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The Fed Is Losing The "Race To Debase"

Tyler Durden's picture


As we pointed out about a month ago, in "While You Were Sleeping, Central Banks Flooded The World In Liquidity" as the world was focused on headlines whether or not the Fed would step up as it always does when the market is sliding, and unleash the monetary floodgates, it was not Ben Bernanke, but eveyrone else that hit CTRL+P and took the place of the Fed, of note the primary central banking peers among the Final Four - the ECB, the BOE and the BOJ. And why not: after all the hope was that since electronic money is electronic money, and can be moved from point A to point B at the push of a button, it would be used primarily to reflate stocks around the world, but mostly where the path has least resistance - the US. What was not accounted for was that money would also be used to inflate commodities such as oil - a key factor when delaying further US-based easing in an election year. However, more than even record for this time of year gas prices, there was one even more important outcome from this chain of events. As the following chart from Willem Buiter shows, in its fake attempt to show monetary restraint, the Fed has gone straight into last place in the "race to debase." Needless to say, in a world with $25+trillion in "excess" debt (debt which would need to be eliminated simply to reduce global debt/GDP to a "sustainable" 180% per BCG), last is a very bad place to be...

Of course, our frequent readers will note that this is the same chart that we have presented, however in the form of the main correlation chart for 2012 as we have dubbed it - i.e,  the ratio between the size of the ECB and the FED vs the EURUSD. What is probably also quite disturbing is that the Fed is "losing" even after expanding by a massive 232% in the past 5 years, a number that is only topped by the Bank of England. To quantify, the Fed is now responsible for "only" 20% or so of US GDP, compared to 30% for the ECB and BOJ. To further quantify, to get back to first place in the race to debase, the Fed will have to do at least another $1.5 trillion in QE.

Also, having become a buyer of last reserve for credit money, it is easy to see why one should be outright skeptical of US GDP "numbers" - from 6% of US GDP, the Fed now accounts for a whopping 19% - this is "growth" that would not have happened unless the Fed, via debt monetization would have allowed it. Said otherwise, net of Fed deleveraging (if it ever unwinds its balance sheet of course), US GDP would be a 13% lower

Not only that but as the chart above shows, global GDP has about $6 trillion in "one-time, non-recurring" growth factored in.

... Only, and let's not fool ourselves here, it is not one-time, and certainly not non-recurring.

As shown here before, the biggest problem for the world right now is the disappearance of "money good" assets, and the redirection of investing capital from worthwhile growth activities such as R&D into shareholder placating pursuits such as dividend issuance (and overall cash hoarding), and job dilution -a practice which as described yesterday may have well killed the virtuous cycle. As such any future global "growth" will be exclusively a function of further "nominal" improvements, achieved only through further currency dilution.

And now that the economy has once again hit a downward inflection point (with 12 of 14 economic indicators coming in negative), and since the Fed has some serious catching up to do to get back to the front of the race to debase, it is only a matter of time before it becomes clear that Obama reelection be damned, it is Bernanke's turn to hit CTRL+P. Because in a world in which only currency devaluation matters, a 10% debt/GDP handicap is most certainly a nominal aggression that will not stand...


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Sun, 03/25/2012 - 11:32 | 2288345 Golden monkey
Golden monkey's picture

Printer is damn slow.

Sun, 03/25/2012 - 11:37 | 2288351 BoNeSxxx
BoNeSxxx's picture

Classic Tortoise and the Hare... they don't call him Helicopter Ben for nothing.

Sun, 03/25/2012 - 11:51 | 2288380 francis_sawyer
francis_sawyer's picture

In the Marines, they give you a CODE RED for fallin' back on runs...

Sun, 03/25/2012 - 11:57 | 2288388 francis_sawyer
francis_sawyer's picture

You can't handle the truth!

Son, we live in a world that has walls, and those walls have to be guarded by men with PRINTING PRESSES

Who's gonna do it? You BERNANKE? You, lieutenant Weinberg?

I have a greater responsibility than you can possibly fathom. You weep for the 99%ers, and you curse the FED. You have that luxury. You have the luxury of not knowing what I know - that the deaths of thousands of 99%ers, while tragic, probably saved [elite] lives; and my existence, while grotesque and incomprehensible to you, saves [elite] lives.

Sun, 03/25/2012 - 12:15 | 2288442 ratso
ratso's picture

it is heartening to note that the Federal Reserve is the most prudent of the large central banks.

Sun, 03/25/2012 - 13:20 | 2288598 AnAnonymouses
AnAnonymouses's picture

US citizenses act like US citizenses, send their dollar around world to create death and destruction just as US citizenses always do.

The end coming for the US citizenses.

Sun, 03/25/2012 - 14:18 | 2288703 Jendrzejczyk
Jendrzejczyk's picture


Sun, 03/25/2012 - 14:46 | 2288740 TruthInSunshine
TruthInSunshine's picture



"Because in a world in which only currency devaluation matters, a 10% debt/GDP handicap is most certainly a nominal aggression that will not stand..."


Did ZH mean to write "a 10% deficit/GDP..." instead?

I ask because U.S. official debt is 100% of GDP and more accurately (according to David M. Walker, former Comptroller General of the U.S., 400% of GDP (although former Reagan Economic Advisor Laurence Kotlkoff claims it's really 1300%).

10% deficit spending (versus aggregate debt which is all accumulated deficits) on an officially claimed GDP of some 15.5 trillion would equal 1.5 trillion.

Sun, 03/25/2012 - 14:55 | 2288765 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Hint, the last to debase means that the short term inflationary effects will be lesser than those ahead of the pack. Once every assset has been bought by the CBs and there is no one left to borrow, the resultant deflation during defaults will also be less. It is just delaying the economic implosion of the US beyond rest of the developed world.

Sun, 03/25/2012 - 17:17 | 2289052 Pinto Currency
Pinto Currency's picture


More than central bank balance sheets indicate debasement.


See the debasement of the M1, M2, M3 monetary aggregates:






Sun, 03/25/2012 - 18:05 | 2289129 derek_vineyard
derek_vineyard's picture

Here we go...........near zero interest rates 4 ever (ala Japan) with deflating home prices, decaying personal income and forced to 'eat' the commodity inflation of finite planet earth.  

If long term rates ever go over 5% its immediate game the meantime its going to be a slow death

Sun, 03/25/2012 - 23:33 | 2289913 DaveyJones
DaveyJones's picture

Nice post. As the currency wars intensify, all the money crowds denser and denser to the front end. Everyday, necessary stuff goes through the roof, long term stuff keeps falling. God knows how high gold will end.  

Sun, 03/25/2012 - 18:53 | 2289244 exartizo
exartizo's picture


I think the opposite is true.

Remember the U.S. was the first to print (debase) and thereby export inflation to places like the middle east etc.

The fact that we are now dead last in debasing means that inflation will come back around to roost in the U.S. FIRST... not last. 

Mon, 03/26/2012 - 00:42 | 2290029 TruthInSunshine
TruthInSunshine's picture

I have no problem being junked and actually wear it as a badge of honor in most cases, but in this instance, it would be nice if someone let me know where my statement (or question) above was somehow flawed or errant.

Sun, 03/25/2012 - 19:38 | 2289360 Nobody For President
Nobody For President's picture

All your debt are belong to us.

Sun, 03/25/2012 - 21:50 | 2289650 StychoKiller
StychoKiller's picture

A little bit of this for ALL US citizenses:

(Me live you long time!) :>D

[EDIT:]  Love what you've done with the avatar (Papa's got a brand new bag!)

Sun, 03/25/2012 - 23:41 | 2289936 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymouses said:

US citizenses act like US citizenses, send their dollar around world to create death and destruction just as US citizenses always do.

The end coming for the US citizenses.

Made me raugh. Made me raugh out roud.


Sun, 03/25/2012 - 13:28 | 2288608 rocker
rocker's picture

The amazing part to all of this is how TPTB have manipulated the direction the excess cash goes to. 

They are taking banking and home builder stocks, (PUKE), up while pimping Oil with them.

Meanwhile, all the white metals, coal, grains, softs and fertilizers are going down. Something does not add up here.

Sun, 03/25/2012 - 13:52 | 2288647 AldousHuxley
AldousHuxley's picture

They take turns debasing

metals are used by China. China uses dollar. 2011 ECB printed while China pulled back.


G8 told BRIC to slow down their  GDP growth so western consumers can get jobs to consume their products once again.

Sun, 03/25/2012 - 14:18 | 2288700 johnu1978
johnu1978's picture

This is just getting nuts!


Primitive Skills Classes - Wild Edible Tours

Sun, 03/25/2012 - 13:31 | 2288611 qqqqtrader
qqqqtrader's picture

something has to give, gold/oil can't just keep going up forever... can it?

Sun, 03/25/2012 - 14:05 | 2288669 francis_sawyer
francis_sawyer's picture

"priced in dollars" (per your chart since 1970)...

Are you FKme?... What's going up?... My guess is that FIAT is going down...

Sun, 03/25/2012 - 14:06 | 2288672 francis_sawyer
francis_sawyer's picture

& YES... Fiat can go to zero (as it has numerous times in the past)...

Sun, 03/25/2012 - 14:30 | 2288687 noob
noob's picture

monetized faith +/-

...less any significant BTU(s)

Sun, 03/25/2012 - 14:14 | 2288692 A Nanny Moose
A Nanny Moose's picture

hooker with VD

Hooker with AIDS?

Choose wisely.

Sun, 03/25/2012 - 16:08 | 2288918 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

Maybe Tyler can read the IP addresses...and see if this is getting through to Mariner Eccles or Maiden Lane. Be nice to know if our team even knows they are falling behind. C'mon bitchez, fire up! Team America, F*uck Yeah! We're the best at bestness!

Sun, 03/25/2012 - 12:05 | 2288408 SHEEPFUKKER

The printer is jammed. 

Sun, 03/25/2012 - 12:11 | 2288430 The Big Ching-aso
The Big Ching-aso's picture



If we melt through the bottom will we reach China?   

Sun, 03/25/2012 - 12:15 | 2288441 spiral_eyes
spiral_eyes's picture

You Americans think you have it bad?

Britain is somehow much worse. 

Sun, 03/25/2012 - 13:58 | 2288656 AldousHuxley
AldousHuxley's picture

but they got the Olympics infrastructure projects this year.


UK is nothing without her colonies.


Britain by itself has no value.

Sun, 03/25/2012 - 14:31 | 2288721 JustObserving
JustObserving's picture

Britons curtseying to a parasitic and inbred royalty has high comedic value.  God save the Queen - the devil take the rest.

Mon, 03/26/2012 - 00:50 | 2290036 TruthInSunshine
TruthInSunshine's picture

London, a city dependent upon wealth-shifting and wealth-destroying financial 'engineering,' is the archetype of how fractional reserve banksters, working on behalf of an allegiant-to-no-nation international cabal of those who literally control the volume of the global fiat money supply (and hence can bring about inflation or deflation at their discretion, thus making entire citizens 'harvestable' and 'liberated' of their real assets), is a pox on the U.K., and New York is its sister city, running on the same racketeering scheme.

Sun, 03/25/2012 - 12:17 | 2288448 Buckaroo Banzai
Buckaroo Banzai's picture

PC load letter? PC LOAD LETTER??!?

Sun, 03/25/2012 - 12:37 | 2288502 Seditious Blasphemer
Seditious Blasphemer's picture

Oh, the irony!

Printer ink is SO expensive to purchase, but without the ink the printer is unable to print the money needed to buy the ink with which it needs to use to print the paper to buy the ink!

Sweet sweet irony.

Sun, 03/25/2012 - 13:14 | 2288587 Curt W
Curt W's picture

The word you were looking for is not irony but paradox.

Sun, 03/25/2012 - 13:41 | 2288626 noob
noob's picture


Sun, 03/25/2012 - 13:47 | 2288636 WonderDawg
WonderDawg's picture

How about, the paradox is laced with irony?


Sun, 03/25/2012 - 18:46 | 2289231 exartizo
exartizo's picture

I think the words you guys are looking for is "Catch-22"

Sun, 03/25/2012 - 21:54 | 2289689 StychoKiller
Sun, 03/25/2012 - 11:54 | 2288386 Gully Foyle
Gully Foyle's picture


Hey now Jimmy, obviously you don't comprehend the strategy laid out in Zeno's paradox of Achilles and the Tortoise.

"In the paradox of Achilles and the Tortoise, Achilles is in a footrace with the tortoise. Achilles allows the tortoise a head start of 100 metres, for example. If we suppose that each racer starts running at some constant speed (one very fast and one very slow), then after some finite time, Achilles will have run 100 metres, bringing him to the tortoise's starting point. During this time, the tortoise has run a much shorter distance, say, 10 metres. It will then take Achilles some further time to run that distance, by which time the tortoise will have advanced farther; and then more time still to reach this third point, while the tortoise moves ahead. Thus, whenever Achilles reaches somewhere the tortoise has been, he still has farther to go. Therefore, because there are an infinite number of points Achilles must reach where the tortoise has already been, he can never overtake the tortoise.[8][9]"


And let that be a lesson to all you naysyers and second guessers!

Sun, 03/25/2012 - 12:08 | 2288420 BoNeSxxx
BoNeSxxx's picture

You want to talk about paradoxes?

Dick Cheney just received a heart.

How's that for a paradox?


Sun, 03/25/2012 - 12:16 | 2288445 JustACitizen
JustACitizen's picture

Anyone want to make a bet on who is paying for that heart, the operation and recovery? (Even though old Dicky boy has plenty of cash...) Remember - "Deficets don't matter" - God, I love that quote.


Sun, 03/25/2012 - 12:27 | 2288479 Urban Roman
Urban Roman's picture

Prolly had five or six dox. A transplant is a pretty technical thing.

Sun, 03/25/2012 - 20:52 | 2289493 Schmuck Raker
Schmuck Raker's picture

Who said anything about a transplant?

Doctors finally gave him a heart.

Sun, 03/25/2012 - 13:17 | 2288593 Floordawg
Floordawg's picture

Was it a human heart? If so that piece of shit better not miss a dose of his rejection medicine.

Sun, 03/25/2012 - 13:45 | 2288620 Bastiat
Bastiat's picture

The Cheney family expresses its profound gratitude and condolences to the family of the young Komodo dragon tragically struck down in its prime.

Sun, 03/25/2012 - 14:06 | 2288673 AldousHuxley
AldousHuxley's picture

Cheney wanted young Afghanistan boy's heart, but his body wouldn't take any heart except from that of a pig.

Sun, 03/25/2012 - 14:50 | 2288756 BoNeSxxx
BoNeSxxx's picture


Post of the day.

I am honored to have teed that one up for you Al.  

Sun, 03/25/2012 - 14:17 | 2288699 11b40
11b40's picture

The unanswered questions have to do with the source of the heart & circumstances of the donor's death.

Mon, 03/26/2012 - 03:46 | 2290140 slewie the pi-rat
slewie the pi-rat's picture

not shot in the face by the recipient at a quail hunt


maybe liz and mary will publish, pullingThePlug0nDad:theDarkLord'sFinalCurse

Sun, 03/25/2012 - 14:43 | 2288741 Hulk
Hulk's picture

Thats nothing, next week Bush is getting a Brain...

Sun, 03/25/2012 - 23:36 | 2289926 DaveyJones
DaveyJones's picture

Don't hold out for Obama's courage

Sun, 03/25/2012 - 18:01 | 2289125 Sun_Tzu
Sun_Tzu's picture

 "Dick Cheney just received a heart."


And, in other news, Dick Cheney now regrets shooting his hunting buddy.

Sun, 03/25/2012 - 11:58 | 2288396 Doña K
Doña K's picture

On an "Inflate or die" situation, you just inflate and inflate until you die.

Sun, 03/25/2012 - 11:43 | 2288362 The Alarmist
The Alarmist's picture

Nah, it is evil speculators who are driving oil prices higher. Get with the
program, folks!

Sun, 03/25/2012 - 12:51 | 2288538 Thamesford
Thamesford's picture

With any luck he hit [Ctrl] X or at least [Ctrl] [Alt] [Del]

Sun, 03/25/2012 - 17:52 | 2289113 Peter Pan
Peter Pan's picture

I think they should outsource the job to Haliburtons. They will have two printers running. One for the Fed and one for themselves.

Sun, 03/25/2012 - 11:34 | 2288347 lolmao500
lolmao500's picture

Don't you worry, America number 1 is coming back! Time for some QE3 ULTRA MEGA SUPER DOUBLE PLUS GOOD PRINTING!

Sun, 03/25/2012 - 11:39 | 2288354 Elmer Fudd
Elmer Fudd's picture

Fed isnt losng anything, they are waiting their turn, and since their currency affects all others, its gonna be a whopper.

Sun, 03/25/2012 - 11:39 | 2288355 ISEEIT
ISEEIT's picture

B.I.S. say's "stick with the plan". Obamma's handlers say "kill gas prices". What a mess!

Poor Ben: What is a mad man to do?

Sun, 03/25/2012 - 13:49 | 2288642 WonderDawg
WonderDawg's picture

Do you honestly think that Bernanke's handlers and Obama's handlers are two different groups? Come on.

Sun, 03/25/2012 - 14:19 | 2288705 AldousHuxley
AldousHuxley's picture

crude is 30% of US imports.

money printing makes imports more expensive.


unemployment's answer: money printing

high gas price's answer: colonize middle east to force them to sell it cheaper and cheaper


Middle East leaders and elites: guilty of selling out their citizens to foreign powers

ME citizens not uprising against corruption: guilty of lacking courage

American politicians/oil companies: guilty of stealing natural resources via imperialism

American citizens: guilty of being undereducated and unemployable SUV drivers who wants to large in a suburb

World leaders: guilty of turning blind



Sun, 03/25/2012 - 14:58 | 2288771 ISEEIT
ISEEIT's picture

Yes. I do think that different personalities are involved. Bernanke's outrank Barry's; which explains Romney (plan B).

Sun, 03/25/2012 - 11:46 | 2288367 hack3434
hack3434's picture

Where's the Chinese balance sheet?


Sun, 03/25/2012 - 15:03 | 2288780 ISEEIT
ISEEIT's picture

It's 'in the red'

He-he, ha-ha.

Sun, 03/25/2012 - 17:59 | 2289122 Peter Pan
Peter Pan's picture

They can't get it to balance. What's more the real balance sheet problem is how to keep the privileged from being torn down by an increasingly disgruntled majority.

Sun, 03/25/2012 - 11:47 | 2288374 JustACitizen
JustACitizen's picture

It's a "Win-Win Deal"!!! The wealthy are protected from recognizing their stupidity and a new era of alternative energy is ushered in by high energy prices and government subsidies.

You little people - you get 0% on your meager savings and the right to pay for the era of alternate energy through higher prices and taxes.

Isn't life grand...

So, who's left on DWTS?

Sun, 03/25/2012 - 12:28 | 2288477 trilliontroll
trilliontroll's picture

The only  problem remaining is that there is still a culture of saving. It is necessary

to blame those savers for all the mess! Public opinion should finally realize that it is

ALL their failure. If they would have done their job right in doing real good and profound

investment , we would  be living in the best of all worlds. But instead of supporting the

Government those fools pulled their money out of the stock market and did other evil things. In North Korea this kind of pepople would not have a good time...

Sun, 03/25/2012 - 18:31 | 2289186 The Alarmist
The Alarmist's picture

We do blame savers ... who do you think are the evil speculators?

Sun, 03/25/2012 - 11:53 | 2288382 fonzannoon
fonzannoon's picture

Maybe we let these other countries blow up first so that everyone else buy's our treasuries due to the strengthening dollar? Bazarro thought but why not put it out there?

Sun, 03/25/2012 - 12:21 | 2288458 robdashu
robdashu's picture

The goal may be to have the USD as the one world currency; Oh, the Chinese, I guess we have to nuke them.  Their population density in mega-urban metroplosises will contain the damage.  Just like Fukushima.

Sun, 03/25/2012 - 15:11 | 2288786 ISEEIT
ISEEIT's picture

Unlikely. The USD represents a degree of emotional attachment to concepts that must be erased/replaced.

Sun, 03/25/2012 - 12:22 | 2288462 robdashu
robdashu's picture

SORRY DOUBLE POST:The goal may be to have the USD as the one world currency; Oh, the Chinese, I guess we have to nuke them.  Their population density in mega-urban metroplosises will contain the damage.  Just like Fukushima.

Sun, 03/25/2012 - 12:19 | 2288383 The Big Ching-aso
The Big Ching-aso's picture



Ben needs a Cray printer to go with the Cray computer.  Then everything will be oCray.

Sun, 03/25/2012 - 12:00 | 2288398 Marduk
Marduk's picture

This post implies that:

After 350 SPX points rally, Zero Hedge is now long and begging for QE3

like other 98% suckers who nearly got wiped out in 2011


I wonder if Paulson is long BAC again

Sun, 03/25/2012 - 12:17 | 2288449 Tyler Durden
Tyler Durden's picture

No. it implies that some commentators who have never actually read ZH, and merely base their opinions on amusing if dead wrong 3rd party summaries (usually by those who have books to peddle, newsletters to sell, or AUM, meager as it may be, to grow), are unaware that our one and only "advice" is to stay away from a broken stock market (thank you BATS and TVIX for proving our point most recently) and if they have to allocate devaluing fiat paper 'capital', it would be to purchase hard assets, the type which can not be printed.

Apparently stupidity is not one of them.

Sun, 03/25/2012 - 12:29 | 2288487 Urban Roman
Urban Roman's picture

So CTRL+P  is giving way to CTRL+X ... ? With my ten second attention span, I can never make it through a keypost.

Sun, 03/25/2012 - 12:43 | 2288514 Ralph Spoilsport
Ralph Spoilsport's picture

Tyler, I spent several hours at a family gathering yesterday trying to explain the significance of what happened with BATS and TVIX. I was wasting my time even though two of them are farmers who got screwed on futures contracts by the MFGlobal fiasco. What is it going to take to break through the "normalcy bias"?

Sun, 03/25/2012 - 14:48 | 2288752 Hulk
Hulk's picture

Complete catastrophe. Then we will fly straight for a few decades and then once again, loose our minds...

This cycle will repeat it self ad infinitum, until an asteroid takes our dumb asses out...

Mon, 03/26/2012 - 21:29 | 2293081 Moe Howard
Moe Howard's picture

It's a staring contest with the sun, and the sun is winning.

Sun, 03/25/2012 - 12:49 | 2288528 Marduk
Marduk's picture

Lately, your low self-esteem is just good common sense

Sun, 03/25/2012 - 12:52 | 2288541 Ralph Spoilsport
Ralph Spoilsport's picture

You're skating on thin ice short-timer. Trolls are disappearing from ZH.

Sun, 03/25/2012 - 12:53 | 2288547 tmosley
tmosley's picture

Take some more pills, pillhead.

Sun, 03/25/2012 - 14:13 | 2288690 francis_sawyer
francis_sawyer's picture

Marduk has the same sophmoric problem as qqqqtrader above in the thread (who questions whether the trajectory of gold & oil can go on forever & links up his own charts to illustrate that)...

He fails to realize that the issue is not the value of gold or oil, it is the VALUE OF PAPER (or "non-value" as the case may be)...

Sun, 03/25/2012 - 23:42 | 2289943 DaveyJones
DaveyJones's picture that special thing about oil and its...special all our places 

Sun, 03/25/2012 - 13:02 | 2288561 resurger
resurger's picture

go long AAPL shitdip

Sun, 03/25/2012 - 13:05 | 2288570 Marduk
Marduk's picture

I am long from $97,

will sell to you from $1000+ in a year

Sun, 03/25/2012 - 13:37 | 2288619 kito
kito's picture

Gosh marduk, you're smart. I really wish I had the fictional capability to call every trade perfect like you...oh wait I do....i bought Berkshire when it was 10 dollars (who cares if I wasn't born yet) I bought silver at 2, gold at 50, I got out of housing after flipping properties to the tune of 6000 percent.......we are like soulmates!........

Mon, 03/26/2012 - 06:14 | 2290210 BorisTheBlade
BorisTheBlade's picture

Dude, it's nothing, I sold a ticket on Titanic twice the price to a dude who pronounced himself as Leo Di Caprio. Oh wait.

Sun, 03/25/2012 - 14:24 | 2288708 francis_sawyer
francis_sawyer's picture

Soon enough, you & your avatar will meet the same fate as your avatars hedge fund $$...


Sun, 03/25/2012 - 13:02 | 2288560 luna_man
luna_man's picture



Caught another one!...



Sun, 03/25/2012 - 14:21 | 2288706 rocker
rocker's picture

Thanks for reiminding us Tyler.  Sometimes I have this urge to try the markets and watch the only sector I want to buy drift even lower and lower.

If the Mining Stocks are No Good. Yet the physical Metals I bought three years still are way up. The message is very clear.

I have read this site for about four years and only made my first post, most likely a year or so after. Why.

Because I did not even trust this site either. But you are true and faithful to your word. Your message has not changed.

Thanks for what you do Zero Hedge. Don't forget to Remind Us now and then.  The Fiat Market is equal to our Fiat Currency.   

Mon, 03/26/2012 - 04:44 | 2290159 silverdragon
silverdragon's picture


Sun, 03/25/2012 - 12:04 | 2288403 LongSoupLine
LongSoupLine's picture



My money's on BOJ as the "winner" (aka - loser in the long run)...there's your "black swan".

Sun, 03/25/2012 - 12:03 | 2288405 fonzannoon
fonzannoon's picture

 I am sure that begging for QE3 from this site would get their prayers answered.

Sun, 03/25/2012 - 12:08 | 2288419 francis_sawyer
francis_sawyer's picture

For better or for worse, more QE3 'electronic paper' casino chips in the system probably translates to more TIME PURCHASED to aquire PHYSICAL while the sheep are looking the other way...

Keep stacking (everything)...

Sun, 03/25/2012 - 12:05 | 2288410 q99x2
q99x2's picture

EUR/USD continues to climb. The greater the devaluation the stronger the currency. I guess there is more dumping of dollars for whatever reason that is the culprit.

Sun, 03/25/2012 - 12:09 | 2288413 slewie the pi-rat
slewie the pi-rat's picture


and it's only been 'a matter of time' till benzelbub prints since, uhnm, ...last...july?

can that be right?  L0L? 



Sun, 03/25/2012 - 12:12 | 2288436 francis_sawyer
francis_sawyer's picture

ask your buddy Yen Cross

Sun, 03/25/2012 - 13:44 | 2288629 slewie the pi-rat
slewie the pi-rat's picture

he's one of my crypto guys

Sun, 03/25/2012 - 14:14 | 2288696 francis_sawyer
francis_sawyer's picture

I kno... I'm still trying to break the code...

Sun, 03/25/2012 - 14:40 | 2288733 Jendrzejczyk
Jendrzejczyk's picture

I've been trying for a year. That nut won't crack.

Sun, 03/25/2012 - 15:23 | 2288807 francis_sawyer
francis_sawyer's picture

may I mambo dogface to the banana patch?

Sun, 03/25/2012 - 18:26 | 2289172 Jendrzejczyk
Jendrzejczyk's picture

Only if you have the COcoNUTS!

Sun, 03/25/2012 - 12:06 | 2288415 koot
koot's picture

0 Hedge.  Well done report, thanks.

Sun, 03/25/2012 - 12:13 | 2288416 Nobody special
Nobody special's picture

For the written analysis to hold, we would need to see both on and off balance sheet records, not this polished public consumption s#!t.

The Fed has already admitted to $16T in debasement. Zerohedge had a posting on it a few days ago. The post even linked the .gov document where the numbers are published. I'm betting that puts the Fed far above the top position. Of course, we still don't know the real financal position of other governments. Until we do, comparison efforts are folly.

Sun, 03/25/2012 - 12:18 | 2288451 koot
koot's picture

Perhaps true, which would show up as swaps at the Fed while the liquidity shows up on the other Central Bank balance sheets.  So in an age of money printing debasement, the "assets" of a central bank are swaps at another central bank, which are themselves hypothecated to show up as economic statistics in order to get this liquidity to increase as money velocity.  Never mind the liability side kicked down the road for some new species to pay off.

Sun, 03/25/2012 - 12:41 | 2288512 grid-b-gone
grid-b-gone's picture

Even for gold held by central banks, we don't know how much, or to how many multiple parties, reserves have been lent.

This is why soverign debt yields are important. When enough "in the know" parties drive rates above 7%, the rest of us get a clearer picture of the state of the balance sheet.

Sun, 03/25/2012 - 13:05 | 2288569 koot
koot's picture

This is true which is like you say the more people who do know, the more difficult it becomes for central banks and governments to manipulate prices and statistics.  If there is smoke either seen or smelt, there usually is fire.  Small wonder why there is so much dumbing down and mind numbing of the masses. 

Sun, 03/25/2012 - 12:08 | 2288418 Snakeeyes
Snakeeyes's picture

Don't worry. The Adminstration and Congress want to give massive mortgage principal writedowns to everyone despite no evidence that it will work. They are debasing IN CONJuNCTION with The Fed.


Sun, 03/25/2012 - 18:32 | 2289192 Stax Edwards
Stax Edwards's picture

It will beyond a shadow of a doubt help the economy.  Whether or not you can stomach the program is irrelevant.

Sun, 03/25/2012 - 12:12 | 2288432 bugs_
bugs_'s picture

I'm glad we are losing at this.  Cease and desist!

Sun, 03/25/2012 - 12:36 | 2288496 Yardfarmer
Yardfarmer's picture

international banksterism knows only "just us". there is no "we". BOJ&E, ECB, FRB = Rothschilds, Lazare-Freres et al. forex currency wars are gang skirmishes and turf wars. back to galley, debt slave, and row.

Sun, 03/25/2012 - 12:12 | 2288435 fonzannoon
fonzannoon's picture

To everyone? Nothing has yet to him my mailbox

Sun, 03/25/2012 - 12:16 | 2288447 Amish Hacker
Amish Hacker's picture

CTRL + P will work for a little while longer, then it will be time for FORMAT C:\

Sun, 03/25/2012 - 12:20 | 2288456 Stuck on Zero
Stuck on Zero's picture

Must be a Hewlett Packard printer.  Those things are total crap.

Sun, 03/25/2012 - 12:40 | 2288511 IronShield
IronShield's picture

HP used to be the best thing going (though I haven't bought one in a while).  What's better nowadays?

Sun, 03/25/2012 - 12:48 | 2288524 Ralph Spoilsport
Ralph Spoilsport's picture

I buy refurb Brother laser printers for around $50 and run them till they wear out. They have good driver support and last several years if you keep the paper dry.

Mon, 03/26/2012 - 21:34 | 2293093 Moe Howard
Moe Howard's picture

I had a brother fax, never printed anything, it ran out of ink and would not fax until the ink was replaced.

Never again.

Sun, 03/25/2012 - 14:11 | 2288684 malek
malek's picture

Ink printer wise I switched to Canon years ago - still happy, never had regrets.

Sun, 03/25/2012 - 16:02 | 2288900 Obadiah
Obadiah's picture

HPs have been garbage for 20 years

Cant beat a brother down and dirty laser brand new for 150

Sun, 03/25/2012 - 12:21 | 2288463 grid-b-gone
grid-b-gone's picture

Things that can't be printed and will retain value include oil, other sources of energy, precious metals, water, food, ag land, fertilizer, defense and security items (guns), sex, services that improve health, antiques and collectibles, >25mpg used vehicles, medicine, liquor that improves with age, and least obvious at this exact moment, modest, energy-efficient housing.

Even education has a more spotty payback as the cost increases and opportunities upon graduation erode. Welders and CNC techs, yes; english, history, and music degrees, not so much.

Invest in the real and useful and you'll do OK.  The problem is knowing what is real and useful when things get surreal.



Sun, 03/25/2012 - 13:45 | 2288632 donsluck
donsluck's picture

Careful with the medicine (the most valuable of all), hoarding is illegal and strictly enforced.

Sun, 03/25/2012 - 12:22 | 2288465 The Continental
The Continental's picture

The bigger message here is that all the western world central banks are rapidly expanding balance sheets while respective GDPs grow very slowly or stagnate, insufficient to service accrued debt principal. We are in a terminal debt (death) spiral. They will print and expand balance sheets further because it is the path of least resistance, operationally and politically. Extrapolating balance sheet growth suggests no more than 2-3 years to dollar implosion. These governments will have no alternative but to come after private gold holdings. Everyone here take note.

Sun, 03/25/2012 - 13:36 | 2288616 noob
Sun, 03/25/2012 - 13:39 | 2288621 Bam_Man
Bam_Man's picture

I doubt these bankrupt, corrupt governments will dare to "come after private gold holdings". This is not 1933 where gold was widely held by a large percentage of the population. It's different now - the rich and super-rich hold most of the gold AND control the governments.

Sun, 03/25/2012 - 14:08 | 2288679 jimmyjames
jimmyjames's picture

the rich and super-rich hold most of the gold AND control the governments.


Exactly-the only reason Roosevelt confiscated gold was to halt bank runs (there is no currency/gold link anywhere in the world) and with only 1.5-2% of public participation in the gold market which includes mmmf's-- Why would they bother-

Sun, 03/25/2012 - 12:29 | 2288478 jonjon831983
jonjon831983's picture

Wait, we're competing with other countries? Guys... we need to buck up.  Start running debts, buy as much foreign stuff as you can from WMT! Run up our current account deficit and write to congress to promote currency debasement.  Tell them we need to lever up TBTF and increase the size of our bailouts!


Let's do it guys! We can win this competition!

Sun, 03/25/2012 - 14:29 | 2288713 11b40
11b40's picture


Sun, 03/25/2012 - 12:27 | 2288481 goforgin
goforgin's picture

It was never intention of the global bankers to print and print. They printed what they thought would be sufficient amount to backstop debt from hyper-deflation. They are going to do about face and push austerity on the rest of us. Contrary to what you are led to believe, long term printing benefits the poor and have less. Zimbabwe did not print to enrich the bankers, Zimbabwe printed to keep the population alive.

Zh will proclaim victory and praise the bankers for coming to their senses.  This is not a prediction, the probability of this is 100%.



Sun, 03/25/2012 - 12:36 | 2288498 The Big Ching-aso
The Big Ching-aso's picture



As long as Ben's around that ain't gonna happen, Skippy.  He's anti-deflation.  That means printing.

Sun, 03/25/2012 - 12:52 | 2288540 goforgin
goforgin's picture

You don't understand how brainwashing works. In order to be effective, brainwashed victims must be made to think that they actually are free to choose. Here is an example how this works:

Pundits go on TV and say how awful currency debasement is for people living on fixed income and for the poor. I am sure that you were exposed to this conditioning a thousand times. No?

What they don't tell you is that the alternative is 75% haircut  to benefits.

Sun, 03/25/2012 - 13:48 | 2288639 donsluck
donsluck's picture

Nowhere in the human realm is anything 100% certain.

Sun, 03/25/2012 - 12:29 | 2288485 Cast Iron Skillet
Cast Iron Skillet's picture

Ben is an underachiever, but Draghi seems to be really performing. Ben, don't you have any pride!!


Sun, 03/25/2012 - 12:36 | 2288494 flow5
flow5's picture

Contrary to economic theory, & Nobel laureate, Dr. Milton Friedman, monetary lags are not “long and variable”.  The lags for monetary flows (MVt), i.e. the proxies for (1) real-growth, and for (2) inflation indices, are historically (for the last 99 years), always, fixed in length.  However, the FED's target (interest rates), varies widely.

Barring countervailing intervention, real-output collapses in the 2nd qtr.

Sun, 03/25/2012 - 12:36 | 2288495 IEVI
IEVI's picture


Did any MF global customers get a letter this weekend from Tannor Partners Credit Fund, LP offering to purchase their claim against MF Global?

Sun, 03/25/2012 - 12:51 | 2288531 Ralph Spoilsport
Ralph Spoilsport's picture

I have two relatives who are farmers who told me yesterday they got letters from Tannor Partners. They are suspicious and are going to talk to their attorneys.

Sun, 03/25/2012 - 12:37 | 2288501 daxtonbrown
daxtonbrown's picture

From experience, money printing doesn't necessarily lead only to inflation, it can also drive down velocity as faith is lost in the currency. What this report says is that we are truly fucked as the Fed tries to catch up. What Joe Mainstreet dosn't understand is that we are about to embark on the cruise ship Global Biflationary Depression.

Sun, 03/25/2012 - 14:00 | 2288658 jimmyjames
jimmyjames's picture

From experience, money printing doesn't necessarily lead only to inflation, it can also drive down velocity as faith is lost in the currency.


Falling velocity does not occur when faith is lost in a currency-the exact opposite happens-

A falling velocity is indicative of a demand for a currency-

It means the currency is being hoarded and not circulating-

Sun, 03/25/2012 - 12:49 | 2288526 Shazam342
Shazam342's picture

 I think Bernanke is just stepping out to take acting lessons-he'll be back.

Sun, 03/25/2012 - 12:51 | 2288536 q99x2
q99x2's picture

Democratic Sens. Chuck Schumer of New York and Richard Blumenthal of Connecticut said they are calling on the Department of Justice and the U.S. Equal Employment Opportunity Commission to launch investigations [into employers asking applicants for FB passwords].

There's two of the Senators getting stuck with FB IPO shares.

Sun, 03/25/2012 - 12:51 | 2288537 zippy-day
zippy-day's picture

well ,in the game of russian roulette, everyone is a winer until the game ends,,   usually rather poorly for someone,,

Sun, 03/25/2012 - 12:53 | 2288543 RagnarDanneskjold
RagnarDanneskjold's picture

Needless to say, in a world with $25+trillion in "excess" debt (debt which would need to be eliminated simply to reduce global debt/GDP to a "sustainable" 180% per BCG), last is a very bad place to be...

Devil's Advocate: au contraire. The Fed, USG, U.S. business and U.S. consumers are not up to their eyeballs in foreign debt. The U.S. dollar is the denominator and foreign central banks are revving the numerator, expecting the Fed to push the denominator. In the game of "let's jump off a cliff," the other nations are jumping first, expecting the Fed to follow. But the splattered bodies of foreign central banks only increases the global power of the Fed and the U.S. dollar. The Fed may be the ultimate vampire, sucking in global capital as foreign currencies hyperinflate into oblivion......

Sun, 03/25/2012 - 12:54 | 2288545 Troy Ounce
Troy Ounce's picture



Tyler: debasement attempt from the Brics. Part/parcel of controlled demolition of US$ supervised by Fed. Note also that Tito Mboweni, Ex-SA Reserve Bank Governor, heads Goldman Sachs in Johannesburg.


Brics move to unseat US dollar as trade currency
Sun, 03/25/2012 - 13:03 | 2288550 Paul451
Paul451's picture

"What was not accounted for was that money would also be used to inflate commodities such as oil.."

They've been inflating our currency so long that they have to know this will be a result. What they've become good at is deflecting attention away from themselves and blaming increases on world events, mostly in the middle east.

What they didnt count on was just how PISSED OFF people become at $4/gallon gasoline. When you're a WDC bureaucrat taking the Metro to work every day and have your illegal immigrant Latina maid doing your food shopping, the price of gasoline and supermarket items are not a part of your daily reality.


Sun, 03/25/2012 - 18:38 | 2289207 The Alarmist
The Alarmist's picture

The real decision makers in DC have a government-issue car, a driver, and a Government National Credit Card (yeah, that's what it is called) and little to no real experience with the actual purchase of gas much less actually having to allocate some of their own wealth to cover the purchase.

Sun, 03/25/2012 - 13:01 | 2288558 GetReady
GetReady's picture

I can't see how the Fed can do much more printing with the price of gasoline on the rise. There would have to be a significant move down in the stock market and employment before they would be prompted to act.

The other central banks have much more motivation to print as they are in more immediate trouble.

Map the Central Bank printing as a function of the stock market and you'll see what I mean.

Sun, 03/25/2012 - 13:07 | 2288568 medicalstudent
medicalstudent's picture

so the global banking cartel increases the extra-dollar money supply, which must be converted into usd to buy oil, thereby allowing extra-dollar inflation to increase demand for dollars, and temper an otherwise (much more) rapidly escalating dollar denominated oil price.


Sun, 03/25/2012 - 13:50 | 2288645 jimmyjames
jimmyjames's picture

so the global banking cartel increases the extra-dollar money supply, which must be converted into usd to buy oil, thereby allowing extra-dollar inflation to increase demand for dollars, and temper an otherwise (much more) rapidly escalating dollar denominated oil price.


Why this myth persists-i have no idea-

Oil is traded in all acceptable to the seller currencies every day-there is no need for foreign oil buyers to have USD's to buy oil-

Oil "mostly" trades in USD's because the US runs a trade deficit with most countries and so they recycle those reserve USD's by using them to buy oil or anything else for that matter-

What do the Saudi's do with those USD's?

They recycle them as well-for food/autos/lumber--for any imports they need-there is no increased USD demand--to purchase oil-

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