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Mark Faber: "I Am Convinced The Whole Derivatives Market Will Cease To Exist And Will Go To Zero"

Tyler Durden's picture


Anyone seeking joyous holiday greetings and cheerful forecasts for the new year is advised to avoid the following most recent Mark Faber interview, in which in addition to his predictions for 2012 (led with "more printing" by the dodecatupling down central planners, and far less prosperity), we get the following: "I am convinced the whole derivatives market will cease to exit. Will become zero. And when it happens I don't know: you can postpone the problems with monetary measures for a long time but you can't solve them... Greece should have defaulted - it would have sent a message that not all derivatives are equal because it depends on the counterparty." And on the long-term future: "I am ultra bearish. I think most people will be lucky if they still have 50% of their money in 5 years time. You have to have diversification - some real estate in the countryside, some gold and some equities because if you think it through, say Germany 1900 to today, we had WWI, we had hyperinflation, WWII, cash holders and bondholders they lost everything 3 times, but if you owned equities you'd be ok. In equities in general you will not lose it all, it may not be a good investment, unless you put it all in one company and it goes bankrupt." As for gold: "I am worried that one day the government will take it away." As for the one thing he hates the most? No surprise here -government bonds.

Full clip:

h/t Scrataliano


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Wed, 12/21/2011 - 19:50 | 2002877 riphowardkatz
riphowardkatz's picture

Really appreciate you coming here to spread the news. Thanks so much. Best wishes to you. May your US bond investments provide many returns. Gold stinks. There is nothing to be concerned about it is all taken care of.  I will sleep soundly tonight knowing that a man with a very esteemed education is steering this ship to brighter pastures. People are so foolish to concern themselves with risk when you make it so obvious there are no risks. 

Wed, 12/21/2011 - 19:57 | 2002888 NoLongerABagHolder
NoLongerABagHolder's picture

Gold is fine - as part of an overall plan. All gold/short bonds is a bad trade.

More from Burkett in 1990:

When that happens to private persons or businesses, they go bankrupt. When it happens
to a nation's government, the whole economy collapses. Once the government has raised taxes as high as citizens will allow, it faces its last resort: to monetize the debt—i.e., to print ever more units of its currency and use them to make its payments. That spells hyperinflation: explosive growth in money supply that causes rapid deterioration of the currency's purchasing power and leads inexorably to huge losses in sales volume, skyrocketing worker layoffs, and widespread bank and other business failures. Vast fortunes vaporize overnight; long-term, high unemployment cripples the general standard of living; foreign trade grinds to a halt as foreign exporters, investors, and governments recognize that our currency is worthless—or soon will be.
If pictures of post-World War I Germans taking wheelbarrows full of million-denomination
Deutschemarks to grocery stores to buy a single loaf of bread don't come to mind, it's only
because our schools do a rotten job of teaching history."

Ever heard that line of thinking before?

The more things change........ you know the rest.

Plus - you're right. It's different this time.

Thu, 12/22/2011 - 02:22 | 2003577 CitizenPete
CitizenPete's picture

The  MMT is part of the problem, not any system that would support a solution. (IMHO)



The Banking System, Itself, is the ROOT CAUSE of Money System Instability

Wed, 12/21/2011 - 19:47 | 2002871 N57Mike
N57Mike's picture

Interesting that Faber said War... could be the trigger, for derivatives going to zero.

Wed, 12/21/2011 - 19:59 | 2002904 americanspirit
americanspirit's picture

Let's see. Here is just what is in plain view, no secret to anyone half-awake. US SecDef just gave Israeli the green light on Iran. US tanks and troops that were in Iraq now on northern Jordanian border with Syria to protect Amman from Syrian armor when the King gives overfly permission to the Israelis. Iraq ready to be taken out of the picture by Iranian special forces, already in-country and in place. Anti-ship missiles all over the Syrian/Lebanese coast. US fleet just off the coast, also in the Gulf, both looking juicy. 3 big Russian combat ships in port in Syria - waiting for an accident ( remember the Maine!). US and Russian nuke subs in position in the eastern Med, quite certain where each other's assets are. Iran has no doubt pre-wired WMDs in a few major European (and US?) cities, and does I'm quite sure have at least a few nukes ready to go for local deployment (thanks to AQ Khan). Pakistan coming apart, moving nukes around the country in vans, easy pickings. Fuel that can get to Afghanistan costs $2000 a gallon and is in short supply, seriously limiting air capabilities from Iran's east. US stealth drones have been thoroughly hacked - waiting to turn Hellfires on Kabul. Saudi oil terminals approximately 2 minutes away from Iranian pre-targeted missiles which will go automatically in the event of a decapitation strike. AND, boys and girls, Christmas eve, when the whole Christian world will be distracted by Santa's journey from the North Pole, but when Muslims, Jews, and all of Asia will be wide awake, is also the dark of the moon - the most opportune time to fly undetected. And a 26 year old son-of-maniac in NK has Seoul in his nuclear sights ready for when the rest of the world is too busy with things going boom in their own backyard to give a shit what happens to SK. Taiwan only a fast few minutes away from China, who has been ready to go for years. Etc.

Two days left to get some physical PM in your hands. Monday may well be too late. But then, what do I know. TSHTF has been predicted way too often, and I'm sure there's nothing to worry about. Everything is no doubt under control. There's a good reason us old coots are called Jeremiahs. So Ho Ho Ho and Joy to the world.

Wed, 12/21/2011 - 20:56 | 2003019 JR
JR's picture

Thanks for these details. The propaganda pushing for war has been especially obvious in the Republican primary campaigns with all major candidates, except Ron Paul, trying to outdo each other in promising Israel and the U.S. Zionists war against Iran. columnist Justin Raimondo today expertly disarmed the attacks coming on Ron Paul as he climbs in the polls. Here’s a key paragraph:

“The onslaught of pure hate unleashed on Paul, coming from both sides of the political spectrum, is rooted in his foreign policy views, which challenge the assumptions on which the entire structure of the ‘left-right’ paradigm is built. That mindset has served the War Party well: the ‘right’ gets to pretend it’s against ‘Big Government,’ whilst voting for massive military appropriations that ensure a steady flow of taxpayer dollars into the coffers of the military-industrial complex. This is the most lucrative form of ‘crony capitalism’ in America today, but you won’t hear any of the other candidates – including Obama – breathe one word about it. Only Paul calls for cutting loose the Empire and reducing our military budget to match the military’s new mission under a Paul administration: defending this country, and not the Empire.”

And Spielberg sets the mood for war with the release of "War Horse" on Christmas Day - for the children, “Rated PG-13 for intense sequences of war violence.”  It seems like this Merry Christmas from Spielberg would have been more appropriate as a Hanukkah present in that Hanukkah represents a battle; is Spielberg trying to send us a message?

Wed, 12/21/2011 - 20:57 | 2003038 Yen Cross
Yen Cross's picture

 J.R.  You are wound up. Sue Ellen will give you a shoulder rub. I personally like shorting ( RISK)

Wed, 12/21/2011 - 22:46 | 2003239 JR
JR's picture

Riled up, Yen. Massive propaganda is setting the stage for war; the money is coming from the Fed and we know where it is going. It begs the old question: Can a maniacal desire for destruction create a new world?  I like your suggestion, Yen, along with a bottle of Dom Perignon. It’s Christmas…

Wed, 12/21/2011 - 22:55 | 2003261 jomama
jomama's picture

i swear if i had a silver eagle for every time i heard this 'in two days' or 'next week', or 'such and such date', well, you know the rest.

Wed, 12/21/2011 - 20:43 | 2003012 Yen Cross
Yen Cross's picture

i'M PULLING  Rugar out of Storage.  Let's discuss FREEDOM!

Wed, 12/21/2011 - 20:57 | 2003036 San Diego Gold Bug
San Diego Gold Bug's picture

Bought more phyzz gold today.  Thanks to the reader who mentioned the other day on this site.  Saved me some money today on my gold Eagles.

Wed, 12/21/2011 - 21:16 | 2003081 banksterhater
banksterhater's picture

"lose your cash" ? BULLCRAP,  if so you lose, STOCKS TOO, if the banks go under. It's at the same brokerage. Pure bullshit .

Wed, 12/21/2011 - 21:16 | 2003082 banksterhater
banksterhater's picture

"lose your cash" ? BULLCRAP,  if so you lose, STOCKS TOO, if the banks go under. It's at the same brokerage. Pure bullshit .

Wed, 12/21/2011 - 21:40 | 2003128 rsnoble
rsnoble's picture

You know what..........i'm not even going to waste my time reading this article.  I read the headline, that's enough.  Of course derivatives aren't going to survive. Are you fucking kidding me?  Horseshit is horseshit and horseshit is horseshit.  In other words, enough is a fucking nuff. Game over, kaput, you're a fucking moron etc.  We're all so fucked most of you have no goddamn idea how much lube you're going to need.  Don't like the language?  Wait till you see your own in writing after what happens when this all transpires.  This fucking game is finished.

Wed, 12/21/2011 - 22:53 | 2003254 sleepingbeauty
sleepingbeauty's picture

Yeah but the fiat horseshit has lasted quite a while so maybe the derivatives aren't stinky enough yet OR the vampire squid can make a few more pennies off of it.

Thu, 12/22/2011 - 05:56 | 2003651 Belarusian Bull
Belarusian Bull's picture

Fiat always lasts some time before it becomes worthless.

It's like flu, while it makes you sick, in the end your natural immune system will prevail (in most cases).

Market is the natural immune system of humanity, it will always prevail.

Wed, 12/21/2011 - 21:45 | 2003133 junkyardjack
junkyardjack's picture

I heard buy stocks, I'm going all in

Wed, 12/21/2011 - 22:13 | 2003177 SilverShortage
SilverShortage's picture

Bob Chapman gold and Silver Forecast :

Wed, 12/21/2011 - 22:43 | 2003234 billybobtx
billybobtx's picture


Wed, 12/21/2011 - 22:52 | 2003249 bill1102inf
bill1102inf's picture

Anyone want to buy some default derivatives? Anything, any price accepted, just PM me.

Wed, 12/21/2011 - 22:54 | 2003257 bill1102inf
bill1102inf's picture

Nothing, I repeat NOTHING will happen when the defaults occur and trigger these derivatives.  You might get a 60 minutes episode out of it and thats it.

Wed, 12/21/2011 - 22:55 | 2003262 jack stephan
jack stephan's picture

John Milton: Eddie Barzoon, Eddie Barzoon. Hah! Oh, I nursed him through two divorces, a cocaine rehab, and a pregnant receptionist. Heh. God's creature, right? God's special creature? Hah! And I've warned him Kevin, I've warned him every step of the way. Watching him bounce around like a fucking game, like a windup toy! Like 250 pounds of self serving greed on wheels. The next thousand years is right around the corner, Kevin, and Eddie Barzoon-take a good look, because he's the poster child for the next millennium! These people, it's no mystery where they come from. You sharpen the human appetite to the point where it can split atoms with its desire, you build egos the size of cathedrals, fiber-optically connect the world to every eager impulse, grease even the dullest dreams with these dollar-green, gold plated fantasies until every human becomes an aspiring emperor, becomes his own god, and where can you go from there? And as we're scrambling from one deal to the next, who's got his eye on the planet? As the air thickens, the water sours, and even the bees honey takes on the metallic taste of radioactivity. And it just keeps coming, faster and faster. There's no chance to think, to prepare. It's buy futures, sell futures, when there is no future! We got a runaway train boy, we got a billion Eddie Barzoons all jogging into the future. Every one of 'em getting ready to fist-fuck god's ex-planet, lick their fingers clean as they reach out toward their pristine, cybernetic keyboards to total up their billable hours. And then it hits home! You gotta pay your own way, Eddie. It's a little late in the game to buy out now! Your belly's too full, your dick is sore, your eyes are bloodshot, and you're screaming for someone to help! But guess what? There's no one there! You're all alone, Eddie. You're god's special little creature. Maybe it's true, maybe god threw the dice once too often. Maybe he let us all down.

Wed, 12/21/2011 - 23:10 | 2003275 swani
swani's picture

Listen people, if things get really bad, and they may not, but if they do, confiscation of gold will work much like the confiscation of gold and guns in Germany before WWII. And if they are imprisoning people for thought crimes while spying on everyone's every move, it would be so easy to legislate the confiscation and find the metal.

They would have electronic records of the purchases, acccess to people's cell phone and computer data, their social media contacts, they would know every website that anyone has ever visited on Google.

But if, before being taken to the Gulag, you managed to have buried some coins somewhere that the newly purchased Homeland Security metal detecting drones, somehow missed, when you did finally get out of detention, you would find that either a.) these coins were taxed so heavily that most of the value was taken upon the sale  b.) they had made it 'illegal 'to possess or sell gold coins, if the person was a convicted felon/ terrorist/radical/whatever, or c.) they make it illegal to buy or sell the metal, except through 'licensed'i.e.'sanctioned' gov. dealers that would enforce the above. 

This is just my paranoia of course, but it comes from historical presedents.  



Thu, 12/22/2011 - 00:45 | 2003461 gwar5
gwar5's picture

....lucky for us gold filliings became unpopular a couple decades ago. 


Gold confiscatory actions are something to think about but first people need to protect their IRA and 401Ks from getting confiscated -- that's $3 Trillion of low hanging theft that is easy for the criminals to get.  That'll be first.

The other thing is, the amount of gold they could confiscate trying through police action and digging up yards would cost them a lot more than the value of the gold they'd find, unless you're a Marc Faber.  More likely the criminal fascists will increase their East German tactics of turning neighbor against neighbor to turn in "evil gold hoarders."

Obscurity is still the best security.

TPTB will probably not be able to perform door to door confiscations in chaos. FDR did not even go door to door. Police will be too busy stopping the looting and protecting  criminal bankers and politicians from urban armies chasing them down the streets. People will no doubt be telling any confiscators that knock on their doors that things of value have already been stolen by the previous bands of thieves that roamed through.

And if anyone still keeps PMs in a safe deposit box at a bank they deserve to have it stolen. During the days of the Great (Lesser) Depression, there were IRS agents at the banks and when they unsealed your box they were right there over your shoulder to confiscate your stuff.  There's that, and now the TSA is in place at airports and highways to stop you from moving around.  

Best way to secure your sovereignty and Constitutional rights is to become an illegal alien.....  you will be free to move about the country, no confiscations of your property, no passport needed, no ID,  no need to show up for court if you break criminal statutes, and the cherry on top is that Eric Holder and Big SIS will even give you an AK-47 if you switch sides.








Fri, 12/23/2011 - 02:28 | 2006554 madbomber
madbomber's picture

you're rather coherent for being 'paranoid'.    'of course' you stated.     which course? what course ?

historical precedents?      

you're rather coherent, minus the misspellings.     homeland security metal detecting drones?


  i am having trouble with your sincerity.












Wed, 12/21/2011 - 23:22 | 2003322 gwar5
gwar5's picture

....and for those of you who are drinking to forget, the bartender kindly asks that you please pay in advance.



Thu, 12/22/2011 - 00:08 | 2003408 jmc8888
jmc8888's picture

He's right about derivatives at zero.  Of course derivatives are worth zero.  Pity the fool that thinks otherwise (and why do they make anything above minimum wage?), and the American and world's people fraudulently paying to prop up the merchant banks that somehow believe derivatives are worth more.  How did anyone think otherwise?  It was obvious years ago to anyone who sat around and thought about it for two seconds. 

The only use for them that are legal (really..not in bizarro imperial monetary world) is by the likes of Southwest for fuel and say General Mills.  Other than that they are illegal and worthless (except in bizarro world).  But then again if the illegal ones were outlawed, like they once were (Glass-Steagall) then there would be less pressure on prices (absent black swans) and even the legitimate users wouldn't need to use as many as the artificial volatility from bankster derivatives (the commodities ones) wouldn't be distorting the market.  If you want to know why you had 150 oil (and all its associated effects), if you think really hard, you would realize you already have your answer.    Thanks (among others) Goldman!


Thu, 12/22/2011 - 00:21 | 2003415 AE911Truth
AE911Truth's picture

From page 16 of the Keenan PDF at

During the course of its existence over the last century, the Dragon Family has accumulated great wealth by having provided the Federal Reserve Bank and the United States Government with asset assignments of gold and silver via certain accounts held in Switzerland, for which it has received consideration in the form of a variety of Notes, Bonds and Certificates such as those described in ~ 2 that are an Obligation of the Federal Reserve System. Upon information and belief, these Bonds have values ranging in the many Thousands of Trillions of United States Dollars, ... was and remains duly registered within the Federal Reserve System and are directly verifiable by the Federal Reserve through its efficient verification system and screening process.

So, how much gold is this?

Well 4% till 2011 is 17x out of thousands of trillions and in 1934 gold was $44/oz so, uh ...

Dude, that's a lota gold!

Thu, 12/22/2011 - 00:17 | 2003418 chump666
chump666's picture

and the cycle begins again...this time markets will shift lower into trading ranges.

-- Regional equities lower due to continued uncertainty over a solution to Europe's sovereign-debt crisis
-- Euro a touch lower as strong demand at ECB LTRO emphasized severity of Europe's funding crisis
-- Mid-sized real estate companies lower in Shanghai on price cut fears

Thu, 12/22/2011 - 02:24 | 2003422 baby_BLYTHE
baby_BLYTHE's picture

Marc Faber is an alpha male. Perhaps the greatest ecomomicst in the world currently. I'd give up an ounce of gold to see him debate not only Paul Krugman, Robert Reich, Noriel Roubini, Larry Summers, Alan Greenspan, etc... but also the likes of Peter Schiff, David Rosenberg and Kyle Bass. Faber has been more accurate than any of these other clowns. In addition to his famous calls of tops in 1987, 2000 and 2008.... his call of the rock bottom of equities in March 2009... his call of an epic US Treasury rally back in 2010 when the 10-year was above 4%... and his infamous call back in 2009 of Gold never declining below $1,000 per/oz EVER AGAIN was the interview that got me interested in the PM markets initially. Thank You Dr. Faber!

Thu, 12/22/2011 - 03:59 | 2003619 ParisianThinker
ParisianThinker's picture

But gold is correcting, and could decline to nearly $1300 per/oz

Thu, 12/22/2011 - 07:19 | 2003686 falak pema
falak pema's picture

an alpha male with a beta drive for contrarian plays and a gamma prediction for derivatives. I would love to know where the omega of his value system lies, as thats where the ride takes us in life. Alpha males like beta females, thats the only thing true about their primal urges, take it or leave it. It's nice knowing one's alphabet, like alpha-bet. I think Mark F knows his alpha-bets better than most of us.

Thu, 12/22/2011 - 00:30 | 2003440 Peter Pan
Peter Pan's picture

Does anyone think bird flu might solve a few issues?

Thu, 12/22/2011 - 11:02 | 2003983 AE911Truth
AE911Truth's picture

A fear is that someone could use a mutated form of bird flu which highly lethal and highly contagious to implement the Georgia Guidestone reduction of population goal. It is a issue if you are not on the short list that has access to the vaccine.

Thu, 12/22/2011 - 01:03 | 2003485 San Diego Gold Bug
San Diego Gold Bug's picture

Thank you to the ZH reader who mentioned and  Saved me some bank this week on my buys!!

Thu, 12/22/2011 - 01:09 | 2003497 San Diego Gold Bug
Thu, 12/22/2011 - 01:23 | 2003518 AssFire
AssFire's picture


An old adage;
Rich men buy Gold
Poor men buy Silver
Wise men buy Lead

Thu, 12/22/2011 - 01:49 | 2003547 steveo
steveo's picture

I still think this is the best Christmas Gift I have ever received (even if I had to buy it).  

 Celestron C8 SGT XLT

Visitors to my site kliking ads have helped pay for 7% of this fine beast, and I appreciate that, since with accessories I was $1200 over budget, ouch.    Consider stopping by and viewing some scope pics, etc.   I actually do stock charts too!

A fantastically good telescope, able to hook up to a camera, and also able to hookup to a computer and be controlled by the computer ...."go to Orion Nebula" and it takes you right there.    It has its own GPS so it has a pretty good idea where it is in the world, then you just point it at any three bright sky objects, and it then knows automatically where everything is Exactly.    Pick any 3 bright objects and you don't even have to tell it what those objects are.

Now that is cool!


The Scope is only about 60 lbs wet (lets hope it doesn't get wet), but is a beast at gathering light.   These are actual pictures.   

C'mon how about a little Christmas present for steveo?    Thanks and have a Happy Holiday season.  I will probably be pretty scarce between Christmas and New Years as far as blogging goes.

Thu, 12/22/2011 - 02:00 | 2003559 PlinyTheElder
PlinyTheElder's picture

In Europe they could confiscate gold and silver, but I doubt the US Gov could pull that off... what are they going to do? Arrest me for buying food for my family with real money? Enough people will say "over my dead body" and that will be that. 

I just hope that after all the bookies rub each other out for non-payment, the derivatives market is allowed to exist for its core purpose - to allow people who are willing to take on the risk of producing something to flatten out volitility in the costs of production. Farmers, Manufacturers, etc. 

Degenerate gamblers be damned.

BTW, anyone have any predictions on spdrs tomorrow AM? 
When I made a little money, I didn't sell out and leave the ghetto, but as soon as I make a little more, I'm gone! LOL

Thu, 12/22/2011 - 04:04 | 2003620 ParisianThinker
ParisianThinker's picture

The reason the US will confiscate your gold is because they want the army of beggars and useless eaters to die. Their plan is genocide.

Thu, 12/22/2011 - 06:17 | 2003658 Sandmann
Sandmann's picture

They say the 1933 Gold Dollar is worth a fortune as only 10 were minted before gold was suspended

Thu, 12/22/2011 - 06:21 | 2003661 Sandmann
Sandmann's picture

They say the 1933 Gold Dollar is worth a fortune as only 10 were minted before gold was suspended

Thu, 12/22/2011 - 02:15 | 2003568 killedbyshortvol
killedbyshortvol's picture

The ancients had it right.  There must always be something physical, which is exogenous to the transaction, to count.

Thu, 12/22/2011 - 02:49 | 2003594 FritoPendejo
FritoPendejo's picture

Windfall of 24K coming my way soon via tax-free family gift. No joke. What should I do with the cash, peeps? I owe 9K on a vehicle, but other than that, I'm debt free with almost ZERO in savings. Home Equity is my only asset. Gold, Silver, Equities peeps?

Thu, 12/22/2011 - 12:44 | 2004259 the grateful un...
the grateful unemployed's picture

1) trade your vehicle for one your own

2) you don't have any home equity, after the next downdraft in housing prices, (don't count on that)

3) put the 24K in savings, if you still have the money in ten years you can count yourself as the 1%, when asset prices fall, that money will be worth twice as much. theres a lot of people who will help you party that money away. (and one good weekend is about it)

4) when the market craps out you buy assets on the cheap, but only then, and buy utilities, or things which operate like utilities, which have a steady stream of income.

Thu, 12/22/2011 - 03:57 | 2003617 ParisianThinker
ParisianThinker's picture

Mark has been wrong for nearly two years now. Bonds have been a great place to be as they were better than equities or PMs. 30 year US Treasuries were great, and the ETF's (ZROZ up+58.2% )so far this year, and (EDV up+54.1)and (TLT up+33%). So what's not to like? Nothing else did as good, Mark.


Thu, 12/22/2011 - 06:03 | 2003653 Belarusian Bull
Belarusian Bull's picture

Lending money to the insolvent is, ofcourse, a wise choice.

Thu, 12/22/2011 - 07:16 | 2003685 Sandmann
Sandmann's picture

Recognising Insolvency is not career-enhancing for those in charge.......rollover relief is the gambler's ambit

Thu, 12/22/2011 - 04:17 | 2003625 cathrynm
cathrynm's picture

I know this is a bit contrarian around here, but I kind of still believe in the power of the state.   That as the state is starved for funding, it will simply devour everything.  It has that power, and it will save itself at expense of every person and thing in its domain.  So government bonds over corporate. 

Thu, 12/22/2011 - 05:04 | 2003635 GFORCE
GFORCE's picture

Investment advice from the Faber who recently got rinsed.

Thu, 12/22/2011 - 05:42 | 2003643 falak pema
falak pema's picture

This whole post makes a statement based on facts, the current death spiral of financialised capitalism will kill itself. It does not address the deeper issue :  it could kill civilization too as we understand it if it goes out of hand. It points to a valid conclusion : take away these instruments of mass wealth destruction from this Oligarchical CABAL and make finance once again a utilitarian profession regulated and oriented as a service industry to the entrepreneur and wealth saver. 

It says that the ponzi will destroy the powers of the Cabal under its own weight. FIne. I hope so, but I am not so optimistic. The people need to ACT to construct a political/social/economic paradigm that never allows this hundred  headed hydra to resurrect its ugly head. We must learn from our collective mistakes, always using the laurel tree, the tree of knowledge. Its not easy when we are in unchartered waters.

Western civilization is an empirically oriented experiment where the LOgic of Power, the oligarchy construct, and the logic of reason/knowledge, the people's aspirations, match up in recurrent fashion. Its an incessant fight between the two logics; one Top down and vertically structured, the other Bottom up and horizontal in its enrichening process to all classes. The pendulum swings from one to other. The People's Welfare state or the Corporate welfare state, in our industrial day and age. There are no easy solutions 'cos we ARE humans. It has to be an uphill battle all the time; its written in our Promethean genes! We will never be Gods. We must accept that as part of the problem for each successive generation; THEY ARE NO FREE LUNCHES written into the cement of our institutions. That is a fallacy. 

Progress comes rarely in times of peace where the course of civilization is one long lazy, hazy boat ride down calm river; when logic of power and logic of knowledge sit side by side and work hand in hand. Those moments are rare in civilization. Most of the time its conflictual fighting between different social economic groups in situations of dire hardship for some, with loss of life and liberty evident . We stay sons of Sisyphus. Today, with our current institutions in the developed world we have the means to charter our course out of these 'Bermuda Triangles'. We must use them. Never despair, and never lose faith in the laurel tree, our tree of knowledge and wisdom.

Learn from the past Bitchez, and go to reset! 

Thu, 12/22/2011 - 12:32 | 2004233 earleflorida
earleflorida's picture


Thu, 12/22/2011 - 05:41 | 2003644 nontaxpayer
nontaxpayer's picture

Faber should read FOFOA on why gold confiscation is rubbish.

Thu, 12/22/2011 - 06:15 | 2003657 Sandmann
Sandmann's picture

Britain funded the First World War with War Loan issued in 1917 @5% Irredeemable with the Coupon reduced in 1932 to a 3.5% yield


From the notice to holders dated 30th June, 1932:
> “Holders who wish to have their holdings redeemed in cash on the 1st December, 1932, must notify the Bank of England or the Bank of Ireland respectively, in the prescribed manner, not later than the 30th September, 1932.”


So there is a case for making outstanding Government Debt Perpetual and simply paying the Coupon

Thu, 12/22/2011 - 07:13 | 2003680 Raging Debate
Raging Debate's picture

+.55 dollar + comment Seeker or + $9T for the analysis! 

Thu, 12/22/2011 - 07:30 | 2003690 swani
swani's picture

One cannot mistrust the government to the extent that most people on this site obviously do, and then trust, that they will follow the law when it comes to individual property rights in a 'time of war'.

Both of these concepts are unfortunately mutually exclusive. All anyone has to do is look at what they are doing now even before they had declared the US homeland- a 'battlefield'. Look at how they have been confiscating people's property for years when they have been accused of a Drug 'Conspiracy' Crime.

Then, look at the NDAA. We have 2.4 million people in prison, and most, are imprisoned for non violent drug conspiracy crimes using RICO. Now, we are expecting to start locking people up for being suspected 'enemies' of the State.

While RICO, was not used on the Wells Fargo executives for knowingly laundering drug money. RICO was not used when the trustee, CME, and others, committed fraud by filing the MF Global bankruptcy under 'Securities Dealer' instead of "Commodities Broker", so that  JP Morgan was allowed to confiscate the property of MF Global customers. 

I mean, please. I know it makes us all feel better to think that something will be safe from this ever growing big goverment kleptocratic cancer that is metastasizing before our very eyes, but I fear that we are not. Not unless, we all start to resist what is happening, in whatever way we can; voting, boycotting, suing, making documentaries, writing stories, anything and everything that we can do, must be done. It is up to us and no one else. 






Thu, 12/22/2011 - 07:25 | 2003692 Monedas
Monedas's picture

It's diabolical.....the PM futures which beat up investors and manipulated prices are not even going to deliver the goods ! It's a form of pre-confiscation ! The only winners are those who took their fiat profits and bought physical ! There's still time....but not much ! Run, don't walk, to your dealer or LCS ! Hoarders have more fun ! Monedas 2011  Comedy Jihad Christmas Special

Thu, 12/22/2011 - 07:25 | 2003694 vegas
vegas's picture

I disagree. The derivatives market isn't going away. It's one of the only sources of income in the Ponzi scheme and will continue as long as there are banks and institutions that need either to 1) leverage risk for yield, or 2) need to hedge risk. Sorry, ain't gonna happen IMHO.

Thu, 12/22/2011 - 07:51 | 2003701 falak pema
falak pema's picture

the whole point is : ponzi scheme = cancer. So will die. Hope it doesn't take us all!

Further down road, if we are still there after reset, we do refer to NAKED derivative play, pure "financial wizardry". Not those linked with hedges for real commercial transactions. These need to stay. Finance = utility services market after reset. 

So, your comment is valid as long as this system is alive...

Thu, 12/22/2011 - 07:49 | 2003702 AntiLeMaire
AntiLeMaire's picture

Ceterum censeo OTC esse delendam.

It's good to see that Mark agrees with that motto. He is of course talking about the OTC derivatives, not the exchange traded variety. Simply because trading via an exchange requires margin larger than 0 and should remove the counterparty risk.

Imagine when the BIS (or US & EU) finally decide to require some acknowledgement of the huge risks involved in the current OTC derivatives positions of the banks. Say that one has to assume a minimal x% counterparty risk (total loss) & that any bank needs to have enough equity to be able to take such a hit...

To me it's clear where the banks really have to start deleveraging to lower the risks to 'the system': the OTC derivatives.


Remember this bit from 2002:

"Charlie and I are of one mind in how we feel about derivatives and the trading activities that go with them: We view them as time bombs, both for the parties that deal in them and the economic system.
Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the creditworthiness of the counterparties to them.
“Mark-to-market” then turned out to be truly “mark-to-myth.”
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear.
Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts.
In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

Warren Buffet, Berkshire Hathaway 2002 Annual Report


Ceterum censeo OTC esse delendam

Thu, 12/22/2011 - 08:15 | 2003710 swani
swani's picture

I agree with Faber. The derivative market, at the moment, is one big fat liability. As we all know, if the 4 derivatives dealers had to make good on any of the contracts sold on the Eurozone, they would all be bankrupted like AIG. So, the best thing for them, would be to have the government declare these contracts, and with them, all obligations, null and void. If I was a kleptocrat with the government in my pocket, I would have them rewrite the laws, for a 'time of war', where I wouldn't have to pay for any of these contracts. Kind of like when insurance companies don't have to pay if there is loss from an 'Act of God'. The probably don't even need to rewite the laws, it's probably in the Patriot Act already.

Then, after this is in place, I could hide behind mommy's skirt and say, "look what the evil big government regulatory crazed administration has done, they are kiling us again". And voila! The whole thing is phoenixed! And the quants can come up with more innovation. 




Fri, 12/23/2011 - 02:52 | 2006567 madbomber
madbomber's picture

DMX (only I can stop the rain)







Fri, 12/30/2011 - 18:14 | 2022668 sharonsj
sharonsj's picture

This Agenda 21 crap is Fox News/Prison Planet conspiracy nonsense.  The conservatives will do anything to pretend climate change doesn't exist because to do otherwise would affect company profits.  For deniers of global warming, I suggest you read the Pentagon report, which says climate change is a greater threat to humanity than terrorism.

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