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Mike Krieger On When Central Banking Dies: China and Oil

Tyler Durden's picture


From Mike Krieger of KAM LP

No quotes today.  Just this image.  This applies to everyone in every country on this planet.  You are being herded.  The gate is closing. 

“Rise and Rise Again until Lambs become Lions.”


When Central Banking Dies: China and Oil


China is a topic on which I have differed greatly from many analysts and macro commentators with whom I generally share a similar economic philosophy.  What I have heard from many in this camp is this story about how China was the next great power and that they are going to revalue the yuan higher.  In that process, they would be able to shift their economy away from a dangerous overemphasis on fixed asset investment and toward consumption.  There was this notion that China had its house in order and was about to totally shift the balance of economic power in the world as the West melted away.  In the middle part of the last decade I heard this argument yet it always seemed a little preposterous.  In 2007/2008 as the Western housing markets and banking systems came apart this view was expressed in the now much maligned (and rightfully so) “decoupling thesis” which turned out to be nothing but a fantasy.  Nevertheless, in the aftermath of the implosion in the West there was still this notion that China was ok.  That they had figured it out and were about to take over the world.  This concept was furthered by the very robust bounce back that they had compared to the weak recoveries in the Western world.  Nevertheless, I was extremely disturbed from day one by the manner in which they were going about achieving this recovery.  First of all, almost none of it was related to a sudden preeminence of currency strength based consumption that would have potentially allowed the economy to actually restructure.  In fact, the yuan stopped appreciating relative to the dollar in July 2008 and didn’t begin strengthening again until June, 2010.  the interim, the Chinese did absolutely nothing to restructure and instead went on a Keynesian orgy of stimulus packages and fixed asset investment.  Million person cities with no one living in them were built seemingly overnight.  The biggest mall in the world was built and there was no one shopping in it.  I saw all of these things and immediately called them out on it.  I was writing about how China’s recovery was a total sham by the first half of 2009, yet there were all these China bulls talking about how they are “the best capitalists in the world.”  What a ridiculous statement.  That economy is total command and control at the top, just like EVERY single major economy on earth today.  To say China isn’t is total delusion and their response to the crisis proved it to me 100%.  They didn’t allow market forces to take over, the flooded the system with liquidity and tried to direct it as well.

In light of that, there was always going to come a time where China suffered the affects of it absurd policies and that time seems to be now.  Anyone that watches markets and pays attention to economic statistics understands that China’s economy is in the midst of a serious slowdown.  In fact, I wouldn’t be surprised if they are already experiencing close to negative real growth if you strip out true inflation.  The bottom line is nobody knows because the data is so clouded in a centrally planned haze.  The more interesting question is what are they going to do about it?  So far not that much.  So why is that?  Well, they are in a similar predicament to the Western world (no surprise there as this is what happens in centrally planned ponzi economies).  Do they triple down on the prior policies or do they try something different?  That question has yet to be answered and the reason I think they haven’t responded is they hope inflation can come down enough to triple down on prior policies.  This of course is very dangerous because with each passing day the economy will get worse and worse and they risk things getting totally out of control.  The main point I am trying to make here is that no major country ever restructures because if any of them tried the entire global ponzi that has benefited all these “leaders” would rapidly unravel in their faces.  This is why the U.S. never does the right thing and it is also why China never does the right thing.  This ponzi is global and it will not be dismantled from the top.  Rather it’s dismantling will be fought by TPTB all the way and to the end because they know when it unravels everyone will see they were just little greedy central planning bureaucrats who brought death and destruction to the world as they played out their fantasies with our lives hanging in the balance.   

Recently there were rumors of a coup in China that turned out to be unfounded.  This story got me thinking and although this turned out to be untrue I think that with each passing day the odds of a genuine coup or outright revolution in China increases exponentially.  Here is why.  The people that are actually pulling the strings in China at the moment are clearly in bed with the Western PTB.  The elites in China benefitted greatly by agreeing to use their citizens as slave labor to fatten up Western multinational profits.  That said, you can be sure there is a growing faction of powerful people in China that see these characters as traitors and the longer they do nothing and the economy slumps lower the more the person on the street will become enraged and the more vocal and powerful those that oppose these Western Keynesian lapdogs will become in Chinese society.  With each passing day that the leadership does nothing with the economy, the greater the threat of a political and social change of massive proportions becomes in China.  I expect historic political and social change to come to every country including the United States I just think China’s power structure may fall before ours does.  This is something everyone should keep a very close eye on. 


Besides gold and silver, there is nothing that scares Central Planners (Bankers) more that oil.  In their delusional world where they play god with our futures, they think they can make the sheeple do whatever they want by adjusting the settings on a printing press and can thus determine the fate of the global economy and humanity itself.  What they hate more than anything else is when all of their money printing causes things like oil to rise because it exposes them for the charlatans that they are.  This is why Obama is constantly attacking speculators and oil companies.  It is all an attempt to scapegoat someone else for the financial nightmare that is hitting everyone’s wallet.  This is why they floated the absurd idea of releasing more oil from the U.S. Strategic Petroleum Reserve and then denied it once the market failed to react vigorously enough to the rumor.  This is also why Obama surely has called the Saudis up repeatedly as of later to remind them that they might see regime change unless they ramp up oil production to help his reelection. 

This brings us to one of the most important aspects of the entire global economy at the moment.  Saudi oil production is hitting record highs at the moment.  In fact if you look at the chart below you will see that the Saudis have never consistently pumped more oil than they are right now.     

Saudi Oil Production 1980-Present

Now this chart has been going around the street for weeks now, but I am not convinced people really understand the significance of it.  There has been a tremendous amount of debate in the oil world over the past decade about what the Saudis can actually pump.  Many such as the late Matt Simmons repeatedly claimed that the situation on the ground there was much worse than people understood and that the Kingdom might be on the verge of experiencing a major peak in production.  Others, such as the Saudis themselves claim they have plenty of room to grow and indeed claim to have the ability to ramp production to 12-12.5 million barrels per day relatively quickly.  Well if I am right we are about to find out.  The Bernank knows he needs to launch QE3 because without it interest rates could rise and officially bankrupt the government.  He also knows that QE3 will be seen by the market as proof that the economy still sucks and they were just lying and that it will just prop up more mal-investment.  Mal-investment will support unproductive consumption and of course result in flying oil prices.  The Bernank and Obama will want to make sure the Saudis come in and raise production further along with the commencement of QE3 so that the rise in gasoline prices is not as severe as it otherwise would be.  Check out the chart of wholesale gasoline prices below.    

Gasoline Prices 2002-Present

As you can see from the chart above, gasoline prices are already at last year’s highs (right before the stock market experienced a correction) and also back very close to the 2008 highs when the whole system imploded.  So what I take away from this is that we may be about to see what the Saudis really have.  In order to print the massive amounts of new money the Central Planners want (need actually) to save their delusional little system they will need Saudi Arabia to pump more oil.  If the Saudis cannot do so, it will create a total panic attack in the markets everywhere.  Why?  Because this will mean that the Central Planners have finally hit the brick wall.  It will mean that any more money printing will result in nothing less than exploding gasoline prices and ultimately judgment day when we finally find out if the world will spiral into uncontrollable inflation or deflationary collapse.  Saudi oil is a major key to this equation.      

The Most Ominous Chart in the World

The Chinese Yuan 2005-Present


Take a look at the chart of the Chinese currency above.  When it is declining it represents appreciation versus the U.S dollar.  What you can see is that the appreciation trend from June 2010 has stopped.  It has been flat since the end of 2011.  Recently, such behavior has foreshadowed major negative events.  I think the reason is because it signals a resource wall has been hit that therefore constrains central planning printing and liquidity expansion.  The last time it stopped appreciating was in early July of 2008.  This coincided perfectly with the collapse of the commodity bubble.  Three months later the entire financial system imploded.  We don’t have a commodity bubble this time but we have other ones.  We have a luxury goods bubble.  A retail sector bubble.  A treasury bubble and then the biggest bubble of all the fiat money bubble.  Which of them will collapse this time?

Good luck out there.

Peace and wisdom,


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Thu, 03/29/2012 - 17:15 | 2301903 Arius
Arius's picture

the picture definetly true!  best one that captures it all ... its always the same ... the only piece missing is the part when the sheeps gets slaughtered ...

the dog remminds me of Timmay!

Give us Timmay or give us Death!

Thu, 03/29/2012 - 17:20 | 2301911 LuKOsro
LuKOsro's picture

We`re not in Kansas anymore...

Thu, 03/29/2012 - 17:46 | 2301985 LaLiLuLeLo
LaLiLuLeLo's picture

We're on another planet and acting like it. no wonder aliens haven't come here: "these guys sUck"

Thu, 03/29/2012 - 18:43 | 2302073 Mr Lennon Hendrix
Mr Lennon Hendrix's picture


Thu, 03/29/2012 - 19:01 | 2302104 BoNeSxxx
BoNeSxxx's picture

And then, there is this:

Why DOES DHS need this much ammo if they just grope children and old ladies at the airport?  And, if they need ammo at all, why hollowpoint rounds?


NOTE: unvetted and unverified... I am in Sao Paulo where, evidently, the internet is run byte-by-byte by carrier pigeon.  Not enough broadband for anything other than my beloved ZH.

Thu, 03/29/2012 - 20:22 | 2302322 Hagbard Celine
Hagbard Celine's picture

all else being equal, hollow points are safer in these crowds. less likely to go through the person you're shooting to hit the person behind them

Thu, 03/29/2012 - 21:27 | 2302476 BoNeSxxx
BoNeSxxx's picture

Which begs the question:

Just why does DHS believe they will be shooting people any time soon?

Thu, 03/29/2012 - 22:02 | 2302545 BobPaulson
BobPaulson's picture

Uh, what else do security forces shoot at? Clay pigeons? Deer?

The question is why do they need to stockpile ammo.

Fri, 03/30/2012 - 00:15 | 2302723 RafterManFMJ
RafterManFMJ's picture

Oh my god yeah! Those highly trained precision HomeLand Sekuirity types - yup, I'm FIN sure they are the masters of controlled fire - probably like Imperial Stormtrooprs X10.  Nothing says to me 'controlled fire' more than some sub-80 IQ troglodyte finger fucking a 90 year old granny in her wheelchair;  And only 450 million rounds? Come now, we have a population of at least 270 million...

You're worried about over-penetration, get a shotgun or buy frangible ammo.  Pop quiz for those who have cable/buy the many rounds have HS used in the last 5 years killing the unending waves of terrorists attacking us like a bad remake of Zulu Dawn? Divide 450 million by that number...I'm guessing that ammo supply should last till the sun burns out.

Sat, 03/31/2012 - 00:33 | 2305751 ruffles
ruffles's picture


What the fuck are you talking about?



Thu, 03/29/2012 - 22:20 | 2302571 Dermasolarapate...
Dermasolarapaterraphatrima's picture


Report: Officers lose 243 Homeland Security guns (CNN)


Gives me a warm and fuzzy feeling....

Thu, 03/29/2012 - 22:56 | 2302631 Vint Slugs
Vint Slugs's picture

First, DHS are not the airport gropers, that's TSA (you're comment is excusable since you're out of the USA).

Even if you figure that only one-third of DHS ("employees") carries and can/will shoot, that figures out to better than several hundred rounds/day for more than a year.  There's no way that they can go out to the range and blow off that number of rounds every day annually.  Just isn't possible in a peacetime environment.  Obviously, they believe that war is coming and it's coming HERE.  What they will do is ship out those millions of rounds to their satraps in the local gestapo - you know, your friendly militarized local police department.

To answer your question, which surely is rhetorical, hollow points are anti-personnel.

Fri, 03/30/2012 - 08:01 | 2303005 DanDaley
DanDaley's picture

Some of you guys are just a little too paranoid.  "They" are not coming after you, but just after everyone who looks, acts, walks, and talks like you...but not you.

Fri, 03/30/2012 - 10:31 | 2303410 Seer
Seer's picture

Maybe they figure they're going to take a hit to their budget, or otherwise won't be able to obtain ammo (due to everyone else stockpiling), so they're putting in one big order now?

HS also includes the CG and border guards.

I always find it interesting that some govt entity acts just like regular humans and everyone thinks it bizarre.

I don't find it appealing, but hey, things are only going to get weirder and weirder as the maddening crowds expand.

Thu, 03/29/2012 - 18:01 | 2302005 theXman
theXman's picture

Very good article by Mike Krieger.

Thu, 03/29/2012 - 18:18 | 2302033 DoChenRollingBearing
DoChenRollingBearing's picture

There are between 70 and 90 brands of CHINESE cars and trucks in Peru.  That is more brands than ALL OTHER BRANDS PUT TOGETHER in that country.  Chinese cars have a general reputation of being POS.  There is going to be a bloodbath at the lower end of the market for cars and trucks there.

And probably in China we well...

"Vehicles in Peru"

"Some bearings we sell in Peru"

Google the above articles or gmail me at my name for link.

Thu, 03/29/2012 - 18:19 | 2302034 4horse
4horse's picture



The Owners of the 12 Central Banks:
- Rothschild Bank of London
- Rothschild Bank of Berlin
- Lazard Brothers of Paris
- Israel Moses Seif Banks of Italy
- Warburg Bank of Amsterdam
- Warburg Bank of Hamburg
- Lehman Brothers of New York
- Kuhn Loeb Bank of New York
- Goldman, Schs of New York
- Chase Manhattan Bank of New York



whether there are about 300 3000 or 3000000 VERY POWERFUL__ individuals who Own The FED


Wed, 04/04/2012 - 07:42 | 2315746 BlackVoid
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Thu, 03/29/2012 - 18:39 | 2302070 bank guy in Brussels
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A really advanced perception in this article is when Mike Krieger writes:

« This is also why Obama surely has called the Saudis up repeatedly as of later to remind them that they might see regime change unless they ramp up oil production to help his reelection. »

This is one of the most un-discussed, but significant themes in geo-politics, the US - Saudi dark connections ... and the fact that the US will eventually turn the heavy hammers onto them, too.

Those mediaeval torturing Saudis only survived these last few decades because the US was propping them up, for the sake of the 'petrodollar' scheme ... now in decline ...

And though the Saudis don't seem to realise it, Saudi Arabia itself is on the longer-term regime change 'hit list', even though they have been all supportive of the US-Nato hit programmes on Libya, Syria and Iran.

Occasionally one of those US CIA think-tank people even blurts it out: Yes, eventually, the US will take down Saudi to get the final siphons out of those oil wells there.

Thu, 03/29/2012 - 19:50 | 2302226 americanspirit
americanspirit's picture

Bank guy in Brussels - I want to say that IMO you are consistently among the most perceptive posters on this forum. Thank you. Don't stop contributing.

Thu, 03/29/2012 - 19:54 | 2302239 DaveyJones
DaveyJones's picture

yup, no honor amongst thieves

Thu, 03/29/2012 - 22:54 | 2302635 CrazyCooter
CrazyCooter's picture

Oh, I think they know it very, very well. It is hard to be in power and not see the obvious writing on the wall. Nations in the MENA who don't play along with the petro-dollar seem to have "issues" with staying alive/in power. As you point out, that is very likely to change soon.

Iran is clearly next, particularly since they are going with a non-dollar oil market (like Iraq under SH).

I think what will happen, when TSHTF with Iran, is that SA will destablize and it will be game on for rolling up all the oil producing regions under a new boot heel that will take care of the host country and toss the rest to the wolves.

I think it is often overlooked how much FOOD the US exports. Check out food production and population in MENA. At any time, the US can crush any government in the world without the ability to feed its own people domestically. But, this was called a long, long time ago ...



Thu, 03/29/2012 - 23:31 | 2302669 Sizzurp
Sizzurp's picture

When you take a hard look into what living on the far side of the peak oil production curve actually means to civilization as we know it, the geopolitical events we are witnessing depict, with ominous and desperate clarity, just what it is we are facing.  The power elites have seen the future and they are scared shitless. They are aware of what is happening, and it would seem that they are willing to go all in at this point.  Their brand of "prepping" is a bit different however.  Mitigation is water under the bridge, the prepping they are doing is for resource wars abroad, and civil unrest at home.  They appear dead serious about it.   

Fri, 03/30/2012 - 07:09 | 2302944 Green Leader
Green Leader's picture

Global depopulation is well on its way, but not at the pace they planned due to unforseen 'outside interference'.


Fri, 03/30/2012 - 10:29 | 2303405 DaveyJones
DaveyJones's picture

this was a great chain of comments.

Fri, 03/30/2012 - 11:37 | 2303621 Seer
Seer's picture

"Saudi Arabia itself is on the longer-term regime change 'hit list',"

More realistically is the long-known issue of "transition of power."  It's why I believe that Iraq was invaded: TPTB figured that the House of Saud was getting a bit old and creaky, with no clear way of transitioning in new power (that's what the Osama bin Laden stuff was really all about).

But obviously this still avoids the elephant in the room: high dependance on non-renewable resources (when you fuck up the fundamentals it'll never end up well).

Thu, 03/29/2012 - 19:01 | 2302105 vast-dom
vast-dom's picture

When oil hits $125 the shit will start to clog the fan. That simple folks. 

Thu, 03/29/2012 - 23:39 | 2302678 Mr. Mandelbrot
Mr. Mandelbrot's picture

Brent's already there . . .

Thu, 03/29/2012 - 17:34 | 2301939 ChrisFromMorningside
ChrisFromMorningside's picture

"The man" = The Banking Cartel

"The dog" = The Police State


Thu, 03/29/2012 - 17:42 | 2301958 King_of_simpletons
King_of_simpletons's picture

Goldman Gods making Godly decisions to do God's work.

Thu, 03/29/2012 - 18:09 | 2302018 Gully Foyle
Gully Foyle's picture


Well that sheds a whole new light on the old saying 'going to see a man about a dog".

Now that I think about it all metaphorically means the same thing.

Thu, 03/29/2012 - 19:23 | 2302145 Al Gorerhythm
Al Gorerhythm's picture

"The man" = The Banking Cartel

"The dog" = The Police State

"Trevor"    = The Homeland Security Informer

Thu, 03/29/2012 - 17:37 | 2301954 Future Tense
Future Tense's picture

I don't understand why people are focused on China and oil, future problems, when they should be focused on Spain: the "here and now" problem.  The clip below shows what is taking place today on the streets of Spain and discusses their coming meltdown:

Thu, 03/29/2012 - 17:42 | 2301967 SheepDog-One
SheepDog-One's picture

OH right, Spain is gonna be real scary and dangerous....just like the GREECE state of panic for 18 months. Yea Im not buying their bullshit anymore myself.

Thu, 03/29/2012 - 18:00 | 2302004 Calmyourself
Calmyourself's picture

Oooo, so scary, the Euro's cannot even make a decent molotov all flash no last..  Wake me when the Germans get pissed, I'll open one eye for those domesticated she men that pee sitting down..

Shit all the Euros are pussy pee twits..

Thu, 03/29/2012 - 18:21 | 2302040 Gully Foyle
Gully Foyle's picture


Dude it might impact the filming of next seasons Benidorm!

Thu, 03/29/2012 - 18:22 | 2302038 Gully Foyle
Gully Foyle's picture

Future Tense

"future problems"

Aging world population, low birth rates in the industrial nations, peak population about 2050 then a decline, and in the US a rapidly aging prison populace requiring expensive care.

Those are future problems that nobody ever talks about.

The worst part is if you wait twenty years to start discussing any of them it is already far too late.

Thu, 03/29/2012 - 19:23 | 2302146 WillyGroper
WillyGroper's picture

GF-----prisoners are already exploited for corporate labor. With CXW & GEO taking hold of many prisons, it's only a matter of time before they pop a cap in their head & steal their organs to sell them with the claim that they came from a 20 yr old. No different than China.

Thu, 03/29/2012 - 19:52 | 2302234 americanspirit
americanspirit's picture

And Gully may I add - water.

Thu, 03/29/2012 - 18:32 | 2302058 ChrisFromMorningside
ChrisFromMorningside's picture

Spain is already doomed. They're goners. Name one industry that could be poised for growth, even post-Great Reset, that would allow them to rebuild their standard-of-living? It's not going to be tourism or leisure-related industries (restaurants, etc.) and that's what they mostly know. I don't see the culture in Spain welcoming in Foxconn-type assembly jobs.

As for a revolution ... I don't see it happening. The youth put on a great show with the black blocs and the hoodies but I have yet to see them really challenge the state in a fundamental way. It's all show. At the end of the day, they go home and play with their iPads. Really challenging the state would involve risking a lot more. China is going to be way more explosive. Simply because of the enormous political dissent that already exists within the PLA ... which is already armed and already has influence over the central state. Not to mention that the people have far less to lose. I bet there are thousands of labor riots in China yearly that we never hear about in the West that eclipse the most violent confrontations in Spain (or probably even Greece).

Thu, 03/29/2012 - 18:34 | 2302065 Calmyourself
Calmyourself's picture

One industry, heck I can name two.. Solar power and usurious banking..

Thu, 03/29/2012 - 20:03 | 2302266 ChrisFromMorningside
ChrisFromMorningside's picture

Solar power is not a mass-employment industry. Solar may have an impact on Spanish GDP and Spanish energy costs but it's not going to solve 50%+ youth unemployment in any reasonable time frame.


Thu, 03/29/2012 - 21:59 | 2302541 Calmyourself
Calmyourself's picture

oop's did I forget again,  "sarc"

Thu, 03/29/2012 - 18:59 | 2302100 blu
blu's picture

Interesting points.

Thu, 03/29/2012 - 19:24 | 2302149 WillyGroper
WillyGroper's picture


Thu, 03/29/2012 - 22:09 | 2302553 masterinchancery
masterinchancery's picture

Completely true. From what I have seen in Spain, they don't have a business except tourism, and they sure as hell don't have a work ethic.

Thu, 03/29/2012 - 19:01 | 2302107 walküre
walküre's picture

Sure, they have problems.

But as soon as Jose, the old unionista started talking about "achievements" and "irreversible damage" I tuned out.

Jose will never understand that none of his "achievements" were ever meant to be sustainable and that one man's "achievements" are another man's ticket to massive wealth on the back of a Central Banking camel.

Fri, 03/30/2012 - 11:40 | 2303628 Seer
Seer's picture

"I don't understand why people are focused on China and oil, future problems, when they should be focused on Spain"

Maybe because Spain doesn't have any resources, nor is it looking like it's going to be gobbling them up...

You're referring to virtual/fiat stuff, which, well, it's all fake.  PHYSICAL, on the other hand, well, sticks and stones...

Thu, 03/29/2012 - 17:49 | 2301991 Kaiser Sousa
Kaiser Sousa's picture

for the collective....

"The Federal Reserve is propping up the entire U.S. economy by buying 61 percent of the government debt issued by the Treasury Department, a trend that cannot last, Lawrence Goodman, a former Treasury official and current president of the Center for Financial Stability, writes in a Wall Street Journal opinion article published Wednesday."

Thu, 03/29/2012 - 19:06 | 2302115 Peter Pan
Peter Pan's picture

The article definitely diplays real thinking but the funny thing in all this is that China thinks it's communist and the USA thinks it's capitalist, yet in reality both nations have become plutocracies in the extreme and this is what threatens both the viability and stability of the system.

Fri, 03/30/2012 - 11:43 | 2303638 Seer
Seer's picture

The "leadership" paradigm will ALWAYS lead to the concentration of power (and on the other side of the equation: a loss of individual power/freedom/liberty).

Thu, 03/29/2012 - 19:39 | 2302188 azzhatter
azzhatter's picture

Nah, Timmy would be blowing the sheep named Benny

Thu, 03/29/2012 - 17:15 | 2301904 maxmad
maxmad's picture

To say China isn’t is total delusion and their response to the crisis proved it to me 100%.  They didn’t allow market forces to take over, the flooded the system with liquidity and tried to direct it as well.



Sounds like the US!!!

Thu, 03/29/2012 - 18:06 | 2302014 Dr. Engali
Dr. Engali's picture

And that is why we all are screwed.

Thu, 03/29/2012 - 19:10 | 2302126 walküre
walküre's picture

No wonder the Chinese take whatever they can out of their economy and buy up businesses in Germany and real estate along the Pacific Rim. They know the days of the Chinese "miracle" economy are numbered and when things unravel in China as they did during the Chinese revolution, those that can will want to be as far away as possible. They don't care that they're paying 2x as much for a house in Vancouver as the guy next door. They want a safe house. It's not an investment, it's a necessity.

Thu, 03/29/2012 - 19:54 | 2302240 americanspirit
americanspirit's picture

Speaking of flooding, how about that Three Gorges dam?  How many people live downstream?

Fri, 03/30/2012 - 00:13 | 2302722 Cadavre
Cadavre's picture

So what's da point ...

Is the article like a test or sumpin'?

While back a trader type proselytized a vid advising against any conclusions based on perceptions. The vid advocated spending an eternity arguing the validity of "the" perception, "rationalize" or, disregard to simply pay no attention. Guessing when the "rationalization" cycle burns out the perception is zero-affected, also, by being discarded.

The Religion of Conforming Self Denial preaches the truth should be well garnished with adequate self-embellishment, and then applying ones self assumed self to achieve a perfect transcendental state of pointlessness - and Krieger deliverers magnificently!

Like watching "Eraser Head" over and over and over ... and over .. infinity!

China suffered the affects of it absurd policies and that time seems to be now


Love it when they get all "absolutist" and all that - makes ya feel like its safe not to think for yourself!

That little jewel raised Mr Pink German Helmet's attention ...

Absurd ...

China, through absurd policy, has acquired trillions in high tech patents and western technology.

Chinese have been doing business since King Tutt reigned in Egypt.

China works on 5 yr plans.

When the politicos employed by Chinese look out their Beijing offices they see billions of bodies, all descended from a culture that had no qualms turning would be tyrants into dung globs.

The people that are actually pulling the strings in China at the moment are clearly in bed with the Western PTB

Like a sheme with in a scheme, (right?) , so dastardly clever that it even defies the largess of wisdom that could only be accumulated by a culture as enduring as the Chinese, and leave them blind to the sophomoric pantomiming of some western up-an-commer gadfly. Works on the US Idiocracy - then it should work on the backwoods Chinamen - too?

The best play is to make your adversary believe he is playing you .. whatever the Chinese are doing , they're the ones doing the "gaming".

And ya got to love this one ..

Saudi oil production is hitting record highs at the moment ..

Gee, since the NATO embargo of almost all the other mega sources ya'd easily think that wren't nothing to do with it - sheesh - see my thumb.

We are in a oil glut folks. The geopolitical sham wow is at best a last hopeless attempt to make it look like prices are demand driven. The issue with oil is not supply - it's demand. And there is no demand despite anything they do - there will be less.  Gas prices in the US are not high because of oil supply. US gas prices are high because US refineries export more than half of total US production,

Title this one "look at my thumb" ..

.. each passing day the odds of a genuine coup or outright revolution in China increases exponentially

The winner in the best "repetitive multi syllable superlative florets in a single sentence" category  goes to .. the guy that penned GENUINE OUTRIGHT EXPONENTIALLY, ...

CNBC says that all the time and two days ago they said buy and hold banks and then Goldman's says that gold to jump above 1.7K (implying more head room in the HFT equity pit (shit - the sell buy zero cost trade reversals the money banks' hft shops are running is not "trading" it's "marketing". "We got a lot more upside left - yeah we be all recovered and all that - yep any second now that upside is gonna happen - RED ALERT RED ALERT - ALL HFT MUST BUY BACK PREVIOUS DAY SELLS RED ALERT RED ALERT ...

In their delusional world where they play god with our futures,

OMFG - give me a f-ing break - "delusional" - is that like a common term in the "how to present chart technical analysis for dummies" pamphlet? If-en ya asking me it sound more like da Mr Sister of de Press Briefing, da one de only Missy Jeff Gannon, a throat throttle`n a Free Republic sermon. And then the penned "... play god with our futures". Must admit, since first consciousness, if reckoning serves, that the imagery provided by that very cliché has never been so eloquently harnessed as it has in the subject article.  One concern is who can afford, in these times, to buy movie rights to it? Again, i do say old man a rousting rowdy bravo for  your daring!

What I have heard from many in this camp is this story about how China was the next great power and that they are going to revalue the yuan higher.

And i heard it through the grape vive - someday i'm gonno make you mine ,,,

If the USD is diluted lower, and the CNY remains stable, revalue higher by default?

The US rackets wanted a "tight money" China soze they could get a little more headroom to run their "lose money" ponzi in the US.

Ever notice the enemy is always some f-ing country that won't surrender and comply to the colonization policies offered by our colonial master, the War Usury Banking Empire.

The BRICS look to be getting serious. China India and Russians have been doing business and trade since time was time. Brazil and China have both put a man into orbit. Can't get to the space station without a Russian Soyuz these days. China is now the super computer top dog.

China had to have capitulated on any expectation of collecting their US debt holdings a long time ago. The return on their investment strategy has been the acquisition of the fruits of trillions of dollars in multi-generational technology projects in less than a decade.

A couple of years back, advocates of "Don't go wrong long" that push pencils in China reassessed real US GDP at 5 Trillion, a third of US central planners prop-desk propaganda were saying.

China could monetize it's US bad debt. Who knows? Maybe that was the plan all along? What would happen to the CNY if China was to print "off" US bad debt might be fun to think about.

But a culture as seasoned as the Chinese being snookered by the white shoe dandies of the FTP, that assertion requires the imagination be stretched to the point it crosses into a parallel universe.

The central banks are eating themselves. China maybe even dripped in th catalyst accidentally on purpose. The gypsy voodoo man's perpetual rehypothocating value extraction confidence scam requiresreal convertible assets - and there ain't like an infinite stack of that stuff lying round. When all the value is ultimately extracted from the system, the scam cannot sustain itself, and it implodes. Might messy when it do that. Central banks are like a virus to dumb to realize that when it kills the host it also kills itself.

Fri, 03/30/2012 - 11:59 | 2303684 Seer
Seer's picture

Growth is D E A D.  This isn't a "business" cycle thing...

Fri, 03/30/2012 - 14:50 | 2304393 Cadavre
Cadavre's picture

Dunno `bout growth being 'dead' - would need a definition.

We could use the "Spring" metaphor for what looks to be an awakening of sorts. Course it be a "Spring" after a very bad winter, Hard to see under all the thrash and toxic melt the buds busting through to chase the light. But they're there, just gotta look.

Caught a piece of a Dr Paul rally in Maryland. Big crowd all ages all colors all creeds. Something is going on. Innovation is pretty much smothered by our elite clan of multinational mega corp nobilities chairing the round table in the main hall of the War Usury Banking Empires administrative palace. The colonial structures will fall. The viceroy administrators will answer to justice. Physics, not perception, is in charge.

But there are unseen innovators future hopefuls of the view that the "customer" is a "partner" and should never be confused or maligned as a "consumer". 

The voodoo clan's incredible multi generational intangible value rehypothocation machine pig in a poke grew through extraction, like a virus, not innovation and not in partnership with anything but the fantasy they are doing divine deeds. If by "growth is dead" we mean the death throes of a multi generational criminal enterprise reduced to feeding on it's dung and scared shitless a really painful coup `d grace is ready to prance with extreme prejudice, it could be assumed that the "old" growth is dead (well getting ready to be anyway) without any problem here.

But humans will always innovate and compete - we hard wired that way - and stuff like "real" growth happens.


please make donations payable to the church of eternal resurrection - thank you.

Thu, 03/29/2012 - 17:20 | 2301912 dick cheneys ghost
dick cheneys ghost's picture

Fiat Money Bubble.............priceless

Thu, 03/29/2012 - 17:26 | 2301920 zerotohero
zerotohero's picture

Won Ton - is not equal to One Ton.

Thu, 03/29/2012 - 17:27 | 2301922 slewie the pi-rat
slewie the pi-rat's picture


Thu, 03/29/2012 - 22:26 | 2302579 John Wilmot
John Wilmot's picture

...with purchase of another province of equal or greater value.

Fri, 03/30/2012 - 01:27 | 2302779 thefedisscam
thefedisscam's picture

FREE AMERICA! Give it back to Native Americans! ALL Europeans go back to Europe!

Thu, 03/29/2012 - 17:27 | 2301924 dick cheneys ghost
dick cheneys ghost's picture

"This ponzi is global and it will not be dismantled from the top.  Rather it’s dismantling will be fought by TPTB all the way and to the end because they know when it unravels everyone will see they were just little greedy central planning bureaucrats who brought death and destruction to the world as they played out their fantasies with our lives hanging in the balance."


this about sums it up........  

Thu, 03/29/2012 - 17:30 | 2301929 SamAdams
SamAdams's picture

Interesting hypothesis Mike.  Let's see how much the taps can flow. 

Thu, 03/29/2012 - 17:30 | 2301930 SamAdams
SamAdams's picture

Interesting hypothesis Mike.  Let's see how much the taps can flow. 

Thu, 03/29/2012 - 17:45 | 2301982 hedgeless_horseman
hedgeless_horseman's picture



Nice article, Mike.  Thank you.

Thu, 03/29/2012 - 17:33 | 2301935 Esculent 69
Esculent 69's picture

We're not in Kansas anymore? Hell, we're not in AMERICA ANYMORE! But it sure feels like 1984 and not in the good way

Thu, 03/29/2012 - 17:34 | 2301941 There is No Spoon
There is No Spoon's picture

It just feels like the next QE will totally backfire and send stocks much lower. Inflation is already out of control and once the Fed's balance sheet is materially expanded again, it'll be game over due to margin compression. $5 will be the new $1.

Thu, 03/29/2012 - 18:00 | 2302002 WillyGroper
WillyGroper's picture

How can that be when $100 is already the new $10?

Thu, 03/29/2012 - 19:08 | 2302121 amadeusb4
amadeusb4's picture

QE3 won't begin until LTRO ends or much later. This puts it out into Q3 if not Q4. The MSM will have to abandon this ridiculous "muddle through recovery" talking point sometime this summer as the next recession becomes painfully obvious. Therefore, earnings and PE compression will be in full swing by the time QE3 hits.

It does seem like oil is on the way down however because the high level of open contracts scheduled for delivery next quarter is about to confilct with  maxed out storage capacity. That's not to say that price at the pump will drop any time soon though.

Thu, 03/29/2012 - 17:36 | 2301952 bankruptcylawyer
bankruptcylawyer's picture

Krieger congrats on your weell presented analysis. Im impressed. The tone and substance of this article is far better and more professional than many of your previous posts. Keep up the good work

Thu, 03/29/2012 - 18:20 | 2301956 JW n FL
JW n FL's picture

BRICS Threaten To Withhold IMF Funding Unless They Get More Voting Power "The BRICS - Brazil, Russia, India, China and South Africa - have agreed to provide credit to each other in local currencies. Officials say the deal will facilitate economic growth in times of crisis.

­The currency swap deal is aimed at promoting trade and investment in local currencies as well as to cut transaction costs. It’s also seen as a step to replace the dollar as a reserve currency in trade between BRICS.


BRICS Threaten To Withhold IMF Funding Unless They Get More Voting Power

BRICS nations have threatened to withhold the additional financing requested by the International Monetary Fund to help fight the sovereign debt crisis, unless they gain more voting power at the IMF.

"We are however concerned at the slow pace of quota and governance reforms in the IMF," said in a statement earlier today.

Read more:

8. We recognize the importance of the global financial architecture in maintaining the stability and integrity of the global monetary and financial system. We therefore call for a more representative international financial architecture, with an increase in the voice and representation of developing countries and the establishment and improvement of a just international monetary system that can serve the interests of all countries and support the development of emerging and developing economies. Moreover, these economies having experienced broad-based growth are now significant contributors to global recovery.

9. We are however concerned at the slow pace of quota and governance reforms in the IMF. We see an urgent need to implement, as agreed, the 2010 Governance and Quota Reform before the 2012 IMF/World Bank Annual Meeting, as well as the comprehensive review of the quota formula to better reflect economic weights and enhance the voice and representation of emerging market and developing countries by January 2013, followed by the completion of the next general quota review by January 2014. This dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund. We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 Reform faithfully. We will work with the international community to ensure that sufficient resources can be mobilized to the IMF in a timely manner as the Fund continues its transition to improve governance and legitimacy. We reiterate our support for measures to protect the voice and representation of the IMF's poorest members.

10. We call upon the IMF to make its surveillance framework more integrated and even-handed, noting that IMF proposals for a new integrated decision on surveillance would be considered before the IMF Spring Meeting.

11. In the current global economic environment, we recognise that there is a pressing need for enhancing the flow of development finance to emerging and developing countries. We therefore call upon the World Bank to give greater priority to mobilising resources and meeting the needs of development finance while reducing lending costs and adopting innovative lending tools.

12. We welcome the candidatures from developing world for the position of the President of the World Bank. We reiterate that the Heads of IMF and World Bank be selected through an open and merit-based process. Furthermore, the new World Bank leadership must commit to transform the Bank into a multilateral institution that truly reflects the vision of all its members, including the governance structure that reflects current economic and political reality. Moreover, the nature of the Bank must shift from an institution that essentially mediates North-South cooperation to an institution that promotes equal partnership with all countries as a way to deal with development issues and to overcome an outdated donor- recipient dichotomy.




Soaring Oil price & weakening US economy-On the Edge with Max Keiser-03-23-2012

Uploaded by on Mar 24, 2012

In this edition of the show Max interviews Chris Cook; a former oil market regulator.

Chris Cook is an independent energy analyst and a former oil regulator who has the latest on energy markets. He talks about the soaring oil prices and its impacts on the weakening US economy.

He argues that the US market is in a free fall and the US has piled debt on debt. He also comments on the role of investment banks like JP Morgan and Goldman Sacks, and the military threats against Iran on the oil price.

Written by Julian Murdoch |

March 04, 2011
Chris Cook: Brent Oil Market Is ‘Dysfunctional’

Amid the highest Brent-WTI spread in years, the former compliance director for the IPE shares his perspective on the global crude oil market.


With the Brent-WTI spread hitting record highs, you have to wonder: Is crude oil still a fundamentally driven market? To separate the facts from the fluff, Hard Assets Investor reporter Julian Murdoch recently sat down with Chris Cook, former compliance and market supervision director of the International Petroleum Exchange (IPE), to get an expert's take on oil's rise.

High Oil Prices Must be Subject of Criminal Investigation

Uploaded by on Mar 27, 2012

Michael Greenberger: Big banks and traders involved in a criminal conspiracy to raise oil prices

Professor Michael Greenberger
Since July 2001, Michael Greenberger has been a professor at the
University of Maryland School of Law, where he teaches a course entitled
"Futures, Options and Derivatives."

Professor Greenberger serves as the Technical Advisor to the United
Nations Commission of Experts of the President of the UN General
Assembly on Reforms of the International Monetary and Financial System.
He has recently been named to the International Energy Forum’s
Independent Expert Group that provided recommendations for reducing
energy price volatility to the IEF’s 12th Ministerial Meeting in March 2010.

Thu, 03/29/2012 - 17:40 | 2301960 aleph0
aleph0's picture



Seems the Irish have finally woken up :

Ben Gilroy and People for Economic Justice serve court papers on Irish government.


Well done guys !

Thu, 03/29/2012 - 19:14 | 2302129 walküre
walküre's picture


Thu, 03/29/2012 - 22:46 | 2302619 Carl Spackler
Carl Spackler's picture

I wouldn't say "the Irish" but rather "some Irish" have awoken.

Well, you have to start somewhere.

I am curious how our resident expert, THE DORK FROM CORK, would opine on this matter ???

Thu, 03/29/2012 - 17:41 | 2301964 Zero Govt
Zero Govt's picture

I don't think Central Bwankers are under any illusions they're not working for the good of the nation

Benny spends all his time with bankrupt politicians and bankrupt banking industry types discussing how to bail the stupid idiots out

he then wraps the zero interest rate policy (so the US Govts debt repayments don't balloon) and printing $Trillions to bailout said political spend-a-holics and gambling junky bankers in terms of aiding unemployment and stimulating the economy

He's shovelling all the money into the greedy hands of the elite, not any of it onto Main Street

He knows he's talking bollocks ...we know he's talking bollocks ..he must know we know he's talking bollocks ..but he's in a monopoly (cushy job) so it's his job to keep talking bollocks

Until we shut him up and shut him down

Stop Payng Your Taxes (don't fund this bollocks)

Thu, 03/29/2012 - 22:06 | 2302551 amadeusb4
amadeusb4's picture

How about before risking jail time, we vote in alternate parties to both state and federal offices. It is literally the least we can do and it turns out that it would be enough to not only stop the bullshit but actually turn other things around as well.

Thu, 03/29/2012 - 17:42 | 2301970 ChrisFromMorningside
ChrisFromMorningside's picture

I'm going to repost a comment I made yesterday. I know this is generally frowned upon, but the comment ties in perfectly with what Krieger writes above about China and political change. It also gives a little more background for those of you who haven't been following the (false?) reports of a coup in China and tanks on the street in Beijing. Please excuse me ... (This was in reply to a comment that the U.S. would contain China by 2013)


Don't know if I agree that China will be "contained" by 2013 however. Potential black swan event(s) -- domestic political unrest within the Chinese Communist Party that shakes up leadership. Namely, we're talking about populist factions within the PLA that are unhappy with the pro-Western technocratic clique that dominates the party currently.

Bloomberg: Wen warns of potential second Cultural Revolution -

In the absence of political change, Wen said China risked a repeat of the 1966-76 Cultural Revolution, which threw the nation into chaos as Chairman Mao Zedong's Red Guards attacked the party apparatus and persecuted millions of people.


Wen’s warnings on the dangers of returning to the chaos of the Cultural Revolution contrast with the policies of Chongqing Communist Party Secretary Bo Xilai, who has encouraged a resurgence of Mao-era songs and sayings to broaden his appeal to ordinary Chinese who feel bruised by 30-plus years of modernization.

Asia Times: Rumors of coup in Beijing are result of growing economic divide -

The coup canard-mongers contended that the PLA had decided to intervene on behalf of Bo and his neo-Maoist comrades against the "Shanghai leadership faction", which had been steering China's economic reform juggernaut after the demise of Deng Xiaoping in the early 1990s.

While the PLA is not entirely pro-Maoist, there are senior figures within the Chinese military who share Bo's ideology of rejecting "capitalist roaders" and reversing the party's adoption of partial free market strategies.

Bo's reputation in Chongqing was forged in a merciless "strike hard" campaign against corporate malpractices and white collar crimes that are on the rise across China in the wake of dozens of new billionaires being minted every year.

Ambrose Evans-Pritchard on the rise of young, nationalist officers within the PLA -

“The young officers are taking control of strategy and it is like young officers in Japan in the 1930s. They are thinking what they can do, not what they should do. This is very dangerous.

“They are on a collision course with a US-dominated system”.

Anyone who thinks that China's course for the next decade has been charted is about to get a rude awakening. When (not if) China has to undergo its own bout of contraction and deleveraging, the Shanghai clique will lose (some) power and that vacuum will be filled by the PLA. Western markets are going to shit their pants when they see young, nationalist, populist, anti-U.S. PLA officers playing a much greater role in policy making and, at the moment, no one is expecting it.

Thu, 03/29/2012 - 17:42 | 2301972 roadhazard
roadhazard's picture

Speculators are as much a part of the problem as everyone else. They get NO pass from me. Fifty cents a gal. extra is because of speculators who cannot accept delivery of a barrel of oil. fuck'm

Thu, 03/29/2012 - 17:52 | 2301994 Bubble
Bubble's picture

You silly person, a free market may now seem like an antiquated idea, but if Ben Mario and Mervyn keep bazooka-ing clown bux from the sky, don't blame them for a full tank of gas doubling the value of your pick-up truck.

Thu, 03/29/2012 - 18:03 | 2302009 Dr. Engali
Dr. Engali's picture

That's what happens when they print. Everything gets more expensive. They know it , they just try to convince you otherwise. It's how they transfer the wealth from us to them.

Thu, 03/29/2012 - 22:50 | 2302630 Carl Spackler
Carl Spackler's picture

That's what happens when they print. Everything gets more expensive. They know it , they just try to convince you otherwise. It's how they transfer the wealth from us to them.

The DOCTOR is in the house !

This is pure, unadulterated genius, and you should be up for Fight Club knockout blow of the week.

(Even though, I have no idea what your avatar means.)


Fri, 03/30/2012 - 09:15 | 2303192 roadhazard
roadhazard's picture

I see the oil speculators got there lip run out and down arrowed me.  I laff.


Thu, 03/29/2012 - 17:43 | 2301976 Esculent 69
Esculent 69's picture

One of the best charts to look at is the gun sales in this country not to mention the shortage of ammo (specifically .45 caliber).

Thu, 03/29/2012 - 19:15 | 2302132 Element
Element's picture

The great and terrible debt-ceiling confabulatum approacheth.

Thu, 03/29/2012 - 17:43 | 2301977 johnQpublic
johnQpublic's picture

oil this talk aboilt peak proilduction is unfoudoiled

Thu, 03/29/2012 - 18:17 | 2302026 SheepDog-One
SheepDog-One's picture

Yep, I'm sure they can just keep pumping oil hand over fist as much as they desire in order to cover for their out of control money printing, no problem.

Thu, 03/29/2012 - 17:47 | 2301987 evolutionx
evolutionx's picture

Although food and fuel inflation is rampant worldwide already, we are only seeing the very beginning. Massive oil price rises are likely to continue as a result of the geopolitical situation as well as peak-oil. The Middle East is a time bomb waiting to go off. Israel is in an extremely precarious position and the involvement or non-involvement of the US in this conflict would both have dire consequences for Israel and peace in the world. Food prices will continue to rise dramatically. Major parts of the world are living below the poverty line today and this will increase exponentially.



Thu, 03/29/2012 - 17:48 | 2301989 FreeNewEnergy
FreeNewEnergy's picture

Geez, I'm bored. Never saw so few comments on ZH as today. Where's Million Dollar Baby when you need some good troll bait.

How about a call to Dick Bove?

Thu, 03/29/2012 - 18:01 | 2302001 Dr. Engali
Dr. Engali's picture

I was thinking the same thing. We need a little financial chaos going on to keep the subscriber base and the commentary interesting. I miss our ejected trolls too.

Thu, 03/29/2012 - 19:07 | 2302119 blu
blu's picture

A China collapse will be bullish for AAPL ... um somehow. Foxconn will have so much added labor, margins will improve. So buy all the AAPL you can with both hands and feet. Bitchez!



How did I do? I think I suck at this tho.

Thu, 03/29/2012 - 20:22 | 2302323 WonderDawg
WonderDawg's picture

Not as easy as MDB makes it look, is it, Blu?

Thu, 03/29/2012 - 17:55 | 2301996 fonzannoon
fonzannoon's picture

Anyone see that Russia sold some gold today?

Thu, 03/29/2012 - 18:01 | 2302003 Lumberjack
Lumberjack's picture

The picture says it all. Let's see if I get junked twice again for the 3rd time (my badge of honor here).

Thu, 03/29/2012 - 18:06 | 2302013 riphowardkatz
riphowardkatz's picture

Saudi's are geniuses or not? If I had a ton of oil in the ground would I get it out, convert to fiat and buy gold? or leave it in the ground for the higher prices ahead? Tough call. I think get it out and buy gold. 

Thu, 03/29/2012 - 18:10 | 2302020 Dr. Engali
Dr. Engali's picture

You ever read FOFOA ? If you don't you need to. He's a bit wordy but has some brilliant insight.

Thu, 03/29/2012 - 18:13 | 2302023 Cult of Criminality
Cult of Criminality's picture

Anyone see that Russia sold some gold today?



I bought a bag of Maples the other day

Thu, 03/29/2012 - 18:17 | 2302027 Lumberjack
Lumberjack's picture

I would like some of you to take a look at this artwork from an outstanding young lady (artist) I know. I have had to take a day or two off because she really needs the hours and the work she has done is outstanding...especially regarding sheep. 

Thu, 03/29/2012 - 18:18 | 2302031 SheepDog-One
SheepDog-One's picture

'Not found'

Thu, 03/29/2012 - 18:24 | 2302039 Lumberjack
Lumberjack's picture

Try this, with apologies...


And click on the 'store'. I am not trying to promote anything but at least am asking a few of you take a peek as well as WB7.  The work says it all. Thanks.

Thu, 03/29/2012 - 19:46 | 2302209 Jendrzejczyk
Jendrzejczyk's picture

She needs to team up with a children's book author. I see spooky and wondrous tales.

Thu, 03/29/2012 - 20:41 | 2302397 Maos Dog
Maos Dog's picture

for what it's worth, I liked "Blow'n Curfew" and a taste of things to come.

Thu, 03/29/2012 - 21:29 | 2302481 hairball48
hairball48's picture

$2500.00? You're kidding right?

Thu, 03/29/2012 - 21:40 | 2302499 Jena
Jena's picture

The childrens book idea is a good one, if she has an interest in being an illustrator.  On the other hand, if she wants to pursue fine art sales she might consider regional art fairs as a way to gain some experience in selling her work.  Right now, they might be a better bet than galleries.

If she is interested, she can see what is available by going here:

It's a one-stop site for the calendar of upcoming shows/fairs, applications, etc.  Everything is explained there.

Thu, 03/29/2012 - 18:17 | 2302028 Cult of Criminality
Cult of Criminality's picture

also remember TOTO pulled the curtain back on the corrupt wizard of Oz

Some good dogs ,some bad depends on the type of indoctrination.

Thu, 03/29/2012 - 18:19 | 2302035 slewie the pi-rat
slewie the pi-rat's picture

in localNews, rSantorum is at the vacavilleJellyBellyTM factory, today, but the feed failed

and student protesers at a ucRegents meeting pulled a clothing-optional "springBreak" demonstration, protesting that they always hold these fukingTrustees'Meeting during springBreak!

they're in the jailHouse, now!


Thu, 03/29/2012 - 18:26 | 2302049 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

have sent this article to everyone I know ....very good

Thu, 03/29/2012 - 18:32 | 2302050 Element
Element's picture

Consumer Metrics Institute's March 29th commentary:


" ... Although this is the last time that a monthly revision will be issued covering the fourth quarter of 2011, the BEA annually makes substantial revisions to historic data in July of each year -- and the scope of those modifications are often substantial in both size and the historic reach. Unfortunately, for the past several years those July revisions have resulted in quiet (and media neglected) acknowledgments that the "Great Recession" was far more severe than was previously reported -- long after the potential for market or electoral consequences of those admissions had passed.

And once again the most interesting component in this report was the effective overall "deflater" that the BEA used to correct the "nominal" data into "real" numbers: annualized inflation during 4Q-2011 is now reported by the BEA to have been a mere 0.84%. As a reminder, lower "deflaters" cause the reported "real" growth rates to increase -- and once again very low seasonally adjusted BEA inflation "deflaters" have been the headline number's best friend.



The headline number of 2.97% is certainly decent, and in the same historical "ball-park" context of pre-recession 4Q-2006 (2.75%), some five years ago. The components of the current number, however, are significantly skewed relative to the historic reference:

-- In 4Q-2006 both consumer goods and consumer services were growing at roughly comparable rates (which we might normally expect, should the growth be fueled by fatter wallets), and between them they contributed enough growth to nearly account for the entire headline number. That was certainly not true five years later.

-- In 4Q-2006 "real" per capita disposable income was growing at a 4.28% annualized rate. That number dropped to a miserable 0.96% rate in 4Q-2011 -- after actually going negative (i.e, contracting) in both the second and third quarters of 2011.

-- The current dichotomy between consumer goods and services is likely telling us something about relatively inelastic demand for certain consumer goods (e.g., energy and food) even in the face of rising prices. If per-capita disposable income is tightly constrained any impact of rising food and energy prices will show up as decreased demand or softer prices (or both) in consumer services. This would cause the relative growth rates for goods and services to decouple in much the manner we are now observing.

-- In 2006 both exports and imports were adding positive contributions to the headline number, with exports alone contributing the equivalent of two-thirds of the headline. By the same quarter in 2011 the combined contributions from exports and imports had dropped from a positive 1.94% contribution to a -0.26% drag on the headline number.

-- In 2006 Governments at all levels were contributing a modest 0.22% to the headline number. That number grew (under stimulus) to +1.21% in the second quarter of 2009. But by 4Q-2011 sharply contracting governments were sucking -0.84% from that headline number -- a trend that is not likely to reverse anytime soon.

-- During 4Q-2006 "real final sales" was growing at a robust 3.82%. Five years later that number was a relatively weak 1.16%.

In our previous reports we had expressed misgivings about the headline number masking general weakness within the detailed line items. Since this revision does not materially revise anything, our misgivings are still in place. This headline number continues to consist mainly of a substantial inventory growth that (if real) is unsustainable and will necessarily reverse in the coming quarters. On the other hand, a significant portion of the apparent inventory growth may be an artifact of progressively larger seasonal adjustments to inventory "deflaters" -- drawing the accuracy of the headline number itself into question.

We continue to believe that despite rosy headline numbers, the underlying dichotomies in the data indicate an economy in dynamic flux -- with consumers less involved in the recovery than is generally accepted, governments continuing to produce major headwinds, and with trade likely to become a major drag going into 2012. We further believe that the quality of these numbers (particularly the inventory data and the "deflaters" used) is such that we should eventually expect substantial revisions (most likely downward) to the published growth rates -- but probably not before the post-election quiet of July 2013.

Yet the true consequence of overly optimistic headlines at this time (which, incidentally, are much to the relief of the BEA's political masters) is that a 3% growth rate at face value simply cannot justify any further easing by the Federal Reserve -- at least as the purported rationale for such easing. In fact, one might argue that headline numbers similar to 4Q-2006 suggest that monetary policies should be tightened to avoid a 2005-2007 style bubble. If some form of QE is actually offered by Mr. Bernanke in the near future, it can only be because he simply does not believe the BEA's optimism. When the numbers from the BEA and the actions of the Fed move in opposite directions, who (or what) are we to trust?"


Buyer beware.

Thu, 03/29/2012 - 18:30 | 2302052 Seasmoke
Seasmoke's picture

look at the picture very closely.....and you will see buzzards sitting and waiting in the background !!!!!!!

Thu, 03/29/2012 - 18:34 | 2302061 MikeMcGspot
MikeMcGspot's picture

Wolves are about.

Sheeple are scared.

My friend Herbert just got chowed down.

Wolves are no longer on the endangered species.

The Department of Natural Resources is starting a wolf hunting season.

I’m throwing down for the wolf hunt lottery.


Thu, 03/29/2012 - 18:37 | 2302068 Poor Grogman
Poor Grogman's picture

Maybe the middle east can turn to tourism when they run out of oil ;) ?


But hey look on the bright side,

1. There would be no more need for a bloated military, (no oilfeilds to liberate)

2.Troops could come home (see above)

3. No more airport TSA groping (No more Jet fuel)

4.No more cheap plastic crap everywhere.


You see its all a matter of perspectivve....





Thu, 03/29/2012 - 22:19 | 2302569 knukles
knukles's picture

No more KY Jelly!

Thu, 03/29/2012 - 18:39 | 2302069 non_anon
non_anon's picture

these sheep aren't representative, as they aren't shorn

Thu, 03/29/2012 - 20:31 | 2302365 WonderDawg
WonderDawg's picture

It's the "before" picture.

Thu, 03/29/2012 - 21:03 | 2302438 non_anon
non_anon's picture

yeah, lol, historical riches

Thu, 03/29/2012 - 18:46 | 2302080 meatbag
meatbag's picture

"The biggest mall in the world was built and there was no one shopping in it."

I think the important word here is "was".  As much as I would like to agree with Mike, the reality I see on the ground here in China is much different.  The empty real estate is all bought an paid for... with cash.  The empty malls now have shops and shoppers.  Unemployment is near zero.   Talented people jump from job to job with no fear.

"Anyone that watches markets and pays attention to economic statistics understands that China’s economy is in the midst of a serious slowdown."

Do you really think you can understand an economy from statistics?   Again, coming from someone who is on the ground in China, there are no apparent signs of any slowdown. 



Thu, 03/29/2012 - 19:04 | 2302110 blu
blu's picture

I would not expect the signs to be apparent on the ground until long after it is too late.

Same in the US right now. Things go along fine or seem to, and then they fall over. Nobody saw it coming is what they say.

Well somebody must have saw it. They just didn't say anything. Probably because there was money to be made on the way down.

So it will be in China, some day.

Fri, 03/30/2012 - 04:25 | 2302861 meatbag
meatbag's picture

Some day... yes, the question is that day in the next 12 months or the next 20 years...  I've been thinking it was right around the corner for many years now and it never came. 

Thu, 03/29/2012 - 19:20 | 2302141 walküre
walküre's picture

You're "on the ground" are you? Good morning then.

Are you as close to the ground as this guy?

Fri, 03/30/2012 - 04:06 | 2302854 meatbag
meatbag's picture

A lot closer, that guy is from Hong Kong...

Thu, 03/29/2012 - 20:30 | 2302361 uniman
uniman's picture

That's not what I see from my vantage point on the ground here.

Most Chinese that I've met are very frugal.  They just won't buy _anything_ unless they must.  For anybody who wishes to trigger a consumergasm among these people, good luck.

Stores that sell necessities are thus usually busy while the stores that sell other things are usually empty.  Mobile phones are considered a necessity and stores trafficing in them are busy.  As I walk around the streets of this 2nd tier town somewhere in China, I see endless new construction of high-rise buildings and giant malls.  At least two of the projects have simply stopped construction for some reason.  The recently built buildings sit empty or extremely unpopulated.  A few days ago I went to the mega furniture mall to buy an office chair.  Almost nobody was in there other than the very bored sales clerks, some of whom were playing badminton.

The older new-construction is almost as vacant.  It appears as if the "management" is attempting to cluster what new tenants they get into occupied areas, while mothballing the unoccupied areas.  Even in the occupied areas the stores are empty of customers.  It is a very common sight to see sales clerks sitting in front of their computer screen doing nothing but watching TV or playing QQ.

At night the towers are dark.  I can count a handful of lights in various rooms of the big hotel a mere few years old, maybe 10% occupancy.

I think this is an observation of an over supply of real-estate and a very slow business environment, but it doesn't speak to any rate of change of business activity.



Fri, 03/30/2012 - 04:18 | 2302858 meatbag
meatbag's picture

If there is a crash coming for China, I sure hope it comes soon, because I am getting the craped kicked out of me by a very scarce labor market (almost zero unemployment in Urban areas), factory capacity issues (again a lack of labor due to demograpics and to the general rise in wealth and thus less demand for factory jobs), and rising costs (labor up 20% annually, industrial materials tracking global oil cost increases).

Yes, I agree that some of these buildings are sitting empty, but this has been covered here before.  The building is empty, but all the units were sold for cash to little old ladies who took the cash out from under the mattress and bought the empty apratment with the intention of gifiting it to her only grandson in 10 years time.   In China, there is simpily NO other place to put saving then into real estate.  So at least for now, who cares if the building is empty.  Its bought and paid for.

As for the badminton playing staff, sounds like my employees!  The challange now is that young people are looking for these types of jobs.  The #1 priority for people I interview now is not even the salary, its how many days off and is the work "easy".  It seems the younger generation is placing "an easy life" as the #1 priority.

Thu, 03/29/2012 - 18:54 | 2302091 Thorny Xi
Thorny Xi's picture

This party's just getting started.  The Peak Oil Production conspiracy theory tin foil hat crowd has predicted now for years now.  So has the US government - if you read the "Kissinger Report" that ZH re-printed here (from 1974) this situation is no surprise, not even the timing.  Neither the Law of Substitution nor Moore's Law apply to oil energy density, portability and storage.   

Thu, 03/29/2012 - 19:00 | 2302103 metaltect
metaltect's picture

How much phys - Gold has US really got?

How much phys + Gold has China really got?

Sure as hell the stance is, "tradition".

Thu, 03/29/2012 - 19:17 | 2302137 Bansters-in-my-...
Bansters-in-my- feces's picture

I hope a gold bullet takes out the bankers

Thu, 03/29/2012 - 21:42 | 2302505 Jena
Jena's picture

According to legend, it has to be silver.

Thu, 03/29/2012 - 19:22 | 2302144 l1b3rty
l1b3rty's picture


In the nineteenth century Wall Street and the Central Planners were FOR gold, which makes me wonder if we might as well buy gold, keep out mouth shut, and PUSH SILVER ON THE PEOPLE!


Thu, 03/29/2012 - 20:16 | 2302302 q99x2
q99x2's picture

Viva la revolucion (sp).

Yes they have put themselves into quite a predicament. Everyone f'n knows who the enemy is. They've managed to piss the entire world off at them. But, at least in that way they have to be considered great. The greatest f'ups known to humankind. Let me just mention Hillary in case someone decides one day to give out awards.

I voted for her in 2008 because of all the candidates I believed she would bring an end to the ponzi faster than any of the other globalists.

Thu, 03/29/2012 - 20:17 | 2302307 nothing can go wrogn
nothing can go wrogn's picture

Bernank is going to have to double down on his college lecture series to get the word out on what great guys they are. Maybe even some tap dancing or juggling.

Saudi Arabia is always trotted out as the "central bank" of oil producers, but they don't have an infinity button on their oil rigs. Even if SA could pump 12+ M/bpd...why would they want to? It'd be like running out to sell all your gold today when you were convinced it's going to reach 5,000/oz tomorrow.

Thu, 03/29/2012 - 20:48 | 2302416 maingan
maingan's picture

"What do you get for pretending the danger's not real.
Meek and obedient you follow the leader
Down well trodden corridors into the valley of steel.
What a surprise!
A look of terminal shock in your eyes.
Now things are really what they seem.
No, this is no bad dream."

Thu, 03/29/2012 - 21:37 | 2302497 Smokey1
Smokey1's picture

Unauthenticated specious garbage replete with grammatical errors and rank speculation.


Try again.

Thu, 03/29/2012 - 22:12 | 2302561 JohnKozac
JohnKozac's picture

China's "stimulus" created many mmore million- and billionaires then I can count. Can you guess who received the lion's share of that money?

If you said, real estate developers, local gubberment officials and bankers you would be correct.

I enjoyed this article every much. The author makes many solid points.

Fri, 03/30/2012 - 04:35 | 2302864 meatbag
meatbag's picture

There is no doubt that the "stimulus" money almost all poured into real estate development.   There is no doubt that countless goverment middlemen became instant millionaires.  What is interesting to me is that so many companies have become "real estate developers".   If you look at Lenovo, there growth has been pretty nice the last few years, but peal back the numbers and you see that almost all that growth is not from core busienss, but rather from real estate!

I have stayed out of this game knowing the risks, but right now I look like the idiot.  Companies that just blindly built have done very well.   

Thu, 03/29/2012 - 22:29 | 2302590 Nukular Freedum
Nukular Freedum's picture

I dont think they grasp that escaping the liquidity trap and monetizing the debt (or defaulting) are really synonymous. The liquidity crisis and the solvency crisis are actually one and the same thing and so the only solution is complete monetisation. Scary prospect.

In addition the games with the strategic oil reserve imply that tptb actually believe the guff about the speculators being to blame. Not too smart.

Thu, 03/29/2012 - 22:33 | 2302596 Clashfan
Clashfan's picture

Isn't Krieger the guy who recently posted something demonstrating belief in large elements of the official 911 lie, hinting that Saudis did it? Hard to take anything else he says too seriously, sadly.

Thu, 03/29/2012 - 22:46 | 2302622 TradingTroll
TradingTroll's picture

Clashfan, You're right. Let me check my trusty copy of the 911 Commission report for what is says on Saudi
Oh gosh. Its missing. The Saudi section is missing! I guess you have it. Tell me what it says and then we can all agree with you on Mike Krieger and Saudis supporting 911

Until then, carry on asshat!-TT

Fri, 03/30/2012 - 01:49 | 2302796 Clashfan
Clashfan's picture

Hi TT. I wish you blessings. :)


I don't doubt the suspiciousness of the whole Saudi connection, but Krieger's piece serves as a distraction from the whole insider nature of the entire event. Rather than calling attention to the major points of legitimate 911 truth, it obfuscates those issues and follows an alternative but largely official account. It's crap.




He who fucks nuns will later join the church.

Thu, 03/29/2012 - 23:09 | 2302648 palmereldritch
palmereldritch's picture

It’s called the Petrodollar because oil and the dollar are inextricably intertwined.  It is impossible to tell now, in the case of the hostage KSA , where one ends and the other begins given that the kingdom is all in on the unravelling ponzi.

It would be more accurate though to call it the Petronote as it is really the fusion of petroleum with FRN debt notes.  Increase the debt and you have to increase oil production in the Saudi kingdom to sponge up all the inflationary debt as represented by a slow creep in price regardless of waning demand by industry being bankrupted by the note holders.  Having the lowest cost per barrel production they are ideally suited for this role.

The Saudis are held to increasing production in the face of falling demand to support a widening and expanding FRN float.  Makes you wonder where they’re going to store it all.

But then perhaps, not unlike the Federal Reserve buying UST’s with FRNs, they are just pumping all their excess production back into the ground so they can take it out the next day at a higher price....this could explain their boasts of ramping up production at will. </sarc font>

Fri, 03/30/2012 - 01:22 | 2302775 geekgrrl
geekgrrl's picture

The herd = The herd

Trevor = ZHers

Man = TPTB

Dog = Fascist machine: Blackwater, Xe, Northcom, DHS, TSA, etc.

Fri, 03/30/2012 - 05:13 | 2302875 kookaburralaugh
kookaburralaugh's picture

The only truly insightful comment in this thread so far.

Thanks, geekgrrl... 

Fri, 03/30/2012 - 08:23 | 2303055 JaylP6
JaylP6's picture

Stock market bottom April 2012 -

Fri, 03/30/2012 - 09:15 | 2303190 alexander-delarge
alexander-delarge's picture

definitions, please  ?



Sun, 04/01/2012 - 21:37 | 2308561 sullymandias
sullymandias's picture

Contrary to Mike's claims, his China position closely mirrors others in the community. Chris Martenson and a variety of KWN interviewees expect crash/slowdown in China.

I think it is a difficult thing to do to view and understand China through western eyes. For instance, most of us westerners are all hung up on one side or another of the socialist/capitalist war. For us westerners, it is a matter of ideology. But even though China is communist, the communist ideology is not a priority. Strength of the nation is priority number one, and nearly every single Chinese citizen is on the same page on that score.

Humiliation and saving face are very important parts of Chinese culture. Many westerners do not understand that the trilateral powers had dominated and utterly humiliated China for a century and a half, threatening the very existence of China as world power, before they finally got out from under the thumbs of the west a bit when the communists took over. But it's not over for them yet. Before major contact between China and the European powers began in the 19th century, China enjoyed all the luxuries of a powerful and self-sufficient country. It didn't think much of the European powers, while it was happy to trade textiles and porceline for european silver. Of course, the european powers changed all this with their military superiority. The Chinese have a two-centuries old grudge with the west, and they plan over generations, not in 2 to 4 year election cycles.

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