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Thu, 09/29/2011 - 10:52 | 1721909 Ancona
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I belive they will kneel before their banking masters, who have explained to them in explicit detail what they must do or they will implode it all.

Thu, 09/29/2011 - 10:53 | 1721913 PivotalTrades
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So Germany decides to help provide more gasoline and matches for the fire that rages in Europe. The socialist(communist) are in power and will use the current events to strengthen that power. How will bailing them out help. The more debt we create the longer this will be dragged out and the more wealth will be vaporized as this debt is either defaulted on or inflated away!

Thu, 09/29/2011 - 11:21 | 1722022 kridkrid
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But absent the creation of more debt you get implosion.  This is what credit/debt money with interest attached at its creation gives us.  The creation of money is really just the creation of debt.  Only the interest that begins to accumulate when the money is issued doesn't exist.  The only way to create the money that must be paid in interest is to create more money (i.e. issue more debt).  This is the system that has been chosen to facilitate economic growth.  When the system can't juice the creation of more debt, you'll have cascading defaults and total destruction.

It's fine for people to want to argue the question of whether or not social security is a ponzi scheme, but the real ponzi scheme is our monetary system.  More debt is issued on a continual basis in order for interest to be paid on debt previously issued.  And that debt is money.  The entire system is a ponzi scheme.  And just like a ponzi scheme, nobody notices much or care much when everyone is getting paid.  In fact, the architects may even look like heroes to some.  But when it starts to crumble, everyone in it gets wiped out. 

Right now it is only a question of how many more rungs are left in us.  Collapse in enviable.  Timing is a little harder to call.


Thu, 09/29/2011 - 11:25 | 1722036 Vincent Vega
Vincent Vega's picture

Well said, Krid.  +1

Thu, 09/29/2011 - 11:32 | 1722044 nyse
nyse's picture

Hear, hear!

Thu, 09/29/2011 - 11:37 | 1722070 PivotalTrades
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"But absent the creation of more debt you get implosion." Only when true growth is unattainable as it is now. Debt is only a problem when it grows and attains a size  that the servicing can not be met from current revenue. The problem we face (Europe and the US) is that socialist in both countries took advantage of the demographics and technological fueld growth to pile on government largess to purchase votes above and beyond the ability to pay. As the demographics continue to worsen the problem will get worse. 

Thu, 09/29/2011 - 11:53 | 1722123 kridkrid
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The problem is partially the gov't in that they are the thug enforcement arm of the monetary system, but it isn't the SOCIALISTS (oh the horror).  That's the narrative provided to make it political.  It keeps people comfortable inside one camp or another, but it isn't what lies at the core of the problem.  As for Gov't debt, that is just one piece of the perpetual debt growth puzzle.  Aggregate debt must increase (consumer, corporate, gov't).  Gov't debt is really nothing more than a lever to pull if the other two credit markets start to wobble.  This is what we are experiencing today; the last gasps of air in the system that requires debt to always grow.  How much longer the facade can hold, I'm not sure.  I think longer than many people here think, mostly because most people want to believe the fantasy.   

Thu, 09/29/2011 - 12:01 | 1722166 PivotalTrades
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Absent the socialist robbing Peter tp pay Paul and provide Paul with all kinds of goodies debt would remain managable. Your refusal to identify the problem is the reason we are at this crossroad.

Thu, 09/29/2011 - 12:17 | 1722224 kridkrid
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I'm telling you the problem, you replying with a narrative.  The problem is a monetary system that uses debt instruments as money and that ties interest to that debt whenever money is created.  In that system, debt will appear manageable during some period of time while that debt grows.  When the cost associated with maintaining that debt becomes too big of a burden, the system will collapse.  This cycle can't be changed any more than you can make 2+2 equal 5.  Credit/debt money requires aggregate debt to continually increase. - I haven't read this article... I mean only for you to look at the graph.  This is math, not politics. 

I'm not in favor of robbing peter to pay paul, but that isn't the problem.  Like I said before... gov't debt is only one piece of the puzzle and right now is only being used to keep things from outright collapse.  And don't hear me wrong, I'm not arguing in favor of it.  I merely want to point out what the actual problem is... even if you tell me that by doing so, I'm not actually identifying the problem.  That seems a little odd.  Maybe you just don't like my answer.  And perhaps that's because it doesn't fit well with the bogeymen you've been given.


Thu, 09/29/2011 - 12:41 | 1722323 PivotalTrades
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So what your telling me is that you personally (since you use debt instruments as money), have or would have put yourself in a posituion where you were unable to or are unable to service your debt. Or have you conducted your finances in a prudent fashion? The problem is not debt it is the ability to create debt with out regard to how it will be repaid. 

Thu, 09/29/2011 - 13:19 | 1722523 kridkrid
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You are conflating two different topics and creating one straw man.  Debt in and of itself isn't bad.  Money as debt is, IMO.  Fiat money combined with fractional reserve banking (our monetary system) is bad.  Virtually all money created in our system begins as debt with interest.  The problem... there isn't enough physical money in the system to pay both the interest and the principle.  So debt not only can't be eliminated, it very mathematically must continually increase.  As the debt increases the interest burden increases until the interest burden overwhelms the productive capability of the system.  You then face cascading defaults and deflationary depression (option A) or you QEX to death to try to stop it, creating inflation in the things that people need, and most likely not having any real effect on prices of things that people own (see housing... and eventually other things as well, I'm guessing).

The straw man is my personal finances. That really has nothing to do with anything in this discussion.  But yes... by virtue of living in a society that doesn't understand what money is, I have put myself in a position where I face the same pending collapse as do you.  I currently have no creditors... but I don't know if that really matters.


Thu, 09/29/2011 - 13:34 | 1722583 PivotalTrades
PivotalTrades's picture

In the same way "Debt in and of itself isn't bad." "Fiat money combined with fractional reserve banking (our monetary system) is bad." , Fiat money in and of itself isnt bad, in both cases its the misuse. Fiat is more easily abused because it does not posess a self regulating mechanism that a hard currency (gold or commodity backed)  does. Socialist governments missuse the debt because they create the debt for their constituants while expecting some one else to pay their fair share! 

Thu, 09/29/2011 - 14:07 | 1722770 Panafrican Funk...
Panafrican Funktron Robot's picture

I'm glad that you specifically pointed out fractional reserve banking as the mechanism of eventual destruction.  I agree that paper/digital money works correctly in the absence of leverage.  Closely related to this, I would suggest that the one thing the islamists got correct was the tyranny of interest.  In this country we refer to it as the "miracle of compounding interest".  Well, it's not really a miracle to the one paying the interest.  Parallels abound in the proverb "borrower is slave to the lender" / Jesus throwing out the moneychangers.  Conceptually ancient and eternally accurate observations.

Thu, 09/29/2011 - 14:25 | 1722894 PivotalTrades
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The money changers were fee operated only certain coinage was exceptable for sacrafices. Again "interest" is not tyranny interest above ability to pay is. Self discipline is the key!

Thu, 09/29/2011 - 11:38 | 1722075 snowball777
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Shut up and cut me another line; I'm starting to come down. ;)

Thu, 09/29/2011 - 13:29 | 1722568 Bicycle Repairman
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Thu, 09/29/2011 - 12:40 | 1722322 SirIssacNewton
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The creation of money is really just the creation of debt.  Only the interest that begins to accumulate when the money is issued doesn't exist.  The only way to create the money that must be paid in interest is to create more money (i.e. issue more debt).

I do agree with the general statement about how the creation of money is really just the creation of debt.  The interest, though, can be paid through two ways.  One way, and the most prevalent, is exactly as you stated...that more debt must be created in ever increasing amounts.  The other way interest is paid is through the creation of commodities.  The productive difference between the cost of extracting or growing the commodity is truly new money and that's why governments want to know how much is produced or extracted as an input into the monetary formula.  For example, the cost to grow corn is X and the market will pay Y (Y being the money created through debt), but the remainder is Z and contributes to the interest portion of a Debt Monetary System.  The problem with produced commodities, like corn, is that once it is consumed and the remainder ends up at the sewage treatment plant......this interest payment is destroyed and, thereby, has only a temporary span as interest.  Extracted commodites have a longer lifecycle as interest depending on their servicable span and/or recycling, but, once it ends up in a land fill, its value as interest is also extinguished.  The one exception, historically, was gold (and in some ways silver) because it was considered money itself and didn't take new debt to circulate as interest or new money.  That's why it was de-monetized, but that's a different discussion.

Thu, 09/29/2011 - 13:29 | 1722572 kridkrid
kridkrid's picture

But is it not debt that underwrites that system?  If you acknowledge that additional debt needed to be created in order to create the money that was needed to purchase the corn, the fact remains that debt will still grow, regardless of the farmer's ability to turn a profit, no?  Our monetary system doesn't preclude people from building profitable businesses.  In fact, if one wanted to argue that the current system is better than a system of sound money and 100% reserve banking, they might even have the better position.  Perhaps we simply need to recognize that every 60 or 70 years there will be global upheaval and some sort of system reset.  Regardless, the math will take our current system down.

By the way, I didn't vote your post down.  It's interesting.  I need to think about it some more.

Thu, 09/29/2011 - 13:57 | 1722688 SirIssacNewton
SirIssacNewton's picture

Like I said.... I don't disagree that our monetary system is based upon money being created by debt.  I was trying to add to the discussion that interest is the exception in that it call be created without debt but not to the same extent.  We all know that we are reaching a critical stage in this monetary system.  This system makes all, but a few, debt slaves and beholden to behemoth banking cartels.  Truly the law of the exponential will take us down eventually without a major structural change or revolution.  The timeframe for this the battle that is being waged before our eyes.....can it be contained and kicked down the road.....or will it explode and cascade.  Since I am not a fortune teller, I can only surmise that its timeframe is close because I am tired of all the bullshit.  Remember, though, the system which may replace this one may actually be even more oppressive than the one we have today.

Thu, 09/29/2011 - 14:28 | 1722913 PivotalTrades
PivotalTrades's picture

Not when payments include principal. The debt is retired as payments are made.

Thu, 09/29/2011 - 14:31 | 1722935 MachoMan
MachoMan's picture

We've opted for the boom bust cycle...  (or it has been chosen for us?)  We get to start the next cycle with the residual technology and whoever was lucky enough to win the last cycle gets to be king in this one.  The problem I see with this approach, as a strategic maneuver, is that world killing technologies keep increasing...  whether it be oil wells out in the ocean, nuclear plants, designer diseases, or anything else...

I'll posit, like you, that the whipsaw of the boom/bust cycle creates a cumulative residual that is greater than if we had kept sound money throughout the same period.  The problem, of course, is when we get a darkages or the like and get a wipe of the residual technology/knowledge.  The gains from the boom/bust cycle are ultimately made upon shaky foundation...  great as they may be.

Not necessarily a right or wrong answer...  although, I think these cycles are more easily perverted to personal gain than their counterpart...

Thu, 09/29/2011 - 10:53 | 1721914 RobotTrader
RobotTrader's picture

Commodities getting destroyed again today.

Everyone is fleeing into USDX, TLT, VXX again.

Thu, 09/29/2011 - 10:55 | 1721919 achmachat
achmachat's picture

you know what would really make my day?

If for once you'd say: "TOMORROW...."

I don't need you to see what's happening right this moment.

Thu, 09/29/2011 - 11:03 | 1721940 SheepDog-One
SheepDog-One's picture

RearviewTrader is the Howard Cosell of the market world, saying mostly obvious and usually irritating things he pretends to be an expert about, but has never actually played in the game himself.

If you read RearviewTrader posts with a nasally Cosell accent, it always fits perfectly and is pretty amusing.

Thu, 09/29/2011 - 11:04 | 1721953 topcallingtroll
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Bought my one true love, my brazilian hotie, EWZ at 53.70 last week and posted it guys.

You should copy the trades of anonymous internet trolls if u wanna get rich.

Thu, 09/29/2011 - 11:10 | 1721980 topcallingtroll
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Tomorrow precious metals largely flat to down. Dollar and bonds flat to slightly up. And stocks up.

Yes it doesnt make much sense but that seems to be the world we live in.

Zero hedge.....where u see tomorrow, today!

Thu, 09/29/2011 - 12:04 | 1722180 jdelano
jdelano's picture

pains me but I'd agree with that call.  the window dressing must hold up through Friday.  But I'd add that next week the balloon rises to the spiked ceiling and pops again.  

Thu, 09/29/2011 - 10:58 | 1721926 BrocilyBeef
BrocilyBeef's picture

Plz, short the silver.

Thu, 09/29/2011 - 11:00 | 1721935 HelluvaEngineer
HelluvaEngineer's picture

+1 looks like 30 is holding.  Oh please god, hold 30.

Thu, 09/29/2011 - 11:31 | 1722041 WonderDawg
WonderDawg's picture

I wouldn't bet on it. In fact, I'm not betting on it. I'll buy the f'ing dip, when the dip is in.

Thu, 09/29/2011 - 12:01 | 1722163 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

Let it tank...I have plenty of FRN$ I will happily trade for really cheep Au and Ag.  This is a nanosecond in a long timeline; in the long run the PMs are heading much higher.  Maybe not tomorrow but I am buying and holding physical so I don't care.


Thu, 09/29/2011 - 11:01 | 1721942 buzzsaw99
buzzsaw99's picture

There is no way in hell you turn a profit trading.

Thu, 09/29/2011 - 10:54 | 1721916 Long-John-Silver
Long-John-Silver's picture

In the military we referred to it as SSDD Same Shit Different Day.

Thu, 09/29/2011 - 10:57 | 1721922 BrocilyBeef
BrocilyBeef's picture


Technically, Different Shit Different Day Same Smell.

Thu, 09/29/2011 - 10:54 | 1721917 zorba THE GREEK
zorba THE GREEK's picture

Germany saw what almost happened in 2008-2009, they will print to avoid the abyss, even if it only delays it.


Thu, 09/29/2011 - 11:24 | 1722034 bonddude
bonddude's picture

I agree.

Thu, 09/29/2011 - 13:30 | 1722580 Bicycle Repairman
Bicycle Repairman's picture

There's a slogan:  "Avoid the Abyss".

Thu, 09/29/2011 - 10:56 | 1721920 BrocilyBeef
BrocilyBeef's picture

Stupid acts of men. Decentralized govt is the best course. Scrap the UN, EU and shutter most of the US Federal govt.

Thu, 09/29/2011 - 11:33 | 1722048 WonderDawg
WonderDawg's picture

Yeah, didn't our founding fathers have some ideas about a large centralized government? They were against it, or something, I think.

Thu, 09/29/2011 - 11:37 | 1722072 tsx500
tsx500's picture

RON PAUL 2012 !

Thu, 09/29/2011 - 11:40 | 1722084 snowball777
snowball777's picture

Some of them were; you'll notice that we have a Senate.

Thu, 09/29/2011 - 11:34 | 1722051 oogs66
oogs66's picture

IMF and World Bank should be shuttered too

Thu, 09/29/2011 - 10:57 | 1721923 jkjacksonhole
jkjacksonhole's picture

Perhaps they realized that printing Euros devalues the Euro. Slow learners.

Thu, 09/29/2011 - 10:58 | 1721924 The4thStooge
The4thStooge's picture

what's going on with ukrain? that has the potential to be quite intersting.

Thu, 09/29/2011 - 11:06 | 1721957 BrocilyBeef
BrocilyBeef's picture

Kaboom. Expect Russian intervention.

Thu, 09/29/2011 - 13:36 | 1722606 Bicycle Repairman
Bicycle Repairman's picture


Thu, 09/29/2011 - 10:58 | 1721928 jdelano
jdelano's picture

thank you tylers. faith restored.

Thu, 09/29/2011 - 10:59 | 1721930 youngman
youngman's picture

I to feel news to jump on....just noise...IMHO...but the trend is to still print..and not to cut still happy with my gold and silver...

Thu, 09/29/2011 - 11:07 | 1721965 SheepDog-One
SheepDog-One's picture

We certainly havent suddenly printed any LESS, thats for damn fact.

Thu, 09/29/2011 - 10:59 | 1721931 The Axe
The Axe's picture

CHINA   is the real story.....TYLER....China in slow down  big time.....OIL   I am short oil big.....china stocks getting kicked like a dog.......a ugly dog

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