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Paul Brodsky: The Seeds of Our Destruction Were - And Still Are - Sown in the Bond Markets
Submitted by Chris Martenson
Paul Brodsky: The Seeds of Our Destruction Were - And Still Are - Sown In The Bond Markets
Paul Brodsky does not trust the bond markets. That position may seem strange coming from someone who has spent most of his professional career trading bonds, but it's precisely this insider knowledge that has led him to start directing investors to safer harbors.
In fact, he thinks our credit system is so far out of control that it will cause a massive - and largely unavoidable at this point - devaluation of the US dollar (and most other fiat currencies, as well).
In our interview with Paul, we asked him to explain the reasons for his concern and to detail how he sees a bond market breakdown unfolding. At the heart of the matter is the run-up in overnight systemic repurchase agreements among banks that started in 1994, which goosed the ensuing credit-driven buying orgy in our economy and has left the system much more vulnerable to exogenous shocks as a result:
All the way through 2006 a monetary aggregate called M-3, which was the only aggregate that included repurchase agreements (which is the process by which banks fund themselves with each other) grew almost 12% a year. It is an enormous amount and that basically tells you that this overnight lending among banks provided the fuel from which all of the term credit, the 30-year mortgages, auto loans, and revolving consumer credit came - which of course has never been paid down from whence it came. So in effect, we knew that the system became highly susceptible to any hiccup.
So the system is levered at least 20 to 1 and there is effectively 20 times more debt than money with which to repay it. And so that is a long-winded way of setting the table for where we come down in our macro views. Clearly, it has great ramifications, negative ramifications for the currency and given that the dollar is the world’s reserve currency, we think it has significant ramifications for the global monetary system in general.
Add to this the lax oversight from the Fed at the time, which as Paul states seemed primarily focused on making sure "banks could expand their balance sheets". Along with the repurchase agreements, the practice of "sweep programs" helped the banks gain unfair advantage while technically not breaking the letter of the law. Chris summarizes this process as:
This is a story of leverage which really began in the mid-nineties. So this is not any particular policy disaster that went off the rails in 2000 or even more recently than that. Interestingly, I have never connected the stop before between the overnights, the repos, and something else that really caught my eye in the mid-nineties. Actually, it was ninety-four or ninety-five.
I don’t know if you know about the sweep programs - for the benefit of listeners who may not, what Greenspan did was he allowed banks to essentially dodge the reserve requirements by "sweeping" demand accounts. And what I mean by that is, if you have money in a checking account, that is yours to demand anytime you want: the banks have to hold a reserve against that, by law, of 10%. But banks were allowed through this policy tweak that the Fed had done, to effectively sweep that money out of that account just before the stroke of midnight.
So that at midnight when they take the snapshot and say, "How much money do you have to hold in reserve against?" they would sweep the money out of the way. The snapshot would be taken, and the bank would say "Look, there is no money, we get to hold very light reserves here." And then the money would get swept back in at let us say, 12:01. But during the snapshot period, oops, it would have disappeared.
That is where I had chased back where this credit bubble really got into high gear. And I thought it was due to the fact that banks were allowed to dodge these reserve requirements, effectively running leverage far, far higher.
At some point, the growing leverage in the system and the rising amount of new credit and money supply leads to ever larger distortions in market pricing. Paul sees this as leading to inflation:
So economics has kind of taken leave of the bond market. The Treasury bond market is no longer we think a true signal of interest rates, where they should be, or a true signal of inflation. It is an interest rate curve that has been distorted by terribly distorted incentives as we see it.
So we understand that. We do not think it is right. We would rather have markets be free to adjust to where they should be, but frankly, we do not see that happening. To your question specifically about will we have something similar to what happened in Greece here in the U.S., we do not think we are ever going to get to that point here. And it is not because we are proud Americans and we think that the U.S. is better in every way than every foreign land; that is not the case at all. We think it is not going to happen here because if anything dire happens in terms of interest rates, like the threat of rising interest rates, you would see the Fed's balance sheet come under severe stress.
I think the Fed is going to have to continue printing. They are going to go to a significant QE3 at some point. I do not know exactly what form it will take but they are going to have to monetize debt. The process of doing that is I am sure your listeners know, is when you buy debt, you print money with which to buy it. That moves new money out, ostensibly into the system but as we have seen it only goes into banks as excess reserves. This process is the exact process of inflation, so if you print a dollar, you are diminishing the purchasing power of that dollar through dilution. And it is a very easy thing to understand that more dollars chasing the same amount of goods and services and assets must drive the price level higher for those goods services and assets. And so what we see happening is, through this process of money printing, we will have rising prices that rise much faster than wage growth or income growth and it is going to make the ability to service debt that much harder.
It's these growing inflationary pressures that Paul sees leading to an accelerating devaluation of paper currencies in the coming years. He sees a revaluation of the US dollar vs gold as a likely outcome at some future point (estimating gold could reach a price in the neighborhood of $10,000 per ounce if it is indeed re-monetized).
Ultimately, he recommends investors concerned with protecting the purchasing power of their wealth today get exposure to hard assets that can't be so easily inflated away:
All of these currencies are baseless and are losing their purchasing power versus the goods and services with inelastic demand properties, such as natural resources and things of scarcity.
Gold should be thought of as cash in the best currency. I would suggest anything scarce with inelastic demand properties, and that is of course how we get energy and how we get agriculture and various other things. They should be considered very strongly.
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The bonds of....bonds.
The bonds that bind us.....
Bonds are edible
Just add water. It's called soup.
I love Chris Martenson! And this guy Kyle Bass from Texas too!
BURST that bond bubble, bitchez
http://azizonomics.com/2011/10/20/commodity-driven-blip/
bond index up nearly 6% when in include divds.
http://stockcharts.com/c-sc/sc?s=AGG&p=D&st=2011-01-01&en=%28today%29&i=t08607005017&r=7545
Bernanke about to buy up some more US bonds.
The strategy of buying debt by increasing the same underlying liabilities is akin to robbing Peter (base of the monetary system) to pay Paul (Treasury). It should be obvious that it is a move of desperation and it ultimately leads toward a defunct system.
The seeds were sown when citizens allowed the Administration to issue liabilities without assets to back them up. I believe this was last commenced in 1971.
There is effectively 20 times more debt than money = Ponzi
*GAME OVER*
Has anyone ever lived through a complete and total worldwide bond market colapse? I hear it's a lot of fun.
A little history lesson for you:
Good man Quixnot. None of us are going to solve problems without facts, cause and effect. Not to say the carnage already here and growing is going to be fun. It is not that this time is different in cause and effect of the Central Bank model it is that the effects are going to be greatly amplified on the way up in the boom (happened) and the ongoing bust.
Some of the nuances from then and now are demographic imbalance and the rate of business. These nuances make adjusting more difficult. I know I am generalizing and this is a comment thread not a dissertion.
Just posted this:
http://thelastcanary.blogspot.com/
See the 2nd chart. Are those spikes around 1930 the yield rate increasing as your bond price chart shows? Looks like a rise to about 10% from 7.5%. Seems like the magnitude would be more considering your chart. But you are exactly right, rates did rise then and then fell for some time. Is there a difference in the amount of margin used to buy bonds now? I assume one big difference is outright monetization of central banks now. I think we somewhat restricted ourselves then using common sense, a forgotten relic.
You made a call of total Armageddon for Oct 10/11th. I still have faith in you, have you set another date?
I assume you're talking to Michael (as I made no such prediction), but I will say this about that:
The 'MeriKan sheeple are heading towards their own, personal Minsky Moments, and by 2013 this will become an exponential phenom enmasse from sea-to-shining-sea.
Book It!
Been fun all, I can see that spending time here (and elsewhere on the net) serves -0- useful purpose for me and my preparations for the future.
Have a lot a things left still to accomplish, before it's time to dig in for the Kondratieff Winter and what that will inevitably mean...
QN Out!
Inclined to agree.
Seeing what's happening and being powerless to change it one can merely prepare.
I will keep informed but not with the fascination of the past.
They, the politicians, could have made different choices. They did not.
The cake is baked.
pride goeth before the fall - Herodotus
if you have a garden and a library, you have everything you need - Cicero
and an apple tree and a vineyard and an olive tree and pomegranate and apricot and figue trees; Thats good dietry right there.
having listened through Brodsky twice now, it's funny hearing someone say you are so fucked in a such a quiet, soft spoken manner
It is useful stepping back for a few weeks to pause, have introspection and recharge. Your sense of community is part of your DNA and reflecting pyschology tells me you'll be back. Peace.
I'm pretty sure it get so bad, words begin losing 'l's!
nice.
This time..I assume....some people will not live thru it..
"They're schemers trying to control their little worlds. I'm not a schemer. I try to show the schemers how pathetic their attempts to control things really are."
http://www.youtube.com/watch?feature=player_detailpage&v=pfmkRi_tr9c#t=24s
PBrodsky notes that only M3 includes repurchase agreements.
I did not know that vital point, so mention it here for others to grasp it. No wonder "official" M3 disappeared.
Thanks to PB and of course TD for this forum.
M3: M2 plus large and long-term deposits. Since 2006, M3 is no longer tracked by the US central bank.[15] However, there are still estimates produced by various private institutions.
http://en.wikipedia.org/wiki/Money_supply
The invaluable John Williams being one of them. Behold the crash of the Banking System and Dr. Bernanke's furious reflation effort:
http://www.shadowstats.com/imgs/sgs-m3.gif?hl=ad&t=1318688862
Kinda reminds me of this:
http://media.photobucket.com/image/Airplane%20movie%20autopilot/jrios68/...
What is the significance of M3 crossing below M1 & M2 in 2009 on the shadowstats chart you link to above. Does it mean that long term deposits are shrinking, or is it the amount of printed money being put into the system, and is the difference between M3 and the others a simple measure of inflation?
Thanks. -Rosoce
greenspan passed the torch to bernanke jan.31.2006 - thus feb.1.2006 the 'bb' is in complete control but waits ~ two months until mar.23.2006 to fulfill or for a better word implementing greenspan's final wish
ref: http://www.n.y.frb.org/aboutthefed/fedpoint/fed49.html *(click-on ; "oops, did you mean" - gets you there,...
**this only backs up the authors acknowledgement,... if link fails which it prbably will go to : http://www.gold-eagle.com/editorials_05/chapmand112205.html
note: question we all should all be asking___http://www.o.c.c.treas.gov/publications/publications-by-type/other-publi... ...link to [pdf] "occ's strategic plan: fiscal years 2012-2016" @ click - google search
I believe that M3, because it includes banks repos (aka loans between banks), can be seen as a measure of credit expansion or contraction. From 2008 to 2010, the Fed was aggressively expanding money supply (M1 & M2) to offset the contraction of credit that shows up in M3. Because the chart shows year to year % change, rather than total amounts, it does not imply that the amount of M3 fell below the amount of M1 & M2.
Thanks R2S, that's makes sense. -Roscoe
You seem to prefer light bondage over current heavy bondage? I am sure They can whip you back in to shape in no time.
You see, in the Western culture you can lose all the face you never had, as long as banks and funds don't lose even one percent of bond face value.
This guy is full of shit. Look at the commitment of traders index on the usd below. Everytime that indicator shows a fluctuation in large positions like that the usd spikes. He's just looking to take the suckers money.
http://finviz.com/futures_charts.ashx?t=DX&p=w1
Prof. E. Ray Canterbery said it much better in his book:
Wall Street Capitalism: the theory of the bondholding class
http://books.google.com/books?id=9cJP3UpB1CMC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false
(And quite some time back, I might add!)
But allow me to simplify it and cut through all the bulltwacky:
In the 1920s, the Wall Street banksters did an ultra-leveraged run, lasting for approximately 7 years, with the Great Crash of 1929.
In 2000, the Wall Street banksters did another ultra-leveraged run, lasting for approximately 7 years, culminating with the mid-2007 meltdown beginning.
I don't know why 7 years is the operative timeframe; perhaps their Ponzi-Tontine scam can only last that long before its collapse?
But that is it put clearly and simply --- regardless of the securitized financial constructs used either time, the scam and the results are always the same.
At some point, the growing leverage in the system and the rising amount of new credit and money supply leads to ever larger distortions in market pricing. Paul sees this as leading to inflation. It's these growing inflationary pressures that Paul sees leading to an accelerating devaluation of paper currencies in the coming years.
Bingo!
What does any of it matter. Let's see. The bond holders are the last to paid in a default.
So they would like us to believe Lehman was not bailed out. Oh yeah, what because the stock holders got fucked. The people.
But wait, the bond holders were bailed out. The Banksters. Half a lie. But a lie is a lie. And we payed to bail the bondholders out.
Like when CNBC first reported on the Greek bailouts and complained that it was to bail out the people.
Oh yeah, bailing out the bond holders is what it is about. Nothing more and nothing less.
For the people it means they want to tax the people to bail out the bondholders again. To be precise, to bail out the Banksters.
And, in case anybody wants to know why the markets are going up. Because the HFTs believe Bernanke's Swap Lines will do just that.
Then there is the market manipulation, either by POMO, (the FED) or some other force with big bucks that can do the rigging of markets.
It does not make sense for markets to go up with all that short interest, (not a record level now), and the exiting of people leaving the markets.
It is rigged. Plain and simple. So the Bankster Cartel and CEO's can get their bonuses. We paid for Lloyd Blankfien's 100 million dollar bonus. Right.
America is a disgrace anymore, I have given up believing this is any thing less than a government for and by the CEO's and Corportations of America.
We the People just don't fucking matter anymore. We the people are fucked. We are a Fucking Disgrace for taking it anymore.
Look at Italy, Greece, and even some of the Mid East nations. Those people are getting it done.
Americans are bullied by Fox, CNBC, CNN, NYPD and Bloomberg. Looks like chicken littles to me. Tell me I am wrong and why. Please!!!
i read that to gain a 50% reduction in its debt greece would have to implement a 100% haircut for bond holders.
hahahaha - when you look at greece its a great story.
Greece has a long history of defaulting on its debts.its first default was in the 4th century BC, when 13 Greek city states borrowed money from the Temple of Delos. Most of them never paid the money back and the Temple took an 80% loss.
Modern Greece issued its first big loan in 1824, three years after the start of the War of Independence. It was for £472,000 so it could keep fighting the Turks, secured on London Stock Exchange. There was another loan for £1.1 million the following year. No interest payments were ever made on those two loans, after which Greece was locked out of the international financial markets for decades. The interest kept accruing and Greece eventually settled for £10 million in 1878, at which point it was allowed to borrow again.
Since then there have been five more defaults. right up there with Venezuela and Ecuador.
the modern Greek economy is built on three things: shipping, tourism and sucking up to rich countries.
most of its shipbuilding industry has long since left for China and Korea. Tourism is still viable, but no state can support itself with tourism alone.
After independence, Britain used Greece to leverage its position against the Ottoman Turks, and then later America played a similar role in supporting the Greeks against the Soviets.
In each case massive of amounts of cash were poured into the country that didn't have to be paid back. Turkey is now a member of NATO and the Cold War is over, so no one needs to pay Greece as part of their strategic interests in the region any more.
All of this means Greece is rooted. It has never been able to compete without a steady stream of capital from abroad that it didn't pay back, and that goes back to ancient times.
and its women are hairy.
But if the bond holders of Greece are not paid off. Does it not mean the banks of France and Germany would be in trouble.
Hence, the banks of America because of contagion. Even JPMorgan said their risk is at a level they could manage.
Isn't what Jamie Diamon really saying if the Bernanke, (FED) steps in and bails them out too. Tell me I'm wrong.
Barton Biggs said they will have to do something about all the PIGS. Who are they ??? The Fed ???
I agree with lots of what Reggie brings to the table.
I am just not sure that they won't bail the shit out of everybody to save their Banking Cartel.
If anybody remembers a little history. When Russia and Argentina defaulted and bond holders were not bailed out,
GDP went up every year after for many years. If we do not allow our banks, Europe's Banks to default tell me why,
"We are Worse than Japan Now" does not apply.
That actually makes sense. Now continue connecting the dots.
You are now at the whitehouse.
What you see is a disease, a serious cancerous, death sentence disease.
You want "class warfare"?
It is today as it has always been.
The political class VS. the people.
That is how it works. Like stealing wallets from corpses. These superhero satanist have their very own private little club.
Want in?
Ya gotta show-em first that you have what 'it' takes.
'It' takes an absence of humanity. 'it' takes a willingness to destroy other 'creatures' in order to prevail.
'It' above all else desires power.
Just choose your sides Ladies and Gentelmen, cause this shit will go down and affiliations will be the name of the game.
I come from a family (father's side) that was fuck-you wealthy for generations, and I've known some seriously wealthy folks in my time on this mudball.
Something that sheeple don't know about "rich" folks is that many crave power the way that the average wannabe bankster craves wealth.
And to tell you the truth, when I think of anrcho-commies like OWS that want to create a Free Shit Army Multiverse, sometimes I wonder if TPTB aren't doing a better job than I give them credit for...
Sometimes I wonder about this; but always I yearn for restoration of the AMERICAN experiment: A Democratic Republic founded on the RULE of LAW, INDIVIDUAL LIBERTY, and PRIVATE PROPERTY RIGHTS.
Perhaps ol' Ben was right after all...
And dam all if we didn't go ahead and lose it...
You Americans are truly flucked. At least China citizens are told the rulers are omni-potent and will do what they want.
Fools awakening. Old Mr. Franklin didn't see the Israeli's sneaking in the back door!
Have not heard from you for a while now. Always enjoy your prognosis and insight.
So would I not be correct that when Homeland Security and it's statues became relevant it included,
that no citizen may protest and have the right to assemble in public places as Bloomberg and the NYPD are doing right now.
There has been a couple who were arrested for assembly and sent to a off jurisdiction site to be arraigned at a precinct that
was not to the arresting officers. They were told that it was because of the threat to national security under homeland security.
Who started that homeland security thing??? Better yet, do we need more of this Bullshit from Bloomberg and his thugs, the NYPD.
Just to add, I had respect for the NYPD. They stole their own honor when they went against the people they are paid to protect.
But then again. Jamie Diamon and J.P. Morgan did donate, with our tax payer money, 4.6 Million to the NYPD to protect his street.
What do you say. Is it all about the money. Sure seems so. Corporate Greed knows no limit. Eh.
Lincoln started it with war powers during civil war. And it led to where we are today, with the help of many.
Slippery slope.
reply all the way back to the big duke: greece clearly has major problems, and they're clearly not the only ones, but hairy women are not one of them, imo.
I've... 'known'... a few Greek women. None of them were particularly hairy.
In fact - the hairiest women in my experience have all been Anglos.
"Who started that homeland security thing???"
Why that would of course be the government son! Or as you might prefer, the massa (just so long as he be promisin' lots of free shit).
No. "It's" all about power & control...
Divide and conquer; same shit, different century...
Nothing more to contribute, it's all been said 1,000,000^2+; As a man without a country, without children, without a culture with which to associate, I now longer care (much), so I am done trying & will prepare...
Either We The People elect Ron Paul in 2012, or You The Sheeple will surely lose (everything).
pauls only chance is to get on the independent ticket or take a back seat to romney
what's even scarier is romney going with cain to get the black vote - why?
barry will get the entire black vote which will put him over the top for the very reason 'tptb' like certainty
i'd just like to reiterate that because were here on this fantasic zh blog, the rest of the dumbed-down public still watches nancy grace, and dancing with the stars
i agree with your thesis wholeheartedly but ron's getting tired from speaking to the deaf and dumb who just don't realize the severity of the immediate situation,... the dire situation,... the pathetically hopeless situation!
Quixotic_Not
Something that sheeple don't know about "rich" folks is that many crave power the way that the average wannabe bankster craves wealth.
Truer words never spoken.
After you are so filthy rich you can have anything you want,the void is still there(just look at the politicians and seekers of the office of POTUS in 12).
Your bored to tears with materialism to a large degree, and the next rung up is POWER.
"But if the bond holders of Greece are not paid off. Does it not mean the banks of France and Germany would be in trouble."
But if the banks of Germand (principally) and France didn't flood Greece with their products in return for loans -- after Greece joined the EU, thus killing Greece's internal industries, then Greece would be in much better shape. But the game is always the same, regardless of which side of the Atlantic or Pacific it's being played on.
gilette or oreal can cure that. Besides to some all cats are grey in the dark. I'm talking about those ruskos in Cyprus.
hey, 6! good literary "bookends" device there around the hair theme!
No doubt that you inadvertently failed to mention MSNBC? Or is it that the corporation that indoctrinates you is somehow exempt from finger pointing?
If you don't get it, then you are it.
Leftist are such fucking morons.
the more you invoke directions, the less you have
If you mean to myself, rocker. Sorry, they are just as bad. The MSM just plain SUCKS. So don't tag me.
I don't like any of them. Because they pit us against them. No "US" implied to anybody.
Actually I gave up on them. But I will trash you one notch for the hey of it.
You see, it's not about the stupid right, (in reality they do favor the rich, self inflicted). or the left, (for the elite who actually earn it).
It is about the richer vs. the poorer hard workers that have to earn, not being rich, but just a living to support their family.
Okay then. My bad. I absolutely own up to a fierce contempt of even a whiff of statism. I quite literally view support of enslavement by government as evil. Thanks largely to ZH I view the world much differently than I did two years ago. I'm a former republican. I always had this vague sense that regardless of who was 'in charge', American citizens were to be screwed. I align myself now with ideology/philosophy rather than party. I lash out when I perceive, sometimes incorrectly, support for the progressive movement. The reason I do so is that in my opinion the progressive movement is merely communism/global enslavement in an Americanized form. Hell, since we are all anonymous here I'll even go so far as to say that I believe progressive = satanic. The ultimate goal of those behind the progressive movement is the destruction of the human soul and complete dominion over the earth.
Crazy? Maybe. Maybe not.
"please to meet you, hope you guess my name.
but what's puzzling you is the nature of my game!"
Glimmer Twins
"Oh yeah, bailing out the bond holders is what it is about. Nothing more and nothing less."
Here you get it right ... and then in the same breath you get it oh so wrong ...
"To be precise, to bail out the Banksters."
Here you get it wrong ... the Banksters are not the target recipients of the bailouts, it's the senior bond holders. There is of course an overlap between the top creditors in the economy (ie. net worth 100 million and up) and some of the banksters, but it's circumstancial. Not all of the Bilderburg/Davos crowd are banksters. It's the top creditors behind the banks (the senior bond holders) who are really getting bailed out, and it's the top creditors who will have divested into physical assets when they allow the final crash to happen, the ultimate demise of the banks is planned.
The current financial system is a method of theft, not a store of looted wealth ... the store will be physical assets of the kind the original article recommended, neo-feudalism ahoy.
Thank God someone else gets it.
This system is designed to be crashed. When it does they wish to create only two classes of people afterward. Those who own everything and slaves.
These fucks who preach about helping the middle class are all liars. They despise the middle class and cannot wait to smash them into peonism.
Marco and ATM have it exactly right.
The one and only one subtle disagreement, based upon years of research is with the following:
"Not all of the Bilderburg/Davos crowd are banksters."
If you looked closely into the backgrounds of everyone there, and intensively drilled down into the interlocking stock ownership of all of those involved, you would find they are indeed all banksters.
But the goal has always appeared to be either that all-inclusive one-world corporation, or one-world bank, but the end result will be the same for the rest of us.
I commend you both, good citizens!
Wall Street Capitalism: the theory of the bondholding class
E. Ray Canterbery
http://books.google.com/books?id=9cJP3UpB1CMC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false
Bank stock holders get much more frequently burned than bond holders ...
Exactly what is happening. Goods with inelastic demand curves will skyrocket in price. For the average Joe this means that when a good is inelastic when a rise in price does not affect demand (People cannot buy less because of higher prices). Its the shit you have to have at any price. I. E. FOOD, GAS< HEATING OIL ECT.
Prepare accordingly. You are going to see those deflationistas going forward as totally wrong, but only part wrong. Elastic goods (THe shit you can live without) will not raise in prices nearly as much.( I. E. Maybe I will put of that boat purchase untill next year)
This one is going to hit us straight in the stomach, gas tank and home heating and other necessities. These bastigies or going to go after the remains of America's savings by hyperinflating your basic needs and you will have t spend enormous amounts of money to survive. I think I am ready but I do not know how long this will last once she gets started.
cowdididdly... You are right about this "Elastic goods (THe shit you can live without) will not raise in prices nearly as much."
But, some elastic goods will be bought up by those sitting on a lot of cash, or PMs, or cash equivalents. Assets such as prime commercial real estate, prime farm land, water rights, mineral rights, utilities, etc, will sometimes be available for rediculous prices.
This is the blood in the street scenerio. We are not going to see a smooth decent but one rife with wild swings.
An anecdotal example: While the bombs from Japanese war planes were still dropping on and around Pearl Harbor a great deal of commercial and agricultural real estate changed hands. Many commercial/ag real estate owners of Asian decent were selling their properties for pennies on the dollar because they thought they would all be deported. Panics can come and go very quickly and fortunes can be made and lost in the blink of an eye. One 'madam' of American decent had a bankroll saved and bought up some of the most popular bars and bordellos in Honolulu during the attack. She became very wealthy during and after WW2. At the time she did not know what the outcome of her purchases, or the war, would be. Many thought the Japanese would invade and occupy Hawaii as they did in the Phillipines... but she bet her money and took her chances...capitalism at work.
Not saying this is right, it's just what happens during financial panics.
Befriend as many farmers as possible. No, not Monsanto farmers.
Well screw me to a pole.........................
As if this is not something we already know.You have be a dunce not to have figured this out long ago.
It is funny as hell these articles seem to come out when PM's are OFF the previous LOWS.(you missed the dip?.)
BTD.
>>It's these growing inflationary pressures that Paul sees leading to an accelerating devaluation of paper currencies in the coming years. He sees a revaluation of the US dollar vs gold as a likely outcome <<
More "Food" for that thought?? : (Biflation continues to kill the middle class) :
Gains at McDonald’s Continue, but Menu Prices Could Rise
By THE ASSOCIATED PRESS
The company’s commodity costs in the United States spiked 8 percent this quarter compared with a year ago. That is higher than the second quarter’s 6 percent and the first quarter’s 1 percent increase.
http://www.nytimes.com/2011/10/22/business/mcdonalds-profit-is-up-but-pr...Good. People shouldn't eat that crap anyway.
Soon organic food will be the same price as the rest because organic don't use petrol products, since the cost of oil is going up and up due to monetary and supply reasons.
Nobody uses tractors to harvest organic foods?
Farmers carry their produce in baskets on their backs to take it to market?
Hey Schmuck!
I love your optimistic perspective . . . the fat slobs can get some exercise too. Who would have dreamed we left utopia behind in the 1850's, brilliant!
Organic food, exercise, I suppose waiting quietly in long lines will teach us patience. It is all becoming clear now . . . Obamatopia!
Damn, I thought I coined a word, somebody beat me to it.
http://www.youtube.com/watch?v=fhK8iU_6HQM
Dear Captain Obvious,
Organic food does not use petro-fert or petro-pesticides.
Yours Truely,
LH
i thought robo was captain obvious
I think Robo is more like Corporal Oblivious.
Allegedly......
Organic food is a toy of the wealthy. Show Me the data that proves otherwise. Fat Lard Ass who made Supersize me proved nothing other than "if you consume 5000 calories per day you'll get fat and your cholesterol will rise.
A (Nebraska, I think) professor just did a diet of Twinkies. He limited his caloric intake and took in some addition protein and a vitamin. The result was weight loss and improved lipid profile.
'Organic' is a buzz word. When the world is truly hungry it wil go away and we will eat what we can get and be perfectly fine. Since DDT was abandoned because of "Silent Spring" what benefits have we accrued?
McDonalds is fine food, Coke is OK. If you caloricly limit youself (which is a completely foreign concept to most people), you can live a long and cancer free life. America's ass has grown large and full (and misshappen) due to quantity NOT quality.
You are right on brother.....high five....its how much you eat...and I would throw in a little exercise....I have lived on fast food all my life..I work out and I am "active"...I stay in shape...
The label "organic" is "owned" by the FDA. Try using it without paying them their inspection and registration fees and see what happens. Google it if you don't believe me, it actually says "owned". Unbelieveable.
Sounds like the 'Kosher' racket. Try putting a tiny little K on a food product! Some Rabbis will hand you your ass!
DDT is still used on the crops today it is called 247D, but now because of weeds becoming resistant it has to have 3 applications insted of 1,FYI the most poisonous is Soy beans. My neighbor started feeding his heard GMO suger beet last year and he lost about 42% of his calves .
Check out the Russian GMO studies. Within 3 generations of mice being fed pure GMOs, 75% were sterile. By the 4th gen, they were growing beards INSIDE their mouths, and other such freaky shit.
Monsatan and the Fatal Drugs Allowed are bending every living thing over the pickle barrel.
Prices could rise you say but portions have "reversed super-sized" in other words, portions continue to shrink. The Big mac should be called the medium mac, the Quarter pounder should be called the 1/4 divided by 2 pounder soon. McD's is confusing the consumer by:
- raising prices
- shrinking portions
Yes.
Don't forget: McDonald's represents the biggest economies of scale available anywhere for food. So imagine what the relative price spikes have been for small restaurants or for families putting food on the table.
In past recessions, McDonald's was the last stop for a dependable 'dollar meal' and 'change from your dollar'. That gives you an idea of how little of a buffer there is in the current situation, and also how fast and far even their "cheapest" prices have risen
Yes.
Don't forget: McDonald's is stuffing it's "beef". Soon it will be a
Wood pulp and Ground soybean shell with beef flavor Pounder.
All your beef is belongs to us.
Dog shit and sawdust...
That is the first type of food inflation, always. Portions shrink and the price stays the same, or, if things are really bad, they get you from both ends. A bag of chips shrinks from 300g to 280g. For some flavors the bag will only be 250g, for the same price. Chocolate bars also shrink.
Go buy an 8oz package of sliced cheese.
FAIL.
It is now a 7oz package that cost 30% more than 1 year ago.
Devaluation has gone viral.
you got it. food size packaging everywhere is shrinking. that's one way to "hide" inflation
Food is the least of a McDonald's costs. Labour costs and rents are deflating faster.
They've got a problem at McDonald's flagship store on Broadway, across from zuccotti park...OWS-NY has infected and it smells like a sewer!
Gonna costs tens of thousands of dollars to clean that place up, once NYPD evicts the squatters, just another cost of doing biz for Mickey D...
More good things coming out of the OWS totalitarian wannabes.
The way of the world. Good things come out of bad intent. Throwing out baby with bathwater kind of thing. What is good is the people on the ground discussing the concepts of a Republic. I thought you were checking out? ;)
Shush yo' mouth child! We can't be talkin' bad about the massa! He be in charge. We jus' needs to be good and trust the massa. Now be goin' back to work and keep yo mouth quite!
"Seeds of our destruction" ???
Give me a break.
The USA have the most intelligent and educated population in the ENTIRE world, immense territories rich in minerals and water, and have not at all suffered from decadence or social decay over the last century-- contrary to Europe.
The future is BRIGHT, if only you wanted to believe in it. Government debt is a false problem.
Trouble is most Americans can no longer afford to live in America. Lil problem.
You're joking, right? PLEASE tell me you're joking.......................
Actually, if you analyze the situation, regarding the statement Government debt is a false problem, he's probably more correct than it appears at first glance...
The 'MeriKaN (D) & (R) Free Crap Empire™, along with the EuroTrash kabal, will ALL be FAR beyond their ability to service their debt loads in the next 1-3 years.
Debt repudiation is not an option for sovereign entities, but currency devaluation is.
What you think the Bernank has been doing for the past three+ year?
Creating an environment for a strong dollar? lol
There's a new currency coming, what it is I don't know yet, hell I don't think TBTF/TPTB know yet, but the eventuality is a mathematically certainty now.
The EURO Ponzi is in final collapse mode now, the U$ Petro Dollar will follow it in weeks to months after the EURO is dead.
Prepare accordingly...
EOM
You should change your Avatar if you're attempting to metamorphose into a serious commentator. Having been outed once, you're forging on with this?
And no, I didn't buy the whole 'faux Xbox dood' moment either. Snake is clever, but perhaps you should think about it a bit before pronouncing the NWO currency de jour.
p.s.
It already exists, you idiot.
01010100011010000110010100100000011011010110000101100011011010000110100101101110011001010010000001100100011001010111010001100101011100100110110101101001011011100110010101110011001000000110000101101110011001000010000001110010011001010110001101101111011100100110010001110011001000000110000101101100011011000010000001110100011100100110000101101110011100110110000101100011011101000110100101101111011011100111001100100000011011100110111101110111
Don't you have something constructive to do, like filling your face with alcohol to deaden the pain between you ears?
You really imagine that I don't chug down at least 20 units before coming here to comment in order to get down to your level?
You should pay attention to the drinking threads, most of the smart cats are fucking wasted by the time they post here. It is called... relaxation in the face of total insanity and ineptitude. Most sane intelligent posters here are now having to get drunk to even read the headlines coming out of the US/EU due to massive cognitive dissonance.
Heck. This week I've put away more than your mother has ever drunk, just to enable me to read your posts without a brain hemorrhage. And you still got born, so kudos to your father's liver.
http://www.youtube.com/watch?v=QoL2ViLiuSQ&feature=related
[edit]
Wait. I AM totally wasted. Some punk has been using your avatar it seems... back in a tick, checking this out. I might have trolled myself ;)
Yeah, there's some other kid using the same Avatar who was stirring up the boards yesterday, who I wrongly assumed you were. Damn. In the spirit of full disclosure, I'll leave my idiocy here for all to see. Apologies... lolololol. (Name aphasia, same Avatar, d'oh - self junk applied, +1 given)
Dam bag-head.
Meh, it happens - most of what the comment section is about is churn, and sparking a bit of fire. And yea, at least I'm honest about my mistakes.
However:
Binary is still the only real currency - if you doubt it, look up why/how your CC's work. And which 4 providers are used across the globe, US interference in Russia to prevent a home-spun version etc. I've outlined this in other posts.
p.s. Let the real Snake answer first, hmm? More amusing that way, and allows him/her to fire off. Oh, and I'm able to do this all with >20 units in my blood - can you say the same, Mr Cougar? Methinks not.
Knob Creek for me....
Did I miss something?
At least there, you get to blow shit up intead of waiting around for this shit to blow itself up. No fun without tracers.
i like both knob creeks . blow stuff up and a drink after
knob creek's good
Yes, change your avatar. perhaps a paper bag like the big shooters wear.. Ha, we are all anonymous for all you know Snake Pliskin is Jamie Dimon.
One of the problems with America is highlighted by our paper bag wearing friend here. Forming conclusions and value judgements using appearances over substance is at epidemic levels and the fall from that illusion is coming and it will be very painful. One man will appear with substance and the sheep will cling onto him, beware he is not a destroyer.
Yup. It could be a basket of currencies, it could be a new Esperanto. But the world has learned a sharp lesson that without gold backing the new currency in some form, then the same mistakes will inevitably be repeated with dire political, social and global economic consequences.
Gold is the stabilizing ingrediet in any currency or mix.
With most "citizens" being narcisists that don't give two cracks about AMERICA, just looking to get a piece of whatever Ponzi scheme is in effect, I don't hold much hope for a return to "rational" thinking when it comes to money -or- economics for that matter...
Everywhere I look out across the fruity plains it's like Lord of the Flies on crack!
From here forward (until the RESET), I'd say it's down, down, DOWN...that is, except for that part of the 1% that is preparing and connected.
Fiat for the huddled mongrels; PMs for the banksters; Power to loot for the politeer brethren!
If the sheeple weren't so busy grazing on pastures of ignorant bliss, they'd already be dumping currency for real money, which of course is NOT happening, and I don't believe WILL happen enmasse.
Fourth turning indeed!
The new currency will be reckless violence. Might makes right. Submit or die, Bitchez.
Welcome back Quixotic. Some get it and others don't. Welcome Back. !!!
Lord of the Flies on Crack.....yep that's the best description I've read yet.
No applause emote but I can +1 you.
For us sheeple its a stabilizing ingredient..but for a banker it is the kiss of death to bonuses...so the new currency will not be gold backed ..this will be so the bankers can make back what they lost over time with new gimics and toys that we the sheeple will buy and pay for..all backed buy the governents and teh politicians who depend on the bankers to fund their campaigns..
Caviat, consider the petro-dollar and global energy deravitives, tied into global warming marketing hysteria to sell the need for this new currency unit. Food for thought. Gold may be the short-term solution but our underlying consciessness is pushing toward energy units as currency.
The intent was bad but something good will come out of the wreckage some day. For full energy unit currency (yes start of it was bits and bytes) it requires trust so I speculate perhaps 2030's we'll see a renewed push toward this end.
Raging Debate,
Gold may be the short-term solution but our underlying consciousness is pushing toward energy units as currency.
How so?.
We have since records have been kept pumped 1T barrels of crude.
Of the wells that are not producing now, most of their reservoirs were only approx 35-40% depleted.
Technology today exists to go back and extract a lot more from them,sure it will cost a bit more, bit not a ton.
There is an estimated 1.5 Trillion barrels left in old wells, and that is not even considering NEW fields being found.
Add the estimated total left on the planet at approx 5 Trillion barrels, and we are NO where close to peak oil.
DosZap
Now don't try sneeking in facts and cogent reasoning against the emotion, politics, and vacuous reasoning of the basement dwellers of "Peak Oil".
Shame on you.... Shame...
Yes sirree "The future is BRIGHT". But the SHADES are imported.
Yeah but even tinted shades get wiped every once in awhile. I am getting $10k from a local Pakistani here in New England that wants to invest in Social Media. I got commitments from a couple of big fish too but I just HAVE to let him into the party ;)
....and 40% of your population are obese.
That leaves another 20-40% merely being fat.
Ye, I know you're a sock-puppet troll for entartainment [delib. there] but really. Run... Forest... Run....
/long spandex
'your' - key word.
Another Eurotard heard from.
Ye, ok, getting a little bored of the sniping from a man who publishes bad fiction on the web and hasn't a clue how to protect his identity. How's those kinky Angels working out for you?
Want to play hard-ball? Please remember last time it took me less than 15 mins to link your real surname to a particular predator of children.
Make an informed post, I'll be nice: keep sniping, and hey... you never know, I might decide to trawl a little deeper. Do. Not. Fuck. With. Me.
Or we can both forgive & forget, and drop the entire drama, and be happy. Your call.
Pretty funny. If you can actually 'OUT' people, I'm all for it. That would be the best thing since T.V dinners.
Might even change the world?
2 minutes after Use's post. Easy. Key words.....
All this little bitches posts make sense now. (sort of.....)
Gotcha!
Which bitch?
Friday night is comedy night, I was doing my thing, whilst others were doing theirs. Heck, I even managed to troll myself, which cracked me up.
http://www.wired.com/threatlevel/2011/10/anonymous-law-enforcement/
http://zone-h.org/mirror/id/15679304
Do. Not. Fuck. With. Me.
nice HAKA but you need to stick your tongue out, close your eyes and do a throat slit motion with your thumb to really make your point.
oh and also be really fucking huge.
I've always assumed whatever I write online would be traceable to my person. I'm surprised to learn that others assume differently. Which leads me to believe that perhaps I could learn a thing or two about protecting myself electronically. Any learnin' you could link me to?
Melin, the world has changed. Basically, what your asking for is generically impossible. You could check yourself off the grid and deliver messages the old fashion way in person, second hand. Kind of the way OWS is communicating. Purposeful devolution isn't my thing. I jest sometimes here of the absudity of people that still think they are 'anonymous' by putting up my name and phone number on the threads.
In the end, people do not follow anonymous anything. They follow men and women of principle that sign clearly on the dotted line of what their intent is and what concepts they represent.
Frankly, I'm shocked. I know government agencies can trace your IP address, but I didn't know another poster could trace my handle to my IP and then to my real name. Interesting, perhaps I should invest in IP hiding software, or is that easy to circumvent too?
There's three schools of thought:
#1 Tor1, proxies, VPNs and keeping yourself hidden. The problem is that a data black hole allows you to see where something is coming from (analogy - stealth submarines, where you're looking for where the background noise of the ocean isn't, rather than is, to find them - same principle being used by FaceBook to make "shadow profiles" of non-users). They work, up to a point.
#2 Datasmog - throw so much garbage through a connection (automated pr0n site clicks, sharing network with Bittorrent users, multiple P2P MMO connections etc) that automated processes don't flag up the connection, or can't spot it without human intervention. I think the current ratio is something like 1.5-3.5 million attempted data intrusions / day for a top 10 banking site, so there's a lot of smog out there. Not to mention a billion people watching pr0n.
#3 Use public access to publish stuff, and don't ever use the same computer twice. MAC alarms, memory only trojans and modern sniffers are easy to keep hidden on most systems [Unix... maybe not]. Good example: http://itunes.apple.com/us/app/security-camera/id421806306?mt=12 ... Assume that your computer is being used as a data collection asset at all times.
#4 Multiple identities that you keep on separate machines and access the internet via differing ISPs. One for personal, one for business, one for trolling.
But, in reality, at this point with packet sniffers and so forth - ISPs are the issue (and further, satellites, but hey). If you're with an ISP that is a) hosted in a country with robust privacy laws and b) encrypts its own traffic, then great. Your large Corporate ISP is doing neither. There's a reason the Wikileak servers are where they're at. Iceland also looks promising (meme of the month is how great Iceland is, because it rocks :) )
It's Fight Club theme here, drawing opinion on facts by pissing each other off a little. It's a brilliant model for phase one of liberation. The theme will become less useful over time but for now stop being such a pussy.
Was that to me?
Trust me... don't teach your grandmother to suck eggs.
Use of Weapons
....and 40% of your population are obese.
That leaves another 20-40% merely being fat.
NOT FOR MUCH LONGER.
hahahahaha, what a hilarious thing to say.
ostrich sticks head in the sand, sees no problem!
I hear that there are companies now that will come out and remove the dog shit from your yard for hefty price.
Is that decadent?
Support, please, as I beg to differ. I'll throw you a bone for your research: South Korea.
I'd modify your statement and say that the US is the most education-indebted in the world, standing at nearly $1T.
"The USA have the most intelligent and educated population in the ENTIRE world . . ."
I was reading just the other day that among the intelligent and educated population of Detroit, the army of the functionally illiterate now stands at 47 per cent. (In Thailand, the third world country where I happen to live, it's about seven per cent.)
My observation is that it would actually be damn difficult to PREVENT a child from learning to read, and yet nearly half of these Detroit wunderkinder can't get 26 letters into their heads, even after ten years of schooling. Christ, Japanese kids have to learn THOUSANDS of kanji ideograms in order to be able to read properly.
I sure wouldn't want to buy any car assembled by these dopes.
Detroit is a war zone so they don’t have the time to edumacate they’re, there, thar, I mean their children.
that's terrible.
Why does this man get downvoted so much?
He is telling the truth, the median education in the US might not be great ... but truth be told you just don't need the median to be very high. The top few % are much more important in this day and age, for instance you only need so many engineers ... and the US still has the cream of the crop as far as that is concerned.
Natural resources, again ... the US is incredibly wealthy in that respect, the only thing it really lacks is cheap to recover oil ... on the other hand it has an abundance of deserts (unfortunately also a population poisoned against the concept of solar power and a political system almost incapable of well targeted investment because of corruption).
Both in personal and natural resources the US is the wealthiest country in the world, it's just squandering that potential because of wealth inequality due to crony capitalism and the associated social instability. Until wealth inequality is fixed there is no future for the US.
"The USA have the most intelligent " There's your problem right there. Nice sentence structure...
Technically, you are correct Krisp. I view articles as requiring careful editing for form a necessity. However, commentary is quick display of opinion and where one stands on an issue. I feel commentary would be more useful with some better tech to harness and incorporate facts.
Market normalization for Digital Publishing is a major business opportunity and permits philanthropic intent.
Hamy Wamger,
Government debt is a false problem.
Gov is THE Problem Hamy WTFU.
Who do you think is keeping us from GETTING to those vast resources ?
Who do you think has take ownership of MOST of it?
WHO will not let us explore it, and create new industries from those resources?.
Simple.
WHEN they get the hell out of the way, real Capitalism could reemerge(but not until this system is changed, Banksters are/have murdered the world),for their own devices.
And guess WHO allowed it?.
There's your BRIGHT FUTURE.
<p>Hamy Wamger,</p><p>Government debt is a false problem.</p><p>Gov is <strong>THE</strong> Problem Hamy WTFU.</p><p>Who do you think is keeping us from GETTING to those vast resources ?</p><p>Who do you think has take ownership of MOST of it?</p><p>WHO will not let us explore it, and create new industries from those resources?.</p><p>Simple.</p><p>WHEN they get the hell out of the way, real Capitalism could reemerge(but not until this system is changed, Banksters are/have murdered the world),for their own devices.</p><p>And guess WHO allowed it?.</p><p>There's your BRIGHT FUTURE.</p><p> </p>
And as prices have been spiking in consumer staples, incomes have taken a Real Big Hit during the cirsis: (can you spell Biflation?)
Real median annual household income has fallen significantly more during the economic recovery period from June 2009 to June 2011 than during the recession lasting from December 2007 to June 2009.
During the recession, real median annual household income fell by 3.2 percent, from $55,309 in December 2007 to $53,518 in June 2009. During the economic recovery, real median annual household income fell by an additional 6.7 percent, from $53,518 in June 2009 to $49,909 in June 2011.?
For the entire period from December 2007 to June 2011, real median annual household income has declined by 9.8 percent. A decline of this magnitude represents a significant reduction in the American standard of living.
http://www.sentierresearch.com/pressreleases/SentierResearch_PressReleas...
Don't tell that to the 401k I've stopped contributing to, after taking out all I can to buy the PM's that fell overboard in a boating accident.
Received the statement today: -14.1% on the quarter, -9.3% on the year. Oughta be worth a Little Mac (no Coke) in about a year....
Buying power of cash and near-cash instruments getting crushed. Since 2000 stocks are gross down (not even factoring in inflation), but gold has nearl quintupled. A big tell. The trend is yo friend.
So, go long?
I would say yeah, Go long but be ready for it to break. The entire regime is fixated by the idea that economic health is measured by the DOW/RUSSEL. They are of course wrong, but what else is new? The game will be to force the perception of recovery up to stinkies (B.O's) reelection.
They can juice it that long and they will.
It's second term will be the fulfillment of its mandate. America will be mortally wounded and the path of global governance shall be fully cleared.
Just as planned.
Mission accomplished.
ISEEIT, do you find any irony that an empire is already in collapse mode while empires are celebrating victory dances? Ahh the hubris of our species. Hillarious if it were not so deadly.
i'm about to make a big gold buy.
i need my zh buddies to reassure me this is a good thing
It's not. Wait a few weeks. 1500 is still in the Tarot cards.
once the deflation bomb is dropped, who knows how low it goes.....that being said, since none of us know anything about the future, instead of one giant purchase, it would be smarter to cost average your buildup. after all, bullion is held with the idea of preserving value, so if you believe gold will do that, spread your purchases out..........
I don't know if 1500 is possible or not. It's the bond market.
It has to continually rise to stop crashing the bond market right now. It can do the headfakes quick run ups and then come right back to where it was to get through a couple months of shakiness on the bond market. But I still think it's great depression time. On second collapse the bond market just DIED. And there was a nearly instant depreciation in the dollar. Actually what they did was load a ship up with gold ship it to england at 25 bucks an ounce that the bondholders bought and then shipped it back and sold it for 30 something bucks and ounce. That was the payment for the bond market crash.
So it just depends on how gold and silver are used in this inevitable bond market crash.
As much as I defend gadafi he was still a dumb ass dictator. But reguardless I don't know if they can bring libyas economy online enough to save the french banks. My guess is europes bond market will just freaking shatter before ours does. Sure the delay will probably be only a week but that will proably be the signal.
The problem you have there is gold goes frikkin kaboom on a bond market earthquake and you'll be fighting frogs for gold. And frogs got as many worthless euro's as you do dollars.
1640 to 1900 and back down in 2 months is not a good freaking sign.
It is. I do not see gold going below 1585. In fact, I think 1605 or so is about as low as it will get, 1585....bounce back up. Asia (China) is rolling it up. I've been buying steadily below 1700. Not sweating a bit. Happy with glee every time I see more, trying to raise worthless cash to get rid of, but there's just not much more I can sell to do that right now.