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It's A Centrally-Planned World After All, With Ever Diminishing Returns

Tyler Durden's picture


By now it is no secret that the primary beneficiary of the over $7 trillion pumped by global central banks into the financial system in just the past 4 years, and countless other trillions in miss-spent fiscal stimuli has been the stock market. But what about the global economy: after all five years after BNP Paribas stopped withdrawals from their investment funds - the unofficial start of the Great Financial Crisis - whose primary beneficiaries have been corn, gold, silver and brent - we should have seen at least some sustained impact in the economy if all Econ 101 teaches us about the virtuous business cycle is true, and if any of this countless money out of ZIRP air actually made its way into the economy instead of just the stock market. Well, let's take a look shall well. Courtesy of Bridgewater we present a chart of coordinated interventions and their impact not on the stock market, but on the economy. What we find is that it was, is, and will be a centrally planned world after all.

Bridgewater's take:

The three contractions in global growth that have occurred since the financial crisis were offset by heavy blasts of fiscal and monetary stimulation by global governments and central banks. But each wave of support has also had less impact on global conditions than the previous wave. We remain concerned that the ability of those policy responses to stabilize the situation is diminishing. The third wave stabilized global growth after last summer’s dip and allowed for the bounce in global conditions and markets over the early part of this year – but its impact on global conditions was more modest than that of earlier waves of stimulation. As the third wave has ended, global growth has again rolled over.

The scariest thing about the above chart? The ever lower global growth bounce as a result of ever increasing, or exponential, central bank intervention.

In other words, not only is conventional economics wrong about virtually everything, but the impact of whatever the real underlying story is, certainly not one that can be captured by econometric models which continue to falsely model out what is essentially a system of infinite complexity and soaring fragility, has increasingly diminishing returns.

Also, when we get to the point on the chart above where global growth is at or below zero irrelevant of how much "money" is pumped into the system, that will be the moment to shut the lights out, because it is then that the central planning fat finger which has to date mostly impacted various intraday inflection points in the S&P, will simply press CTRL-P. And not let go.


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Sat, 08/11/2012 - 11:56 | 2697334 orangegeek
orangegeek's picture

The Dow has always been a strong indicator of change of presidency.  This weekly goes back to 2004 - Bush's re-election.


If markets hold (unlikely), Obama is in.  When markets crash, Ryan's cost cutting mentality will be welcomed...and necessary and largely dimish centralized planning, but not eliminate it.

Sat, 08/11/2012 - 12:01 | 2697351 Seize Mars
Seize Mars's picture

Orange geek, your narrative is phoney.

There is no Ryan cost cutting mentality. It's a goddamned lie. And you are promulgating it.

Red versus Blue is GS versus GS. They win. Liberty loses.

Sat, 08/11/2012 - 12:08 | 2697376 theTribster
theTribster's picture

Nice! Well said Mars. You couldn't be more right and I couldn't say it better myself. GS vs GS is exactly right.

You win today's best comment award!


Sat, 08/11/2012 - 12:25 | 2697412 francis_sawyer
francis_sawyer's picture

Trying to mix a RED/Blue narrative & cram it into a treatise which correlate them to Elliott Wave Rorschach blots mocked up [in crayon] by an amateur... LMFAO!


Jeez Man... Someone must have slipped some purple micro-dot into my whiskey last night...

Sat, 08/11/2012 - 14:02 | 2697568 macholatte
macholatte's picture

purple micro-dot into my whiskey...... the good 'ol days


I know *exactly* what you mean. Let me tell you why you're here. You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad. It is this feeling that has brought you to me. Do you know what I'm talking about?

Sat, 08/11/2012 - 14:41 | 2697614 Chris Jusset
Chris Jusset's picture

The LAW OF DIMINISHING RETURNS is just one of many downfalls of central bank intervention.  But Tyler is correct that when the net returns equal ZERO (or less), then it's LIGHTS OUT ... GAME OVER.  I think we're quickly approaching that point, and Bernanke and Draghi realize it.

Sat, 08/11/2012 - 16:44 | 2697780 Dr Benway
Dr Benway's picture

It will be interesting to see how long they will be able to drag it out though. And it will be hilarious to see the shills continously evermore desperately claim that *now* the bottom has been reached and everyone should buy. Bullish and Bullshit are very similar words.

Sat, 08/11/2012 - 16:45 | 2697781 trebuchet
trebuchet's picture

the basic hypthesis of that article is that the CB intervention was MEANT to equal fiscal stimulus (build a straw man to knock it down)  but it was about fixing broken banking system keeping GS vs GS in play etc. 

if that is the case, why did stock market go up?  A "fundamentals" interpretation of the side effect of overcompensation of declining velocity/deleveraging =  reduced discount factor/lowering shapre ratio - cost of "risk" has fallen as banking system chases higher returns/tries to maintain performance for bonus payouts etc etc

But underlying "cost" of risk - the failure rate of businesses, job losses, etc has not been fixed. 

This disconnect - based on expectations and front running CBs is now evident to central bankers and as ZH keeps pointing out, reduces the chances of CB action...   despite algo action when the average fund manager realises that CB isnt intervening to raise asset prices  and in fact wont if they are being overly "front run" then it is game over.... 


how long does it take for momos work out they're being played for muppets? if only i knew.... 




Sat, 08/11/2012 - 17:05 | 2697813 cranky-old-geezer
cranky-old-geezer's picture



But Tyler is correct that when the net returns equal ZERO (or less), then it's LIGHTS OUT ... GAME OVER. 

No, zero return isn't game over, because it never was about helping the economy recover, it's always been about looting the economy, and the looting will go on until there's nothing left to loot.

I think we're quickly approaching that point, and Bernanke and Draghi realize it.

No, Bernanke and Draghi realize more QE might precipitate a currency collapse, especially USD.

Fear of currency collpase is the only thing putting brakes on their looting spree.

And it's not 7 trillion, more like 26 trillion.  Fed's balance sheet shows 1/10 of it.  90% is "off balance sheet".

If they showed the whole 26 trillion, faith in the US dollar would collapse overnight and we'd see currency collapse tomorrow.



Sat, 08/11/2012 - 18:14 | 2697911 centerline
centerline's picture

Yup.  They are gonna try and play this game right up to the 19th tee.  Hard to tell how far they make it before lightning strikes though.

Sat, 08/11/2012 - 21:36 | 2698094 Wild tree
Wild tree's picture

Your comment center/, reminds me of that golf play in Caddyshack in a driving rainstorm with the best game of his life, until lightning struck. Unfortunately, that movie is closer to reality than what passes for informed consent today, but the result is the same. All get burned except the men behind the curtain. Party on.......

Sun, 08/12/2012 - 12:51 | 2698812 goldfish1
goldfish1's picture

Certainly the demise is accelerating :

Sharp rises in pig feed prices are not new. There have been spikes in 2008 and 2011 due to poor weather. "But what we are seeing now is a fundamental shift in grain prices going upwards," said NPA general manager Dr Zoe Davies.

Sat, 08/11/2012 - 15:18 | 2697666 tenpanhandle
tenpanhandle's picture

No, I don't know what yer talking about.  I guess it's because I only dropped a couple hits of acid in my drug daze.  It didn't take me long to figure out that elucidation and enlightenment wasn't what was really going on during those few trips.

Sat, 08/11/2012 - 15:22 | 2697670 francis_sawyer
francis_sawyer's picture

It was fun while it lasted anyway... (same could be said about the dollar someday)...

Sat, 08/11/2012 - 23:11 | 2698202 groundedkiwi
groundedkiwi's picture

I have often wondered why Orwell gave him an Irish surname

Sat, 08/11/2012 - 13:19 | 2697517 Benisprintingqu...
Benisprintingquintillionsbehindourbacks's picture

Comment of the Decade... Nice!

Sat, 08/11/2012 - 14:46 | 2697624 orangegeek
orangegeek's picture

Really?  You should try and get out a bit more.

Sat, 08/11/2012 - 13:28 | 2697532 potlatch
potlatch's picture

Mr. Mars, my comments on this site constantly harp on moonbases,  You are a bolder person, since you advocate straight to Mars.  I salute you.


Your comment is spot on.  Elelctoral level politics is a downward directed informational grindhouse, that only witless proles think matters.  It is a side show for people without enough sense of reality to tell its a sideshow.

Sat, 08/11/2012 - 13:39 | 2697541 Nobody For President
Nobody For President's picture

Plus one for 'informational grindhouse'.

Sat, 08/11/2012 - 15:01 | 2697638 Silver Bug
Silver Bug's picture

A small minority is controlling a mass majority. Sad really.

Sat, 08/11/2012 - 15:19 | 2697667 tenpanhandle
tenpanhandle's picture

GS versus GS:  Gold/Silver versus Goldman Sachs

Sat, 08/11/2012 - 15:54 | 2697711 fiftybagger
fiftybagger's picture

Red algos versus blue algos might make for some very volatile markets eh?  Buy straddles.

Sat, 08/11/2012 - 16:17 | 2697746 Chief KnocAHoma
Chief KnocAHoma's picture

Mars - with all due respect I must debate this point. While aspects of your argument are valid in that GS and Wall Street have fixed the game in their favor, there are actions the country can and must take if we are to survive. Romney and Ryan are the grown ups in the whore house that is Washington. I'm gona cast my vote for them based upon one issue and one issue only which is this .... The current dumbass in the White House has increased our national debt from $10-trillion to $16-trillion in just a 104 rounds of golf. I'm no genius, but that seems like a lot of printing to me.

Plus Obama is Muslem.

Sat, 08/11/2012 - 19:04 | 2697965 Ima anal sphincter
Ima anal sphincter's picture

First screw up....."Romney and Ryan are the grown-ups"

Second screw up....."I'm going to cast my vote"

Third screw up..... "Obama is Muslim'

1,2,'re out.

Just as a question....are YOU any better than Muslims? Please tell me why.

Sun, 08/12/2012 - 19:38 | 2699576 Seize Mars
Seize Mars's picture


Hating the guy because he's a muslim is a failure of intellect, but more importantly a failure of spirit. Don't hate people because of their religion, race, et cetera. It's unproductive, but also a fake standard to measure a person's character. Accept people the way they are. If you want to hate, hate injustice. For example, Obama is a liar, phoney and megalomaniac. He doesn't deserve the office. Hate him for that, don't hate his religion. Hate the fact that he lied when characterizing himself as a Christian.

Now, as for voting, don't vote for liars and puppets! Will you be posting on the internet lamenting the police state we inhabit, only to make-believe you are surprised? (Oh No! How could this happen? It's a Republican administration!)

Act like a man. If you vote at all, vote for Ron Paul. If we are all going to submit to a violent police state, then at least you can tell your children you tried something real, something true.

The national debt is a moan from a sinking ship. The dollar will not survive. It's not going to matter. Render unto Caesar what is his. If your bills are denominated in dollars, pay them in dollars. Get rid of every dollar you have. Let the lying puppets tell their lies. Turn away and chart a true course.

Sat, 08/11/2012 - 17:19 | 2697839 banksterhater
banksterhater's picture

Where's he getting the $4 TRILLION in 10yrs by dropping the top rate? $35>25% ? Defense? NOPE, mortgage deduction? NOPE, employer deductn for healthcare? NOPE! FROM WHERE?

Sat, 08/11/2012 - 18:41 | 2697942 FreedomGuy
FreedomGuy's picture

It is not just the economy that is centrally planned. "They" have plans for our whole lives. Your life is and will be centrally planned and you WILL like it.

Sat, 08/11/2012 - 12:04 | 2697364 PiratePawpaw
PiratePawpaw's picture

When was the last time that anyone in office actually CUT federal spending?.......................................

Sat, 08/11/2012 - 12:13 | 2697385 kito
kito's picture

Ryan the fake conservative knows full well that if there are any real cuts to the 1.3 trillion deficit crutch, that whopping 1 percent gdp would quickly be -5 percent gdp and he would be thrown out on his ass by the angry much better to just talk about cuts and hope the herd moos loudly in approval while grazing on the government grass......

Sat, 08/11/2012 - 13:37 | 2697537 Hype Alert
Hype Alert's picture

That's a key point: not one MSM source has ever pointed out that deficit spending, money printed out of thin air for the last 30 years, has been such a large part of GDP.  I really don't know how any "source of information" can continue, with a straight face, without recognizing this fact.  It's like their saying "We promote ignorance", and look, we can smile while we say it!





Sat, 08/11/2012 - 14:10 | 2697576 macholatte
macholatte's picture










Sat, 08/11/2012 - 16:49 | 2697788 trebuchet
trebuchet's picture

"it is the people that can make you believe absurdities are the people that can make you commit atrocities"  (or something like that)  - voltaire 

Sat, 08/11/2012 - 22:57 | 2698184 Republicae
Republicae's picture

“In a way, the world-view of the Party imposed itself most successfully on people incapable of understanding it. They could be made to accept the most flagrant violations of reality, because they never fully grasped the enormity of what was demanded of them, and were not sufficiently interested in public events to notice what was happening. By lack of understanding they remained sane. They simply swallowed everything. . .” 1984

Sat, 08/11/2012 - 15:04 | 2697643 Law97
Law97's picture

We've pretty much pulled the next 30 years of economic growth and prosperity into the last 30 years.  This was the easy path of least resistance for policy-makers and citizens alike and covered over a LOT of egregious policy errors.  We are now paying the piper and will be for the next 30 years or more while these excesses and malinvestments are worked off.  Or, we crash the system and/or have a world war, and we clear the system in 10 years. 

Sat, 08/11/2012 - 15:56 | 2697714 PiratePawpaw
PiratePawpaw's picture

Since people in general and politicians in particular are prone to take the path of least resistance(initialy); I would bet on the latter since the former contains the word "worked".

Sat, 08/11/2012 - 17:38 | 2697873 Aknownymouse
Aknownymouse's picture

How do you know that? The guys budget is definitely serious. I dont understand. You bring in the biggest commie in the world for 4 years just because he is black, and you would not give those guys even five minutes before the long knives are out? I bet you the general public is much happier with that pick than the arrogant know it alls in zero hedge seem to be.

Sat, 08/11/2012 - 18:34 | 2697937 kito
kito's picture

aknownymouse--WAKE UP!!!!  your boy ryan voted for the expansion of medicare, patriot act, ndaa, tarp, the invasion of iraq....should i go on?????? get a clue......your eye is so far off the ball,  crying about one commie that you cant see BOTH PARTIES are stripping you and the country of everything sacred......................

Sun, 08/12/2012 - 07:24 | 2698507 Aknownymouse
Aknownymouse's picture

You do the best of what we got. Ryan and romney are much better than obummer. Dont like it? Work on the better team to put pressure. But what other constructive options do you have? Being negative and sitting home will only give way to the extremists to take over.

Sat, 08/11/2012 - 12:37 | 2697442 Sudden Debt
Sudden Debt's picture

Obama? every time he went golfing, are moments he didn't hand out money.
if no.... god help America....

Sat, 08/11/2012 - 15:49 | 2697706 Skateboarder
Skateboarder's picture

Fool loves going on vacation. He's leading the way to our part-time worker society! TWO DAYS OF WORK PER WEEK OR BUST!

Sat, 08/11/2012 - 16:51 | 2697792 trebuchet
trebuchet's picture

im all for part time work as long as i get shit loads per hour :)  

and i get counted in the employed category - good for economy, good for stock market, good for quality of life :) 


get a part time job !!! 


share the jobs, spread the wealth!!*   (*after i get paid my shitloads of course)

Sat, 08/11/2012 - 17:00 | 2697807 Poetic injustice
Poetic injustice's picture

You mean he will be hired as part-time president, without pension and healthcare? That makes too much sense.

Sat, 08/11/2012 - 16:15 | 2697744 Herodotus
Herodotus's picture

Dwight D. Eisenhower is the last President to cut federal spending in absolute terms (actual $ cut!!!, not percentage of GDP, not inflation adjusted).

This was done after the Korean War ended.



Sat, 08/11/2012 - 12:10 | 2697378 goodrich4bk
goodrich4bk's picture

I see you've drunk the kool-aid, Orangegeek.  Just think about what you have said: "when markets crash cost cutting will be welcomed."  Do you not see that every "cost" is some lobby's gain, that the lobbies bring the politicians to the dance and therefore get to call the tune?  You are hopelessly naive if you think the Red Team has any intention of cutting costs in the middle of a market crash.  The Republicans will never forget the last time they did that --- Hoover --- and that they were out of power for almost 40 years.

Just look at how frightened your Republican saviors are of the fiscal cliff.  Here's there chance to cut spending across the board and what do they do?  Scramble to delay it --- and we're not even in a market crash!  How much more evidence do you need to see that the bankers own our government, that the bankers WANT more debt and a larger government, and that both parties are beholden to the bankers and will do nothing to change the trajectory of growing debt and growing central government until people like you wake up.

Sat, 08/11/2012 - 12:22 | 2697407 A Man without Q...
A Man without Qualities's picture

I love the way Americans think they live in a democracy.  Listen, the fix is in, the fix is always in.  Obama is going to win.  Romney doesn't even want to be president, because it's all going to go wrong in the next four years.  But the American people need to be pushed to the edge of the precipice on spending to keep the American underclasses in fried chicken and sweat pants.

Ryan is being prepped for 2016, he's the man who will push for the debt held by the Fed to be cancelled and in exchange take a slash and burn to the entitlement programs, especially Medicare and Medicaid that Bernanke despises.


Sat, 08/11/2012 - 13:17 | 2697515 resurger
resurger's picture

Do you still believe in elections? It has already been decided who will be the next president... whether the markets hold or not.

Am sorry, but you have no VOTE, its all a charade, wake up

Sat, 08/11/2012 - 16:53 | 2697764 LMAOLORI
LMAOLORI's picture



"The Dow has always been a strong indicator of change of presidency.  This weekly goes back to 2004 - Bush's re-election"

Orangegeek the problem I see with your argument is banana ben he will print to save obama so the market's won't crash until after the election. Obama's been great for the markets and the bankster's  ZERO PROSECUTIONS he's just been shit for mainstreet.




Obama Has Been The Best President For The Stock Market Since Eisenhower



Sat, 08/11/2012 - 17:20 | 2697838 deflator
deflator's picture

 When markets crash, Ryan's cost cutting mentality will be welcomed...

When/if markets crash, governments and technocratic central bankers will print, period end of lesson.

Sun, 08/12/2012 - 22:04 | 2699916 Redhotfill
Redhotfill's picture

Ryan  was that the dufus who was arguing about cuttin like 300 billion, or some other number that amounted to like less than 3% of the budget, or some amount that was less debated in the house longer than it took uncle sugar to spend that amount?  IE more budget theater.

Sat, 08/11/2012 - 11:56 | 2697337 diogeneslaertius
diogeneslaertius's picture

because it is then that the central planning fat finger which has to date mostly impacted various intraday inflection points in the S&P, will simply press CTRL-P. And not let go.



Sat, 08/11/2012 - 11:57 | 2697339 diogeneslaertius
diogeneslaertius's picture

The Longest Con in the History of Planet Earth

Sat, 08/11/2012 - 12:02 | 2697358 JohnKozac
JohnKozac's picture
Canada surprises with big job losses in July


OTTAWA (Reuters) - Canada's economy unexpectedly lost 30,400 jobs in July in a third disappointing month for the labor market, indicating tepid growth that will likely keep the central bank on the sidelines for longer.



Sat, 08/11/2012 - 17:54 | 2697886 BurningFuld
BurningFuld's picture

You don't actually believe the numbers from those idiots do you? As a small business owner at the end of each month you put in a small box the number of employees you have. God forbid they actually got off their lazy ass and entered those numbers and came up with real figures. It's much easier to consult the phase of the moon in relation to the consistency of someones shit pile to come up with the number.

Sat, 08/11/2012 - 18:29 | 2697930 shovelhead
shovelhead's picture

Lunar Scatological Indicators is the term we professionals use.

Sun, 08/12/2012 - 04:31 | 2698433 Disenchanted
Disenchanted's picture





LSI would probably be just as accurate as BLS or CPI numbers...

Sat, 08/11/2012 - 12:04 | 2697362 Segestan
Segestan's picture

A centrally planned world...... now thats funny!!

Sat, 08/11/2012 - 12:06 | 2697372 gadzooks
gadzooks's picture

And now the worst emplementible model to shove down our throats,and there`s no way out because even the money for servicing debts is going 

everywere but servicing debts and not even servicing goverment held basic programs,where does it end ?what and who are we paying for or too??/

Sat, 08/11/2012 - 13:08 | 2697499 Tirpitz
Tirpitz's picture

Where and whom are we forced to pay? The Cayman Islands et al. are sitting on more than 30 trillion bucks of tax-sheltered money. Money stolen from the common citizen and money not contributing to the funding of a functioning government.

But we need more tax cuts for the tax cheating super-rich.

Sat, 08/11/2012 - 15:44 | 2697699 tenpanhandle
tenpanhandle's picture

I'm sitting on 30 trillion bucks my ownself.  Of course, they're Zimbabwe Bucks.  Does that make a difference?  Not in the long run.  So buck up me bucko and know that all those tax cheating super rich will founder in their own creation.  Not only that but they will be on 7 billion target lists, even when they're broke.

Sat, 08/11/2012 - 16:34 | 2697772 smlbizman
smlbizman's picture

is that you billy joe?

Sat, 08/11/2012 - 12:11 | 2697380 FieldingMellish
FieldingMellish's picture

Notice how the periods between intervention get smaller and smaller. From biennial to annual and soon quarterly, then monthly, then weekly, then daily, then the noon-QE vs the midnight-QE and thus individual acts become a continuum. 

Sat, 08/11/2012 - 12:41 | 2697453 Totentänzerlied
Totentänzerlied's picture

Got to it before me! And notice the diminishing effect of each round of stimulus as well. Next one's going to be big or they risk making their bazooka look like a peashooter with the whole world watching.

Sat, 08/11/2012 - 12:44 | 2697457 FieldingMellish
FieldingMellish's picture


Sat, 08/11/2012 - 13:23 | 2697523 Amish Hacker
Amish Hacker's picture

Me, too. One look at that chart and you can see they're just applying the cardiac paddles to a corpse.

Sat, 08/11/2012 - 14:18 | 2697588 FieldingMellish
FieldingMellish's picture

Yes. Its time for the adrenaline needle straight to the heart.

Sat, 08/11/2012 - 15:13 | 2697661 Law97
Law97's picture

a.k.a. "world war"

Sat, 08/11/2012 - 12:22 | 2697408 Hype Alert
Hype Alert's picture

Do they not teach Point of Diminishing Returns in Keynesian colleges anymore.  Or did they ever?  Maybe it's a concept they chose to overlook.

Sat, 08/11/2012 - 13:37 | 2697530 A Lunatic
A Lunatic's picture

Diminishing returns can be eliminated through a combination of diminished expectations and Hopium injections........

Sat, 08/11/2012 - 14:37 | 2697608 ebworthen
ebworthen's picture

"I'll give you two quarters for one dollar; two is more than one, right?"

Sat, 08/11/2012 - 15:58 | 2697718 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

Nah, they just show you how to change the ink cartridge in

HP (hyper Ponzi) printer and how to download the app the pre-tweets QE

Sat, 08/11/2012 - 12:25 | 2697417 JohnKozac
JohnKozac's picture

In the US, life without Fed-inspired inflation is unimaginable, and investors are struggling with it on a daily basis. “My investing model is ABCD: Anything Bernanke Cannot Destroy: flashlight batteries, canned beans, bottled water, gold, a cabin in the mountains,” said David Stockman in an awesome and pungent interview. The director of the Office of Management and Budget under President Reagan said with his usual flair that a "paralyzed" Fed is in its "final days," hostage of Wall Street "robots" that trade in markets that are "artificially medicated." Read the whole interview..... The Emperor is Naked: David Stockman.

Sat, 08/11/2012 - 12:35 | 2697435 Long-John-Silver
Long-John-Silver's picture

Not one single (official) currency in this world is backed by anything of actual intrinsic value. Is it any wonder that all this fiat currency is being created in ever increasing volumes of diminishing value?

Sat, 08/11/2012 - 23:21 | 2698219 Republicae
Republicae's picture

Exactly, each unit of money substitutes (fiat currency) loses its economic potency as the quanitity of the currency is increased, eventually the distortions created by this continual loss of potency becomes apparent, at least to some. 

Eventually, there is no productive economic benefit in the constant expansion of the fiat money supply, in fact the opposite is true, there is a detrimental effect on everything from pricing to wages, from profit to decision-making within an economy subjected to fiat regimes. The degree of distortions created by the system are beyond calculation, even worse is the fact that those distortions interrupt normal economic market processes and therefore, require government intervention and manipulation to maintain the entire system. Without government intervention and manipulation, a fiat monetary system would simply not exist! It is not natural money, it is purely a substitute for money and there is no recognition of any asset value other than that which is mandated by government decree.

Fiat money has no asset value; there is no actual difference in the valuation between a $100 Dollar Bill and a $1 Dollar Bill except in the minds of us who must be coerced through legal tender laws to use them. The surprising advantage to fiat money is that people are willing to accept the same piece of paper and think that just because the printed image on the paper denotes $100 Dollars that it is actually of more value than the same type of paper which denote simply $1 Dollar.

Recently, there have been several episodes of the government’s fiat money being counterfeited. $5 Dollar Bills have been bleached and the image of a $100 Dollar Bill has been printed on the bleached out $5 Dollar Bill. What an advantage, unofficial counterfeiters can do the very same thing as the official government counterfeiters, making the same type of paper more valuable by simply changing the printed image. These counterfeited bills are accepted at the higher value, goods and services are exchanged for the higher value even though it is printed on a bill that was previously considered a less valuable $5 Dollar Bill. There is really no difference between the two Bills in terms of actual value, only perceived value based upon an image that bears not actual asset value.

Gold does not require coercive laws to enforce its use as money, this is a particular disadvantage for the government since the degree of social control cannot be maintained as easily under a gold monetary system as it can under a fiat monetary regime. The act of voluntary market exchange is hampered through the fiat monetary system, this gives the government the advantage of manipulation, not only of the fiat money itself, but also of the markets and rates of interest. Since the government can control the supply of the money it can also control the demand, shifting market forces into politically expedient directions; through this process the economy can be relatively managed based on policy rather than allowing it to self-regulate through market forces. The more control the government has over the markets the more control it has over the public, fiat money presents this advantage to government in ways that are simply not possible under a gold monetary regime.

While it now appears that expansion of credit associated with public or government debt is natural, the fact is that it is simply a reflection of underlying political expediencies, but not social necessities. Public or government debts are nothing more than anticipated taxes. At one time, government debt was governed by the amount of tax revenues and if the distribution of the holding of such public debt were equal to the distribution of the weight of taxation then any public debt would pose no burden on the society. The problem is that such a view of public debt was always very restrictive on government under a gold monetary system, but that is not the case under the wondrous fiat monetary system, which is not subject to such restrictions.

Under a very restrictive gold monetary system, government debt was very limited and any expansion of government debt beyond the measure of anticipated revenues always resulted in an increased burden of taxation. Since the imposition of such excessive taxation hampers and places a real check on private enterprise there is a very real economic cost associated with higher accumulations of public or government debt, thus diminishing any socio-economic dividend within the economy.

Such restrictions on public debt posed a severe problem for government, in that it did not allow for the expansion of that debt beyond the anticipated tax revenues. Since a gold monetary system poses such restrictions on government due to the necessity of balancing the extension of spending with that of anticipated tax revenue, the budgetary restraint on government proved very prohibitive on any expansion of government and the services it is able to provide. Government was so limited by gold money that there is a long history of political contrivances to evade such limitations.

Of course, it goes without saying that without the fiat monetary system, this government would be unable to maintain its militaristic regime.


Sat, 08/11/2012 - 12:37 | 2697440 Occams Aftershave
Occams Aftershave's picture

As more observers notice the emperor is naked, he will soon mandate nudist colonies for all, so no-one will notice.

Sat, 08/11/2012 - 12:37 | 2697443 Dareconomics
Dareconomics's picture

Once the government starts intervention, it cannot stop. All of those farm and housing programs that we rely on were started as temporary measure during the Great Depression.

Sat, 08/11/2012 - 12:43 | 2697456 CaptainAmerica
CaptainAmerica's picture

The world economy is so Effed-up, my big question is when will the slippery slope to  "lights out" begin?

Sat, 08/11/2012 - 12:59 | 2697483 Tirpitz
Tirpitz's picture

Captain, you didn't yet feel how our cruising speed is accelerating?

Sat, 08/11/2012 - 19:08 | 2697972 shovelhead
shovelhead's picture

I think that most folks will slumber until the property taxes double like their water bills when Uncle Sugar kick their State to the curb. County and city/towns will be desperate for funds.

The biggie will be when the EBT gets cut in half and the resulting supermarket looting will ruin sleep with random gunfire at night.

Glad I ain't a city slicker.


Sat, 08/11/2012 - 12:41 | 2697447 knowshitsurelock
knowshitsurelock's picture

There is no stock market.  The computer algo's scalp the new money and give it to their cronies, while the volume is pathetic.  No one actually invests in the Wall Street casino anymore, and it is running on fumes.

There is no way to avoid the fiscal cliff.  It was never the intention to pay off the debt.  The idea was to make us all debt slaves and to send all assets and value to the global banksters.

The issue is not whether to choose a Republicrat or a Democran for president, the issue is to fire the globalists, take back sound money without interest, have a global debt jubilee, repatriate the common man, and start to make stuff again that people actually need.

It now takes about a trillion dollars of fiat just to kick the can down the road for about 60 days.  It only takes about a 2% move against the overall bet to take the whole systerm down.  How much longer can this go on?

Sat, 08/11/2012 - 12:57 | 2697477 Tirpitz
Tirpitz's picture

"The scariest thing about the above chart? The ever lower global growth bounce as a result of ever increasing, or exponential, central bank intervention."

Not sure here. In my humbling view, the debt overhang is simply too huge. So if the global central banks would have purchased more bad assets, to simply write them off after some period of grace, it might have helped the general economy back to life.

They should have gone the full way, instead of trying to jump half across the ditch. Or let the chips fall as they may, which would have resulted in a two month shock and a quick V-shaped recovery afterwards, Iceland-style.

Sat, 08/11/2012 - 12:59 | 2697482 q99x2
q99x2's picture

Looks like the reign of the central banks will last a little longer. If they've destroyed free markets and are attempting to stay above the law until they get a force big enough to militarily attack the US as well as the Middle East and fight the BRICS over Africa I would say they are not as firmly situated as some would think. In addition a worldwide uprising against bankers is just waiting for a penny more of inflation. I'm short on Central Banksters and politicians that support them.

Hang a banker voodoo doll from beneath your American flags where ever they fly. 

Sat, 08/11/2012 - 13:02 | 2697491 Tirpitz
Tirpitz's picture

The war machine is fighting for the globalized banksters at least since 1941.

Sun, 08/12/2012 - 04:37 | 2698434 Disenchanted
Disenchanted's picture



"The war machine is fighting for the globalized banksters at least since 1812."



By 1810,The House of Rothschild not only had a substantial stake in the Bank of the United States, they were quietly gaining control of the Bank of England. Although foreign owners were not, by law, allowed a say in the day to day operations of the Bank of the United States, there is little doubt that the American share holders and directors were, if not affiliated, complicit in the aims and goals of the Illuminati and their central bankers.

In 1811 the charter for the First Bank of America was not renewed. As a result, the House of Rothschild lost millions. This enraged Nathan Rothschild so much that he, almost single handedly fomented the War of 1812. Using his formidable power and influence, he coerced the British Parliament to attempt to retake the Colonies. The first military attempt failed. The second strategy was to divide and conquer. Any serious historian will find that the Civil War was largely stirred up by Rothschild's illuminati agents in the United States.




Sat, 08/11/2012 - 17:10 | 2697825 engineertheeconomy
engineertheeconomy's picture

I can imagine driving thru Los Angeles and seeing Bankers hung from billboards, trees and bridges lol

Sat, 08/11/2012 - 13:00 | 2697485 marcusfenix
marcusfenix's picture

the centrally planned war is coming into focus now as well. the dark lord Killory and her NATO puppet Turkey are now planning a " no fly zone" in Syria  because their "rebel" Al Qaeda puppets are getting their asses kicked all over Damascus and Aleppo by the Syrian military.

so now, in order to salvage operation "liberate Syria" we will have to pay out hundreds of billions more in tax payer money in support of those very same individuals (see Libya) who we shell out hundreds of billions of dollars every year to kill in Afghanistan, Pakistan, Yemen ect. of which, interestingly enough, some of the money (over 2 billion) goes to shipping contractors every year to transport military goods from Pakistan to Afghanistan. now, a couple hundred million est. of that US taxpayer money finds it's way from those shipping contractors to the Taliban as bribe money not to attack those convoys.

so the Taliban then takes that money generously provided by the US taxpayer, buys weapons and ammo, recruits new members and sends American sons, husbands, brothers and fathers home in a flag draped boxes. Yet try to refuse to pay your taxes on the moral grounds that even the possibility that a single penny of that money may contribute to the death of an American overseas and you may very well find yourself in prison and labeled a "domestic terrorist".

and now, once again, the PTB's in the US and UN are talking about bombing another country, killing tens or hundreds of thousands more civilians to liberate them from the evil secular government and leave them at the mercy of a dozen different groups who hate anybody who is not them. but the PTB's don't care about that because it will keep the nation divided and it's new government easy to control, full of weak minded, hate filled puppets who are easily payed off, threatened or disposed off as the situation may call for.

just like Libya.

the hypocrisy never ends, and neither does the bloodshed, death and misery for all unfortunate enough to get caught up in this sick twisted game the PTB's have foisted upon the citizens of this planet.


Sat, 08/11/2012 - 13:14 | 2697507 Tirpitz
Tirpitz's picture

"so the Taliban then takes that money generously provided by the US taxpayer, buys weapons and ammo,"

... which helps the military industrial complex and a bunch of privatized arms dealers to maintain profitability;

"recruits new members and sends American sons, husbands, brothers and fathers home in a flag draped boxes."

... which pleasantly keeps the unemployments numbers within managable bounaries, and helps advancing the GDP in general.

You see, no reason to doubt the wisdom of our blessed leaders.


Sat, 08/11/2012 - 14:54 | 2697636 JR
JR's picture

When an Afghan or a Taliban is killed they don’t have to be sent home; they’re already home.

Sat, 08/11/2012 - 16:02 | 2697723 tenpanhandle
tenpanhandle's picture

Plan C - the citizens plan:  US pull all troops out of Afgan-land.  Alquerda can then send all their freedom fighters to Syria to back their rebel brethren.  US sits back and watches while current (supposed) enemies fight each other. Then send our well armed returning soldiers into Washington DC to to fight the real enemy.  

One can dream, anyway.

Sun, 08/12/2012 - 04:52 | 2698439 Disenchanted
Disenchanted's picture



"Then send our well armed returning soldiers into Washington DC to to fight the real enemy.  "


We'll need a division or three to split off in a pincer movement towards NYC.

Sat, 08/11/2012 - 13:31 | 2697533 marz929
marz929's picture

As an avid reader of things relating to the Great Depression, I draw your attention to the "Roosevelt Recession" of 1937. Things were just wonderful in the USA up to and including the year 1936 when Roosevelt was re-elected in a landslide. The market was up and the economy was rolling. However, unemployment remained stubbornly high and the National Debt had balooned to around $40B. In 1937, Roosevelt decides to try and reduce the deficit and fund his social initiatives by raising taxes. This on top of the Fed's decision to increase bank reserve ratios. We all know what happened next. The market crash of 1937 was monumental.

The looming fiscal cliff may be forestalled but eventually spending will be cut and taxes will go up. I look to 2013 as perhaps a replay of 1937. If Obama wins taxes go up, Obamacare is institutionalized begetting more taxes, the deficit baloons etc. If Romney wins, taxes go up, spending goes down and the deficit shrinks. Neither scenario will be pleasant.

But until then, the market will boom into year end.

Sat, 08/11/2012 - 14:07 | 2697574's picture


Dangerous Lessons of 1937

Oftentimes, the official history turns out to be wrong. This history of the Great Depression is not an exception. The idea that Herbert Hoover was a laissez-faire president and that Roosevelt's New Deal paved the road to recovery have been refuted elsewhere.[3] Here we shall concern ourselves only with the myths of 1937.


The 1937 recession was preceded by a decrease in deficit spending and an increase in the reserve requirements of banks by part of the Federal Reserve. Otherwise known as "Roosevelt's recession," it is a perfect example of how a drop in government spending and tight monetary policy leads to economic disaster. Or so the official story goes.

The actual lessons of Roosevelt's Recession are much different. The 1937–1938 dip was not the product of tight fiscal and monetary policy, but of excessive government regulation and loose monetary policy. We must clear away the misconception that, without deficit spending and easy credit, the market will fail.


If it was not tight credit or low government spending, then what caused the 1937 downturn? Three main factors stand out:

  1. An inflow of gold from Europe and an artificial increase in the dollar-gold exchange ratio caused inflation.

  2. Meanwhile, government's union and wage policies maintained high real wages in the face of stagnating productivity.

  3. Finally, heavy government regulation made the stock market extremely volatile and susceptible to otherwise minor changes

Sat, 08/11/2012 - 16:14 | 2697742 tenpanhandle
tenpanhandle's picture

"We must clear away the misconception that, without deficit spending and easy credit, the market will fail."

What markets? There are no markets. 

There is no comparison.  Our breadlines are 50 million + people long and supposedly we are not even in a depression.  If deficit spending were to stop, it will be the country (govt) that fails.

Sat, 08/11/2012 - 17:20 | 2697841 engineertheeconomy
engineertheeconomy's picture

"If deficit spending were to stop, it will be the country (Govt) that fails"

You could take a pyramid and draw a horizontal line across the middle of it, and say that the Government is the top half of the pyramid with all the money, and the country is the bottom half without any of the money. If deficit spending were to stop, only the top half of the pyramid would fail... THAT WOULD BE A GOOD THING

Sat, 08/11/2012 - 13:41 | 2697543 marz929
marz929's picture

But then again, maybe the money is really not yours at all:


More from Ann Barnhardt who has been warning about this for months.

Do you remember how I told you about the Ponzi scheme that imploded in 2007 called "Sentinel Management Group" that stole over $500 million in customer funds? The NFA was the auditing regulator of Sentinel, and the NFA admitted after the Sentinel Ponzi imploded that they signed off on their audits even though the NFA claimed not fully understanding Sentinel's books or accounting methods. In other words, the NFA didn't really audit Sentinel at all - they just PRETENDED to audit them, drew up some forms, had some robosigners sign off, and then just hoped that when the shit hit the fan, everyone in the industry would be so terrified of the NFA that no one would hold the NFA accountable for their criminal malfeasance - or even talk about it.

Sentinel took customer segregated money and fraudulently used it as the collateral on a loan from Bank of New York Mellon for $312 million to fund their own in-house proprietary trading operations. When the Sentinel Ponzi collapsed, BNYM sued to go to the front of the line of creditors - ahead of the customers of Sentinel whose money was fraudulently used as collateral, which has now been "linguistically sanitized" into the word "hypothecated".

The federal appeals court ruled yesterday that not only does BNYM stay at the front of the line, but that using customer segregated funds as collateral is NOT a crime, and that co-mingling customer segregated funds with proprietary funds is NOT fraud.

Here is the Reuters piece.

Read this quote from the ruling, which is, in essence, the entire financial market paradigm being guillotined:


That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud' its customers.

U.S. Circuit Judge John D. Tinder

What this means is that even if Jon Corzine is somehow dragged into court by private citizens, because you know damn good and well that the Justice Department will never, ever touch him, Corzine now has a legal precedent, likely from a bribed or otherwise coerced Federal Appeals Court, explicitly stating that an FCM can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to their own monies, no matter what the law says, or what legal assurances, claims or guarantees are made to that customer about their funds held with an FCM or any other brokerage or depository institution. The "secured" party at the front of the line will always be the mega-bank who made the fraudulent loan using the stolen customer funds as collateral.

In other words, all customer funds in the United States are now the legal property of JP Morgan, Goldman Sachs, BNYM, or whichever megabank is the counterparty on the loans the FCM or depository institution takes out in order to fund its mega-levered proprietary in-house trading desks.

For the love of God, I don't know what more there could possibly be to say to snap you people out of your normalcy bias trance. You have GOT to get ALL MONIES out of the financial system NOW. This ruling sets precedence for every depository institution, not just futures brokerages. It is now legal in the United States for any financial institution to steal customer funds, borrow money against those funds for the uber-levered proprietary trading use of the financial institution, and the customers have ZERO CLAIM TO THEIR OWN FUNDS once they are in the custody of the financial institution.

The court has ruled that once your money passes out of your PHYSICAL POSSESSION, and I mean PHYSICAL possession, it is no longer yours, and you have no legal claim or legal recourse to it when it is stolen. This includes BANK ACCOUNTS. Money in a bank is in the possession of the BANK, not you. Do you comprehend this? The entire system is utterly devoid of any integrity or genuine security and is breaking down catastophically before our very eyes. You HAVE to comprehend that your money sitting in an account is no longer legally yours. You have to force your brain to process and comprehend this, no matter how incomprehensible it may seem. IT IS OVER. This is Marxist hell. We have arrived.

This ruling and precedent will be used by every brokerage, every bank, every insurance company and every pension fund to deny you your money when the financial system finally collapses, be it on Monday, or be it two years from now.


You have GOT to GET OUT.

Sat, 08/11/2012 - 15:11 | 2697659 otto skorzeny
otto skorzeny's picture

sometimes I get to dreamin' about Ann B. dressed up like Ilse -"She-Wolf of the SS"  and all the while she is screaming  at me about how I have strayed from the tenets of The Catholic Church.

Sat, 08/11/2012 - 16:31 | 2697767 northerngirl
northerngirl's picture

Nice post.  Thank you for taking the time to put this out for us to read.  I had no idea the courts were making such rulings.

Sun, 08/12/2012 - 05:04 | 2698443 Disenchanted
Disenchanted's picture




U.S. Circuit Judge John D. Tinder - Appointed by George W. Bush

Sat, 08/11/2012 - 13:55 | 2697552 WarPony
WarPony's picture

Think they call this "the Fourth Reich!?"  "illumined" conquest with finacial/debt control as the war de jure.

Sat, 08/11/2012 - 13:55 | 2697554 JR
JR's picture

The basic mistake by the central planners in their unfolding solution of “financial repression and inflation” as succinctly described by Eric Sprott is in their assumption of a slow lack of recovery.

With the size of the debt and the economic overleverage the world faces, I don’t see this slow movement; things are going to happen fast.  The reason? We’re dealing with trillions in government intervention; too much debt and massive printing to have any kind of measured movement one way or another.

Ben Bernanke with his education and experience, nor any other central planner, has ever dealt with anything this big; it is multiple times bigger than the depression he studied. It’s one thing to be like Mises and watch the different actions of the market push back and forth against one another, i.e., the cycles, but it’s a different ball game completely when you go above the market, when you are making the decisions of what the country is going to do and what you and the financiers and power planners are going to get from it and how the populations will be managed - when there isn’t any market. In short, there is no such thing as experience under this scenario. Ben and his fellows are in uncharted territory; they are in high risk uncharted territory. They are skating on thin ice and they don’t know the territory or what’s ahead.  They just know they want it all and they want it now.

In short, they don’t have any way to predict what the country – or the world -  is going to do when it’s pushed.

Also, this thing about using the retirees and savers as a part of their “financial repression and inflation” solution, is an Achilles heel. It’s not the savers and retirees they are destroying; it’s sound money, the basis for private property and growth –the basis for the future. They are monetacidal maniacs taking chances on the unknown, with no way of knowing where they or where we will end up. They’re thinking we’re in for years of slow motion. Yet, they don’t know; they’ve built their safety on paper. There’s nothing holding them up.

They’ve tried to use the stock market as a symbol that everything’s ok in the country, just a little rough patch here and there, that in general stocks are making money. It’s a lie, of course. The stock market if unchecked could drop 4000-5000 in one day; there’s nothing under it but promises the Fed will take care of it. When that’s removed, the market has nothing to stand on.

Congress? Relying on Congress is a dead end. Congress has no clue as to what Ben’s doing. The Administration? Obama doesn’t even care.

It was only six days ago that Zero Hedge reported: "With Earnings Season Nearly Over 60% Of Companies Have Missed On The Top Line, Revenues Down 1% From Last Year" with this caveat: “One thing is certain: absent central bank intervention, which for some inexplicable reason has seen the PE multiple of the S&P rise to 2012 highs, the stock market would not be where it is today if corporate fundamentals had anything to do with actual stock price.”

 And that very afternoon, I heard on the radio the media spin it had been a positive season for companies.

As Tyler says above: when we get to the point on the chart above where global growth is at or below zero irrelevant of how much "money" is pumped into the system, that will be the moment to shut the lights out, because it is then that the central planning fat finger which has to date mostly impacted various intraday inflection points in the S&P, will simply press CTRL-P. And not let go…”

Sat, 08/11/2012 - 14:37 | 2697564 AssFire
AssFire's picture

On a lighter note, I saw the latest Southern Comfort ad of the fat dude walking on the beach..laughed my ass off :

and then found this:

Probably not the best commercial given the times, but still funny.

Sat, 08/11/2012 - 14:53 | 2697632 Atomizer
Atomizer's picture

I would like to explain the benefits of holding technology, yet the thieves will do anything to declare it was stolen.


Imagine in the future, you have be picked off for some alleged crime the STATE decided to impose on you for whatever odd monetary reason. While you stand, listen to the allegations, and glance over to the 12 members of a kangaroo court. You chuckle inside. While the court finds you guilty on all charges, the judge asks you to speak your final word. You nod with enthusiasm.  

This device will replay events of what really happened. The judge will break his hammer in complete embarrassment to the STATE’s common law. This tool will be released in the near future. Why did I just tell you this? Because, when a new technology has been created outside the controlling hands, they’ll go down faster than a $2 whore.


Let’s look at a new N-technology created back in 2007. Again, someone has figured out how to improve the process by making it affordable.  

Mosaic: World News From The Middle East - April 9, 2007 

So what is the first thing a lying thief does? He/she creates fear to acquire technology for the sole purpose of control.  Nikola Tesla and JPM go back many years.

In conclusion, they want you to tap at your keyboard by collecting information on you by finding new means for taxation. Joke is on them, the record button has been going on for many years. This technology will be released when deemed necessary! Kindly continue to be good government stool pigeons.


The best one line classics:

  • I don’t recall
  • I never said that
  • I plea da FIF
  • He gave me money to say that
  • I never met this person before
  • He raped me
  • She stole money

…the list goes on, and those days are coming to a close.

Sat, 08/11/2012 - 15:50 | 2697649 Yen Cross
Yen Cross's picture

 That is a good one AssFire :)   Ok, on to the real reason I'm posting.   In recorded history, what generally happens to massive corporations, and governments? GM, Toyota, IBM, RailRoads, Airlines, Romans, Greeks, English, Spanish ECT....>

  They prolapse, and then colapse in like like "Barney Frank" in a mens locker room...  The world is in prolapse mode, with some general "Hershey Squirts" , from  {Fed., ECB, BoJ, BoE, SNB,PBOC ect...}   The "( ZIRP) TURD of reality" , will eventually clear the system .    Then the "Great Ponzi Writedown" can begin...

Sat, 08/11/2012 - 15:22 | 2697672 Sandmann
Sandmann's picture

Maybe Schumacher was right and Small Is Beautiful. The Market was destroyed by M&A and Mega-Corporations building Cartels. The Cartels have destroyed incomes and consumers and the Banking Cartels own the Industrial Cartels and dominate Government.


It is a Marxian World because the Regulators resigned

Sat, 08/11/2012 - 15:32 | 2697683 max2205
max2205's picture

When the banks steal everyone's and your money, money won't be worth shit anyway. If it happens

Sat, 08/11/2012 - 15:40 | 2697693 marz929
marz929's picture

They don't have to steal it because a Federal Court has already ruled that your money belongs to the institution (brokerage, bank, mutual fund etc.) and is not your own once it leaves your possession. They can use it to pledge in support of their own book and you are second in line to their creidtor! Jon Corzine is now a free man! See the Reuters story here:

Sat, 08/11/2012 - 17:08 | 2697823 JR
JR's picture

A great and rare summation! marz929, of the case and the plight of American justice.

If this is an international banker-controlled government, then the wealth Americans produce belongs to the bankers and there is banker justice and a banker court.

“Justice being taken away, then, what are kingdoms but great robberies?” – St. Augustine

America is trending toward a point where she’ll necessarily get rid of the two-party system as it narrows our choices; each election the status quo is forcing the people into worse choices.

The increasinglly heard phrase - it doesn’t pay to vote - is leading the way to overturning the two-party system. Maybe it’s too soon yet not to vote, but pretty soon it will be. And when that center of gravity changes, the parties will be finished. They have become too corrupted to continue.

I would just add that the connection between a representative government and the functioning of the two-party system has been broken. It is no longer possible to say I’m going to work at the grassroots level for the election of good and decent people for the common good of America. You can walk precincts, you can donate money, you can write articles, you can carry a sign and what will you be doing?  You will be helping in the selection of corrupted Establishment candidates.

And in the end you will be asked to pick between not only two evils, but to pick between two candidates that already have been purchased and paid for by the banker government.

Sat, 08/11/2012 - 17:20 | 2697840 Yen Cross
Yen Cross's picture

 I rate you +AAA ) J.R. that had some passion!   That post made my day!

   Your two party system theology ( shrinking options), is spot on! 

Sat, 08/11/2012 - 17:29 | 2697857 JR
JR's picture

You always make me smile, Yen. Thanks.

Sat, 08/11/2012 - 18:37 | 2697876 css1971
css1971's picture

Correct and it's been this way since the mid 19th century. I used to have a link to the exact precedent.

You give them your money and in return get some credit entries on their books. It's really really simple, I'm amazed people don't understand this fact of finance. The credit entries in the bank account are NOT YOUR MONEY.

You have an agreement with them and there are terms and conditions attached to the account. Ironically usually set by the bank... Normally you'd think it's the lender who sets terms and conditions.


p.s. If anyone has info on the exact legal precedents which said that banks own the money i'd appreciate it, my Google skills are not finding it at the moment. UK or US law.

Sat, 08/11/2012 - 16:28 | 2697761 tenpanhandle
tenpanhandle's picture

it's not your money.  (sorry, couldn't resist)

Sat, 08/11/2012 - 17:01 | 2697806 Dr Benway
Dr Benway's picture

Don't you mean "You didn't print that money. Somebody else made that happen."

Sat, 08/11/2012 - 16:02 | 2697722 Ted Baker
Ted Baker's picture


Sat, 08/11/2012 - 16:23 | 2697751 “Rebellion to t...
“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

The lion's share of people in this country are so damn obtuse and thick headed, they can't (won't) comprehend there is no difference between republican and democrat.  Blaming the central banks is a diversion.  Blame the scum of the earth politicians of both parties who only want to increase their power and net worth.  There is an elaborate game of insiders vs. outsiders.  The strategy is simple: Divide and conquer.  The politicians, banksters, assorted crony capitalists, Fox news, WSJ, and any and all moron stations/rag publications not worth mentioning are all complicit. 

The model is changing.  The system is broken and teetering.  Those who deserve blame, shame, prosecution, and prison, will desperately try to lay the blame elsewhere; i.e... 5 aircraft carriers in the Persian Gulf is a pretty good way to completely light the Middle East on fire until we get the whole damn world involved with WWIII.  Youth worldwide unemployment languishing at mid 20's to mid 30's means the maniacs are going to eventually kill off several million young victims.

The powerful and controlling interests like to scare us and make us feel threatened.  Mark my words.  The arms dealer to the world is going to try and pull a fast one on us all very soon.  God help us!

Sat, 08/11/2012 - 16:56 | 2697802 northerngirl
northerngirl's picture

I think most people know the truth about the state of affairs in our country, they also understand that there's pretty much nothing they can do about it.  The majority of the people I know are just trying to keep the roof over their head, food on the table, and make it through each week, forget about making to the end of the month or end of the year.  Outside of the TPTB, we know the game will not end well, and therefore are just trying to tread water for as long as we can.

Sat, 08/11/2012 - 17:11 | 2697826 Yen Cross
Yen Cross's picture

 Submission, will be your "Death Knell"   You can do something about it!

Sat, 08/11/2012 - 20:56 | 2698051 Monedas
Monedas's picture

"Death Kneel" .... that moment when you get down on your knees and put your head in the Guillotine stock !

Sat, 08/11/2012 - 17:27 | 2697851 “Rebellion to t...
“Rebellion to tyranny is obedience to God.”-ThomasJefferson's picture

@northern girl,  The Jews, gypsies, convicts, homo's, and mental defectives of Europe in the 1930's  had your same can do spirit.  The victims of Stalin and Mao also used your strategy.  What is the choice for you and your progeny, a gulag or perhaps a nice lampshade?

Sat, 08/11/2012 - 23:42 | 2698250 bunnyswanson
bunnyswanson's picture

We have an obligation to the people who sacrificed to give us this life and the children of tomorrow to do everything possible to continue to give them a life worth living.  Call it patriotism if you'd like.

Sun, 08/12/2012 - 00:46 | 2698312 Freddie
Freddie's picture

Morons who watch TV and Hollywoods crap and lies are to blame as well. They enable the scum brainwashing them 24x7 by watching TV.   They TV viewing public gets what they deserve.  Americans traded liberty for a clicker and HD.

Sun, 08/12/2012 - 04:16 | 2698426 falak pema
falak pema's picture

maybe you should move south... or further north. 

And start your own game as a free dame with one legged men who can't catch you when your skirt is up!

Concentrate on one legged men, they should be your core customer base and make sure you can run as fast as an olympian once you have taken their booty by showing them your female beauty. 

That's how the corporate world works so why not learn from it, on a "now you see it now you don't" principle.

Go dump a slam dunk in a rich man's basket. And leave it empty of all golden nuggets; just a trace of your perfume to remind him of what slippied thru his fingers, like gold dust from the river of no return. 

Sat, 08/11/2012 - 16:29 | 2697762 Duke of Con Dao
Duke of Con Dao's picture

not sure if anyone has posted this yet... passed to me by well known writer named Jane (maybe a Pulitizer)

is this an iconic representation of the Romney-Ryan ticket???

Sat, 08/11/2012 - 16:39 | 2697774 Zola
Zola's picture

I have a serious question: where is Galt's Gulch ?

Sat, 08/11/2012 - 17:01 | 2697787 AssFire
AssFire's picture

In the novel Atlas Shrugged it is hidden in the Colorado mountains. If nothing else when you read it you will be amazed how much of what Ayn wrote came true. Confiscation is what happened to her family's property in Russia..she knew the problems with progressives because she had lived it.


Sat, 08/11/2012 - 16:56 | 2697801 Zola
Zola's picture

I mean where is the modern version ?

Sat, 08/11/2012 - 17:06 | 2697817 Dr Benway
Dr Benway's picture

Solely in the imagination of libertarians, and like all utopias, fantasy it shall remain

Sat, 08/11/2012 - 18:57 | 2697819 AssFire
AssFire's picture

Don't know if you mean the movie?? Part II coming out soon.

But for me it is the Hill Country of Texas, you can get ranch land near Junction (86% white) with water.

Did I mention that Texas has it's own power grid? Just bring your guns.

Sat, 08/11/2012 - 17:17 | 2697837 danster82
danster82's picture

Its not a centrally planned world for the growing number of people using and enjoying bitcoins, if you want to get in on the action I wrote a simple guide here

Sat, 08/11/2012 - 18:10 | 2697904 Poetic injustice
Poetic injustice's picture

Having sex with one woman only also has diminishing returns.

Sat, 08/11/2012 - 19:00 | 2697962 Yen Cross
Yen Cross's picture

  You GOTTA LOVE this tune! LINKIN PARK     Long live Zero Hedge!

Sat, 08/11/2012 - 20:15 | 2698019 toomanyfakecons...
toomanyfakeconservatives's picture

A Centrally Planned World with the illegitimate, Unconstitutional American federal government as the linchpin of it all... *for now*

Sat, 08/11/2012 - 20:45 | 2698045 Monedas
Monedas's picture

Baja Tourist:  "Amigo, how's the road to San Borja ?"      Grizzled Mexican Goatherder/Prospector:  "Señor, there is no road to San Borja !"

Sat, 08/11/2012 - 22:19 | 2698143 Monk
Monk's picture

Central planning?! Completely the opposite! It's a world of gambling controlled by private corporations, especially banks:

with governments bailing them out.


Sun, 08/12/2012 - 00:06 | 2698268 JR
JR's picture

So, OWS, co-opted or not, is right. NewScientist has provided a major missing piece in the puzzle of world power. These four paragraphs alone advance economic and political knowledge into the Age of Enlightenment. And to think this research with the list of The top 50 of the 147 Superconnected Companies has been around since October 2011. Shades of Eustace Mullins and the interlocking connections in "The Secrets of the Federal Reserve." Unbelievable!! Monk. The best gift I've had in a year...

 AS PROTESTS against financial power sweep the world this week, science may have confirmed the protesters' worst fears. An analysis of the relationships between 43,000 transnational corporations (TNCs) has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. …


The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What's more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world's large blue chip and manufacturing firms - the "real" economy - representing a further 60 per cent of global revenues.


When the team further untangled the web of ownership, it found much of it tracked back to a "super-entity" of 147 even more tightly knit companies - all of their ownership was held by other members of the super-entity - that controlled 40 per cent of the total wealth in the network. "In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.


John Driffill of the University of London, a macroeconomics expert, says the value of the analysis is not just to see if a small number of people control the global economy, but rather its insights into economic stability…

Sun, 08/12/2012 - 01:12 | 2698334 Freddie
Freddie's picture

.....less than 1 per cent of the companies were able to control 40 per cent of the entire network," says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

There is a reason why they call Goldman the vampire squid.

Also the Chase in JP Morgan Chase is the Rockfellers.

Sun, 08/12/2012 - 03:24 | 2698379 Dr Benway
Dr Benway's picture

I cannot believe I have not seen this article until now...


Exceedingly interesting! Thanks for posting.


If you should happen to find the full study, please do post a link.

Sun, 08/12/2012 - 04:46 | 2698435 falak pema
falak pema's picture

dead on. The central planning cabal is to save the banks; who ARE the water carriers for the Oligarchy clan of Caymanista world. 

Have you noticed, the banks get money at ZIRP and LEND to peripheral governments at 7% to earn their interest?

That is called prudential capitalism, as practised by scammers GS/JPM/Barclays!

Of Derivative shit pile and Liebor world. All the while they get those same governments to SOCIALISE this debt via increased taxation  to compensate debt build up, they try and rake in their margins on their carry trades of currency war. Crazy world, where the FIRE assets of those very countries sit on the banksta balance sheets. So you push the states to the edge of the cliff all the while you hold their very assets on your books...ain't that cute thinking?

Diminishing returns are already here as with ZIRP now a permanent fixture in euro-us-jap lands there is no way interestes rates can go up as it will tank the risk assets of stocks worldwide. 

When the profit margins of those transnational Caymanista corporations start to tank, who will be able to pump P/E to impossible heights?

As for MArxian central planned world its been hi-jacked by the Banksta capitalist cabal : ah the irony of history!

As that is another name for Oligarchy monopoly ranch; we are heading there with King Chisholm of Texas oil oligarchy dynasty (GWB/DC legacy) now playing at divide and rule in the Oil patch and on all commodity markets. Billy the Kid runs the show in Syria you can bet on that. 

Play on Pax Americana. 


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