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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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@ BigDuke6
ANYTIME is a good time to buy gold. When I have some extra dough I go out and buy, I do not let the price influence my purchase decision. I have been buying small amounts of gold steadily since the 1980s. And it has worked out great.
Yes, buying gold is a good thing. And you do NOT have to be at the All Inn...
don't fret about the timing
hey, 6!
gold?
you know your way around those other bars, at least
Big Duke,
BIG depends on HOW big,why you would buy over 10ozs at a time and not keep excess powder dry,buying the dips, DCA is the way to go.
You can win at $1643.00 spot,(own price around $1700.), if Greece defaults which I forsee as a given, and now we have the Fed VP talking QEIII again.It will spike and you could have to pay another $50/100.00 an oz.
Deleted, posted in the wrong spot ...... wierd
Hamy is either a Paid Troll or the worlds biggest idiot.....
Settle down kid.
Hamy took over here on zh from the legendary Harry Wanger who was a real american patriot but is no longer seen in these parts.
Hamy has been away for a while but now he's back and he continues Harry's good work to get us into a lather.... goodam it.
I heard Harry is now a roadie for the Shower-Hook convention circuit and his Atari laptop is not wifi-ready.
Now we know Obama's onile ID.
WRONG.
The seeds of our destruciton is the banking system with its printing press.
If banks didn't have a printing press, the bond market woud be kept in check by a limited money supply. The government couldn't issue bonds and borrow money printed on a printing press. Corporations and state governments and local governments couldn't issue bonds and borrow money printed on a printing press. Home buyers couldn't issue a promissory note and borrow money printed on a printing press. Consumers couldn't issue a prommisory note nor sign a credit card contract and borrow money printed on a printing press to buy cars and other stuff they don't have money to pay for.
Banks' ability to create money out of thin air or its digital equivalent is THE seeds of our destruction, allowing governments and corporations and individuals to borrow way more than they'll ever be able to pay back.
I blame "Johnny Bankerseed" on the destruction. Rockefeller or Morgan, your choice.
I think that very few realize how the fractional banking system works with the megabanks and its ability to create money out of thin air.
You are correct, therein lies a major problem.
The seeds of your or my failing lay by what and who we are. Destruction begins within. We go outside when the answers are internal. We are our own worst fools. Junk--rantings of an idiot. Milestones
Since when do bonds have jack to do with the S&P?
Bunch o'suckers buying unpayable debt, geez, get real.
THAT'S WHAT THE FED IS FOR!
This is great, I appreciate that this article was posted. Many of us are quick to point out that the Fed is the causation of all these runaway policies and policy bungles, but what this analysis does is to delve into exactly how the nightmare bore itself out. PB is smart and successful; people should pay attention to his thoughts on this. He's just right on everything.
Hamey is right, we have saved our oil and have great mineral wealth as well. I will be riding the energy sector wave in Bakken 2 years from now while you many of yoy Socialists will still be whining the system is not fair. Go where the work is; you can't eat sand you stupid Ethiopians. If it were to fall apart, you'd be a hell of a lot better off in a state like Texas- thats all I'm sayin.
You mean Mexas?
He's right, as much as it pains your Rue Paul sensibilities.
But you'd have to think to figure it out.
Yes, and they work. Unlike the fat ass welfare handicapped looters who "earn their living by the government".
The difference between Federal workers and Welfare recipients is: Many Federal workers don't realize they are on welfare , while most welfare recipients think they are employed.
I'll take all the hard working Mexicans over the Katrina crew that moved here any day. We can deal with another hurricane here, but if one hits New Orleans again- that would be devastating.
Fuk NO, Charley was a Cat-4, and went right over my house.
Bunch of pansy-ass Dim voters.
Nagin rules! As the almost dumbest elected Dim.
Breathlessly awaiting his appoint to the EPA.
So Sir Greenspan enabled fraud in reserve requirements? And for that he is bestowed a knighthood and called a maestro. Yeah, he was cheated of his Nobel.
SUPERNOVA Economics:
"Stars start their life (and spend 95% of it) fusing hydrogen nuclei to helium nuclei in their cores, to produce energy. Eventually the hydrogen nuclei in the cores runs low, the core contracts driving the core temperature up to well over 100 million degrees and this is now hot enough to start a new nuclear reaction whereby the core quickly fuses 3 helium nuclei to a carbon nuclei to produce energy.
Ok the next round of nuclear reactions is the key here....once the He is fused to C nuclei, the core once again contracts to drive the temperature up, trying to start another round of reactions [where] carbon nuclei joins with a helium nuclei to form an oxygen nuclei and so on up to the iron nuclei, forming all the elements up to, and including iron.
All these reactions are exothermic, producing energy (to keep gravity from collapsing the star). But.....once you have an iron nuclei core....there's a problem. Any reactions involving iron nuclei...be it fission or fusion... are endothermic, REQUIRING energy. The star's in big trouble, as elements merge with iron nuclei taking energy from the core. The core rapidly contracts, driving the temperature still higher, which actually makes the iron reactions proceed even faster.
With no energy to support the outer layers, they all come crashing down (by gravity) onto the super-hot … core, and basically the star implodes. All that incoming plasma onto the superhot core immediately fuses, the core rebounds, and we see a supernova as the implosion becomes an explosion... There can be 3 outcomes to the core in a supernova....the core can be completely disrupted by the implosion, leaving nothing but hot gases and dust. Or, the core can collapse down to a neutron star, or in some cases, the neutron star can even be crushed down to a black hole....but the death of a massive star is another story."
Quit trying to edicate the masses.
Yes, I know it's educate. Also read 'Gravitation' by Misner, Thorne, and Wheeler. Even got it replaced after Charley took it out.
i bet the girl cats see stars around uranus. nyuck nyuck :bed time 4 bonzo:
U still crack me up. Get it? crack....
get your own show, hear CBS is looking to replace Letterman....
tho, christ, a dead letter would do it. Maybe you should apply at the USPS?
I feel too lazy to dust off those Lagrangian and differential maths.
I'm too buzy planting some of those destuction seeds and other anti-personnel landmines to make the markets more bots-friendly.
Funny! I used super novas as a metaphor for our economy the other day. I think we are rapidly reaching the final collapse before the PONZI-NOVA.
and someone used "dancing with the stars" as a metaphor. hmm
Agree, bonds (which are a market 10 times larger than stocks) is what will crash the system.
The Powers that Be have rigged the sovereign bond market, rigged the stock market, rigged the PM market (suppressing it rather than pumping it). No doubt the Feds are patting themselves on the back thinking how they've mastered the markets. NOT. All they've done is drive anyone with functioning brain cells out of the markets.
The markets are rigged. Only short term traders dare venture into them.
It's hunker down time, as in solid (reach out and touch at 3AM) assets.
Can't say whether things blow up next week, next year or whenever ... but its coming.
Along with revolution.
No chance. None.
Largely contained.
Irrational exhuberance.
Read my lips.
Truly epoch moments.
The Bond Market is rigged and so is the Gold Market:
October 21, 2011 7:06 pm
Is there a shadowy plot behind gold?By Gillian Tett
"I attended a dinner last week where Chris Powell, the treasurer of the Gold Anti-Trust Action Committee (Gata), was talking. Powell, an investigative journalist based in Connecticut, co-established Gata with a former commodities trader two decades ago, and he is convinced that the American government has long been manipulating gold prices as a matter of national policy. “Gold is a currency that competes with government currencies and has a powerful influence on interest rates and the value of government bonds,” Powell explains. “This … is why central banks have tried to control – usually suppress – the price of gold.”
This rigging continues even today, he adds. Never mind the fact that the gold price has soared by 22 per cent in a year: to Gata it remains far below the “proper” – non-manipulated – price. Thus, when the gold price tumbled last month, Powell blamed this on central banks, who “meant to knock down the gold price at a crucial moment”. (Check out www.gata.org for the arguments in full.)"
http://www.ft.com/intl/cms/s/2/90effa18-faa3-11e0-8fe7-00144feab49a.html#axzz1bT2RpNVx
Those of us that have been paying attention to the Ponzi for any length of time (15 years in my case), have known all along that central banks have tried to control – usually suppress – the price of gold as a matter of policy, to keep the Ponzi from imploding.
Anyone making decisions whether or not to purchase physical PMs based upon manipulated data will be the ones left holding the bag (of currencies) when TPTB/TBTF pull the plug on the U$D.
Got Ag/Au?
OK,,,,,but,,,,
It's not a one sided subject. The CBs use gold as the prop loan to fund the ponzi. They play both sides of the trade. It is important to usnderstand the whole picture because the manipulation is from both the short and long positions that the CBs and their proxie banks hold.
To answer your question... if it is a question... you have to think on a longer time scale.
Many countries have started with a 'hard money' currency (backed by PMs) and, eventually have slowly moved to a 'soft money' currency. Once the soft money (fiat currency) is printed into oblivion the only recourse to get the economy moving again is a return to hard money. This is why central banks/nations never let go of their gold reserves...they know what is going to happen at the end of soft money...kaboom!
Rinse, repeat.
What is required is the loss of memory of what happened at the end of the last soft money cycle. It takes a few generations.
What makes this work is 1. human nature is the same everywhere 2. people do not have generational memories and even if they do the educational system does not teach the truth, but a fictional account of the hard/soft money cycle.
This is why the study of real history is so important... if you want to know how the game is played.
The Fed holds 14k tonnes of Treasurie gold on its balance sheet. The decade long appreciation of gold has kept the Fed solvent.
When the price is let to appreciate, then they loan the gold to other CBs, and the price drops. This way their ponzi continues. They play both sides by benefitting on the rise and selling the top, and then using propaganda to yell about the dips.
I do agree with your statement, too.
Snidley Whipsnae
"This is why central banks/nations never let go of their gold reserves..."
Great observation. Hiding in plain sight.
I gotta get out of the coal mines....
If you've seen this for 15 yrs, why aren't you dead?
Oh, still playing the spread, I feel you. Gambling is a bitch, but fun.
You are in a mood tonight - enjoying it!
Can somebody explain to me what the consequences are of the fed being massively insolvent and holding everything to maturity? If I could create money, I wouldnt care if someone paid me back at par or not.
None if you are long. Your life if you are short. Any other questions?
The danger is that if the assets held by the Fed (MBS, Treasury bonds) lose their value while consumer prices go up (food, energy), the Fed will not be able to sell their assets to withdraw liquidity and control inflation. Of course, the Fed could still raise interest rates, unless the US were to develop serious trouble rolling its debt, and then that tool would also come off the table. Remaining options would be printing money into a hyperinflationary environment to prevent failed bond auctions or just plain default on the debt.
yeah the price of servicing an asset excedes the asset value, as someone once said the price of onions once went negative as storage costs were more than the commodity.
hah! Ive been so conditioned by the current environment that i didnt consider the fed selling assets to move rates up. Sort of forgot they could do that in theory...
OK sure. But sell to who, and at what price???
Return2Sanity... Have you seriously considered the consequences of the Fed raising interest rates now... or ever again?
Think about it...
Sure--you probably recall that Paul Volcker raised rates in the early 1980s and caused a recession, but we weren't sitting on the mountain of debt then that we have now. That's why I think that if consumer inflation develops, the Fed will let it run, up to about 10% per year, without taking any action. You'll just keep hearing Bernanke repeat that line about inflation being transitory--nothing to worry about.
Over 10% per year and they might take action, but that would depend on what causes the inflation. If China unpegs their currency and import prices rise drastically, probably no action because they see that as a one time event. If inflation were caused by the bond market starting to collapse, then no action at first because higher interest rates would just make the collapse worse. Only after consumer prices had doubled or maybe tripled, would the US debt be inflated away enough to make raising interest rates feasible.
David Icke explains the credit scam: "The money system has been created for human suppression and enslavement"
http://www.federaljack.com/?p=128283
Is this the same David Ickes who professes the rothschilds et al are a hybrid of three alien races interbred with humans?
(just wondering if I should consider this as a reliable source for information)
David Icke?!?!? This is the man who thinks the moon is hollow and is a giant spacecraft run by lizard aliens. NOT the best man to quote for anything other than ridicule.
Time to get as much credit out of my bank and buy gold.
What is this 'bond' youse guys are talking about?
Iz gotz tons of these Greeks bondz due tomorrow....
C3X Ex bond traders who launched C3X continue to thrive
http://capital3x.com/think-tank/performance-oct-22-week-tough-week-that-...
check performance every week and the trading is done live so no chance of fudging
Benoit Mendelbrot. Gone 1yr this month,
I have never been to Black-Scholes.
Why haven’t finance academics and practitioners paid more attention to Mandelbrot’s warnings?
“So why haven’t finance academics and practitioners paid more attention to Mandelbrot’s warnings? I think it’s mainly that he didn’t provide them a handy alternative to Black-Scholes.”
No Alternative to Black-Scholes!!!! Repeat
Maybe the deeper question is:
Should there be one (alternative to BS) ?
Dapper. Mandelbrot gave them the hypothetical answer even though he didn't have the final computing tool to prove his answers. It's reflected in the movie War Games and the computer telling the military brass that the best solution is not to play.
This is a deep subject of evolution and the tools man creates that are markers reflecting our evolution from 2d to 5d. Mandelbrots study of fractals 2x2 model helps facilitate a mathematic framework or an engine that could ask the right questions about our physical existence (3d complex organism) while beginning exploration of our soon coming energy existence which is 4d. I know I am not doing Mandelbrot justice with this simple commentary so it is time to discontinue.
http://www.youtube.com/watch?v=YoaUTpr2SNo
Two problems with the arguments here. First, he even admits the newly printed dollars stop at the banks as excess reserves. If they don't get out into the system they are not chasing goods and services.
Second, prices can are limted by how much they can rise by how much people can spend. No wage increase = not much price increase. (Actually I think wages are declining on the whole,)
So, Fox... If you believe this "If they don't get out into the system they are not chasing goods and services."
How do you account for the rise in prices in food and energy?
Hint: There is always 'leakage' from the banks into the real economy. The historic lag time is about 18 months.
Snidley, I understand the basis for the question but understand that both food and fuel/energy have long since peaked yet M2 is still on fire! Really, brent and commodity prices are trading purely on recessionary outcomes. Market gets all fired up if economic data firm, rally on commodities. Soft data, sell the shit out of them, meanwhile unlce Ben is printing, twisting, beating his shit, etc. with zero wage inflation.
In fact, without Chindia, you'd see brent WAY off right now as demand destruction for petro in the U.S. continues full steam ahead. That and I can feed a family of 6 at McDonalds for $18 bucks...not much inflaton here either.
The great contraction continues!
"Second, prices can are limted by how much they can rise by how much people can spend. No wage increase = not much price increase. (Actually I think wages are declining on the whole,)" - as you can see all over the world people spending from 50-80% of their income on basic needs of life (by basic I really mean basic) and here in N.America is 15-20%. Now you can imagine how much deflation in wages and inflation in prices we can take to get to their level and still live.
What's an ounce of hopium going for these days? Might be a better short term investment than commodities.
And to think I bought a slot machine to assuage my gambling habit......and they're off!
It did work for 15 yrs.
The Hyper is coming.
We'll find Ben in a sewer.
It won't happen. Quit jacking off to the possibility.
You know what really sux ass? The money I pay for life insurance now is worth something and "costs" me. If I die in a few years, my large policy will be peanuts for my family; makes me question whether I should continue to support the premiums at all.
Term insurance is worthless. Can you fake your death?
Screwing the fools is fun. After all, they sukked you into buying that cit.
If I faked my death, I couldn't be a loud mouthed know-it-all anymore. Plus I have 3 young kids, hard to be "dead" in that situation...
Not sure if you have kids yet, but life insurance isn't a suckers play in that situation, it is just a responsibility. Case in point, a father on my oldest sons baseball team died this week; he was days away from his 37th birthday. You never know...
the more things change, the more they stay the same. here is greece, year 1932
http://news.google.com/newspapers?id=0bFfAAAAIBAJ&sjid=AjMMAAAAIBAJ&pg=3824,2404603&dq=greece+default&hl=en
FL has a good system. First, you bid on taxes owed on property. If it isn't redeemed, you go to TAX Deed auction. Winner there gets the privilege of paying 4 yrs of taxes, should said winner not pay a lawyer for a quite title.
Then the prop is yours.
Just remembered I have 3 lots that are now mine. Just off a road being re-devveloped, and 2 blocks from the fire station.
Research works. Less than a grand in taxes since I got the tax deed.
Location, location.
Fortress has been buying SW FL for 2 years, Orlando for 3.
Location, location.
Check out Cumbre Viejo. WHEN that sucker slides, SW FL residents will need scuba gear for a while....
And then I'll have ocean frontage!
USA in dispare. If you default on your debt you will regret your decision.
Your future depends on the extraction of the earths resources, NOT the ownership of said resources.
Default on your debts and extraction will be impossible, even if you own it.
The country with the largest population are the ones who can play man-to-man coverage till the cows come home.
MIC. Ha ha your drones will not work in this game.
China ghost towns; soon to be full. Population explosion.
The future industry is not green tech, it's Military Miners. Ask Tarzan he'll tell you.
http://english.aljazeera.net/indepth/opinion/2011/08/201182812377546414.html
They can't default on debt. They print the value of the debt away and export inflation to low wage economies @ 37 c an hour !
Fortress has the tax cert on CIA-U.
http://www.univsource.com/impac-university-punta-gorda-florida.htm
http://www.degreeinfo.com/general-distance-learning-discussions/27892-de...
I'm frigging serious. This is where SEALS were trained.
"I would suggest anything scarce with inelastic demand properties"
Can anyone give me examples; both obvious AND out of the box....
Booze, smokes, weed, and unfortunately, eventually (soon) food.
.... potable water, defensible farmland, chickens and feed, a way to defend them....
energy .
These guys never say which currenies are baseless. I'm in the Australian and Canadian dollar because their debt to GDP ratios are 30% or below, but I'm an engineer not a finance guy. Are these currencies at risk too? Is there a safe haven out there?
I'm not a money man in any way. Common sense tells me all paper is more or less suspect (even Canadian etc). I think as much in food and physical as possible is the prudent way to go. About inflation: I think sooner or later the money will surface in the economy once banks start to collapse due to CDS and all other shitty papers and then people will demand their insured deposits. Suddently we'll be swimming in paper. When I see a queue in front of the bank, I'm going to buy more food with my leftover cash.
I'm an engineer too mate and have come to the conlusion that everything in this fianace sphere is a casino. No safe havens as the value of *everything* is based on the continued acquisition of debt. Oh precious metals are not backed by debt and have no counterparty ? Just look at the volitility of the price recently like everything else in the casino ie the paper marker is x100 (?) the size of the physical.(ps you need to learn about naked short selling to complete the picture)
Money as Debt
http://www.youtube.com/watch?v=vVkFb26u9g8
The Dark Side of the Looking Glass
http://vimeo.com/4071250
Live gold/silver price
http://www.goldprice.org/live-gold-price.html
Whaha did anyone notice 4 downvotes on the Youtube-video already, i bet they are from the Morgue and B of A offices.
CIA- U is gated, 4 stories, overlooks the Peace River, perfect for a hotel, but Fortress is going to get it for a song.
300K starting for thr the taxes. A 10 M piece of property. Just pissed I don't have enough, and if I did, I wouldn't be broadcasting.
.025 on the taxes! CIT!
fukin Goobermint. Will be there at the auction, btw. I know the shill, and might be able to deck him.
It's the flip of a lifetime, and yes, I bid them up. Actually have a 500K line from those banks you despise.
You drunk tonight nigg?
Tyler if you're still awake:
BREAKING: A State Department official confirms to CNN that Saudi Crown Prince Sultan al Saud has died.
Definite implications for House of Saud, line of succession and future of the kingdom
BBC quotes: Indeed a lot has been Going on in the arab world lately.
He died in NYC
Yep. Al Jazeera is reporting this, also.
As a kicker, it says analysts were saying he was suffering from a form of dementia, while he was Minister of Defence.
Go figure.
He must have caught it on his last visit to the Big Apple
Says it all about the kingdom of Saud :
A king age 87, A crown prince age 86 just dead, A next in line aged 85, and a myriad of princely brothers to incumbent going from age 84 to 65. What sort of country and government is that?
Good country for old men! Especially if fathered by Old Saud!
With a country like that, you'll never see anything new in a month of Fridays! Why don't they just jump two generations or change the lineage!
They really need their symbolic Q-daffy moment. Not in blood, but like for Mubarak or Ben Ali...get that mojo going.
Until they run out of oil and they surely will, it's best to be patient and simply let nature take its course.
Then the place will go back to being a desert. And the house of Saud blown away like a dune.
Outside of the corruption of banking is demographic imbalance and lack of viable successor planning. This problem isn't limited to Saudi Arabia, its a global generational disconnect. If your in Gen Xor younger, it is wise to learn to get to know your elders because they certainly aren't going to approach you without at least demonstrating you understand them.
And I'm sorry but this just makes me sick.Veni, vidi, vici NOT! Embrassing to women everywhere. And from sentiment gathered around the web, I'm not the only one
Almost forgot: http://www.cbsnews.com/video/watch/?id=7385396n
No shit, Hillary is a f'n pig!
One of the main characteristics of leadership is a strong sense of free will, discipline and self-control.
This lezzie has not one of them.
She's a fat slob out of the Roseanne Barr, Rosie O'donnell school of power mongers without a single accomplishment of her own.
Ben Bernanke told me inflation is good.
Delusional FuckTard.
What this scamster piped for was a sucker scenario that will not happen.
Why not Huckman? With the Fed's avowed promise to keep things (US, Europe, WB, IMF, UN, etc.) afloat, what is counter argument
US headed for a 1974 devaluation event... it is the only solution and it resolves a lot of issues with debt including China unwillingness to revalue
Tyler(s), a video for you, that aired last night.
John Clarke and Brian Dawe tackle the finer points of QE.
http://www.abc.net.au/7.30/content/2011/s3344698.htm
Weekend Report
http://thethoughtfultrader.blogspot.com/2011/10/weekend-report_22.html
Chna's unwillingness to devalue equals a tax.
Big call here. Makes total sense to me but then again, so did inflation 1, 2, 3 years ago. Still, much like Japan, no velocity to dollars = no inflation and in fact, the fed would love to get some inflation going right now but it seems like we're just printing money to be thrown into a defacto trash can that's on fire. Bank reserves don't need to be lent out into circulation, hence what is happening now. We've been monitizing the debt with zero ability to effectively "push" more money into circulation.
Love my gold/silver et. al. but would be suprised to see an inflationary outcome. As for bonds, hard to get a big correction in the bond market when we're heading into another recession as we speak, coincedent data peaked in July and again in September. If it rolls over in October, look out below, this may hurt!
Starting to think we're Japanamerica.
OT: Too "funny", vampire-banker sucking the last drop of blood from it's victim, the people.
http://www.elpais.com/articulo/english/Sacked/CAM/manager/files/jobless/...
The sense I get to all this is that while we here on the ground are stragetizing, thinking, venting, and otherwise trying to divine the future, and have seemed to agree on in principle that there is some kind of apocalyse on the the distant or near horizon, backed up with solid logic, rational, and out of the box analyses, that gods in the pantheon have a whole 'nuther scenario planned that they can actually execute. All that we can deduce from this is that it will not necessarily be of benefit to anyone but them.
But--- and i know this is so far out of the box as to make it appear insane-----we ar all wrong?
Shouldn't that also be considered at least as much as our own confirmation biases?
after we witnessed these extraordinary scenes earlier this year in egypt....
http://www.youtube.com/watch?v=u9jvL65m6qw&feature=related
what has really changed? anything?
http://www.bbc.co.uk/blogs/africahaveyoursay/2011/10/has-anything-really...
OT-Hello? Anyone out there? I will wait 10 minutes and try again... I guess I missed the new Camping Rapture, unless heaven is just like my current life.....
Edit: OK, I am back. Guess it didn't happen. I hope Harold can spot me some of the money I gave him....
'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.'
Yep. Da Fed is leveraged more than 50-to-1, and is increasing its holdings of long Treasuries with higher interest rate risk.
Bankster cartel's solution: hold bonds at cost, not market value. Problem papered over ... even if the Fed's true net worth is negative.
Since the Fed's largest liability (currency) is irredeemable, neither a bank run nor involuntary Ch. 7 bankruptcy is possible -- even if it's insolvent.
The sole market-based response is indirect: sell the dollar. Which is okay with Benny Bubbles, as competitive devaluation is a form of easing.
Heads they win, tails we lose.
There are some people in this thread that don't believe the Fed will want to raise interest rates. Why think that this is a given? Because Ben stated he wouldnt?? Hahahaha. Good one. They will raise when it suits them, or should I say, they will raise when nobody except the banksters think they will raise, and they will buy up the last of the 'in-elastics' available from the same fools they sold their bullshit bonds to in the first place.
because it would destroy the very indebted banks they are trying to protect
Let's face it: we were fucked as a country the minute we started electing men who cared more about re-election than the long term health and well being of the nation. Instead of making hard choices, our leaders take the easy way out and kick the can down the road. These people barely even blink at trying to sweep our messes under the rug. At first the messes were relatively small, but they have become ever larger. And the measures required to mask the problems become ever larger and more radical. Sometime in the next 20 years (likely sooner) everything will come to a head and it won't be pretty. But I suppose we'll get what the majority deserves--even those of us who play by (outdated) rules.
Take me to Iceland
http://tiny.cc/u1ox4
"This so-called social media has transformed our democratic institutions in such a way that what takes place in the more traditional institutions of power -- congress, ministries, even the White House or the presidency and the cabinet in my country -- has become almost a sideshow," Olafur Ragnar Grimsson, Iceland's president, said in an interview with CNN on Thursday at the PopTech conference here in coastal Maine.
"I know it's a strong statement, especially coming from someone who spent most of his life within those institutions. But the power of the social media is, in my opinion, transforming the political process in such a way that I can't see any chance for the traditional, formal institutions of our democratic systems to keep up."
...
"One of the lessons is that if you want to grow your economy towards the creative direction of the 21st century, a big banking sector, even if it is successful, is in fact bad news," he said....
. "It's one of those countries that's still assuming that anyone who come comes as a friend until proven otherwise, whereas most of the world is moving in a different direction -- assuming everyone is a threat, until proven otherwise."
...
A creative spirit helped the country recover, as former bankers found new jobs in other industries that are, on the whole, more helpful for the country, he said.
100% ACK. Only downside is that Iceland is really nasty during winter.
So if you want to live there you have to love it :)
Ironically like Japan, if asset values and bond values collapse because of diminishing repayments then there is LESS money supply in the system.
Less leverage, less liquidity and less economy.
The sweep accounts were to get more liquidity into the system and then it blew up in the dotcom period.
This market has a liquidity, or lack of money issue. Inflation is too much money- nobody has too much money except the 1%.
even the banks have less money.
Does anyone here have too much money(ie: inflation or hyperinflation.)
The historical interest of this article and of course,Greenspans ineptitude, are great. The assumption that hyperinflation occurs is not going to happen.
The FED cannot print from Bonds fast enough to account for the total loss of reserves, insolvencies, sovereign defaults. Think about how much money is going to go when Greece tanks? Why did Merrill put 50 trillion into Bank America? They know 50 trillion exposure to an inherently worthless asset is zero.
"... 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."
Banks offer credit in excess to enslsave a nation. Or a world. Now we have the "hiccup"...banks can demand anything from enslaved countries, and get it.
HOW THE WORLD REALY WORKS http://www.amazon.com/World-Really-Works-Alan-Jones/dp/0964084813
How can the FEDS balance sheet ever go insolvent?
I assume that is a rhetorical question.
Gold prices 2012-2017-prediction chart:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=700#p34702
Silver prices 2011-2017 -prediction chart
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&start=680#p34623
.
1987 Was Last Year When Wages Exceeded Inflation (Social Security Payroll Data) - And It's Getting Worse!
When real wages are collapsing, we will hit a brick wall.
http://confoundedinterest.wordpress.com/
that was also the year the stock market collapsed and a sitting President bailed out the NYSE with taxpayer funds.
re Edit reCut textiles thc kissacat zigzag bond gmbh!
trust the bond OZE 007 COT on backhome 3m master debate "ONE" nothing to report dix no disaster
CURE $ CURIOSITY
This guy is dead on. The legislation that initiated the practice was misnamed
Riegle Community Development and Regulatory Improvement Act of 1994
http://www.gpo.gov/fdsys/pkg/BILLS-103hr3474enr/pdf/BILLS-103hr3474enr.pdf
P.L. 103-325, 108 STAT. 2160
The flood gates really opened when they passed Public Law 106-122
H.R.1094
Latest Title: To amend the Federal Reserve Act to broaden the range of discount window loans which may be used as collateral for Federal reserve notes.
Sponsor: Rep Leach, James A. [IA-1] (introduced 3/11/1999) Cosponsors (3)
Latest Major Action: Became Public Law No: 106-122 [GPO: Text, PDF]
SUMMARY AS OF:
8/2/1999--Passed House amended. (There is 1 other summary)
Amends the Federal Reserve Act to include among the types of collateral security which may be required (to back currency) in a Federal Reserve bank application for Federal Reserve notes any acceptances acquired (discount window loans extended) with respect to: (1) emergency advances to groups of or individual member banks; and (2) discounts of agricultural paper.
If you read the text of it you will see that the currency is lo and behold now backed by residential mortgages.....
see Section 10b of the Federal reserve act
OOps forgot this part
http://www.gpo.gov/fdsys/pkg/FR-1994-11-10/html/94-27870.htm
SUMMARY: The Board is amending its Regulation H to remove the requirement that a state member bank publish its reports of condition. The amendment implements section 308 of the Riegle Community Development and Regulatory Improvements Act of 1994 which contains a number of measures to reduce the burden of federal regulation in depository institutions. EFFECTIVE DATE: November 10, 1994.
SP500 weekly chart shows megaphone wedge and looks bullish.
Market consensus became clearer on Friday so back to the original bullish analysis and SP500 weekly chart reverts to bullish/neutral.
More info:
http://stockmarket618.wordpress.com