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Guest Post: Worse Than 2008
Submitted by ChrisMartenson.com
Worse Than 2008
There are clear signs of a liquidity crunch in the asset markets right now, and the question I keep hearing is, Is this 2008 all over again?
No, it’s worse. Much worse.
In 2008 there was a lot more faith and optimism upon which to draw. But both have been squandered to significant degrees by feckless regulators and authorities who failed to properly address any of the root causes of the first crisis even as they slathered layer after layer of thin-air money over many of the symptoms.
Anyone who has paid attention knows that those "magic potions" proved to be anything but. Not only are the root causes still with us (too much debt, vast regional financial imbalances, and high energy prices), but they have actually grown worse the entire time.
As always, we have no idea exactly what is going to happen and when, but we can track the various stresses and strains, noting that more and wider fingers of instability increase the risk of a major event. Heading into 2012, there's enough data to warrant maintaining an extremely cautious stance regarding holding onto one's wealth and increasing one's preparations towards resilience.
Here’s the evidence:
- Oil prices higher now than in 2009
- Derivatives up more than $100 trillion since 2009
- Government debts exploding
- Weak GDP growth
- Europe in trouble
- Small investors leaving the market
- China hitting a wall
One of the most important things we need to track is simply untrackable, and that is market perception. When faith in a faith-based money system vanishes, the game is pretty much over.
If you have been reading my work (or anyone else's) with a decent macro view, you likely lost your faith in the system a while ago and marvel that it can continue along for another moment, let alone all the years it has been creaking towards its eventual date with reality. But along it creaks, day after day, week after week, and month after month, threatening to wear down the observant and vigilant before finally letting go.
2012 promises to be an interesting year, with more than $10 trillion in funding and rollover financing required to keep the developed world floating along. But where will that funding come from? The lesson from defunct economies is “not internally!” And if China’s recent slowdowns and projections of an even more lackluster 2012 come true, then we might also scratch a few external sources off the list as well.
Oil Prices
As Gregor recently penned so eloquently for us, high oil prices are like sand in the gearbox of the economy -- they represent the most serious form of friction there is. Rather astutely, Jim Puplava has called oil prices 'the new Fed Funds rate,' meaning that the traditional role of the Federal Reserve in regulating the economy via the price of money has been usurped by oil.
As oil prices go up, the economy slows down, and vice versa.
The simple fact is that oil prices remain quite elevated by historical standards, and since the correction in 2008, they have been ratcheting steadily higher each year. They are now at their highest average rate in three years. In round dollar terms, oil is $30/bbl higher than in 2009 and $10/bbl than in 2010.
I won't rehash the data here, but the best explanation for this steady increase is that supplies of cheap oil are dwindling and flow rates of the desired blends are having a hard time keeping up with demand.
The twin deficits to the export market are falling production from existing fields and rising internal demand in the producing countries. The way all that gets balanced is in the usual fashion -- through prices.
All of this would be fine, except for the idea that the world is in a far more fragile condition today than back in 2008 when it suffered the first insults levied by high oil prices.
As the Bank of England's Paul Fisher recently put it:
Financial markets in greater danger than 2008-BoE's Fisher
Dec 19, 2011
Dec 19 (Reuters) - Financial markets are facing a more dangerous situation now than during the financial crisis of 2008, Bank of England policymaker Paul Fisher was quoted as saying on Monday.
Fisher, who is the central bank's executive director of markets and sits on the Monetary Policy Committee, also said governments had fewer options to deal with the current crisis because of their stretched public finances.
Fisher was quoted as saying that in 2008, governments had more leeway and cash available to stimulate their economies and bail out banks. Today that "sovereign backstop is less clear", Fisher said.
"The policy out is going to be more difficult than it was in 2009, given the current position of the sovereigns."
(Source)
We'll explore these ideas in greater depth below, but I think the bolded parts illuminate why high oil prices are potentially more corrosive now than in 2008. The bottom line is that economic growth is central to nearly every story of recovery, and there are appallingly few analyses coming out of the OECD countries that address how the various debt rescue plans will fare if said economic growth does not materialize. Most just note that 'it will not be good' and leave it at that.
Debt
Let's begin with debt. This crisis was rooted in too much debt. Even without the headwinds caused by structurally rising energy prices (we'll get to those in a minute), the credit bubble was destined to someday pop all on its own. After all, there's no way for debt to continually expand faster than income, which is what was happening across the entire OECD, thanks to the ultra-accommodative policies of the world's central banks.
(Source)
Note that GDP is virtually unchanged since 2008, meaning those $5 trillion did not buy us any incremental GDP; it only managed to bring us back to about even:
(Source)
That means we have about the same-sized economy to support an additional $5 trillion in federal debt, or roughly a third more than when the crisis started.
It is also true that GDP growth in the US is weaker this year than last year, a trend that does not bode well for the US deficit situation:
(Source)
It should be noted here that this weak growth is happening even though the US federal deficit for FY 2011 was $1.3 trillion, or more than 10% of GDP. If that's how anemic the economy is with that level of deficit spending, where would it be with less?
Europe in Trouble
The bad news out of Europe continues unabated, including debt and ratings downgrades, sliding economic growth, and exploding red ink.
Much of the hope in Europe rests upon carefully crafted bailouts that rest upon assumed rates of economic recovery and growth in order to pencil out. Without the assumed rates of growth, the plans fall apart, and more rescue funds -- or outright defaults -- lie in the future.
Ireland is an instructive case because it entered its difficulties earlier, and it has already received a bailout and implemented the austerity measures that were meant to balance the equation.
Ireland
Unfortunately, the plan is now in tatters with the recent revelation that the Irish economy is slumping more than expected under the twin weights of reduced lending and imposed austerity
Ireland's debt rating under threat as economy contracts
Dec 16, 2011
Rating agency Fitch tonight warned it may downgrade Ireland and five other euro zone countries in the absence of a comprehensive solution to the region's debt crisis which it concluded may now be "technically and politically beyond reach".
The agency placed the ratings of Belgium, Spain, Slovenia, Italy, Ireland and Cyprus in credit watch “negative”, which means a downgrade is possible within three months.
The move comes on back of unexpectedly poor economic data for Ireland which showed economy weakened considerably in the third quarter, shrinking at the fastest rate in more than two years.
(Source)
Here's the data:
(Source)
GNP is a better measure than GDP in this case because GNP removes repatriated corporate profits that have left the shores. Many companies use Ireland as a tax haven, so the monies that cycle briefly into and then right back out of the Irish system really should not be counted towards their economic progress.
With economic contraction, the Irish fiscal deficits will once again breach agreed-upon levels, and repaying debts also becomes that much harder. It is a negative spiral that can be quite destructive and difficult to stop.
The bottom line here, which should surprise exactly nobody, is that austerity shrinks an economy and that economic shrinkage and crushing debt loads are incompatible. Ireland has not been fixed, and it seems that the can is once again right in front of the ECB, ready for another good kick down the road.
Ireland's debt yields are instructive here. While it is true that Ireland's debt yields are down quite a lot from their maximum levels (which were over 23% for 2-year paper and 15.5% for their 9-year debt), the current yields of 7.9% and 8.6%, respectively, are utterly unsustainable for an economy that is shrinking. It is only a matter of time before those rates crush the finances of the Irish government.
Do you know why the generally agreed-upon limit for persistent government deficits is 3%? That's because it's the basic rate of GDP growth that history has shown to be sustainable. As long as deficits are growing at the same rate as the economy, then the debt-to-GDP ratio stays constant and everybody is happy. If (or when, I should say) the economy grows more slowly than the rate of interest that is demanded from a government, it is a mathematical certainty that either the deficits will swell or austerity and/or tax hikes must be imposed. There is no other way to balance the books.
On this basis, Ireland is still mired in a math problem.
Spain
One theme of the financial crisis is governments loading up on debt in order to get by for a little longer, with the plan seeming to be to face the music later and/or keep one's fingers crossed that the economy will have somehow sorted itself out by then.
Spain, suffering from a truly crushing housing bust that is still playing out (and will for a long time), very high unemployment, and a stalled economy, has also compounded the issues by piling up an astounding amount of new debt over the past year:
Spain regional debt up 22 percent to $176 billion
Dec 16, 2011
MADRID (AP) -- Debt levels for Spain's cash-strapped 17 semiautonomous regions have soared 22 percent over the past year, the country's central bank said Friday.
A near two-year recession after a real estate bubble collapse has left Spain with swollen regional and national deficits, a stalled economy and 21.5 percent unemployment.
Many regions are facing severe cash-flow problems and are having to delay payments to suppliers.
An example of the cutbacks came Thursday, when Spain's Woman's Institute said nearly 100 centers for the victims of domestic violence face closure next year in the central Castilla-la-Mancha region. Centers for drug addicts in Madrid are facing a similar fate.
(Source)
The good news out of Spain is that its bond yields have fallen considerably since the end of October, when they breached the 6% barrier and seemed ready to launch into truly dangerous, irrecoverable territory.
Most recently, Spain's 10-year bond yields were 5.13%, down from 6.7% on October 31 but still about 1.5% higher than pre-crisis levels. It's important to note that the current yield may not be indicative of the true market perception of Spanish risk because the ECB has been heavily involved in buying Spanish debt. The true yield should undoubtedly be a lot higher given the grim state of finances there.
Still, Spain's yield levels are in the best shape out of all the PIIGS. Speaking of which...
Portugal
Portugal is still in trouble, and the government has, quite worryingly for the precedent it sets, raided private pension funds to help balance the books.
Portugal deficit falls, helped by one-off measure
Dec 16, 2011
LISBON, Portugal (AP) -- Portugal's finance minister says his debt-stressed country's budget deficit will likely fall to below 5 percent this year from 9.8 percent in 2010.
But Vitor Gaspar says the sharp drop is largely due to the transfer to the Treasury of euro6 billion ($7.8 billion) in private banks' pension funds.
(Source)
I am not sure of all the back story and intrigue that must accompany this move, but it seems loaded with implications ranging from the door it opens to other governments seeking relief, to the fact that we know that Portugal is being leaned on heavily by the international banking community and has decided to raid the pensions of...wait for it...four of the largest private banks in Portugal. Maybe there's a bit of spite built into that move?
Portuguese bond yields are down from their crisis highs of 20.4% (2-year) and 14.1% (10-year), but again not enough to count, as they are sitting at 15.6% (2-year) and 13.1% (10-year), levels well above the current rate of GDP growth.
Greece
Our poster child for the entire Eurozone mess is, of course, Greece. And quite understandably, a trickle of bank withdrawals has turned into a flood:
Greeks fearing collapse of eurozone bailout pulled record sums from bank
Dec 16, 2011
An unprecedented exodus of capital from Greece – peaking in a record number of withdrawals from banks in recent months – has exacerbated the liquidity crisis now wracking the recession-hit country.
The latest figures released by the Bank of Greece reveal that in September and October alone investors pulled €12.3bn (£10.3bn) from domestic banks, spurred by fears of political uncertainty and economic collapse.
Overall, outflows have reached a record 25% since September 2009 – when household and corporate deposits stood at a peak of €237.5bn, the data showed.
Theodore Pelagidis, an economics professor at the University of Piraeus, said: "This is part of the death spiral of the recession as a result of austerity measures. People realize that contagion has come to banks and they are very afraid of losing their deposits. On average around €4bn-€5bn in capital flees the banking system every month."
The extraordinary figures back up anecdotal evidence that it is not just the super-rich behind the flight of funds.
(Source)
This data, released by the Bank of Greece, is over a month old, and we'd be especially interested to see what November and December add to the story. At any rate, it is now "game over" for Greece. The market is still pricing in a nearly 100% chance of default even as the bankers and Eurocrats squabble over the prospect of raising the haircut on Greek debt from 20% to 50%.
Where the Greek crisis highs for debt yields were 151.9% (2-year) and 35.1% (10-year), they are now sitting at 146.6% (2-year) and 34.6% (10-year), which are essentially unchanged.
The Pattern
I keep mentioning that the ECB is interfering heavily in the bond markets of various countries in their attempts to keep things going. Apparently they've tossed in the towel on Greece, as evidenced by the Greek yields above.
However, when we note the ways in which the Spanish, Irish, and Italian debts have come down off their highs, can we make sense of why the ECB focused their efforts there? Sure, that's easy, and the BBC has put together an extraordinarily helpful interactive chart to make it all crystal clear.
The interactive chart can be found here, but I've taken a number of screen shots so that you can more easily follow the story.
To begin with, what the chart is showing by the width of the arrows is how much money is owed to banks of other countries -- the wider the arrow, the greater the amount.
Here's the country that was let go:
Now let's compare that to Ireland, which was rescued (for now):
And here's Portugal, which is apparently in the process of being tossed under the bus, at least judging by how its interest rates are still punishingly (and ruinously) high:
See the pattern? Now let's look at Spain and Italy, both of which have recently enjoyed a nice decline in their yields
Now are the actions and focus of the ECB coming clear? It's not a surprising insight, but these charts help bring things into focus for me, and inform us that falling bond yields are probably more indicative of ECB actions than an improving debt crisis.
Just for kicks, and to complete the story, here are the charts for the UK and the US, which hopefully make clear why these two countries could never be allowed to fail, for surely the whole world would fail to spin on its axis
The other takeaway from these charts is that everybody owes everybody, a point I've made before, but not as nicely as these charts manage to do. Kudos to whomever thought these up.
Where Things Are Headed
In Part II: Get Ready for Worldwide Currency Devaluation, we detail the remaining risks posed by the massive amount of outstanding derivatives, small investors fleeing the markets, and China's increasingly visible slowdown. At this point, it's quite clear that there simply won't be enough economic growth to rescue the global economy from the hole it's in. So, how does this end?
It will most likely end in a concerted devaluation of the world's currencies, in an attempt to inflate away the worst of our debt burden. And if that happens, there's one asset in particular that you will want to be holding.
Click here to access Part II of this report (free executive summary, enrollment required for full access).
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doom has never been this beautiful.
thx :-)
They just fired a half-trillion Euro nuclear missile into the face of the European Debt Kraken, and it just ate it up and smiled, hungry for more.
Notice how NO ONE will send their GOLD to any other bank or country to pay down the debt...
Get rid of the electrons and paper!
I say wake up to gold's potential thud. The thud that will be heard around the world.
Heck, the Dragon Family is out, gloves off, in US court... bruce k wrote about it too. How many tons? Mind boggling numbers, tin-foil hat nirvana and if true a free-gold-killer.
Holy moly....b...dnumb!
Gold will Fold.
ori
This is what I thought a year and a bit ago.
/an-opportunity-and-a-golden-warning/
And those circle charts.....beautiful! Just beautiful. Ironic, since it's a grim picture they paint, but beautifully.
If there were more gold out there than we know about it, enough to back all the trillions of fiat and debt, there would be no reason to suppress pm prices and no reason for central banks to buy, and no reason to kick the can. This rumor flies in the face of reality.
Smiddy, it's war of another kind. Of course shit hits the fan from time to time. It would rock the shit out of the system. And it seems legit. These are big boys and they have long histories and memories.
ori
These charts are simply stunning. I was just about coping until I came to the US chart, now there's a set of fat lines.
Also, wonder why the UK is into Ireland for so much? I reckon this is what it cost them to get the IRA to stop.
France is dead.
Ori, why the link to invest in running shoe technology, I didn't get that.
Was a post I wrote, started out about Gold manipulation/doom and ended up being a "This is my plan and you are welcome to partake" thing. Thus.
ori
Seems pretty apt, thanks.
I'd be looking at running shoe technology if I was a US Citizen after reading this
https://www.fbo.gov/utils/view?id=d74252eb90a97743ba617c181a428427
I am really beginning to think that my pile of silver, my 3 acres of arable land and newly acquired bow making skills might just not be enough.
This is in case you live in an urban area when the EBT cards stop working.
Your post reminds me of this:
http://www.youtube.com/watch?v=YHr0XwPRMDo
+2 One for the clip. One for it being in Spanish.. good form.
OMG thank you, I really needed that!
This article over complicates the issue. The true root of our problems is a debt based world reserve currency. Of course there is going to be endless printing and massive new debt creation in the end stage of this ponzi scheme as growth subsides. You can't grow to infinity. That's the obvious flaw in all these crazy Keynsian policies. The emporer has no clothes.
Similar to DEC 2008, US bond yields incl costs and inflation are around 0% or negative.
I think it is you cannot force people to grow to infinity. You cannot manage infinite growth. With freedom comes growth generally. With freedom you can also choose not to take part.
Triffin Dilemna, bitchez!
Yep.
Here it is argued that the ECB's measures continue to be underestimated:
this is on the LTRO: http://www.acting-man.com/?p=12622
but to fully follow the lines of argument one should probably begin with the analysis of the original decision
http://www.acting-man.com/?p=12317
and the follow-up regarding the ECB's transformation into 'Europe's biggest bad bank': http://www.acting-man.com/?p=12519
PS: sorry for spamming, but these provide an interesting look at the debate over the how important the ECB's interventions are.
"One of the most important things we need to track is simply untrackable, and that is market perception. When faith in a faith-based money system vanishes, the game is pretty much over."
I would add that trust and confidence are 100% vital for a functioning global investment scheme. MFing Global has shattered that confidence. The effects of this are just beginning to be felt. The end result will be a mass exodus of paper markets and "runs" on financial institutions of all types.
Yes, it's much worse than 2008. 2012 is going to be a very mean year.
Dude, MF Global was just a company run into the ground by its kindergarten level trading knowledge boss; two weeks from now nobody will even remember the name. What do you know about LTCM, for instance? NOthing. But it was much more significant; for a month.
Wow, you have no idea what you are talking about.
MF Global proved that that a, your broker might just steal from you to cover bad bets, and much more significantly b, contrary to popular opinon, exchanges will NOT make you whole when your broker pulls something like that. The CME said just a few months ago that they had more than a hundred billion dollars worth of guarantees for just such an eventuality as MF Global, but now we see that they can't or won't even cover just over a billion.
If you know anything about futures exchanges, you will understand that they exist for two purposes. They provide a centralized price discovery mechanism AND insure that trades are executed such that one bad actor won't become the liability of all involved parties. Now that we see that the second is no longer in effect, and with the ongoing suspicions regarding price manipulation, there is no longer any point to the continuation of the CME.
This is the worst thing that has happened in the 150 year history of futures trading. What kind of agenda are you pushing in your hamfisted attempts to talk down the implications of this event?
And which of those lessons weren't already largely available to any one who was paying attention? (Lehman, anyone. By and large the same thing, just a little different flavor). IMO, his point is the market WON'T LEARN from this. It has a short attention span, and it will keep making the same mistakes it always makes. And in this case, sh1t is going to get worse before it really hits the fan, at some point down the road.
Lehman didn't comingle accounts. No-one lost their money, nor was anyone left exposed to market fluctuations without the ability to close out positions. Further, no physical, allocated assets belonging to customers were seized.
Big, BIG difference.
That said, I knew the paper markets were screwed as soon as I learned about QE1, and got out within a few months. This event should shatter the faith of everyone that is left. The fact that it hasn't speaks to the immense inertia of the normalcy bias in the mainstream.
True, but people had collateral frozen for LONG periods of time through the Lehman London brokerage. If you didn't learn to scrutinize your prime broker (their operations, credit profile, business risk, legal structure, riesgo pais) as a source of counter party risk (independent from exchange regulations and gaurantees) then you weren't paying attention. A strong counterparty to a non-deliverable cash-settled OTC contract actually looked less risky to me than a shitty FCM.
And I agree - it should remove the market's blind faith, but I know that normalcy bias (& you forget recency bias - the tendency to project the immediate past into the future) will trump logic and the market won't learn. But, again, this is why inefficiencies in capital markets persist, and most mathematical models based on rational actors fail repeatedly.
Also, don't rely on the SPIC to bail you out if you invest in Madoff or Stanford. Or the FDIC to bail you out if you have money at Lincoln Savings and Loan. Or the PBGC to bail you out if you worked at Bilidisco. They may, but you can avoid that circumstance altogether by being skeptical and scrutinizing your counterparties - whatever promises someone makes you. There's usually pretty obvious evidence to those who care to look, and plenty of past case studies. History may not repeat, but it sure does rhyme...
Taker easy. He only got an 800 on the SAT. This was probably over his head. Let me try and explain it to him...
Market go boom boom.
So far, MF is yet more proof these bastards are above the law. Also, showing the CME has no funds to guarantee the losses on commodities.
AND JPM just got a pass on the new position limits until May 2012. WTF. How many bricks have to be thrown at one's head before they get it?
I'm pretty sure people who know anything about MF won't forget it in two weeks. But more to your weak attempt at claiming some deeper knowledge of collossal collapses by citing LTCM: the only thing MF and LTCM have in common is that Corzine was running Goldman during LTCM's short life. LTCM wasn't about theft and its collapse was significant for more than a month. Perhaps you could try again at making a real point - and please don't start out using the word "dude". It really undermines any chance of credibility.
Hey, I thought you were taking the day off !?
Truth never takes a day off. The truth works 23/7. (coffee break mandated by the union of course.)
Turd, You along with Peter Schiff and the Cornell Chemist have really helped me prepare and understand. Thanks! Still crossing my fingers and waiting for Jan 2nd.
I think you may mean January the turd.
Cue Twilight zone theme. How did you know that?
And the winner for the understatement of the year: "you likely lost your faith in the system a while ago and marvel that it can continue along for another moment."
Someone get this man a button and a free cookie.
MF Global was an example of a desperate flight crew throwing everything out of the plane to stay in the air just one more minute. They would never endanger the system unless the system's continued life depended upon it.
It's coming, this year. Brace yourselves for the final attack on pm prices before the big reset. All they have to do is let the stock market sell off, and pms will deflate, then they will use everything in their disposal. If you have any powder left, scale into pms as the year begins and keep on stacking until you run out of money or you run out of time.
Season's Greetings to the Mighty Turd! Thanks for all your work.
and to you Rocky. I've been reciving a couple of "funnies" from you through my friend Do Chen.
Interesting to note that there is not one, yes NOT ONE, positive remark to found about anything in this version of impending doom. How tiresome it must be to be the prophet of disaster when there is no disaster actually happening or about to happen.
Europe and the USA will muddle through with some difficult fits and starts.
The end is not near - Merry Christmas.
Where do you buy your denial from? You use the triple-strength stuff, yes?
Since you note the absence of any "positive" data, why not post some data that refutes the article?
That's the hard part about seeing the end coming. When you're right, there's no one around to tell, "I told you so."
Sorry for the minus one but I have been crafting my "I told you so" letter for about a month now. It starts like this:
Usually saying I told you so seems petty but since most of you are heading here to wait out the disaster, the pass code is "You told me so." I will also accept "I am a moron and you were right." But that one is reserved for my sister.
What do you think?
I like the part about the "best explanation for the higher oil prices is the decreased supply of cheap oil"; I laughed out loud at that one. That's the best explanation if you know absolutely nothing about the oil market, and b.) you desperately need to bolster up your gloom and doom blog.
SAT 800=400 math,400 verbal.
ratso looks like you're just fatso in your own head.. typical troll.
Shut up or put up with your "positive remark".
Merry Christmas to you too.
a shame to my avatars name ....
Barry Soweto is that you??????
Merry "muddle-through" Christmas!
At the end of all empires, there's "muddle-through" until they're really through and looking at what? The truth!
Don't disrupt the herd. From the preponderance of buy silver, to vote Ron Paul to now the world is ending in the near future-don't tap the glass.
Where is Chumbawumba anyway?
The herd? You can't be serious.
Hurp a durp, ZH==the street.
Hurp a durp.
Yeah, Chumba ain't Wumba'd for a while now, they got him, he bin tooked?
Chumba pop's up about once a week these day's.
Listen to ratso! Sell me your gold and silver. It isn't backed by anything. The government and banks are good for the couple quadrillion they owe. Trust me!
http://www.youtube.com/watch?v=NV7nEkt2ySI
"Muddle through"
In financial history, muddle through means the cycle resets. Which means, of course, that the peasants take a haircut, usually most of their retirement savings, and then embark upon a lifetime of austerity while the looters make off with everything they can prior to the collapse, and then buy up everything that's left from their victims after the collapse. That's why some people hated Jews in Germany, because in Wiemar Germany, they were perceived as the looters who then carpet bagged everyone for their household goods when money became scarce.
In that sense, yeah, we will muddle through. You need to read more and rely upon normalcy bias less, these cycles are longer than a human lifespan.
Merry Cristmas, and a green for your optimism
Check your history dude, people have been hating on the Joos for more than a 1000 years. Not in favour of hate, but it's a fact nonetheless.
>3,000 years. And this is why. Just look what Ilana did to 'lil Trilby, @ http://barelyablog.com/?p=45868
Heres some positive news for you shill: WWIII will bring back US manufacturing and jobs! I hope you enjoy either hard labor work or fighting in the war...
I enjoy hard work and I have already fought in a war for you to write this stuff.
Merry Christmas.
You aren't allowed to say that on here mate, even if it's likely to be true.
What makes me laugh are the constant predictions of the imminent demise of Europe, that have been ongoing for over a year now .. you'd think someone might have got a history book or two out and realised if the continent can give birth to democracy, recover from numerous plagues and epidemics and annihilation (twice in the past hundred years), and still colonise the rest of the planet and instigate most of humanity's major technological advances, then a bit of belt-tightening should not prove too difficult.
http://s.wsj.net/public/resources/MWimages/MW-AJ589_ecb_fr_MD_2011040708... Here's the problem, the litttle gold stars all over; ehh- Too Gay.
You peeps are fucking downers.
Man, total buzz kill.
http://www.southparkstudios.com/clips/388737/rated-arg-for-pirates
...or realists. Time will be the final arbiter.
Article is too long, didn't read. Just skipped to see if he does his usual cliff hanger ending - subscribe for part 2. Thumbs down.
COLLAPSE
« Gloom, despair and agony on me!
Deep dark depression, excessive misery
If it weren't for bad luck, I'd have no luck at all
Gloom, despair and agony on me! »
- repeat song on the old classic American rural comedy show, 'Hee Haw'
http://www.youtube.com/watch?v=_LfKly2sayk
At least we'll have Hee Haw Babes......
http://www.youtube.com/watch?v=da8sZyXeHn8
"When in danger or in doubt, run in circles, scream and shout!"
good book! great author!
http://www.amazon.com/Collapse-Societies-Choose-Succeed-Revised/dp/01431...
Free range chickens bitchez!
Free range rude people, buggers.
Woops double post. Since this is some good real estate I'm going to sell this comment space to the highest bidder.
Bidding starts at $15. Go!
I bid five 2020 Bernanke bucks. They will be souvenirs for your grandchildren.
I bid $14.50
Wow, beautiful! GOLD can help if these words and images give you nightmares...
Things DO look worse than 2008. Prepare!
Of course it's WORSE now than back in 2008...
back then, I could buy an ounce of gold with a "6" handle on it... Now it costs more than double that...
So yeah, things are much worse...
Of course, it has to be much worse as once the banksters' ultra-leveraged 7-year run ended with the predictable meltdown, unlike the first time in the 1920s, when countervailing forces enacted pushback with the New Deal, and ended securitizations in 1933 (along with the dark pools of Prohibition), they immediately restarted another ultra-leveraged run --- which can only lead to disaster for the 99%, with that upper 1/10th of 1% raking in their ill-gotten gains!
This is what plutocracy looks like!
i prefer,
"which can only lead to disaster for the 1%, and upper 1/10th of 1%, after getting raked over, and pitchforked, for all their ill-gotten gains, by the 99%."
If wishes were horses, beggars would ride. don't hold your breath.
Buy Bitchez Gold!
After the reset, gold will be able to buy all you could want...
Terrible advice. I bought one 17 years ago in the pre-bitch stage, she converted to bitch after she got the gold on the finger..............
Maybe your post should read "Rent Bitchez, Buy Gold".......
Best advice on the whole page. Agree.
Excellent!
I am not the originator of this, but I found it on this site, to paraphrase:
If it flies, floats, or fucks, then rent it.
Need to add one more extremely significant factor: Japan is on the verge of being unable to service its huge debt.
http://www.gurufocus.com/news/154556/kyle-bass-third-quarter-letter-immi...
http://articles.businessinsider.com/2011-12-01/wall_street/30462012_1_ma...
BTW, at the first link above, note the Moody's sovereign bond rating versus the CDS implied rating table on page 5 of the report. France, for instance, is 9 notches too high.
All this DOOM...
You might be right, but I prefer to ignore all these things and be happy. Why spend your life worrying about your retirement or bank bankruptcies? It is simply not worth it.
PLEASE DO NOT JUNK HAMY.
Hamy is not Harry 'Urinal Cake Salesman' Wanger.
Hamy is a brilliant and truly funny satirist, successfully bringing either sell-side bullshit or eternally delusional Mad Money sheeple flavor to ZH.
Thank you for your cooperation.
Let's not forget, the minority 'Urinal Cake Salesman' you disparage today, may be president tomorrow.
Sounds like somebody is pining for the Labor Secretary cabinet position in that administration...
A brilliant satirist needs no one to explain his schtick.
right on, live in the present moment, be happy now...just charge it to your credit card
No worries Hamy, just like cancer, if you ignore this it will go away.
pods
bet your ass; I knew a guy had cancer; six months later; hey he had no problem at all.
Pods, I've read very interesting reports lately that it actually goes into remission itself. It's the pharmacology that does cancer patients in, not cancer. Cancer is just an extreme response by the body to industriallization. In all it's aspects. A disease of the environment.
ori
Disclaimer: Deeply immersed from last 20 years in the mechanisms of cancer in all it's stages, through a very close association with one of the world's leading cancer researchers. I tell him, just give them rats some .003% medical grade H2O2 and watch them remiss. Says not one animal can be unaccounted for acccording to strict protocol. All those millions of mice, tracked.
Sick minds. Crazy world.
sounds like you're already enjoying your 20 per room, fema family fun centers! please share that single daily supply of toilet paper!
FEMA is necessary to ensure quick government action against terrorist attacks and natural disasters. I do believe that our elected representatives have our best interests in mind (if they didn't, they would not have been elected, simple as that) so I do not worry about all this crazy talk about FEMA on the Internet.
Hamy, you always get buggered on this site.
i cannot believe the many up votes for this post.
FEMA is necessary?
Representatives have our best interests?
Give me a break. Sounds like everybody loves fighting 5 wars and paying taxes for it, without any benefit unless you own 10% of Raytheon.
Hamy, grap a gun and run off to Afghanistan you douche bag.
Fight Club does not suit you. You're gonna have perpetual black eyes.
FEMA camps are a good way to concentrate the current crop of bankers and their families. Thanks for building them.
0100010101100001
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Oh sorry humans, this Binary message was directed at HamyWanger, whom I take from all the goverment propanda spewed to be a Web Bot for some alphabet government agency. Carry on!
0100010101100001
0111010000100000
0111001101101000
0110100101110100
0010000001110111
0110010101100010
0010000001100010
0110111101110100
Oh sorry humans, this Binary message was directed at HamyWanger, whom I take from all the goverment propanda spewed to be a Web Bot for some alphabet government agency. Carry on!
Thanks Hamy.
I've noticed Spanish wine and cheese going down in price at Costco. As a result, I'm buying more. Can Spanish vinyards and dairy farms provide enough growth to solve the debt problem?
Yes.
They are going to 'kill it' with exponentionally larger sales of negative margin units.
Margarine?
Rioja y manchego, putas !
Rioja? Whats your favorite Rioja wine. I'd love to have new leads on that.
Love the reds. You cannot go wrong with Muga, I would say. I have had them, and they are most excellent. If you care to spend, the Prado Enea Gran Riserva.
Ay si! In the next world economy, which the banksters and their ilk will hate, we will all have plenty of wine and cheese to live on. Our needs will be simple. We will become a simple people addicted to happiness. Salud!
Right on, CE. Is there really any other sane way to live?
Read the fine print on those "spanish wines and cheeses".
It reads: "designed in Spain, made in China"
The plains nort of Madrid have grape vines as far as the eye can see, recently planted and with modern irrigation. The plate of the day at typical spanish restaurants will include your choice of water or wine. One person gets .75 litre. Wine is cheaper in Spain than anywhere else I've seen and it's mostly somewhat drinkable.
Thanks to the New Normal, my selections are limited to Two Buck Chuck. I do Vinho Verde on special occasions, and Cold Duck for Xmas. Pray for me.
Bring me all the finest meats & cheeses in the land!
charts are making me spin
Oh it's much worse just look at that swaps chart before Lehman and now. RED ALARM going off in Big Ben's office.
In my mind we're in Oz and the wicked witch is at the point where " these things must be handled delicately" and there ain't no bucket of water to save the day this time around.
How long is the only question at this point. How long before system failure....
2008? Two thousand and late.
Applause for the great work analysis C.Martenson. +1
stop sending your monies to the thugs in DC, get your GGG and get ready
enough of this shit from the fuckers in DC
courtesy Drudge
http://www.youtube.com/watch?v=6KJhdaQO_CM
Another piece courtesy Drudge:
http://www.thedailybeast.com/articles/2011/12/20/local-cops-ready-for-war-with-homeland-security-funded-military-weapons.html
Wonder when they will get Robocop?
Can't you just smell the freedom?
My better half asked me why all the cops looked like thugs even at a Christmas parade. I told her to scare the populace. The whole look intimidates, from the helmets, shades (no eye contact) etc, right down to the jack boots.
Shit, even the new patrol cars look like they are a cross between robocop and transformers.
pods
thanks for that link Dr. - sickening though it is.
one can see why the latest legislation passed, designating the world, and the "homeland" of amrka a BATTLEFIELD is pushing the edges of what being a nationstate means:
"they" have designated "you" as a gun-crazy "terrorist" and redefined the space we all occupy in order to play their war games here, just as they do globally.
you may have your arsenals, but theirs are "bigger" in the "measuring" contest. . .
With everybody from county sheriffs to USMC 4-star generals telling the ZOG they aren't doing any globalist enforcement work, I'd say this might turn out to be a fair fight. In fact, I think we are going to win.
Civil Disobedience.
"Withholding payment of taxes is one of the quickest methods of overthrowing a government"
Mahatma Gandhi
If you can get enough brave people to do this, the system would not last more than few months.
Stop the cash flow and you wipe out the crooks...no state\government employee wants to work for free.
Different country. Ours has the printing press. No taxes? No problem.
Most jail inmates do more to boost GDP than working class americans and the poor. They insert a good 50k a year into the economy each year aaaaaaaand they create jobs. The solution is obvious folks.......time to start jailing these working class losers.
Long correctional Institutions?
How to hedge?
shits gettin real. more and more imminent 'collapse is here' headlines on a daily basis than I've ever seen and I track alot of news sites:
http://bulletsbeansandbullion.blogspot.com/
Luckily I got my veg patch sorted, and my metals buried, bring it on. lets get back to local and sustainable.
Yawn... Collapse is for those who care and didn't lose everything in 2008 - 2009. Before the collapse I go to work, after the collapse I go to work. No retirement before hand, no retirement afterwards.
Royal Bank of Scotland Prepares for Massive Layoffs By Emily Knapphttp://wallstcheatsheet.com/stocks/rbs-prepares-for-massive-layoffs.html/
Worse? there is no word to describe how much worse. The system cannot take even one more shock. And it can come from ANYWHERE. A butterfly flapping its wings in south america could knock over the house of cards in EU/US.
If you can spin that just right, there is work for you in DC
It's different this time. TPTB have nearly complete control of the money printing, bank accounts, food and energy supply, police and the military, and public opinion thanks to their ownership of the msm and Hollywood.
2011 beat 2008 as the recrod year for average gasoline prices. And 2011 tied the 1981 all time record for gasoline as a % of household income at 8.4%
We didn't change the name of the game in 2009, we just increased the leverage in the SAME mind set with the SAME players. What did these guys expect???
Feed backward to Middle ages, cicrca 1070 :
Byzantine Lost at Manzikert in 1071 to Turks, it got a bigger enemy, the Crusader Franks, Christians but not of same Orthodox bend, Latins bowing to Pope in Rome, to come "assist" them, by establishing a local base in Crusader States with Jerusalem as capital. Byzantine didn't change its ways. When they fell a second time at Myriokephalon to same Turks in 1176 in SAME mindset, it was game over for them.
But,...here comes the twist. It was NOT the Seljuks, twice victors over Byzance, who killed off the Byzantine Empire. It was the Crusaders in 1204!
Corrupted and sooo incestuous...it makes for bad bed fellows. Ask the Comnenos.
With friends like that....watch out Europe! ...
http://en.wikipedia.org/wiki/Battle_of_Manzikert
http://en.wikipedia.org/wiki/Battle_of_Myriokephalon
http://en.wikipedia.org/wiki/Fourth_Crusade
Corrupted mind set and all becomes possible amongst Oligarchs; when predatory instincts are set loose...We are there.
Yes, very reminiscent. Collapse usually starts from within and is often completed at the hands of local vultures
Notice the U.S. "width of the arrows is how much money is owed" had to be overlapped. There isn't enough room on the chart to show them at full scale. Its gonna be a doozey when faith is lost in the USD and TSY.
Keep kickin' the can, rat bastards. It gives us who are watching more time to prepare.
US population growth in 2011 slowed to a rate last seen in the 1940s.
If they evicted all thriteen million illegal aliens instead of o'bummer breaking out in hives every time someone wants to enfore the law, it would be like a paradise.
The entire so called recovery was built on conterfeiting of US$ and lies, it got to finish badly.
Now we know why we call US economy "an economy of scale".
I heart your charts.
Well my calcs said crash Sept/Oct and here we are heading into 2012 somehow defying nature, physics, all math and econ and common sense up in the green with some kind of rally yesterday.....sheer insanity....
I think if you had factored insanity into your 'calcs', you would find greater accuracy, or at least a wider range of outcomes in your expectations.