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Paul Woolley: "The Market Has Become Dangerous For Humanity...It Isn't Reaching Equilibrium, It Is Falling Into Chaos"

Tyler Durden's picture


For anyone who is still confused why the tail-wags-dog reverse relationship of the stock market as a leading indicator to the economy, and to western civilization in general, can be a problem for said civilization (not to mention the former) once the current iteration of central planning loses control over everything, as it always does, here is an interview between German daily Spiegel and Paul Woolley, a one time fund manager, and currently head of the LSE's center for Capital Market Dysfunctionality (sometimes affectionately known as the Princeton Economics department) who explains why things are on the edge of a precipice. His message for anyone who thought that Irene may have been a risk: you ain't seen nothing yet. "The developments in recent weeks have made it quite clear that the markets don't function properly. Things are spinning out of control and are potentially dangerous for society. Only a fraternity of academic high priests connected to the finance markets is still speaking of efficient markets. Still each market participant is pursuing their own selfish interests. The market isn't reaching equilibrium -- it's falling into chaos."

From Der Spiegel:

Financial markets are inefficient and growing to the point of overwhelming the economy, according to Paul Woolley, an expert on market dysfunctionality. In an interview with SPIEGEL he explains why it's up to investors to stop dangerous trends and hold financial institutions accountable.

SPIEGEL: Mr. Woolley, you were fund manager for many years, but went on to found a research institute at the London School of Economics to study why financial markets repeatedly go haywire. Now speculators are once again betting against the euro, and share prices for big companies are falling by 20 percent in a day only to shoot back up again. What is going on?

Woolley: The developments in recent weeks have made it quite clear that the markets don't function properly. Things are spinning out of control and are potentially dangerous for society. Only a fraternity of academic high priests connected to the finance markets is still speaking of efficient markets. Still each market participant is pursuing their own selfish interests. The market isn't reaching equilibrium -- it's falling into chaos.

SPIEGEL: You've compared the finance markets to a cancer. What do you mean by that?

Woolley: The finance sector can -- and is -- growing until it overwhelms the economy. In good years the US finance industry cashes in on more than 40 percent of all corporate profits. In bad years they are saved by the taxpayers. The agents are doing a devilishly good job of developing innovative, complicated new products that people can't understand. It gives them the opportunity to earn excess returns and attract the best talent. While they are acting rationally, the result is a catastrophe.

SPIEGEL: For someone who took part in this activity himself, that is a harsh judgement.

Woolley: I suppose as an investment manager for a large fund manager I was quite successful. But I also spent much of my career taking advantage of investors' herd instinct. Most fund managers follow only the newest trends and strengthen them by doing so. In the short term that leads to success, but in the long term it leads to a crash. This connection occurred to me when we pulled out of technology stocks in the late 1990s and investors with us withdrew money. After the new economy bubble broke in 2000 they came back to us because we were better than the rest of the market.

SPIEGEL: Why did you leave the finance industry in 2006, then?

Woolley: I wanted to do something socially useful. We want to revolutionize the finance industry with our institute. You have to build into the models and the self interests of the banks and fund managers to which the most investors have delegated their investment decisions. The finance industry is characterized by many innovations. Because the customers hardly understand their innovative products, banks make amazing returns. But simultaneously there is a moral hazard: When something goes wrong the bankers just move on to the next employer. The banks bear the losses. Or, in the case of bankruptcy, the state takes on the costs.

SPIEGEL: Governments are trying to curb the financial industry. What are their chances?

Woolley: I'm skeptical about this. There are many incentives for banks to get around the rules. Sanctions won't help in the long run.

SPIEGEL: You rely on the insight of the investors, then?

Woolley: Right. The big investors are in a position to force their service providers, the banks, fund managers and bankers into better behaviour. I have developed 10 simple rules that big investors should introduce for their own interests. After all, average returns on pension funds worldwide, for example, have decreased repeatedly after the market crashes in recent years.

SPIEGEL: What should investors take to heart from these 10 rules?

Woolley: They should stop chasing short-term price changes, and instead take a long-range approach to investing. That's why they should cap annual turnover of portfolios at 30 percent per annum. They should stop paying performance fees to managers who increase the worth of funds because it encourages gambling. It is nearly impossible to assess whether above average returns come from a manager's skill, luck or market moves.

SPIEGEL: What can insurers and other large investors do additionally to contain the excesses of the financial markets?

Woolley: They shouldn't invest in hedge funds or private equity companies. Managers at these companies are particularly good at hiding high costs to enrich themselves. To generate returns they must take on significantly higher risks. Big investors should also insist that trading take place on a public market. Bank profits would sink almost automatically if they were no longer allowed to sell opaque products.

Interview conducted by Christoph Pauly


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Sun, 08/28/2011 - 12:55 | 1609428 Highrev
Highrev's picture

Yeah, yeah, yeah.

I guess the point is that free markets should now be banned? Or better yet, controlled?


Sun, 08/28/2011 - 13:05 | 1609442 Kayman
Kayman's picture

free markets should now be banned?

You cannot ban that which never existed.  I am all for free markets, but show me a free market PLEASE.

Sun, 08/28/2011 - 13:19 | 1609469 malikai
malikai's picture


Sun, 08/28/2011 - 13:37 | 1609502 Ahmeexnal
Ahmeexnal's picture

He said free market. Not Open Source ponzi.

Sun, 08/28/2011 - 13:51 | 1609533 spiral_eyes
spiral_eyes's picture

i love this market. we're all going to get to watch warren buffett lose a big chunk of shirt off his back. of course it's not enough to hurt the oligarch. but it's enough to hurt his pride. bath tub boy! 

Sun, 08/28/2011 - 14:05 | 1609564 DoChenRollingBearing
DoChenRollingBearing's picture

Somehow I do not think The Warren will suffer in any way.  He is a TBTF, a member of the elite and a BIG fundraiser for Obama.  Instead, I think ol' Warren just made a great play that we little investors cannot.

The rich get richer...

Sun, 08/28/2011 - 14:33 | 1609617 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"Somehow I do not think Joseph Goebbels will suffer in any way. He is a Nazi Officer and one of Hitler's ministers and the Reich will reign for a thousand years."

The evil will continue their evil...

Sun, 08/28/2011 - 16:11 | 1609821 DoChenRollingBearing
DoChenRollingBearing's picture

Well put Tuco.  Maybe there will be a justice of sorts.

Sun, 08/28/2011 - 19:43 | 1610330 Karl Tashjian
Karl Tashjian's picture

Or a justice of shorts...

Sun, 08/28/2011 - 17:40 | 1610015 sun tzu
sun tzu's picture

Hitler was not part of the global financial elite. That is why he lost. Who will defeat the international bankers?

Sun, 08/28/2011 - 18:08 | 1610066 RockyRacoon
RockyRacoon's picture

You are definitely onto something here.   All the capital extraction that could be done had been done so the thing had to be finished.  When the looting got down to extracting the gold from teeth you could pretty much bet that the bottom had been scraped.   Time to move on to the cash cow of rebuilding all that had been destroyed so that the next war could be planned.

Sun, 08/28/2011 - 19:08 | 1610244 Kayman
Kayman's picture

sun tzu

So true, but Hitlers financial chief clearly understood the printing and borrowing game.  When that was not enough to keep the Nazi Ponzi going then theft, plunder, wars and murder followed.

Mon, 08/29/2011 - 00:53 | 1610934 See in the pink
See in the pink's picture

I've long suspected that he was very much a tool of the elite but that he was never meant to succeed...

Mon, 08/29/2011 - 01:19 | 1610965 Bloodstock
Bloodstock's picture

,,,maybe little suffering for now, but in the long run they are doomed. There is no honor among thieves and they will turn on each other.

Sun, 08/28/2011 - 15:08 | 1609686 DeeDeeTwo
DeeDeeTwo's picture

All the Crony Capitalists have broken the law Big Time. A Special Prosecutor would slice and dice Uncle Warren, baby.

Sun, 08/28/2011 - 14:06 | 1609566 JailBank
JailBank's picture

Buffet won't lose a dime. That $5 billion is backstopped by US citizens. You think he would amke that bet without a gurantee from Uncle Sam?

Sun, 08/28/2011 - 14:28 | 1609609 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

A "bath tub boy" nonetheless.

Sun, 08/28/2011 - 14:52 | 1609654 Alpha Monkey
Alpha Monkey's picture

is that like Tub Girl?

Sun, 08/28/2011 - 14:07 | 1609562 Alpha Monkey
Alpha Monkey's picture

Open source ponzi... interesting I hadn't thought of it that way. 

My understanding is to get coins you either 1) Buy them on "the market" or 2) Mine them by running a program on your computer.

Mining, in this case, is the digital labor required to attain new coins.  Buying them is just like any other commodity.

Where does the ponzi come in?

Sun, 08/28/2011 - 18:41 | 1610157 eisley79
eisley79's picture

virtual money is worthless outside of its eco-system unless it can be exchanged for REAL money.

A ponzi scheme makes money for the people already in it, by taking money from new people joining, and paying those already in it (until it saturates, and not enough new people can join and it collapses, leaving the earliest adopters on top, and the last with nothing).

The money paid out for bitcoins ultimately comes from the new people joining the party

Most ponzi schemes are proprietary :), as in those who started it, are the original adopters and the ones who profit the most.  Open source, means developed by the users.  In this case, the motivation to perpetuate resides in everyone sharing in the ponzi'ing :)


So, Open Source Ponzi is pretty clever.

It might be more accurate to call it a "Distributed Ponzi Scheme", or "Peer-2-Peer Ponzi" ROFL

Sun, 08/28/2011 - 18:46 | 1610178 malikai
malikai's picture

Please define 'real money'.

Sun, 08/28/2011 - 19:05 | 1610233 eisley79
eisley79's picture

a store of value that be exchanged for a good or service

Sun, 08/28/2011 - 19:08 | 1610243 eisley79
eisley79's picture

you appear (but i wont assume), to be looking to make some comment that USD isnt real money.  Dont confuse money backed by something, versus fiat, and the meaning of the word REAL.  The USD is REAL money, it gets used every day as money, its VALUE is being depreciated, but as long as people keep agreeing to ascribe SOME value (albeit a shrinking one), it is still REAL money.



Sun, 08/28/2011 - 19:21 | 1610270 malikai
malikai's picture

What makes the USD real? The fact that people use it to exchange it for goods and services, and other forms of money, i.e. EUR, GBP, AU, etc.

What makes BTC real? The fact that people use it to exchange for goods and services, and other forms of money.

The point I'm aiming at is that money is what we make of it.

Sun, 08/28/2011 - 19:36 | 1610316 eisley79
eisley79's picture

well you failed lol.  Bitcoins only exist in their own system, and can be brought back to the real world, by exchanging them for real money.  As i explained to you...


Read my original post, and my answers again, then go sell your bitcoins.



Sun, 08/28/2011 - 19:44 | 1610331 malikai
malikai's picture

I read your original post. Several times.

I'd love to hear a solid argument against bitcoin that can hold water.

I'll continue experimenting with them. I find it worth studying.

If nothing else, at least the geeks are trying.

Sun, 08/28/2011 - 20:11 | 1610357 eisley79
eisley79's picture

my arguments are as strong as the laws of physics, and you are bahgdad bob claiming there are no americans in iraq, with an M1 Abrahams pointing its gun at you in the background.


Mon, 08/29/2011 - 01:37 | 1610994 Mark_BC
Mark_BC's picture

Why not just empower the government to print its own non-backed fiat currency and allow freegold and freesilver to emerge. Peopel will use fiat money for transactions and PM's for storage of wealth. Problem is, any politician that tries this gets assassinated. Isn't that why JFK was shot? He tried to bring in a government issued $100 bill?

Mon, 08/29/2011 - 06:24 | 1611113 malikai
malikai's picture

There we have it. Eilsey cannot come up with a good counter argument, so he/he must resort to ad-hominem. Shame too, I'd really like to hear something better than "you're baghdad bob". Thanks for playing.

As to why John and Bobby Kennedy were shot, I'd say the evidence is purposefully unclear. But it sure is convineant that they had wanted to reverse the real corruption in the mob, unions, and FED.

Mon, 08/29/2011 - 08:03 | 1611179 eisley79
eisley79's picture

my arguments stand on their own, you arent countering them, or even addressing them.  You just then CLAIM you are right still without any evidence, rebuttal or proof

Hence, you are like the former iraqi information minister.  You try to invent the truth just by repeating it, when its obvious you are wrong.

So keep telling yourself "there are no americans in bahgdad" LOL

Mon, 08/29/2011 - 11:18 | 1611296 malikai
malikai's picture

All I've seen is a bunch of ambiguous arguments which can be applied to BTC or USD equally with the exception of a paper (physical form) and a military backing. I'm not claiming anything about BTC. I have seen many arguments towards BTC, so I am truly trying to find solid arguments against BTC. I honestly don't see BTC going too far, but not for the reasons you've stated.

Don't confuse someone genuinely seeking counter arguments as an evangelist.

Sun, 08/28/2011 - 23:49 | 1610826 tip e. canoe
tip e. canoe's picture

"Mine them by running a program on your computer."

does this program do anything useful and/or productive to justify consuming the energy to run it?

Mon, 08/29/2011 - 09:02 | 1611303 malikai
malikai's picture

It sure does. "Mining" is a misnomer term used to describe the cryptographic processes required to create new coins and proccess transactions. When you are a "miner" your benefit to the BTC community is that you are helping to ensure the security of BTC itself as well as processing the transactions which occur.

Sun, 08/28/2011 - 14:15 | 1609571 dwdollar
dwdollar's picture

Bitcoin does have a lot of enemies. I imagine the paid .gov trolls on zerohedge have it on their hit list. You've got to be doing something right when you have that many enemies.

Sun, 08/28/2011 - 18:43 | 1610170 eisley79
eisley79's picture

your enemy are the MI6 and CIA agents who run WikiLeaks and LulzSec, and dope n00bs into joining to take the fall as patsy, and who made you think bitcoins are cool, and those leakers/hackers are really sticking it the MAN, man.

Take the Red Pill, foo

Sun, 08/28/2011 - 14:26 | 1609602 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

I had no idea that Bitcoin used the "Social Security" business model!?

Sun, 08/28/2011 - 18:17 | 1609606 gangland
gangland's picture


impossible, no such thing as a "free market", oxymoron, a tautological fallacy if ever there was one.

Mon, 08/29/2011 - 01:42 | 1610999 Mark_BC
Mark_BC's picture

Free markets are unicorns; they exist only in our minds, just like one handed claps, dry watrfalls, and sustainable economic growth. Anytime you get anything resembling true unregulated "freedom" in a market, the first big bully to come along will take advantage of its "freeness" and soon turn it into a rigged market for its own advantage. The benefits of "free" markets must be carefully regulated or you will quickly lose them. A better term is "fair market". Free markets are not fair and fair markets are not free.

Sun, 08/28/2011 - 14:58 | 1609663 Freddie
Freddie's picture


Obam and Bill Ayres with Piven/Clovard talked about how they would wreck economies and countries.  Make banks lend money to people who have no hope of paying it back, pass laws that punish them and make productive people pay for it.

Sun, 08/28/2011 - 16:44 | 1609895 disabledvet
disabledvet's picture

Unfortunately for them George Bush beat them to it by eight years. In fact he may have been the first President in history to get Wall Street to agree that destroying itself was in its best interests. Statements like the above only serve to enrage "the beast"--and look! THEY'RE WILDING! Heaven's to Betsy! What will the government do to save us! OH NO! They're gonna make it WORSE!

Sun, 08/28/2011 - 17:43 | 1610024 sun tzu
sun tzu's picture

0bama is Bush on steroids. To make it worse, the media turns a blind eye to everything he does. 

Mon, 08/29/2011 - 01:32 | 1610983 hardcleareye
hardcleareye's picture

Concur, but I do miss the W stupid talk, ...  Obama is a snake in the grass... 

Sun, 08/28/2011 - 13:58 | 1609551 Jack Burton
Jack Burton's picture

Bitcoin was just robbed. Way too easy to be hacked and looted. Bitcoin is like a foolish tourist in Paris, he will be pickpocketed in no time flat.

Ask some Bitcoin owners how it feels to be looted.

Sun, 08/28/2011 - 14:05 | 1609563 smore
smore's picture

Very profitable ponzi if you got in early and got out before the SHTF, though.

Sun, 08/28/2011 - 14:29 | 1609612 aminorex
aminorex's picture

And as we all know, U.S. Dollars have never been stolen.  Much less gold.  I regard the fact that someone is willing to risk prison to gain something as a fair proof of its value.

Sun, 08/28/2011 - 17:39 | 1610009 Mad Cow
Mad Cow's picture

I also heard people having their accounts hacked in virtual economies within online games. I'm sure it sucks, but that's reality? Fantasy coins backed by the full faith and credit of fantasists and electricity! Dig a fake ditch and fill it back in! Have we hit peak insanity yet?

Sun, 08/28/2011 - 18:47 | 1610180 eisley79
eisley79's picture

Anyone who thinks Bitcoins are cool, or not a ponzi, are

1.) 25 or younger

2.) In debt

3.) own no Gold, but have some old nickels and dimes with silver in them

4.) has been to in the last 3 weeks


Shoe fit bitchez?

Sun, 08/28/2011 - 19:37 | 1610317 malikai
malikai's picture

Nope. Nope. Own plenty. Nope.

Sun, 08/28/2011 - 19:55 | 1610350 eisley79
eisley79's picture

you mad cinderella? :D

Mon, 08/29/2011 - 09:05 | 1611313 malikai
malikai's picture

Not at all. But wouldn't it help your credibility a bit to understand the types of people you're "describing" before you lay blanket statements which you are easily incorrect about?

Sun, 08/28/2011 - 15:17 | 1609695 malikai
malikai's picture

I am one. I was looted when Gox got hacked. I learned my lesson. Do I need a central authority to rape me or can I take my chances on my own?

Aren't we being robbed by the FED/Govt?

Weren't people robbed in stores as long as they have existed?

Weren't trains robbed during the western expansion?

Does the existence of robbery doom a money?

Sun, 08/28/2011 - 18:12 | 1610078 RockyRacoon
RockyRacoon's picture

Many of the above comments demonstrate muddy thinking.   I don't have a dog in the BitCoin fight but I'm FOR anything that can store any form of wealth that TPTB can't get their grubby hands on, tax, or sell derivatives of.    Talk about Ponzis!

Sun, 08/28/2011 - 19:02 | 1610226 eisley79
eisley79's picture

bitcoins only have value when expressed in dollars 8|, so how is that not something the government can get its hands on, tax, or sell derivatives of.........


if every person on the planet all died instantly right now, how much is gold worth, or a USD, or a bitcoin, or anything?  Exactly 0.  Value is the real measure we are talking about, and money is simply a store of it, that allows people to not have to use a barter system for commerce.


Gold isnt WORTH anything, unless people perscribe a value to it.  Why it became the universal store of value for all of human history lies in the fact that it is, Rare, Equally Divisible(the same no matter how you divide it), Non-Oxidizing(doesnt degrade), and you could even say visually desirable(historically).


So in theory, Bitcoins could become real money, but the problem is, they aren't real (virtual), can only be exchanged for other existing stores of values to be used in the real world(aka US Dollars), not widely desirable(except by those who have been bamboozled into thinking they can get money for nothing), have artifical rarity (rarity is made up by the creators).


Whether its pigeons, or virtual coins, the sure sign of a Ponzi is money for nothing, and the need for other people to bring value from outside the system to create worth.  The USD is raped through inflation and money printing, but it operates within the system that ascribes its value, not outside it.


and now you know

Sun, 08/28/2011 - 19:34 | 1610310 malikai
malikai's picture

So in theory, Bitcoins could become real money, but the problem is, they aren't real (virtual), can only be exchanged for other existing stores of values to be used in the real world(aka US Dollars), not widely desirable(except by those who have been bamboozled into thinking they can get money for nothing), have artifical rarity (rarity is made up by the creators).

In what way do people think they can get money for nothing? What differences do you see between any of these ways and current methods being used to exploit the USD?

During the gold rush into the west, there was rather high inflation caused by entirely natural economic phenomena. The same applies to Spain during their conquests in central and south america. Many people 'made money'. Some got extremely rich.

If you want BTC, you have to either trade your dollars, services, or property for it. Alternatively, you can rob someone, a bank/exchange, or some other entity, just like on the street today.

Sun, 08/28/2011 - 19:52 | 1610347 eisley79
eisley79's picture

I already explained all your questions in detail, and you included part of it in your quote of me.


"In what way do people think they can get money for nothing?"

 The running your computer churning random numbers is the money for nothing aspect


"What differences do you see between any of these ways and current methods being used to exploit the USD?"

Bitcoins only have value in the world, by bring them out of their virtual eco-system and exchanging them for a real currency.  The money that is given for taking them out comes from other people joining in, the definition of ponzi. 



"During the gold rush into the west, there was rather high inflation caused by entirely natural economic phenomena. The same applies to Spain during their conquests in central and south america. Many people 'made money'. Some got extremely rich."

I already explain this to you:

Gold isnt WORTH anything, unless people perscribe a value to it.  Why it became the universal store of value for all of human history lies in the fact that it is, Rare, Equally Divisible(the same no matter how you divide it), Non-Oxidizing(doesnt degrade), and you could even say visually desirable(historically).

 So in theory, Bitcoins could become real money, but the problem is, they aren't real (virtual), can only be exchanged for other existing stores of values to be used in the real world(aka US Dollars), not widely desirable(except by those who have been bamboozled into thinking they can get money for nothing), have artifical rarity (rarity is made up by the creators).


If you want BTC, you have to either trade your dollars, services, or property for it. Alternatively, you can rob someone, a bank/exchange, or some other entity, just like on the street today.

People within the eco-system attempt to extend the eco-system, by bartering BitCoins to other people in the system, and say "look, its real".  But it's not.  cause the only reason people will give you anything other than dollars for a bit coin, is because they are planning to LATER exchange their bit coins for dollars.  And no matter what, the dollars they get, when they exchange their bit coins COME FROM NEW PEOPLE BECAUSE ITS A PONZI SCHEME...

People in the gold rush werent trying to dig up Gold because they thought it was going to go up in value, its because it already had value, as the universally excepted store of value, and it was rare because its not being created....LOL

Get a clue, stop making me repeat myself, and make a point....

Mon, 08/29/2011 - 09:15 | 1611340 malikai
malikai's picture

Your first point is incorrect. Those miners are performing a service. They are ensuring the cryptographic security of the system and they are processing transactions. Their work is not free. It takes electricity and hardware to perform this service. If you want to trade stocks on NASDAQ, you will be paying them for essentially the same thing.

Your second point relates inversely to the dollar. All you have described is the core property of a deflationary currency. Likewise, if I bought gold in 1998, I'd be in a ponzi because it's worth more now? No way man.

I agree with your third point, apart from the ponzi aspect. Also, desirability is an effect of the range and acceptance of the currency. When I first went to Sharm El Sheikh in 1998, I could use dollars to buy anything. I was there again in 2006 and I couldn't buy jack shit with the USD, does this make the dollar a bogus currency?

Your fourth point again attributes ponzi to deflationary currency. These are distinctly different. I can say the same thing about gold or any other "asset" believed to appreciate in value. It probably sounds good in your head, but it doesn't stand the smell test.

Sun, 08/28/2011 - 20:03 | 1610374 Karl Tashjian
Karl Tashjian's picture

While I'll agree that Bitcoin is a Ponzi and that it (as with any currency) can be stolen, I'll say this:

The value of BTC lies it its logarithmic rate of growth.

See chart here.

The problem with the USD and most western fiat currencies is that the central banksters can print it at will, making the money supply go parabolic (and gold along with it.) Bitcoin on the other hand hits that nice horizontal asymtope around 2025 and therein lies its value. 

Could you imagine the strength of (Insert X currency here) if you could say with certainty, this is exactly how many units will be in circulation in 20 years, 10 years or even next month?

It must seem counter intuitive to most zero hedgers that something digital could hold it's value better than 'real' things. Bitcoins can be stolen in the same way crackers can get into a website and steal your credit card number.  This doesn;t change the structural strength of a peer-to-peer currency that grows at a predetermined rate.

I think after the collapse that bitcoins will serve as a nice model for how a central bank should function.

Sun, 08/28/2011 - 20:17 | 1610405 eisley79
eisley79's picture

controlling supply of money is a virtuous thing, but is not the sole necessary ingredient for a good currency.  Read my comparison of gold to bit coins above for example.


Also look at the Civil War era Greenback, not based on a Gold standard, true fiat, and fantastic.  Fiat works fine if the supply is controlled.  Its the unaccountable Fed controlling the currency supply that creates the supply problem, not the fact that its fiat.

Gold backed money can be manipulate quite well, through manipulation of the Gold supply itself.  Look up the history on it.


While having a declining production of bitcoins is beneficial to their model, look at the early adopters advantage.  Its still a ponzi scheme, just a well planned one, designed to last as long as possible, with plenty of smart sounding but flawed arguments to convince people who want Gold backed money, that this is some how related, and computers churning numbers is like mining gold lol.

Mon, 08/29/2011 - 11:41 | 1611820 malikai
malikai's picture

The supply of BTC is strictly controlled in a fixed and publicly known manner. It's quite similar to how the greenback was managed, however, it does not require a responsible government.

Sun, 08/28/2011 - 13:36 | 1609500 Highrev
Highrev's picture

Oh how I feel for you cry babies.

Sun, 08/28/2011 - 14:24 | 1609598 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

You will have to go back a bit. Just watch Raquel Welch in 10,000 years BC.

Sun, 08/28/2011 - 14:29 | 1609610's picture

Was that a furry bikini or were cave women exceptionally hirsute?

Sun, 08/28/2011 - 16:39 | 1609882 Ignorance is bliss
Ignorance is bliss's picture

Raquel is yummy. Love those furry suits. I'd kick that caveman and his cave dad's ass for a piece of Raquel under age 30. Yep.. Love that Bolivian thing...

Sun, 08/28/2011 - 16:57 | 1609928 caerus
Sun, 08/28/2011 - 18:39 | 1610152's picture

Ahh, Bach!

Sun, 08/28/2011 - 13:21 | 1609473 fonestar
fonestar's picture

Um, I think the point he was making was that fraud markets and not "free markets" should be banned and that it's investors moral obligation to see to this.

Sun, 08/28/2011 - 15:54 | 1609785 cossack55
cossack55's picture

Agreed, and since there is no justice in DoJ, SEC, CFTC et. al., duelling should be reinstated for satisfaction of insult and injury.

Sun, 08/28/2011 - 13:21 | 1609475 Raymond K Hessel
Raymond K Hessel's picture

You're absolutely right. When these fucks are in the business they fight against regations. Then they make millions, set themselves up for life.... and NOW they want regulations. They seem to think it will make up for whatever fucked up thing they did coming up. They're willing to hand our economy over to central planning just to make themselves feel better.

What a fucking asshat!

Sun, 08/28/2011 - 13:29 | 1609490 fonestar
fonestar's picture

Right but how many people have become involved with something first only to find out it isn't what they thought?  Or just had a change of heart?  Think of Andrew Maguire or John Perkins.

Sun, 08/28/2011 - 14:03 | 1609559 Rainman
Rainman's picture

....better yet, think of 9 out of 10 husbands worldwide.

Sun, 08/28/2011 - 14:21 | 1609595 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

"Or" 10 out of 10 women!:)

Sun, 08/28/2011 - 15:24 | 1609721 malikai
malikai's picture

1 out of 10 husbands don't give a shit.

Sun, 08/28/2011 - 15:17 | 1609706 Dyler Turden II Esq
Dyler Turden II Esq's picture
Mutualist Blog: Free Market Anti-Capitalism
Mutualist.Org: Free Market Anti-Capitalism
Kevin Carson
Corporate Capitalism As a State-Guaranteed System of Privilege
by Kevin A. Carson
Center for a Stateless Society
building awareness of the market anarchist alternative

Sun, 08/28/2011 - 12:55 | 1609429 LookingWithAmazement
LookingWithAmazement's picture

Food for thought. Unfortunately they pick a Saturday.

Is America Ripe for a Tahrir Moment?

Sun, 08/28/2011 - 15:30 | 1609737 EINSILVERGUY

All we need is anarchists and communists building Obamavilles in downtown Manhattan. Where is Cat 4 when you need it

Sun, 08/28/2011 - 15:49 | 1609770 Spastica Rex
Spastica Rex's picture


Sun, 08/28/2011 - 13:06 | 1609430 Earl of Chiswick
Earl of Chiswick's picture

WTF there was a post here at the pole position  a second ago with ROBO talking up gold miners? and now it's gone


Sun, 08/28/2011 - 13:10 | 1609453 Highrev
Highrev's picture

I saw that too.

Selective censoring? Or just buggy software?

(And he made a very good point.)


Sun, 08/28/2011 - 13:22 | 1609474 Earl of Chiswick
Earl of Chiswick's picture

I know  if Robo (widely hated but liked by some) has a perspecitve on why the miners aren't following the metal I would be interested to it.

Perhaps Robo has gone the way of Leo.

Sun, 08/28/2011 - 13:33 | 1609495 Highrev
Highrev's picture

He was basically saying that the miners are looking strong, and that, in turn, would help to propel the broader market higher.

Chart Ramblings has also picked up on the miners' strength.

Sun, 08/28/2011 - 17:45 | 1610028 sun tzu
sun tzu's picture

No miners on the DOW and very few in the S&P

Sun, 08/28/2011 - 13:56 | 1609548 Hook Line and S...
Hook Line and Sphincter's picture

perhaps robo and leo are 69 somewhere?

Sun, 08/28/2011 - 14:07 | 1609567 Kayman
Kayman's picture

No they are 68 somewhere. I owe you one.

Sun, 08/28/2011 - 14:20 | 1609592 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture


Sun, 08/28/2011 - 14:33 | 1609616 Earl of Chiswick
Earl of Chiswick's picture

if I were a betting person I would say that was Robo's final post here at ZH and to think it's been lost for eternity


gone, not with a bang but a wimper

Sun, 08/28/2011 - 15:30 | 1609733 Tyler Durden
Tyler Durden's picture

dbase issues. Everyone enjoys the humor that Robo imparts

Sun, 08/28/2011 - 15:57 | 1609791 css1971
css1971's picture

Don't tell me you're using mysql instead of postgresql? All to save a lousy buck?


A couple of donations of an ounce or two should cover the difference.


Sun, 08/28/2011 - 18:19 | 1610092 RockyRacoon
RockyRacoon's picture

Everyone.   Absolutes can be a killer!   I like his humor as well.   When does he start doing stand-up?

Sun, 08/28/2011 - 14:46 | 1609639 smlbizman
smlbizman's picture

that happened to me the other day......i was first or second...when i went back i was way, way down and not by people commenting in between.....if this site ever started acting that way it would die immediately

Sun, 08/28/2011 - 12:59 | 1609435 lasvegaspersona
lasvegaspersona's picture

Tyler you said:

For anyone who is still confused why the tail-wags-dog reverse relationship of the stock market as a leading indicator to the economy, and to western civilization in general, can be a problem for said civilization (not to mention the former) once the current iteration of central planning loses control over everything, as it always does, here is an interview between German daily Spiegel and Paul Woolley, a one time fund manager, and currently head of the LSE's center forCapital Market Dysfunctionality (sometimes affectionately known as the Princeton Economics department) who explains why things are on the edge of a precipice.

Please diagram that sentence. It is your punishment for the pain it is causing me to read it.

Sun, 08/28/2011 - 13:24 | 1609479 Kayman
Kayman's picture

Your christmas gift to TD. A copy of Strunk.

Clearly, Tyler has been reading too much French and German philosophy.

Sun, 08/28/2011 - 13:40 | 1609509 WmMcK
Sun, 08/28/2011 - 13:54 | 1609543 Kayman
Kayman's picture

Perhaps Tyler is the re-incarnation of Proust.

Sun, 08/28/2011 - 13:43 | 1609507 falardea
falardea's picture

Unfortunately, if he were to diagram that sentence, he's have to kill you...  For you see, hidden within the diagram of that sentence is the schematic to his cold fussion generator... or a home ice cream machine... I got lost there a little in the middle.

Sun, 08/28/2011 - 14:18 | 1609591 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Why don't "you" diagram the sentence for the rest of us?  I don't care if the truth comes in the form of smoke signals or sign language.  It is still the truth.

And further regarding your statement, to paraphrase Sir Winston Churchill,  "that is something up with which I will not put".:)

Sun, 08/28/2011 - 14:36 | 1609618's picture

Couldn't Winnie have simply said "I won't put up with that?" Why pretend that speaking the language in an understandable manner is difficult when it isn't?

Sun, 08/28/2011 - 14:46 | 1609640 Kayman
Kayman's picture

You need the context my friend.  Winston was constantly harassed about his writings by the inbred British cronies.

Your criticism is simply something off which you should not jack.

Sun, 08/28/2011 - 15:34 | 1609745's picture

Perhaps you could buttress your argument by providing the context of which you speak.

Sun, 08/28/2011 - 17:31 | 1609994 Kayman
Kayman's picture

Winnies witicisms and I quote, "

“The rule which forbids ending a sentence with a preposition is the kind of nonsense up with which I will not put.”

He may have had mixed virtues but he had no mercy with a pen.

Sun, 08/28/2011 - 18:50 | 1610192's picture

If we consider this quote to be purely humorous then that's fine. But we can't consider it to be an effective critique of the "rule" which forbids terminal prepositions as Winnie's tongue twister can be much more easily and properly written as:

"I will not put up with the rule which forbids one to end a sentence with a preposition."

It's not a particularly difficult series of words to put together. Apart from humor, why pretend that writing in the most consistently understandable manner is a difficult task?

Sun, 08/28/2011 - 19:21 | 1610274 Kayman
Kayman's picture

Smile... it no break yer face.

I am not going to dust off an old history book to quote the context for you.  But (not proper English) Winnie retorted with his correct preposition when he was criticized for  not using the King's english.

Thankfully the English language is a shameless thief, co-opting as it's own, any word or phrase that provides better meaning.


Sun, 08/28/2011 - 19:49 | 1610335's picture

I get the joke. I'm just saying that folks shouldn't employ it to justify misuse of the language.

A reader expects a writer to write succinctly and in an understandable manner. If writes one in which a way understand people can't then no one will to bother what one wrote read.

Sun, 08/28/2011 - 23:14 | 1610754 Cathartes Aura
Cathartes Aura's picture

He found in the world without as actual what was in his world within as possible.
James Joyce


"language" is fluid, expressive, provocative, subtly confrontational, a method of expression, sometimes artistic. . . it varies, as it should.

Mon, 08/29/2011 - 02:30 | 1611033's picture

Not everyone who fails to string a proper sentence together is as brilliant as Joyce.

And if speaking and writing poorly is a virtue then is getting other things wrong a good thing, too? Should we praise those who say that two plus two equals twenty two?

Sun, 08/28/2011 - 22:38 | 1610661 Tunga
Tunga's picture

Because; if it was written as you suggest Tunga would get it not. 
Why do you distract from the real issue here?

The true enemy is fear. Spells; incantations; rituals; are playthings of the Devil worshipers.


Are you one of them? 

Sun, 08/28/2011 - 23:22 | 1610766 Cathartes Aura
Cathartes Aura's picture

Spells; incantations; rituals; are playthings of the Devil worshipers.

a rather sweeping statement there, which seems to come from someone who draws a firm line between "gods" and "devils" when in fact they co-mingle, as figments of imaginations. very reminiscent of malleus maleficarum. . .


The true enemy is fear.

of the unknown, as yet, yes.

Mon, 08/29/2011 - 02:35 | 1611035's picture

Am I surprised that the thesis which praises poor sentence construction as the highest virtue has degenerated into pure stupidity?

That's rhetorical, folks.

Sun, 08/28/2011 - 15:55 | 1609788 sgt_doom
sgt_doom's picture

This is a brilliant interview by Mr. Woolley, and I believe that central planning emanates from der Wall Street.

With the Dodd-Frank Act -- ostensibly referred to by American stenographers from the myth-media as "financial reform" -- the focus was shifted from AIG (although they're still going whole hog on writing CDSes again) to the banksters privately-owned clearinghouse, ICE US Trust or whatever they changed that name to recently, and unlike previously, when Paulson had to go to congress for bailout funds, now the bailout takes place, relatively automatically at the clearinghouse level by the Fed --- and there's nothing in that bill I could find which indicates they are required to notify anyone of said bailout --- in other words, everything became opaque.

I believe we are witnessing that portion in action......

Sun, 08/28/2011 - 18:24 | 1610109 RockyRacoon
RockyRacoon's picture

There is a sentence in Les Miserables that goes on for two pages.   It can be done with clarity.  I see nothing wrong with the structure of the sentence (other than the unnecessary parentheticals) .   Carrying a concept in the mind for more than 5 words is getting to be a lost art.

Sun, 08/28/2011 - 23:34 | 1610785 Cathartes Aura
Cathartes Aura's picture

J.D. Salinger often wrote lengthy sentences, paragraphs in his stories can go on for pages, with so many layers of wit and wisdom I can still read them after decades, and feel full with their insight.

agree the attention span deficit will continue to degrade the lost art of reflection.

Sun, 08/28/2011 - 13:00 | 1609436 ServingMyKing
ServingMyKing's picture

Let them fail.  Prosecute them if they beak the law.  

Sun, 08/28/2011 - 13:01 | 1609439 Kayman
Kayman's picture

1. the problem is Wall Streets book of tricks

2. the solution is to eliminate the book of tricks

3. it is time to EXECUTE the solution (before we are back to the Stone Age)


Sun, 08/28/2011 - 13:09 | 1609450 narnia
narnia's picture

if the game is rigged to benefit heavy political contribution & speculation, perhaps there's a problem with the game, not the players.

Sun, 08/28/2011 - 13:13 | 1609459 LawsofPhysics
LawsofPhysics's picture

Exactly why the only way to end this game is not to play it.  Got physical?

Sun, 08/28/2011 - 13:27 | 1609488 narnia
narnia's picture

the only way to end it is to forbid political control of the markets by force.  the form of currency is only midly relevant.

Sun, 08/28/2011 - 13:44 | 1609519 LawsofPhysics
LawsofPhysics's picture

" the form of currency is only midly relevant."

Not if it can be grossly manipulated by a relative few.

Chaos indeed, but I guess you can't fight entropy.

Sun, 08/28/2011 - 14:15 | 1609583 narnia
narnia's picture

it's hard for a relative few to manipulate currency absent legal tender laws & the force of government to enforce those laws.

a "gold and/or silver" standard centrally enforced single legal tender system, where convertibility is determined by a select few, is not a free market currency system.  such a system would be almost equally as destined to be gamed (in convertibility) or to fail (in providing the free market adequate or too much currency) as the current fiat system.

Sun, 08/28/2011 - 14:00 | 1609555 trembo slice
trembo slice's picture

A 100% reserve banking system with a commodity-backed currency (gold or silver) is how prohibiting political control of markets would play out.  sound money is of primary importance.

Sun, 08/28/2011 - 14:41 | 1609630's picture

Given a choice through a loosening of political constraints people would chose sound money over unsound money. Gresham's Law applies most forcefully when legal tender laws are in effect.

Remove the political constraints and markets will gravitate toward the soundest money, the most efficient means of production and the tastiest pizza. Eliminating  the power of the state to manipulate markets (economic and otherwise) is key.

Sun, 08/28/2011 - 14:11 | 1609577 DoChenRollingBearing
DoChenRollingBearing's picture

@ LawsofPhysics,

Yes, I believe you are right.  As individuals (or even if we group up a la Tea Party) I believe we are POWERLESS to stop the .gov spending (the BIG problem) and Banksterism (the second problem).

We shrimps should just stay out of the way.  Buy gold and other useful things.  Do not play in a crooked casino.  (Or for that matter in a legit casino, I lost $200 casino on board the cruise ship on my last vacation)

Sun, 08/28/2011 - 13:18 | 1609455 LawsofPhysics
LawsofPhysics's picture

The only thing this financial hypocrite said that I can agree with is that banks should be "just banks" again.  He is dead right in that all proprietary trading does is steal real wealth from a healthy economy while adding no real value.  Non of it is sustainable.  "Winning" while we all eat $1,000 hamburgers.  LOL!

Sun, 08/28/2011 - 13:15 | 1609462 disabledvet
disabledvet's picture

Interesting article. Go long inherited wealth as the very idea of earning money is legislated out of existence.

Sun, 08/28/2011 - 13:18 | 1609468 Catullus
Catullus's picture

Meaningless and opaque.  His conclusions are there are suckers out there and the banks take advantage of them.  People taking higher risk in order to earn higher rates of return is the result of central banks throughout the world manipulating rate of return on short-term turnover assets close to zero in a failed attempt to increase consumption.  The observation is to be extended that the Fed and central banks are forcing money to chase higher yields and therefore playing into the arms of the banks employing confusing and ill-defined financial products for investment.

In the end, the central banks are destroying the incentive to save and build capital and therefore are destroying structure capital accumulation and production.  Attempting to manipulate the rules from the resultant movement of capital to higher yielding financial products is treating the symptoms, not the cause.

Sun, 08/28/2011 - 13:31 | 1609493 Kayman
Kayman's picture

the central banks are destroying the incentive to save and build capital . Amend to "have destroyed"

One of the critical problems of our time and one that Bernanke and his owners avoid like the plague.

Sun, 08/28/2011 - 13:49 | 1609532 Catullus
Catullus's picture

They have caused saving to be lost simply by destroying the value of money in general, but the incentive to save is the price of capital over time (or the interest rate).  So their continued manipulation of interest rates lower than that would have otherwise have been priced, is and will continue to cause a disincentive to save and therefore a continued decapitalization of the economy broadly.

What they like to avoid is the fact that they destroyed the value of money to the benefit of those who were particularly imprudent with it (bank managers).

Sun, 08/28/2011 - 13:58 | 1609552 Kayman
Kayman's picture

Perverse but true.

Sun, 08/28/2011 - 14:15 | 1609581 DoChenRollingBearing
DoChenRollingBearing's picture

Catullus, Kayman,

For various reasons I would never start a business here in the USA.  Capital (investible money) is poorly tretaed now.  There is so much regulatory uncertainty.  .gov grows bigger by the second.   Lawsuits abound.

Enormous changes would be required to bring big money back to the USA to rebuild our factories, etc.  And I am not chipping in a nickel until I see such changes.

Sun, 08/28/2011 - 14:45 | 1609637's picture

DoChen Shrugged.

Sun, 08/28/2011 - 14:25 | 1609601 Prometheus418
Prometheus418's picture


And, it's another indication that the inflation side of the debate has more merit that the deflation one does.  I'm exhibit #1.  I don't give a crap about markets, or at least, did not.  I'm an engineer by trade, and under normal circumstances, I would have been perfectly fine with a 401(k) and savings generated by, well, saving, and side-hustles like my little combination cabinet shop and forge.

But because the value of my savings in dollars has been all but wiped out, and the 401(k) is losing money, yet again, I'm now speculating.  The same thing happens in the run up phase of any large inflation.  Despite what wall-streeters and professional traders think, everyone who is not a greedy money-syphoning tick is not mentally retarded, and we will enter the markets if we are forced to.  If the cost of my kids' shoes have tripled in the last year, my food costs have doubled, and my energy prices are going through the roof, all while my wages increased a whopping 3%, there needs to be an alternative that allows me to continue to provide food, clothing and heat for my family- these are basic necessities, and there is no option that allows me to choose one and ignore the others.

The problem is that it's a self-fulfilling prophecy.  When the people who make it their business to manage money decide it's ok to steal it from those who actually produce durable goods, and those producers then need to step in to try and manage their own affairs, it throws society out of balance.  Instead of doing what I normally would be doing, researching new materials, methods and scientific advances that I can apply to the manufacture of domestic products, I'm now spending almost all my free time simply trying to figure out where to put what I have already produced so that it isn't stolen again.  That means not only that I am no longer working on any new advancements or production methods, but also that I am tired and distracted when trying to create methods for manufacturing products.  Since 50% of my time is spent in helping to develop new surgical instruments, I certainly hope you intelligencia in the money markets do not suffer any injuries or become the victims of degenerative bone diseases anytime too soon, because where I was 100% confident in my performance a few years ago, today I am exhausted, and merely phoning it in most days.  Don't bitch at me if a flake of metal falls in your spine during surgery and paralyzes you- bankers and traders could have prevented that by simply investing and taking rational profits only, rather than deciding you were the only ones who mattered, and fucking everyone else to death.

The economy as a whole cannot and will not recover until this is reversed.  There can be no new innovation when the people who create it are forced into studying arcane paper-shuffling bullshit to save their families, and without innovation, there is no advancement.  The whole damn thing is not merely "bearish" it's sick and bleak, and will end in blood.


Sun, 08/28/2011 - 14:51 | 1609647's picture

Since 50% of my time is spent in helping to develop new surgical instruments,


Is it true that silver is now being widely used in medical equipment? If so, to what degree? What's on the horizon for the medical uses of silver?



I was 100% confident in my performance a few years ago, today I am exhausted, and merely phoning it in most days.


Prometheus Shrugged.

Sun, 08/28/2011 - 16:51 | 1609917 Prometheus418
Prometheus418's picture

Yes- it's true that silver is being used in medical equipment.  There are two drivers for that- the first is it's use as solder, when it's necessary to create a brazed joint for a product that might wear out and need replacing.  A good example of this would be a product we've manufactured a few times that is a handle with a serraded tube protruding from it that is used as a coring tool for bone marrow.  The tube can dull or be worn out, but the handle is pretty simple, and there's no reason not to reuse it.  The solder can be melted off when the tube requires replacement, and the handle reused.  

Silver is important as solder for medical instruments because it has anti-bacterial properties, and melts at a low enough temperature to allow it to be used as such without destroying the parts it is brazing together.

The second use of silver is the same as in many other industries- it is an excellent conductor, so it is used for circuits in delicate electrical systems, where copper would make the product too bulky or would offer too much resistance.  While I am generally invloved in the mechanical, and not electronic side of the industry, there are requirements cross between the two.  A few years ago, I was involved in a project with GE medical, for the next generation of MRIs, which were so advanced they were like a sci-fi movie.  The things could capture video of organs and blood moving internally in real time, but to do that, they had to spin at mach 6 or 7, and the circuitry involved couldn't have been made without excellent conductors like silver.

On the other hand, despite the rumors to the contrary, we also use gold.  But private industries rarely opt for that- it is our military that feels they need their components gold-plated, for the most part.  There is a reason for that, though.  Silver and gold have similar conductive characteristics, but silver tarnishes and gold does not.  An MRI just sits in a climate controlled room, but a gold-plated board on a ship is subject to all sorts of changing weather conditions, as well as exposure to salt.


Sun, 08/28/2011 - 18:59 | 1610215's picture

Thanks for the detailed reply and interesting information. Sure are a lot of intelligent folks with a wide variety of skills posting at ZH.

Sun, 08/28/2011 - 17:04 | 1609935 DosZap
DosZap's picture


Well, it kills germs,disinfects, and if you have someone you want to really get back at, but not murder.

Slip a LOT of Colloidial Silver into their beverages(LOL),IF your not the Wictum.

Turn their ass blue for life.That would be the ultimate Blue's Bros.

Sun, 08/28/2011 - 19:01 | 1610222's picture

Saw a guy like that on TV a couple years back. He was a walking Papa Smurf, I tell ya.

Sun, 08/28/2011 - 15:01 | 1609672 Kayman
Kayman's picture


Your story is being replicated throughout America.  Producers are not producing because the Parasites steal the profits.

Government and Wall Street only know larceny.

And plants are being dismantled  to end up in the melting pots of China.


Sun, 08/28/2011 - 23:39 | 1610801 Manthong
Manthong's picture

Don't forget about the resources and assets destroyed complying with their regulations and preparing for and paying their taxes and fees.

Sun, 08/28/2011 - 16:49 | 1609912 disabledvet
disabledvet's picture

NO! NO! "They embrace it like the plague." "They EMBRACE IT like the plague!"

Sun, 08/28/2011 - 13:27 | 1609482 falak pema
falak pema's picture

The issue is not what it should be but what it is.

The issue is not how to mend it slowly, organically, but how to stop the cancer from spreading fast. Its now eleventh hour play.

The schizophrenia of market in its mayhem spiral is beyond discussion. Arsonist of such magnitude that all fireman activity now seems derisory. It will fall so hard we'll be back to the thirties. The wind down of the derivatives and the interdiction of all naked plays that feed the beast must be implemented. Fast, by ALL leaders of the world. Nationalise all over indebted banks and wind down the market fast, is a world wide requirement.

Sun, 08/28/2011 - 13:35 | 1609499 Kayman
Kayman's picture

leaders of the world

We have no leaders. Or do you wish to name a few ?

Sun, 08/28/2011 - 14:11 | 1609576 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, the six mega banks and the fortune 100!

Sun, 08/28/2011 - 15:07 | 1609682 Kayman
Kayman's picture


I don't know whether to laugh or cry.  But thanks.... No soup for you...

Sun, 08/28/2011 - 14:41 | 1609629 falak pema
falak pema's picture

Find them the unknown ones, then elect them. If you can't then your republic is dysfunctional. Maybe the lesson of this crisis is that the US PEOPLE have to rediscover a deeper more practical civic sense that makes the responsible citizen center piece. Don't blame the system. Its the collective will that has to be refound. Its the false sense of security of perpetual affluence that has washed out this civic sense.You guys are on automatic pilot on the civic front and that makes it easy for those tricksters.

Sun, 08/28/2011 - 14:53 | 1609658's picture

Only when the sovereignty of the individual is respected can society be civil.

Sun, 08/28/2011 - 15:05 | 1609681 Kayman
Kayman's picture

falak pema

Don't limit this to America.  Name a few world leaders. You know- country first.  I know of none.

Sun, 08/28/2011 - 15:25 | 1609712 falak pema
falak pema's picture

Well  there are none because its the Oligarchs that run the government. If you posted a 'national civic sense' index here you would see how it has been eroded over 30 Years. A bit like the 'Michigan confidence index' in the other post. Something like that does not happen suddenly. The takeover of the national economy by the Oligarchs was organised 30 years ago, with the Reagan/Thatcher mandate. Deregulation and let the supply side take over. The elected took a back seat. Why? The welfare state was deemed a failure. They junked the welfare state as they junked the civic sense of the people with it. Its been eroded over time in the irrational exuberance of the prefabricated ponzi. 

Now that we are in systemic failure, those elected leaders, that civic culture, the Pentagon papers strain,  has been absent in USA for thirty years, and the civic sense has been definitely eroded. As for the leaders of other countries, it is a non starter. What the US oligarchs have unleashed on the world in this derivative ponzi orgy is beyond their comprehension and belief. Some bought into the US solution like Brown, Sarkozy, Berlsuconi etc in 2009. Some were skeptical like Merkel. But she is isolated and her banks, private banks, are up to their heads and beyond in shit. 

So the ONLY leader who is laughing at the west is that of China. As they are on a better trajectory than the west. 

When you ask that question about why we don't have responsible leaders, you know the answer : Because we have not had responsible citizens in the US since 1979! You get what you deserve in a democracy. The US lost its vigilence back then. 

With Reaganomics we got a worse deal than the bad governance of a welfare state that had bruised the economy and morale by unjust wars and excessive government spending. Losing the civic sense in the aftermath of Carter was the unkindest cut of them all.

Now the price is so high...

Sun, 08/28/2011 - 14:53 | 1609656 Manthong
Manthong's picture

Look to Utah. If they get their way, gold and silver will be protected (legal tender:no tax or fees) as a way to insulate your earnings and savings against the theft of deficit spending.

It is probably the only hope left.

I wonder if the Feds will step in and overrule states rights. 

Sun, 08/28/2011 - 14:55 | 1609659's picture

I doubt that the IRS will permit citizens of Utah to sell metals for a "profit" and not demand their cut.

Sun, 08/28/2011 - 17:01 | 1609932 Prometheus418
Prometheus418's picture

There is a legitimate way to circumvent that, though I'm sure it would involve seeing the inside of a courtroom.

There are no taxes on a "like kind" exchange.  The argument would have to fall along the lines that since metals are not considered legal tender, but commodities, it should be legitimate to exchange them directly for other commodities on a tax-free basis (like-kind: commodity for commodity.)  Where the argument would not work is in a case where you sold your metal for FRNs, and then went elsewhere to purchase goods with them.

Of course, in any case like the one listed above, it's more like black-market barter in any case, and that is rarely, if ever, taxed.  The trick is to find people who are willing to trade with you (which is not all that hard to do, really.)

Sun, 08/28/2011 - 19:03 | 1610230's picture

But isn't that how they got Willie Nelson?

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