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Interactive Visual History Of Financial Crises Since 1810 - Note Where The Fed Arrives

Tyler Durden's picture


As the name implies. What is funny is how only after the advent of the Federal Reserve in 1913 did Financial crises expose increasingly more of world GDP to a crisis state. But at least the Fed and ECB tell us all they do is enforce price stabeeletee. Could they be lying!? We thought it was all the gold standard's fault for causing unprecedented economic volatility... Guess not. From History Shots: "The giant wave in the top section of the graphic depicts the percentage of world GDP by region in crisis during the 200 year period. It includes the four major financial crisis types (sovereign default, banking, currency, and inflation) along with stock market crashes. The bottom section provides a detailed chart of all sovereign defaults by country, region and year. It shows the repeating nature of sovereign default, a central theme of Reinhart and Rogoff's book."

Full chronology after the jump.

Source: HistoryShots


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Sun, 01/22/2012 - 21:49 | 2087334 SnobGobbler
SnobGobbler's picture

hillarious, i may order one... fuck the fed

Sun, 01/22/2012 - 22:41 | 2087457 trav7777
trav7777's picture

hey, lesser central banks have lost 100% of their currencies' value...the Fed is only at like 96, 97...which is a total win for a banker

Sun, 01/22/2012 - 23:15 | 2087507 Oh regional Indian
Oh regional Indian's picture

Actually it's the little strip below, number of countries in default that tells us something about timing.

Once the first big Greek Crisis is in full flow, we'll see that number accelerate.

The crisis will have to be locally global (many places, but dis-united). Then there is the possibility of a simple event (Oil way up or some such) that will unite them all.

It's I MF....



Sun, 01/22/2012 - 23:51 | 2087562 Sam Clemons
Sam Clemons's picture

Since the ORI is out pimping his blog, I decided to join the fun.  I actually hope you guys find the info useful.

Check out this chart I created comparing gold, s&p, dow and MZM.

Mon, 01/23/2012 - 01:04 | 2087685 i-dog
i-dog's picture

Better that ORI "pimps his blog" in a one-line reference at the bottom of his posts rather than some posters who cut and paste 200 lines from their blog in bold italics ... then also add the gratuitous link to the same (usually off-topic) nonsense at the end.

If you have something interesting to say about the topics at hand, then by all means post a link.

PS. Your chart is very interesting (moreso after google reminded me what MZM is!). Most interesting is the real acceleration of "irrational exuberance" in stocks from 1994/5 (with the arrival of Rubin as Treasury Secretary in Clinton's administration) rather than where one would have expected it (earlier, under Reagan or Papa Bush). The stock crash of 1987 is hardly a noticeable speed bump on that chart.

I wonder, from your chart, which entities are in a bubble?! LOL.

Mon, 01/23/2012 - 01:32 | 2087823 flacon
flacon's picture

That chart is really good. Thank you for posting it. 

Mon, 01/23/2012 - 02:14 | 2087898 Michael
Michael's picture

Rand Paul should use this chart on the Senate floor in an address.

Mon, 01/23/2012 - 02:57 | 2087945 Max Fischer
Max Fischer's picture



I'm not sure that would be helpful because only backwater Kentucky goons dressed in camouflage listen to Rand Paul. No one outside Kentucky takes that freak seriously. He's one of the "hobbits who needs to crawl back to the center of the Earth" that McCain referenced last year.     

However, if Rand did bring the chart to the Senate floor, he certainly needs to bring two charts, side by side. One is the aforementioned.  The other chart should be the percentage of revenue Rand's ophthalmology practice derives from government money, like medicare and medicaid.  By his own admission, it's over half... about 55%. This way, normal people outside Kentucky can see how much of a complete fucking hypocrite he is.  If over 50% of his income comes from taxpayer funds, then he's essentially a government employee and obviously despises himself. Can you even imagine the cognitive dissonance of being a hard-core libertarian on the government's payroll?

<Kentucky hillbilly drawl>  Wat 'n tarrrr-nation?

Max Fischer, Magnus Frater te spectat




Mon, 01/23/2012 - 03:20 | 2087968 Ropingdown
Ropingdown's picture

Curious, ain't it, how almost everybody making big money either gets it from the taxpayer, or makes it by stepping into a slot in an organization built by someone else, or makes it through some form of subsidy or statutory preference.  I was delighted to learn the other day that South Carolinians prefer a president who tries out his next wife for four or five years before deciding to get rid of his present one, repeatedly.  That shows, I suppose, great deliberative tendencies on the part of the candidate.  As for Rand Paul, though, is it any worse to make your living from taxpayer-paid medical services than taxpayer-paid military service or LEO service or DoD contracting?  Boy does this goes deep in the country.  I grew up thinking, for example, that Barry Goldwater was a small-government conservative, right up until I learned his family built their retailing prosperity by selling horses and donkeys to the US Cavalry, paid for by eastern taxes, mostly.  Railroads, shipping lines, physicians, home-builders, the whole economy runs on taking taxes and handing them to someone else, directly or indirectly.  Solution? 

Mon, 01/23/2012 - 04:47 | 2088030 Oh regional Indian
Oh regional Indian's picture


Good old fashioned micro-entrepreneurship based strongly and boldly and with commitment on the principles of Permaculture.

The world as we know it is built that way. 


Watch this.... someone was kind enough to point to it yestarday.


Or this, my vision, only if called.


Mon, 01/23/2012 - 04:15 | 2088014 ffart
ffart's picture

You're a lot more sophisticated troll than MDB or RoboTrader. You had me going until I googled your signature, then things clicked into place.

Mon, 01/23/2012 - 08:08 | 2088128 fearsomepirate
fearsomepirate's picture

According to Mas Fischer, you're not allowed to be a libertarian unless you have a career that involves no dealing with the government whatsoever, from your education to doing your job to doing your taxes.  In America, that encompasses approximately 100% of all jobs, so I guess that means every libertarian who doesn't move is a "fucking hypocrite."

On the other hand, I've noticed all the socialists in this country still buy things with money in stores.  What a bunch of fucking hypocrites, participating in markets when they claim to love socialism! 

Mon, 01/23/2012 - 11:45 | 2088704 GoodMorningMr.V...
GoodMorningMr.VanRumpoy...'s picture

Rand Paul is currently being detained by the TSA, not to be seen again.

Mon, 01/23/2012 - 00:08 | 2087580 Chupacabra-322
Chupacabra-322's picture

"When plunder becomes a way of life for a group of men,
living together in society,
they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."

Frederic Bastiat, (1801-1850)

 “The last official act of any government is to loot the treasury.” - George Washington
Mon, 01/23/2012 - 00:18 | 2087607 LeonardoFibonacci
LeonardoFibonacci's picture

Erect the gallows, lads.  Once a century or so, it becomes obvious its time to use them again.

Mon, 01/23/2012 - 06:33 | 2088068 Archduke
Archduke's picture

The fed and other central banks are responsible in a very large part, but there are other

major structural catalysts post-1890 that increased the velocity and amplitude of shocks.

the central banks were in a way necessary to manage the social and industrial boom.


the gold standard  peg of 1900.  the panama canal (suez precede it by a few decades).

mechanized industrialisation.  shift from coal to petrol (Model T came out in 1908).

the rise of nationalism and boost in arms production for defence and colonial influence.

the opening up of global exchanges, indices, ratings (hong kong, sao paolo, dow jones).



Mon, 01/23/2012 - 07:12 | 2088087 Snidley Whipsnae
Snidley Whipsnae's picture

The major structural catalyst was the decision by the US to have an empire. That decision, to go to war against Spain in 1898, passed the congress by one vote.

All decisions since then sprang from the decision to become an empire. Empires need enormous funding and what better way to fund than to get off the gold standard and onto an infinitely expandable fiat currency?

Once the path of empire is chosen the outcome is always the same... collapse. But it's been one hell of a party! Especially for the 1%.

History, as taught in most institutions, is incomprehensible and boring... Why, you ask? Because trying to teach students history without the accompanying economic drivers of history makes little sense to the student... or to anyone, even the proff. History seems boring because it usually ignores the WHY of events, and events are driven by money, teachers simply say 'memorize these dates'... George Washington attacked Trenton in the snow with bare feet in blah, blah, blah... History, as taught, doesn't include the 'money trail'... If we begin connecting what happened with the money trail then history begins to make sense.

Smedley Butler, in his famous 'War is a Racket' Speech, didn't go far enough... but he made a damn good start.

Mon, 01/23/2012 - 08:02 | 2088121 Oh regional Indian
Oh regional Indian's picture

Snid, well said and perhaps you are not going back far enough either?

America is not an Empire per-se anyways. it is an extension of an old power. Much older as I understand it.  Even in the players of the American Freedom movement, the Civil war and war of independence are full of characters of questionable leanings, as in who/what were they really fighting for.

I read about Amenhoetep I think, who had the stone cravings all across Egypt altered to remove any memory of his predecessor.

True history perhaps lives on in a very small clique of people who passed on the truth as it was. 

i hope it's true revelation is nigh.


Mon, 01/23/2012 - 09:31 | 2088148 Archduke
Archduke's picture

That's a bit too US-centric.  At that time the US was one of many powers undergoing momentous change.


Don't get me wrong, like Jekyl Island fans I think the fed is terribe because it's private and unaccountable.

I just don't think we can do without central banks.  Also note that public central-bank systems also crashed,


Mon, 01/23/2012 - 11:13 | 2088565 forexskin
forexskin's picture

central banks = central planning

central planning = central control

central control = arbitrary power leading to absolute power for the controllers

absolute power for the controllers = slavery for those controlled


if you really believe we need central banks and all that it implies, you are my enemy

Mon, 01/23/2012 - 09:56 | 2088332 tired1
tired1's picture

I thought I knew a bit about history, I have  certainly spent more than a few years studying some topics of interest to me.

A few years ago I began to view events through the prism of economics (theft) and sadly my understanding of humanity and history has increased by at least an order of magnitude.

Sun, 01/22/2012 - 21:50 | 2087335 UP Forester
UP Forester's picture

So, 50%+ of the world GDP in crisis is bullish?

Sun, 01/22/2012 - 22:30 | 2087438 JW n FL
JW n FL's picture




Buy More NetFlix NOW!!


Sun, 01/22/2012 - 21:52 | 2087339 holdbuysell
holdbuysell's picture

Would be interesting to see world debt to world GDP plotted along the top.

Sun, 01/22/2012 - 21:52 | 2087342 Terminus C
Terminus C's picture

Cock sucking thieves, all of them.  May they hang from lamp posts.

Sun, 01/22/2012 - 22:31 | 2087443 JW n FL
JW n FL's picture



I wanna hang them on the White Hose Lawn.. lots of room, big trees.. let the new President show the rest of the scumbag bottom feeders what the "New Normal" is all about!

Dont laugh!

I can Dream!!

Sun, 01/22/2012 - 23:24 | 2087521 UP4Liberty
UP4Liberty's picture

There's a place in the world already where they hang people...Iran (people are hung from giant cranes to set an example to those contemplating a different form of governance).

Unfortunately, the people hanging in Iran are usually engaged in civil disobedience...or somehow trying to improve things...

Personally, I think an appropriate penalty to TPTB is to place an M-80 in the posterior of the treasonous bas***ds...

So they know what it is like to "blow up" - the same way they "blew up" our financial system an our economy.


Mon, 01/23/2012 - 01:34 | 2087828 A Nanny Moose
A Nanny Moose's picture

Of course we, the United States of America, provide the sovereigns in Iran, with said opportunites to hang dissidents.

Mon, 01/23/2012 - 00:28 | 2087637 Ahmeexnal
Ahmeexnal's picture

I can Dream!!


"If you will it, it is no dream."

Mon, 01/23/2012 - 00:47 | 2087704 Oh regional Indian
Oh regional Indian's picture

Sleeple dream with eyes wide shut...


Sun, 01/22/2012 - 23:50 | 2087558 Crummy
Crummy's picture

I have to take issue with labeling them cocksuckers.

Cocksuckers are a valued labor resource and add value to any economy.


Mon, 01/23/2012 - 01:17 | 2087789 DaveyJones
DaveyJones's picture

they have talent and you can measure the results  more important the government doesn't bail them out they put them in so  their professional managers can

Sun, 01/22/2012 - 21:53 | 2087346 SHEEPFUKKER

The Fed was not designed to bring market was designed to make banksters rich. 

Sun, 01/22/2012 - 22:34 | 2087429 anonnn
anonnn's picture

The banksters, Morgan et al, were already super-rich beyond rich.

 The FedRes provided them the power to control  to [1] maintain their wealth and [2] protect their status against undesired outsider interlopers/superrich wannabes and threats against their status cum privileges [ideas of community and sharing were and are their Achilles Heel].

A not-so-fine point: Bill Gates is super-rich in money. He has no power...such as family lines that have established generations of common, priviliged interests and connections, in both defensive and expansive activities.

Consider: there cannot be a privileged rich group without an unprivileged poor group. The terms are entirely relative. Too many rich and the privileged status is diluted.

FedRes motto: To protect and serve. Not very original, is it?

Mon, 01/23/2012 - 10:04 | 2088347 tired1
tired1's picture

"It's a COOKBOOK!"

Sun, 01/22/2012 - 23:09 | 2087492 AUD
AUD's picture

No it wasn't. I'm not saying the project has been successful but the Federal Reserve was originally envisaged as a 're-discount house' where commercial banks could swap, at a discount, their self liquidating commercial paper (real bills) for more 'liquid' Federal Reserve notes, so 'greasing' the wheels of commerce. I believe originally Federal Reserve notes were redeemable in gold, though there may have been a caveat "gold or lawful money", I am unsure on this point.

The original Federal Reserve Act certainly prohibited the monetisation of government debt but this & gold redeemability soon went out the window. The fault lies more with the governments' propensity to spend thus requiring recourse on the central bank than nefarious bankers plotting to steal everybodies money & rule the world.

Mon, 01/23/2012 - 00:11 | 2087587 snblitz
snblitz's picture

My 1928 Gold Certificate says its payable to the bearer on demand in gold.

Oddly no one in the government will make good on it.

It also does not say 'backed by the full faith and credit of the US government.'

It says redeemable in gold.

I guess I should have gone for the 'full faith and credit of the US government' version.

Mon, 01/23/2012 - 01:57 | 2087866 Real Money Wins
Real Money Wins's picture

After FDR confiscated the gold in 1933 he also made gold notes or certificates illegal and no longer redeemable in gold. Like wise in 1968 President Johnson declared silver certificates to be fiat and no longer redeemable in silver.

So at this point if you want to redeem your note you must sell it for the Numismatic value in fiat and then use the fiat to purchase gold.

Mon, 01/23/2012 - 01:27 | 2087809 Real Money Wins
Real Money Wins's picture

Perhaps this info at this link will be helpful.


Mon, 01/23/2012 - 01:33 | 2087825 PrinceDraxx
PrinceDraxx's picture

That is BS. The Fed is the government's enabler. Fed is happy to give the gov money to get them further in debt. Eventually so deep they can't get out. Somewhat like now.

Sun, 01/22/2012 - 21:56 | 2087354 fnord88
fnord88's picture

But I thought the Fed was our friend? It protects us and our money, keeps us safe, so we may sleep soundly at night? Like the Patriot Act. And NDAA.

Giving up liberty in exchange for safety is the smartest choice. What use is liberty if we are killed by freedom haters?

Thats why I no longer leave the house. Statistically, if I leave the house often enough, I am certain to be hit by a meteorite, even if the terrorists don't get me. Don't bath or shower either, cause more people die in bathtubs every year than have ever been killed by terrorists, better to just smell bad than be dead. Also did you know you could get electrocuted indoors? I switched to oil lamps, its the safe and smart thing to do.

Also thinking the house is burning down, fucking oil lamps, I knew I should have gone and lived in a cave, but I was worried about falling rocks.

Goddamn it.....why didn't the government protect me? Is that not their job? 

Sun, 01/22/2012 - 22:05 | 2087389 ozziindaus
ozziindaus's picture

careful blogging, those keys have some powerful springs behind them. 

Sun, 01/22/2012 - 22:18 | 2087424 Papasmurf
Papasmurf's picture

Sent from my iPod.  No springs.

Mon, 01/23/2012 - 01:23 | 2087799 DaveyJones
DaveyJones's picture

Crap, you forgot the carpal tunnel syndrome

Mon, 01/23/2012 - 05:39 | 2088043 HD
Sun, 01/22/2012 - 21:58 | 2087356 AC_Doctor
AC_Doctor's picture

We need to rid the world permanantly of these agregious, parasitic leeches.

Sun, 01/22/2012 - 23:02 | 2087485 Dr. Engali
Dr. Engali's picture

My guess is that if that were to happen then a new set of parasites would take their place. It will take a major upheaval to comepletly rid ourselves of them.

Mon, 01/23/2012 - 11:28 | 2088632 MachoMan
MachoMan's picture

Exactly...  the strangest part is that the new parasites have an incredibly large chance of being the very same people who are presently calling the existing power structure parasites...  the picture of a dog chasing his tail comes to mind.  Absolute power...

It's like saying we should rid the world of self interest...  good luck with that one.

Mon, 01/23/2012 - 01:27 | 2087810 DaveyJones
DaveyJones's picture

It's the only way I would ever forgive Monsanto

Mon, 01/23/2012 - 05:49 | 2088047 HD
HD's picture

Souless, money grubbing parasitic leeches are the McJob creators. Where would be without our part time, no benefits, no advancement McJobs?

Sun, 01/22/2012 - 22:03 | 2087382 pakled
pakled's picture

Very instructive.


just a thought or 2;

1) If one were to believe the superficial reasons for creating the Fed, which is somewhat akin to why rivers are dammed, which is to prevent flooding and crop failures (bank runs and bakruptcy), and make the flows more predictable, one might conclude it ain't workin' so well.

2) Whether you believe the superficial Fed creation reasons or not, it would also seem what you might call the "barnacle effect" took place after the Fed creation. As in, if a reef suddenly appears, barnacles and other creatures will attach themselves to it. A backstop allows for an increase in risk taking.


I heard once that for every problem you solve, you create two more. Seems to apply to both above

Sun, 01/22/2012 - 22:12 | 2087416 Taint Boil
Taint Boil's picture

Holy analogies Batman! Quick Robin get the bat quote dictionary.

Sun, 01/22/2012 - 22:21 | 2087430 ozziindaus
ozziindaus's picture

So in your analogy, who controls the flow to the public faucets? You imply (i think) that the FED does so. It does not. The FED can buy up treasuries, the Treasury can deposit funds into the banks but that's as far as it goes. In case of a "liquidity trap", money stays in the banks or parked back at the FED earning measly interest while the public demand remains low. This is exactly what's going on today. To borrow your analogy, dam gates are open, no water in the sink. 

Sun, 01/22/2012 - 23:09 | 2087483 pakled
pakled's picture

Borrow away. I was referring to the financial crisis of 1907, which almost wiped out JP Morgan's bank in NY. The public excuse for creating the Fed was as a backstop to provide liquidity (to the banks) in such circumstances. So my point is that even if you take them at their word as to why the fed was created (for "good" and to stabilize the financial system, like damming a river), they have failed to do their primary job it would seem.

And of course there is all the awful side effects we are now living through!

Mon, 01/23/2012 - 03:36 | 2087992 Ropingdown
Ropingdown's picture

The demand for a flexible money supply and safer banks was huge among farmers and small business people, too.  That's why a Congress in control of the Democrats passed the Federal Reserve Act.  It is a mistake to put the sins of the voters and their representatives purely on the bankers.  It is our fault that we have not struggled to enact laws which require budgetary restraint and laws that strictly would punish corrupt trading of favors.  Cancel the next four years of professional sports and reality tv, and lets get to it!  Damned, nobody agrees with me.  They just want to count their money, or their crack, or think about the Bachelor.  Don't care much about THEIR DAMNED GOVERNMENT, or the debt burden they're laying on their kids through payback or inflation. 

Mon, 01/23/2012 - 10:29 | 2088431 Husk-Erzulie
Husk-Erzulie's picture

"The sack of these United States by the Fed is the greatest crime in history"

Louis T. McFadden

Mon, 01/23/2012 - 11:28 | 2088622 forexskin
forexskin's picture

jp morgan was a rothschild man, and the real money was never at risk. the crisis of 1907 was manufactured. the farmers and small business were being squeezed by the railroads and the bankers - and with the nascent control of the media, the outcome was as intended. there was significant opposition to the 'money trust' at that time, and the FED Act was sold as a means of controlling them.

reading history with the benefit of more complete record of intent and actions at the time, its pretty clear that larger forces were planning (and have throughout the history of the US) these events to get their hands on the levers of money exclusively.

we've been either actively fighting central banking or getting played toward it virtually since the beginning.

you really think the political process is an avenue for change now? even though i mainly vehemently disagree with the author of this quote, in this she had it right.

"If Voting Changed Anything, They'd Make It Illegal"

Mon, 01/23/2012 - 05:40 | 2088044 Snidley Whipsnae
Snidley Whipsnae's picture

OZZI... Is the Fed authorized to open multi trillion dollar swap lines with foreign banks and soverigns? Is the Fed authorized to bail out domestic banks with secret money creation? Is the Fed authorized to provide Americans with their own public motels... Red Roof Inns?

I didn't see that stuff their charter.

Sun, 01/22/2012 - 22:13 | 2087417 Seasmoke
Seasmoke's picture

Their time is up !!!

Sun, 01/22/2012 - 22:13 | 2087419 ozziindaus
ozziindaus's picture

The main pillars of central banking (not mandates) is to remain independent and non-partisan. i.e. no influence from politicians. Instead, we have the banks influencing the politicians. OK then. 

Sun, 01/22/2012 - 22:27 | 2087433 disabledvet
disabledvet's picture

empirically this is simply incontrovertible. I will say this: Ben Bernanke to date has only been "too optimistic." In the world of Fed Governance...i'll take that error anytime...especially given what has transpired over the last decade in the USA, for twenty years in Japan and what is currently impacting our Super Mario's (though they push against it to the best of their ability...and it is great ability i might add.) Given that the British Pound was backed by gold for centuries I still fail to see what the big deal with gold backed currency is. so the USA had one major blow up in 1906 which resulted in "Congress declaring JPMorgan too powerful"? Now all of us seem....well "powerless." Anywho great post...espcially in its simplicity.

Sun, 01/22/2012 - 22:38 | 2087448 JW n FL
JW n FL's picture



Look here.. you are Fight Club Family.. so I say this with Love!


hold a little cash so when the Markets slide do to contagion from Europe that you can order some at really low prices.. timing will be everythiing.. the on-line store fronts will close when Gold gets to, too low..

and always by silver! too!!

Other than that.. Ammo! but I dont feel like I need to encourage you there for some reason.

God Bless! and Thank You for Your Service!!!!!!!!!!!!


Sun, 01/22/2012 - 22:38 | 2087447 dolph9
dolph9's picture

I'm no fan of the Fed, but I'm also not into scapegoating, or questionable attempts to turn correlation into causation.

Basically, what happened is that humans got clever and found out how to burn the massive amounts of fossil fuels that lay in the ground.  As that happened, economic activity and population exploded ever higher, and the old standards of doing things (such as gold) failed to keep pace and eventually we found ourselves where we are today:  dependent on central banks which issue fiat money out of thin air.

You can't blame everything on the Fed or FDR or Nixon or whoever you want to blame.  Each of these are only players, only actors in a giant game.

If we were to stop this suddenly, it would be akin to stopping the flow of oil.  Imagine if, tomorrow, there was literally no oil available, at any cost.  It would practically be armageddon.  It's the same with fiat money.

So who is at fault?  If we are honest with ourselves, we would have to say that the entire human race is at fault.  We have these enormous gifts, but ultimately we fall short because our appetites and imaginations are infinite, but we live on a finite planet.  We don't know how to live within our means.  And everybody thinks they will live forever.  Look at the pitiful, old, tired fogies running things in the U.S., Europe, and Japan, for example.

When this gigantic bubble finally runs it's course, it may just result in an evolutionary change in human behavior that nobody right now can entirely predict.  Without a doubt, the current financial system, the globe over, is going to fail.  There's no question about that.  The questions are timing, what comes next, things like that.

Sun, 01/22/2012 - 22:40 | 2087452 JW n FL
JW n FL's picture



Start here..

if you get it.. I will feed you some more info.

Good Luck and God Bless!

Mon, 01/23/2012 - 01:32 | 2087811 palmereldritch
palmereldritch's picture

Wow. Smells like he's now changed up to a "notwithstanding and despite all claims to the previous that oil supplies are nearly depleted and clearly not abiotic in origin, what petroleum is left (denominated in the following cartel private bank ponzi currencies) is too expensive" argument.

Does this guy fill in for Kreskin and Reveen when they are on vacation?

Sun, 01/22/2012 - 22:44 | 2087463 jimmyjames
jimmyjames's picture

Basically, what happened is that humans got clever and found out how to burn the massive amounts of fossil fuels that lay in the ground.  As that happened, economic activity and population exploded ever higher, and the old standards of doing things (such as gold) failed to keep pace


Money supply has nothing to do with advancement-

If the money supply is fixed-then wages/prices will adjust to the fixed price and we can advance just fine-

It's ridiculous to think that money supply must keep increasing with advancement-

Sun, 01/22/2012 - 22:48 | 2087467 jm
jm's picture

This is just too honest and reasonable to get any traction, but the effort is appreciated.

One thought for you... perhaps the asset side of this mess starts inflating again and/or debt aligns to cashflows either by default restructuring or growth.  Then there is no outright collapse.  This "opposite of apocalypse" is most likely, as it is what has happened since 1810 and running.


Sun, 01/22/2012 - 23:26 | 2087522 AUD
AUD's picture

the old standards of doing things (such as gold) failed to keep pace and eventually we found ourselves where we are today:  dependent on central banks which issue fiat money out of thin air.

Your claims are not right either. 'We' are not dependent on fiat money out of thin air, the government & its sycophants are dependent on fiat money out of thin air. Those of us who produce real things that other people desire, in my case, sheep & cattle, are the the ones being screwed as the value of our labour is siphoned off through currency inflation.

Gold did not fail to keep pace, it was deliberately ostracised by bankrupt governments, & their sycophants, desperate to keep their hands on the levers of control. You in the US can certainly blame FDR, though government bankruptcy is universal.

Sun, 01/22/2012 - 23:40 | 2087541 StychoKiller
StychoKiller's picture

Conclusion:  "The surface of a planet is NOT the correct place for an expanding, technological civilization." -- R.A. Wilson

Mon, 01/23/2012 - 06:03 | 2088053 Snidley Whipsnae
Snidley Whipsnae's picture

Dolph... "Basically, what happened is that humans got clever and found out how to burn the massive amounts of fossil fuels that lay in the ground. As that happened, economic activity and population exploded ever higher, and the old standards of doing things (such as gold) failed to keep pace and eventually we found ourselves where we are today: dependent on central banks which issue fiat money out of thin air."


What a total crock of bull shit. Until the end of WW2 the US was the largest oil exporter in the world. So plenty of oil was available for economic expansion even when the US remained on the gold standard. Debt, and growth, was held in check by the amount of gold available to back the currency.

Some would argue, as you do, that the reins of gold needed to be removed so that the world economy, and population, could expand more quickly. How has that worked out? We now have 7 billion people scattered across the earth that are dependent on a shaky financial system and even shakier commodities mkts for their very existence. Any bump in the road can and will derail the entire system and billions will starve... Billions that arguably should never have been brought into this world because the system to support them is a house of cards.

The second debt explosion (after the roaring 20s led to the depression) came when the US, under Nixon, closed the gold window and issued only unbacked fiat, which is infinitely expandable.

Once off the gold standard there was nothing to hold back the spending in the public sector and then, bankers being ever more greedy, offered ever more cheap credit to the private sector... bankers made loans that they knew would never be repaid, because it increased their bonuses.

None of this could have happened had we remained on the gold standard... or, not to the extent that we see today.

Had we remained on the gold standard we would have had slower growth but far less debt. We are in this debt trap because we abandoned the gold standard.


Sun, 01/22/2012 - 22:40 | 2087453 slewie the pi-rat
slewie the pi-rat's picture

this is the sovereign "birth-death default model"?

doesn't their book prove why it's gonna be different this time?  L0L!!!

Sun, 01/22/2012 - 23:08 | 2087493 Heroic Couplet
Heroic Couplet's picture

Who needs Keynesian clowns when we have the private bank cartel and the Federal Reserve?

No farmer in his right mind would look at a silo of grain and expect the silo to magically duplicate itself overnight, and yet the Federal Reserve clowns expected empty houses to double in value. Enjoy the clowns and their comedy.

Sun, 01/22/2012 - 23:09 | 2087495 non_anon
non_anon's picture

how shall we celebrate the Fed Res 100th b-day?

Sun, 01/22/2012 - 23:42 | 2087547 UP Forester
UP Forester's picture

13 flaming buildings?

Mon, 01/23/2012 - 00:36 | 2087653 btechtrader
btechtrader's picture

mescaline for all fed governors prior to committee meetings

Mon, 01/23/2012 - 06:07 | 2088056 Snidley Whipsnae
Snidley Whipsnae's picture

Those azz hats don't need mescaline, they need a dose of reality.

Mon, 01/23/2012 - 09:15 | 2088241 jimijon
jimijon's picture

LSD it is then.

Sun, 01/22/2012 - 23:13 | 2087502 q99x2
q99x2's picture

Locate them and publish their whereabouts at all times. People of the world have been financially affected by the fraud they created.

TPTB use soveriegns against each other as a way to take what they want.

Now that globally we've been united by their financial destruction the whole darn world is learning who the real enemy is.

I'd like to at least regain control over the taxes I've paid.

Sun, 01/22/2012 - 23:14 | 2087503 BlackholeDivestment
BlackholeDivestment's picture

...Reignhart broke this chart pattern out, when she testified at the Simpson Bowles commission, only she pointed out the pattern spike that happen just before war breaks out. Lol

Sun, 01/22/2012 - 23:17 | 2087509 gwar5
gwar5's picture

Everybody knows what the problem is but we can't convice the deniers in charge.  Charts like that is now treason.


Sun, 01/22/2012 - 23:19 | 2087512 working class dog
working class dog's picture

How many ammendments to the Federal Reserve Act has occurred where the noose is tightened on the freedoms of the american public, and the indenturedness and slavery to the Dimons, Pimcos, Paulsens and all the rest  who sit at the money nozzle.

When the act was passed very little teeth, now we have a school of pirhannas and their pack of wolves (president, sentate , congress and judicial) all pounce on the sheeple.

Undo this abomanation and scurge to mankind. 

Sun, 01/22/2012 - 23:20 | 2087513 El Gordo
El Gordo's picture

I still have this nagging question - if our dollars become worthless, what difference does it make how many of them you have?  Currency collapse would seem to me to be the great equalizer, from China to the Squid to the Morgue to El Gordo, unless El Gordo is smart enough to continue to stack PM's and bullets.

Sun, 01/22/2012 - 23:29 | 2087528 UP4Liberty
UP4Liberty's picture

Good question.

Since the value of all fiat currencies is based on what we are TOLD they are worth, it won't make a difference if you have a jillion of them if - and more importantly - when people begin not accepting them.

This is also a good reason to have a nice stash of gold or silver coins...there is no counter party risk, and gold and silver have been money for over 6,000 years.

I wish the legal tender laws would be repealed...IMHO.

Sun, 01/22/2012 - 23:30 | 2087529 AC_Doctor
AC_Doctor's picture

Hard commodities, arable land with irrigation, gold, silver, guns, ammo etc. should all be stores of wealth.

Sun, 01/22/2012 - 23:35 | 2087537 Dr Paul Krugman
Dr Paul Krugman's picture

Yet somehow standards of living have increased how much?  What is everyone on this blog doing with their free time?  Where do most of you find food?  Do you all spend hours laboring in the forest hunting, or do you go to the nearest grocery store?  Everyone here has a computer!  A car!  Yes, the 20th century was horrible for us all!

Mon, 01/23/2012 - 00:44 | 2087689 BlackholeDivestment
BlackholeDivestment's picture

...Dr. Krugman, lol, ...that would be a Chinese Communist Doctor, with a terminal case of addiction to debt and demand destruction.

Mon, 01/23/2012 - 01:00 | 2087749 squidward
squidward's picture

Standards of living...ignorant economist/politcal propaganda for owning too much shit.  It is not quality of life. According to economics a couple that divorces has an increased standard of living, now they have two houses instead of one, two cable bills more flat screens more netflix accounts.  Owning more shit is not an increase in quality of life for most it is debt slavery or increased overtime.


The things you own end up owning you.---Tyler Durden

Mon, 01/23/2012 - 01:01 | 2087751 jimmyjames
jimmyjames's picture

Do you all spend hours laboring in the forest hunting, or do you go to the nearest grocery store?  Everyone here has a computer!  A car!  Yes, the 20th century was horrible for us all!


50 million and counting on SNAP-

The house repossessed-the car repossessed--no job

Keynesian wizardry at its fruitful end-

Mon, 01/23/2012 - 06:16 | 2088061 Snidley Whipsnae
Snidley Whipsnae's picture

Krugman... You sound like all the others that take your vehicle to a mechanic. Almost every time the auto owner says to the mechanic... "I don't understand, it was running fine yesterday."

Well, this 'system' of unbacked fiat will run fine... Until, one day, it doesn't.

Then you will try to call the electric company to find out why your home/office has no power. But your phone won't work either. Then you will get in your car and attempt to drive to the power company office but will notice your gas gauge is nearing E, so you will pull into a gas station only to find out there is no gas for sale... same thing when you get to the grocery store.

It all  works fine... until it doesn't.

Mon, 01/23/2012 - 06:51 | 2088071 vato poco
vato poco's picture

Much as it pains me to semi-agree with anyone named "Krugman", (not the real Krugman: that idiot midget sucks donkey dicks), the guy's got a point. I'm as gloomy as anyone else in re the USA/USD long-term prospects, but maybe.....just MAYbe.....when it all finally collapses, the world won't stop turning. Maybe the sun WILL rise the next day.

Every dominant politcal philosophy, every existing system of government, every currency on Earth - good bad or meh - came into being by supplanting an earlier one. In some cases, OK, *most* cases, this was accompanied by massive upheaval, bloodshed, & revolution. But not in every case. Prepare, stock up on food/water/gold/ammo, fine. But I saw this same movie in the late '70's, as the moron Carter was driving us all to despair. The survivalists were running rampant, and we heard the same stuff we do today: societal collapse, barter economy, heavily-guarded family compounds growing their own food, Howard Ruff predicts $3000 gold, blah blah blah.

That was some 33 years ago. Eventually, most of the survivalists came down from the hills, sheepishly. Thing is, all the far-seeing folks who saw doom ahead were wrong then - so it might could be they're (we're) wrong now, too. 33 years is a lifetime for some folks: that's a long time to be wrong. Daddy always said to ask, "What if I'm wrong?" when making drastic plans for the future. Nothing wrong with a plan B, is there? FWIW.

Sun, 01/22/2012 - 23:50 | 2087561 TheSilverJournal
TheSilverJournal's picture

Without money, trade would be much more difficult and it would be impossible for a complex economy to function. For example: if a potato farmer needs a dentist’s services but the dentist doesn’t want potatoes, then how does the dentist get paid? One solution might be if the dentist wants shoes and the shoemaker wants potatoes, the potato farmer can sell potatoes to the shoemaker in exchange for shoes and then trade the shoes for the doctor’s services..but that is a lot of work. Trade is much easier if there’s a generally accepted medium of exchange to solve the problem of coincidence of wants, or money.

Many things have been used as money throughout civilization, but only two, silver and gold, have stood the test of time. The important qualities that make silver and gold shine above other possibilities are scarcity, portability, divisibility, durability, homogeneity, and desirability for non monetary purposes.

Mon, 01/23/2012 - 06:19 | 2088062 Snidley Whipsnae
Snidley Whipsnae's picture

Silver Journal... "The important qualities that make silver and gold shine above other possibilities are scarcity, portability, divisibility, durability, homogeneity, and desirability for non monetary purposes."


You missed the most important point. PMs are not infinetely expandable, and infinite expandability is the cause of our current insane budgets and unmanageable debt.


Mon, 01/23/2012 - 06:51 | 2088072 TheSilverJournal
TheSilverJournal's picture

Which is why fiat will soon be worthless and much of the value of fiat will be transferred to gold and silver. When fiat collapses, likely sometime between the next six months and the next five years, the currencies of the world will be gone but all of the goods and resources of the world will still exist. Goods will then be purchasable with a different medium of exchange and if that medium of exchange is not entirely silver and gold, it will certainly move largely towards silver and gold having much more purchasing power than they have today.

The enormous amount of purchasing power that gold is set to gain is evidenced by the size of the bond market which completely dwarfs the size of the gold market. At the  minimum, the purchasing power of an ounce of gold will be equal to the amount that $10,000 purchases today. When a large amount of purchasing power flows into the precious metals, the silver to gold ratio will compress. In this precious metals bull market, the silver to gold ratio is set to hit at least ten to one, meaning that one ounce of silver will have the purchasing power of at least the amount that $1,000 is able to purchase today.

Mon, 01/23/2012 - 07:21 | 2088091 Snidley Whipsnae
Snidley Whipsnae's picture

Silver Journal... I will take your word on all your predictions for dates and prices.

I sent my crystal ball out for repair last week.

Levity aside, we do need sound money and the only proven sound money is PMs.

Mon, 01/23/2012 - 11:42 | 2088679 TheSilverJournal
TheSilverJournal's picture

It doesn't take a crystal ball. All it takes is to realize that the US will default and will make the USD worthless. Also, when the USD becomes worthless, all currencies will go down because the USD is the world's reserve currency. And all of the wealth that's in currencies will flow somewhere, mostly into PMs.

I think my 5 year time frame, $10,000 gold and $1,000 silver are conservative for the situation.

Yes we do need sound money. It looks like we may get sound money through the force of the market instead of a by choice.

Sun, 01/22/2012 - 23:52 | 2087563 bugs_
bugs_'s picture

an excellent chart.  speaks volumes.  thanks tyler.

Sun, 01/22/2012 - 23:52 | 2087565 Fix It Again Timmy
Fix It Again Timmy's picture

We'll scam and steal while the little people squeal - that about sums it up for bankers and financiers. 

As already stated, the funded debt of the US government rose by a total of $US 50 Billion over the TWO
DECADES between 1946 and 1965. Over the next two decades - 1966-1985 - the funded debt rose by
$US 1.6 TRILLION. In the two decades after that - 1986-2005 - it rose just under $US 6 TRILLION.
And in the SIX years between the end of 2005 and the end of 2011, it rose another 8.1 TRILLION.
As already stated, the average annual rise in US government funded debt in the two decades between
1946 and 1965 was $US 2.5 Billion. In the following two decades - 1966-1985 - this rise had blown out
to $US 80 Billion. Over the period 1986-2005 - that average annual rise was $US 300 Billion. Finally,
the average annual rise in the six years since the beginning of 2006 is $US 1,350 Billion. AND WHAT DO WE HAVE FOR ALL THAT?  BEATS ME!

Mon, 01/23/2012 - 00:30 | 2087643 cranky-old-geezer
cranky-old-geezer's picture



Sounds parabolic to me.

Mon, 01/23/2012 - 06:23 | 2088065 Snidley Whipsnae
Snidley Whipsnae's picture



ZIRP... as far as the eye can see and then some.

I suggest that for the Feds birthday we send the a cake with ZIRP on the top.

Mon, 01/23/2012 - 00:10 | 2087584 AmazingLarry
AmazingLarry's picture

This time is differenter. I really meant it. Not kidding. No joke. Seriously.

Mon, 01/23/2012 - 00:52 | 2087588 cranky-old-geezer
cranky-old-geezer's picture



Fed was created for 2 reasons, (a) get around constitutional limitations on money, and (b) steal people's wealth via inflation & currency debasement

...which they've done rather well at, debasing the US dollar to 2 cents of its original value.

So much for "price stability".

BTW, $20 / .02 = $1,000, where gold should be today based on the dollar devalued 98%.

$1,600 gold infers dollar is worth 1.25 cents of its original value.

On 12/31/08 gold closed at 926.72, on 12/29/11 gold closed at 1,562.92, inferring USD lost 41% of its value 2009 - 2011.

To maintain your purchasing power over those 3 years your income would have to rise 70% ...not counting higher taxes you'd pay.

If you're in a 30% tax bracket your income would have to rise 84% in those 3 years to maintain your purchasing power.

Mon, 01/23/2012 - 08:47 | 2088171 Widowmaker
Widowmaker's picture

Record bonuses is purchasing power.

Syndicated fraud from top to bottom of every peak and valley.

Mon, 01/23/2012 - 00:13 | 2087589 yogibear
yogibear's picture

The Fed is the brain of the bankster leech. Bernake and the rest of the Federal Resrve leechs are always out in the meadia (CNBC, etc) trying to justify their looting.

They have had about 100 years and did nothing to stop the depression in the 1930's. The Federal Reserve created the last two recessions by fostering cheap money which created huge bubbles.

End the Federal Reserve and their dollar debasement! Let's all unemploy the Federal Reserve banksters and give the citizens freedom from their financial tyranny.  


Mon, 01/23/2012 - 00:19 | 2087608 cranky-old-geezer
cranky-old-geezer's picture



The Fed is the brain of the bankster leech.

...sorta like the "brain bug" on Starship Troopers :)

Mon, 01/23/2012 - 00:20 | 2087619 Stuck on Zero
Stuck on Zero's picture

Silly.  This time it is different.  We have nukes.

Mon, 01/23/2012 - 00:41 | 2087677 DionysusDevotee
DionysusDevotee's picture

-The Ben Bernanke

Mon, 01/23/2012 - 00:57 | 2087737 UP Forester
UP Forester's picture

....he yelled, with nuts in his cheeks....

Mon, 01/23/2012 - 01:10 | 2087778 Bansters-in-my-...
Bansters-in-my- feces's picture

FUCK YOU Ben Bernanke......

I know your reading this site.

Like the rest of the PPT does.........

Mon, 01/23/2012 - 01:19 | 2087791 PrintPressPimpin
PrintPressPimpin's picture

Is it really that hard to see what the federal reserve has done to our nation?  For the sheeple just because it isnt explained to them like a sports forecast, well "yes we cant"  even some really smart chemist and computer type folks i know are just clueless.  I am not sure if it is due to apathy and they would rather have rachel maddow tell them what they should think..  And to the Obama lickers that still think he and ben  saved the world from the brink of armageddon and bush led our nation down a path which we are still overcoming.. Oh they are still out there folks.. cant wait to look like nosterdamas in this bitch

Mon, 01/23/2012 - 06:34 | 2088069 Snidley Whipsnae
Snidley Whipsnae's picture

"Is it really that hard to see what the federal reserve has done to our nation?"


In order to have an empire a soverign must have a treasury to fund conquests. The US, arguably, became an empire when they took away Cuba, the Philippines, etc, from Spain. The vote to go to war against Spain passed he congress by one vote.

From 1898 till today the US has been involved in one foreign adventure after another... From sending the Marines to protect the interests of United Fruit in Central America to sending troops to ~ 170 countries around the world today.

The expansion of the US into the empire it is today could never have happened if the US had remained on the gold standard.

Draw your own conclusions from the facts above.

Mon, 01/23/2012 - 02:20 | 2087904 Peter K
Peter K's picture

Does Nomi know about this FED stuff?

Mon, 01/23/2012 - 02:25 | 2087908 Anarchyteez
Anarchyteez's picture

Hey Krugman! Wealth only comes from one place, adding value to a raw material.

Fuck your debt! Choke on it!

Mon, 01/23/2012 - 02:37 | 2087927 Peter Pan
Peter Pan's picture

Take it easy everyone. The reality is that from now on we are meant to be living in recessions, depressions and crises which will occasionally be broken up by a few good years. A bit like the work week being followed by a weekend off.

I disagree with the comment about hanging the bankers. What's wrong with sending them to Guantanamo Bay? Or better still send them to an overseas location so their cries cannot be heard.

In any case the FED is doing the best it can........for its masters.

Mon, 01/23/2012 - 03:12 | 2087965 navy62802
navy62802's picture

Nice chart. But I want to scratch my eyes out whenever I have to listen to Ken Rogoff talk about the economy.

Mon, 01/23/2012 - 04:27 | 2088023 tim73
tim73's picture

Typical arrogant American bullshit. There were central banks before FED (BOE, Bank of France for example) and even way before USA even existed. There were not much global trading going on during WWI and WWII for example.

Mon, 01/23/2012 - 06:10 | 2088059 Sandmann
Sandmann's picture

1694 Bank of England - 1913 Federal Reserve and Federal Income Tax and elected Senate.

The fact is that once British industrial dominance was challenged by Germany, France and USA it became harder to manage in a world of Tariffs - McKInley 1890 because the US wanted the resources of the British Empire especially rubber, gold, markets. Two world wars dislocated the payments system as British Gold Standard collapsed in a debtor nation and the USA couldn't recycle dollars to keep it going instead of over-heating a domestic economy.

The Fed was inappropriate for the task of being a global central bank

Mon, 01/23/2012 - 06:45 | 2088070 Snidley Whipsnae
Snidley Whipsnae's picture

"There were not much global trading going on during WWI and WWII for example."


Where did you come up with this idea? There was far MORE trade going on during the world wars... But the trade was in war materials and was mostly done using lend/lease and other forms of buy tanks now, pay later.

"No other form of human endeavour uses up natural resources faster and in greater quantities than war"

This fact is why Greenspan made the comment... 'in extremis, only gold will be accepted as payment'... In Greenspanese that means that once it becomes obvious to the banks which side is going to win the conflict the banks will only extend credit to the percieved winners... The side seen as the eventual losers can only get more war materials by purchase with gold.

Mon, 01/23/2012 - 05:28 | 2088040 falak pema
falak pema's picture

That historical chart looks like a map of an Alpine stage in the Tour de France bicycle race!

Man, we all gotta get on our bikes and ....pedddddddddle to hell!

Mon, 01/23/2012 - 08:48 | 2088165 Widowmaker
Widowmaker's picture

Indentured socialist clusterfuck costing millions of lives.

I wonder what other bullshit the world has been indoctrinated with that is nothing but lies? Capitalism? Democracy? Freedom?

End the Fed. Kill it lest it kill you!

Mon, 01/23/2012 - 14:48 | 2089687 Lord Koos
Lord Koos's picture

Notice the huge majority of crises are in Latin America, primarily in countries that the USA has fucked with for decades.  These crises were to the benefit of US capital.

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