are shoved into 'up skilling' courses to pad the numbers.
There is no need to sell your MSM mantra of the lucky country here.

Sat, 03/03/2012 - 09:50 | Link to Comment wonderatitall
wonderatitall's picture

take it easy on them. i mean , besides putting down a couple of keggers and a barbie what the  hell are australian.  dont worry once the obama/bush regime gets us our "free" healthcare we can stay as drunk as "australians" and have no worries..eh mate...australians...criminals and drunks...everything will be rosy and uneployment out the wazoo...just like australia. they count having a barbie as working ...good times

 

Sat, 03/03/2012 - 09:45 | Link to Comment wonderatitall
wonderatitall's picture

australians? a bunch of criminals who think obama is a piker. free you say. i love the nazi thought process, such as it is that it is free. do the doctors work for free. do your nurses? what is wrong with the infantile democrat mindset that they love slavery so much?

...and new zealand is the real country...you and you gday shit can stick it...australians...too funny

Sat, 03/03/2012 - 12:29 | Link to Comment debtandtaxes
debtandtaxes's picture

Australians are known for their arrogance, narrow mindedness and feelings of entitlement displayed every time they travel outside their borders for cheap all inclusive vacations on the islands.....

Oh wait, sounds like 'mericans ..... hmmm

 

Sat, 03/03/2012 - 11:24 | Link to Comment AC_Doctor
AC_Doctor's picture

peterh101 your housing bubble in on par with the Vancouver Canada area, and no you guys are not immune to future economic insomnia.  Plus, you are in China's line of sight with a low percentage of private gun ownership and a very small standing army, so who is watching out for those Maersk container ships full of Chinese Army regulars looking to feed on your local Roo population and strip mine your beautiful country clean?

Sat, 03/03/2012 - 02:50 | Link to Comment mess nonster
mess nonster's picture

I've ridden a kangaroo...oh wait, she wasn't a kangaroo!

Sat, 03/03/2012 - 03:11 | Link to Comment TheObsoleteMan
TheObsoleteMan's picture

Peterh101; The phrases "best healthcare in the world" and "completely free of charge" don't go together. Sorry, but there is no such thing as a "free lunch". SOMEBODY HAS TO PAY. That is what is wrong with so many people these days, they want the best of everything, yet pay for none of it. That mentallity is why we are witness to the current global finacial meltdown.

Sat, 03/03/2012 - 04:35 | Link to Comment EmileLargo
EmileLargo's picture

The day the politicians bribe the people with their own money, it will be the end of the American republic. - Alexis de Tocuqeville

Sat, 03/03/2012 - 08:22 | Link to Comment Antipodeus
Antipodeus's picture

You're quite correct there, OldMan.  Our pretty-excellent health care isn't "free" in the sense that it costs us nothing.  We all pay for it out of our taxes -- we like to buy our civilisation that way.

 

And if you're on any sort of welfare, you can get it VERY cheap -- no-one NEED go without if they're 'in need'.

 

There's a reason why if you buy travel insurance. there's one rate for the rest of the world, and another one for the USA.

 

Sat, 03/03/2012 - 04:31 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Since all the inflation is being exported, would it be possible for there to come a time where other nations that have already imported a lot of our debt could turn around and for the average consumeer in that country (lets say for the sake of argument AUSTRALIA) could find that for the average person it would be cheaper to send money to a relative in the USA to buy goods and have them shipped into australia?

 

IE: Might it be possible that everyone outside America suddenly wants to buy American goods from American store shelves ?

 

I know I can send a chicken pot pie to Australia for probably half the price of one there XD !

Sat, 03/03/2012 - 07:54 | Link to Comment Strange-Currencies
Strange-Currencies's picture

Ideology rules, right? Statesmen and central bankers are idiots, obviously, and passionate and highly opinionated people who leave comments to the articles on ZH know how to fix things, if only someone let them do it.

So tell me how we profit from all this? "Buy gold" does not count as a valuable piece of advice (this I know already). -

Sat, 03/03/2012 - 09:14 | Link to Comment engineertheeconomy
engineertheeconomy's picture

 

I have been stacking Gold for decades. Because of that I can afford to retire comfortably. Also, I can afford to pay cash for another home or two if I choose. Because the Gold price is going up exponentially, in a few years I will be able to buy myself an entire town.

I don't know what the hell your problem is.

Sat, 03/03/2012 - 11:23 | Link to Comment lakecity55
lakecity55's picture

I have a physical Au supply as well, but went into silver, as I think the gap between silver and gold is too great. I think silver is going to catch up? Anyone have any feedback?

Thanks.

Sat, 03/03/2012 - 08:17 | Link to Comment Silverhog
Silverhog's picture

Just like Gold & Silver, when are they going to dump 250 million pounds of beef on the market to knock the price down? I was at BJ's yesterday and wow, my $200 did not go very far.  

Sat, 03/03/2012 - 09:02 | Link to Comment engineertheeconomy
engineertheeconomy's picture

not going to happen. the bankers already own all the farms and ranches. time for a revolution?

Sat, 03/03/2012 - 08:37 | Link to Comment poydras
poydras's picture

37 years of trade deficits is truly remarkable.  I suggest that few in 1975 could have imagined it lasting that long.  The unsustainable has to end sometime.  That end is likely to be a bit ugly.  It is fine until a critical mass of participants conclude otherwise.

Sat, 03/03/2012 - 08:43 | Link to Comment BandGap
BandGap's picture

The dance gets faster, the cycles get shorter and at some point an anisoptropy will disrupt the system. Then any directional flow becomes chaos in an instant.  When it becomes every man for himself don't be near the exit doors.

 

Sat, 03/03/2012 - 09:05 | Link to Comment ivars
ivars's picture

A scenario how things might start to unfold very soon with a critical poiint in May 2012 (EUR down, USDx up, Silver UP, DJIA UP, GOLD steady:

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=36724#p36724

Sat, 03/03/2012 - 11:53 | Link to Comment AC_Doctor
AC_Doctor's picture

Ivars, I don't see how silver can go up without gold tagging along.

Sat, 03/03/2012 - 12:54 | Link to Comment ivars
ivars's picture

Silver may be first to get attentions of masses due to its relative cheapness.

Sat, 03/03/2012 - 14:52 | Link to Comment AC_Doctor
AC_Doctor's picture

I could see that it being more affordable could make it more attractive to investors.  I believe the upside in silver is 30x and gold 12x returns within 3 years. 

Sat, 03/03/2012 - 11:53 | Link to Comment AC_Doctor
AC_Doctor's picture

DT

Sat, 03/03/2012 - 09:12 | Link to Comment jfarrall
jfarrall's picture

I Didn't see this one, and it is my personal favorite Donnie quote from Just Shoot Me:

   http://www.youtube.com/watch?v=ApmvDU5RmyY

More here on vacant houses being stripped of plumbing for the value of the copper pipes in Cleveland Ohio:

   http://blog.cleveland.com/parmasunpost/2012/01/parma_police_ask_for_resi...

   (Take it easy on the Cleveland jokes - Parma is not an inner-city kill zone, but a very middle class suburb with a typically low crime rate)

OH, and my favorite, more pressure for Greece to default, withdraw, or otherwise get lost from Germany:

   http://edition.cnn.com/2012/03/01/business/greece-fund-delay/index.html

   (So the saga continues, Greece lied to be able to live off of low rates afforded to it, now has no chance of paying... and Germany doesn't really want to pay either)

One more just posted worth a read - In case you think Germans work so much more than others in Europe (or other places):

   http://fullcomment.nationalpost.com/2012/02/27/lorne-gunter-its-probably...

 

Sat, 03/03/2012 - 10:42 | Link to Comment spinone
spinone's picture

Townsend made a bunch of money in the dot com boom, and got really interested in economics with ChrisMartenson.com.  But being rich didn't make him smart.  Why is it rich people think they're smart?

Anyway, inductive reasoning (specific to general) is specious.  From the specific fact that he saw a pot pie for $57, he generalized that the US is exporting inflation.

It would be logical to use deductive reasoning, from the general to the specific, or to use more than one observation of pot pie price.

Waste of time.

Sat, 03/03/2012 - 10:10 | Link to Comment Bob Bercy
Bob Bercy's picture

What a load of unsubstantiated tosh. "I think, I think, I think". Who is this guy and who cares what he "thinks"? If he had spent his past several years acquiring a basic knowledge of monetary economics rather than swanning around the world what he "thinks" might have been worth reading. As it is I can only think that ZH is getting more and more deperate for anything bearish...

Sat, 03/03/2012 - 14:57 | Link to Comment Mary Wilbur
Mary Wilbur's picture

Anecdotes are not evidence. I have no doubt that the huge increase in the EU and US paper money supply will have and is having consequences (China is already reducing its US dollar supply) but the future cannot be predicted. All anyone can do is prepare for all kinds of possibilities. One thing does seem certain the level of risk in the world economy seems to be increasing, and its quite obvious the elites have no idea what is happening nor I suspect do they care.

Sat, 03/03/2012 - 11:18 | Link to Comment rsnoble
rsnoble's picture

I live in the US and I just put a chicken pot pie in the microwave. Delicious. It cost 99cents.  Guess I my as well get as fat as I can since I won't be able to afford to eat in the future.  I don't really want to give up my lifestyle.........but I don't want to force other countries into starvation either. Which is inevitable coming here it looks like......and we all know by now where the problem is.

Then again maybe I don't wanna get fat. Chopping firewood, growing a garden, chasing chickens with an ax and taking shifts to guard the premises from the zombies is hard work.  Our roles will shift from consumerism to pure survivalism.

Speaking of which I'm always making crazy videos on my cellphone and sending them to friends.  Usually when we're all drunk everyone gets a good laugh and sometimes they even request them lol. At any rate I was cutting wood the other week and a huge piece of bark fell off the tree and it had those white worms you see the natives eat all over. So, being drunk as I was, got my cellphone out and grabed a small handful and popped them in my mouth. Starting chewing. Instant gag reflex I threw that shit up all over.  I'm sorry to say......we're just never going to make it. LOL.

 

Sat, 03/03/2012 - 11:41 | Link to Comment optimator
optimator's picture

After a thoroughly exhaustive study on the best place in the world to live where one will get the most stretch and acceptance of dollars and/or gold, I've arrived at not only the country, but the area of the country to live in. If you like living on the shore the place is Wonsan, N. Korea. If you like the big city it will be Pyongyang.

Sat, 03/03/2012 - 15:55 | Link to Comment mimsy
mimsy's picture

I don't have a problem with Martenson's or Townsend's analysis on what is happening globally. I am a bit confused on what is going on with bonds.

If we are in a liquidity trap, which essentially means that money is not flowing in the real economy but is sloshing around in the banking system solely used to create massive profits for banking executives and speculators, then why is the Russel 2000 at all time highs? Martenson says that bonds are not attractive to investors due to 2% or lower yield, so that is driving stocks up. Wouldn't that suggest that we are not in a liquidity crisis, and that the money is reaching small businesses? I could be just severely misguided, but maybe someone could clear this up for me. btw first post sup.

Sat, 03/03/2012 - 17:24 | Link to Comment altlaw
altlaw's picture

The $57 Pot Pie is a terrible example.  Restaurant Food in Australia has always been expensive compared to the US for at least 2 reasons.  1) Servers are paid a living wage and that wage is reflected in the price of food.  There is no (or minimal) tipping in Australia; and 2) The taxes are built into the price.  I was recently in Australia and the prices were high, though not as high as Erik suggests.  However, if you take a $25 entree and add 8% tax ($2.00) plus a 15% tip ($3.75), the US price becomes $30.75.  This undermines his credibility.

Sat, 03/03/2012 - 21:29 | Link to Comment monkeyboy
monkeyboy's picture

What kind of moron orders a chicken pie @ a strip club?

$57 chicken pies do not exist in this country in working class restaurants.

Have a look at the top restaurants in Oz(Tetsuyas, Vue De Monde, Pier, Press Club, Rockpool(has some incredibly expensive steaks!) Nobu, etc) no one is chraging $57 for a chicken pie. A full degust is from $120-$250 from the top restaurants in the country.

$57 for a chicken pie @ a 'working class' restaurant - tell him he's dreaming! Still get $10 parma and a pot on a tuesday night at quite a few pubs here in Melb - working class restaurants.

In saying all that Oz is pretty expensive relative to the rest of the world, but like everything in life knowing where to buy helps.

 

 

Sun, 03/04/2012 - 19:41 | Link to Comment covert
covert's picture

why the black swan obsession?

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