This page has been archived and commenting is disabled.

The "Muddle Through" Has Failed: BCG Says "There May Be Only Painful Ways Out Of The Crisis"

Tyler Durden's picture




 

Denial. Denial is safe. Comforting. Religiously and relentlessly abused by politicians who don't want nor can face reality. A word synonymous with "muddle through." Ah yes, that "muddle through" which so many C-grade economists and pundits believe is the long-term status quo for the US and the world just because it worked for Japan for the past three decades, or, said otherwise, "just because." Well, too bad. As the following absolutely must read report, which comes not from some trader of dubious credibility interviewed by BBC, nor even from an impassioned executive from a doomed Italian bank, but from consultancy powerhouse Boston Consulting Group confirms, the "muddle through" is dead. And now it is time to face the facts. What facts? The facts which state that between household, corporate and government debt, the developed world has $20 trillion in debt over and above the  sustainable threshold by the definition of "stable" debt to GDP of 180%. The facts according to which all attempts to eliminate the excess debt have failed, and for now even the Fed's relentless pursuit of inflating our way out this insurmountable debt load have been for nothing. The facts which state that the only way to resolve the massive debt load is through a global coordinated debt restructuring (which would, among other things, push all global banks into bankruptcy) which, when all is said and done, will have to be funded by the world's financial asset holders: the middle-and upper-class, which, if BCS is right, have a ~30% one-time tax on all their assets to look forward to as the great mean reversion finally arrives and the world is set back on a viable path. But not before the biggest episode of "transitory" pain, misery and suffering in the history of mankind. Good luck, politicians and holders of financial assets, you will need it because after Denial comes Anger, and only long after does Acceptance finally arrive.

First, let's recap why BCG thinks all the alternatives have been exhausted

We believe that some politicians and central banks - in spite of protestations to the contrary - have been trying to solve the crisis by creating sizable inflation, largely because the alternatives are either not attractive or not feasible:

  • Austerity - essentially saving and paying back - is probably a recipe for a long, deep recession and social unrest
  • Higher growth is unachievable because of unfavorable demographic change and an inherent lack of competitiveness in some countries
  • Debt restructuring is out of reach because the banking sectors are not strong enough to absorb losses
  • Financial repression (holding interest rates below nominal GDP growth for many years) would be difficult to implement in a low-growth and low-inflation environment

Inflation will be the preferred option - in spite of the potential for social unrest and the difficult consequences for middle-class savers should it really take hold. However, boosting inflation has not worked so far because of the pressure to deleverage and because of the low demand for new credit. Moreover the inflation "solution" while becoming more tempting, may come to be seen as having economic and social implications that are too unpalatable. So what might the politicians and central banks do?

 

Since the publication of Stop Kicking The Can Down The Road, a number of readers have asked us what would happen if governments persisted in playing for time. To what measures might they have to resort? In this paper, we describe what might need to happen if the politicians muddle through for too much longer.

 

It is likely that wiping out the debt overhang will be at the heart of any solution. Such a course of action would not be new. In ancient Mesopotamia, debt was commonplace; individual debts were recorded on clay tablets. Periodically, upon the ascendancy of a new monarch, debts would be forgiven: in other news, the slate would be wiped clean. The challenge facing today's politicians is how clean to wipe the slates. In considering some of the potential measures likely to be required, the reader may be struck by the essential problem facing politicians: there may be only painful ways out of the crisis.

At this point BCG goes into the details of why it is long overdue for reality to be finally acknowledged. We will skip this part as any regular readers of Zero Hedge are all too aware of reality, and how it is masked constantly by the mainstream media and its agents in all walks of life. The truth is far, far uglier than anything anyone in a position of power will tell you because acknowledgment would imply the need to come up with solutions that involve more than merely extending the event horizon for a little longer. Alas, even politicians now realize there is only so far that the can can be kicked.

There is one thing we would like to bring to our readers' attention because we are confident, that one way or another, sooner or later, it will be implemented. Namely a one-time wealth tax: in other words, instead of stealth inflation, the government will be forced to proceed with over transfer of wealth. According to BCG, the amount of developed world debt between household, corporate and government that needs to be eliminated is just over $21 trillion. Which unfortunately means that there is an equity shortfall that will have to be funded with incremental cash which will have to come from somewhere. That somewhere is tax of the middle and upper classes, which are in possession of $74 trillion in financial assets, which in turn will have to be taxed at a blended rate of 28.7%.

And if the prospect that very soon a government near you will force you to hand over a third of your wealth, here is the rest of the terrifying analysis of what will happen to the world in order to get it back in order:

A Program for the United States

The situation in the U.S. is different from that of the euro zone and, in a way, would be less complicated  to resolve.  The U.S. has all the levers with which to address the crisis and would not need to coordinate 17 countries with divergent interest. But some facts would need to be acknowledged before decisive action could be taken:

  • In spite of massive intervention by the Fed and the US government, growth remains anemic
  • The deleveraging of private households will have to go on for many years
  • The real estate market has not yet stabilized. About 11 million US households suffer from negative equity (their mortgage outstanding is higher than the value of their home). And the supply of homes is still in excess by 1.2 to 3.5 million (depending on the data used to estimate this number).
  • The US government deficit is not sustainable and will need to be brought to acceptable levels, which will slow growth and amplify the problems of the private sector.
  • In spite of a significant weakening in the dollar, the U.S. is still running a trade deficit that cannot be blamed on China alone. It reflects a lack of competitiveness in some key markets and the low proportion of manufacturing in the U.S. economy compared with countries such as Germany and Japan.
  • There is a striking similarity between the US and Japan in the development of stock and real estate prices (See chart below). A correlation does not mean causality, but it is a sobering picture should Ben Bernanke and his team fail to reflate the economy.
  • The interventions of the Fed, notably the programs designed to buy financial assets, have created a monetary overhang that could be the basis for sizable inflation in the future.

Addressing the debt overhang.

The US would also  need to reduce the debt overhang of the government, of consumer loans besides mortgages, and of non-financial corporate sector in the same way as in Europe. As exhibit 2 shows, the total debt overhang in the US equals $11.5 trillion or 77% of GDP. In the somewhat unlikely event of the US following the same path that Europe might pursue, a one-time wealth tax of 25% of financial assets would be required. As in Europe, this would also require the following initiatives.

  • Cleaning up the banking sector by calculating the losses and recapitalizing as needed – even if it means wiping out existing shareholders.
  • Additional taxes on real estate, including an increased capital-gains tax to offset the support for the real-estate market.
  • Creating an incentive for corporations to invest in R&D and new machinery by taxing profits not reinvested.
  • A commitment by the government to restrict its debt level and to prepare for the increasing costs of an aging population by either limiting benefits or raising the retirement age.

Addressing the fundamental issues of the US Economy.

We have argued for a long time that the US economy needs to address some fundamental issues in order to become globally competitive again. In putting an end to muddling through, the government might also embark on a major restructuring of the economy:

  • Reindustrialize and grow the share of the manufacturing sector from the current low of 12% of GDP to 20% of GDP . This might then allow a rebalancing of trade flows.
  • Revisit income distribution.  Most U.S. families cannot make up for their income shortfall with increased credit – and 41 million Americans are officially considered to be below the poverty line.
  • Take action to reduce dependency on imported oil by investing in new technologies and modernizing existing infrastructure.
  • As in Europe, an administration that truly bit the bullet would take a long-term view and invest more in education.

All this is still speculation. But history shows that the US economy, like no other, is capable of adjusting and implementing quite radical changes. And in our view, some of the actions described above might be pursued by the US government if things do not improve soon.

BCG's conclusion:

The programs we have described would be drastic. The would not be popular, and they would require broad political coordinate and leadership – something that politicians have replaced up til now with playing for time, in spite of a deteriorating outlook. Acknowledgment of the facts may be the biggest hurdle. Politicians and central bankers still do not agree on the full scale of the crisis and are therefore placing too much hope on easy solutions. We need to understand that balance sheet recessions are very different from normal recessions.  The longer the politicians and bankers wait, the more necessary will be the response outlined in this paper.  Unfortunately, reaching consensus on
such tough action might requiring an environment last seen in the 1930s.

Full report:

BCG_Back_to_Mesopotamia_Sep_11[2]

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 09/29/2011 - 16:14 | 1723544 Tsar Pointless
Tsar Pointless's picture

Shit. Then there is only one thing left to do.

Print.

Dow 30,000, here we come!

Thu, 09/29/2011 - 16:16 | 1723553 Long-John-Silver
Long-John-Silver's picture

Gold $30,000, here we come!

Thu, 09/29/2011 - 16:27 | 1723602 Cynical Sidney
Cynical Sidney's picture

either end the fiat enslavement or convince the world reserve status of the dollar guarantees world security and continuing globalization

Thu, 09/29/2011 - 16:40 | 1723654 Comay Mierda
Comay Mierda's picture

europe and america are going to look like zimbabwe soon

 

http://www.momoneyblog.com/wp-content/uploads/2010/05/zim-dollars-toilet...

Thu, 09/29/2011 - 16:49 | 1723717 slackrabbit
slackrabbit's picture

 

Youre right....hmmm...maybe zimbabwe is the safer place to move to.

Thu, 09/29/2011 - 16:50 | 1723720 Pinto Currency
Pinto Currency's picture

What a brilliant idea.

Instead of writing down the debt and breaking-up the TBTF banks and reforming the currency, tax the assets of those who still hold them in country.

 

That's one way to deal with the looting of a country by the financial sector and its enabler, self-owned central bank.

 

Oh, and keep the central bank and debt-based money in place so that we can do it again.  That will go over REALLLL GOODDDDD.  Hyuk.

Thu, 09/29/2011 - 17:05 | 1723793 That Peak Oil Guy
That Peak Oil Guy's picture

Assuming 3% growth to GDP while the cost of oil will continue to rise is probably a bad call.

-3% sounds like a more realistic number for long-term planning.  That is probably overly optimistic as well, though...

Thu, 09/29/2011 - 18:44 | 1724091 gmj
gmj's picture

Economists seem to be genetically unable to comprehend resource depletion.  Therefore, none of their predictive models will work.  But it isn't just an economic problem.  In a few decades, it will become a question of survival of our modern technological civilization.  The future will not follow the trendlines of the past.  The data is all out there, but the experts are too specialized to comprehend it.

Thu, 09/29/2011 - 19:35 | 1724207 Bicycle Repairman
Bicycle Repairman's picture

Rhodes and Stelter?  That's a comedy team, right?

Thu, 09/29/2011 - 19:35 | 1724208 PierreLegrand
PierreLegrand's picture

Oh yea Peak Oil bullshit...please we will be burning more oil in 20 years than we are now.

Thu, 09/29/2011 - 19:46 | 1724235 Jack Burton
Jack Burton's picture

Yes, sure, but what will the price of that "more oil" be in 20 years time?

It ain't about lack of oil, it IS about what it will cost to explore, develope and pump that "more oil".  Peak Oil doesn't mean there isn't plenty of oil, it means the new oil that is found is expensive to produce. Big difference between Saudi oil just under the sand and oil from tar sands or deep water oil off of the Falklands or new arctic oil produced in the newly ice free portions of the arctic sea.

Thu, 09/29/2011 - 20:31 | 1724369 Dr. Acula
Dr. Acula's picture

>what will the price of that "more oil" be

When priced in gold, probably the same as it is now. The same as it was 60 years ago.

 

Thu, 09/29/2011 - 20:49 | 1724424 DeadFred
DeadFred's picture

10 cents a gallon.

Thu, 09/29/2011 - 21:20 | 1724498 CrazyCooter
CrazyCooter's picture

60 years ago, some red necks in East Texas threw up some wood derricks, drilled, and pumped oil at great profit.

A similar field might exist in the Beaufort Sea off the North shores of Alaska.

Now, do you think the price of oil 60 years ago is the price of oil today is the price of oil tomorrow?

The energy inputs required to produce are steadily going up. At some point it will take as much energy input as there is output at which point its game over. At that time, there may still be a lot of oil somewhere, but it won't get developed.

It's unfortunate that so many people in the world rely on food production levels which are only possible due to fossil fuel inputs. I am 30 something and if I live to see 70 something I will have lived through some of the darkest moments in our species history.

Regards,

Cooter

Thu, 09/29/2011 - 23:46 | 1724767 Phil Free
Phil Free's picture

With usage-levels scaling as they are now, it's projected that after (aprox.) 2050, there will be no more oil left in the ground. 

 

All major reserves tapped.  Sure, they'll work to stretch availability with difficult/expensive extraction techniques w/ oil shale and such, but.  The sand countries that have one singular export - oil - will not be happy.  Along with the oil-consumers.  So, 40 years out things will get very interesting.

Fri, 09/30/2011 - 00:38 | 1724838 Oh regional Indian
Oh regional Indian's picture

Peak Everything is correct. Even Peak Manliness and Womanliness. 

Tipping point is definitely behind us.

Of Tipping Points and Shape Shifting

 

ORI

 

Fri, 09/30/2011 - 01:09 | 1724883 AustriAnnie
AustriAnnie's picture

Doesn't matter how much oil is in the ground.  If the gov't declares an Energy Czar that controls it, you bet its gonna cost ya.

And I think we are looking at a situation where gov't (or friends of gov't) will be controlling a good deal of resources and distributing them "to each according to his need" (er, votes and campaign contributions).

I think politics are more important to consider, rather than arguing over how much oil there is.

How much of what we pay today is pure tax?  The cost to us of oil, not just at the pump, but the tax dollars that go into regulation and gov't "studies" and regulation of the transport of oil, and regulation of the environmental impact, and on and on.  Then you add that our tax dollars purchase most of the world's oil for our military, we are already paying a massive cost that has very little to do with the science of drilling it out of the ground.  Has much more to do with WHERE (within which nation's boundaries) the oil exists, and the control of that oil (domestic production as well as use, and geopolitically on the world stage).

 

Fri, 09/30/2011 - 01:15 | 1724890 buck4free
buck4free's picture

You've got it Sir. Financial economy is the Matrix. Political economy is the real world.

Fri, 09/30/2011 - 02:15 | 1724958 Michael
Michael's picture

Great.

Queen Elizabeth II and Queen Beatrix will have to take a hair cut on their oil revenues in the not too distant future.

Tue, 07/03/2012 - 11:02 | 2583805 The Big Ching-aso
The Big Ching-aso's picture

 

 

Unless I missed it being mentioned, BCG has missed the biggest initiater and thus the biggest forthcoming 'tax' of all.   War.   World war.     All in the guise of international security.   Everyone's gonna pay either by fiat or by blood one way or the other, brother.   The economic engines of man against man are ready to rock and roll like never before.    There's no business like war business.   You can bank on it.

Thu, 09/29/2011 - 23:14 | 1724712 gmj
gmj's picture

Human population has increased by 500% since 1900.  I argue that this is mainly due to the utilization of fossil fuels for fuel, transportation, fertilizers, pesticides, plastics, tires, etc.  I argue that this is a population bubble, and is unsustainable without fossil fuels.  

 

"The era of cheap oil is over.  Current trends in energy supply and consumption are patently unsustainable--environmentally, economically and socially--they can and must be altered."  Nobuo Tanaka, executive director of the International Energy Agency (IEA), in World Energy Outlook 2008.

 

Oh, by the way, it's not just peak oil.  It's peak everything.  Go ahead and try to cleverly innovate your way out of that.  I predict that the human race will do what comes naturally, until it's much too late (which it may already be).  Then the usual mechanisms will take care of the population problem.  It's our choice:  controlled adaptation to the future, or uncontrolled.

Thu, 09/29/2011 - 23:53 | 1724781 Phil Free
Phil Free's picture

Heh.  Peak oil.  They sweat now.  40 years out, year 2050, projected all major oil reserves tapped? The "military-industrial complex", the world at large .. there will be much gnashing of teeth.

Tue, 10/11/2011 - 21:53 | 1763976 Ranger4564
Ranger4564's picture

You can argue whatever you want but you'd be wrong.  Populations in Western countries with most technological development / access and use to fuel rose much less than the rest of the world that was not as technologically developed, and had little access to the fuel.

Thu, 09/29/2011 - 17:24 | 1723869 fishface
fishface's picture

yeah preserves the system and keeps parts of everyones debt.

 

This isn't about setting the serfs free.

Thu, 09/29/2011 - 17:46 | 1723952 Pinto Currency
Pinto Currency's picture

 

You would probably need a border fence to prevent people from flooding into Canada.

Ron Paul not so dumb.  Not dumb at all.

 

http://www.ctv.ca/CTVNews/TopStories/20110929/us-canada-border-proposed-fencing-110929/

 

Thu, 09/29/2011 - 18:10 | 1724012 SeanJKerrigan
SeanJKerrigan's picture

That's whats amazing about that comment... I know people who are so indebted, they are seriously considering leaving the country to escape their loans.  There's talk that if this continues, the gov could make it very difficult to get a passport if you have significant debt.

In short: RON WAS RIGHT.  Again.

Thu, 09/29/2011 - 18:17 | 1724031 DosZap
DosZap's picture

Sean,

I know people who are so indebted, they are seriously considering leaving the country to escape their loans.

That makes ZERO sense...........if they are that far in debt, how the hell they going to leave, and what will they live on when they get there?.

 

Thu, 09/29/2011 - 18:44 | 1724090 Diogenes
Diogenes's picture

They will get jobs and start over just like millions of immigrants have done in the US. Starting from scratch in a country with a viable economy could be tempting for a young person with $100,000 worth of debt, a fresh degree, and a job at Best Buy.

The smart ones will max out their credit cards and start fresh with new wardrobes.

Fri, 09/30/2011 - 00:45 | 1724854 AldousHuxley
AldousHuxley's picture

Or they can come up with some bull shit "management consulting" business like BCG and write fluff pieces to pay for that useless "social" MBA with questionable ROI. BCG makes money bilking clients, so they don't have time for conslutants to write for free. The authors must be on the bench to write useless crap like this to ask for government money printing. When they do ignore them.

 

David Rhodes

Senior Partner & Managing Director
Global Leader – Financial Institutions Practice

 

Dr. Daniel Stelter

Senior Partner & Managing Director
Global Leader – Corporate Development Practice

Fri, 09/30/2011 - 03:46 | 1725001 Seer
Seer's picture

I'm a US citizen (born and raised), in which case I cannot comment on what immigration requirements are, but I CAN tell you that immigration to other countries (Canada, New Zealand, Australia to name a few) has strict requirements that immigrants have valid means of financial support (either their own financial assets or support from a sponsor).

People need to understand that debt isn't just public, it's also private (which, I believe, is greater than public).  With lots of debt being owed to financial institutions, many that are international.  You can run, but you cannot hide...  Better believe that TPTB are going to account for this.  Of course, one could probably "escape" to some "rouge" country, but I'm not thinking that such places are going to welcome poor white trash.

Fri, 09/30/2011 - 22:50 | 1728134 AldousHuxley
AldousHuxley's picture

when corporations outsource, they bring up "global diversity initiatives" to get you used to living the life style of the 3rd world workers.

 

Tue, 07/03/2012 - 11:07 | 2583844 NidStyles
NidStyles's picture

You need to get out more. Many poor third world nations have such an exchange rate that a poor white trash person with 10K is like a King. 

Thu, 09/29/2011 - 19:16 | 1724150 SeanJKerrigan
SeanJKerrigan's picture

Understand that much of this debt is student loan debt, which I'm sure you know, cannot be forgiven in bankrupcy court.

For example, a friend of mine is in 80,000 in student loan debt.  That amounts to about $800 in payments a month and adds about $15,000 in addition over the life of the loan.  She got this while studying Spanish abroad.  If she was not able to find a job here, she was seriously considering leaving the country as a way to refuse to pay her debts, which for her was totally plausible considering her ability to speak and interact with people in those countries.  Also, native English speakers are in high demand overseas.  She was planning to go back eventually anyway with the little bit in savings she had left, so it is possible.

There are others I've spoken to online who have similar circumstances, although they're thinking more along the lines of Australia.  Anyway, my point is, the idea that the government would want to keep people who have large debts inside the country is completely plausible.

EDIT: By the way, I fully recognize that it is largely her fault for agreeing to take on so much debt.  Also, about my friend, she did manage to find a job making a somewhat decent wage, although she will have to live at home for a wihle.  So things will work out for her.

Thu, 09/29/2011 - 19:39 | 1724216 Bicycle Repairman
Bicycle Repairman's picture

"She got this while studying Spanish abroad. "

Stop it!  I'm tearing up already.

Thu, 09/29/2011 - 20:23 | 1724347 Stares straight...
Stares straight ahead's picture

Yes!  A real hardship case.  Where do i donate?

Thu, 09/29/2011 - 20:31 | 1724370 knukles
knukles's picture

When they make English the official language of Amhurikuh and throw all them immugrunts outta here, then she'll wish that she'd stayed the fuck overseas and taught or tended bar or whatever there instead of coming back here to the Lump of Hopportunity and bitched and pissed and moaned about being unemployed.  Hell, just go to El Salvador or somewhere and bitch about it.  Fit right in.

Jesus H., everybody is feeling the stiffie!
So what's all this crap about student loans, unemployment?
It's here now, real time, pervasive about the whole fucking country and right here in My Own Fucking Home In River City.
Deal with it.

Direct your anger, resentments, whatever where it will do some good.
Write your congresscritter, and maybe they'll sic the feebies on you and toss your ass into the camps till you brioghten up and do something productive.  Like participate in a National Service Day.

Agggggggggaaaaaarrrrrrrggghh

It is sooooooooooooooo fucked up.  

Fri, 09/30/2011 - 00:48 | 1724857 sgorem
sgorem's picture

+14 trillion. (just please don't "sugar coat" the situation:)

Thu, 09/29/2011 - 21:10 | 1724481 SeanJKerrigan
SeanJKerrigan's picture

Like I said, not looking for sympathy for her in any way.  She brought it upon herself for the most part.  BUT, when you've got huge debts to pay, (or your rich and don't want to pay double taxes) leaving the country or renouncing your US citizenship has its draw.

Thu, 09/29/2011 - 21:26 | 1724511 CrazyCooter
CrazyCooter's picture

Well, if she is going to pack it in, have her read Richard Maybury's "What ever happened to Justice?". It is written for a young audience, but its points are pretty simple and sound; common law legal system is good.

The book scores all the nations based on a variety of criteria presented in the book.

Oh, and don't listen to Simon Black, I think his advice sucks (if you are not independently wealthy).

Regards,

Cooter

Fri, 09/30/2011 - 00:39 | 1724842 Cull Morgan
Cull Morgan's picture

> Richard Maybury's "What ever happened to Justice?"

Cooter, you're an interesting enough guy that I googled the book and now bought it.

Been wanting to learn more about common law ever since I tried to educate myself about all laws relevant to my mortgage. Fascinating to try to understand the history of it: livery of seisin, etc. "This turf and twig I give to thee, as free as Athelstan gave to me, and I hope a loving brother thou wilt be." But I digress...

P.S. Can't stand Simon Black! I know a bit about living in foreign countries, enough to tell that SB has no clue. He sounds like a precocious 15-year old writing articles about exotic locales based on their Wikipedia pages.

Fri, 09/30/2011 - 00:51 | 1724860 AldousHuxley
AldousHuxley's picture

https://occupywallst.org/

 

Might as well be heard because her representatives only listen when there is money involved > wall st. lobbying money.

 

Otherwise, she can also go protest at her own university who is the one who screwed her over. Go hold a sign that says "degreed and unemployed" at the prospective student office. I'm sure the school will throw her some bs work to shut her up.

 

 

Thu, 10/06/2011 - 00:57 | 1744329 CrazyCooter
CrazyCooter's picture

If you had 100MM in cash and the cold logic calculation to travel the world and "sample its riches" you would sound like SB. Life is different when you can buy the locals. But that is a dangerous road when your interest is not real.

I am a simple man. I cut out the back of junk mail envelopes for scratch paper (e.g. grocery lists, etc). I have my simple pleasures though, we all do (e.g. peerless coffee).

But at the end of the day, I value community and my place in it.

Let me paint the picture in American terms. Just the other day, I saw this in the news up here:

http://www.alaskadispatch.com/article/pebble-mine-vote-southwest-alaskas...

The guy who is fighting against the mine has a multi-million dollar lodge and gives out a turkey to all the local residents every year. But he doesn't give a shit about the locals; he wants to bring in his "investors" and be "cool". Not a bad deal for the price of a few turkeys. Now he is getting his ass hung out when folks are looking at real work/jobs that will last decades.

It is a very interesting "debate" when you really dig in past the sound bytes. Read. Think. Come to your own conclusions. Just don't be spoon fed for god sakes.

Regards,

Cooter

 

Thu, 10/06/2011 - 01:21 | 1744360 Anonymouse
Anonymouse's picture

Words of wisdom, Cooter.  Well said

Fri, 09/30/2011 - 00:43 | 1724847 Tompooz
Tompooz's picture

If there is  the smallest chance of confiscatory taxation, even if you are not very wealthy, it makes good sense to have an escape plan to spend your creative and productive energies in a (developing) country where you will be allowed to keep your capital and encouraged to grow it. 

 www.orchidpark.net 

Thu, 09/29/2011 - 22:04 | 1724580 Stares straight...
Stares straight ahead's picture

tell her we'll miss her

Thu, 09/29/2011 - 21:26 | 1724515 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

sorry, and so some foreign country is going to willingly take American  debt-refugees, because they have a piece of paper degree that says they certified debt whores. you finished it honestly, she brought it on her self with some false scam of an education. Good luck anyway. you'll only make it past the guards at the border if you have gold to donate.

 

Fri, 09/30/2011 - 01:27 | 1724902 AustriAnnie
AustriAnnie's picture

Actually many work abroad programs offer free room and board plus plenty to live on (often tax free as "work internships" or "charity work" teaching English abroad.  

In 2002 I was offered a job teaching English with pay at $40 an hour in California for a church organization that was sucking grant money from the Federal government for outreach programs.  I did not take it because it was clearly a bureacratic nonprofit nightmare.  But this girl has many options.  Resort communities in South America have many opportunities for Americans who are bilingual.

Unlike Asia and Europe where everyone learns English in school starting at a young age, places in Mexico have demand for bilingual speakers, and like having Americans on their staff because many yuppie American tourists are scared to death of dealing with anyone who is not American.

Also, if she speaks Spanish she can suck the gov't for some eco grant to go study the rainforest in Costa Rica or some crap, and she'll make a fortune.

Good gawd, I can think of a million things she can do to earn a living in the U.S. or abroad.  Her problem, from what it sounds like, is that she doesn't actually want to WORK.  Might be a problem of a slightly inflated sense of entitlement, perhaps?

Thu, 09/29/2011 - 21:03 | 1724459 mkkby
mkkby's picture

Shhhh.  Don't tell them all they have to do is stop paying or declare bankruptcy.  Let morons like that go.  Please.

Thu, 09/29/2011 - 22:31 | 1724635 SPAREPARTS
SPAREPARTS's picture

Think of young people with 100k debt or 250k get educated borrow and blow this pop stand, thats my advice

Thu, 09/29/2011 - 18:32 | 1724065 Snidley Whipsnae
Snidley Whipsnae's picture

Have you tried to renew your passport recently?

Try to get into Canada if you have a DUI on your record...

I don't have a DUI but have friends that do and cannot gain entry into Canads (and probably other countries).

When I first began traveling to Canada the only question asked by Canadian Customs was "do you have any American bacon?". If one did, customs confiscated it.

This ain't the relationship that I remember from 8th grade civics where it was stressed that 'America and Canada have the longest unguarded border in the world'. lol

Thu, 09/29/2011 - 18:35 | 1724072 DosZap
DosZap's picture

Snidley,

Try crosing with a vehicle with Texas plates.................

Your transportation will be dissasembled.( they assume EVERY Texan carries weapons).

Fri, 09/30/2011 - 00:26 | 1724820 AnarchyInc
AnarchyInc's picture

Every Texan should carry weapons.  There are two types of people:  those with weapons and victims.  Us Texans will need them when blood-crazed Lincoln II sends the murderers for the state across the Republic of Texas border after we secede due to insane economy policies.  (Just like the first time).

Thu, 09/29/2011 - 19:20 | 1724160 DoChenRollingBearing
DoChenRollingBearing's picture

@ Snidley,

I renewed my passport some 6 months ago.  What a trial that was!  And it is MUCH WORSE to apply for a passport if you have never had one.  Very onerous forms and documentation requirements.  I am glad that our daughter already has hers...

Easier to be an illegal here.  :(

Thu, 09/29/2011 - 19:36 | 1724210 Grimbert
Grimbert's picture

I was worried going to the USA last year with a DR10 (look in wiki) from 2003, worried if I classed as a non-visa waiver person as a result. Is my crime 'moral turpitude'? wtf, I searched for hours on the internet trying to find out, and all I could get was Homer Simpson drink driving and not getting thrown into prison, the bastard. The concept of moral turpitude doesn't exist in England therefore I claimed to be an honest person. I had the good fortune to travel to the usa via Toronto where you go through american customs in Canada, so if you fail their tests you don't get sent back to another continent. Just in case I was wrong.

Thu, 09/29/2011 - 20:23 | 1724350 Stares straight...
Stares straight ahead's picture

sobering...

Thu, 09/29/2011 - 19:25 | 1724174 Syrin
Syrin's picture

Yeah no kidding.   Try to take a third of the property of the productive members of society (post tax property), and see if it doesn't spark an armed uprising.

Thu, 09/29/2011 - 20:59 | 1724448 mkkby
mkkby's picture

We won't have a 30% wealth tax.  We will have a 30% devaluation over the next 10 years, just as we had the last 10.  No change.  Ho hum.

Thu, 09/29/2011 - 18:19 | 1724035 Whalley World
Whalley World's picture

In an in

In an interview with goldseek radio, Jim Rogers said the new place to be for investment is North Korea and Myanmar!
I wuld prefer Zimbabwe to either of these countries.

Tue, 07/03/2012 - 19:37 | 2585566 Shaktipalooza
Shaktipalooza's picture

North Korea sounds like a terrible bet. On the other hand, I was in Myanmar last fall and it would make perfect sense if you can figure out how to invest safely. Beautiful place that's been held back for a very long time.

Fri, 09/30/2011 - 02:57 | 1724985 The Navigator
The Navigator's picture

Last year I bought bundles of 50 Trillion and 100 Trillion Zim notes to give away as 'funny' gifts and to remind friends of what inflation can bring - wouldn't that be a hoot if those bundles turn out to be worth more than FRNs?
Long Zim Dollars???

Either way, short USD and long anything else of (real) value. 

Thu, 09/29/2011 - 16:41 | 1723671 johnQpublic
johnQpublic's picture

before i let them take 28.7% of my wealth, i will empty the bank accounts, money markets and stock portfolio and go on a coke binge motherfucking scarface would be proud of.

 

i didnt create the problem

and i wont pay for it

keep all your government bennies, i'll take care of my self

even let the roads go to shit

i'll walk or ride my bike

Thu, 09/29/2011 - 16:44 | 1723682 Comay Mierda
Comay Mierda's picture

if a 30% wealth tax is coming, you will only hear about it after all your accounts have been seized, and you are in a FEMA camp

Thu, 09/29/2011 - 17:37 | 1723931 macholatte
macholatte's picture

Now consider how loudly the unions and civil servants squealed when they were asked to give up a pay raise, give back 3% of bloated retirement pay, etc., etc. Nothing like this wealth tax is going to happen. They can't even get a little surcharge on income over $1M nor a real cut to spending. The only solution to this is going to have to come from the public and it's probably going to be in the form of serious civil disobedience in the form of uncontrolled mass riots in many, many locations and countires which requires leadership which is not likely.... OR ...... they continue to stall for time and in 10 years the sheeple have been so dumbed down and enslaved that they know not what has happened to them. That is a much more likely scenario in my mind. The oligarchs have no intention in taking a hair cut so don't plan on it anytime soon. JMHO

 

"He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark moustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother."

1984 (Orwell)

 

Thu, 09/29/2011 - 20:34 | 1724378 BigJim
BigJim's picture

I don't think they've got ten years. But I do know they have a mighty fast printer.

Thu, 09/29/2011 - 18:13 | 1724023 DosZap
DosZap's picture

Comay Mierda,@ 16:44

 after all your accounts have been seized, and you are in a FEMA camp

YOUR accts may be seized, and YOU may be in a FEMA camp,but I guarantee you NEITHER will be the case for me.

Just exactly how many of the enemy would it take to pull your scenario off?, w/out a humongous backlash.

Thu, 09/29/2011 - 18:35 | 1724070 Comay Mierda
Comay Mierda's picture

the way the feds will try to engineer it is to make you WANT to come to a camp

classic problem - reaction - solution technique

if you dont think thats possible, ask yourself if you would have ever thought before 9/11 that there would be an army of TSA agents at airports having crippled old ladies removing their diapers for inspection before boarding planes. the sheeple begged for this type of police state after that.

and still to this day, steel doesnt melt at 1200 degrees farhenheit, towel heads that cant fly cessna's still cant fly jumbo jets, and bin laden was never indicted by the FBI for those attacks because they lacked hard evidence.

dont take my word for it. research it yourself

Thu, 09/29/2011 - 18:40 | 1724079 DosZap
DosZap's picture

Comay,

Been around a LONG time, and am familiar with Hegelian Dialectics, and there is NO Way I would vountarily go into any Govt camp.

Period.

I did not say it wasn't possible for OTHERS to do so, I just said I WAS NOT GOING.

What part of NOT GOING do you not get?.

Thu, 09/29/2011 - 18:41 | 1724083 Comay Mierda
Comay Mierda's picture

then i misunderstood. i will also be one of those who see through the BS and not go

Thu, 09/29/2011 - 19:26 | 1724177 DoChenRollingBearing
DoChenRollingBearing's picture

JohnQ, Comay, DosZap,

I may be preaching to the choir here, but GET STARTED (those who have started, start accelerating!) in your preparations!  All you other ZH-ers too!

A Fascist America would be a terrible thing (NO, we are not there yet).  Leaving in time is the tricky part.  Leave, and then everything works out OK?  Then you may have a hard time coming back and be stuck in, say, Peru!  Wait too long, they seize your wealth (here) and FEMA-camp you.

A tricky problem.  Stay nimble, stay alert, stay prepared.  Oh, buy gold while you're at it.

Thu, 09/29/2011 - 19:46 | 1724240 DosZap
DosZap's picture

DoChen,

Thanks................

I hear ya bro,but when I said NO camps for me, that's what I meant.They will not seize my wealth, because I will not have it.

How do you get stuck in Peru(how do you get to stay?),if things are ok here, you have a passport,and can always return.I can think of a lot worse things than being stuck in Peru.

Gonna email ya,have some questions.

 

Thu, 09/29/2011 - 20:08 | 1724299 DoChenRollingBearing
DoChenRollingBearing's picture

Fire away brother DosZap!  Emails that is!  Not lead!

Thu, 09/29/2011 - 19:29 | 1724190 Syrin
Syrin's picture

There are far more than you realize.   Gun and ammo sales aren't at record levels without a reason.   I've stockpiled 2 years worth of food, water, weapons, ammo, etc.  A substantial number of people I know are doing the same.   There will be a SERIOUS backlash if they try anything like this at all.

 

Suggestion.   Keep as many of your assets OUT of the banks as best possible.

Thu, 09/29/2011 - 20:08 | 1724302 DosZap
DosZap's picture

Syrin,@19:29

They have a clue, but they do not know the extent nor the numbers, nor the expertise levels of those that will stand.

That's the  UNknown variable.

The people I have known have been in/at this all their adult lives, Mil/Ex Mil/LE/Ex LE, preparations have been balls to the wall for a showdown (possibility of one) since at least Clintons first day in office.

Why do you think the .gub has hired and ramped up so much,so fast, and curtailed our rights as they have............systematically taking it apart.

Thu, 09/29/2011 - 20:53 | 1724434 Syrin
Syrin's picture

Yep, I agree

Fri, 09/30/2011 - 03:05 | 1724987 The Navigator
The Navigator's picture

Keep as many of your assets OUT of your house (that require registration, receipts, etc) as best possible also - i.e. guns, ammo, silver/gold - in multiple locations - but don't forget to draw a map an give to next of kin that can be trusted AND don't develope alzheimers.

Fri, 09/30/2011 - 01:36 | 1724915 AustriAnnie
AustriAnnie's picture

No, you two are the types they don't even INVITE to the camp (they fear you'll incite uprising).

You types, they just shoot on sight.  

Get invisible boys! (Or shoot first)

Thu, 09/29/2011 - 21:11 | 1724485 mkkby
mkkby's picture

When the tap water doesn't flow and the lights don't come on, everyone will gladly go to the "freedom" center for a meal, hot shower, free TV and video games.  You may be the 1 in a million that won't, but so what?

Fri, 09/30/2011 - 01:09 | 1724884 Uncle Remus
Uncle Remus's picture

You might want to consider Hezbollah, their shadow government social services and Lebanon.

Thu, 09/29/2011 - 20:51 | 1724414 The Big Ching-aso
The Big Ching-aso's picture

For some reason I think that especially blue-collar type union members won't be too happy about all their accounts getting seized plus being interned in non-union FEMA camps for non-payment of their new non-union dues.

Call me crazy but I can see where Operation Fuck the Public at Large (OFPL) will not go quite as smoothly as let's say muddle-judging through a tie on Dancing with the Stars. 

 

Fri, 09/30/2011 - 00:20 | 1724812 Blorf
Blorf's picture

Sorry G-man I'm broke!  All those PMs I bought?  Sold on craigslist, money spent on hookers.  Definitely not secured in a foreign country with no US paper trail.

Fri, 12/30/2011 - 23:36 | 2023153 Jolly.Roger
Jolly.Roger's picture

Secured how?

Tue, 07/03/2012 - 11:19 | 2583915 NidStyles
NidStyles's picture

Can't you read? He said they weren't secured. Neither are mine. 

Thu, 09/29/2011 - 17:51 | 1723969 Dick Fitz
Dick Fitz's picture

While the authors understand the problem, and articulate it well, their solution is untenable and will never work. Taking 30% of the money in the banks as an ex post facto tax and expecting the populace to just swallow it is absurd. Even though it is a fraction of the lower and middle classes that are voicing their distaste for Wall St today, such an action would result in a bloody revolution overnight. Elected officials who supported it would be forced into hiding for fear of lynching, and the dissolution of the federal government would be swift and brutal.

After re-reading the paragraph above, maybe it wouldn't be such a bad thing if TPTB pursued this course of action- at least DC would be dead, and the States would be free to experiment with true freedom and individual liberty.

Thu, 09/29/2011 - 17:55 | 1723980 Dick Fitz
Dick Fitz's picture

Oh, I must add that the multi-national banks would be robbed of any currency in their vaults, and the gold (if it exists) in their vaults would be liberated. All federal lands would become state property also, with any mineral or energy rights open to extraction.

The more I think about this, the more I support the plan!

Thu, 09/29/2011 - 18:17 | 1724032 Snidley Whipsnae
Snidley Whipsnae's picture

"such an action would result in a bloody revolution overnight."

......................................................................................

People revolt when they are starving and when they see their families starving. I have said this many times but most here have not studied history...or, ignore history.

A plot to assisinate FDR was hatched when he began introducing programs that would relieve the starving...but the plot failed and FDR had the good sense to keep the scheme under wraps.

Of course, the 1% that have most of the wealth will go to great lengths to preserve their wealth but they will not succeed against billions of starving people with no hope.

In times like these some populist (think Hitler) always finds an audience among the hungry. If the current crop of Pols/banksters fail to act they will lose all their wealth to a populist uprising of the hungry. Wanna lose 33%...or 100%?

 

Thu, 09/29/2011 - 19:06 | 1724134 Sophist Economicus
Sophist Economicus's picture

and FDR had the good sense to keep the scheme under wraps.

 

Boy, I'll say!   NEVER let the citizery of a Republic know what you're gonna stick'em with until its too late for them to do anything about it

Thu, 09/29/2011 - 21:15 | 1724484 baby_BLYTHE
baby_BLYTHE's picture

I believe Max Keiser and Marc Faber had said in Egypt 40% of income goes toward food alone, this was one of the many catalysts for their Revolution. It will be much worse in American when the dollar collapses and inflation explodes during the coming years.

Thu, 09/29/2011 - 19:31 | 1724194 Syrin
Syrin's picture

*gives Dick Fitz a high five*

 

Amen to that bro.

Thu, 09/29/2011 - 19:44 | 1724234 Bicycle Repairman
Bicycle Repairman's picture

The authors of this article are politically tone deaf.  This could never happen.  They can't even get Greece to pay up.

Thu, 09/29/2011 - 20:44 | 1724409 BigJim
BigJim's picture

@ Dick Fitz

While the authors understand the problem, and articulate it well, their solution is untenable and will never work. Taking 30% of the money in the banks as an ex post facto tax and expecting the populace to just swallow it is absurd.

Chum, what did Americans do when FDR depreciated their wealth by 69% in 1933... by seizing their gold, then changing the 'price' of gold from $20.67/oz to $35/oz?

Not a fucking thing.

The morons even voted him back into office next election.

But I agree - they're far more likely to just inflate their way out of the problem. It's easier - the sheep won't know what's hitting them.

Fri, 09/30/2011 - 01:45 | 1724930 AustriAnnie
AustriAnnie's picture

And yet, time and again we have been taxed through inflation, and the populace IS swallowing it.

Fill in the blank:

Between the year ___ and today, the dollar has lost 30% of its purchasing power.

Since that year we have had __ revolutions.

Yep.  The people take it.  And starving people, in fact, don't always revolt.  In history you see many instances where starving people are actually very easy to rule over, they simply accept a loaf of bread for being silent and good (two loaves if they turn in a rebel conspirator or hoarder of illegal goods).

I WISH for people to revolt.  I think that rapid collapses allow for that.  But long, slow, collapses just mean the people accept their loss of freedom in increments and hardly notice.  For this reason i actually find myself sometimes hoping for the most severe, quick collapse possible, while people still have a little fight in them (and enough old timers are alive, as younger generations do not fear gov't nearly enough to revolt, and if younger generations revolt they will almost suredly call for MORE gov't in some Marxists form or another).

Thu, 09/29/2011 - 18:05 | 1723998 Snidley Whipsnae
Snidley Whipsnae's picture

Well, it isn't like the US has not had extremely high marginal income tax rates in the past... And, we have heard rumors for the past several years of legislation to force retirement savings (401Ks, pension accounts, etc) into US Treasury purchases... As an individual you should take appropriate action if you can... From WIKI...

"During World War II, Congress introduced payroll withholding and quarterly tax payments, Franklin D. Roosevelt tried to impose a 100% tax on all incomes over $25,000[citation needed] to help with the war effort. For tax years 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% for tax years 1954 through 1963.[16]

For the 1964 tax year, the top marginal tax rate for individuals was lowered to 77%, and then to 70% for tax years 1965 through 1981. The top marginal tax rate was lowered to 50% for tax years 1982 through 1986.[17]

For tax year 1987, the highest marginal tax rate was 38.5% for individuals.[18] It was lowered to 28%, eliminating many loopholes and shelters, (with a 33% "bubble rate") for tax years 1988 through 1990.[19][20]

For the 1991 and 1992 tax years, the top marginal rate was increased to 31% in a budget deal President George H. W. Bush made with the Congress.[21]

In 1993 the Clinton administration proposed and the Congress accepted (with no Republican support) an increase in the top marginal rate to 39.6% for the 1993 tax year, where it remained"

http://en.wikipedia.org/wiki/Taxation_history_of_the_United_States 

Thu, 09/29/2011 - 18:33 | 1724066 DosZap
DosZap's picture

Snidley,

While that appears WE have been getting off lightly,we have not.

The rates shown for those past years the population did not have all the additonal taxes we have.

Thu, 09/29/2011 - 19:46 | 1724237 Bicycle Repairman
Bicycle Repairman's picture

Also there were a million deductions and loopholes.  Comparing today's rates to the past is BS.

Thu, 09/29/2011 - 19:55 | 1724268 Snidley Whipsnae
Snidley Whipsnae's picture

DZ... So true.

Also, we have been moved into higher tax brackets due to inflation. IOWs, our purchasing power has gone down while our income tax burden has increased.

For that we can thank the Fed and it's scheme of 'inflation targeting.'

..........................................................

Here is an excerpt from a Marriner Eccles paper, made after the economic collapse and during the great depression... Yes, the same Marriner Eccles the Fed Building is named for... Eccles was one whip smart dude and a read of his entire comments is worth your while... link at bottom.

"It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they can not save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying. It is for the interests of the well to do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment."

http://londonbanker.blogspot.com/2011/09/testimony-of-marriner-eccles-to.html

 

Thu, 09/29/2011 - 20:42 | 1724405 Bicycle Repairman
Bicycle Repairman's picture

Marriner Eccles.  Could use him now.  You do have to ask yourself "What is in the upper regions of the elite's Maslow's triangle"?

Thu, 09/29/2011 - 20:46 | 1724416 BigJim
BigJim's picture

An... eccles cake?

Thu, 09/29/2011 - 20:52 | 1724431 Sophist Economicus
Sophist Economicus's picture

Thank God we have the STATE protecting us from ourselves....LOL

Thu, 09/29/2011 - 18:06 | 1724000 Golden Showers
Golden Showers's picture

Define "wealth".

Since emptying my own bank accounts and riding my bike, I can afford beer and PMs. Got some beans and rice in buckets, too.

Holy Shit! I'm RICH!

-Don't put off for tomorrow what you can do today.

 

 

Thu, 09/29/2011 - 18:38 | 1724076 donsluck
donsluck's picture

Historically, paved roads were first built for bicycles, the cars at the time didn't need them.

Thu, 09/29/2011 - 16:28 | 1723609 X.inf.capt
X.inf.capt's picture

damn, and i was going to back up the truck on monday....

Thu, 09/29/2011 - 19:30 | 1724191 DoChenRollingBearing
DoChenRollingBearing's picture

I'm visiting the ATM again on my way home...

Thu, 09/29/2011 - 21:08 | 1724476 X.inf.capt
X.inf.capt's picture

hey, bearing, thanks for the advise earlier, i think ill stay with silver, though, 

im not as rich as you:)

Thu, 09/29/2011 - 16:40 | 1723668 baten
baten's picture

It's not that they are ignorant - it's that they know so much that isnt so...

Mark Twain

Thu, 09/29/2011 - 16:49 | 1723709 Pinto Currency
Pinto Currency's picture

`

Thu, 09/29/2011 - 17:17 | 1723842 Ethics Gradient
Ethics Gradient's picture

I agree completely. Except that bit about hamsters, but then what you do in your free time is none of my business.

Thu, 09/29/2011 - 19:31 | 1724193 Sophist Economicus
Sophist Economicus's picture

LMFAO!

Thu, 09/29/2011 - 23:38 | 1724753 object_orient
object_orient's picture

it's over 9000!!!!

Thu, 09/29/2011 - 16:33 | 1723628 Ruffcut
Ruffcut's picture

Denial is easy. Then comes turd polishing, candy coating, capital raising by diluting, diluted planning, printing, manipulating, lying, cheating, conning, candy coating turds, an occasional easter egg hunt and there you have it.

Thu, 09/29/2011 - 16:52 | 1723733 upWising
upWising's picture

Don't matter how much frosting you put on a pile of shit....it still aint a chocholate cake.

I'm putting new battrys in my magic wand and re-soling my magic tap shoes.  That should work!

Thu, 09/29/2011 - 21:55 | 1724565 slewie the pi-rat
slewie the pi-rat's picture

ok, now the new juice for the magic wand is a great idea, i think

but if you have worn out the soles on your magic tap shoes, you might just put them up for a while and maybe hold off getting them re-furb'd til after christmas...

Fri, 09/30/2011 - 02:11 | 1724954 Yen Cross
Yen Cross's picture

Tag you're it!

Fri, 09/30/2011 - 00:04 | 1724795 bid the soldier...
bid the soldiers shoot's picture

Been there. Done that.

Thu, 09/29/2011 - 17:30 | 1723900 agent default
agent default's picture

This seems to be the way it will be implemented.  Stagflation will in fact do exactly what the article describes in an almost imperceptible way.  It will be just like the 70's, with equities going nowhere and commodity prices going up.  And no real political cost, because the process will be slow and will not shock the masses.

Fri, 09/30/2011 - 01:56 | 1724939 AustriAnnie
AustriAnnie's picture

Agree on all but the "political cost"

I think there will be huge cost, because the masses have priced in a recovery.  The exponential increase in credit has gone on long enough that people now in their 20's and 30's have known no other way.  They do not consider that debt was what got them everything they own.  They want not only their previous purchasing power back, they want it increased.

They simply NEED to have their free credit money machine turned back on.  I just don't see any way the masses will endure having their cable shut off and their gas tanks empty, without demanding the gov't steal from someone and give to them.  And the gov't will oblige.  I think the unrest has begun, albeit quietly and in isolated incidents.

 

Thu, 09/29/2011 - 18:00 | 1723988 Tuffmug
Tuffmug's picture

BCG = more useless brainwashed idiots who believe more government coersion and taxation are the solution to every problem!

Thu, 09/29/2011 - 19:48 | 1724245 Bicycle Repairman
Bicycle Repairman's picture

Who paid for this "think piece"?

Thu, 09/29/2011 - 21:06 | 1724471 Mr. Fix
Mr. Fix's picture

Obama

Thu, 09/29/2011 - 18:49 | 1724101 BORT
BORT's picture

It will take a civil war to get to this solution

Thu, 09/29/2011 - 19:42 | 1724220 Phil Free
Phil Free's picture

Try a world-wide, global revolution. 

 

When wallets and stomachs empty, eyes will widen and feet will move.

Thu, 09/29/2011 - 20:02 | 1724288 High Plains Drifter
High Plains Drifter's picture

but, but , but, the deflationistas like mish will say that we are going into a deflationary depression..............

Thu, 09/29/2011 - 21:45 | 1724545 Prairie Fire
Prairie Fire's picture

wrong

Thu, 09/29/2011 - 23:15 | 1724717 jdelano
jdelano's picture

Morgan Stanley CDs now at 457 bps---far wider than soc gen. I smell smoke. Did zh light the match? What exactly is going on at ms?

Fri, 09/30/2011 - 01:01 | 1724871 darkstar7646
darkstar7646's picture

Frankly, it is about the only way to get to the next election -- Print AND basically Jubilee the mess.

Between now and the moment that the President for the next four years is successfully projected by the networks, it basically has to end.

There is too much anger, resentment, and the like on the table for the next 15 months to go by without massive violence (even if only on the basis of the election and economy -- as I think we have hit the point where a significant portion of the voter base now believes that, for the future of the country, another significant portion of the voter base must be done away with and killed!) on an even larger scale than we've seen now.

Thu, 09/29/2011 - 16:18 | 1723556 firstdivision
Thu, 09/29/2011 - 16:26 | 1723597 Edward Fiatski
Edward Fiatski's picture

Holeeee shit, indeed! Up on HFT volume.

Trillions of transactions. Per second, bitches. :)

Fri, 09/30/2011 - 01:02 | 1724874 darkstar7646
darkstar7646's picture

What did I hear, that the average share of stock is held for 8 seconds?

There is no freaking "stock exchange" anymore -- the machines set the price and financially rape the real-time human traders blind.

Thu, 09/29/2011 - 16:30 | 1723614 Comay Mierda
Comay Mierda's picture

perfectly normal, nothing to see here, move along

Thu, 09/29/2011 - 16:58 | 1723762 upWising
upWising's picture

i'm going long on that yellow police tape; that helps keep folks movin' past all the stuff there ISN'T there to see.

 Also goin' long on that factory in Nebraska where they make "zero's"  When Ben and his helicopters are done, we're gunna need a lot of zero's

ALCOHOL, TELEVISION, ALL-YOU-CAN-BUFFETS, RECLINER COUCHES.....
BUT ABOVE ALL....FAITH IN THE SYSTEM!

 and remember:
Jesus was American...that's why the BIble is in English. 

 

Thu, 09/29/2011 - 20:38 | 1724395 knukles
knukles's picture

Dimwit...
If Jesus was Americun, the Bible woulda been in Americun, too.
Fucking simpleton.

Thu, 09/29/2011 - 22:53 | 1724675 Imminent Crucible
Imminent Crucible's picture

No, no, no. King James was American, that's why the Bible is in Gideon's room at Motel 6. How can you guys be so stoopid?

Thu, 09/29/2011 - 22:28 | 1724628 Mr_Wonderful
Mr_Wonderful's picture

Actually Jesus never existed but that´s another story.

I posit that in last decades stupidity has become a norm as ever larger unemployment reservoirs have needed to be filled/hidden. Every idiot has a so called degree and by now the bar is about two inches above ground. Your dog probably could have good chance of landing a job at the Treasury. So, stupidity has in time become stimulative to the economy, something that is bound to crash down to earth with serious consequences, perhaps as early as next month.This is bizarro world as opposed to the market and its compnies where the incentive to hire total idiots for management would seem to be very limited. But in this system you have the intellectually challenged in charge and their hopeless policies damage and confound he market and its necessary functions. It can´t end well.

 

 

Thu, 09/29/2011 - 16:38 | 1723658 SheepDog-One
SheepDog-One's picture

SO sick of seeing the same old bullshit day after day. Wheres the SEC? Oh I remember, theyre worried about adjusting market breakers. The big one is coming and wont be recovered....this is conditioning only.

Thu, 09/29/2011 - 18:28 | 1724054 WhatCouldGoWrong
WhatCouldGoWrong's picture

Easy now, big dog. What do you mean, "where's the SEC"? They're right there for all to see. The chairman of the SEC, or his designants are part of the PPT.

For those ammo and food hoarders now amongst us and the young G-20 protesters taking a break from anarchy to post on ZH from their parent's basement, here's the wiki definition for the PPT;

http://en.wikipedia.org/wiki/Plunge_Protection_Team

Thu, 09/29/2011 - 18:16 | 1724028 WhatCouldGoWrong
WhatCouldGoWrong's picture

My guess is that you're looking at a PPT volume spike not HFT volume. Most of the HFT volume is exiting ES at that time of day. Today would have been truly ugly if your +20 day ends up in the red. Something had to be done....

Thu, 09/29/2011 - 16:20 | 1723563 Veteran
Veteran's picture

le systéme D always seemed to work for the french

Thu, 09/29/2011 - 16:20 | 1723564 I am a Man I am...
I am a Man I am Forty's picture

wait, hold on, i'm going to get my check book out.......fucking not

Thu, 09/29/2011 - 16:22 | 1723572 Chicago bear
Chicago bear's picture

Good time for Dems to implement plan C: hand over control to Ron Paul now that the pin is out of the grenade. Then, 2016, liberal fascism/global government answers to the fact that he implemented austerity and taxed the rich against his pledge.

Who let this piece of analysis out of the BCG office? Don't they understand their clients need to keep the cat in the bag.  

Thu, 09/29/2011 - 17:01 | 1723776 upWising
upWising's picture

that's exactly the plan.  Let the next dude try to get the hysterical, madly scratching cat anywhere NEAR the bag, much less in it. It aint liberal fascism/global government.....it's greed.

Thu, 09/29/2011 - 19:50 | 1724249 Bicycle Repairman
Bicycle Repairman's picture

I hope Rick Parry publicly endorses this plan.

Thu, 09/29/2011 - 19:54 | 1724265 DosZap
DosZap's picture

Bicycle,

PERRY IS DOA.

Thu, 09/29/2011 - 20:05 | 1724293 High Plains Drifter
High Plains Drifter's picture

http://www.youtube.com/watch?v=HdtjOZG0u0g

but, but , but , perry has friends with black hats and beards...

Thu, 09/29/2011 - 20:37 | 1724387 Bicycle Repairman
Bicycle Repairman's picture

I know.  Who better to introduce this POS that is also DOA.

Fri, 09/30/2011 - 01:05 | 1724878 darkstar7646
darkstar7646's picture

Perry has been anointed by the Bildeberg Group, it appears.

My guess: He's the next President.

Thu, 09/29/2011 - 18:13 | 1724026 FEARTHESHARK
FEARTHESHARK's picture

Ha! You think this is a Democratic plan?  Democrats aren't smart enough to conceive of this approach; they will merely do to the Republicans what the Republicans did to them in 2008--hand over a steaming pile of shit and say "your turn, but don't expect one iota of help from us." 

Fri, 09/30/2011 - 01:04 | 1724877 darkstar7646
darkstar7646's picture

You honestly believe we make it another five years...

That's delusion enough!!

Thu, 09/29/2011 - 16:22 | 1723575 TreZeke
Thu, 09/29/2011 - 16:22 | 1723577 AcidRastaHead
AcidRastaHead's picture

What? The extend and pretend strategy isn't going to solve the crisis?  Where's that dollar loving reporter when you need her.  She's got the answers.

Thu, 09/29/2011 - 16:22 | 1723579 kevinearick
kevinearick's picture

Pop-Goes-The-Weasel

The S&P goes through 0 with a 40 VIX, and the Obama venture capitalists let out another $1B for solar, to dramatically increase amps while driving more holes in the magnet. Does it get any better?

Stupid + paper = stupid + paper

If you adjust for inflation/computer money, we are in a depression. If we were monetizing future productivity there would be a counter argument, but we are not. We are monetizing government, of, by, and for government. Government workers are paying themselves with artificial demand to put everyone else out of business. It’s not the fault of stupid individuals; they are playing the system the way it was designed to be played, of, by, and for zombies.

The private sector walks away, and the government takes over. If you’re a government-related worker that has made the latest cut, it doesn’t get any better, until the next cut. Government is not capable of producing an economic profit, try as it might, and placing a gun to the head of economic producers is counter-productive, especially when they can shut the economy off with a switch on their way out.

Currency has no intrinsic value. Giving 4% loans to the people creating massive economic losses and 0% loans to the governments employing them is not going to solve the problem. It is the problem, and inflating the balance sheets of corporations with no real economic function doesn’t help any. They cannot maintain what they have, but they want to build more? What is the function of Home Depot(Boeing,etc) at this point, and why isn’t its balance sheet elastic?

If you don’t set your own tax rate, you don’t own, have an equity stake in anything. Only make-workers make decisions based on government self-reinforcing data. Do the same when you want to build a bigger catapult. Government is simply a fulcrum supporting a counter-weight, which may be replaced at will. Normally, you are better off with the devil you know, but you only have yourself to blame if you think it’s God.

Every so often, the spring is released to reach the next orbit. Don't fight city hall; become city hall.

Re-examine the voices in your head frequently. Are they pulling you back or propelling you forward? Where are they coming from?

Thu, 09/29/2011 - 17:11 | 1723812 Stoploss
Stoploss's picture

You left out that the biggest loan went to the solar company run by Nancy Pelosi's brother in law.  Coincidence?? I think not.

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