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Guest Post: The All-Important Question

Tyler Durden's picture




 

Submitted by David Galland of Casey Research

The All-Important Question

For pretty much everyone, no matter where they are located in the economic strata, few if any questions are more germane to making plans for the future than whether the US and other major global economies are in recovery.

Getting the answer to that question right is of special importance to investors and businesses.

Stating the obvious, if the broader economy really is in recovery, then investors would be well served by investing in the equities of solid companies positioned to take advantage. Similarly, those very same solid companies would be rewarded by increasing their productive capacity through investments in the plants and people necessary to meeting growing demand.

On the same side of the ledger, bond investors would want to begin shorting up their durations or leaving the bubbly bond market altogether, in anticipation that the flood of funds into fixed income would reverse, sending rates higher (and bond prices lower).

Conversely, if the recovery is a head fake, then an entirely different course of action is called for. For instance, one would want to adopt a cautious attitude about common stocks. And because of the nature of the crisis – crushing levels of sovereign debt – one would want to take advantage of pullbacks in precious metals to buy more, along with other so-called "tangibles." That way they would have some measure of protection against the inflation that fiat-currency powers make all but a certainty.

In addition, reducing personal and business spending in order to conserve rainy-day cash would be advised.

And what about US bonds in the no-recovery scenario? A sound case can be made for including them in a portfolio as that puts you in lockstep with the government's desperate need to keep interest rates down – or, better yet, have them fall further still. Given the highly politicized nature of our economy, that seems reasonable – and anyone who has been long bonds over the last few years has done very well, indeed.

While you'll have to make your own call on bonds, my own enthusiasm is curbed by looking at the charts of the upwards-spiking interest rates on the bonds of Spain, Greece, Italy, and so forth. When Mr. Market ultimately becomes disenchanted with the fiscal excesses of the sovereign deadbeats, he can express his ire most energetically. When the current bond bubble here in the US ultimately bursts, as it must, it's going to be a bloodbath.

Of course, there is much, much more at stake to coming to the correct answer on the recovery, or lack thereof, than that.

For instance, poor economies make for poor reelection odds for political incumbents. And when it comes to maintaining a civil society, the lack of jobs inherent in poor economies often leads to a breakdown in civility. On that note, overall unemployment in Spain is now running at depression levels of almost 25%, and youth unemployment at close to 50%. How long do you think it will be before the citizens of this prominent member of the PIIGS will refuse being led to the slaughter and start taking out their anger on the swine (governmental and private) seen as bearing some responsibility for the malaise?

Meanwhile, back here in the United States, the commander-in-chief is striding around the deck of the ship of state trying to look like the right man for the job in the upcoming election, despite the gaping hole of unemployment just under the economic water line. His future prospects are very much entangled with this question of recovery.

So, what's it going to be? Recovery… no recovery… or worse, maybe even a crash?

We all have a lot riding on getting the answer right.

The Quest for Confidence

Ultimately, the purpose of searching for the truth about the recovery isn't about either fear or greed. It's about confidence.

If you really knew what's coming, then the right moves to make become obvious. You could then make those moves with the calmness of spirit that comes from certain knowledge and get on with your life. While others struggle or miss an opportunity by betting on the wrong future, you'd have set up your affairs to survive and prosper.

Of course, given that we are talking about a complex system – the economy – total certainty is never completely possible. But for reasons I'll share, the nature of the current crisis paradoxically allows for more certainty than would normally be the case.

And so I want to share my conclusion about how I believe things will unfold from here, followed with some support for that conclusion.

While, as readers of any duration are well aware, we at Casey Research foresaw the current crisis years in advance and have remained firm in our conviction that the recovery is a charade… based on my own readings, and after spending the last two weeks in the company of a couple dozen very plugged-in economists, top-performing money managers, and top financial analysts, my conclusion is thus:

The world's largest economies, including the US, Europe, Japan, and China are speeding for the equivalent of a brick wall. In short, I believe that before this crisis is over, we will experience the Greater Depression my dear friend and business partner Doug Casey has long anticipated.

In case that conclusion fails to communicate my current view sufficiently clearly, I will condense it as follows:

The world's largest economies are screwed.

And I will even set my conclusion to music, in the form of the song Somebody That I Used to Know by Gotye, which seems appropriate because the economy that we used to know won't be back again for many years to come.

Trust me, stating an opinion on the direction of the economy in such unequivocal terms troubles me. For starters, I wish my conclusion could be otherwise because no one likes to be a harbinger of doom. Mostly, however, I have long resisted adopting a set-in-cement position on something as wiggly as the future. In my experience, anyone who absolutely, totally buys into a particular future is almost always proven wrong by time.

Yet, as my quest for certainty unfolded, I could come to no other conclusion than that the world as we know it is headed for an economic catastrophe.

Allow me to explain.

The quest started with our Casey Research Recovery Reality Check Summit, April 27-29, in Weston, Florida. We took our mandate of getting to the bottom of this matter of recovery seriously, including faculty members with a variety of perspectives to see if an overarching conclusion about the recovery could be ascertained.

In addition to our own team of Doug Casey, Bud Conrad, Terry Coxon, Louis James, Marin Katusa and Jeff Clark, included in the faculty were: Lacy Hunt, former economist with the Dallas Fed and the world's most successful bond manager; Jim Rickards, money manager and author of Currency Crisis; John Mauldin, best-selling author of Endgame and the just-released The Little Book of Bull's Eye Investing; John Williams of ShadowStats fame; Porter Stansberry, founder of Stansberry Research; Michael Lewitt, editor of The Credit Strategist; Gordon Chang, China analyst; Harry Dent, author of The Great Crash Ahead (who also debated James Rickards on the question of inflation or deflation); Andy Miller on real estate; Greg Weldon of the Weldon Report; John Hathaway of the Tocqueville Funds; resource market guru Rick Rule of Sprott Asset Management; Caesar Bryan, a senior portfolio manager for the Gabelli Fund group; and David Stockman, the head of the Office of Management and Budget during the Reagan administration.

(Plus, on the taking-action front, there was a special panel on international diversification as well as panels where a dozen or so experts on everything from gold stocks to uranium, to rare earths, to graphite, to technology, to energy gave their best picks.)

In other words, a full program.

Then, immediately following the conclusion of our summit, Olivier Garret, Casey Research CEO and partner, and I climbed on a plane for California and John Mauldin's Strategic Investment Conference.

John's event was geared more for hedge fund and very-high-net-worth investors and, as such, included a more mainstream slate of speakers, but what a slate it was.

For the better part of three days, Olivier and I hunkered down to hear presentations and meet with the likes of: David Rosenberg, the star analyst of Gluskin Sheff; H. "Woody" Brock, an economist with some of the deepest credentials in the business (you can Google any of these guys for bio info); economic historian and best-selling author Niall Ferguson; Marc Faber of the Gloom, Doom and Boom Report; David McWilliams, the popular and very erudite Irish economist; David Harding of Winton Capital Management; Jeffrey Gundlach of DoubleLine Capital; Lacy Hunt again… and my favorite for this conference, Mohamed El-Erian of PIMCO fame.

In other words, for the better part of two weeks, I was immersed in presentations and one-on-one discussions with truly some of the smartest, best-studied people in the world today on economics and investment markets – with the primary topic being whether the so-called recovery is real, and the consequences if it falters.

While the speakers used a variety of methodologies to approach the topic, when all was said, the only conclusion that could be reached was that the world is headed for a very challenging period.

That conclusion was for the most part derived from three aspects of the many presentations:

  1. Hard data. Tallying up all the charts and tables I viewed and heard discussed over the last couple of weeks, if such a thing were possible, would produce a number well in excess of 1,000. While there were some that dealt in forward-looking projections, the vast majority dealt with the here and now, as well as the historical context of how we got here.
  2. What wasn't said. For business reasons, many of the big-name money managers couldn't come right out and say that we were heading for a crash, but they all took pains to communicate in not so subtle ways that this was a likely outcome. Tellingly, not a single speaker over the entire two-week period – at either event – came out and said that we could expect a normal business-cycle recovery to continue.
  3. The complete lack of practical discussion about how the world can avoid hitting the wall. While the pessimism was palpable, even among the usually perma-bull Wall Street types, at no point did anyone espouse a politically feasible solution to avoid the coming crash. The few who even attempted to point to a solution, at best, mumbled platitudes about the politicians finding the spine to adopt fiscal-austerity measures. One of the speakers – something of a gas bag, it must be admitted – pronounced in all seriousness that the only solution to the economic malaise was for everyone in America to rush out and read his book.

    As an aside, over the course of lunch with that same gas bag, we had a discussion that went something like this:

[Me] "All of the speakers, you included, point to the current trend of higher debts and deficits and say they are untenable, and so the big economies will hit a wall in the not-too-distant future. Yet hardly anyone actually then defines what hitting the wall will look like."

[Him] "Yes, well, things will likely get a bit messy if the politicians can't pull together to address the structural problems in the economy."

"But wouldn't you agree that, given the nature of our democracy, the odds of the politicians taking action before we hit the wall are almost nil?"

"Not at all. If everyone in this country would read my new book, they would understand the situation and rise up to force their elected representatives to take the right action."

"Seriously? The only way to avoid the next leg down is if everyone in the US reads your book? That's it?"

At which point – I kid you not – he picked up his plate and changed tables. (There's a reason I am only rarely allowed out in public.)

But the fact remains that other than perhaps Doug Casey and a small handful of other presenters at our conference, almost no one even attempted to anticipate just what happens when the crisis swells up to its full height and then comes crashing down.

Or, specifically, what the consequences are likely to be when the world's largest economies all hit the wall at more or less the same time. For the record, I have compiled a list of the ten largest economies in the world, and a reasonable assessment of their current situation follows in descending order by size of GDP:

United States – screwed

China – really screwed

Japan – massively screwed

Germany – pretty screwed, especially in that export economies take a big hit in a crisis

France – le screwed!

Brazil – somewhat screwed

United Kingdom – blimey, screwed too

Italy – properly screwed

Russia – hardly screwed at all (lots of resources and next to no government debt)

Canada – pretty screwed, eh?

As concerning as it is to see how many of the world's largest economies are in trouble, the biggest problem of all is that the central bank reserves of virtually every country in the world are stuffed with US government IOUs masquerading as tangible assets.

So, what happens when the world's reserve currency enters collapse and the dollar turns into a hot potato? Don't know, but I'm pretty sure we'll find out in the not-so-distant future.

 

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Thu, 05/17/2012 - 18:45 | 2437692 SilverTree
SilverTree's picture

My question is: WHEN?

Thu, 05/17/2012 - 19:00 | 2437735 Death and Gravity
Death and Gravity's picture

Noone can answer that with precision. One day, enough traders will loose their cool, start selling, and it will start the avalanche, and from there, it's downhill....

Thu, 05/17/2012 - 19:37 | 2437847 sitenine
sitenine's picture

It has already begun.  Black swans no longer exist - only manifestations of inevitability.

Thu, 05/17/2012 - 19:56 | 2437869 Caviar Emptor
Caviar Emptor's picture

@ siteline: agree. Been sayin it here too: no black swans, just brown muck as far as the eye can see

Thu, 05/17/2012 - 20:20 | 2437927 AldousHuxley
AldousHuxley's picture

once US government found out about black swans, they exterminated them all, so that they can keep telling the sheeple that black swans don't exist.

 

Fed's QE to triple the money supply shoudl exterminate any shorts.

 

QE3 coming up soon to continue the extermination as reality keeps creeping back out of the box.

Thu, 05/17/2012 - 20:32 | 2437959 Caviar Emptor
Caviar Emptor's picture

Tryin every trick to keep up the status quo. But the status quo keeps slipping away the more they try. Unintended consequences multiply. And the productive economy keeps getting ground down

Thu, 05/17/2012 - 21:02 | 2438018 JLee2027
JLee2027's picture

My eyes glazed over when the article started talking about the recovery. What "recovery"?

We need a new debt-free currency to "recover" from the old one.

Thu, 05/17/2012 - 23:12 | 2438205 The Big Ching-aso
The Big Ching-aso's picture

 

 

Uncle Ben's Instant Chopper Dollars on their way to save the day.   

Fri, 05/18/2012 - 08:46 | 2439112 goldfish1
goldfish1's picture

The 1% care not about the hoi polloi:

Sisters Spend $150 Million for Two Houses 5/17/2012

The real-estate purchases of the daughters of Formula 1 Racing boss Bernie Ecclestone call attention to a handful of ultrawealthy young people making waves at the very top of the real-estate market.

This is not a crisis for them.

Thu, 05/17/2012 - 19:02 | 2437739 UP Forester
UP Forester's picture

You can find out when in my new book.

For $29.95 and a mercury dime, you'll be properly introduced to the Magic 8-BallTM, the Ouija Board, and how to read chicken entrails and tea leaves.

**Tarot cards not included.

Thu, 05/17/2012 - 19:03 | 2437744 The Alarmist
The Alarmist's picture

Smart move ... with that Mercury dime you'll be able to pick up a slightly used McMansion.

Thu, 05/17/2012 - 20:11 | 2437900 HD
HD's picture

"...chicken entrails and tea leaves"

New on the dollar menu!

Thu, 05/17/2012 - 21:31 | 2438049 DavidPierre
DavidPierre's picture

 

 

 Bill:

I just listened to old 'Pump And Dump' Doug Casey talk about the impossibility of gold being manipulated and he said, "anyone who thinks gold is manipulated is either stupid or insane.  For a really smart guy that I've met and even followed some of his investing advice a decade ago.

But you know what?

YOU ARE RIGHT!!! He is Wrong!!!!!. I just had to say this to you.

I don't know why but sometimes Phd types are really too easy too fool.

Of course we all fall under this old saying at some time or other in our lives.

You can fool all of the people some of the time,
Some of the people all of the time
But...You Can’t Fool All the People All the time.

Bill, you were the first to move the curtain aside and see who the wizard really is.

One thing Wannabee University professors types should never say is..."Don't even waste your time investigating that idea because it is impossible"

Now ...Why should they never say this ?

Because some determined Football player type of guy may prove it is Possible.

Talk about embarrassing to their tender egos.

Take Care.
Paul

...............................................................

 

I guess Mr. Casey believes John Embry, Eric Sprott, James Turk, etc., are stupid or insane too. 

Oh well, that is his problem. 

While very smart, the point is Casey is a loudmouth

He represents what GATA has been up against all these many years, and still is. 

This sort of inane talk (Casey probably has never even bothered to read what GATA has gathered) is what makes the efforts of The Gold Cartel easier than it should be.

Bill

http://www.lemetropolecafe.com

 

Fri, 05/18/2012 - 08:52 | 2439145 goldfish1
goldfish1's picture

Read the inanity for yourself:

http://news.goldseek.com/GoldSeek/1337282313.php

 

He's even using my word of the day, hoi polloi. Sample statement:

Q: Why do these banks (JPMorgan, etc.) even give a damn, in the first place, what the price of the metals might be?

He answers himself:  These banks have no dog in the fight; they couldn't care less what the metals prices are and have no reason to try manipulating the market.

I suggest he read ZH more regularly to get up to speed. He needs to do his own homework rather than insist someone provide him with "proof".

Fri, 05/18/2012 - 09:02 | 2439186 goldfish1
goldfish1's picture

Someone who refers to himself as a great mind has issues:

"For much more economic straight talk, from Doug Casey and 30 other great minds..."

Bleeach.

Thu, 05/17/2012 - 19:02 | 2437742 The Alarmist
The Alarmist's picture

Right direction, but not looking far enough ahead: My question is, "THEN WHAT?"

Thu, 05/17/2012 - 19:19 | 2437798 mcguire
mcguire's picture

for "THEN WHAT", read the 66th book of the bible.. the luciferians are within a stone's throw of recapturing what was lost at Babel. 

Thu, 05/17/2012 - 19:28 | 2437830 mcguire
mcguire's picture

one more thing.  i assume everyone here knows that 9/11 was an inside job.  which was a bigger event in terms of dictaing what direction we are moving, the Lehman crash or 9/11.  clearly, it was 9/11, a false flag event.  is the creation of the TSA, the Iraq war, and massive funding for the military industrial complex (not to mention the missing $2 trillion) "mission accomplished" for this monumental false flag event?? or was this just setting the stage for more to come??? 

questions about recovery, the budget, etc. are all only part of the story, the first part.  look further for paradigm shifting events that will shape the next 1000 years, fourth riech type events, georgia guidestone type events... look to see what "synthesis" the global hegelian dynamic is pushing us towards... "ordo ab chao".  at the conference, they got that the "chao" part is coming.. they just need to flesh out what type of order is being prescribed to come out of it..

disclosure:  long jesus.

Thu, 05/17/2012 - 20:24 | 2437939 Pinktip
Pinktip's picture

I just posted this in the 666 thread.

The DOW closed at the exact same number on 9/11/01 as it did eight yrs later on 9/11/09

http://www.ritholtz.com/blog/2009/09/dow-91101-91109/

Thu, 05/17/2012 - 20:46 | 2437991 El Oregonian
El Oregonian's picture

Intresting developing/black swan event in the works? What better way to distract the sheeple...

http://www.youtube.com/user/dutchsinse/featured

Fri, 05/18/2012 - 08:59 | 2439170 goldfish1
goldfish1's picture

not to mention the missing $2 trillion. . .

Eons ago. At the rate of inflation...let's use silver as a measurement: in 2001 an ounce of spot was in the $5 ballpark...now it's in the $30 ballpark.

doesn't that make the missing 2 tril ballpark at least $24 tril?

Fri, 05/18/2012 - 00:31 | 2438502 PersonalRespons...
PersonalResponsibility's picture

 

"But what about the rest of it?" http://www.imdb.com/title/tt0851578/

 

Fri, 05/18/2012 - 06:29 | 2438845 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

would you please be so kind as to change the image of your avatar?  I can stomach a lot, but this, buddy, this is just too much.

Thu, 05/17/2012 - 19:03 | 2437746 Michael
Michael's picture

Have you ever lived through a complete and total worldwide bond market collapse on top of a complete and total $700 trillion derivatives market collapse?

Thu, 05/17/2012 - 19:23 | 2437809 rodocostarica
rodocostarica's picture

Never lived through that Michael. Sounds interesting. Bring it on. So we can get it over.

Thu, 05/17/2012 - 20:09 | 2437894 TJ00
TJ00's picture

Yes, every night I wake up screaming, then realise it was only a nightmare, until the day it isn't.

Thu, 05/17/2012 - 20:26 | 2437943 AmCockerSpaniel
AmCockerSpaniel's picture

Forget the bond bubble. The Fed/ Ben just keeps printing and buying.

Thu, 05/17/2012 - 20:38 | 2437964 Freddie
Freddie's picture

The news media and Democrats are protecting their usurper Kenyan.   The Dems and media love Hussein Travolta.  Unemployment in America is almost as bad as Spain.

Hey Tyler's - more SnorgTee Shirt banners ads.  Tell them the girl models need tighter T-shirts and even larger busoms.  Let's have fewer Kenyan banner ads.

Thu, 05/17/2012 - 18:47 | 2437706 cossack55
cossack55's picture

I vote for "crash".  When are they counting ballots?

Thu, 05/17/2012 - 19:04 | 2437748 UP Forester
UP Forester's picture

The fourth day of the seventh month.

Thu, 05/17/2012 - 18:49 | 2437709 I am a Man I am...
I am a Man I am Forty's picture

Interest rates are going nowhere.  Shit started to get all fucked up when the 10 year went to 2.4%.

Thu, 05/17/2012 - 20:39 | 2437972 Freddie
Freddie's picture

Hope and Change - Kenyan style.

Thu, 05/17/2012 - 18:54 | 2437719 rsnoble
rsnoble's picture

I started drinking vodka last week. Put a quart(similar, don't know exact ml) in the freezer. Drank it in 4 shots within 1/2hr.  I also play chess. I'm moving to russia.

Seriously though have you ever met any of those guys? I worked with 3 for the longest time. Boris,Igor and James. Biggest bunch of bullheaded mofo's ever. I can only imagine being drunk around them.  Nothing like ending a chess game in a wrestling match with a few cheap shots thrown in. No kidding.

Thu, 05/17/2012 - 18:58 | 2437729 rsnoble
rsnoble's picture

fyi---I don't advise anyone here try that.  Even with my level of exp it was a bit of an ass kicker. A real avalanche. I drank Absolut because some vodka guy on utube said it was best for no hangover. I was ok the next day but tired, im sure he didn't mean drink the whole bottle. Sorry, I was just in one of those moods.

Thu, 05/17/2012 - 19:04 | 2437749 HungrySeagull
HungrySeagull's picture

I used to drink a glass of water or two before bed with a aspirin.

Alcohol is a Diuretic. Takes fluids right out of your kidneys which require quite a bit to process the day's waste while you sleep.

A long time ago I blasted a JD Bottle in 10 minutes over a card game... that bender cost me a month of hangover, blurred vision, poisoning and other issues.

I should have died but no I was too stupid to go from this world that way.

As far as the damn Market is concern... CRASH already. Clear out the accumulated driftwood before the waters start undermining the bridge piers.

Thu, 05/17/2012 - 19:25 | 2437819 Thucydides
Thucydides's picture

I once drank a case of Heineken, severals shots of tequila between bong hits, and a bottle of Southern Comfort. I only had a two week hangover and a long bout of amnesia which when I recovered I was married with two children and a full time job. Damn it was that bottle of Southern Comfort that did me in. Never drank it since that I can remember.

Thu, 05/17/2012 - 20:23 | 2437936 francis_sawyer
francis_sawyer's picture

Let me fill in the blanks... Here were all the things that happened during your bout of amnesia...

~~~

http://www.youtube.com/watch?v=nnjV7qIPVsA

Fri, 05/18/2012 - 00:18 | 2438489 bluebare
Thu, 05/17/2012 - 20:43 | 2437982 Freddie
Freddie's picture

Glad you have stayed off the juice.   Beer and alcohol are also a stimulant.  I never was a big drinker but when I was young I might have 3 beers maybe in a rare case 4.  You go to sleep and then wake up in the middle of the night.  Alcohol also dries out your skin and organs.  Everything in moderation.  Sugar is an acid and it is not good either.  

 

Thu, 05/17/2012 - 21:00 | 2438014 JohnG
JohnG's picture

Lightweight :)

Thu, 05/17/2012 - 21:56 | 2438151 smiler03
smiler03's picture

 "Beer and alcohol are also a stimulant."

Wrong. Alcohol is a sedative, it may lower your inhibitions but that shouldn't be considered a stimulant. If it was a stimulant then athletes would strive to be drunk.

Fri, 05/18/2012 - 00:13 | 2438479 MayerRothschild
MayerRothschild's picture

alcohol acts as a stimulant initially, but then its depressant effects take over. Once that initial high wears off, alcohol causes sedation and drowsiness

Thu, 05/17/2012 - 20:52 | 2437997 JohnG
JohnG's picture

Saline IV's gentlemen, saline.  No hangovers here.

Yes, my GF is a nurse and berates me for poisoning myself the next day..... 

Pretty good with a catheter as well, can't feel it going in, hurts like hell on the way out.  Keeps the washing of the sheets down.

Thu, 05/17/2012 - 20:43 | 2437981 Abitdodgie
Abitdodgie's picture

Svedka vodka $15.99 for 1.75lt and you never get a hangover from it .

Thu, 05/17/2012 - 20:45 | 2437986 Freddie
Freddie's picture

Svenska women - priceless and you always get a hard on from them...........unless you are Travolta or Clooney.

Thu, 05/17/2012 - 21:46 | 2438129 HungrySeagull
HungrySeagull's picture

At my age, any women is good as long they have not altered the goods.

Thu, 05/17/2012 - 18:58 | 2437722 Sudden Debt
Sudden Debt's picture

The elephant In the distance still looks like a mouse for most people. There's still time

Thu, 05/17/2012 - 18:56 | 2437725 rsnoble
rsnoble's picture

Oh and btw that person wearing the "meh" t-shirt in the zh ad on the homepage you guys are all drooling over............get over it. That's Stephen Tyler when he was 23.

Thu, 05/17/2012 - 19:04 | 2437756 HungrySeagull
HungrySeagull's picture

M E H.

Thu, 05/17/2012 - 20:45 | 2437988 Abitdodgie
Abitdodgie's picture

what the fuck does MEH mean? besides the small camel toe, WHATEVER !!!

Thu, 05/17/2012 - 23:30 | 2438381 worbsid
Thu, 05/17/2012 - 19:19 | 2437796 onelight
onelight's picture

hilarious...

Thu, 05/17/2012 - 20:29 | 2437949 francis_sawyer
francis_sawyer's picture

Stephen Tyler has a cameltoe?

Thu, 05/17/2012 - 20:31 | 2437952 Hulk
Hulk's picture

I got a landscaping ad...

Thu, 05/17/2012 - 20:38 | 2437968 francis_sawyer
francis_sawyer's picture

prolly need more porn in your browser history... get busy...

Thu, 05/17/2012 - 21:57 | 2438153 CCanuck
CCanuck's picture

+100  What was the tip-off?

Had to be the socks, and I was 18 not 23 Biiiiiicheeeezzzzz, Whoaa.

Stephen

Thu, 05/17/2012 - 23:15 | 2438352 Milestones
Milestones's picture

TIP OF THE HAT TO ALL OF YOU. GREAT INTERPLAY. LMAO.              Milestones

Thu, 05/17/2012 - 22:12 | 2438193 Freddie
Freddie's picture

Well the face is not so good and there appears to be some adam's apple action going there as well.  Still beats the ****ing usurper Kenyan banner ads.  More Snorge T's banner ads.  Make the t-shirts tighter and the busoms larger.

Fri, 05/18/2012 - 00:15 | 2438486 MayerRothschild
MayerRothschild's picture

ads?  You all really need to start using Firefox with adblock... My ZH is ad free

Thu, 05/17/2012 - 19:03 | 2437743 zerotohero
zerotohero's picture

More Casey rehash.

Thu, 05/17/2012 - 19:04 | 2437752 daxtonbrown
daxtonbrown's picture

The problem in answering which way we are headed is that easy money doesn't lead inexorably to inflation, but biflation. Since GDP=M * V has two independent variables, you can Either get money induced inflation AND/OR a deflationary collapse in velocity. What we are experiencing is both inflation AND deflation. Oil and Gold are currently deflating, but food and most everything else still going up (except wages).

This still means we are massively screwed, just screwed coming and going. In short, we are in a Biflationary Depression. http://www.futurnamics.com/biflation.php

Thu, 05/17/2012 - 19:14 | 2437783 Joe The Plumber
Joe The Plumber's picture

Goddammit there are bisexuals bicycles and bipedal mammals but there is no such economic term as biflation

It is stagflation. This is merely a sequel to that seventies show

Thu, 05/17/2012 - 19:20 | 2437802 onelight
onelight's picture

yeah it's that gey agenda -- always changing normal words around

Thu, 05/17/2012 - 19:21 | 2437803 Dr. Engali
Dr. Engali's picture

Stagflation is when there is inflation with no growth. Right now we are in an inflationary no growth environment with deflating asset prices. That's biflation. Just because that isn't an "official " economic term doesn't make it so.

Thu, 05/17/2012 - 21:04 | 2437858 Bollixed
Bollixed's picture

Biflation is when your girlfriend gladly blows up your love doll on her own impetus.

Thu, 05/17/2012 - 20:13 | 2437907 Joe The Plumber
Joe The Plumber's picture

Ok. I will bi that explanation

Thu, 05/17/2012 - 22:40 | 2438257 cranky-old-geezer
cranky-old-geezer's picture

 

 

Please get off the "biflation" bullshit, it makes you look really stupid.

What we have is inflationary depression.  Inflation on the monetary side, depression on the economic side.

And yes some asset prices can fall during inflationary depression, especially with heavily manipulated markets like we have now.

Falling prices isn't deflation.  It's just falling prices, in this case from supply / demand issues.

Deflation is when the money supply shrinks relative to GDP, which ain't happening.

Biflation would mean the money supply is growing and shrinking at the same time, which is impossible.

Fri, 05/18/2012 - 01:46 | 2438662 daxtonbrown
daxtonbrown's picture

So you are say 'some ssets can fall' during an inflationary depression? Like gold and oil have been falling lately? Sort of like what you'd find in a biflationary depression, if you weren't too stupid to get off your old bullshit Keynesian descriptions of what is going on.

Thu, 05/17/2012 - 19:24 | 2437815 daxtonbrown
daxtonbrown's picture

No it is Not stagflation. Stagflation is the Unexpected Keynesian result in which you have high unemployment Despite monetary stimulus.Keynesians (who run governments) did not expect stagflation, in fact they still don't.

Biflation (deflation, inflation, high unemployment, everything fucked) is the EXPECTED result of sovereign debt coupled with monetary debasement.

Stagflation is high unemployment plus high inflation, but we have moderate inflation coupled with high employment with deflation of some assets. A raisin muffin of fuckedness that goes beyond 1980s stagflation.

Thu, 05/17/2012 - 20:12 | 2437903 Joe The Plumber
Joe The Plumber's picture

Ok I will drink to that

Biflation it is until we have negative gdp growth with positive inflation. Then it becomes stagflation

Thu, 05/17/2012 - 19:05 | 2437758 razorthin
razorthin's picture

I don't know many of the attendees, but let me take a stab at who was the "gas bag".  Harry Dent.

Thu, 05/17/2012 - 20:05 | 2437884 lasvegaspersona
lasvegaspersona's picture

my guess too...anyone who could still be certain that the system will permit deflation has to be a bit thorny

Thu, 05/17/2012 - 19:05 | 2437759 fwchiro
fwchiro's picture

It's all good, Krugman's alien invasion is scheduled just before the election...

Thu, 05/17/2012 - 19:45 | 2437857 American Dreams
American Dreams's picture

See.. "The Report From Iron Mountain" for further clarification, Krug has not a single original thought in his head.

Know your enemy

Thu, 05/17/2012 - 19:09 | 2437766 Joe The Plumber
Joe The Plumber's picture

They will never turn against the government in spain. They are too brainwashed that government is the solution and they just need to spend more

Thu, 05/17/2012 - 19:12 | 2437775 Judge Arrow
Judge Arrow's picture

The cascade of the fall provides the calendar of it - what constitutes the step by step -- it would seem that losing faith is the underlying theme here and at the end of the day, economics is predicated on faith in what the next guy is going to do - and if there is no faith (knowledge) then what we get is - paralysis. With consumer confidence falling like a stone, it would seem we are at the threshold of paralysis at the retail level - people just holding on. When the ponzi faith fails, this could hit hard and fast, with govts unable to write anymore checks. Look for strikes by public employee unions to lead the way to civil unrest and a massive cutback in the redistribution games to lead to more and more of it. All of that over the next year seems almost pre-ordained now that the Euro has just looked out over the falls.

Thu, 05/17/2012 - 20:09 | 2437896 lasvegaspersona
lasvegaspersona's picture

Judge

I will be shocked if there is even one nominal dime not paid out by the government in settleing its bills.

That would mean Obama lost Bens phone number.

Bills will be paid, Obama's executive order stated that all heads were to get what they need to run the government no matter what the cost. Nominally we will be fine thank you very much!

Thu, 05/17/2012 - 21:48 | 2438132 HungrySeagull
HungrySeagull's picture

We're sorry, your Federal Employment has been Terminated due to lack of Fiscal Accomodation.

To Buy your job back press 1

To grovel Press 2

Thu, 05/17/2012 - 19:15 | 2437784 Dr. Engali
Dr. Engali's picture

Things are going to get even more crazy in this country with our Kenyan born president. I wonder if we'll even have elections in our official banana republic.

http://www.breitbart.com/Big-Government/2012/05/17/The-Vetting-Barack-Ob...

Thu, 05/17/2012 - 19:49 | 2437849 Tenshin Headache
Tenshin Headache's picture

It's the number one story on Drudge, so it should see some pickup. Failing that, it's certainly attracted a lot of attention. Sheriff Joe must be having a good day.

Edit: The story has been picked up by the Daily Telegraph: http://blogs.telegraph.co.uk/news/timstanley/100158834/obama-used-to-be-...

 

Thu, 05/17/2012 - 20:13 | 2437906 lasvegaspersona
lasvegaspersona's picture

I sent the sherriff a hundred dollars to continue his good cause. He has the proof that the birth certificate and draft card are forgeries. the problem is the medias massive defense of the prez. If this issue ever gets to the surface of popular opinion if will be the biggest scandal in the country's history. It will be the second biggets news story of the year....right behind the global collapse.

Thu, 05/17/2012 - 20:23 | 2437920 Joe The Plumber
Joe The Plumber's picture

Sheriff joe proved it was not a scanned copy but embedded rich text layers. I dont understand why no one will think thru the implications of such a finding

Thu, 05/17/2012 - 20:25 | 2437940 NemoDeNovo
NemoDeNovo's picture

Well for "Most" having the ILLUSION of their REALITY Shattered is far too tough of a thing to deal with.  Humans ONLY learn by consequence, so for most at this point it going to have to be VERY BAD before they figure it out.  Just my 2c.

 

 

Nemo

Thu, 05/17/2012 - 19:15 | 2437785 q99x2
q99x2's picture

The world will end if the FB ipo is a flop so we are getting pretty close.

Thu, 05/17/2012 - 19:17 | 2437789 Dr. Kananga
Dr. Kananga's picture

"bond bubble bloodbath" ... betcha can't say that three times real quick.

Thu, 05/17/2012 - 20:39 | 2437969 francis_sawyer
francis_sawyer's picture

the sixth sick shieks sixth sheep's sick

Thu, 05/17/2012 - 19:19 | 2437799 mjk0259
mjk0259's picture

I'm getting killed on my 'solid companies'. What the hell can you invest in that pays more than inflation. Even gold sucks this year.

Thu, 05/17/2012 - 19:22 | 2437807 onelight
onelight's picture

BIP BrookfieldInfrastructure.com -- but it fluctuates like other things -- 5pct payout I think -- will add some around 25

Thu, 05/17/2012 - 20:56 | 2438005 JohnG
JohnG's picture

Life insurance, then fake your own death?

Thu, 05/17/2012 - 19:23 | 2437811 Cruel Aid
Cruel Aid's picture

Russia doing fine.

We have resources, so we are screwed by choice.

 

 

Thu, 05/17/2012 - 20:55 | 2438004 CaptainObvious
CaptainObvious's picture

You can thank the greenies for that. Who needs natural gas, oil, coal, when we can spend $200,000 saving a "rare" bush that you can buy in any nursery and there's pond smelt that need protecting?

Thu, 05/17/2012 - 19:26 | 2437823 spanish inquisition
spanish inquisition's picture

Preaching to the choir. Could be a ZH name dropping record though...

Thu, 05/17/2012 - 19:45 | 2437856 AndreiC
AndreiC's picture

Who was the gas bag? Please tell!!!

Thu, 05/17/2012 - 20:55 | 2438002 Yes_Questions
Yes_Questions's picture

 

 

Krugman?

 

He does have a new book out..

 

and has started calling this a Depression, so maybe that's why he was invited.

My bet (not money) is on Krugman.

Thu, 05/17/2012 - 19:59 | 2437859 NuYawkFrankie
NuYawkFrankie's picture
Here we go gathering nuts in May,
Nuts in May, nuts in May,
Here we go gathering nuts in May,
On a cold and frosty morning.
...

(To be continued.)

Thu, 05/17/2012 - 19:59 | 2437877 Caviar Emptor
Caviar Emptor's picture

We're already up to our eyeballs in melted goo. Yields have melted down. Now biflation is eating away at the productive economy. 

Thu, 05/17/2012 - 20:19 | 2437924 jumbo maverick
jumbo maverick's picture

Just wait until the goo blobs up

Thu, 05/17/2012 - 21:02 | 2438019 Yes_Questions
Yes_Questions's picture

 

 

That's what she said.

Thu, 05/17/2012 - 20:03 | 2437881 economicminor
economicminor's picture

Interesting yet not very revealing except to add another bunch of people to the list who believe that there is a reality and there are consequences. Math is math and there really is nothing else to say except argue over whether the developed world is insolvent or bankrupted both morally and finacially.

I do get tired of all this bs about austarity.  As we have seen in Greece, austarity has as dire consequences as just printing more money and giving it to the people thru pensions, unemployment ins, subsidized housing loans or refinancing and even massive spending on veterans and old folks. There is neither a free lunch nor someone else left to pay. We spent our wad and now most sit around and complain or try and figure out who else they can steal from...

The world is going to find out the hard way about how fiat money and unfunded promises actually do have consequences. It really is to bad as this didn't have to be this way.. except we are human and we never learn.

 

Thu, 05/17/2012 - 20:43 | 2437983 ableman28
ableman28's picture

Austerity, austerity......

 

 

Thu, 05/17/2012 - 20:53 | 2437999 Yes_Questions
Yes_Questions's picture

 

 

The world is finding out the hard way that they do not have to live in debt and the death throes of the vampire squid has yet to run its course.

Like those few, small mammals watching from the rocks and crevasses: we wait for the last dinosaur to usher in the extinction of his kind.

 

 

Thu, 05/17/2012 - 20:08 | 2437885 Curtis LeMay
Curtis LeMay's picture

The hell with all this...we'll piss it all away on coke, hookers and Ferrari's anyway...

So listen to Donna:

http://www.youtube.com/watch?v=q5DrqymST64

 

Thu, 05/17/2012 - 20:15 | 2437914 Yes_Questions
Yes_Questions's picture

 

 

The quest started with our Casey Research Recovery Reality Check Summit, April 27-29, in Weston, Florida. We took our mandate of getting to the bottom of this matter of recovery seriously

 

Good place to start considering upside down mortgages AND the underwater (geographically) features of this suburban-sprawl-shithole.

 

I read on..

Thu, 05/17/2012 - 20:19 | 2437923 Yes_Questions
Yes_Questions's picture

 

 

Then, immediately following the conclusion of our summit, Olivier Garret, Casey Research CEO and partner, and I climbed on a plane for California and John Mauldin's Strategic Investment Conference.

 

Carslbad, CA..the west coast equivalent of Weston (suburban-sprawl-Shithole), FL. 

 

Thu, 05/17/2012 - 20:25 | 2437941 Yes_Questions
Yes_Questions's picture

 

 

Tellingly, not a single speaker over the entire two-week period – at either event – came out and said that we could expect a normal business-cycle recovery to continue.

 

Looking around at the environs (not to mention electronic "market" data), what a shock.

 

still reading..

Thu, 05/17/2012 - 20:28 | 2437947 q99x2
q99x2's picture

Prosecute the crimminals. That would at least be a start. Nothing will change until then. And. Instead we have Obama covering for them.

Thu, 05/17/2012 - 20:32 | 2437957 SKY85hawk
SKY85hawk's picture

Doug Casey is  smart man.

He could raise his intellectual stature by using fewer words.

K.I.S.S.  & Buy Low...Sell High

 

What to buy in a Deflationary environment?

I hope someone is smart enuff to speak to this.

 

Thu, 05/17/2012 - 20:37 | 2437965 Atomizer
Atomizer's picture

May 20th will bring on a socially engineered government effort to stabilize peasantry control. Do not live in their fear!

 

Start with the basic questions:

  • What
  • Why
  • When
  • Where
  • Who
  • How

Once you master these technics, you can blow through any loosely sensualized media breaking news blip.

Visual illustration of Chaos Theory– 2006

Thu, 05/17/2012 - 20:40 | 2437973 Heroic Couplet
Heroic Couplet's picture

When Mr. Market takes out the private bank cartel, good riddance. And when there's no more lobbying money to be spent on Capitol HIll, good. Wanna shrink the government? Shrink the Cayman Island accounts first.

Thu, 05/17/2012 - 21:18 | 2438045 Atomizer
Atomizer's picture

Funny you mentioned that.. While looking at CGIX IPO today, this came up.

 

IPO Preview: Loyalty Alliance Enterprise

NEGATIVE

At the top of the S-1 the investment bankers say the CEO is based in Hong Kong, which is true. But the entity that is going public is based in the Cayman Island. Note: "Our registered office in the Cayman Islands is located at

Maples Corporate Services Limited, P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands." S-1, page 6 Also see organization chart here. The above appears to be purposeful obfuscation, and is reason enough to pass on the LAEC IPO. It appears the China Telecom had an in-house unit that is competing with LAEC, so it seems reasonable that the major customer China Unicom might also be preparing to compete directly with LAEC.

Thu, 05/17/2012 - 20:41 | 2437975 Michelle
Michelle's picture

The retail investor is out and isn't coming back so all we have now is churn, hedge funds and the JPM's of the world moving from one investment class to another, which means that the selling becomes less and less. Where does one go? U.S. stocks.

Thu, 05/17/2012 - 20:41 | 2437980 Yes_Questions
Yes_Questions's picture

 

 

and the only presenter from this bi-coastal symposium with a "solution" proved to be one of the schmucks at dinner.

 

Well, thanks for affirming our underlying suspicions that its all TOTALLY SCREWED!

 

My take away, PREP accordingly.  Which for those in Carlsbad and Weston will involve a move.

 

and soon...

 

+1

Thu, 05/17/2012 - 21:56 | 2438138 Convolved Man
Convolved Man's picture

I'm already looking into a potentially lucrative investment opportunity -- cockfighting.

Now, don't laugh.  Hear me out.

The way I figure it, from what I've been reading on ZH, there's going to be plenty survivors of the coming collapse holding physical precious metals.  Now, these same people seem to have a healthy attitude towards betting..., pardon me..., towards trading, and are going to have plenty of time to scratch that itch.

There's a small chicken farm about a half mile from my place.  Not one of those chicken warehouse factory farms, more of a free range chicken ranch.  I've noticed over the past years, that some hens and roosters manage to escape and can be seen roaming the local woods for months.  Hell, I see them darting across road every once in a while.  There are hawks, owls, eagles, foxes, coyotes and bobcats about; my wife even saw a young mountain lion stalking a raccoon foraging next to the storage shed.  So any rooster that manages to survive in the wild around here is probably one tough bird.  Just need to round up a few, get some spurs, start some training sessions, pay off whoever will be the "local constabulary" and I'm in business.

There can always be a future for a man with a plan.

And no, the mountain lion didn't get the raccoon.  My wife startled it when she turned to get the video camera and it slunk off into the woods as the raccoon scrambled up the nearest tree.

Thu, 05/17/2012 - 22:27 | 2438228 Yes_Questions
Yes_Questions's picture

 

 

Just like manbearpig, slinked off before the camera shot..

my bet is on the free range bird too

http://www.youtube.com/watch?v=fOSl4glsTvI

tough, shit eating and bred in the Capitol

 

Fri, 05/18/2012 - 00:05 | 2438418 Convolved Man
Convolved Man's picture

We're heading back to the future.

Always had fresh eggs and meat from the chicken coup, fresh honey from the beehives, and fresh fish from the pond at my grandparent's farm in the 60's.  Ironically, my grandfather bought the 160 acre property during the depression with a government subsidized low interest loan.  A loan stipulation was you had to plant fruit trees, thus the beehives. Built the house himself.  No indoor bathroom till mid 60's -- used outhouse set between two massive pecan trees out behind the smokehouse.  Grandma made great fig preserves and peach pie.

 

At my place, not uncommon to see a dozen or more wild turkeys trooping across the driveway.  Plenty of deer about too.

Been fattening the gray squirrels on sunflower seeds -- just a hedge in case we run out of rabbit or possum!

Fri, 05/18/2012 - 00:07 | 2438455 Yes_Questions
Yes_Questions's picture

 

 

Damn.  My dog is threatening the squirrels round here keeping them too lean.

 

Give me land

lots of land..

 

Don't fence me in.

Fri, 05/18/2012 - 00:19 | 2438488 Convolved Man
Convolved Man's picture

Don't have a dog, so the squirrels own the land during the day;  foxes, racoons, skunks and possums own the night.

Haven't seen a coyote in about a year.  Farmers and ranchers around here kill them as soon as they spot em.

Fri, 05/18/2012 - 01:05 | 2438589 Element
Element's picture

So ... Joe Stiglitz has a new book out then? ... you didn't even list him.

Fri, 05/18/2012 - 01:53 | 2438672 Psyman
Psyman's picture

The national debt in countries such as Spain and Greece is odious in nature and should be rejected outright by the population.  What has a 30 year old Spaniard that has NEVER had a good job in his life gained from the state and its excesses?

 

Sure, probably some hand outs, but the reason he needs hand outs from the state is because the state destroyed the national economy thus robbing him of opportunity to exist without hand outs.

 

The youth of Spain, Greece, and any other nation under a mountain of crippling government debt MUST reject as illegitimate any government that expects them to pay back the debts of their fathers, grand fathers, and great grand fathers.

Fri, 05/18/2012 - 04:13 | 2438787 silverdragon
silverdragon's picture

Great idea to understand where we are heading but the meeting sounds like a bunch of pussies afraid to speak up.

The analysis for China was, "really screwed". So they may only grow by 5-8% this year. What's so bad about that? What if they take their foot off the brake, of their economy? China is intentionally slowing its economy to reduce inflation. It can take its foot off the brake any time it wants.

The reality is China will continue to grow and the economies linked to it will do OK. The BRIC nations and its trading partners will all keep doing well.

The scary reality for Europe and the US is that they aren't so relevant anymore. The broke bum nations are kinda screwed.

 

Fri, 05/18/2012 - 06:50 | 2438863 lakecity55
lakecity55's picture

Joe: Look boss, some left over Cheney plans to take over the country due to an "emergency."

Gay Kenyan: Screw that, Joe, where is my zig-zags. Ayers just brought me some good weed.

Joe: It says here you don't have to ever run for re-election. Gee, boss, we could be here forever!

Gay Kenyan: Waitaminnit! Lemme see those!

Fri, 05/18/2012 - 08:02 | 2438986 Olympia
Olympia's picture

From the Wall Street Crash of 1929 to the Global Financial Crisis of 2007

 

It all started with the big crisis of 1929. The American economy reached a deadlock because of its social "pathogenesis"; a deadlock that led it to economic crisis in a different - faster- pace than the rest of the industrial forces of that time. Important decisions had to be made - mostly social - and the Whites didn't like that, especially the Whites' rulers, the Anglo-Saxons. The USA society had to either be homogenized and "forget" about racism against black people or find itself in a permanent deadlock that would threaten it with social uprising. If they didn't equate the black working people with their white colleagues so that there wouldn’t be an issue with the salaries that threatened the national currency, they couldn't avoid reactions and all that goes with it.

 

The problem which began as social but was turning into economic was simple. As long as the economy functioned adequately and the Blacks worked and asserted what they deserved for their work, the white employers had to "fund" the white working force with extra money because of their skin color. To avoid complaints from a white worker who received the same salary with his black colleague, the employers had no choice but to give them more money. The demands of the Blacks were used as an excuse by the Whites to demand more and everything ended up in the same pocket, since they were under the same employ. The problem that arose from this "strange" tactic was that the increased takings of the "superior" White employers were seeking outlet in investments and that threatened the capital. Having higher salaries, they bought more houses; they bought stocks and so on.

 

 

www.eamb-ydrohoos.blogspot.com/2010/02/ten-plagues-of-pharaoh.html

 

Authored by Panagiotis Traianou

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