This page has been archived and commenting is disabled.

Martenson Interviews Dines: 'Wealth In The Ground' Is Your Best Bet to Surviving the Coming 'Supernova of Inflations'

Tyler Durden's picture


Submitted by Chris Martenson

James Dines: Owning 'Wealth In The Ground' Is Your Best Bet to Surviving the Coming 'Supernova of Inflations'

James Dines has been in the business of making bold calls for over 50 years. In this deep-diving interview, he minces no words about the dire risks the US economy - and the world at large - faces at this juncture.

Simply put, he sees the excessive credit in the financial system as having placed the global economy on a collision-course with hyperinflation.

Unlike past periods of turmoil, there are no truly 'safe' places for investment capital to hide. Geographic markets and almost all asset classes are positively correlated these days. They share many of the same risks and if a systemic crash occurs, they will crash together.

At this point, says Mr Dines, you want to invest in assets that can not be printed away by government desperation. You want to hold hard assets; "wealth in the ground" as Dines says (physical commodities, mining companies, etc). They're your best best to make money faster at a rate faster than inflation is going to happen. 

On Government's Odds Of 'Saving' The Economy

They are borrowing money with no intention of paying it off. Politicians hope to be safely dead by the time it hits the fan. This year alone America is going to be running a deficit of 1.3 trillion dollars. Most people do not really even grasp how much a trillion dollars is. One trillion dollars. If you spend one million dollars each and every day from now on, back to the time of Jesus’ birth, you could not spend one trillion dollars. Right now America’s debt is approaching 15 trillion dollars, which are numbers used for astronomy. How is America going to earn that? With Facebook and Twitter corporations? Our industrial base is gone. Entitlements of fixed forced payments are a large and growing section of it.

On Resource Scarcity 

 Energy is, of course, extremely important. We have been writing in recent years about the coming resource imperialism. I founded the neo-Malthusian school of economics, which says that the planet is limited and the population is soaring. By brute logic, it is obviously unsustainable. You cannot just keep having more and more people on the same planet without, someday, sooner or later, running out. The nations that perceive this would start buying assets with that in mind. The primary example, of course, is China. 

So there will come a time, in the not-too-distant-future, where the last new copper mine on the planet will be found. Hard to believe – because there has always been more – but with the world’s population soaring into the billions on an accelerating uptrend, something is going to break. Along with the currency going to break, things are going to be happening here from out of nowhere. Because when you are going at high speeds toward a brick wall in the dark, things can happen very quickly.

On Peak Oil

So the rapidly increasing demand and the shrinking supply of oil, despite any short-term oversupply, which is probably true now… is going to lead to a stratospherically higher oil prices. As soon as the military grasps that they will start needing to put windmills on airplanes, they will seize the remaining supplies and you will not be able to drive your car until the last drop. At some point there are some very disruptive changes coming to society.

On Gold

The price of gold and silver did not go up. It is the paper money that went down. Gold and silver are the ultimate money, coins of which are good anywhere in the world, no matter what is stamped on them, and that is the money. Depending on the amount of paper each nation prints is the price of gold in that particular country, or in that particular currency.

That is one way we were protected by the price of gold. Gold is the only investible asset in the world that has gone up the last 11 years without interruption, and that is because they are just running the printing presses. The more they do, the more value builds into gold and silver. Now of course, it will have its fluctuations. It went down in the 2008 crash but came right back up and made new highs. We tend to ride those out, and it is very important understanding what the main trend is. When you are really clear what is happening in the world, you know how to place your bets, instead of doing it blindly or just following casual recommendations from people.

 Click the play button below to listen to Chris' interview with James Dines (runtime 56m:21s): 

Download/Play the Podcast
Report a Problem Playing the Podcast


Or click here to read the full transcript.  


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sat, 02/04/2012 - 12:07 | 2126434 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I'll believe inflation arguements when wages rise along with housing prices.  If you truly believe that inflation is coming then you would load up on debt and buy the biggest house on the biggest lot possible.

Sat, 02/04/2012 - 12:20 | 2126463 Blindweb
Blindweb's picture

If you think war and social unrest is coming I wouldn't tie your assets down into a fixed location

Sat, 02/04/2012 - 12:23 | 2126468 redpill
redpill's picture

There's only so much you can carry, it does make sense to "tie your assets down" if it means having somewhere you have some land, could potentially grow things, etc.   If you have to abandon that, well it means things are bad enough that what you thought of as your "assets" before are largely worthless anyway because you can only carry so much food and ammo.

Sat, 02/04/2012 - 12:27 | 2126474 knukles
knukles's picture

Hey Tyler!

Brian Westbery (bury?) is at it again, this time reciting the same in one of his videos.

Sat, 02/04/2012 - 12:55 | 2126547 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This guy is the biggest douchebag in the universe.

Tyler Durden is Matt Drudge....

Wow, talk about taking the meme of Fight Club too far.

Sat, 02/04/2012 - 13:08 | 2126591 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

OMFG!  Mr Hendrix does not exaggerate in the slight amount.  Biggest DB in the universe -- BAR NONE.

Sat, 02/04/2012 - 13:48 | 2126631 TruthInSunshine
TruthInSunshine's picture

I think the best question to ask is not whether the money masters will print - they will, without question, and in massive quantities (inflation is always their easiest & most seductive option on the path to 'fix' things [aka screwing the bulk of the population]) - but to whom the digitized fiat will flow, and how debt deflation and/or deleveraging will take place and in what aggregate amount - as a countervailing force to printing fiat.

Only by comparing and contrasting the nominal sums represented by the printing and the debt deflation/deleveraging, can one even roughly approximate how badly screwed the economy will get (and how badly broken markets will be, with malinvestment and bubbles everywhere).

And lest we forget, we surely could have a period of rapid deflation followed by rapid inflation, to whatever degree each takes place and for how long, or we could have a vicious period of stagflation (that has its own unique set of wicked variables).


On the issue of the BLS U3 January 2012 report, I'd be remiss to not share this with my fellow ZH's (yesterday's BLS report has really, really been bothering me):


Another FANTASTIC break down of the flaws in the January 2012 BLS U3 report by Robert Oak over at Economic Populist (this guy is on fire - I hope Zero Hedge starts linking his articles).

He has a knack for separating the wheat from the chaff in the statistical data used by the BLS in pointing out the misleading (intentional or not) factors:

The January Employment Report Shows Things Aren't as Rosy as Some Want to Believe


And here's an excerpt of his that is purely AWESOME, which speaks to how the census bureau data that revised the U.S. population adjustment for the entire last year got dumped into January's pool that the BLS used to compute U3, rendering January's report WORTHLESS (not to mention that the December 2011 to January 2012 month-over-month change is nothing but noise):

The December to January unemployment statistics are often reported wrong in the press. We're sorry, god love ya, but these articles are plain incorrect. People like to compare the month to month change in population, the number of people no longer considered part of the labor force and other data. The grave mistake made by so many in the press and elsewhere is not realizing annual population adjustments are placed in the January data, not distributed evenly across the entire year, or backwards applied and that's why one cannot compare these two months. Below is a graph of non-institutional population monthly change. This is the number from where all other unemployment statistics are derived. It represents people 16 and older, not locked up somewhere, in a medical facility or in the military.



Getting It Wrong on the BLS Employment Report

Sat, 02/04/2012 - 14:46 | 2126815 linrom
linrom's picture

Debt/deflation was a theory proposed by Prof. Fisher as an explanation of the causes of the Great Depression. Deleveraging refers to contraction of Debt in relation to GDP to the point where the ratio stops falling and begins to stabilize and then rises again. Steve Keen analyzed deleveraging in Australia during the Long Depression of 1890s and the Great Depression of 1930s. In both instances Debt/GDP ratio fell for 15-years at rates of 4% and 8% respectively

In the US, deleveraging in 1930s happened very rapidly because of the debt collapse in 1932 that was then followed by rapid growth in GDP brought about by rearmament.

Sat, 02/04/2012 - 15:46 | 2126974 TruthInSunshine
TruthInSunshine's picture

I just want to point out one thing, and if you think I'm wrong, I'd genuinely like to know how so I can reassess my own thoughts:


Debt deflation is the process of pre-existing debts being either paid down, cut ('haircuts' or settled for less than face amount) or wiped out (defaults, bankruptcies, forgiveness, write-offs/exclusions), whereas deleveraging encompasses both existing debt being impaired/reduced, and also the reluctance of consumers, businesses and sovereigns to take on or assume new debt (for whatever period of time).

So, the process of debt deflation is necessarily time limited, whereas deleveraging can last for a undetermined period of time (in theory, it can last forever).

This is primarily the reason I believe Bernanke is caught in a monetary web of his own making, which is impairing fiscal policy and economic activity:  He is focusing so heavily on monetary policy designed to benefit the banking sector that he is stimulating debt deflation and encouraging current and future deleveraging (I realize there has been a period of time whereby U.S. publicly traded corporations have issued a record amount of debt in the form of corporate bonds - 12 trillion USD worth - but that is slowing as there's no incremental need for additional monies at this point, given the macroeconomic fundamentals).

Sat, 02/04/2012 - 16:57 | 2127105 linrom
linrom's picture

I think I understand the distinction you are making between debt reduction(you call it debt deflation?) and deleveraging. You could theoretically add financial repression to your list of things that lead to debt reduction - a term that Jim Pulplava likes to to mention every week-which is supposedly a policy of keeping interest rates low and boosting the rate of inflation to reduce debt burden in order to pay it off. He conveniently forgets to omit that for this to work, top tax bracket needs to move to its historical highs of 70-90%.

I disagree with the way you define deleveraging. To me deleveraging simply means reduction in debt and the associated fall in GDP to a level where borrowing can start up again.

Sat, 02/04/2012 - 17:42 | 2127194 TruthInSunshine
TruthInSunshine's picture

If Mr. & Mrs. Smith decide to not add the sunroom to their home, after much consideration, because they don't want to assume the debt in doing so (assume they are not cash buyers), how is this not "deleveraging?"

You would agree that if Mr. & Mrs. Smith decide to use savings to pay off their existing HELOC in one lump sum, prior to the time it is due (assuming there's no ban against pre-payment), that this would be "deleveraging," obviously, correct?

The only difference between the above two courses of action is that one deals with future debt and one deals with existing debt.

Sun, 02/05/2012 - 02:54 | 2128084 Demonoid
Demonoid's picture

You're right. Robert Oak is the real stuff. His knife cuts clean.

He even caught ZH making a dumb mistake on the "disappearance" of 1.2 million from the labor force. I like how he wields his Sabatier without snark, too.

I owe you a beer for the new bookmark.


Sat, 02/04/2012 - 13:30 | 2126641 LongBalls
LongBalls's picture


Sat, 02/04/2012 - 16:04 | 2127013 r00t61
r00t61's picture

Do you really want to take the title away from John Edward, come on now!

Sat, 02/04/2012 - 12:33 | 2126497 DaveyJones
DaveyJones's picture

physical assets are one category. Relearning old (pre oil skills) are another, perhaps more valuable category.

Sat, 02/04/2012 - 13:24 | 2126625 Blindweb
Blindweb's picture

Yes.  Invest in your body and brain, another mobile investment.  If one has the resources buy the best quality food you can; live in a clean environment.  If you have excess resources to invest put yourself through medical school or engineering school, weapons training, MMA.  While Dr. Zhivago was fiction I suspect being a doctor will be useful in all situations.

Sat, 02/04/2012 - 15:26 | 2126925 HungrySeagull
HungrySeagull's picture

If you put together 500 people and gave them something to solve, they will get it done.

It aint pretty, but they will get it done.

Sat, 02/04/2012 - 17:59 | 2127225 11b40
11b40's picture

Does not apply to Congress.

Sat, 02/04/2012 - 19:52 | 2127378 TruthInSunshine
TruthInSunshine's picture

You took the thoughts from my brain. It was like a Jedi mind trick.


Sat, 02/04/2012 - 20:03 | 2127393 akak
akak's picture

He used the power of the Farce.

Sat, 02/04/2012 - 20:07 | 2127403 TruthInSunshine
TruthInSunshine's picture

He must be Druish.

Sun, 02/05/2012 - 10:14 | 2128331 prole
prole's picture

"If you put together 500 people and gave them something to solve, they will get it done.

It aint pretty, but they will get it done."


"Does not apply to Congress."

YOU ARE SO WRONG!! (You are 100% wrong never been more wronger)

Ahem, sorry.

"OK Gentlemen what is the problem?"
"Everyone's money is not in our pocket yet"
"Then let's solve the problem"

Sat, 02/04/2012 - 17:21 | 2126998 DaveyJones
DaveyJones's picture


Sat, 02/04/2012 - 18:36 | 2127286 Amish Hacker
Amish Hacker's picture

Another valuable category, DaveyJones, is developing community. How many of us really know our neighbors? I mean not just as someone we wave to as we drive by, but as someone we would trust with our safety, or even (in the Mad Max scenario) our lives. 

Mad Max aside, a more likely scenario, imho, is a wide-ranging breakdown in transportation, communication, public utilities, and all the government services we currently take for granted. Imagine any kind of scenario where you'd need to call 911, and then imagine that there is no 911. This is where your neighbors can help you, and you can help them. But first you have to know them, which ones you can count on and which ones are best avoided.

Whatever's coming after the SHTF, teamwork, compassion, and cooperation are going to be the way to go, not trying to act out some Rambo fantasy.

Sat, 02/04/2012 - 20:26 | 2127447 Dugald
Dugald's picture

Yo Bro Is'e hear ya, Love thy neighbor, I do, I do, problem is most of them have husbands......!

Sun, 02/05/2012 - 00:31 | 2127914 DaveyJones
DaveyJones's picture

very true. I am working in my 200 home development on a community garden, food growing skill teaching, winter production, and a food exchange system.

Sun, 02/05/2012 - 16:32 | 2129201 SAT 800
SAT 800's picture

200 home development;?. A gated White Ghetto? How chi chi. pretty soon you'll be completely politically correct and you can eat your organic peas.

Sun, 02/05/2012 - 23:30 | 2129781 DaveyJones
DaveyJones's picture

close by a long shot. This development is very humble and has folks from nearly everywhere in the world mostly with computer degrees working at Microsoft.   

Sat, 02/04/2012 - 12:52 | 2126541 Oh regional Indian
Oh regional Indian's picture

Very insightful man, Dines. Deflationary is obvious in Crap. Inflation is obvious in essentials.

But for that oil story, now is the time to move to increasing efficiency.

The MASTER Resource, energy, needs to be done much much better. 

The Industrial Way is just plain inefficient. Cars, 10%-15% efficient to the ground. .......



Sat, 02/04/2012 - 14:26 | 2126703 kito
kito's picture

Dines is an egomaniac. The man names everything after himself. I heard hes pushing to rename February 14 valenDines day........

Sat, 02/04/2012 - 18:30 | 2127278 Likstane
Likstane's picture

Are you that guy who lived in OJ's garage?

Sat, 02/04/2012 - 20:18 | 2127431 Ponzi Unit
Ponzi Unit's picture

Yes, he calls himself a pioneer in technical analysis, when McGee and Edwards wrote the book before Dines set foot on Wall Street.

Sun, 02/05/2012 - 16:35 | 2129209 SAT 800
SAT 800's picture

He's been publishing entertainment for the masses for forty years; but then so has the Krishna Press; it's amazing what there's a market for out there.

Sun, 02/05/2012 - 17:14 | 2129285 akak
akak's picture

Very true SAT, and those are good points to always re-emphasize.  It is precisely to avoid confusion that I prefer to use the phrase "currency depreciation" rather than "inflation" --- the former being without any question the REAL threat to the financial health of the average person in the future, not some putative appreciating fiat currency as a result of a mythical and never-before-seen fiat currency deflation.

Sat, 02/04/2012 - 16:07 | 2127017 r00t61
r00t61's picture

That's right.  You get deflation in the stuff that you own, like your houses, your cars, your electronic gadgets, and your 401ks.  Meanwhile, you get inflation in food, gas, water, and electricity.

Biflation, really.

Sat, 02/04/2012 - 23:49 | 2127840 Freddie
Freddie's picture

Didn't Kyle Bass just the other day say that deflation is the stuff you got (house) and inflation is the stuff you need or maybe use (food, commodities).

Sun, 02/05/2012 - 16:38 | 2129216 SAT 800
SAT 800's picture

Yes, he did say that; it's very un-fortunate because it destroys language. Language is necessary for communication and one needs to learn the meaning of the words; using deflation to mean lower prices and inflation to mean higher prices is a serious trashing of the language. This immediately results in confusion; no conclusions can be drawn because you're not talking about what you thought you were talking about. There definitions for deflation and inflation; learn them, use them. This is called literacy.

Sun, 02/05/2012 - 16:33 | 2129205 SAT 800
SAT 800's picture

I'm sure you'll fix it all up for us, you ignorant mofo.

Sat, 02/04/2012 - 13:22 | 2126617 Blindweb
Blindweb's picture


Sat, 02/04/2012 - 14:14 | 2126745 Silver Bug
Silver Bug's picture

Dines has been remarkable at calling bull markets early. I agree, I would much rather have wealth in the ground, rather than trash in the bank.

Sat, 02/04/2012 - 20:31 | 2127460 Ponzi Unit
Ponzi Unit's picture

Dines is clear thinker, but he has an enormous ego. Not a deal killer, just an observation.

Sun, 02/05/2012 - 08:23 | 2128248 i_fly_me
i_fly_me's picture

A friend at work and I have a Gartner'esque magic square classification system for the people we have to deal with during the course of our job:

   X-axis: arrogance   y-axis: competence

We can work with anyone except quadrant 4 types.

Sat, 02/04/2012 - 16:59 | 2127108 grid-b-gone
grid-b-gone's picture

Here's the test. Gather everything you would flee with if it came to the point of home abandonment.

Forget the apocalypse, survivalist scenario. This is a prudent exercise just for emergency preparedness.

Do you even have a backpack? That designer wheelie suitcase is useless in the woods.

For long walks, like doing 70 miles in Philmont, your load should ideally be 25% of body weight. Many Americans already exceed this rule of thumb with the excess pounds they carry.

Water weighs 62.4 lbs/gal. You'll need a gallon per day if walking. More in dry climates.

Let's face it. Aging, out-of-shape America can drive, but not flee. If you're driving during a public panic, you'll lose the vehicle and valuables.

Assets in the ground that can't be burned, stolen, or devalued make a lot of sense.


Sat, 02/04/2012 - 17:17 | 2127144 DavidPierre
DavidPierre's picture

1 US Gallon of water = approx. 8.35 lb.

Weight of 1 imperial gallon  of water weighs 10 pounds by definition.

Sat, 02/04/2012 - 20:38 | 2127474 grid-b-gone
grid-b-gone's picture

I stand corrected. 62.4 lbs. is per cubic ft. 

Sat, 02/04/2012 - 22:13 | 2127636 Hulk
Hulk's picture

Holy water is 62.3 lbs per cubic meter as demons weigh .1lb per cubic ft...

Sun, 02/05/2012 - 03:33 | 2128114 LudwigVon
LudwigVon's picture

If d, demons has mass M, d must also have an wave equivalent, counterbalanced with the inverse energy, perhaps with Holy work W, dissolving Md by imparting the correct delta K to the system in question, effectively "turning off the strobe" of standing waves any particle emits to claim its relative existence.


Sun, 02/05/2012 - 05:09 | 2128152 francis_sawyer
francis_sawyer's picture

close enough for 'government' work...

Tue, 02/07/2012 - 12:15 | 2134022 flattrader
flattrader's picture

The real trick is to know how to find water...and carry the equip necessary to make it potable...not carry a ton of water around with you.  I have four different water purification methods that cover the range from hunker in place to hiking the back country.

I carry dry, hihgly concentrated bleach tabs and paper filters with me in case I get separated from my vehicle and vehicle bug out bag while about town in an earthquake.  It takes up little space in a back pack, fanny pack, carry bag or purse.  Find two emply bottles water and you are in business.

Tue, 02/07/2012 - 12:22 | 2134048 Flakmeister
Flakmeister's picture

A ketadyne is a handy thing to have in the bug-out survival pack....

Sat, 02/04/2012 - 17:48 | 2127205 Ponzi Unit
Ponzi Unit's picture

A pint a pound the world around...

Sat, 02/04/2012 - 20:09 | 2127408 Pondmaster
Pondmaster's picture

Did Philmont ,120 miles , to Mt Casteele ( noone allowed to climb it anymore) . 60 lb pack at start , only lost weight was food eaten . Did trip with 15 Boy Scouts . Stopped in Bear Creek to replenish supplies. Had the fiercest electric storm I ever saw while hiking out , marble sized hail floating in flowed over bank mountain stream we were following out. Funny , we slept in a mine co's abandoned core sample house that night . Wonder what they get out of the rocks in the rockies of New Mexico. Philmont was great but grueling . We own eight backpacks and all the quick flight gear needed . Plus the vitals . Need to BE SURE YOU HAVE SOME SORT OF WATER PURIFICATION OR DISINFECTANT SYS. 


My vote is for Polar-pure ( iodine additive) or a reversable filter .  

Sat, 02/04/2012 - 20:33 | 2127465 Dugald
Dugald's picture

Ahhh you Landlubbers, floatie things with sails just never enter your tilted way of thinking....

Sun, 02/05/2012 - 12:35 | 2128589 merizobeach
merizobeach's picture

Haha!  I suspect your observation is sailing past the tip of an iceberg; there seems to be many such impediments to people's conceptions.

For instance, in Guam, a particularly small island surrounded by a particularly large amount of water, many people cannot swim.  Furthermore, in the local mentality, there are two possible conditions of existence: one is either 'on island' or 'off island'.  While that is quite naturally logically true, it is indicative of the provincial mindset; when asking about a person, a response of "s/he is off-island", is surprisingly sufficient to resolve the topic.  Psychologically, there exists a nondifferentiated "off-island", a veritable 'outter space' or 'unknowable void'.  When "the world = Guam", that makes for a pretty small world.  And if only that were the end..  While at university, i met a 19-year old Filipino kid from Dededo village in the north, who had never been to Merizo, at the southern tip, where I lived.  (A person can drive a car around Guam's coastline, save for the military land, in under two hours.)  Shocked at what the kid told me, I inquired more and was further dumbfounded to learn that he actually hadn't been south of Yona or Agat, meaning the entire southern half of the island.  Why?  Well, because the scary Chamorro boys in Merizo would beat him up...  WTF?!  Yeah, there's probably too much ice getting smoked in most of those villages, but even a haole can live there without being harrassed.  These boundaries and demons are all self-imposed.

Guam is a microcosm.  For how many Americans does "America = the world"?  And so on, for the people of all countries.  When the sinking of America gets intolerable, or even if life becomes unreasonably difficult, why not just leave?  Life is pretty good here, off island.

Sat, 02/04/2012 - 17:08 | 2127125 non_anon
non_anon's picture

and don't forget the lead that goes along with the other precious metals

Sat, 02/04/2012 - 17:35 | 2127183 DosZap
DosZap's picture


There's only so much you can carry

agree w/100% of what you said.

Problem is here,more like just thrown out for pondering.

CARRY WHERE?...........

This is the MOST difficult of all dilemas we all face if we're staying, or if this SHTF reaches you point.


Sat, 02/04/2012 - 12:22 | 2126466 redpill
redpill's picture

That's what precisely a lot of investors have been doing.  The share of home purchases made with cash and purchases made by investors are both higher now than they were during the housing bubble when "everyone you knew" was an amateur real estate speculator.

And while housing in some areas may give up some more in terms of price, it's down to small single digit percentages.  Most places are at the bottom, so if you had a pile of cash, a big house on a big lot would be a good place to sink it at the moment.  Even then, there still is a lot of shadow inventory and future foreclosure inventory out there that has to be worked through, so that will keep prices pretty flat until 2015 or so.

Oh and in regards to the authors note that "most people don't understand what a trillion dollars is," it doesn't necessarily make sense to use a 2,000 year Biblical time frame because humans can't really conceive how long 2,000 years is either.  I've found an effective example is that if you wanted to spend $1 million in a year, you'd have to spend about $2 a second.  To spend a $1 trillion in a year, you'd have to spend $2 million per second.  Holy ****!

Sat, 02/04/2012 - 12:31 | 2126491 DaveyJones
DaveyJones's picture

2 million a second. God those guys are talented.

Sat, 02/04/2012 - 12:41 | 2126511 disabledvet
disabledvet's picture

what the hell are...can i use this word?..."they"...spending it all on? (i use the word "they" because while i have a clue where my 5 dollars is...where the phuck is "the million every 2 seconds"? i then devolve this un-reality to "they"...since "i" do not...therefore..."it is them. THEY have it." kinda scary when you think about it...

Sat, 02/04/2012 - 12:45 | 2126521 DaveyJones
DaveyJones's picture

hell is, perhaps, the most appropriate word to use when referring to our elected officials 

Sat, 02/04/2012 - 14:01 | 2126704 disabledvet
disabledvet's picture

the elected part? hahaha. that's funny. i'm thinking more along the lines of "bureaucrats" and "who's accounting for this money"? outside of Presidents do elections really matter anymore? not really when you consider the amount of debt in the system. my point would be this: "all wars have a war aim." obviously "losing" is not one of them. What think you is this one's? Even at this late date (the "losing" part) i frankly still can't see it. How does one "win through bankruptcy" any war? And of course you can't. And yet we find ourselves "getting more war not less" even with the stated policy of "less war not more."

Sat, 02/04/2012 - 20:33 | 2127466 Ponzi Unit
Ponzi Unit's picture

Here's a clown throwing away a mere million and takes a while.

Sat, 02/04/2012 - 13:35 | 2126655 piceridu
piceridu's picture

31,556,926 seconds in a year...How did you get 2 mil per second to reach 1 tril? I think the answer is $31,688 per I wrong?

Sat, 02/04/2012 - 14:54 | 2126835 Kipper und Wipp...
Kipper und Wipperzeit's picture

my calculations agree with yours ...

but can any of us conceive of spending either $31,688 or $2,000,000 a second?

other than the "holy shit" factor of either one, does it really bring us closer to conceiving the inconceivable, e.g. a trillion dollars?

a trillion dollars (a billion if your British) = net worth of a million millionaires

and, as we all know, a million isn't even that much anymore

conservatively speaking, 4,000 Mitt Romneys?

I mean, how do you quantify a thing like that?

how many normal folks can conceive of, say, what 250 million dollars can buy you that 100 million can't?

let alone a billion ... a trillion ... the mind boggles.

Sat, 02/04/2012 - 17:08 | 2127120 DeadFred
DeadFred's picture

Try 2 million/minute and you're there.

Good article but the Devil's advocate side of me would like to point out the unstated risk. If ZHers are worried that the Feds are going to come seize their gold, do you think your goldmine is safe? One-stop shopping (stealing) is as convenient for the government as it is for anyone else. Think carefully about your end of the world scenarios, if many of the old rules are thrown out why do you assume the remaining rules are safe?

Sat, 02/04/2012 - 19:24 | 2127345 redpill
redpill's picture

My bad fellas, it is per minute, that's what I get for firing up Excel before having my second cup of coffee in the morning!

Sat, 02/04/2012 - 17:05 | 2127115 The trend is yo...
The trend is your friend's picture

Housing has not bottomed yet nor will it until rates rise, whenever that might be.  The problem with owning the biggest house with the bigget lot is taxes.  The desparation that will come from the government will force higher taxes on property owners, not to mention the rising costs of  heating and cooling a bigger home.  The best solution is still to downsize or rent if you can.

Sat, 02/04/2012 - 19:16 | 2127336 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Totally agree with you on taxes.  I was thinking about buying an investment property so rental income pays for my property taxes and utilities.

Sat, 02/04/2012 - 12:36 | 2126478 LongBalls
LongBalls's picture

It is my belief that on overall balance an economy either has inflation of deflation. It is also true that you can have either via pockets in the overall trend. Food, gasoline, medications, and other basic needs are inflating while assets like houses are falling. American's are getting crushed on both ends in a flat or falling wage enviornment. This is a reflection of many things to include a soft jobs market. So if the velocity of money worldwide is slow why are basic needs taking off? Money printing......... Sooner or later that money is going to be let loose. I believe that is starting to happen right now by the large investment banks as reflected in the DOW while the Baltic Dry Index is tanking. The advice above is front running this development. Being flexable is based on your unique situation when it comes to tied down assests. But none-the-less inflation is here and it's going to gain rapid speed. A war is not going to help the fiscal situation and the printing clowns know this. Balance your cash/gold/food/guns/ammo etc..... We are about to see some wild azz shiznitz!

Sat, 02/04/2012 - 12:41 | 2126514 spinone
spinone's picture

Even thoug the money is being printed, its not making it out of the banks to cause inflation.  The dollar is being intentionally devalued.

Not even countries borrow $15 Trillion with the intention of paying it off.

Right now we enjoy the senoriage of printing the settlement currency for oil.  We are abusing that privelege.  We won't have it much longer.

Once enough bilateral trade agreements are in place to supplant the dollar as the settelement currency for oil, the world's excess dollars will come home to the US.  They will have nowhere else to go.  That's when hyperinflation may start.

Sat, 02/04/2012 - 13:34 | 2126649 LongBalls
LongBalls's picture

I believe it is starting to make it's way out of the banks. Retail investors are leaving the market. The Baltic Dry is tanking. Unemployment and wages are soft at best, Europe is in recession at best, Japan is lost, but yet equities are chasing the sky?

Sat, 02/04/2012 - 15:37 | 2126957 spinone
spinone's picture

I believe the holes in bank balance sheets are too big to fill.  We have a zombe banking system.  Moreover, there are no more borrowers with collateral.  The dollar-based economy is debt saturated.  When a fractional reserve currency is debt saturated, the monopoly game is over.  Time to put the pieces away.  That means nationalizing all the banks and a debt jubile.

Why start a new game now, when peak oil is here and all the palyers are positioning for the end of the pertrodollar?

Sun, 02/05/2012 - 16:12 | 2129164 i_fly_me
i_fly_me's picture

You have it sorta backwards.  It is a debt-based economy that is currently dollar denominated and always liquidity starved.  Nationalization of the banks may happen but only on their terms.  A debt jubilee cannot happen.  They will kill the dollar to save the debt because there is no other way to do it in their world.

Sat, 02/04/2012 - 14:25 | 2126775 ActionFive
ActionFive's picture

Where is that guy trolling to buy 30yr and 3x S&P shorts./Bernanke come and get me?

Friday had to hurt.

Sat, 02/04/2012 - 12:28 | 2126483 Calmyourself
Calmyourself's picture

Hyperinflation for the 1,000th time is a psychological occurrence it is not a monetary phenomenon it does NOT require rising wages.  I would be careful loading up on debt as indexing could be in your future..

Sat, 02/04/2012 - 12:48 | 2126523 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The BOJ has had ZIRP for 20 years as they approach a 200% Federal deficit.  The Federal government will continue to spend to prop up the debt deleveraging on the private side.  Eventually it may end in a soveriegn default, but that is years away, IMHO.

Sat, 02/04/2012 - 12:52 | 2126536 dwdollar
dwdollar's picture

I agree. However, all monetary phenomena is actually a bunch of psychological occurrences, which is why most fail to understand money properly.

Sat, 02/04/2012 - 12:57 | 2126519 Jumbotron
Jumbotron's picture

I'll believe inflation arguements when wages rise along with housing prices.  If you truly believe that inflation is coming then you would load up on debt and buy the biggest house on the biggest lot possible.


You have a really narrow, technical definition of inflation....the same as Ben Bernanke.  Everything that is needed for living, not just survival, but for living a non-hunter-gatherer life, is going up.  Food....Utilities....Gasoline....Health Care.....all of these are going up.  Each time the price rise of these items goes up faster than your notational pay, you have inflation.  If these items go up faster than your notational pay at the same time that your notational pay loses its purchasing power due to Federal Reserve policies such as money printing, QE 1,2,3.xxxx, you have inflation.

You are technically correct from a Ivory Tower perspective......but you certainly do not see the Truth of the matter in the real world.

Sat, 02/04/2012 - 13:22 | 2126573 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Fuel prices are back up but they haven't climbed above the 2007 peak.  That is reality.  The next deflationary storm will bring them back down as it did in 2008 when a gallon of gas fell from $4.12 to $1.61.  Commodity prices are notoriously volatile and have largely followed the eb and flow of debt deflation and inflation over the past 10 years.  IMHO, gold, food and oil will all fall with the next deflationary crash of debt that I think will be triggered by a wave of European sovereign defaults.

Sat, 02/04/2012 - 14:03 | 2126707 aphlaque_duck
aphlaque_duck's picture

Entirely possible, but if you hold gold do you really care? If a deflationary crash occurs in the US we might see commodities go down in price but gold increase in purchasing power because energy is falling faster than gold. The East will buy more gold if it gets cheaper, but they won't be hoarding physical FCOJ. 

Too risky to sit on FRNs waiting for that opportunity. If it happens again the Fed will respond with inflation quicker than they did in '08.

Sat, 02/04/2012 - 16:29 | 2127054 Lucius Corneliu...
Lucius Cornelius Sulla's picture

IMO, FRNs are exactly what you want to hold.  They have already gone up 50% over the past 5 years in comparison to RE.  More bargains are to come when the stock market finally craters ... which is only a matter of time.  The hopium is sure to wear off soon as corporate margins come down from nose bleed levels.  Your claim that the FED will respond faster doesn't convince me.  The FED is out of ammunition.  You can't go negative on Treasuries because people will hoard FRNs.  Plus Ron Paul is making major political inroads and don't think for a second that Helicopter Ben hasn't noticed.  You think they will expand Maiden Lane purchases or put anything on its balance sheet that is not backed by the full faith and credit of the US Government?  They are in defense mode so they will not put anything on their balance sheet except the most pristine debt.  The FED will not QE until AFTER a collapse when the public is begging for it.  By then you will be able to pick up stocks for 15 or 20 cents on your current FRN.

Sat, 02/04/2012 - 16:55 | 2127081 akak
akak's picture

Your clueless deflationary arguments are absurd and historically ignorant.

It is disingenuous at best to try to claim that the dollar has "gone up" relative to real estate --- the value of real estate has merely fallen relative to almost everything and anything else.  In reality, NO fiat currency has EVER risen in value --- they all begin depreciating from the moment of their ill-conceived conceptions, at varying rates, with most (so far) eventually collapsing in hyperinflation.  The fact that wages are not rising concurrently with the cost of living is precisely the plan of the powers-that-be, and precisely what has happened countless times elsewhere under similar(ly bad) fiscal and monetary conditions: a falling standard of living.  You can expect this trend to continue.

The fact of the matter is, there has NEVER, not once, been a period of exponentially (and unsustainably) rising governmental debt which has not ALSO seen accelerating fiat currency depreciation or outright collapse.  Despite all the fervent denials of you deflationary flat-earthers, the overall price level (cost of living, call it what you will) IS rising, not falling, as governmental debt continues to grow far faster than any other economic metric, and to believe that this time, for the very FIRST time in monetary history, it will be accompanied by an appreciating fiat currency is laughable and intellectually insulting.  Your denial,and ignorance, of hundreds if not thousands of years of monetary history is revealing --- as is the similar denial and historical ignorance of every other deflationary flat-earther whom I have ever read.

You can try to redefine up as down and black is white all you want, and trot out ivory-tower neo-Keynesian academic theories all you like, and deny reality itself until you are blue in the face, but it is the undeniable truth that for the average person, the cost of living is going up, their standards of living are falling, and their dollars do not go nearly as far as they did even a few years ago --- and from every historical precedent, all these trends can be expected to continue and accelerate.  And that is ALL that matters, your dishonest and/or financially subversive misinformation to the contrary.

Sat, 02/04/2012 - 17:16 | 2127113 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I'm not denying that hyperinflation will happen eventually or that fiat paper always reverts to its intrinsic value.  I'm just describing what happens along the way.  Debt cycles ALWAYS end in a deflationary collapse.  We have lived through the biggest debt buildup in history.  The FED and US Governemnt are doing everything in its power to prop it up but it will not work because they have to walk a tight rope between access to credit markets to fund itself and the threat of higher interest rates which will threaten its very survival.  Therefore, the FED will not go all out on money printing until AFTER a debt collapse when it has nothing to lose.  So far the FED has printed enough money to plug the hole in private bank balance sheets to cover the bankster's fraud.  But they are clearly on the defense.

You can call me a flat-earther, in denial, ignorant or what ever other stupid middle school name calling you can come up with but that only reveals the weakness of your retort.

Sat, 02/04/2012 - 17:43 | 2127162 akak
akak's picture


 Debt cycles ALWAYS end in a deflationary collapse.

Only in the clueless academic jargon of Keynesian eggheads.  Your claim would only potentially make sense in the context of a hard-money regime, such as a gold standard, which of course is not the case anywhere in the world today.  By making such a patently false statement, you only further prove your profound historical ignorance.

But just for a few examples, please tell me how the African debt bubble of the 1970s, or the Latin American debt bubble of the 1980s, or the Asian debt bubble of the 1990s, or the Argentine debt bubble of 2001, ended up in "deflationary collapse".  How each and every one of those debt bubbles ended up, in actual fact, was in severe fiat currency depreciation or outright hyperinflationary collapse, NOT deflation!   What you are asking us (or pretending) to believe is utterly and completely contrary to reality.

God!  Do any of you clueless deflationary flat-earthers EVER bother to study monetary history even slightly?  Apparently not.

Take your pro-Establishment deflationary bullshit propaganda and shove it up your ass.  By repeating such disingenuous and finacially ruinous falsehoods, designed I firmly believe to further separate the average saver and investor from his wealth, you merely make yourself a useful tool of the criminal and sociopathic political and financial elite.  I have had it already with hearing and reading such specious disinformation and lies.

Sat, 02/04/2012 - 18:58 | 2127293 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Argentina 2001 to 2002:–2002)

December 2001:

The crisis intensified when, on 2001-12-5, the IMF refused to release a US$1.3 billion tranche of its loan, citing the failure of the Argentinean government to reach previously agreed-upon budget deficit targets,[22] and demanded further budget cuts, amounting 10% of the federal budget.[23] On 4 December, Argentinean bond yields stood at 34% over U.S. treasury bonds, and, by dec 11, the spread jumped to 42%.[24][25]

Note: The bond and stock market collapsed BEFORE the devaluation.  This is when you should buy.

November 2001 (Bank runs so government freezes accounts):

By the end of November 2001, people fearing the worst began withdrawing large sums of money from their bank accounts, turning pesos into dollars and sending them abroad, causing a run on the banks. On 2001-12-2 the government enacted a set of measures, informally known as the corralito,[26][27] that effectively froze all bank accounts for twelve months,[28][29] allowing for only minor sums of cash to be withdrawn, initially announced to be of just $250 a week.[30]


After much deliberation, Duhalde abandoned in January 2002 the fixed 1-to-1 peso–dollar parity that had been in place for ten years. In a matter of days, the peso lost a large part of its value in the unregulated market. A provisional "official" exchange rate was set at 1.4 pesos per dollar.

Argentina's case study is more like what we are witnessing with Greece, who does not have its own currency.  The USA is not Argentina.  We still have the reserve currency and our debts are denominated in dollars.  Argentina had most debt denominated in US dollars.  That is why they defaulted.  Therefore, I think our situation is more like Japan's but it won't go on for decades because the world economy held up Japan but it won't hold us up because we are facing a worldwide recession.

Dude, you need to lighten up and learn to respect different opinions.  Go ahead and position yourself however you see fit.  I don't really care.  Furthermore, I don't care about your stupid, petty personal attacks.


Sat, 02/04/2012 - 19:45 | 2127352 akak
akak's picture

Again, like every other deflationist I have ever read, you try to use inconsequential minutia and irrelevant trivia to deflect attention away from the simple and fundamental lesson to be learned from the Argentine fiscal and monetary fiasco, the same lesson that is to be learned from EVERY such fiasco fed by the explosion of governmental debt throughout history: such episodes always, ALWAYS result in fiat currency depreciation and/or collapse, leading to the wiping-out of the average person's savings and the radical diminution of their standard of living.  Every other fact that you try to introduce into the discussion is just noise.

Now, you can try to torture the definition of "deflation" all you want, and argue that what happened to Argentina was somehow, in some mangled meaning of the word, "deflationary", but in the end you can NOT dispute the end result for virtually every Argentinian: the loss of their savings, and the decline in their standard of living, as the direct consequence of debt-fueled fiat currency depreciation --- just as Americans and Europeans have been experiencing, slowly but surely, and will increasingly experience going forward, quite possibly catastrophically so.  Trying to argue that our savings in dollars are somehow going to APPRECIATE in value, in line with exponentially-rising governmental debt, is to grossly insult the intelligence of anyone reading such absurd and historically baseless assertions.

Sat, 02/04/2012 - 18:53 | 2127307 Rogue Trooper
Rogue Trooper's picture

Thank you Akak, I could not agree more.  The other aspect is that price deflation has a positive effect when based on technological and/or improvements in productivity. That of course assumes a mechanism for stable money (that old barbarous relic again?).

In the examples you mentioned above the saving grace was that the USD underpined the transitionary phase has each national currency either massively devalued or simple ceased to exist.  This time the end game includes the USD, EUR, YEN and GBP.  There will be no getting out of this one lightly.

Your last paragraph summed the agenda underpinning this perfectly.  TPTB need to continue to slow boil the savings base of the population as they extract as much as they can with out causing mass panic.

Important though that the voice of the deflationist camp continues to be heard.  Last thing we need on this site is a group think mentality and censorship of alternative thought.


Sat, 02/04/2012 - 14:10 | 2126730 kito
kito's picture

@lucius--Yep. Egggactly. Rogers agriculture index way off highs, so is silver, oil, gold, etc. and Ben won't be q-easing for the for the foreseeable future. The reason college tuition and medical insurance is up is due to the generosity of the federal govt...if uncle Sam is paying, why not charge more??

Sat, 02/04/2012 - 15:20 | 2126903 francis_sawyer
francis_sawyer's picture

What they're 'PRINTING' is basically the coupon [+ the incremental addition of unfunded obligations coming online + all the 'pet project' earmarks that inevitably work themselves in + a little cheese on the side]...

No problem, right? Probably not (at least in a 'controlled glidepath' paradigm)...

Unfortunately & inconveniently, there is terrible WIND SHEAR at the moment... Mostly due, to the escalating poker game surrounding 'petrodollars'... & the COMBINED problem that, since it's all just too easy, there is no political incentive to administer the brakes (or otherwise risk outright anarchy)...

SEER [ht] - made a great post the other day... I'll re-post it here...

"You're correct, except you imply there's a maximum. There isn't and things are worse than meets the eye.

A classic sign of exponential growth is a doubling over some roughly constant period, aka N = X^(2t/T) where T is the time interval to double and t is the time we're at. For most processes, if you look at the exponent itself, it usually doesn't change (much) as the interval is roughly constnat, but the magnitude of the results doubles over the same roughly constant interval. And that repeated doubling over time turns into the insane, out-of-control numbers we're used to from exponential progressions. So, it'd be a fucking disaster if it were even this. But...

Tyler's graph has an offset Y axis and truncated X axis. Usually when this trick i used it's to make something look more exponential than it really is. In this case, it makes it look less exponential. Look at a 10-year or 50-year chart in constant dollars and it's pretty concerning. I eyeballed the long-term chart and it looks like we're doubling the debt every five years right now.

Now, that's bad, but what's terrifying is that a decade ago, the doubling interval was 15 years. In other words, not only are we dealing with an exponentially growing debt, we're dealing with an exponentially growing where the exponent that determines growth is changing, and as a result, the doubling time is decreasing.

If a system were simply accelerating it's speed -- it'd have a constant exponent describing it's speed equation. In the case of the US debt, the acceleration of the debt itself is accelerating, and the time interval to doubling in shortening. I don't think there's enough data to determine if the rate of interval shortening is linear or exponential, but if it's a linear case, we hit essentially infinite growth (aka dollar collapse to zero) in approximately 6 years. The scary little uptick at the very end of the chart could indicate exponentially growing acceleration. That means it happens sooner.

Nothing real can go to infinity, the charts are telling us something will change (and likely break down significantly) in five years at most. If the debt growth acceleration is itself exponential, the doubling interval will likely to be measured in months within a year. The fact that real markets aren't heading up on afterburners just shows that everyone is clueless and/or active intervention is keeping it from happening... but for how long?

Here's a formula that some may find instructive as to how the laws of physics can demonstrate how such things pan out:

v(f) = v(o) + at

[Final velocity is equal to initial velocity plus the acceleration times time]"

Sat, 02/04/2012 - 15:30 | 2126905 Jumbotron
Jumbotron's picture

IMHO, gold, food and oil will all fall with the next deflationary crash of debt that I think will be triggered by a wave of European sovereign defaults.

Well of course they will.  We saw that with oil a couple of years back.  But's it back up above 100 on both WTI and Brent.  We are still in the throes of the Great Recession/Depression 2.0.  Yet oil has rebounded very quickly.  Some of that is due to Peak Oil....some of it due to speculation which is due to currency devaluation by the Fed.  Same with food based commodities.  Health care does not care about these external factors it seems.

The next deflationary storm will bring them back down as it did in 2008 when a gallon of gas fell from $4.12 to $1.61. 

Once again....duh.....that only means that the economy is now in the second, deeper phase of the Great Recession/Depression which means even MORE unemployed. underemployed and/or homeless people can not afford to drive to their jobs or go looking for jobs which means that shippers of iCrap don't need as much fuel to ship shit that is no longer being bought.  So you see...when you get paid ZERO, $1.61 is still an inflated price to pay. 

The scenario of boom (inflation) and bust (deflation) in perpetuity you seem to propose is called stagflation which we have now.  We are range bound for the foreseeable future because of these three things.... 1) Peak Cheap Energy....2) Peak Debt.....3) Peak Ponzi Financing.  The things that matter will go up until the majority of people and businesses that need those things for survival and growth cannot afford them in such great degree thus a deflation will occur.  This is akin to yo-yo dieting and is NOT healthy for either body or economics.  However.....inflation, in a range bound economy in which currency devaluation and debt buybacks by the Fed are the only way to prop up the economy, is guarenteed.  You WILL NEVER see wage increase inflation in this scenario.  But you WILL ALWAYS see inflation of the things that matter....until it collapses and even I explained before....when you're laid-offed and broke.....1.61 for gas is INLFATED.

Sun, 02/05/2012 - 03:54 | 2128121 LudwigVon
LudwigVon's picture


Just think of all of the E&P that will go into increasing supply when this supposed freefall takes place.

Just like the extensive investments in food production over the last 20 years.../sarc


Sat, 02/04/2012 - 12:53 | 2126543 Fiatfan
Fiatfan's picture

He pretty much lost me at : So the rapidly increasing demand and the shrinking supply of oil, despite any short-term oversupply, which is probably true now… is going to lead to a stratospherically higher oil prices.

Taking out inflated $, I really don't see any demand increase.  Quite to the contrary, I see demand showing statistically insignificant deviations from the longer term mean decline.  

Anybody have any real data (not denominated in $ or deflated by the official BLS inflation rate) to contradict this?

Sat, 02/04/2012 - 13:07 | 2126588 Kayman
Kayman's picture


Completely agree with you.

Also, the rate of population growth has been declining for decades and soon will approach zero.


Sat, 02/04/2012 - 20:22 | 2127436 Papasmurf
Papasmurf's picture

Soon will be negative.

Sat, 02/04/2012 - 13:23 | 2126620 11b40
11b40's picture

Are you asking about U.S demand, or demand worldwide?  With millions of upwardly mobile consumers in the emerging markets, energy demand is moving up along with them.  Of course, there are ebs and flows in supply, but the trend cannot be reasonably denied.  Every new computer, every bicycle that is traded in for a motor scooterevery new refrigerator means more demand for energy...not to mention every new birth.  Dines is taking the long-term perspective, not the day-traders mentality. 

Sat, 02/04/2012 - 13:34 | 2126640 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I don't buy all the alarmist crap about energy.  There are plenty of energy substitutes which, if widely adopted, are economical.  The USA is much less dependent on oil because of its use of natural gas and better fuel efficiency in vehicles, appliances, industrial equipment, etc...  The last time oil peaked in 2007 more people were taking the bus, telecommuting and buying Priuses and Civics.  I remember in my area how traffic died down on the freeways.  Commutes were easy.  Humans adapt and innovate.

Sat, 02/04/2012 - 14:29 | 2126783 kito
kito's picture

All hail Lucius!

Sat, 02/04/2012 - 15:24 | 2126920 francis_sawyer
francis_sawyer's picture

"Humans adapt and innovate."

Says the man with a Roman Legionnaires helmet... (take his word for it people)...

Sat, 02/04/2012 - 16:33 | 2126956 Jumbotron
Jumbotron's picture

There are plenty of energy substitutes which, if widely adopted, are economical.

"If if's and butts were candy and nuts we'd all have a Merry Christmas."

We cannot afford to make all of these "plentiful energy substitutes" widely adopted.  First of all these others avaiable substitutes are either not that plentiful once demand ramps up to replace oil in any meaniful way to at least keep the economy at large at par much less the growth we have seen over the last 100 years.  Secondly, the other alternatives....even if you ramped them up and made them widely available...such as wind, solar, geothermal, and not have the same energy ratio that oil has....and they never will.

Humans adapt and innovate.

Sure they do......we will all learn to adapt with less....we will all learn again the value of land and how to plant.  The first lesson in learning how to adapt to the new upcoming reality is talk to your grandparents or great-grandparents.

Even you will learn to adapt to the truth.....but I think in your case and the case of millions of's going to take the next decade for you to get it.  Rest will adapt.

Sat, 02/04/2012 - 17:13 | 2127135 Lucius Corneliu...
Lucius Cornelius Sulla's picture

I've got a bike.

Sat, 02/04/2012 - 18:33 | 2127284 11b40
11b40's picture

...and a closed mind, methinks.

Sat, 02/04/2012 - 18:51 | 2127305 Lucius Corneliu...
Lucius Cornelius Sulla's picture

The only closed minds I find are on the ZH message board which has just become a congregation of gold bugs, conspiracy freaks and survivalists.  I read ZH articles because I find a lot of truth in them, agree with a lot of it and because sometimes they make me laugh.  Admittance to this board isn't predicated on the belief that hyperinflation is imminent and gold is going to the moon.

Sat, 02/04/2012 - 19:00 | 2127321 akak
akak's picture

Another lying and clueless deflationary propagandist.

The essence of your disingenuousity and/or cluelessness, like that of all deflationary flat-earthers and useful idiots, is your idiotic insistence on the false dichotomy that it will be either deflation, or hyperinflation --- never acknowledging any possible outcome that falls either between those two extremes, or even outside of that false dichotomy altogether.  Again, this is the classic argument and logical fallacy of each and every deflationist --- it is as if they come pre-programmed with the exact same talking points and arguments, as lame and ignorant as they are.

It is not my fault if your lies and disingenuous arguments do not find a receptive audience here.  Take your malicious deflationary propaganda and shove it.

Sat, 02/04/2012 - 19:09 | 2127323 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Case in point.

Take 2 prozac and call your doctor in the morning.

Sat, 02/04/2012 - 18:17 | 2127256 grid-b-gone
grid-b-gone's picture

Grantham admits to thinking along those lines. Then he did his due diligence:

This is an informative 20 minutes and covers many of today's critical issues. He concludes that earth can sustainably support just over 3 billion humans.

Only 1,600 hits. Some of Grantham's points.

1 gal of gasoline = 300 hrs. of human labor. 

Potash and phosphates for food production will become critical. These are controlled by only a few countries.

Sat, 02/04/2012 - 13:47 | 2126670 AnAnonymous
AnAnonymous's picture

With millions of upwardly mobile consumers in the emerging markets, energy demand is moving up along with them.


Those millions are peanuts and can not compete with the increase due to the ever increasing devices wished by US citizens.

Heated floor, motorized shutters, surveillance cameras, more...No match for a guy with a cell charged with hand dynamo.

All these guys are lagging behind the ever increasing demand by US citizens.

US citizens demand do not stall.

Sat, 02/04/2012 - 14:43 | 2126781 Fiatfan
Fiatfan's picture

@ AnA...

I'll give one opportunity to get real before calling TROLL!  

Demand in any itemized or aggregate retail part of the US economy has been and continues to be on a long term decline of exceptional proportions.  Only the spectacular deceit of inflatable dollars masks this for the ignoratti.

Your choice, more Kool-Aid or lay off it all together.  

I will give you a green for sheer ignorance or creativity, it remains to be determined which!

Sat, 02/04/2012 - 17:03 | 2127112 akak
akak's picture

Those millions are peanuts and can not compete with the increase due to the ever increasing devices wished by rabit-breeding Chinese citizens.

Building dozens of "ghost cities" fostered and demanded by a centrally-planned command-and-control oligarchic elite in Beijing --- talk about a waste of resources!

But even these guys are lagging behind the ever increasing demand by Chinese citizens.

Chinese citizens demand do not stall --- nor does the running dog imperialism of Chinese citizenism, as the dying people of Tibet have learned to their grave misfortune, and by which the people of the independent republic of Taiwan are constantly being threatened.

Sat, 02/04/2012 - 14:23 | 2126759 Fiatfan
Fiatfan's picture


I was referring to worldwide.  I have direct, specific access to US data, worldwide is more difficult to come by and therefore is somewhat more speculative on my part.  I was hoping someone could provide some data or charts (that are real, not fluffed up) to demonstrate increased demand that is not transitory, moving from place to place on the globe, or statistically insignificant.  

What I have seen is increased 'demand' using the same gamemanship the US uses.  Higher sales in Rupees or whatever local currency is being used.  What I want is gallon for gallon or deflated for real.  That info seems to be difficult to find, or it is just difficult for me.  


Sat, 02/04/2012 - 16:57 | 2127101 Flakmeister
Flakmeister's picture

Have fun.... and get back to me when you think you understand what is going on....Pay attention to China and India and the large exporting nations...

The only catch in the above graph (BP 2011 Energy Survey) is that anything that is liquid is called oil...So if I use 2 million barrels of oil to produce 3 million equivalent barrels of  bio-fuel, the data implies a 5 million barrel supply and not 1 million Net.... also NGL are counted as oil and they simply are not...


Sat, 02/04/2012 - 14:05 | 2126718 disabledvet
disabledvet's picture

not only that but we know that refiners that make gasoline have been getting killed in the marketplace. believe or not (maybe it was joke?) after 2008 Europe was massively exporting gasoline and distillates to the United States! Methinks "ignore price...look at demand" is SLIGHTLY more important here. In other words..."the price is the price" people. Move along.

Sat, 02/04/2012 - 14:39 | 2126805 Fiatfan
Fiatfan's picture

Hahaha!  Who down arrows a factual observation and a question to verify same?  

Sat, 02/04/2012 - 15:26 | 2126924 Jumbotron
Jumbotron's picture

Taking out inflated $, I really don't see any demand increase.  Quite to the contrary, I see demand showing statistically insignificant deviations from the longer term mean decline. 

Let me introduce you to China, India, Saudi Arabia ( yes, they are increasing their own, internal demand), Africa,  you know....all the places we are exporting jobs to, not to mention that their own people are leaving the farms and putting their bycycles on Ebay as they all buy cars, to drive to their new homes or apartments, on newly paved roads made from petroleum.

Sat, 02/04/2012 - 15:06 | 2126780 _ConanTheLibert...
_ConanTheLibertarian_'s picture

way too simplistic. It is well known housing prices and wages are the last to go up and then you're probably approaching hyperinflation.

Sat, 02/04/2012 - 16:38 | 2127074 James-Morrison
James-Morrison's picture

Wages will continue to fall as they "normalize" with Chinese labor, the new gold standard for labor in an over-supplied world. 

Housing prices are not a valid gage because they will continue to correct to a point where an average yearly wage equals the average home price.

With falling wages, housing prices follow. 


Sat, 02/04/2012 - 17:01 | 2127109 Captain Planet
Captain Planet's picture

How often does this need to be repeated? Inflation in the things you need. deflation in the things you don't.

Your wages/housing prices argument is meaningless in a world of "comparative advantage", and the realization that American's have next to zero savings.

When a house can be purchased for 20oz of gold, you will understand the lack of correlation between housing prices and inflation.

Sat, 02/04/2012 - 17:23 | 2127155 pacu44
pacu44's picture

Inflation in food and fuel, with deflation on homes and lesiure items

Sun, 02/05/2012 - 10:59 | 2128411 Sabremesh
Sabremesh's picture

Your analysis is deeply flawed. In hyperinflationary scenarios, property prices increase in nominal terms, but lose value massively in real terms (measured, say, against gold). This is because surplus property is sold off in desperation to buy necessities like food and fuel.

For that reason Weimar Germany and Argentina (more recently) threw up some incredible property bargains for anybody with "real" money. Smart people will ignore your advice, and keep their powder dry.

Sun, 02/05/2012 - 11:04 | 2128417 TrulyStupid
TrulyStupid's picture

Houses are not assets, they are liabilities - they produce negative cash flow.. ergo they are not subject to price inflation in times of monetary inflation. The constituent parts are however.  Wages used to be tied to prices via union contracts, but since the busting of the unions and thetrend to supply side economics (artificial price support) they no longer respond to increases in the money supply.

Hence it is possible to have notional falling exisiting home prices, rising new home prices and decreasing wages in an environment of monetary inflation.

Sun, 02/05/2012 - 19:07 | 2129470 RafterManFMJ
RafterManFMJ's picture

I'll believe inflation arguements when wages rise along with housing prices.  If you truly believe that inflation is coming then you would load up on debt and buy the biggest house on the biggest lot possible.


LOL another dullard buying into a HOA plantation, with all the Nazi controls and high taxes.  No, not a 'lot' son, better buy acreage you can farm on far from the path of the Golden Hordes.

Sat, 02/04/2012 - 12:09 | 2126439 Future Tense
Future Tense's picture

Dines is incredible.  His new 47 page report is a masterpiece.  He also had some amazing calls last year for subscribers.  I think he is spot on with the idea that the world is now unstable due to all currencies falling in value at the same time.  The chart here showing the ECB's balance sheet growth pretty much sums it up:

Sat, 02/04/2012 - 12:17 | 2126453 blindfaith
blindfaith's picture



Seems the message is, the only ones who will survive the FUTURE are the wealthy who have their groceries delivered by armed guards.

Everyone else is collaterial damage in the new neocon world.

So, all of us Zero Hedge readers...just where do you think we all fit in?

Any guesses?

Sat, 02/04/2012 - 12:26 | 2126472 francis_sawyer
francis_sawyer's picture

somewhere between 'rock' & 'hard place'...

Sat, 02/04/2012 - 12:36 | 2126505 The Beam
The Beam's picture

On the moon with Newt Ginrich and his colony that will have been made there.... a military base is only the first step.

Sat, 02/04/2012 - 12:47 | 2126527 disabledvet
disabledvet's picture

"a million every two seconds" makes me think we can do better than better than mere "lunar colonies" actually. how about this instead!
i imgagine for that amount of money "our's can't just fit on top of your kitchen table and doesn't come in a box from Lego Corporation." it does however come with the cool soundtrack!

Sat, 02/04/2012 - 14:09 | 2126726 disabledvet
disabledvet's picture

here...let me answer my lack of question for all of you. "mind martians cost money." TRILLIONS isn't inconceivable.
HAHAHAHA. Gotchya right where we want ya!

Sat, 02/04/2012 - 12:46 | 2126522 zerotohero
zerotohero's picture

I guess it depends on how you prepare and how extreme your willing to go. I have to admit to not perhaps taking all the steps necessary according to others on ZH like buying a years supply of freeze dried food. I still fall prey to being lulled into a false sense of daily routine living whereby I am like so many other "zombies". I have bought some silver and gold, taken some cash out of banks - but really how far am I willing to go at this time seems to depend many factors such as family, available funds etc. 

Sat, 02/04/2012 - 12:58 | 2126556 Jumbotron
Jumbotron's picture

So, all of us Zero Hedge readers...just where do you think we all fit in?

Any guesses?

Between Soylent and Green

Sat, 02/04/2012 - 13:20 | 2126615 francis_sawyer
francis_sawyer's picture

LOL +1

"More GREEN Jobs" coming in 5...4...3...2...

Sat, 02/04/2012 - 15:28 | 2126934 Jumbotron
Jumbotron's picture

LOL +1

"More GREEN Jobs" coming in 5...4...3...2...'s...  "a One...a Two....a Three....."CRUNCH" !!!!!

Tootsie Green Pops anyone ?

Sat, 02/04/2012 - 16:35 | 2126935 Jumbotron
Jumbotron's picture


Sat, 02/04/2012 - 15:33 | 2126945 HungrySeagull
HungrySeagull's picture

There is a street legal car for sale at a golf cart store. It will not get you much beyond 45 mph or withstand crumbling roads.

Sat, 02/04/2012 - 12:10 | 2126441 Taint Boil
Taint Boil's picture




As soon as the military grasps that they will start needing to put windmills on airplanes.......


Sat, 02/04/2012 - 13:00 | 2126561 Jumbotron
Sat, 02/04/2012 - 12:11 | 2126442 Jefferson
Jefferson's picture
Looks like we may get another chance to buy gold on the cheap in the near future.
Sat, 02/04/2012 - 12:50 | 2126537 redpill
redpill's picture

Europe will come up with something to avoid triggering CDS. It will be some bullshit imaginary something, but it will postpone CDS trigger, because if that happens the dominos start to fall and you can't really stop them.

Sat, 02/04/2012 - 13:04 | 2126568 Jefferson
Jefferson's picture

The problem is once you have an agreement by the creditors to take a 70% haircut with no CDS trigger then the CDS buyers panic and the CDS market blows up not just in Greece but everywhere else. That will leave quite a hole in some balance sheets. The only "solution" is for the ECB to come in and pay the Greek creditors 100 percent ala Goldman/AIG.

Sat, 02/04/2012 - 14:55 | 2126840 Fiatfan
Fiatfan's picture

15. "Extend and pretend" has "worked" for almost 2 years. If Greece defaults and it is recognized by even one player as a default, then the system will quickly unravel and cash/dollars will be king until the deleveraging runs its course. 

Good grief, I may have been born at night but it was'nt last night!  Try 6 years of naked, flaunted extend and pretend (E&P) with a previous 34 years of warm up and practice.  Nearly 100 if you want to include foundations and initial trial runs.  Or perhaps...if you want to include...

Cash is king...Bwahahahahaha!  Yup, that stuff is good for starting fires and toilet paper!  

E&P is not over, it is just closer to the end of it now than yesterday!

Did this author just figure this out and is trying to look smart?  Back to the books, you failed in observation, logic, reason, and plain old cut and paste!  

Earned a down arrow.  

Good luck with that cash strategy!

Sat, 02/04/2012 - 12:10 | 2126444 Jena
Jena's picture

Gold, bitchez.

Sat, 02/04/2012 - 12:11 | 2126445 bugs_
bugs_'s picture

DIRT....we'll ring it up as pure hydro

Sat, 02/04/2012 - 12:11 | 2126446 yabyum
yabyum's picture

I would include food and fertilizer. Gotta have 'em.

Sat, 02/04/2012 - 12:11 | 2126447 Sisyphus
Sisyphus's picture

Titties, bitchez!

Sat, 02/04/2012 - 12:16 | 2126449 walcott
walcott's picture

Dines is coolness.

Sat, 02/04/2012 - 12:16 | 2126450 GeneMarchbanks
GeneMarchbanks's picture

Lord. What's the difference between now and the 70s? Volcker, bond yields, bankers weren't in some weird self-worship delusion, add your favorite as the differences are inexhaustable...

Sat, 02/04/2012 - 12:27 | 2126473 blindfaith
blindfaith's picture


 aaaaah the 1970's.  So here is one for you historians out there.  Go listen or read the last speeches of Malcom-X.  You know the enemy of capitalism and America...the Moslem, the communist ( now there is a contradiction).

Go read what he said about the banks, the bankers, where America was headed.  You will be surprised how he saw the now that we are living.  But then again, George Carlin was on target too.

Sat, 02/04/2012 - 12:32 | 2126495 Calmyourself
Calmyourself's picture

Malcolm was on in many ways, the right to self defense, the willingness to protect his life and his property from over reaching government, banks, usury and many other topics.  His present day acolytes have twisted that message into race hating inflammatory rhetoric.

Sat, 02/04/2012 - 12:16 | 2126452 TooBearish
TooBearish's picture

RIch wind bag with an opinion .....BTFD

Sat, 02/04/2012 - 12:17 | 2126455 stant
stant's picture

when my daughters coin jar gets full i take them and replace with frn. is that stealing from my childrens future? shes quite ok with it.

Sat, 02/04/2012 - 12:28 | 2126481 a growing concern
a growing concern's picture

Bastard!  At least the pennies could be cast into bullets.  

Sat, 02/04/2012 - 12:55 | 2126550 Mr. Lucky
Mr. Lucky's picture

Zinc or copper?

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