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Guest Post: America “Makes The Cut” – So What Happens Next?

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Submitted by Brandon Smith of Alt-Market

America “Makes The Cut” – So What Happens Next?

Around the world, starting Monday, all eyes are on the markets. The tension is palpable. The uncertainty is ample. And anger is heavy in the air. As predicted, the debt ceiling deal was not only NOT enough to assuage economic fears, it actually exacerbated them, triggering a flight from the Dow, and creating a decisive opportunity for ratings agency S&P to cut the once perfect U.S. credit rating from AAA to AA+.

At Alt-Market, we often talk about points of balance, and how certain moments in history become highly visible indicators of balance lost. If we pay close attention, and know what we are looking for, these moments can be recognized, allowing us time to shield ourselves from the explosion and the resulting financial shrapnel. The past two weeks have culminated into one of these defining events that tell us the tide has fully turned, and something new and dangerous is just over the horizon. The question now is; what should we expect?

The nature of the credit downgrade situation is not necessarily “unprecedented” in history, but it is surely unprecedented on the scale we see currently in the U.S. It is difficult to predict how exactly the investment world will react. Some consequences, though, are probable, if not inevitable. Let’s examine the events we are likely to see in the coming weeks as well as the coming months, as nations attempt to adjust to America’s final plunge…

1) Ratings Agencies Under Attack

This has already begun. Italian authorities have raided the offices of S&P and Moody’s, apparently perturbed that their credit rating is not under their control. The U.S. is accusing S&P of making "accounting mistakes” and jumping the gun on the American downgrade. The battle between insolvent governments and the ratings agencies from here on will escalate quickly. More offices will be investigated and raided. The mainstream media will try to assert that the downgrades are “not that important”, and that the U.S. will recover quite nicely without a perfect score. Eventually, as the collapse becomes more evident, ratings agencies will fill the role as the go to scapegoat / economic hitman at which all governments will point accusing fingers.

“S&P is gonna’ cut you man! S&P’s a blade-man, man!”

In my view, it’s all theater. First, let’s set aside the recent ratings cuts altogether and look at the facts. The U.S. should have been downgraded years ago, especially after the Federal Reserve decided to begin purchasing U.S. Treasury Bonds in place of dwindling foreign interest and turned to monetizing our debt to the point of rampant inflation. Italy and numerous other EU members should have been downgraded to junk status a long time ago as well. If anything, the ratings agencies over the past few years have been PROTECTING the credit reputations of many countries which in no way deserve it. The recent downgrades are long overdue…

Second, suddenly governments and MSM pundits feel it necessary to point out the large part ratings agencies played in the derivatives bubble and subsequent credit crisis? Please! They were perfectly content with S&P or Moody’s giving fraudulent top ratings for toxic garbage securities, and even defended agency actions after the bubble burst! Now, after they finally start doing their jobs by downgrading bad debt, governments want an investigation?

Third, ratings agencies were not alone in the creation of the derivatives bubble. The private Federal Reserve artificially lowered interest rates and flooded the markets with cheap fiat. International banks used this fast money to create the easy mortgage groundswell and the derivatives poison that was fed it into the system. Ratings agencies went along with the scam and graded the worthless securities as AAA. The federal government and the SEC allowed all of this to take place by purposely ignoring the crime and refusing to apply existing regulations in investigating the fraud.

The Bottom line? You CANNOT create an economic crisis like the one we face today without collusion between big business, government, regulatory bodies, and ratings agencies. The Obama Administration is well aware of this, and the attacks on S&P are nothing more than a show. S&P is not to blame for the downgrade this past weekend. They are ALL to blame.

2) Increased Borrowing Costs

While the mainstream will attempt to downplay the effects of a U.S. downgrade, they cannot deny that our country’s borrowing costs have just gone up. This causes several unfortunate circumstances to develop. Our ability to continue funding our liabilities is now greatly diminished, unless we turn to the Federal Reserve even more in the purchasing of treasury bonds. If investors and central banks can’t get AAA protection for their money in America, they will simply turn to other countries that still retain a top credit rating. The safety of dollars and treasuries already held by other countries will come under question. In response to the S&P downgrade, China, our largest creditor, has openly stated that U.S. securities can no longer be trusted, and that the dollar must be replaced as the world reserve currency. If the dollar does not take an immediate dive starting this week, it certainly will over the course of the Fall season. There are, indeed, many direct consequences in light of a U.S. downgrade. Anyone who says otherwise is living in dreamland.

3) European Union Feeling The Pain

The EU is on a direct interception course with disaster, just as we are, however, being that the U.S. dollar is a widespread world reserve currency, all nations will be affected by our particular downgrade, as opposed to the Greek downgrade, for example, whose effects were minor in comparison.

The European Central Bank has initiated its own TARP measures, and due to the quickening implosion of Spain and Italy, is fully prepared to print fiat Euros in a desperate attempt to control the damage. European reliance on the American consumer has proved fatal. The result is an ever expanding avalanche of fiat on both sides of the Atlantic in an insane race to the bottom between our respective currencies. This development fits perfectly with the IMF plan to introduce Special Drawing Rights (the SDR) as the new global reserve currency, though I’m sure it’s all just a coincidence…

The ECB is also facing serious resistance from Germany, which has been shelling out the largest portion of bailout funds for countries like Greece, Ireland, and Portugal. Germany is tired of playing sugar daddy to the EU, which could conceivably lead to a breakup of the union itself, even with the implementation of fiat injections.

4) Blame Game Overdrive

The blame game is about to get ugly. When economic catastrophe is on the line, civility goes out the window. Who will be the primary target besides ratings agencies? Why fiscal conservatives, of course! Obviously, the Tea Party is full of “terrorists”, and real conservatives are the true culprit behind the collapse because we have this annoying tendency of pointing out that our spending addicted government is dragging us hogtied on a speedboat to Hades.

Please, America, don’t blame the Federal Reserve for feeding the derivatives bubble and destroying our currency. Don’t fret over global banks like Goldman Sachs that deliberately conjured the credit crisis. Don’t attack the government for lending a helping hand to these entities in their quest for complete financial centralization. Instead, shoot the messenger. We love that…

5) Drastic Measures

An announcement by the Fed of yet a third QE stimulus package is a certainty. If the market reaction is especially negative this week, an announcement could even be made before this month is out. I have no doubt, QE3 will be the undoing of this country. Any further devaluation of the dollar will NOT be tolerated by creditor nations who have much to lose if the process of U.S. inflation continues. Treasuries will be dumped. The dollar will be dumped. And, America will have little choice but to hyperinflate to keep up with rising debt burdens.

Those who believe that the U.S. is not expendable in terms of the world economy, and believe that foreign nations will continue pouring money into our coffers because they “have to”, are kidding themselves. We are dealing with an engineered global shift. For central bankers, the U.S. economy is no less expendable than an aging sports car. It can easily be replaced with something newer, shinier, and more compact. Something that will get more girls. The call for “international regulation” of U.S. finances will become the rallying cry of elites across the planet, as well as the largest holders of our exponential debt. The current system will be sacrificed to make way for an IMF controlled body of unaccountable economic overseers.

This is not theory. This is not conjecture. This is reality. The credit downgrade of the U.S. is a concrete trigger point that sets all of the above proceedings in motion.

People will ask for hypotheses on time frames for the events above. I don’t have any, though this week’s market attitudes will be revealing as to the speed that events will take shape. So many interacting factors are present that any specific time predictions on the progress of collapse would be unrealistic. For the short term, watch Federal Reserve activity carefully. Introduction of new QE will be extraordinarily volatile. For the long term, watch wholesale and retail prices of goods, along with treasury auctions and foreign flights from U.S. bonds. One thing is certain, the final half of 2011 will be remembered as a historical turning point for us all.  That said, the trials ahead were never the issue. That which is most important is how we RESPOND in these moments. How we adapt. How we function. How we fight back. Disasters do not make history. We make history. As overwhelming as the currents of such events may feel, in the end, they are subservient to the actions of resolved men. Nothing is fated. The conclusion depends upon us.

 


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Sun, 08/07/2011 - 12:05 | Link to Comment wang (not verified)
Sun, 08/07/2011 - 12:09 | Link to Comment BaBaBouy
BaBaBouy's picture

 

World Riots already starting.

 

Print Bitchez Print ...

 

Tottenham riot: burned buildings may contain bodies, MP warns

http://www.telegraph.co.uk/

Sun, 08/07/2011 - 13:02 | Link to Comment Dave Thomas
Dave Thomas's picture

Looks like there are some angry Jamacians!

Sun, 08/07/2011 - 12:20 | Link to Comment midtowng
midtowng's picture

My guess is that we won't see a Black Monday, but only because the central banks will openly manipulate the markets.

Of course the problem from open manipulation (as opposed to behind-the-scenes) is that you can only do it once before the markets lose credibility.

Sun, 08/07/2011 - 12:42 | Link to Comment Smiddywesson
Smiddywesson's picture

Sorry, market manipulation has been pretty open these last three years and nobody cares.

 

Sun, 08/07/2011 - 12:43 | Link to Comment TwelfthVulture
TwelfthVulture's picture

Maybe because the only participants in the market are the ones doing the manipulating.

Sun, 08/07/2011 - 12:45 | Link to Comment UGrev
UGrev's picture

we've already passed that point...

Sun, 08/07/2011 - 12:44 | Link to Comment EhKnowKneeMass
EhKnowKneeMass's picture

Wanna bet that it might be a green Monday?

Sun, 08/07/2011 - 12:58 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Can't tell until 4pm closing obviously, but S&P afterhours trading is currently 0.8% in the green, Dow 0.26%, and Nadaq -1.04.

 

It's either going to be a monumental day of red, or it is not. In light of QE expectations, I'd say it could be the latter. But almost everyone I know thinks it's going to be the worst day this year.

Sun, 08/07/2011 - 13:07 | Link to Comment EhKnowKneeMass
EhKnowKneeMass's picture

Thanks for opining, instead of just decrementing the counter. I will not try to offend your intelligence, but, obviously, the market has a propensity for proving most wrong; and it might just do that on Monday. The reason I say that is because of the NFP predictions here. Did you happen to read what most were predicting. It did not turn out to be true. Call it manipulation or the truth, but most were proven wrong and the number just surprised on the upside. And that might just happen on Monday. Every governmental agency, around the world, will downplay this event. The CBs will throw everything at the market to maintain control. Therefore, we might just close green. That's my supposition and I might well be wrong. But that's okay; I have been wrong before. Let's watch and see how the situation unfolds. And as you say, 'can't tell before 4 pm obviously'.

Sun, 08/07/2011 - 13:16 | Link to Comment TwelfthVulture
TwelfthVulture's picture

You're absolutely right.  It may well be a green day, however, in my opinion, the fact that the market sentiment has turned decidedly bearish, indices are flirting with major technical support levels coupled with the s&p news and the continuing euro disaster, my bets will prolly be cautiously on the short side.   Plus, my gut tells me it's a major bear market forming.   Like you, I may be right, I may be wrong, I too have been wrong plenty of times in the past. 

Sun, 08/07/2011 - 13:29 | Link to Comment WestVillageIdiot
WestVillageIdiot's picture

Those are not the futures being looked at.  The futures will not reset until later today, after the Asian opening.  That is when you will get a better idea about tomorrow.

What has been quoted above is from Friday's close.  That is the rearview mirror.  In front of us is the semi coming in the wrong direction. 

Sun, 08/07/2011 - 13:45 | Link to Comment TwelfthVulture
TwelfthVulture's picture

Really?  You don't say?  I did not know that futures cutoff on Friday eve at 4:30 p.m. until Sun eve.  He still could be right, it may well be a green day tomorrow. 

I forgot who said it, and I'm probably paraphrasing, "In every market transaction there's a buyer and a seller.  Both believe they are astute."

Sun, 08/07/2011 - 14:17 | Link to Comment Kayman
Kayman's picture

 "In every market transaction there's a buyer and a seller.  Both believe they are astute."

Let's modernize that saying, "In every apparent market transaction, there is a Primary Dealer and the Fed, acting as buyer and seller, to mimic market activity.  Both are shills.

Mon, 08/08/2011 - 06:22 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Yep. 2am GMT is when I'm busiest. Whether wishful thinking or not, I'm told it will open green. We'll see. 

 

EDIT: Ha! Red, red, red. -2% down at least on S&P, DOW, and Nasdaq open

Sun, 08/07/2011 - 13:42 | Link to Comment YHC-FTSE
YHC-FTSE's picture

+1 There, you got your first increment. :)

We're heading for a green S&P opening, sure. How the day ends is beyond our control and we can only surmise on the likely actions of those who have the funds to manipulate the desires and nightmares of ordinary people. If it were not for the EU fracas, I would have said QE would come much later and we would see more controlled heavy losses this week. But the US downgrade compounds the EU contagion and that may be just one too many unknown variables to play fast and loose with the markets for those in power.

All of these emergency meetings this weekend can only be about stemming the flow of red. So, your/our supposition may be right. On the other hand..... if they decide to let it ride for a myriad of political reasons, tomorrow could be one of the worst days in history, after which all manner of nightmares can become reality: QE becomes the hero, and austerity measures the manna that nourishes the markets until the public is bled dry. Interesting week ahead.

Sun, 08/07/2011 - 13:00 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture
Rainy Days and Mondays

 


http://www.youtube.com/watch?v=QUEhjIuz5n4

Sun, 08/07/2011 - 14:02 | Link to Comment caerus
Sun, 08/07/2011 - 12:07 | Link to Comment MicksBus
MicksBus's picture

Lads the craic = 90 (if you own PMs)

Sun, 08/07/2011 - 12:30 | Link to Comment Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Sorry, but QE3 as we know it to be will NOT happen. Its not that Ben doesnt want to: he just can't. If they do anything, it will be to hold the line, while all attempts are made to distract the citizenry with something else: whether we throw the the EU under the bus, up to war (either option hurts us too)

 

A little dated but read Buiter's Debt of Nations at page 64 about the USA. Watch for an increase in long Treasury rates to help determine how the world has really digested the latest S & P downgrade

 

http://www.nber.org/~wbuiter/DoN.pdf

 

 

Maybe the Old Regime and its Banks WILL HAVE TO EAT THEIR PEAS!! bwahhaha.

Sun, 08/07/2011 - 13:00 | Link to Comment Temporalist
Temporalist's picture

Sorry Cindy they can't hold the line as it is already sagging too deep.  They are left with nothing else but their Billy Barule, i.e. printing money.

Oh Billy, Billy, Billy...

http://s238.photobucket.com/albums/ff41/paperhogan/?action=view&current=...

Sun, 08/07/2011 - 13:22 | Link to Comment Cindy_Dies_In_T...
Cindy_Dies_In_The_End's picture

Let me tell you something, when EVERYONE screams QE3, it ain't gonna happen. I didn't say that the Fed won't do Something else, just won't be QE3 as we know it, thats all.

 

Contrarians live longer, honey.

Sun, 08/07/2011 - 13:51 | Link to Comment Loose Caboose
Loose Caboose's picture

Cindy is right.  No QE3 as we know it.  QE3 would guarantee another downgrade - perhaps Moody's this time - and bring an abrupt end to the story. The EU could well be thrown under the bus to funnel the desperate money to the US$ yet again to save it another day.  But this thing is on the ropes and running out of options quickly.  I really do fear that TPTB may unleash holy hell in the form of a global/national disaster to distract and consolidate the masses - sort of like a shot to numb the pain while they remove every vital organ. 

Disobey.

Sun, 08/07/2011 - 17:41 | Link to Comment New World Chaos
New World Chaos's picture

9/11 10-year anniversary coming up.  There have been increased troop movements around the country and plus we have the Super Congress, which would be perfect during martial law.  False flag coming?

http://theintelhub.com/2011/08/02/multiple-military-train-convoys-filmed-in-oregon-as-domestic-troop-movements-continue-to-skyrocket-amid-super-congress-tyranny/

Sun, 08/07/2011 - 12:08 | Link to Comment Doyle Hargraves
Doyle Hargraves's picture

Those who believe that the U.S. is not expendable in terms of the world economy, and believe that foreign nations will continue pouring money into our coffers because they “have to”, are kidding themselves.-SJGR Bitchez!

Sun, 08/07/2011 - 13:03 | Link to Comment Temporalist
Temporalist's picture

Of course that is true.  Would a bar owner continue to extend credit to an alcoholic indefinitely just so they can "sell" them more alcohol?  Some day the check has to be paid.

Sun, 08/07/2011 - 13:35 | Link to Comment trav7777
trav7777's picture

they would if their entire bar was predicated upon being the sales end of a ponzi

Sun, 08/07/2011 - 14:31 | Link to Comment snowball777
snowball777's picture

That would be a function of how many other living drunks were available in the general vicinity.

Sun, 08/07/2011 - 12:08 | Link to Comment falga
falga's picture

Let's fire all of congress for not doing the needed cut in the deficit! This crisis of incompetence is their's only....

Sun, 08/07/2011 - 12:08 | Link to Comment CapedCrusader
CapedCrusader's picture

Ridiculous.  I predict bond yields are stable and the equity markets end the week up 4%.  Debt downgrade is meaningless.

I'll be easily stealing money from the sheeple this week.  

 

Sun, 08/07/2011 - 17:44 | Link to Comment Spitzer
Spitzer's picture

It wouldn't surprise me.

The markets are mentally fucking retarded. Gold down $80, DOW down 60, dollar up 4%

Sun, 08/07/2011 - 12:10 | Link to Comment Captain Planet
Captain Planet's picture

Seeds, bitches.

Sun, 08/07/2011 - 12:19 | Link to Comment narapoiddyslexia
narapoiddyslexia's picture

Good farm land, bitchez, with water. And large-caliber rifles. And lots and lots of ammo.

Sun, 08/07/2011 - 12:19 | Link to Comment Doyle Hargraves
Doyle Hargraves's picture

+.308

Sun, 08/07/2011 - 12:45 | Link to Comment Zero Hedging
Zero Hedging's picture

30-06  :o)

 

Sun, 08/07/2011 - 13:03 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

Isn't life Garand?

Sun, 08/07/2011 - 13:06 | Link to Comment Conor
Conor's picture

Lead of the 9mm, .45, .223, and 00 buck variety is the precious metal of the future.

Great to live down South. Plenty of farm land, plenty of water, and warm weather.

Blue-state urbanites will be in big trouble when society falls apart.

 

Sun, 08/07/2011 - 14:30 | Link to Comment toady
toady's picture

I bought out two local Walmarts 30.06, .45, .22, double aught AND slug shotgun ammo.

So my lead is fully funded.

Now if I could only top up silver!

Mon, 08/08/2011 - 22:10 | Link to Comment srelf
srelf's picture

You know, of course, that the ammo you now collect may be used against one of those now amiably conversing with you!

 

Sun, 08/07/2011 - 12:14 | Link to Comment A Lunatic
A Lunatic's picture

Who could possibly have not known this day was coming?  Would it seem out of sorts for a grown man to curl into fetal position behind the toilet, while chain smoking cigarettes and crying for his Mommy, or is it too soon for that?

Sun, 08/07/2011 - 12:14 | Link to Comment Boilermaker
Boilermaker's picture

In all seriousness, the 'collapse' which is coming, and I do believe it is, will seriously destroy China the most.  In my thoughts, bring it on and get it over with.  the EU and US will rebuild quickly and, this time and hopefully, correctly.  China can go eat a bag of shit as far as I'm concerned.

Of course, there might be some more flaming pelican sightings off the coast of L.A. but this is unavoidable now.

I'd rather take the hit now and live a life of shit than let my kid end up some sort of serf to the Chinese.

Sun, 08/07/2011 - 12:20 | Link to Comment meatball
meatball's picture

Keep dreaming.

If everyone falls, who has more to lose? People in the west.

Chinese who lose their 50 cents an hour job making iphones will just go back to farming.

Sun, 08/07/2011 - 12:24 | Link to Comment Boilermaker
Boilermaker's picture

You're just flat wrong and, I suspect, have never actually been to China.  That place will absolutely implode if we just simply stop buying their shit (including iphones, etc).

The EU and US will struggle, for sure.  But, you can't strip us of what we already have.  China will go back to the stone age.

This is overdue.

Sun, 08/07/2011 - 12:47 | Link to Comment Smiddywesson
Smiddywesson's picture

Agreed China would implode if we raised trade barriers.  It is only continued prosperity, or the hope of continued prosperity, thatt has led the public to buy into the Century of China pipe dream.  One billion single guys discovering they will never find a wife leads to all sorts of ethnic, religious, you name it violence.

They didn't toss out Google for nothing.  They are scared to death of the public.

Sun, 08/07/2011 - 12:47 | Link to Comment Zero Hedging
Zero Hedging's picture

If the US (when) does down, it will be a global event.  No one is immune....

Sun, 08/07/2011 - 12:50 | Link to Comment Boilermaker
Boilermaker's picture

Well, that's going to happen.  Now place your chips on who you think emerges from the dust.  China is a fucking joke compared to the EU and US.

Sun, 08/07/2011 - 12:56 | Link to Comment DosZap
DosZap's picture

Zero Hedging

Agree, the only countries that would not be in serious trouble, are the undeveloped, and underdeveloped.

That's one reason for the Expat Brigades running up prop values in places NO one ere would wanted to have lived 10yrs ago.

Sun, 08/07/2011 - 13:06 | Link to Comment Temporalist
Temporalist's picture

Yes DZ the people that will suffer the least are those that are already used to suffering.  There is nowhere to go but up when you are already at bottom.

Sun, 08/07/2011 - 13:12 | Link to Comment Boilermaker
Boilermaker's picture

That's great logic.  I never thought of it that way.  It's like the people with cancer are the least afraid of chemotherapy.  Or those that are the least educated about how bad their lives have the best percieved quality of life.

That's some deep zen buddah shit there.

Sun, 08/07/2011 - 14:46 | Link to Comment toady
toady's picture

The problem is that China, and India, had a taste of ipads, indoor plumbing, and cars for the last decade pr two. Add that to their HUGE populations, and I don't see a good outcome.

Hell, China is having problems controlling their population now, with dissidents and riots already the norm. Now imagine post-collapse.

Sure, some outlying natives may never know the difference, but a billion screaming Chinamen, or Indians, in the cities will be hard to handle.

Sun, 08/07/2011 - 14:30 | Link to Comment Kayman
Kayman's picture

Temporalist

There is nowhere to go but up when you are already at bottom.

Uh... you could stay at the bottom.....

Sun, 08/07/2011 - 12:56 | Link to Comment DosZap
DosZap's picture

Zero Hedging

Agree, the only countries that would not be in serious trouble, are the undeveloped, and underdeveloped.

That's one reason for the Expat Brigades running up prop values in places NO one ere would wanted to have lived 10yrs ago.

Sun, 08/07/2011 - 12:51 | Link to Comment EhKnowKneeMass
EhKnowKneeMass's picture

Okay, kindly tell me this; given your scenario, it will be easier for which category of people to move back into the shithouse:

1. people who just recently moved a few steps away from the shit house (China and rest of the the fucked-up world)

2. people who have been away from a shitlhouse for quite a while (U.S, and others); people who cannot live without electricity, running water, good road, cars, fast food, supermarkets, malls, 24 hour television, NFL, NBA, MLB, NHL, justin beiber, lady gaga, britney spears, etc., etc., etc..

Sun, 08/07/2011 - 13:00 | Link to Comment Boilermaker
Boilermaker's picture

Look, you're just delusional about the supremecy of China.  We're talking about a total reboot here.  The US and EU simply don't need China.  We have the technology, resources (OK, oil is a challenge), and foundations in our cultures to get passed it.  China is a land of ignorant peasants that work cheap.

You go ahead and place your bet on China.  Aside from having billions of slave-wage hands making stuff and stealing every bit of know-how from the West, this idiots have NOTHING.  Christ, they were stupid enough to fund the US and EU into point where they wouldn't / couldn't get paid back.

It's coming and it's going to be horrible.  But, the US, then the EU, then Japan, will emerge.  China will just be a toilet of humanity again.

Sun, 08/07/2011 - 13:27 | Link to Comment EhKnowKneeMass
EhKnowKneeMass's picture

Mr./Ms. Notre Dame Boilermaker, I am not delusional about anything. Never in my post did I mention anything about the supremacy of China. So, kindly, don't assume that. All I am saying is this. If there is a total reboot here, and I assume you are talking about a "Total Reboot", which mean that the entire landscape visits the shithouse, starts from a scratch and builds again. That's what a 'total reboot' is in my dictionary, by the way reboots are always total in scope, in my opinion. Then, are you saying that a person who merely stepped away from the shit house will suffer the most or the the person who has been away from the shithouse for a generation or two? There are families in the U.S. who do not know how to cook and would wither away and die were it not for all the fast food restaurants, boston markets and the likes. The same cannot be said about the "fucked up world". I know you have mentioned about visiting China and how much you dislike them. I think you have even called it a shit hole. So, I am assuming you have also noticed how much less they need to surivive in this shit hole of theirs. Can you say the same about your brethrens in the U.S? Can they live without and AC; heat; car; supermarkets, etc. The fucked up world can. If you opine differently, then good for you. For each his/her own. Best of luck.

 

By the by, I am not a from China and am not a China phile.

Sun, 08/07/2011 - 13:37 | Link to Comment docj
docj's picture

I largely agree with you, Boilermaker. But I only think it's important to point something out in response to this...

We have the technology, resources (OK, oil is a challenge), and foundations in our cultures to get passed it. China is a land of ignorant peasants that work cheap.

That may or may not be true with regard to China itself (I don't know personally and having spent my entire professional career in the US defense industry would just assume not set-foot in mainland China, thank you very much). But it doesn't take very long walking around graduate schools of engineering and science in the US to notice that there is something almost entirely missing - namely, Americans.

Just saying, is all.

Sun, 08/07/2011 - 13:41 | Link to Comment trav7777
trav7777's picture

that will change.  Science and engineering used to be all white people.  The competency is there, and at some point, an engineer will be seen again by our women as a catch (instead of a black thug with a criminal record) and then the career will be more desirable.

Right now, engineering is not glamorous and not particularly lucrative compared to a lot of bullshit professions.

Sun, 08/07/2011 - 16:41 | Link to Comment Toma Haja
Toma Haja's picture

Do you suppose our public "education" system might have anything to do with it?

Sun, 08/07/2011 - 13:00 | Link to Comment Boilermaker
Boilermaker's picture

Duplicate.

Sun, 08/07/2011 - 13:39 | Link to Comment trav7777
trav7777's picture

China has systematically destroyed their environment and misdeployed capital to negative ROI pursuits all in order to appear western.

So, people will move back to where, polluted farms with all the water going to try to prop up the ponzi?

Sun, 08/07/2011 - 14:23 | Link to Comment EhKnowKneeMass
EhKnowKneeMass's picture

Yes, exactly, just as the Japanese moved back to their irradiated farms and built from there. It's not going to be the end of the world. I believe it was you who had prophesized that and called the rest, who were calling for the end, the 'doomers'. Humans adapt and if they can't Nature takes everything back. In the end, we are all just dust in the wind trying to scream at the top of our voice that we have the biggest dick.

Sun, 08/07/2011 - 14:25 | Link to Comment Kayman
Kayman's picture

Chinese who lose their 50 cents an hour job making iphones will just go back to farming

You forget the first step of rioting and turning Chicoms into ferilizer, then returning to the farms.

Sun, 08/07/2011 - 13:06 | Link to Comment Boilermaker
Boilermaker's picture

There are some serious Chink lovers here.  OK, you guys got me, they are just the fucking best at everything and the Americans and Europeans are shit eating morons.

Sun, 08/07/2011 - 13:19 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

deep.

Sun, 08/07/2011 - 13:26 | Link to Comment Boilermaker
Boilermaker's picture

I wish it were deep instead of a 'Go China' jerk off session.  Instead it's just pathetically ignorant.

Sun, 08/07/2011 - 12:16 | Link to Comment jimcg
jimcg's picture

Anyone believing that they know how tomorrow will end is delusional.

Hopefully, you are hedged in several directions.....fasten your seatbelts and be prepared for anything, it's going to be one hell of a ride.

Good luck!

J

 

 

Sun, 08/07/2011 - 12:49 | Link to Comment Smiddywesson
Smiddywesson's picture

Tomorrow? no

Eventually?  Yes.  I have  no doubt at all.

PMs, all-in, no hedge, no worries.

Sun, 08/07/2011 - 12:50 | Link to Comment DosZap
DosZap's picture

jimcj,

@ 12:16.......................

Bingo.

Old saying's come to mind.

The Inmates are running the Asylum,and there are Too many Chiefs and not enough Indians.

Sun, 08/07/2011 - 12:20 | Link to Comment narapoiddyslexia
narapoiddyslexia's picture

See you on the other side. . . 

Sun, 08/07/2011 - 12:21 | Link to Comment lunaticfringe
lunaticfringe's picture

Robert Reich, seen babbling incoherently on Huffpo, gets taken to the woodshed. Nothing I enjoy more than a moonbat whining like a baby. http://thecivillibertarian.blogspot.com/2011/08/robert-reich-may-have-ha...

Sun, 08/07/2011 - 12:33 | Link to Comment wang (not verified)
Sun, 08/07/2011 - 13:11 | Link to Comment Dave Thomas
Dave Thomas's picture

I believe that Robbie's brother whom was separated at birth believes the same kinda junk and proudly displays so in his sandbox. Stunnigly similar.

Here take a good steamy look:

http://krugman.blogs.nytimes.com/2011/08/06/the-best-summary-of-the-sp-d...

 

Sun, 08/07/2011 - 14:46 | Link to Comment snowball777
snowball777's picture

Sorry, moonbat though he may be, he's spot on that S&P was asleep at the switch (or perhaps blinded by fee collection) for a solid decade of decadent debt accumulation.

 

Where were the ratings agencies when Dubya was handing out tax cuts like Halloween candy, engaging in multiple simultaneous "overseas contingencies", signing up to subsidize Big Pharma to the tune of billions, and congress was acquiescing to "an offer they couldn't refuse" from Hank the Stank?

Was the trajectory really different then? Or did they suddenly regain the ability to do simple math last week?

Sun, 08/07/2011 - 12:25 | Link to Comment sunny
sunny's picture

I remain unconvinced that rating agencies will face all that much scrutiny because of bad calls on various junk bond ratings in the 2005-2008 period.  Clearly these ratings were wrong, but paid for by banksters who knew they were junk and paid dearly for the ratings they received.  I simply have to believe that the rating agencies saved the receipts from these purchases of good ratings by the banks.  Any intense investigations of the ratings from that period will bring those receipts to the light of day, implicating any number of bankster as the greedy, fraud-driven bastards they are.  Members of congress are not inclined to have all their good buddy/sugar daddy banksters shown in bad light. 

We shall see.  Exciting times ahead in any case.

sunny

Sun, 08/07/2011 - 14:45 | Link to Comment Kayman
Kayman's picture

Will the Obamster give back the Goldman contributions ?  How about the Republican's owned by the TBTF ? 

 The political whores are simply buying time for their financial pimps. It is all in now. Reich and Krugman are bleating while pillow fighting with Fox et al.

The gold bars are already out of the country.  And the private jets will leave, just like the Saudis got clearance from Dubya on 9/11. 

Sun, 08/07/2011 - 12:28 | Link to Comment jmc8888
jmc8888's picture

It's not hard.  The debt is fraudulent.

The people to blame is EVERYONE that DOES NOT cancel the fraudulent debt through Glass-Steagall

So if your 'party' wants to cut, print, or tax to pay off fraud.  Then your 'party' IS the problem.  They ARE acting like 'terrorists'.  Because they are killing off the economy, and the people of this country, and the world (joined by others in the world doing the same thing...their political parties)....for FRAUD.

So it's not just republicans, democrats, and tea party who are fucktards.

It's also the political parties of basically all nations that engage with the overlords.

So should we all just kill ourselves over fraud? Or cancel it, with Glass-Steagall? Gee how fucking hard is it knuckleheads (those that don't want Glass-Steagall)?

So rating agencies are wrong, and doing the bidding of select people on wall street.  (no doubt those who would benefit in some way from it, either financially and/or ideologically). Plus why are they even around? They rated everything wrong up to this point, and now when everything is about to break THEN they find religion and add the last bit of straw upon the camel's back. Are they right? In a sense...if you forget they are rating FRAUD.

We don't need to borrow from banks, we CHOOSE to be in such hock, thus even ratings are useless, as we never need money (if we choose) to come from banks, who use ratings.  Congress has the power of the purse.  Not what we can borrow from banks based on our credit rating from corrupt assholes, who only are 'right' when it serves their purpose and after the fact. 

Yes they will take drastic measures, because they were all dropped 100 times as babies.  No we can't Glass-Steagall the fraud, and wipe out the fraudulent debt, putting us nowhere near our 'debt limit'.  No we can't actually use congress as power of the purse.  No we can't actually engage in the physical economy...because it's all about 'money'.  Money is worth something.  (nope).  Money is a tool, a unit of account.  It's not 'worth something'.  Money needs to be used in practical things to build wealth.  Not some ponzi where everyone makes 'more money' which somehow is supposed to mean 'more wealth', but in reality, they just added more 'money' to the equation.

Glass-Steagall, or your position is that of a terrorist (in the metaphorical way its been thrown around as of late...but not too far departed nonetheless).

Sun, 08/07/2011 - 12:32 | Link to Comment the grateful un...
the grateful unemployed's picture

Monetary Policy

Fiscal Policy

 

We saw Fiscal policy trump Monetary Policy, for a change. Is it a sea-change or just a hiccup?  Most economists prefer Monetary Policy, which is consistent, and can span across several election cycles, and power shifts in the Congress. The FF (Jefferson esp) preferred Fiscal Policy, but they lived in an Agrarian world, and they had their slave girls keep them warm at night. (I think there's a Beach Boys song about that)

Final answer, we are better off than Europe, and better off than China (please), and the new American age will probably come out of all this. All the doomsday writers who took their money offshore, (andf who now pen their apocalyptic predictions from the shore of some Caribbean island) should be made to pay to get back in, including US corps like GE.

Sun, 08/07/2011 - 12:36 | Link to Comment wang (not verified)
Sun, 08/07/2011 - 12:37 | Link to Comment falak pema
falak pema's picture

Alt-mart the cry of desperation. Can the ECB hold together France, UK & Germany to help Italy.Spain by going Tarp route?

Big decision as it's NOW make or break time for Euro and EU. If they have the support of China, Russia, Brazil on concerted action along with FED they might be tempted to try. It's Merkel's call....Black swan Monday...

Sun, 08/07/2011 - 12:45 | Link to Comment cdskiller
cdskiller's picture

I have no idea what will happen next. I leave that to Tyler, who seems to have been correct about just about everything since zerohedge was started. I only know what should happen, which is that S&P and Moody's should be stormed by FBI agents and have their computers confiscated. Prosecutions should ensue, with everyone who gave AAA ratings to junk MBS's and tranches of toxic bundles sent to jail. Their businesses should be dismantled, and the fraudulent rating system reformed. 

Sun, 08/07/2011 - 12:51 | Link to Comment TwelfthVulture
TwelfthVulture's picture

Oh, that's brilliant.  S&P finally steps up to the plate, takes their responsiblities seriously, does the right thing by downgrading a nation that borrows half of what it spends and is approaching (I say well past) 100% debt-to-gdp ratio, and NOW you want to arrest them.  Just brilliant.

Sun, 08/07/2011 - 14:25 | Link to Comment cdskiller
cdskiller's picture

I say that because they are criminals. What they did was far more than just refuse to step up to the plate. They were part of a securities fraud scheme.

Sun, 08/07/2011 - 12:52 | Link to Comment lunaticfringe
lunaticfringe's picture

ZeroHedge hasn't always been right...but Tyler is certainly willing to take a stand and paint the other side of the picture. I am very grateful for ZH. It is a rallying point, a place where we can all go because we know that the shit sandwich the USG and the MSM is feeding us ain't the BLT they would have us believe it is. Building brushfires in the minds of free men.

Sun, 08/07/2011 - 13:09 | Link to Comment wang (not verified)
Sun, 08/07/2011 - 12:48 | Link to Comment disabledvet
disabledvet's picture

"collusion" is EXACTLY what the problem STILL IS. Still...there's always "an odd man out." If that "odd man" happens to be "the entire United States Military" exactly who has the problem again? Anywho--here's some Monday theme music for the festivities:
http://www.youtube.com/watch?v=-Hh--22Eu_M&feature=player_detailpage
and how about a pictorial just because:
http://www.youtube.com/watch?v=1eHRK6zVFbQ&feature=player_detailpage

Sun, 08/07/2011 - 12:51 | Link to Comment automato
automato's picture

The bottom line is if you subscribe to belief in "Animal Spirits", then WE ARE SCREWED! You can try and talk your way out but losing AAA is the absolute WORST thing that could ever happen in a Universe where "Animal Spirits" are the paradigm. It is the economic equivalent of a stockbroker jumping to his death from a Wall Street window. So everyone, everywhere better hope and pray that Keynes was an idiot.

Sun, 08/07/2011 - 12:59 | Link to Comment TwelfthVulture
TwelfthVulture's picture

Unless you're a government troll, I think "Keynes was an idiot" is a prerequisite for visiting ZH.

Sun, 08/07/2011 - 13:02 | Link to Comment Sudden Debt
Sudden Debt's picture

So if a rating agency does what they are paid for and gives a country a bogus rating that is AAA.... they are good.

If the don't do what they are told..... they are not so good....

Strange how ratings work at gunpoint...

Sun, 08/07/2011 - 13:03 | Link to Comment BlackMagician
BlackMagician's picture

Tel Aviv market open today...down 7%...yikes!

Sun, 08/07/2011 - 13:08 | Link to Comment FranSix
FranSix's picture

Take notice that the ratings agencies downgrade follow on negative short term nominal interest rates. The desired effect should be seen to be a rise in the short term interest rate, which no effort has been spared. The subtle irony is that negative rates will proceed along the yield curve. Just how far along is any body's guess.

Sun, 08/07/2011 - 13:09 | Link to Comment besnook
besnook's picture

what is going to happen?

 

on the fiscal side the downgrade provides political cover to refinance the entitlement programs effectively starving old people(gen x and later) and the poor(today) while euthanizing the sick people on medicaid and medicare.

 

on the monetary side it looks like an open door to qe n+1, devaluation of the dollar and a jolt of inflation. i haven't worked out the numbers but 20% inflation would seem to be enough to bring all the debt into manageble territory. i only wonder if wages will follow. the consumer is still the key element to any recovery(even if the banks think they are) and need debt relief to spend more. higher wages would work, so would a debt holiday showered upon the people with a bernank helicopter.

Sun, 08/07/2011 - 13:24 | Link to Comment TwelfthVulture
TwelfthVulture's picture

Of all the thoughts I've read on ZH over the years, in my humble opinion, this statement here, epitomizes the faulty economic logic that is responsible for our nation's ills:

the consumer is still the key element to any recovery.

Let me say categorically and without hesitation that the PRODUCER is the KEY to any recovery.  Always has been, always will be.

Sun, 08/07/2011 - 13:36 | Link to Comment besnook
besnook's picture

in a normal economy you are correct. in the debt based economy the usa is the consumer is the key. if the usa were to switch back to a producer economy(never happen) it would take a full generation or a world war to accomplish it.

Sun, 08/07/2011 - 14:21 | Link to Comment TwelfthVulture
TwelfthVulture's picture

You prove my point.  In ANY economy it is the PRODUCER who is the engine of the economy, not the consumer.

You borrow to consume to borrow more to consume more to borrow ... 

At what point in this circle does a "recovery" happen?  Even a Marxist understands that the productive power of labor is the engine of economic growth.  From where exactly does growth come under your model?  Borrowing more, or, consuming more?

I've listened to about a dozen Sunday morning talking head shows this morning and every "expert" trotted out basically said the exact same thing about the S&P downgrade, i.e., "it doesn't matter since America can print more dollars."  Wow!  Simply, amazing.  They all, without exception, are claiming, openly, that there is no intention whatsoever of ever paying back the $14 trillion already lent to this country.  AA+?  We should be downgraded to C- with that kind of leadership.  That's not AMEX Platinum, that some real ghetto payday loan thinking right there.

Your debt based economy is A LIE.  Just as the belief that the social security tax collected from you is yours is A LIE.  Hint: it's being given to my grandmother. 

Do you hear that?  It's the last gasps of a dying superpower woefully unprepared for the reality that's about to rear its ugly head.

BTW, I doubt that the US has a generation to get its house in order.

Sun, 08/07/2011 - 16:02 | Link to Comment besnook
besnook's picture

the debt based economy is the logical end to the producer economy(british empire) which will return to a producer economy only when the standard of living falls way below the current producer economies. in the meantime, the usa can only play with the cards it holds. the cards it holds say the consumer better start spending or the collapse in living standard will accelerate.

Sun, 08/07/2011 - 17:20 | Link to Comment Toma Haja
Toma Haja's picture

Our living standard has been a function of our consumption patterns.  Our consumption patterns have been a function of our debt.  Our growing debt was sustainable based on our productivity and confidence.  We lost track of reality (production) and over confidence has led us to bursting bubbles and overleverage.  The cards we hold look a lot like too much debt and fewer and fewer willing suppliers of new debt. 

If the U.S. is to avoid/overcome a collapse in its living standard, it will come from innovation and "Animal Spirits".  Which, by definition, implies less government intrusion.

p.s. This is not to say proper, effective, and honest regulation is not required.

Sun, 08/07/2011 - 13:17 | Link to Comment markar
markar's picture

just keeps getting worse. Bob Chapman posted this yesterday:

 

America Act (H.R. 4646) , a bill calling for the implementation of a scheme to pay down the [2010] by Rep. Chaka Fattah (D-Pa.). His "Debt Free America Act" (H.R. 4646) would impose a 1 percent "transaction tax" on every financial transaction...

 YOU READ IT: EVERY DEPOSIT, WITHDRAWAL FROM ANY BANK ACCOUNT WOULD CARRY A 1% FEE!

 

I supposed this doesn't apply to HFT market transactions.

Sun, 08/07/2011 - 13:24 | Link to Comment TwelfthVulture
TwelfthVulture's picture

They provide liquidity to the markets.

Sun, 08/07/2011 - 14:02 | Link to Comment Milestones
Milestones's picture

Type in H.R.4646 into Goolge, msn,etc and see what you get!       Milestones

Sun, 08/07/2011 - 13:20 | Link to Comment Frank N. Beans
Frank N. Beans's picture

Monday morning will be down with margin calls galore, causing selling in gold and silver to raise cash.  US Treasurys and the dollar may actually come out of this smelling okay, especially with Europe in worse shape. 

But volatility is about the only sure bet Monday.

Sun, 08/07/2011 - 13:26 | Link to Comment bardian
bardian's picture

Franz Oppenheimer said that two ways of acquiring wealth were the political and economic means, and government is the manifestation of the political means.

We can of course go further and say that every debate, every law, every meeting or war or even every action, in fact every breath of any politician or organization associated with government is politically motivated, or motivated to create a certain image with a certain group.

The deep irony of the SP's poitically motivated downgrade  is that they are creating the illusion of operating under the law of economics, while in fact doing just the opposite.

Of course, us freemarketers and anarchocapitalists know that not only are "political means of acquiring wealth" but politics in general are immoral and impractical, only voluntary exchange is neccessary for a society to thrive.

I think people will see right through this action, its absurd to think that kicking the US in the shins will help usher in the SDR.

Governments need CONSENT, there will be no SDR, and incidentally, no significant war either.

Sun, 08/07/2011 - 13:24 | Link to Comment Mark_BC
Mark_BC's picture

That was a pretty good article but I have an issue with, "Who will be the primary target besides ratings agencies? Why fiscal conservatives, of course! Obviously, the Tea Party is full of “terrorists”, and real conservatives are the true culprit behind the collapse because we have this annoying tendency of pointing out that our spending addicted government is dragging us hogtied on a speedboat to Hades."

Well of course conservatives are to blame, just like leftist Keynians are! We are all in part to blame for this, some more so than others. The Tea Party has been hijacked by Big Oil for the purpose of gaining popular support to deregulate everything in some perverted Austrian thought experiment which says that when you throw everyone into a pot, stir then cover and simmer for an hour, that somehow when you open it up at the end it will sort itself all out to maxmimize efficiency and come to some optimal outcome. Sheer fantasy.

This conservative idea that we can just cut spending and deregulate and then everything will just fix itself accordign to free market ideology is pure fantasy. Reagan's tax cuts for the wealthy only paved the way for the final destruction of the country, as you say, for big business, government, ratings agencies, and regulators to all conspire to steal the wealth of the middle class, all controlled by a very few very wealthy people sitting atop this all drooling at the trillions of dollars they will make when the system finally collapse.

There is NO HOPE for the US economy. It is at the peak of its 30 year ponzi sheme, and the only future for a ponzi scheme involves its final catastrophic collapse. Everything else is merely stalling tactics.

Sun, 08/07/2011 - 17:47 | Link to Comment Toma Haja
Toma Haja's picture

"This conservative idea that we can just cut spending and deregulate and then everything will just fix itself accordign to free market ideology is pure fantasy."

No one is kidding themselves that less spending and regulation will fix everything.  The facts are that with the ongoing economic contraction, tax revenues have declined significantly and government spending has gone up significantly.  As the taxation burden grows on the private sector, its abiltiy to create a profit is diminished.  Profit is the precursor to savings, which are the precursor to investment and new job creation.  Atheletes can train and train and train to improve their strength, endurance and ability.  At a certain point, they can't go any further.  In extreme cases they push themselves or are pushed to fatal consequences.

I saw Steve Forbes on Fox today complaining about the S&P downgrade.  IMHO the downgrade may be the needed turning point, the wake up call, that does give hope to the U.S. economy.  Anything that hastens the collapse of a ponzi scheme can't be al that bad.

Sun, 08/07/2011 - 13:29 | Link to Comment Piranhanoia
Piranhanoia's picture

Very good and timely summation

Sun, 08/07/2011 - 13:39 | Link to Comment ccrabill
ccrabill's picture

Tomorrow, Dr. Jerome Corsi and Orly Taitz, as well as a prestigious law firm based in Hawaii, will present her subpeona to the Clerk in charge of Obama's BC. There is no legal recourse open to the Clerk and the State of Hawaii except to produce it, (which is not to say I don't think they won't try to defy the law...). This is scheduled to happen 10 a.m. Pacific Time.

Naturally, there will be press coverage. Do you think perhaps, as per Clinton, et al, that Obama will welcome a cataclysmic distraction from this event that will distract the masses indefinately?

Sun, 08/07/2011 - 13:40 | Link to Comment ccrabill
ccrabill's picture

Tomorrow, Dr. Jerome Corsi and Orly Taitz, as well as a prestigious law firm based in Hawaii, will present her subpeona to the Clerk in charge of Obama's BC. There is no legal recourse open to the Clerk and the State of Hawaii except to produce it, (which is not to say I don't think they won't try to defy the law...). This is scheduled to happen 10 a.m. Pacific Time. Naturally, there will be press coverage. Do you think perhaps, as per Clinton, et al, that Obama will welcome a cataclysmic distraction from this event that will distract the masses indefinately?

Sun, 08/07/2011 - 13:46 | Link to Comment Irrational Exub...
Irrational Exuberance's picture

I smell a margin hike in GOLD !!!

Sun, 08/07/2011 - 13:46 | Link to Comment Irrational Exub...
Irrational Exuberance's picture

I smell a margin hike in GOLD !!!

Sun, 08/07/2011 - 13:54 | Link to Comment PulauHantu29
PulauHantu29's picture

After listening to the news shows this monring I'm more pessimistic about our economy. Most of these Muppets still don't understand (or want to understand...or... are Knowingly Paids Shills/Spinmeisters).

The massive deficits and spending and military experiements are crushing the Nation yet few of them offer any common sense (and obvious although painful) solutions."More printing" said one. "More military" said another. "More entitlements and housing subsidies" said another. "Invade Syria" boasted another.

The glimmer of hope is gone.

Sun, 08/07/2011 - 14:14 | Link to Comment sasebo
sasebo's picture

No big deal. Just take control of the real economy away from the obnoxious, pompous financial elite &  their politician puppets & lobbyists & give it back to the "free" market where it belongs. Anybody think the market is "free" now? 

Dump all the stupid Keynesians & replace them with Austrians. Vote for Ron Paul. Think things might get shaken up a bit when he puts Austrian economists at the fed, treasury & ag? Ever read any Austrian economics? All this other stuff is meaningless crap.

What the markets do is just a bunch of noise in the real situation.

That's our only hope. Its all about ideas.   

Sun, 08/07/2011 - 15:34 | Link to Comment Mark_BC
Mark_BC's picture

I can understand your sentiment and disdain towards Keynesians but Austrian economics isn't much better.

"Anybody think the market is "free" now?"

Of course not, there is no such thing as a free market, it's a unicorn that exists only in our minds (or Austrian thought experiments). Any time a market approaches "freedom", then due to its "freeness" it will quickly be taken over by the first big thug who sees an opportunity to distort it for its own self interest. The benefits of free markets must be carefully regulated or you lose them.

I've read quite a bit of Austrian economics, even spent time on the Von Mises website, and it's all pure fantasy, all based on the false premise (thought experiment? Why do they need imaginary experiments to get their ideas across? What's wrong with real world scientific experiments?) that labour "produces" things, when in fact we produce absolutely nothing. The natural world is what produces things, we simply take those things and transform them.

Ron Paul is naive. The solution lies in thermo-economics. Unfortunataely, it means that economists will have to learn about science and engineering in order to be able to understand how economies work. Fat chance of that happening. Therefore, I do not have much hope for the future of our economy or species....

Sun, 08/07/2011 - 16:20 | Link to Comment sasebo
sasebo's picture

Sorry, I just can't take seriously commemts from someone with no hope.

Sun, 08/07/2011 - 16:35 | Link to Comment Mark_BC
Mark_BC's picture

I guess you took the blue pill....
There is hope for our species, if the field of economics can be completely overhauled and brought back to reality. But there is no hope for the US economy, it is a ponzi scheme. Maybe in the long run they will be able to rebuild it if they accept scientific principles and real world constraints but that's a long way off.

Sun, 08/07/2011 - 17:53 | Link to Comment sasebo
sasebo's picture

You must be taking blue pills by the bottle..........

And just who is going to convince the average voter that our country should be run on scientific principles? And who is going to run the country on scientific principles? Which ones? Is there a book explaining how to do this? What's the platform look like?

How many Keynesians, with their partial differential equation models, predicted the 07 crash? How many Austrians predicted the crash using their praxeological concepts? Who's explanations of the cause are more accurate?

 

Sun, 08/07/2011 - 15:36 | Link to Comment Mark_BC
Mark_BC's picture

delete

Sun, 08/07/2011 - 14:25 | Link to Comment Ted K
Ted K's picture

Tyler Durden, are you going to give your readers an explanation on THIS story?????

http://screwtapefiles.blogspot.com/2011/08/bear-necessities-of-silver-li...


Sun, 08/07/2011 - 15:15 | Link to Comment smore
smore's picture

Story?  The story is that a hysterical-sounding blogger calling themselves "Jeanne D'Arc" has gone to a LOT of trouble to imply that Zerohedge has benefited in some unspecified way from the Bears videos.

Someone on this person's site asked what the point was.  Here is her reply:

    I have sought simply to examine the publically available facts, free to all to check for themselves, to show how the avowed motivations and backgrounds of those who give buy and sell calls on the net do not, in some instances, appear to meet with all our preconceptions. And that should be a cautionary tale for silver investors everywhere.

    Sadly, there are many who do follow such sites blindly. Many, many investors got badly hurt on 2 May after following such sites blindly. I wanted to know more about how we got to the state where people were maxing out their credit cards and pulling money out of their 401k's largely on the basis of what they read on silver blogs. Yes, they bear (pun intended) responsibility for not doing their own due diligence. But the sites are not, in some cases, entirely without blame either. And if some sites are purporting to be written by an expert who is in fact not an expert, then that is a valid case to put to that site.

    Additionally, an enormous group confirmational bias has been established regarding certain memes. I think it's worth the time and effort to try to combat some of this disinformation. I should also stress that this article is not a one-off, but part of a longer-term project to assess the credentials of those who seek to speak with authority on the issues of the day.
    August 7, 2011 9:53 AM

So, she's concerned that none of us ninnies get talked into buying silver by a "non-expert", and they MIGHT buy it from the site related to the videos.  Big f-ing whoop.  Obviously she is motivated by something other than that.

Sun, 08/07/2011 - 14:57 | Link to Comment Founders Keeper
Founders Keeper's picture

[I have no doubt, QE3 will be the undoing of this country. Any further devaluation of the dollar will NOT be tolerated by creditor nations who have much to lose...]---Brandon Smith

First, this is an excellent article, TD.  Smart and clearly written. 

As for how many QEs remain?  The govt will allow unlimited QEs.  However, how many will the market tolerate before complete currency collapse?  Have been thinking about this since the end of QE2.  Been rethinking things.  We definitley get QE3.  But, QE4 is a wild card.  Any announcement of a QE5 will likely not be heard over the roar of riots, sirens, and crackle of burning buildings.

(Incidentally, my local cable company has been running Weekly Emergency Broadcast tests on my TV several times EVERY DAY for several days now.  Anyone else experiencing this?)

 

Sun, 08/07/2011 - 16:42 | Link to Comment sunkeye
sunkeye's picture

im too dumb to opine on the financial stuff but that ' ... dragging us hogtied on a speedboat to Hades.' was pretty darn good word picture painting-wise

 

Wed, 09/14/2011 - 05:03 | Link to Comment chinawholesaler
chinawholesaler's picture

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