Guest Post: The Experiment Has Failed. Are You Ready?

Tyler Durden's picture

From Simon Black of Sovereign Man

The Experiment Has Failed. Are You Ready?

After about an hour’s worth of air traffic congestion delays around JFK airport, I finally departed New York City yesterday evening en route for Vilnius, Lithuania… one of my favorite inconspicuous corners of Europe.

The route took me through Helsinki, Finland for a brief connection, and I was on the ground long enough to witness something truly bizarre: a complete and utter lack of people.

I could practically count on two hands the number of passengers milling around the airport this morning during peak business hours… it was almost something out of a zombie movie.

Ordinarily I would have seen hundreds, thousands of people… and I have in the past as I’ve traversed this route many times before. And no, today was not a holiday.

Helsinki’s airport functions as a major transfer point, especially for European business travelers criss-crossing the continent or flying to Asia, which makes airport traffic an interesting proxy on the European economy (though not necessarily a reflection of Finland’s).

While a single example is not enough data to draw any significant conclusions, I mentally filed the observation as another snapshot of Europe’s deteriorating economic situation.

It reinforces what I observed here several months ago when I was last on the continent in April; it was as if a dark cloud was hanging overhead, and the general mood was absolutely sour. People seemed to be capitulating all hope and starting to make peace with the fact that their economic futures have been squandered by a stupid experiment.

Of course, I’m referring specifically to the ‘euro experiment’… however the euro is merely a symptom of a much larger experiment– that of fiat currency.

It wasn’t all that long ago that money was actually made of something scarce– a real asset that couldn’t be conjured at will by an appointed bureaucrat.

In time, money supplies grew to be controlled by governments and banking cartels in the form of worthless pieces of paper. Since then, it’s devolved further to strings of bits in a giant database; our money supply is nearly all digital.

As my friend Tim Price characterizes it, what passes as ‘money’ today is merely an abstraction of an abstraction of the real thing.

The euro experiment was merely a commingling of 17 different national fiat experiments… albeit a remarkably stupid one.

Under the normal fiat game, a country would at least have to stand on its own two feet and con(vince) the market that its particular brand of monopoly money was sound.

With the euro, even the trashiest economies in Europe were able to pass off Germany’s credibility as their own. And now, finally, after more than a decade, the market is calling that ridiculous bluff.

Spanish bond yields have risen to a euro-era record, well north of 7%. Italian bond yields are 6%. The talking heads on financial news are going bonkers… nobody can fathom these countries staying afloat with interest rates being so ‘high’. And they’re right.

What’s funny is that the 20-year average of Italian 10-year bond yields since 1993 is 5.9%. They’re currently priced at 6.06%. Italian bond yields aren’t spiking, they’re just reverting to the mean. The real spike hasn’t happened yet.

Italy is in such dismal shape that having to borrow funds at ‘average’ rates is going to push it into insolvency… the government can only limp along if it can borrow at absurdly low rates that don’t even keep pace with inflation.

Perhaps more than anything, this shows how truly broken the system has become… and what a colossal failure the experiment has been.

Of course, before things completely break down, they’ll resort to the same old tactics that bankrupt governments have relied on in the past–outright confiscation of wealth, capital controls, and financial repression.

It’s already happening across the continent, in fact.

In Greece, the government is helping itself to people’s savings at will, in their sole discretion… and forcing businesses to ‘prove’ the tax purity of their funds.

In Italy, the government has colluded with several banks (like BNI) to freeze customers out of their accounts with no warning or explanation.

ATM limits are being imposed at many banks across the continent, and Euro leaders are openly discussing more severe controls to stem potential capital flight.

The conclusion to draw from all of this is clear: finance the government, save the banks, screw the people. This reality, coming soon to a western civilization near you.

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LULZBank's picture

Second passport Bitchezz!!!

Silver Bug's picture

The experiment created a monster. Time to put it down.

 

http://ericsprott.blogspot.ca/

SilverTree's picture

champagne [silver] supernova in the sky

Popo's picture

Simon Black:  The man who discovered "other countries".     

Lulz.

The Big Ching-aso's picture

 

 

Maybe the observation is telling him something about galavanting around like he's Branson on vacay.   Like I better keep my ass away from unusually empty airports during economic upheavals?  Kinda reminds me of right after an 9.0 earthquake 1,000 miles away if you stand on the beach and watch the unexpected oddity of the tide going out at about 70 mph then just maybe it's time to head for higher ground.   Well ya know observational genius comes in many forms.  Some of it even as common sense.

XitSam's picture

Simon selects evidence to make his point.  Note he does not report on the at least one other airport in Europe he used.

Marginal Call's picture

I'm having a hard time deciding between Simon, or Pheonix capital.  Trivial reporting? Check.  First had anecdotal evidence=mega trend?  Check.  Pitching free reports on ZH?

 

Tough call. 

mcguire's picture

agreed.  what the hell... at least pull some data on finland air traffic for our edification.  

kito's picture

poor simon, nobody told him he was in the old terminal, which they closed a while ago. the new shiny one was brimming with thousands of people..............................

The Big Ching-aso's picture

 

 

Come 2 think of it if he's gonna be flying anywhere right now shouldn't it be 2 his 1,500 acre survival farm in phuckin Chile?

AldousHuxley's picture

Executive coach: 'Finance is an amoral world, bordering on the immoral'

A psychologist compares the 'twisted minds' of some executives to those of paedophiles he has tried to treat in the past

http://www.guardian.co.uk/commentisfree/joris-luyendijk-banking-blog/2012/jun/18/executive-coach-finance-amoral-world

"Mid-30s is also when people are just before their mid-life crisis. They have more or less found out who they are, they can sort of see the limit of their potential, and it leads to disenchantment, disillusionment. 'I will not become the next Richard Branson', they realise. "At the same time they see that all good intentions aside, the world is tough place, and you need to be tough to survive and succeed. This is the age when you see people suddenly become serious. They have lost their innocence.

 

How so many brilliant, arrogant, super-talented young people get abused, sucked dry, burned out and then tossed aside by corporations and banks. In the early days of capitalism it seems the game was to exploit the less gifted; miners, factory workers etc. Today it's about taking advantage of talent. People are used, then discarded. Especially these days with the crisis. Fear rules supreme. You can get fired any moment, five minutes and you're gone.

 

"For psychologists like me the world of finance is very interesting, if only in purely clinical terms. You're a CEO and you pay yourself £8m. Now, look at the kind of organisation you need to put in place in order to make that amount … It's almost dirty.

"It gets more interesting still when your company has failed on a range of issues, and at the end of the year you still pay yourself those £8m. There's an outcry but you say: 'it's in my contract'. Now, take a step back, how has that £8m become so important to you that you can't even see why you shouldn't get them? Apparently your need for the money is so strong you stop registering the anger you provoke.

"Those CEOs and managing directors at banks with their millions … They deserve our pity, really. They are the victims of their own twisted minds. And it will bring them down. Whether you are a paedophile or pervert or control freak or psychopath; sooner or later a twisted mind will turn on itself.

 

amoral bordering on the immoral

 

"It's almost a perversion. The CEOs such as Fred Goodwin and Jamie Dimon and the like. They present themselves as to the outside world as posh and erudite and sophisticated; as supermen. But they are just like you and me, with similar needs and fears. We shouldn't fall for their spiel. .......they are not worth millions

Colombian Gringo's picture

I think a noose is a more appropriate bonus for most of the bankster CEO's. I suggest putting it to shareholder vote and see if the majority would  give them millions or hang them. 

adeptish's picture

They could be worth millions.

Forget the noose, such a waste.

Suggestion. Upon conviction the guilty party is assessed by 3 independant organ harvesting "bidders of interest" who have themselves submitted the 3 highest bids in an open process. Clearly the bidders would account for age, health and probability of matching.

The highest bid would surely make maximum use of the "guilty party", obviously the heart would be last. The irony.

Who the proceeds would go to would be the tough call.

I visualise a game show format. Celebrity organs.

I'll buy that for a dollar...

Papasmurf's picture

Xenotransplants are problematic, so these will have low value.

BeetleBailey's picture

I've been to Helsinki airport - 4 times. Each time, it was near empty. The new terminal.

But hey, it's fucking Helsinki.

The babes were hot in the kiosks. The men wore funny glasses and shoes. All had Nokia phones growing out of their ears.

The surrounding area off the airport looked like a big piece of Melba toast.

"Go To Hell-sinki!"

Will To Live's picture

He didn't tell us it was 4AM Helsinki time.

Hive Raid's picture

"en route for Vilnius, Lithuania… one of my favorite inconspicuous corners of Europe... where I can sodomize adolescent gentile boys for sheckels on the dollar. *Jew cackle*"

--Simon Black, the Globe Trotting Jew

Terminus C's picture

Seriously?  You are one fucked up human being...

Classic ad hominem character assassination, no facts, just brutal accusations...  Take your shit somewhere else.

Colombian Gringo's picture

Whatever. He makes this point clear that he speaks of one airport.  And yah, it is easier to get flights than before throughout Europe.

mkkby's picture

He makes one brief comment about an airport, then fills the pages with crap everyone's known for the past year. I thought he was going to tell us something interesting about Finland or Latvia.

Simon, you truly are useless.  Go peddle your newsletters on a street corner somewhere in your favorite South American barrio.

Precious's picture

Sovereign Man --- Maybe you were in the Air TSA terminal (Touch Some Anatomy)?

westboundnup's picture

For what it's worth, I know someone who traveled to Madrid on business within the last month.  He met a business partner for dinner at one of the most respected restaurants in the city.  As their meals were served, they looked around and realized they were the only patrons.  A handful of other patrons filtered in as they finished their meals.  When they left there were only 5 other people in the restaurant.

imaginalis's picture

The Spanish start eating really late.

i-dog's picture

They were probably eating at an American dinner time. You'd be lucky to find a Spanish restaurant even open before 9pm!

I've arrived at a Spanish club at 2am and they were still just setting up the music system!

Freddie's picture

I am seeing this sh*t in the USA.  Restaurants and stores pretty much empty. Anything to do with bedding or furniture is going out of business.  Even places like Taco Bell and McDonalds (gag) are fairly empty even though they take WIC cards aka Obama bux.

I have avoided airports because I don't want the Coach Sandusky routine from TSA.

ArgentoFisico's picture

SilverTree, don't you think silver will go down like in 2008 before taking off to the sky?

HungrySeagull's picture

Silver will drop some more.

But you will wake up one day and curse the missed stacking opportunity.

ArgentoFisico's picture

Don't think so my dear seagull... Argento Fisico is italian for Phisical Silver, and this is my blog:

http://argentofisico.blogspot.it/

: )

ArgentoFisico's picture

Hmmmm .. I'd love to buy some more at 15 €/oz!

Hurdy Gurdy Man's picture

I have heard that the price of silver does not corroborate to gold because there is a lot of silver in other forms that people will run to melt down and buffer anything that would begin to look like scarcity.  So Silver, though the point of entry is lower, will not keep parity with gold -- not just because the market-makers control the price, but because of the floods that ballast it.  What do you think? Have you heard anytihng similar?

Colombian Gringo's picture

Stinky Europeans deserve to get the Rothschild dick up their collective asses for punishment of their stupidity.

Ima anal sphincter's picture

Uh....... The whole damn world is going to be feeling that ass rape. No reach around, no lube, just the pain and screaming. I'm tired of being f####d by my government and the bankers.

When (if ever) will everybody else feel this way???? Better yet......when will we DO something about it????

Cortez the Killer's picture

Sounds like you are more than a little obsessed with having a dick up your asshole, no?

Colombian Gringo's picture

Assuming you are a yank, you are already used it getting it good and hard from the Obamessiah. But hey, in this world, we all get fucked good and hard by the elites, the ortifice being secondary.

LULZBank's picture

"Sometimes life leaves you a hundred dollar bill on your dresser, and you don't realize until later that it's because it fucked you."

HungrySeagull's picture

You forget Blood makes for a good mark.

You need to take a vacation from your own obsession.

Pladizow's picture

Wow, then what does the US deserve?

cossack55's picture

Much, much worse. For Bretton Woods if nothing else.

Swarmee's picture

Yes, because when I was born in 1980 I had SO MUCH influence on that deal. And my single vote, diluted and malformed via constant congressional redistricting and the electoral college has allowed me so much control over current fiscal policy.

You must be right, mine and every generation since should be punished remorselessly for being born into a corrupt and broken system clearly controlled by vast wealth pooled decades before even my parents were born.

What was I thinking? So sorry.

Umh's picture

So it's our ancestors fault. Are you asking for sympathy or some sort of reparation?

Swarmee's picture

Just lashing out because what else is there to do? The show is so rigged and the sheep so enthralled by the propaganda that it seems impossible to correct the problems anymore.

It's hard enough "waking up" in this environment, then once you do it takes more time to realize how ineffective most attempts at reform are, or have become, under new technological means of brainwashing and repression.

It seems the best one can do is to provide and prepare for self and family, educate those we meet who may yet be woken (few and far between), and hope to collect enough momentum with like minds to someday return to sane principles. It's like trying to accrete a planet from stellar dust while being told it's your fault that entropy exists.

forexskin's picture

word, brother.

keep your own head up.

merizobeach's picture

"what else is there to do?"  GTFO, seriously.  It's a big world; find it.

Swarmee's picture

Way to distill everything I said into an out of context remark then offer a flippant insult. Truly, yours is wisdom to dispense.

merizobeach's picture

Wasn't actually meant as an insult, just the most direct approach to a real solution.  I left that sinking shit-ship 16 years ago, and that decision ranks among the best I've made in my life.

If I was inclined to be selfish or insulting, I could say something like, "on second thought, one of the great things about the world is that the insufferable USuckAss-ians are mostly contained in one place and don't, presently, pollute the rest of the world to saturation with their presence... So, carry on then--stay exactly where you are and continue doing exactly as you're already doing--traveling isn't worth it, and generally speaking, the world is better, more enjoyable place when Americans stay in America."

Bollixed's picture

Don't feel like the Lone Ranger. I'm a boomer who keeps getting blamed for FDR's bullshit like we went back in history and fucked things up for every generation born since yours.

Yea, I suppose we could have paid better attention, but the pre-internet days only fed us a diet of MSM bullshit...like God Bless the Fed, and Be proud to die in order to kill Commies, and What's good for General Motors is good for the Country...

merizobeach's picture

Well, instead of blaming you for "FDR's bullshit", how about we just agree to your complicity in financially subsidizing the military industrial complex's perpetual wars for your decades as a tax-payer and give you a share of ownership in the numerous genocides that have been perpetrated on your behalf as a war-supporter, regardless of whether you were brain-washed or intimidated into it or not.

If you don't agree, then go to Saigon or Phnom Penh and visit the war museums; see what you paid for back in the day.  Maybe someday there will be similar museums in Kabul and Baghdad; won't your grandkids be proud of you as a lawful, patriotic tax-payer when they visit those museums!