This page has been archived and commenting is disabled.

Guest Post: Welcome To Year Five In The Crazy House

Tyler Durden's picture


Submitted by Charles Hugh Smith of OfTwoMinds blog,

For four long years, the financial and political Status Quo has masked pervasive structural decay with artifice, pretense and lies. It's like we're living in a rotting mansion run by delusional megalomaniacs.

For four long years, the power-drunk Status Quo Elites have piled on pretense and illusion at the expense of truth. Welcome to the Crazy House. The entire rotten edifice of global financialization was visibly crumbling by early 2008, and yet here we are, four long years later, still under the jackboots of artifice and lies. Instead of the cruel illusions of TARP, now we have HAMP, LTRO, The Troika, and assorted other acronyms and inanities passing for policy.

Welcome to the Crazy House, a rotting McMansion ruled by power-drunk megalomaniacs suffering from delusions of invulnerability and god-like powers. Why are we here, you ask? Because the drunks who run the household make it so darned easy: just keep quiet, listen politely to their ravings, and you get subsidized meals, free rent, a houseful of techno-gadgetry and nonstop entertainment--and that's not even counting the amusement value of their delusional, sloppy-drunk ramblings out by the rust-stained pool.

It takes a while to habituate to the Crazy House; at first, all the artifice, illusions, delusions and lies are disorienting. The dysfunctional "family" that runs the place acts like the money is endless, as if borrowing money was the same as actually producing something of value.

Meanwhile, you hear whispers that everything's paid with credit, and some of the vendors are threatening to cut the mansion's credit. That would be curtains for the whole charade, of course, but the "leaders" pontificate about the magnificence of the rotting mansion as if still having credit was the same as having productive wealth.

It doesn't take long before you start noticing the whole mansion is actually falling apart. The surface grandeur is totally illusory: the handrails are held together with duct tape, painted to match the background; the dry-rotted steps have been patched with putty and covered with fresh paint (step on the rotted parts and they crumble); the roof leaks are masked by pans placed in the attic, and the foundation is buckling.

Once you see enough of this decay covered by slipshod repairs, you wonder how much longer the mansion can last before it simply collapses under its own rotting weight.

From a distance, the expansive pool looks inviting, but that's also illusion; the power-drunk "leaders" and their Elite guests have dropped so many wine glasses on the deck that the bottom of the pool is now littered with shards of essentially invisible glass. At first you wonder why nobody ever goes in the pool, and then a whispered explanation fills you in on the sordid truth.

The truth must be whispered, lest the "family" overhear some shred of truth; any challenge to their account of limitless, god-like powers sends them into a spittle-flecked rage. Rage, denial and fear rule the household: fear of the truth, fear of vulnerability, fear of having to face the real world.

Residents' meetings are bizarre, for the "facts" presented about the mansion's upkeep are so blatantly false that you wonder how anyone present can even keep a straight face. Yet they all do; eventually you get used to the complete disconnect between the "official reports" and reality, and you just shrug it off and seek out other more engaging distractions.

It takes much longer to learn how to stomach the "lectures" by the "family leaders," as the subject matter is once again totally disconnected from reality. The "lectures" always extol the glorious wealth the "family" controls, its equally glorious past, and all the "innovations" that are currently increasing the mansion's already immense wealth and reach.

Yet there is no sign of any meaningful innovation being put in place; there are only endless surface repairs and paint jobs to mask the underlying rot, and a front yard that is maintained specifically to display a completely artificial veneer of wealth and solidity.

Will we ever get sick enough of the lies to leave the security offered by the Crazy House? Probably not, because it's too easy to stay: the food is greasy and sugary but tasty, the rent is basically free, and there's plenty of meds, booze and drugs to fix whatever "healthcare" issues you might have. Of course none of the meds actually restores your health; they only treat the symptoms of ill-health and ruin.

The sad thing about living in the Crazy House for four years is how living a life of illusory security saps the will and perhaps even the ability to function in the real world. The grease-soaked sugar bomb food they serve has left everyone obese and malnourished, and all the electronic toys and entertainment has rendered them mentally and physically unfit and terminally distracted.

They know the reassurances of the "leaders" are false, and that beneath the surface, everything in the mansion is either squalid and falling apart or ripe with the rot of corruption and lies. But leaving opens a Pandora's Box of uncertainty and sacrifice; it's easier to stay and listen to the absurd claims of godhood and endless wealth, and phony exhortations of the mansion's mythical "can-do" spirit.

As long as the vendors keep letting the mansion's delusional megalomaniacs run up their credit tab, then it's easier to passively stay put than to face the challenges of truth and reality outside the rotting palace of illusion and lies.

If this recession strikes you as different from previous downturns, you might be interested in my new book An Unconventional Guide to Investing in Troubled Times (print edition) or Kindle ebook format. You can read the ebook on any computer, smart phone, iPad, etc. Click here for links to Kindle apps and Chapter One. The solution in one word: Localism.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 03/06/2012 - 12:46 | 2228469 Cognitive Dissonance
Cognitive Dissonance's picture

"The sad thing about living in the Crazy House for four years is how living a life of illusory security saps the will and perhaps even the ability to function in the real world."

Only if you are dependent upon the illusion for your inner peace and happiness. This is why my constant message is to look within and understand who and what you really are, not what the matrix tells you that you are.

Create your own reality or live within one created by someone else.

Tue, 03/06/2012 - 12:46 | 2228485 LawsofPhysics
LawsofPhysics's picture

Carefully CD, there's a "re-education" camp out there with your name on it.

Tue, 03/06/2012 - 12:52 | 2228514 tickhound
tickhound's picture

Fairfax County Police continue to remind residents "if you see something, say something"


Tue, 03/06/2012 - 12:56 | 2228534 Cognitive Dissonance
Cognitive Dissonance's picture

The overhead message boards on the Washington DC Beltway (# 495) are always a treat to read when there's no accidents or traffic slowdowns to report.

Very Big Brother at times.

Tue, 03/06/2012 - 13:20 | 2228629 tickhound
tickhound's picture

It's getting in your face, big.  And the closer you get to the flagpole, the more comfortably numb you become.  It's like Kryptonite.

Tue, 03/06/2012 - 13:25 | 2228651 trav7777
trav7777's picture

on the key bridge into DC, the portable sign was reading "report suspicious activity" and whatnot, someone spraypainted "read orwell" on a electrical junction box next to

Tue, 03/06/2012 - 13:38 | 2228686 tickhound
tickhound's picture

So you're sayin' there's hope.

Fairfax County Police Department

Public Information Office
4100 Chain Bridge Road, Fairfax, Va. 22030

703-246-2253. TTY 703-204-2264. Fax 703-246-4253

News Release: 2012/066/0188/LHC(6)

March 6, 2012


Explosive Device Found in Franconia area Home

Franconia Police District – Police responded to a report of a suspicious device that was found in a townhouse in the 6500 block of Gildar Street around 6:30 p.m. on Monday, March 5.  

The device, described as an unusual looking box with tape and wires, was found by a cleaning crew. Police were called and summoned the Explosive Ordnance Unit who responded, removed the device from the home and rendered it safe.

The home is currently vacant and for sale. Police are continuing the investigation.

Police continue to remind residents “if you see something, say something”; if something appears suspicious and unusual, don’t hesitate to contact police.

                Anyone with information is asked to contact Crime Solvers by phone at 1-866-411-TIPS/8477, e-mail at or text “TIP187” plus your message to CRIMES/274637 or call Fairfax County Police at 703-691-2131.

Sloppy bomb makers always seem to hide their bag full of wires and cords in vacant homes and public street corners.

Tue, 03/06/2012 - 15:02 | 2229115 walküre
walküre's picture

Of course the place was vacant!

The FBI took their patsi off the street right in front of the WH where he allegedly wanted to blow himself up! They also found his passport a few yards from the suggested blast area. He had placed it there carefully just in case they'd have trouble iding him afterwards!

Tue, 03/06/2012 - 13:41 | 2228698 fuu
fuu's picture

Figures you live near DC.

Tue, 03/06/2012 - 13:49 | 2228730 tmosley
tmosley's picture

He apparently lives in a DC ghetto, with a couple of crack-whores, apparently.  He thinks he's not racist because they are black crack whores.  lol

Tue, 03/06/2012 - 14:01 | 2228789 Stanwick
Stanwick's picture

racist nigger whore

Tue, 03/06/2012 - 18:06 | 2229999 CIABS
CIABS's picture

I agree with what Charles is saying, but "the Crazy House" makes it sound like it might all be a comedy of errors, which it isn't.  Sort of like, "Welcome to the Crazy House! We're all in this together and nobody knows what the heck's going on.  Oh, well, what are you gonna do?"

Tue, 03/06/2012 - 14:14 | 2228839 JPM Hater001
JPM Hater001's picture

"The sad thing about living in the Crazy House for four years is how living a life of illusory security saps the will and perhaps even the ability to function in the real world."

I've been awake for 2 years and these last 4 months have totally drained me.

Tue, 03/06/2012 - 12:55 | 2228527 Jason T
Jason T's picture

like in the movie sleeper?   min 6:00

Tue, 03/06/2012 - 13:03 | 2228565 Cognitive Dissonance
Cognitive Dissonance's picture

Released in 1973.

Seems we were sleeping all this time and are only now waking up to the warnings that were obvious back then. Oh well, can't do anything about it now. Might as well go back to sleep.

Maybe just a little snack before I hit the hay. Yeah, that's the ticket.

Tue, 03/06/2012 - 12:58 | 2228546 ElvisDog
ElvisDog's picture

where the only food is Big Macs and 64 oz Big Gulps, and they make you watch endless re-runs of "Jersey Shore".

Tue, 03/06/2012 - 13:02 | 2228562 t_kAyk
t_kAyk's picture

how long until we get to the point of "Idiocracy"?  perhaps we are there...

Tue, 03/06/2012 - 13:17 | 2228621 HelluvaEngineer
HelluvaEngineer's picture

Quit talking like a fag

Tue, 03/06/2012 - 19:31 | 2230286 t_kAyk
t_kAyk's picture

they don't understand.  i got you dawg... 

Tue, 03/06/2012 - 13:25 | 2228648 Alcoholic Nativ...
Alcoholic Native American's picture

I like money

Tue, 03/06/2012 - 17:04 | 2229786 Shitters_Full
Shitters_Full's picture

This thread brought to you by Carl's Jr.

Tue, 03/06/2012 - 13:40 | 2228695 Crab Cake
Crab Cake's picture

Personally, Im waiting for the day I get to put extra holes in the people that try to take my brothers and myself to "re-education".

Fuck the police.

Tue, 03/06/2012 - 12:59 | 2228549 VulpisVulpis
VulpisVulpis's picture

Plato wrote about this once.


All the crazy house residents see are shadows.

Tue, 03/06/2012 - 17:40 | 2229930 Wrender
Wrender's picture

Great point Vulpis - just re-read The Rupublic recently and have used the same example with a few people.  Good on ya

Tue, 03/06/2012 - 13:47 | 2228720 Jim in MN
Jim in MN's picture
"Suppose that men kill thee, cut thee in pieces, curse thee. What then can these things do to prevent thy mind from remaining pure, wise, sober, just? For instance, if a man should stand by a limpid pure spring, and curse it, the spring never ceases sending up potable water; and if he should cast clay into it or filth, it will speedily disperse them and wash them out, and will not be at all polluted. How then shalt thou possess a perpetual fountain [and not a mere well]? By forming thyself hourly to freedom conjoined with contentment, simplicity and modesty."
--Marcus Aurelius, Meditations
Tue, 03/06/2012 - 14:19 | 2228868 rbhatia613
rbhatia613's picture

This. Goes without saying that it's easier to talk about looking within -- or to make fun of other people trying to "find themselves" -- than it is to actually man up and realize that a fancy banking job w/ 70-hour weeks out of college isn't going to help you sleep a night. 

...But then again, those MBA brochures are so damn shiny...

Tue, 03/06/2012 - 15:04 | 2229124 non_anon
non_anon's picture

rosecolored glasses?

Tue, 03/06/2012 - 15:39 | 2229294 non_anon
non_anon's picture

(glitch)rose-colored glasses?

Tue, 03/06/2012 - 12:50 | 2228497 carbonmutant
carbonmutant's picture

You can't tell the truth and get elected.

The voters always want a happy ending...

Tue, 03/06/2012 - 13:02 | 2228558 tecno242
tecno242's picture

correct.  we have passed the event horizon of a larger part of the population taking and taking from the government pot than the part that is producing for it.

thus, now the vote will never be for the man who intends to fix it.

Tue, 03/06/2012 - 13:25 | 2228646 carbonmutant
carbonmutant's picture

Pot dependent population...

Tue, 03/06/2012 - 13:48 | 2228726 Jim in MN
Jim in MN's picture

Dude, the kettle is rainbow-colored!

Tue, 03/06/2012 - 16:44 | 2229685 non_anon
non_anon's picture

yeah, just ask Jesse Jackson Sr.

Tue, 03/06/2012 - 12:50 | 2228502 ElvisDog
ElvisDog's picture

Could there be a more Orwellian-inspired term than the "Troika"? And the ironic/funny/disturbing thing is that the Euro powers-that-be openly embrace the use of that term when referring to themselves.

Tue, 03/06/2012 - 13:02 | 2228561 Lotus
Lotus's picture

red arrow was an accident (smart phone.not so smart)  sorry Elvis

Tue, 03/06/2012 - 13:12 | 2228600 Conax
Conax's picture

There, I greened him to fix his ratio, Lotus.  Accidents happen.

Tue, 03/06/2012 - 13:54 | 2228748 ElvisDog
ElvisDog's picture

No problem, I thought a member of the ECB was monitoring ZH....

Tue, 03/06/2012 - 12:54 | 2228523 FranSix
FranSix's picture

I think they should put parentheses around each word in the article for emphasis.  Double paretheses.

Tue, 03/06/2012 - 12:55 | 2228530 Piranhanoia
Piranhanoia's picture

I would only ask that you extend the timeline well past that 4 years Charles.  When did the manager first start ignoring the payments on upkeep?

Tue, 03/06/2012 - 12:55 | 2228531 BliptoP3
BliptoP3's picture

I speak for all drunks when I say I find this article offensive; we don't harm anybody but ourselves.  I think crack-addict would be a better comparison.

Tue, 03/06/2012 - 13:32 | 2228671 juangrande
juangrande's picture

i'm sure there's many a beaten spouse and child that might disagree!

Tue, 03/06/2012 - 14:03 | 2228799 BliptoP3
BliptoP3's picture

true, maybe I shouldn't be so glib.  Vehiculer manslaughter is not funny either.


I believe there should be a special drunk drivers permit, with it you could drive no matter how drunk you are - but you can only drive a motorcycle.

Tue, 03/06/2012 - 12:55 | 2228532 walküre
walküre's picture

Fiver years in the crazy house

Is this another article on the Ritters?

Give them a break, will ya! The banks are.


Granite Countertops and iTulips

The end of America.


Tue, 03/06/2012 - 12:57 | 2228539 mayhem_korner
mayhem_korner's picture



All puffed up with vanity

We see what we want to see

To the beautiful and the wise

The mirror always lies.

(War Paint, N. Peart)

Tue, 03/06/2012 - 13:01 | 2228551 Wakanda
Wakanda's picture

In duct tape and Goop I trust.

Any thing else can be fixed with PMs.

Tue, 03/06/2012 - 13:02 | 2228563 Coffin Dodger
Coffin Dodger's picture

Enjoy each day as if it's your last.

When it finally pops, you'll look back at today with envy.

Tue, 03/06/2012 - 13:05 | 2228574 tempo
tempo's picture

I just talked to some rich friends who are suing the attorney that represented their son who lost his home in foreclosure after living free for two years. My friends are really pissed that their son's lawyer didn't stop the foreclosure after only two years. The entitlement society goes much deeper than you might think. Its free for the rich and the poor. Obama lit the fuse.

Tue, 03/06/2012 - 13:14 | 2228608 reload
reload's picture

Its probably just an action on the advise of their lawyer - your sons lawyer will have insurance, file a suit and see if they blink, if they do an out of court settlement awaits, if not we can drop it before it gets to court. Just legal bullshit.

Tue, 03/06/2012 - 15:03 | 2229123 MachoMan
MachoMan's picture

This.  The standard for malpractice is...  not an impossibility, but sure as fuck pretty difficult in these cases...  anything other than a gutlock is a no-go for trial...  just a desperate attempt to siphon some money back via the insurance company.  And, in all likelihood, the court (as a practicing attorney) is going to do everything in its power to protect its own against someone crying over sour grapes.  [especially if it was the same court that decided the previous issue against their son].

The other thing is that the attorney filing the malpractice action is probably...  err...  not highly regarded...  which also affects the value of the case.  (depending on your cause of action, you just have to bottom feed sometimes).


Tue, 03/06/2012 - 13:43 | 2228703 Ayn Rand
Ayn Rand's picture


If one is judged by the friends they keep, you ain't doing too well.

Tue, 03/06/2012 - 13:14 | 2228607 peekcrackers
peekcrackers's picture

Summer breeze makes you feel alright
Neon lights shining brightly make your brain ignite
See the girls with the dresses so tight
Give you love if the price is right
Black or white
In the streets there's no wrong and no right
so forget all that you see
It's not reality
It's just a fantasy

Aldo Nova  life is just a fantasy

Tue, 03/06/2012 - 13:14 | 2228609 Eric L. Prentis
Eric L. Prentis's picture

A lousy economy for four years is not living—I call it hell. And so do savers, the un-and-under employed, pensioners, the young and those employed whose wages are not keeping up with inflation.


The people who like this “Crazy House” are the corrupt politicians, the Wall Street snakes-in-suits, the warmongers, swindlers, con men and their shills.


When truth and beauty confronts privilege and power:

“First they ignore you, then they laugh at you, then they fight you, then you win.”Mohandas Gandhi


Tue, 03/06/2012 - 13:17 | 2228620 Conax
Conax's picture

A great piece Mr. Smith - now that's how you set up an analogy.

"The truth must be whispered, lest the "family" overhear some shred of truth; any challenge to their account of limitless, god-like powers sends them into a spittle-flecked rage."

Just great writing. Thanks for posting it, TD.

Tue, 03/06/2012 - 14:02 | 2228795 r101958
r101958's picture

Conax- Agreed!

Tue, 03/06/2012 - 13:18 | 2228623 Shizzmoney
Shizzmoney's picture

American society, as Teddy KGB in Rounders said, "It's a fackin' jooke, anyvays".

Tue, 03/06/2012 - 13:30 | 2228666 marcusfenix
marcusfenix's picture

great movie.

Tue, 03/06/2012 - 14:21 | 2228889 BeerBrewer09
BeerBrewer09's picture


Tue, 03/06/2012 - 13:21 | 2228633 cdskiller
cdskiller's picture

just keep quiet, listen politely to their ravings, and you get subsidized meals, free rent, a houseful of techno-gadgetry and nonstop entertainment

living a life of illusory security saps the will and perhaps even the ability to function in the real world

Whatever. I know I've been in the crazy house since 2005, when I became obsessed with the OTC derivatives market. What's this entitlement BS? Nobody has ever given me a subsidized meal, or free rent and I've never had the illusion of security.


Tue, 03/06/2012 - 14:45 | 2229028 piceridu
piceridu's picture

Maybe not you or me but 46.5 million, yes.

Tue, 03/06/2012 - 15:55 | 2229380 Kobe Beef
Kobe Beef's picture

You must be a white male under the age of 65. No soup for you!

Tue, 03/06/2012 - 13:23 | 2228640 whoopsing
whoopsing's picture

Localism aint no walk in the park

Tue, 03/06/2012 - 13:23 | 2228643 SillySalesmanQu...
SillySalesmanQuestion's picture

Our popcorn may not get stale today...or this week for that matter...keep poppin.

Tue, 03/06/2012 - 13:27 | 2228654 blu
blu's picture

These are what I like to call self-limiting problems.

Reality abhors a vacuum. The mansion is going to fall down, doesn't matter what anyone says to the contrary. Wait for it, it will happen. At this point the only reasonable course for sane adults is to discuss among themselves what they think should come after.

Tue, 03/06/2012 - 13:29 | 2228660 Crab Cake
Crab Cake's picture

Too bad the mansion comparison isnt true because then I could use one well placed molotov cocktail to end the whole grotesque party; shame.

Tue, 03/06/2012 - 13:34 | 2228673 Spawn of Cagliostro
Spawn of Cagliostro's picture

Feels like a crime trading crap fiat for "An Unconventional Guide to Investing in Troubled Times"....but I just did.  Hope it reads as well as your posts (I expect it to).

Tue, 03/06/2012 - 13:54 | 2228745 CompassionateFascist
CompassionateFascist's picture

I'll give you better advice for free: water and canned food; silvereagles; M1A for long distance work; S&W Governor for close encounters; plenty of lead.

Tue, 03/06/2012 - 14:24 | 2228906 Lucky Guesst
Lucky Guesst's picture

Even better advice.... learn how to clean water, hunt and farm. Band with others that can do the same. Learn skills that you can barter with. A little protection and a lot of friends with the same. Try to fly under the radar if you can.

Tue, 03/06/2012 - 13:40 | 2228694 Lucky Guesst
Lucky Guesst's picture

Will we ever get sick enough of the lies to leave the security offered by the Crazy House?

At first just a few will. We'll walk out the door, buy a tent and start over. With a little hard work it won't take long to rebuild a sound house and inspire someone else to do the same! As the nasty McMansion corrodes... our strong, clean and morally sound community will grow. Have faith.... "The answer to 1984 is 1776"!!!!!!!!





Tue, 03/06/2012 - 13:42 | 2228704 Crab Cake
Crab Cake's picture

Damn straight brother, and then we shall see who truly hates our freedoms.

Tue, 03/06/2012 - 13:43 | 2228702 diesheepledie
diesheepledie's picture

The reason the cattle stay in their pens (rotten mansion or whatever), is that they would not survive on their own. It is beyond obesity and electronic distractions. They have been bred to be dumb cattle, and are incapable of being self sufficient. If they left "the mansion" they would be living in cardboard boxes and probably starve to death. So they should stop bitching and do what their told.

Tue, 03/06/2012 - 15:42 | 2229301 Captain Kink
Captain Kink's picture

Either Natural Selection has not acted on our species for a very long time (Nothing in the environment limits the ability to reproduce)  or the other side of the same coin:  the traits for which our society is selecting have more to do with having too many kids while on the dole.  As a society, we de-volve.  More and more childeren are being had by people of low education and no economic prospects while educated and hard working types responsibly limit the number of their offspring (if any) to what they can afford.  This is the arc of democratic society:  guaranteed to lead to socialism as those consuming with their hands out overwhelm those producing and paying in to "the general welfare"...  and the politicians keep using our money to buy votes

Tue, 03/06/2012 - 20:04 | 2230073 New World Chaos
New World Chaos's picture

The elites use ecomomic rewards and punishments to breed the perfect sheep:  Stupid, corrupt, and dependent.  Such people are easy to divide and conquer.  Independent, alturistic people cannot be trusted to support the evil system, therefore they must be destroyed.  This goal is reflected in every law passed in the last 50 years.

Wed, 03/14/2012 - 03:24 | 2253193 geekgrrl
geekgrrl's picture

You are a most vile man.

Tue, 03/06/2012 - 13:44 | 2228709 resurger
resurger's picture

"the power-drunk "leaders" and their Elite guests have dropped so many wine glasses on the deck that the bottom of the pool is now littered with shards of essentially invisible glass. At first you wonder why nobody ever goes in the pool, and then a whispered explanation fills you in on the sordid truth."


+5 2M's

Tue, 03/06/2012 - 13:47 | 2228718 tmosley
tmosley's picture

Subsidized metals, bitchez.

Tue, 03/06/2012 - 13:50 | 2228732 flacorps
flacorps's picture

If hanging out in the mansion has left you caught in a tight spot, try my book "Debt Hope: Down and Dirty Survival Strategies":

Tue, 03/06/2012 - 13:53 | 2228742 rosiescenario
rosiescenario's picture

Good read....just like an episode from............The TwiLight ZonE..........thoughts of Gone With the Wind and Tara come floating to mind....whose going to pick the cotton when the slaves are gone?

Tue, 03/06/2012 - 14:04 | 2228806 acetinker
acetinker's picture

No shit!  You should write a novel, Charlie.  No shit!

Tue, 03/06/2012 - 14:23 | 2228810 DavidPierre
DavidPierre's picture



  What a week it will be!  Don't worry, it's coming! For Gold watchers... Watch Wednesday.

Dennis Gartman chimed in about last weeks massacre ... saying something nefarious could have taken place in one pompous breath, and of course poking fun at by talking down to and basically trashing Gold bugs as usual.

Can't argue with someone who doesn't understand the argument.

Hard money advocates, Gold bugs whom Mr. Gartman constantly makes fun of, have been correct for at least the last 40+ years.  They have been right, and right for all the right reasons.

This past Wednesday, finally and very publicly put an end to conspiracy theorists being considered nuts. 

As it turns out, anyone who towed the mainstream lines of investment logic since at least 1971 have been wrong.  It has taken many decades for the proof to arrive.  It finally has. No one can deny now that too much debt is the problem and has been the problem building for 40 years or more. 

More debt cannot be the solution. Without unfairly pounding his royal pompousness with no chance to defend himself... Dennis feels easily threatened.  Mr. Gartman needs to question whether or not Gold and Silver have been manipulated in price.  He can no longer say "it doesn't matter, or I don't care" like Jeff Christian does.

It does matter.  

You should care because it has, is, and will affect you, your children, your children's children and everyone else on the planet!  So there it is. Treat Gold bugs with the respect that they deserve and have earned... despite his and other's constant ridicule.

Debate publicly... here on ZH would be a good start... or just STFU and go away!

Back to this week.  China has become an aggressive seller of U.S. Treasuries.  The ECB created another $700 Billion out of thin air while Greek one year paper traded near 1,000%.  At the same time ISDA said that no default has occurred and now anyone who purchased CDS for protection is butt naked and sitting on unrecoverable losses.  Make the mental leap forward ... backward... this insurance isn't and never was, insurance. It could not and cannot be paid out.

The money... the reserves, whatever the fuck they call it has never and can never exist.

What idiot would go to JP Morgan, Credit Suisse, AIG or whoever to insure their U.S. Treasury bonds? What paper financial entity on the planet will still be alive if the U.S. Treasury fails?   Are we only talking about Greece right now?  The European sovereign's and thus Germany and the ECB itself are coming soon, and then ultimately the U.S. Treasury.

Inside the system, the Rotting House, there is no place to hide. 

 There is no magical product or insurance or CB policy that has the ability to protect you. The only protection is to go outside... out of the paper system. The only insurance is in Gold and it's little sister Silver.  The fact that global physical demand is much greater than actual supply ... has been for 40+ years.  Volume and open interests on the paper markets are dropping as investors say 'no mas' and are leaving the rigged and rotten casino. Even though The Fed and ECB are flooding the markets with more and more liquidity, the tide is continuing to recede and naked insolvency’s everywhere are continuing to be exposed.

This week is important.  We will get intuitive action.  We will get some answers!

Now for sure central banks will provide liquidity to and beyond infinity. We now know that the rule of law is no longer.

The ISDA ruled that default isn't default.  

If you own CDS... well... that's just too damn bad. 

MF Global was thrown under the bus.  A bus filled with Mafia thieves will land on 'free parking'.

No one will be prosecuted. This was the greatest Rot of all.  The end of the road for fiat.  

The rule of law is lost... exactly what is happening.

Tue, 03/06/2012 - 15:08 | 2229150 walküre
walküre's picture

Watch prices on PHYS decouple soon.

From my experience as rancher, the cattle auctions have been very bare. No product, no sellers. Tons of buying interest. Might be too late to start a good herd.

Prices on everything that you will need to live are going to explode.

There's no hedge other than what you can barter for food. If you have your own food and you can trade it, you will most likely only accept tangible assets, ie currency gold silver, maybe art for the barn. LOL. Cars and car parts, and gasoline for food.

Shit is falling apart. Be prepared.

Tue, 03/06/2012 - 14:16 | 2228851 Sandmann
Sandmann's picture

The Capitalist System was built on Jewish Mortgage Law and The Protestant Ethic with Responsibility and Individual Obligation at its Core. The Marriage of Socialism and Crony Capitalism has created National Socialism where The State looks after the favoured Private Corporations so long as they serve The State and vice versa.


Tue, 03/06/2012 - 14:20 | 2228878 justsayin2u
justsayin2u's picture

Charles you are an idealist - things really aren't that good!  Now just sit back, inhale, and watch a little TV - everything will be just fine.  Obama. Nernanke, Geithner, Holder - they've got your back dude!

Tue, 03/06/2012 - 14:31 | 2228949 Bartanist
Bartanist's picture

Is there a simple explanation for our history? Sure ... will anyone believe it? Probably not because it requires people to believe something that is believed by people unlike "us" and goes completely against what we have been told.

However, there are whole populations of people who fully believe that Satan's throne resided in England for 1000 years (1 biblical year), then the US for 83 (1 biblical month). The transfer of Satan's power to Israel occurred in 2001 with the ritual blood sacrifice at the two towers (reminiscent of those that framed the gate at Solomon's temple). Israel now consolidates their power and their promised land of greater Israel from the nile to the Euphrates (for the period of one biblial week of 20 years more or less) ... leading to ...

... the final conflict and then 1000 years of peace.

Is it no wonder that the UK is only a tiny shell of its previous glory, left unsuppported by Satan's unnatural power ... and now the US to follow the same fate as a has been, basking in his evil aura, only to be abandoned, revealing the rot beneath the venear.

It may not have been us, only "him".

Tue, 03/06/2012 - 16:00 | 2229394 LawsofPhysics
LawsofPhysics's picture

Right, you forgot about Japan.  They were "great" once too.  You say Satan is responsible, I say human stupidity.  Never underestimate human stupidity.

Tue, 03/06/2012 - 14:46 | 2229032 Yardfarmer
Yardfarmer's picture

Great post charlie .localism to me means getting up in an unheated room above the barn at 5:30 in the morning when its 8 degrees out, going down to the milk room where we store all the cases of produce and extraneous foodstuffs from the Safeway dumpster which we raid on a weekly or biweekly basis, chopping up the various fruits and vegetables and throwing them into the slop bucket along with scoops of corn and milo soaked in some of the gallons of orange juice we also scavenged. (geez are my fingers freezing in my stone stiff leather gloves!) I shred some potatoes with a brick to top it all off and throw in some cherries and avocados on the parfait for looks. i haul the five gallon bucket down the hill to the pen where Silvio, Guido and Luigi, our 300+ lb. mulefoot pigs are just stirring themselves from the hay in their shed and dump the whole concoction into the rubber feeder pans where the chickens have also gathered to feast off the spoils.then its back up the hill to break the ice in the several five gallon buckets, stored in the milk room so they don't freeze all the way through, and resupplying the water to the stock buckets in the barn for the 30+goats and Navaho Churro sheep, feed the four Maremma/Akbash flock guardians (two are 5 month old puppies)their some kibble topped with some special dumpster rotisserie chicken Then I bust out some bales of sweet grass hay and supply the mangers which i supplement with alfalfa a half hour later. In a light snow i then proceed over to the garden  next to the generator shed and lift a corner of the plastic of the hoop house. It's a pleasant sight in there with green shoots (yes, the real kind!) of spinach, bok choy,chinese cabbage, several varieties of lettuce, arugula, chard etc. I proceed to thin the plants and water them with a heady green effluvium we obtained from the stock tank before it froze for the winter. Then I haul three or four loads of goat and sheep manure up to the garden and dump it next to the garlic patch where i dig it in to the freshly broken mountain grass sod. This is followed by a pleasant respite it front of the wood burning stove in the yurt where i thaw out the old freezing toes, but only after i turn on the solar inverter panel to charge up the electricity for the Internet access so I can check the spot price of Au/Ag and leisurely write this while scarfing down some eggs i gathered from the hay room along with some potatoes from the root cellar and some piping hot green tea. Hmmm, maybe I'll have some time to dial in the scope on the .223 this afternoon.

Tue, 03/06/2012 - 16:50 | 2229710 Likstane
Likstane's picture

Man oh man, I would pay a silver eagle just to get a sniff of that scene!

Tue, 03/06/2012 - 15:16 | 2229180 JR
JR's picture

You think the government does not control housing? Never mind statistics. Facts they don’t like, they ignore, lie about or distort by spouting lobbyist special-interest propaganda.

Joseph Gyourko asked late last year on Politico: Has D.C. learned Econ 101?

The answer is No! The banker-controlled Congress that couldn’t put Humpty Dumpty together again is setting up another economic fall that “could put taxpayers on the hook again for tens of billions of dollars or more…”

After the Greenspan-Bernanke 2008 housing fiasco that devastated home owners and taxpayers, FHA is continuing to make loans at 3.5% down on credit scores of 640. With this difference: “In 2007, FHA insured the mortgages of just 6 percent of new home purchases. By 2010, it insured 30 percent. Its insurance guarantees tripled from $305 billion in 2007 to more than $1 trillion today.”

Says Gyourko, the Martin Bucksbaum professor of real estate, finance and business & public policy at the University of Pennsylvania’s Wharton School: “When the mortgage market imploded in 2008, FHA shifted from being a backstop for relatively poorer borrowers to the lender of last resort… Meanwhile, its capital reserve has fallen perilously low — to less than one-third its required level.”.

Continues Gyourko, “It is no surprise that more than half of FHA’s insurance is on mortgages backed by homes with negative equity… To make matters worse, it encouraged people to buy homes with little or no personal equity investment. Essentially, taxpayers provided down-payment assistance. Existing research indicates that defaults will be high among those who did not make the down payment out of their own resources.”

His paper is worth the full read:

The government is trying to appeal to a third world audience, the devil to the economy or the nation and its people, because that’s where the media is; it’s either that or lose office or not get elected . And, of course, the banks, who control  media financing, want their cuts and bailouts.

This is the stairway of socialism to the bottom – headed toward the point where the state makes all the decisions on who gets a home, how many live in it and who pays for it. The government has no money, of course, so all the money it gets will come from the people who work, from taxation.

Every time every one of these programs comes out, the free market economy dies a little and socialism gains. There’s a model for this: it’s called the U.S.S.R.; the latter is what happens when the state has complete control over every thing, including your life.

The point is whether the U.S. semi-market system and educated middle class will be susceptible to and accept the Crazy House scenario. I say No!  At some point they are going to revolt.

Tue, 03/06/2012 - 15:42 | 2229309 LawsofPhysics
LawsofPhysics's picture

"The point is whether the U.S. semi-market system and educated middle class will be susceptible to and accept the Crazy House scenario. I say No!  At some point they are going to revolt."


Assuming that there are enough educated (big difference between knowledge and wisdom) middle class to pull this off, precisely how will they fund the revolution you speak of?

Tue, 03/06/2012 - 16:29 | 2229606 JR
JR's picture

My knowledge of grassroots revolutions is that the process begins with individuals and groups so angry and motivated that they physically take on the establishment and when the establishment reacts, many more motivated people join the activists and it becomes a wave of people against the government.

It’s not a question of funding. Yemen wasn’t “funded.” Tunisia wasn’t “funded…”

Of course, there can also be, say, a taxpayers’ revolt; can the government imprison a third of the population of the United States? No. By "educated" I mean savvy, aware.

Do NOT follow this link or you will be banned from the site!