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Swiss, Germans Set To Unleash Capital Controls As European Companies Prepare For Euro End

Tyler Durden's picture





 

Even as Eurozone leaders attempted to instill some meager sense of accomplishment following the latest (but certainly not last) Euro summit culminating with yet another 7-page term sheet which achieved absolutely nothing, and in fact succeeded in alienating the UK even more, the real game continues behind the scenes. And it is a game which the euro looks set to lose. As Bloomberg reports, in the aftermath of the Telegraph's latest report confirming what has been said here all about the collateral crunch in Europe, Europe's CEO are now actively preparing for the worst case outcome: the end of the Euro (despite UBS' and other banks' repeated calls that such an event would result in an end of the world). To wit: "Grupo Gowex (GOW), a Spanish provider of Wi-Fi wireless services, is moving funds to Germany because it expects Spain to exit the euro. German machinery maker GEA Group AG is setting maximum amounts held at any one bank. “I don’t trust Spain will remain in the euro zone,” said Jenaro Garcia, founder and chief executive officer of Madrid- based Grupo Gowex, which provides Wi-Fi access in 15 countries. “We moved our cash and deposits to Germany because Spain will come back to the peseta"... Contingency planning for an unraveling of the currency involves cutting investment, moving money to Germany, transferring headquarters to northern Europe from southern, and even going out of business." And to all the chatterboxes on CNBC repeating ad inf that a Eurozone collapse would be "manageable" here is a person who actually knows what he is talking about: "“How do you control an explosion in a controlled way?” Fiat SpA (F) Chief Executive Officer Sergio Marchionne told reporters in Brussels on Dec. 2. “That’s a contradiction in terms. This will be an implosion of some size with potentially disastrous consequences." He is right, and while the outcome is certain, it will not stop Europe's financial leader Germany from intervening in an attempt to prevent a surge in Deutsche Marks once the currency returns, and will likely set up capital control measures - that last bastion to every failing monetary system - to halt what is sure to be a record inflow of post-collapse DEM appreciating capital.

From Bloomberg:

The Bundesbank, Germany’s central bank, registered capital inflows of 11.3 billion euros ($15 billion) from non-banks in September, according to the breakdown of its current account published Nov. 9. That helped transform a deficit of 47.3 billion euros in Germany’s balance of other capital flows in August to a surplus of 700 million euros in September.

 

In another bid to end the debt crisis, European leaders added 200 billion euros to their warchest and tightened anti- deficit rules in what they called a “fiscal compact” at a meeting in Brussels. European stocks dropped and the euro was little changed as the plan disappointed some investors.

And confirming the case for capital controls, is Handelsblatt which reports that Switzerland is preparing contingency plans in the event that the €-crisis escalates.

The government would oppose a flight to the Swiss franc. In this context, a working group is examining and negative interest rates and capital controls, the Swiss Finance Minister Eveline Widmer-Schlumpf said in Parliament yesterday. At negative interest rates of foreign assets in CHF are subject to a penalty tax.

 

"We are certainly prepared for possible alternatives," Widmer-Schlumpf said on questions of deputies, the government would like to respond. To capital controls or negative interest rates, she said: "These are questions which are examined in this Task Force on the franc strength."

But just like any other centrally panned intervention this one too shall fail. What is more important, is that now that the concept of a EUR end is tangible, it will likely become a self-fulfilling prophecy:

Companies switched gears from preparing for a possible exit by Greece to some sort of currency breakdown after Italian Prime Minister Silvio Berlusconi’s government collapsed and 10-year Italian bond yields rose past 7 percent in November.

 

“A couple of weeks ago I would never have thought about having conversations on the probability of the euro disappearing, but now there is more speculation on such a scenario,” Wolters Kluwer NV (WKL) CEO Nancy McKinstry said in a Nov. 29 interview at the company’s headquarters outside Amsterdam.

 

The board of Wolters Kluwer, Europe’s largest tax and legal publisher with offices in Frankfurt, Milan, London and Phoenix, has spent more time on scenario planning, she said.

 

“We obviously have plans in place if something happens,” ABB Ltd. (ABBN) CEO Joe Hogan said in Zurich on Dec. 1. “They can never be as robust as you’d want them to be but we certainly are prepared if there is a crisis.”

 

The Swiss engineering company “updated what we would do” in the past few weeks, Hogan said. “We just keep updating and making our plan more and more detailed.’

 

Bayerische Motoren Werke AG, the world’s largest maker of luxury cars, has honed its plans developed following the 2009 financial crisis and is prepared to act if markets dive, Chief Financial Officer Friedrich Eichiner said in November.

 

The Munich-based carmaker’s response would include reducing production by as much as 30 percent and using its banking unit to directly tap central bank reserves. The company also has reduced its leasing portfolio to manage risks in case used car values decline.

In other words, what is certain is that nobody has any certainty what will happen, and the result would be a massive deleveraging wave of epic proportions. What is also certain is that the global central banking cartel (sans the ECB in the post non-EUR world), would do everything to halt said deflationary vortex, and will just hit the CTRL+P combination on every possible device in its arsenal to stave off the inevitable. What is then absolutely sure, is that the second to last step will be the realization of Bernanke's theoretical threat to dump money out of helicopters... with the final outcome being history repeating itself once again, in that no civilization has ever collapsed from a deflationary collapse but always from the authoritarian response to it, yet which has seen hard assets survive in fair value form for over 20 centuries.

 


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Sat, 12/10/2011 - 18:11 | Link to Comment Tic tock
Tic tock's picture

wot...no mention of the illustrious dollar?

Sat, 12/10/2011 - 18:18 | Link to Comment agent default
agent default's picture

Not yet.  And to be fair the Bernank is nowhere near as ridiculous as that bunch across the pond.  He is scary, but compared to the Euroclusterfuck, he is a pussy compared to the pros over there.  For now.  In any case long popcorn and overweight physical silver.  And get some gold while at it.

Sat, 12/10/2011 - 18:21 | Link to Comment Chris Jusset
Chris Jusset's picture

We all know that, as a last gasp, the Central Bankers will PRINT, PRINT, PRINT ... so the only questions are (1) how much time will this buy; and (2) how much worse will this make the crisis?

Sat, 12/10/2011 - 18:49 | Link to Comment SwingForce
SwingForce's picture

The FED will print for the UK same as they did in 1927, notice how the UK just extracted themselves from the EU? Call them England, UK, British, All the more to FOOL you with, my Dear......

h/t Griffin, TCFJI (When the BAU hatches a profile, its easy to follow. Add'l h/t Criminal Minds tv show BF).

Sat, 12/10/2011 - 20:05 | Link to Comment rsi1
rsi1's picture

comments of 2 CEOs of comapny nobody has ever heard of before, lol! great evidence of capital flight ZH! way to go!

whats next? crude oil will not be used any longer in a month because the CEO of TinycompanyX believes renewables will be a solution in the next month and has invested $1000 in FSLR?

Sat, 12/10/2011 - 21:46 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Stick a fork in this porker. It's done, sliced and diced.

 

Switzerland already preparing for recession as soon as war breaks out in Europe following euro collapse:

http://www.tdg.ch/actu/economie/seco-suisse-pourrait-rentrer-recession-2...

Sat, 12/10/2011 - 23:38 | Link to Comment Teamtc321
Teamtc321's picture

There was a cyclical weakening in the third quarter of 2011, observe the chief economist of the State Secretariat for Economic Affairs (SECO), in an interview published Saturday by the newspaper Aargauer Zeitung . It is quite conceivable that we see two negative quarters. However, as a whole, the Swiss economy is still doing well.

 

http://www.tdg.ch/actu/economie/seco-suisse-pourrait-rentrer-recession-2011-12-10

Sat, 12/10/2011 - 20:14 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bayerische Motoren Werke AG

Sat, 12/10/2011 - 20:33 | Link to Comment Manthong
Manthong's picture

It would sure be nice if there was some kind of monetary asset out there that wasn't subject to all that counter party risk and uncertainty.

Sat, 12/10/2011 - 20:46 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

yeah....

sigh

Sat, 12/10/2011 - 20:48 | Link to Comment SilverIsKing
SilverIsKing's picture

I'm scanning the periodic table of elements in search of something that could serve as a suitable monetary asset. I'm going in numerical order and am at #46, Palladium. I feel like I'm getting close so I'll let you know if I find something soon.

Sat, 12/10/2011 - 21:15 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

if you find something, test it out by showing it to babes.  if they like it then we can probably use it as a medium of exchange.  that's how i do my science experiments.

Sat, 12/10/2011 - 21:40 | Link to Comment ratso
ratso's picture

It is David Cameron who alienated the rest of the EU.

Furthermore, if corporations take precautions, it is not equivalent to predicting the outcome of the current situation. 

Also, it is far too early to say the euro ship is sinking.  My bets are that it floats into the furture - stronger that has been up until now - after the recession that will come in 2011.

Sat, 12/10/2011 - 21:50 | Link to Comment SilverIsKing
SilverIsKing's picture

Taking precautions can become a self-fulfilling prophecy.

Sat, 12/10/2011 - 22:17 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

viva la fiat

Sun, 12/11/2011 - 00:55 | Link to Comment knukles
knukles's picture

Plutonium. 

Sun, 12/11/2011 - 02:57 | Link to Comment MrPalladium
MrPalladium's picture

Thanks, but palladium will do!!

Sun, 12/11/2011 - 19:38 | Link to Comment obejoyful
obejoyful's picture

My fear is that the government will put a 90% tax on the gain on this element when the rest of people "get it".  How do protect yourself for this situation?

Mon, 12/19/2011 - 14:45 | Link to Comment NEOSERF
NEOSERF's picture

Baked beans, spam and ammo...put your money on it...these are assets you won't regret...

Sat, 12/10/2011 - 20:41 | Link to Comment Calmyourself
Calmyourself's picture

Good point dude, who the hell ever heard of these guys, what do they make buggies or somthin..  Bayerische Motoren Werke, sounds like the last thing they made was Frankensteen's wagon, ehh..

Sun, 12/11/2011 - 00:30 | Link to Comment Calmyourself
Calmyourself's picture

Ha, yeah thats the ticket..

Sat, 12/10/2011 - 20:43 | Link to Comment MarketWatchTerrorist
MarketWatchTerrorist's picture

Agreed. This story is nonsense. Just an outlier, not a trend.

 

There is 0 chance that the 70 to 90 year old men that spent most of their lives setting up the New World Order will allow Europe, their crowning achievement, to dissolve back into petty sovereign nation states with disparate governments and cultures.  They already got most of them speaking English, just another hundred years to normalize their cultures and it's game over.

 

Seriously, there is 0 chance of a European Union break up.  Zero.  I just wish I knew how to trade that fact via some outrageously leveraged bet, because this one is a sure thing.

Sat, 12/10/2011 - 20:48 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

brzezinski disagrees

Sat, 12/10/2011 - 21:22 | Link to Comment nmewn
nmewn's picture

Well, he should know.

Sun, 12/11/2011 - 03:55 | Link to Comment Transformer
Transformer's picture

Didn't Corzine make the same bet?

Sun, 12/11/2011 - 06:28 | Link to Comment nmewn
nmewn's picture

He was betting it would hold together but as they say, the market can stay stupid longer than you can stay solvent.

I think he also signed off on a mandatory seatbelt law against the citizens while New Jersey govenor...then promptly got into a crash in his SUV while not wearing one...life is full of these little ironies & cosmic balances...lol.

Sun, 12/11/2011 - 12:22 | Link to Comment Jackfish
Jackfish's picture

Exactly correct

 

http://money.cnn.com/2007/04/19/magazines/fortune/pluggedin_corzine.fort...

Fact Number One: Why was Corzine thrown around the inside of the vehicle? Simple - he wasn't wearing a seat belt. "It was not his habit," said a former aide, Scott Kisch, to Newsday. Kisch was Corzine's driver when he served in the U.S. Senate. "You had to tell him if you wanted him to wear it. I gave up early on."

Not wearing a seat belt happens to be a violation of New Jersey state law. It is also beyond stupid. I won't drive down my driveway to the mailbox without buckling up.

Sun, 12/11/2011 - 17:38 | Link to Comment Manthong
Manthong's picture

To paraphrase Ayn Rand: He chose to ignore the laws of physics and the risk of carelessness but he could not ignore their consequences.

Sat, 12/10/2011 - 21:17 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Another fool who believes he can block the sun with his fat greasy thumb.

Sun, 12/11/2011 - 11:27 | Link to Comment h3m1ngw4y
h3m1ngw4y's picture

everybody can block the sun with his thumb its a matter of focal point, eyes and sun

Sat, 12/10/2011 - 22:06 | Link to Comment kito
kito's picture

frankenstein.................

Sun, 12/11/2011 - 00:33 | Link to Comment Calmyourself
Calmyourself's picture

I'm the older brother and I was passed over, I'm smart,.. I'm smart and I deserve respect...

SARC.... with a touch of Young Frankensteeen, get with the program..

Sun, 12/11/2011 - 02:19 | Link to Comment pkea
pkea's picture

 the chances are slim that the euro will go down.  I wouldn't make assumption that there is a zero chance though. This quarrel between the US and Eu old men( chase and some other houses in Europe) goes back a while ago. I would thoroughly enjoy some US houses bets against EZ  and on eurobonds to give them at least significant pains . The old men did put a lot on the line to make it work on both sides of the pond. Greece and spain may leave, france and germany will stick together.

Sun, 12/11/2011 - 16:14 | Link to Comment rsi1
rsi1's picture

i am not as sure about the zero probability, but totally agree being very low. i find it fascinating how mostly americans and brits (who have seen their currencies devalue substantially in the last 10 years against the euro despite crisis and bullshit) do not understand that it is in fact per se a much stronger currency as it is at the moment, it doesnt have big flaws and it can certainly survive very well, even with a few govs. defaulting. but most importantly, you understand very little the kind of political commitment that has been invested and is still devoted to the project. We are talking about fiat currency in any case, so problems can always be solver if it has to do with money when it is fiat money if there is political commitment.

News: its not a euro crisis! its a crisis of confidence of some european governements debt situation, things have some link but its like saying a dollar crisis because california has too much debt.. its propaganda to get the fiscal unity moving as soon as possible.

Sat, 12/10/2011 - 21:06 | Link to Comment RiverRoad
RiverRoad's picture

rsi1:  Only the little folks dare speak for the record....as ZH knows.  From their lips to God's ears.

Sat, 12/10/2011 - 21:26 | Link to Comment mrgneiss
mrgneiss's picture

WTF Fiat is a tiny company?

So if the company is tiny the premise is invalid?

They should send these trolls to a few logic classes before turning them loose.......

Sat, 12/10/2011 - 22:08 | Link to Comment Mr.Bigfoot
Mr.Bigfoot's picture

BMW automobiles are somewhat obscure, very localized German market...

Sun, 12/11/2011 - 00:42 | Link to Comment JOYFUL
JOYFUL's picture

Yes, but in the statist definition of Big, an automaker aint big till it's been fed at the public trough long enough to grow a huge belly of taxpayer funded debt.  BMW, Fiat, small potatoes....GM...now that's BIG.

Looks like a gaggle of Obummers' country cousins have logged on here tonite!

Sun, 12/11/2011 - 12:18 | Link to Comment francis_sawyer
francis_sawyer's picture

gm owns fiat (controlling) cept for the ferrari & maserati brands

Sun, 12/11/2011 - 14:00 | Link to Comment Dismal Scientist
Dismal Scientist's picture

Do your homework. BMW sell globally, particularly in US and Asia.

Sat, 12/10/2011 - 21:29 | Link to Comment philipat
philipat's picture

The ECB cannot print because it is against its charter. A Treaty change would be required and Draghi will not print without forcing the politicians to take the decisions they should be taking. The problem for Merkel is that she can't get any further bailouts (In the form of printing or whatever) through her own democratic processes.

So it's easier just to blame the Brits and continue to do nothing. Czech mate?

Mon, 12/19/2011 - 14:48 | Link to Comment NEOSERF
NEOSERF's picture

The endgame is very clear to me...watch for a series of all 17 state emergency meetings which will be the meeting that the ECB is given "emergency powers" to print...you will want to be fully shorting the euro and buying metals as inflation will go through the roof

Sat, 12/10/2011 - 19:09 | Link to Comment economics1996
economics1996's picture

Ammo and guns.

Sat, 12/10/2011 - 20:45 | Link to Comment MarketWatchTerrorist
MarketWatchTerrorist's picture

Will need them to kill all the Mexicans with "BROWN PRIDE" tattooed across their chest liek the guy in your picture.  Did you enjoy watching him get knocked out in 60 seconds on his first title defense by a white Brazilian?

 

I sure did.

Sun, 12/11/2011 - 03:08 | Link to Comment jeff montanye
jeff montanye's picture

kind of like republicans vs. democrats, albeit even uglier.

keep them uneducated and fighting amongst themselves.

Sat, 12/10/2011 - 19:10 | Link to Comment Imminent Crucible
Imminent Crucible's picture

I foresee a frenetic game of musical bank accounts, as Spanish companies sling their euros into Germany to escape the peseta, French companies rush their euros into Belgium to avoid the Return of the Franc, Italian corporations move all their funds to France to evade the resurrected lira, and Germans fling their money across the pond into Bernanke Bucks to dodge the resuscitated Deutsche Mark.

What's clear now is that absolutely no one knows where the ax falls next.

At least the velocity of digital money should pick up, as everyone rushes helter-skelter into his neighbor's basement to avoid the Eurocollapse tornado.

Sat, 12/10/2011 - 20:45 | Link to Comment Calmyourself
Calmyourself's picture

Velocity will come yes, but it will not be the velocity we are looking for.. At least that is if you are trying to time the HI inflection point in order to maximize debt into true assets (hard) that will take more time. Sheep being sheep after all, tough to stampede, even when they should..

Sun, 12/11/2011 - 20:09 | Link to Comment UP Forester
UP Forester's picture

Sure, currency transactions will bounce around like a free electron looking for a positive outcome.

Until a great, big, positive currency comes around backed by real money.

And whoever controls that currency will survive the bankpocalypse that is upcoming.

Sat, 12/10/2011 - 20:19 | Link to Comment ISEEIT
ISEEIT's picture

To fucking obvious. I am down EUR but very ready for games. Underwater short @ 1.3440 and feel like an idiot. I think it might dead cat hard before it dies and I also think it won't die so soon either. These sociopaths would clean up bringing the shit to 1.38 before letting go.

It's all shit and giggles for them anyways.

Nothing earned, nothing gained.

Peices of shit.

Yep, I'm drunk.

Sorry man. My bad. Can't afford the better meds.

Sat, 12/10/2011 - 20:52 | Link to Comment SilverIsKing
SilverIsKing's picture

Short at 1.3440 is not underwater.

Sat, 12/10/2011 - 21:16 | Link to Comment Lord Welligton
Lord Welligton's picture

Stay cool.

Knock off the sauce.

DO NOT GO ON MEDS.

 

Sat, 12/10/2011 - 21:32 | Link to Comment nmewn
nmewn's picture

"Yep, I'm drunk."

lol...and they never let poor Rudolph, play in any reindeer gaaames!...Merry Christmas!

Sun, 12/11/2011 - 00:23 | Link to Comment BigDuke6
BigDuke6's picture

People who post on ZH either inebriated or high on maradjuwana are a goddam embarassment to the good ol USA

:o

 

Sun, 12/11/2011 - 03:43 | Link to Comment BigDuke6
BigDuke6's picture

And i'm all 3 at the moment.

Sun, 12/11/2011 - 12:23 | Link to Comment francis_sawyer
francis_sawyer's picture

People who post on ZH either inebriated or high on maradjuwana are a goddam embarassment to the good ol USA

So let's say I'm some aborigine... High on something... & I stumble across an internet connection & make a post on ZH...

I guess I'm embarassing the USA (according to your premise)...

 

Sun, 12/11/2011 - 21:50 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

it would depend on the post

right, 6?

^*<right, slewie>*^

see?

Mon, 12/12/2011 - 07:22 | Link to Comment BigDuke6
BigDuke6's picture

You got it dude,

Some people just dont get our sense of humour.

Ah well.

Sat, 12/10/2011 - 21:23 | Link to Comment Eally Ucked
Eally Ucked's picture

Really? They supposed to follow footsteps of print master to satisfy your standards? For now just do concentrate on your popcorn.

Sat, 12/10/2011 - 23:32 | Link to Comment covert
covert's picture

the dollar is worthless and everyone knows it.

http://covert3.wordpress.com

http://expose2.wordpress.com

 

Sun, 12/11/2011 - 02:19 | Link to Comment Buck Johnson
Buck Johnson's picture

This is getting more and more desperate. 

Sat, 12/10/2011 - 18:15 | Link to Comment DosZap
DosZap's picture

 it will not stop Europe's financial leader Germany from intervening in an attempt to prevent a surge in Deutsche Marks once the currency returns, and will likely set up capital control measures - that last bastion to every failing monetary system - to halt what is sure to be a record inflow of post-collapse DEM appreciating capital.

Hmmmm.........................Weren't we here with the CHF Swissie just a couple of months ago?.

Sat, 12/10/2011 - 18:51 | Link to Comment SwingForce
SwingForce's picture

CHF is already out, DM is a figment of........

Sat, 12/10/2011 - 20:51 | Link to Comment disabledvet
disabledvet's picture

Absolutely. Why DM when you can euro? I say stay long dollars cuz the demand destruction is beyond apocalyptic. As a consequence you should see a flood of merchandise--and this being Europe that would be pretty much whatever you want--provided you have greenbacks. Industry itself has already been moving to the USA--throw in an energy boom courtesy of the shale boon and this could be a profound "return of the King" moment. This will have potentially dramatic security implications however--all involving the Middle East and Greece of course... to me that's the big unknowable and not "gold." gold doesn't move armies--that's debt. And as the record shows "you can set the price of gold from your bedside" if the armies that are moving are that big.

Sat, 12/10/2011 - 21:17 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

what

Sat, 12/10/2011 - 23:54 | Link to Comment kito
kito's picture

stop picking on disabled vet....hes a disabled vet.......

Sat, 12/10/2011 - 18:16 | Link to Comment LawsofPhysics
LawsofPhysics's picture

And just like the phrase "Sick and Tired"  BANK RUNS always go with capital controls.  Got Physical?

Sat, 12/10/2011 - 18:54 | Link to Comment SwingForce
SwingForce's picture

You don't need "physical" if you don't have any money in the banks. You are hedging. Get real yourself.

Sat, 12/10/2011 - 18:18 | Link to Comment sunny
sunny's picture

Interesting thought...No country has ever collapsed because of a deflationary collapse, but always from the authoritarian response to it.  Has any told Benny that?

sunny

Sat, 12/10/2011 - 18:26 | Link to Comment Socratic Dog
Socratic Dog's picture

A fairly sweeping statement that.  What is it based on?  Not denying it, but, seems like it should be supported in some way.  A few references please?

Sat, 12/10/2011 - 18:39 | Link to Comment Global Hunter
Global Hunter's picture

I think all the great and not so great empires were debasing their coins when they fell (thus inflationary).  I know a lot were.

Sat, 12/10/2011 - 21:20 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Supported in some way?  How about 80 thousand years of human history.

Sun, 12/11/2011 - 03:18 | Link to Comment jeff montanye
jeff montanye's picture

typo or exaggerating by a power of ten?  

Sun, 12/11/2011 - 12:27 | Link to Comment francis_sawyer
francis_sawyer's picture

That's like saying... Nobody ever died by jumping off a high building... They died from splatting on the pavement below...

Sat, 12/10/2011 - 18:57 | Link to Comment SwingForce
SwingForce's picture

WHAT? There has never been a Fiat currency- based economy in history that has survived. Except The US in temporium. Read The Creature from Jekyll Island, or, just read the footnotes on each page.....

Sat, 12/10/2011 - 19:19 | Link to Comment Worker Bee
Worker Bee's picture

Collapse is deflationary. So it is the end game..always.

Sat, 12/10/2011 - 19:47 | Link to Comment Global Hunter
Global Hunter's picture

a society can survive or even thrive in a deflationary environment IMO it is the debasement of the coinage and in modern times the printing of money to make up increasing shortfalls that is the end game.  Imagine this whole thing had collapsed when Nixon closed the gold window, all of the western powers could conceivably been in a better place than they are now.  It has been the printing, artificially low interest rates and central planning of the last 40 years (interest rates more like last 25 years) that have made a serious but manageable problem into one that threatens the stability of the whole world.

Sun, 12/11/2011 - 11:27 | Link to Comment LawsofPhysics
LawsofPhysics's picture

You are missing an important aspect of this whole thing, POWER and CONTROL.

Had it gone to shit with Nixon, all those in power would have to be removed forcibly and tried for treason etc.  A major power shift, or the perception of one would have had to have happened.

 

I agree that a deflationary environment is in general good for the savers and creators of things of real value. Their labor and investment capital is treated with respect.  However, we are long past any sort of workable solution without the BRICS steping up and being the adults and the truth of the matter is that none of them really want to do that as it would crush their export markets overnight and lead to more social revolution.  Hard to be taken seriously while you ar killing your own.

Sat, 12/10/2011 - 21:12 | Link to Comment roccman
roccman's picture

so is the kill off of the human project

 

once the JIT system hits the mat...6 billion gone in under a year...goon squad comes topside...scapes bodies off sidewalk...rinse and repeat...those left standing either get shot in the head or work in slave camps for a cot and cup of gruel.

peak everything is only temporary (temporarily)

Sat, 12/10/2011 - 22:22 | Link to Comment oldman
oldman's picture

The 'human project' failed when the species exceeded 3 billion

Sun, 12/11/2011 - 16:33 | Link to Comment roccman
roccman's picture

500,000 million is where we are headed

 

google "georgia guidestones" then read Common Sense Renewed (not T. Paine's Common Sense, but "RC Christianson's")

Sat, 12/10/2011 - 21:30 | Link to Comment Calmyourself
Calmyourself's picture

REALLY,  all those FRN's I have are going to get super, super valuable and then society will collapse because apparently my paper is too valuable mmm, seems almost counterintuitive...

What say your worker bee?? 

Sat, 12/10/2011 - 21:33 | Link to Comment roccman
roccman's picture

you mean your petrodollars?

here's the world's greatest secret - the petrodollar died in 2008 with the peaking of oil.

your FRN (read petrodollars) are worth less and will continue to be worth less as more are needed to buy less oil.

Sun, 12/11/2011 - 01:41 | Link to Comment dolph9
dolph9's picture

The real economy is deflating while the financial economy is inflating.

Perfect recipe for hyperinflation, followed by either new national currencies, or NWO.

Sat, 12/10/2011 - 19:48 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Sunny...

Try 'This Time Is Different' by Reinhart and Rogoff. The book covers the last 800 years of economic collapses.

Here is a WSJ review of the book... http://online.wsj.com/article/SB10001424052748703298004574459001609215112.html

"Keynes did not add any new idea to the body of inflationist fallacies, a thousand times refuted by economists… He merely knew how to cloak the plea for inflation and credit expansion in the sophisticated terminology of mathematical economics." Ludwig von Mises

Sat, 12/10/2011 - 20:18 | Link to Comment BigDuke6
BigDuke6's picture

Snidley, dont you think Cameron has totally shown the uk up for what it is?

A nation run by the london banking cartel - and sod the ordinary people.

In 1970, a 6 per cent return for a risk-free government investment seemed good. Then came the inflation of the 1970's.

‘Bond vigilantes’ – a term coined in the 1980s – forced governments around the world to control inflation. Never again would they allow politicians to slowly rob them through the expansion of money and rising prices.

Now the bond vigilantes are at it again, except this time they are demanding monetary expansion. Governments that don’t print money are punished, and those that do are richly rewarded with yields below 2 per cent, or even 1 per cent.

The UK has had four rounds of quantitative easing (QE), or money printing, and its 10-year bonds, have fallen from 3.8 per cent to 2.3 per cent in six months. The US Fed has had the TARP, QE 1, QE 2 and the Twist, printing money like there’s no tomorrow, and yet the 10-year Treasury bond is stuck at a 2 per cent yield.

The eurozone, on the other hand, is being tormented by the bond vigilantes, who are using the lash of bond yields to demand that the European Central Bank falls into line and prints money. The ECB has bought €209 billion worth of bonds since May 2010; in the past three months its balance sheet has expanded at an annual rate of 77 per cent, but it’s not enough.

With €1.2 trillion of European government debt to be refinanced in 2012, the bond market is putting big pressure on the ECB and Germany to abandon their ‘conservative’ ways and print more money.

How on earth did we get to this point, where the bond market vigilantes have gone from demanding monetary discipline to demanding the exact opposite?

The world’s marginal fixed interest 'prudent' investors have gone from being long-term risk managers to short-term yield arbitrage stealers.

What they want is cheap money. They don’t give a monkey's about inflation or deflation – just give us a fix of near-zero interest rates so we can make easy profits on the carry.

There was a time when European and American governments might have satisfied bond markets and lowered the interest rate on their long-term debt simply through tight, responsible fiscal policy.

Not any more. What’s required now is a willingness to create euros and dollars, and to keep the price of money down in the short-term so the hedge funds that control marginal pricing can continue to get rich – at least until the inflation catches up with them. But they’ll be long gone by then, or so they believe.

So Merkel is taking the right approach. Basically tell the financial markets to get stuffed, refuse to print more money and change the paradigm - painful though it will be. 

http://www.businessspectator.com.au/bs.nsf/Article/bond-markets-yields-g...

Sat, 12/10/2011 - 22:12 | Link to Comment BigJim
BigJim's picture

The bond vigilantes aren't 'rewarding' countries whose CB's print - they are being outbid by those same CB's at bond auctions.

Sun, 12/11/2011 - 02:13 | Link to Comment BorisTheBlade
BorisTheBlade's picture

If every auction wasn't backstopped by the respective central bank, then bond vigilantes would have their vengeance and both long-term and short-term interest rates would go up to potentially doudle digits. However, no one is crazy enough to wrestle with central bank that has all power to create as many currency as it deems necessary. Plus, I think bond vigilantes would be coined economic terrorists this time, given rising interest rates could collapse every government finances with rising interest payments and little left for everything else. Evil speculators that is. Best vengeance is to stay away from bond auctions, but get protective towards inflation (i.e. going physical monetary metals) and let the CBs play last act in what about to become inflationary mayhem.

Sun, 12/11/2011 - 11:35 | Link to Comment LawsofPhysics
LawsofPhysics's picture

All you fucknuts are ignoring the resource issue.  Money printing can not fix this, and I am not referring simply to oil.  Lots of other resource issues will become much bigger problems before the fossil fuel issue really becomes a problem.

Sat, 12/10/2011 - 22:18 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Big Duke... You ask a lot of good questions. If I was smart I might be able to offer an educated answer to all of them. If I was a bull shitter I would definitely reply to all of them. Being neither, I will do the best I can.

I believe that the Anglo-American economic pact to be one of the strongest, unwritten, and longest lived in the world. One of the biggest recent 'tells' for this was when GB decided to retain the pound currency and avoiding the Euro.

When I saw GB opt out of the Euro I saw the handwriting on the wall for the Euro. IMO, the dollar cannot stand the competition of the Euro in the oil and other commodities mkts... but especially oil. The Euro had to be destroyed, else the dollar would be destroyed. Only one form of monopoly money is used in the game of monopoly. 

I think we both know that the London Banking and Wall St are joined at the hip.

"Sod the people"... Well, hasn't that almost always been the case? There was a short period of time after WW2 when the average person in the US experienced a higher standard of living than at any time prior in the US (without private credit). But, what was happening in GB then? GB, along with the other industrial powers were destroyed and attempting to recover from WW2. The US Joe was doing well, all others were in austerity mode. Now the central banks, using governments, the US Military and large private banks, are intending to put the entire world into austerity mode. As the economic pie shrinks TPTB still want the same or a larger size slice while the rest of us fight over the little remaining pie.

Cameron? He is a politician and will take his orders like all pols. The pols, police, sheriffs, military... all layers between us little people and TPTB that remain almost entirely out of the media.

'bond vigilantes' ? Who are these bond vigilantes? China and most of SE Asia are in Tbond run off mode. Are the soverigns of SE Asia, India buying Tbonds, Eurobonds? China recently told European leaders that they must get their economic house in order before getting more help. Meanwhile, GB is purchasing Tbonds like they are as good as gold. This data shows up in the CFR published flows. It used to show up glaringly prior to the Fed dropping of US M3 data.

So, are the bond vigilantes really the US Treasury in conjunction with the US Fed and the primary dealer network? Some very large bond funds announced that they were getting out of US T paper... only to recant later. Did the treasury make some bond funds an offer they couldn't refuse? Perhaps this would answer your question and your statement "How on earth did we get to this point, where the bond market vigilantes have gone from demanding monetary discipline to demanding the exact opposite?

The world’s marginal fixed interest 'prudent' investors have gone from being long-term risk managers to short-term yield arbitrage stealers."?

In the EU there is no exact equivalent of the US Treasury. Is Timmy G so afraid that the collapse of the Euro currency would bring down the entire world financial system? Have TPTB, in their quest to destroy the Euro currency, suddenly realized that the destruction of the Euro will bring down the whole system? Why is Timmy G shuttling to meetings in Europe every week, telling them they need to print and that they need something like the US Treasury to accomplish the printing en masse. Meanwhile, the European leaders are telling Timmy to get lost.

Cheap money? Well, during the hyper inflation in Weimar Germany very few complained about the purchasing power of the money heading south. Both the little Joes and TPTB demanded more money, not a stronger currency. Do you believe that central bankers learned nothing from this? Very few little Joes consider the declining purchasing power of their currency when it happens slowly. From Weimar we learned that very few think of purchasing power of money even when it happens fast...they just run around with wheelbarrows of the stuff trying to get rid of it for something useful...and, as now, the bankers can blame price inflation on some other country.

Merkel? She is just another pol but with a plan of her own. She has very close ties with Putin, speaks perfect Russian, and meets with him often... and makes only vauge comments on what their meetings are about. Merkel is smart and was well placed in the East German gov prior to the CCCP collapse. Germany has the industrial might, engineering know how, and Russia has enormous natural resources. Strange bedfellows made for each other?

As you can see I have as many questions as you. I do not place a lot of weight on day to day 'news', even that on ZH. I try to look at a bunch of dots and see if I can connect them... and sometimes I make connections that are wrong or the dots disappear only to show up elsewhere.

Halford Mackinder's Heart Land theory goes a long way toward explaining why the Anglo-Americans cannot allow a consolidation on the continent from Atlantic to Pacific. Here is a link to Mackinder's Heartland theory. 

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

 

Sat, 12/10/2011 - 22:38 | Link to Comment oldman
oldman's picture

snidely,

mostly in agreement but I'm laughing about the 'connecting the dots'; if you are working in two-dimensional space it is sort of fun, but when working in three dimensions---it gets a lot more interesting. I don't dare try it with this low capacity engine of mine, but you're a lot smarter. What's it like in three dimensions, connecting the dots?

Thanks for your thought-provoking comment          om

Sun, 12/11/2011 - 09:35 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Oldman... Attempting to connect dots is not something I set out in life to do... It's just the way my brain works. And, it probably qualifies me as a conspiracy theorist squared by many. I'm not 'a lot smarter' than anyone who offers considered and honest posts here on ZH. Usually by the time I read the thread topic and think about whether or not I have something to add that might be of interest, it's too late. I post but all have moved on to the newest topic. This doesn't bother me for posting forces me to look at events from various perspectives. Posting forces me to think and to reconsider and sometimes to go back and edit because I have thought of another dot.

The dots we are trying to connect today will be the history that future generations read about...absent revisionism. Simply apply what you know of human nature and add to it what you know of history as it has been driven by economics and allow for the occasional altruist and presto!... We have probably come to the wrong conclusion. :)

BTW, I don't know if you're an old man, but I'm getting there. It's a pleasure exchanging ideas with you.

Sun, 12/11/2011 - 13:07 | Link to Comment oldman
oldman's picture

Dear Snidely,

Yes, I am oldman, but the part that is curious is when I arise each morning I find that I am no more than thirty---or feel like it. After five or six hours 'socializing' with humans, if I do not take a nap, meditate, or just 'get off by myself' for an hour of solitude-----I feel my age and revert to the 70 year-old. This has surprised me because no one ever talks about how it is to grow 'old'. I like it, though!

My question about the dots was because looking at dots on a piece of paper is to see them in two dimensions, but in reality the dots exists in three dimensions, and thus are more complicated to connect or visualize than we are trained to work with-----plus, 'reality' is not continuous, but exists with gaps that we are unaware of until we fall into them. This is the reason I try to not connect the dots---it allows for a more spontaneous way of being and has few of the disappointments that my life used to be replete with.

Like you, I also post most of my comments hours after everyone is gone, but the posting does help sort out the impressions of reality that we are hyperstimulated with by reading this inflammatory, but interesting blog called Zerohedge. Also, rants are welcome here an unedited----free expression is the cornerstone of mental health in my experience. 

Yeah, this is a good place to hang out                 thanks for the response                om

Sun, 12/11/2011 - 22:30 | Link to Comment Seer
Seer's picture

"My question about the dots was because looking at dots on a piece of paper is to see them in two dimensions, but in reality the dots exists in three dimensions"

Ha!  Have I not been blasting people for thinking in only two dimensions?

Having stated this, though, it's really not that hard to understand how things work or what direction things will take, on the greater time-line scale that is.  The best models for all of this are in nature.  Nature tells us what will become of us.

Anyway, thanks for being out there.  I'm a fan :-) (same to Snidely)

Sun, 12/11/2011 - 01:49 | Link to Comment pkea
pkea's picture

snidley, agree with most of the points. Not sure if Timmy is really worried about the euro collapse. I sense there are some other motives for those trips.  Just one point, think who merkel represent and who is whining the most about solving the Eu crisis? I believe she is the most educated out of them all. 

Sun, 12/11/2011 - 09:52 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

pkea... My comments about Timmy's trips were speculation. I do know that he has encouraged more printing and I do know that he has been laughed at by European leaders/economists as well as college students in Bejing.

Merkel? Maybe she is being honest when she says that more wars on the continent will be far more expensive than a piigs bail out? I agree that she is by far the smartest leader on the continent with the possible exception of  Putin. Merkle certainly understands that the bankers/industrialists will be the winners if more wars occur on the continent...and, she seems to be the only one that has her ego in check while most of the males are acting like former European royalty...ass hats, iows.

Is a 'snub' of one economist or finance minister or head of state worth starting a shooting war that will take the lives of millions? We've seen this movie already.

Thanks for sharing your thoughts with me.

Sun, 12/11/2011 - 00:08 | Link to Comment BigDuke6
BigDuke6's picture

Educational as always Snidley - looking forward to checking that link.

i found an interesting article that suggests you are smarter than you let on.

i wont post the link as i think it would inflame passions... but google 'nymag dow zero insurgency' where it tries to categorise ZH readers ... interesting.  

THe hedge funds have their own agenda as i said above

They don’t care whether the euro stays together. They have very little interest in fiscal policy – in fact, deficits are good because it means there are more bonds to play with. Their only concern, and the reason they want better fiscal policies, is the prospect of a hard default, but that’s not really much of a concern, they doubt it will happen, TBTF remember?.

What they want is to be bailed out with money created from thin air by the ECB. Inflation? Who cares?

 BUT!

The megalomaniac founders of europe always expected there to be a big crises in the Euro - now here - where the member states would forge closer union (under duress) and finally merge to become the united states of europe.

they didn't know the details but they knew that inevitably there would be blood on the streets.

this is their fantasy come true and it'll be US of europe or ... a big shitty mess i guess.

 

Sun, 12/11/2011 - 02:10 | Link to Comment pkea
pkea's picture

great point on merkel relationship with russia, duke. the rest of the post is better to stay off line:)

Sun, 12/11/2011 - 09:11 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Thanks for the link Big Duke 6. The NYM article was interesting but I could have guessed that the MSM characterized the posters here as "dickweeds and morons". Sticks and Stones and all that...

I feel that ZH and TD(s) are providing a great service to all of us that are not in the finance industry, insurance industry, or real estate industry.

There are people in the world that believe every word their government utters and they are adamant that all conspiricy theories are the products of deranged minds. This group is embued with something close to religious faith. I sometimes wonder if they have read Shakespeare, for so many of his plays revolved around palace intrigue. Of course, this group would respond that Shakespeare's plays were merely fiction... I would respond that Shakespeare's plays were based on Shakespeare's observations of human nature.

Hedge funds? Sure they are looking for a fast buck and they care little for anything but their commissions. They seem to be blowing up on a regular basis and that makes me wonder how much influence they have over fiscal policy. Recent studies have shown that 'funds of hedge funds', picked by 'experts', have a worse rate of return than a person throwing darts at a wall with names of individual hedge funds posted on the wall. I'm not an expert on hedgies but it seems to me they are extremely vulnerable to Friday after close fiscal or monetary policy change announcements... just as we all are. Huge leverage and extreme positions... hmmm. Are they the smartest guys in the room or gambling addicts?

Euro project? Well, one of the stated goals of the Eu and common currency was to prevent more wars on the continent and, perhaps between Anglo-America and the continent. Since England (and therefore part of Anglo-America) decided not to adopt the Euro the project was hampered from the beginning. I believe that Anglo-American bankers have done a great deal to attempt to destroy the Euro. As a single example there is the GS help given to Greece which allowed Greece to enter the EU with fake financials.

Since bankers and industrialists profit by wars, why would they want a financial system in Europe to succeed that might reduce future wars?

As usual, I have far more questions than answers. It's a pleasure to exchange ideas with you.

Sun, 12/11/2011 - 11:27 | Link to Comment Dr. Kananga
Dr. Kananga's picture

Re: the NYM article and the idea that those who think something is wrong on Wall St/London are conspiracy theorists--if one watches the bizarre gyrations of the financial/ES markets long enough, the only rational conclusion that can emerge in such an environment is that there is indeed collusion at the top. The market is behaving in ways that make no sense to a disinterested bystander (though I imagine there are truly precious few of those left on this planet, whether they know it or not.)

Or put another way: if you think this market is normal, then you're probably crazy. If you think it's crazy, then you're probably normal.

I am of the opinion that crazy people should not be playing with buttons and levers, but then again, what do I know?

BTW--great posts, all. I'm learning quite a bit about all those things that were unfortunately left out of my Macro Econ classes.

Sun, 12/11/2011 - 15:08 | Link to Comment Jackfish
Jackfish's picture

SW,

Enjoyed reading your thoughts about connecting dots.  There are many to connect.

Just don't forget that we are all wired to recognize patterns that may not exist. Sometimes TPTB manipulate the evidence to create patterns that they want us to 'see'.

http://rationalwiki.org/wiki/Pattern_recognition#Pattern_recognition_and...

Pattern recognition and evolution

Each step introduces various sources of both internal and external noise. This noise makes accuracy difficult, and it exponentially increases as you move down the chain. Some form of signal detection must be used to find meaningful salient stimuli amidst all the noise. As pointed out in signal detection theory accuracy can never be perfect and you must trade off between "missing" patterns that exist and "detecting" patterns where none exist. In a general abstract environment one can find an "optimal" trade-off between these types of errors, but in the real world, things are very different. The consequences for a missed pattern are usually much worse than the consequences for detecting a false pattern. If one thinks one sees something coming at one's head, it is better to duck and be wrong, than not duck and be wrong. This difference in trade-off means that there is strong evolutionary pressure to bias processing in favor of detection, and not worry as much about false positives.

Mon, 12/12/2011 - 00:34 | Link to Comment Seer
Seer's picture

As I've stated, it's the ONLY game that they know, they cannot play anything else.  It's the game that gives them their control.

As populations increase (and resources decrease) the pressures start building against them.  It's pretty much automatic that the response/avenue/only game is to increase control.  Now then, "control" in their minds is viewed as "proper management."  Like anyone who is in a position of superiority, they make sure that they get a bit (well, OK, a LOT) more than the rest: the mental games used to justify it cover the map.  And as the pressures mount (their very actions only help increase it!) they feel MORE justified in their positions (doing god's work).

I don't necessarily agree that the bankers and industrialists want war.  War is highly unpredictable: just ask those corporations that get booted out of countries following some major uprising.  They're in the business of stability: note that it's the stability of energy that's most important (that's why the US has led the charge to undertake "illegal" wars to ensure that nasty dictators cannot hold markets hostage [no, only the markets can only hold everyone hostage!]).  The ONLY case that I could imaging that war would be desired would be in order to force open markets (history records this rather well) OR to completely change a paradigm (recognition that a collapse in existing system is closing in [knowing the history of fiat?]- a means to cover tracks [what was really buried on 9/11?]).  Their desire to maintain power will always cause them to rally their wagons, even knowing that some will be stomped in the process: better to have a go at it to become one of the chosen than to face certain death; and, hey, they're all of like-kind, no real harm intended old chap!

Britain isn't too far removed from its days of being an empire.  That mentality is likely what kept it from the path of the EU.  No reason to NOT believe that the banking sector ran the decision.  NOTE: I have no idea how the British could ever believe that they could escape their fate, they're on a fucking island, and their resources are minimal: just like Japan- how could anyone NOT conclude that limited real estate isn't going to get you far into the future?

Sun, 12/11/2011 - 10:07 | Link to Comment pods
pods's picture

Thanks for that no link Big Duke.  Really is a sight to behold when the old guard tries to explain a paradigm shift.

It is funny how one can merely read the information here and have a lucid argument with anyone on the topics of today, from money, to geopolitics.

I don't read newspapers or watch cable and can have a conversation with "learned" people who leave the conversation a little less comfortable in their bubbles.

Shit, I don't even HAVE cable. 

pods

Sun, 12/11/2011 - 22:01 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

well, good!!!

Mon, 12/12/2011 - 00:41 | Link to Comment Seer
Seer's picture

Shit, I don't even HAVE cable.

And that's why you're not a dupe! (but, careful! that might get you on the terrorist watch list! [anti-American!])

All that shit is meant as straight propaganda: very few instances of things presenting actual facts.

I haven't had a TV for... at least 5 years I think.

I don't read newspapers or watch cable and can have a conversation with "learned" people who leave the conversation a little less comfortable in their bubbles.

I make EVERYONE squirm!  Comfort the afflicted and afflict the comfortable...  It's time that civilization grew up and faced the facts.  I'm getting old, in which case I don't need to give people my patience!

Sun, 12/11/2011 - 02:37 | Link to Comment pkea
pkea's picture

btw, re russia, note demoting Putin from power in progress now and protests against him. guess who is behind it........

Sun, 12/11/2011 - 10:18 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

pkea... Had to laugh at when I read your post... not at your post but I was wondering what COLOR will designate this attempt to shove Putin under the bus? Orange, rose, blue, banana and pink have already been used...certain that I left out some. 

Sun, 12/11/2011 - 15:25 | Link to Comment pkea
pkea's picture

certainly, medvedev is paid for. Much cheaper than putin. Putin removal is sewn with white threads. It is quite obvious whose interest got ahead in russia. Russia is just another lever on europe and china. I hope merkel and forces still have a chance to win there. The battle for russia is still on I believe. 

Mon, 12/12/2011 - 00:44 | Link to Comment Seer
Seer's picture

Yes, to all in this thread.

But... could the old KGB folks really be incapable?  I'm not thinking that they'd abandon Putin.

Damn! and just when you start liking one of these power beasts...

Mon, 12/12/2011 - 01:02 | Link to Comment Fanakapan
Fanakapan's picture

The only reason the UK stayed out of the Euro was to continue in its role as Uncle Scams friendly money laundry.

At this time the 3rd largest holder of US treasury debt is the UK, behind China and Japan, how could such a state of affairs come to pass ? its a fiddle thats why, to allow the US to fiddle its books via the Cayman Islands and such :)

Any idea that Britain is economically soveriegn went out the window in 1940, it was either the Yanks or Herr Hitler.

 

 

Mon, 12/12/2011 - 09:04 | Link to Comment anyways
anyways's picture

@BigDuke6

+1, you should be a zerohedge staff member.

Sat, 12/10/2011 - 20:47 | Link to Comment Calmyourself
Calmyourself's picture

Benny is a SCHOLAR, didn't you hear ?  He KNOWS everything..  Just ask MDB, he knows..

Sat, 12/10/2011 - 20:47 | Link to Comment MarketWatchTerrorist
MarketWatchTerrorist's picture

The Roman Empire lasted a loooooooooooooooooooooong time as little more than a brutal authoritarian police state run by armies of bureaucrats.

Sat, 12/10/2011 - 21:21 | Link to Comment RiverRoad
RiverRoad's picture

Until they raaaaan out of money and drank too much vino from lead cups.

Sat, 12/10/2011 - 21:32 | Link to Comment Calmyourself
Calmyourself's picture

How do you pay the burearats and TSA thugs to keep the empire humming, mmm?

Sat, 12/10/2011 - 18:19 | Link to Comment americanspirit
americanspirit's picture

Rich Chinese are buying US real estate hand over fist but any CEO would have to be a fool to move their company or its assets to the US. And I'm not so sure about Germany either. I would be considering The Netherlands or Sweden before Deutschland, for sure, even with their burdensome tax systems.

Sat, 12/10/2011 - 18:27 | Link to Comment agent default
agent default's picture

I would be considering somewhere outside the West period.  And I realy think that we should be contemplating moving to countries which one might call third world.  They have self sustainable communities, which may be closed to a foreigner to a certain degree but are more self sufficient and not much dependent on the banking system for their survival. The West on  the other hand will go down the path of absolute totalitarianism before it enters a Mad Max ending.  Got gold? You will need it.

Sat, 12/10/2011 - 18:35 | Link to Comment spinone
spinone's picture

Promises, promises

Sat, 12/10/2011 - 19:13 | Link to Comment economics1996
economics1996's picture

Canada.  Third world countries are shit holes because of the people.  

Sat, 12/10/2011 - 19:36 | Link to Comment DosZap
DosZap's picture

economics1996

Third world countries are shit holes because of the people.  

I disagree 100%, they are shit holes because of their lack of REAL Governments.You know, like we used to have. The people are generally good ,decent souls.They have been screwed so long, they are clueless and helpless to become really productive,and educated.

They have been kept under thumb so long, they have no will to fight,nor knowledge of how to.

We as a nation ave gone around the world fighting wars with everyone under the sun, when we should have started just barely ten hours from me, and drove across.

But, that would have done away with slave wages would it not?.

Sat, 12/10/2011 - 19:46 | Link to Comment Seer
Seer's picture

Might want to reconsider Canada.  As China's economic growth plummets (it's not a matter of IF but of WHEN) many Chinese will flee Canada (recalled back home).  This sets off the real estate collapse: amazing that they've held off this long up there.

"Third world countries are shit holes because of the people."  What, it's NOT the robots?  Really, though, "first world countries" are great because why (and why are many talking about leaving them?)?  I sense xenophobia...

Sat, 12/10/2011 - 20:54 | Link to Comment Calmyourself
Calmyourself's picture

Right China will be collapsing and they will head on home... Thats why they bought in Canada right because they are extraordinarily stupid..  I do not think so, your point to reconsider Canda has merit, but the well to do Chinese fleeing Canada for China, ha...

Mon, 12/12/2011 - 01:01 | Link to Comment Seer
Seer's picture

Well, you're free to your thoughts, but they are, after all, thoughts...

I had a first-hand view from up there: my wife is from Canada.

You see, it will go just as I have been stating for well over a year now (what the trigger will be).  The children of the rich Chinese will be recalled because of contractionary forces in China (I can't recall what it would be, I seem to recall hearing that they had to keep up with something like 9% growth else things would start to shake).  This creates holes in the housing markets in the bigger economic areas.  That which isn't going up, after it hits the stall speed of neutral, WILL go down.  Without growth in the housing market the switch is thrown into reverse.  Anyone who fails to grasp this has been asleep during the great housing crash in the US!

You see, my wife had a big mortgage, one that required taking on boarders.  It was becoming increasingly hard to attract boarders.  Continued boom in construction (apartments close to downtown etc.) applied pressure.  Well, fine you might say, it didn't work for HER!  Consider that this practice is very common, and that that is how those mortgages get sold up there: rental income is factored in; very common also is that there are multiple family members contributing (signing).  Start a few distress sales here and there and before you know it its Dominoes.  Luckily I got my wife out of this mess before she was upside down: broke even, or a bit to the upside (even given she bought very close to the peak).

Housing pressures will push back on the govt to promote higher wages.  Whether they attempt it or not, we know that this won't work; this would only force up prices on other things, such as exports, and increasing prices on exports when your main customers are in economic hardship, well...

Racism also lurks pretty heavily up there.  Lots of angry white men (running around with hockey sticks!) for sure.  Not seeing this as getting any better when the economic stall sets in real good up there.

Mon, 12/12/2011 - 01:41 | Link to Comment Seer
Seer's picture

And then there are the Black Swans out there:

South Korea Coast Guard Officer Dies After Being Stabbed by Chinese Sailor

http://www.bloomberg.com/news/2011-12-12/south-korea-coast-guard-officer...

You know, the US and South Korea are pretty chummy, no?  And, well, the US pulls Canada's strings.  All pretty easy to follow this sing-a-long...

But, continue to feel free to invest in real estate up there in Canada! :-)

Mon, 12/12/2011 - 01:56 | Link to Comment Seer
Seer's picture

Not a Black Swan:

 

Canadian Dollar To Weaken Further As Growth Prospects Deteriorate

http://news.tradingcharts.com/futures/9/7/169901479.html?mpop

 

The Canadian Dollar struggled to hold its ground as the Bank of Canada struck a cautious tone for the region, and the loonie is likely to face additional headwinds over the following week as the economic docket is expected to instill a dour outlook for future growth. Demands for Canadian assets are projected to grow at a slower pace in October, while manufacturing sales are anticipated to fall 0.6% following the 2.6% advance in the previous month, and the batch of dismal data is likely to weigh on the exchange rate as the central bank scale back its pledge to gradually withdraw monetary stimulus.

Sun, 12/11/2011 - 01:36 | Link to Comment dolph9
dolph9's picture

I'd rather be in Canada than the U.S.

But that's not saying much.

Sun, 12/11/2011 - 02:29 | Link to Comment Mary Wilbur
Mary Wilbur's picture

Canada's fanatically PC.

Sun, 12/11/2011 - 10:30 | Link to Comment Calmyourself
Calmyourself's picture

Once the JIT system starts to falter and bellies rumble that PC shit will disappear like a fart in a hurricane, count on it and prepare for it..

Mon, 12/12/2011 - 01:09 | Link to Comment Seer
Seer's picture

Not much was said! </sarc>

But, really, if you absolutely KNEW how things were going to go then I figure that you'd make the right choice.

I had contemplated moving up there as well (yes, as mentioned several times, my wife is from there).  Property was too expensive.  And, I just wasn't seeing Canada as escaping the coming world-wide depression.  In the end it comes down to fight or flight.  Get rid of everything in the US and you still have one of the biggest reasons why it's one of the greatest places- land: arable land.

My decisions always have to be grounded in the fundamentals: Food, Shelter and Water.

Sat, 12/10/2011 - 19:32 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

PMs should be physical, and under your own control.

The best place to store clownbux and other pieces of magic paper is probably Antarctica, such as the First Bank of Gwar.

 

Sat, 12/10/2011 - 20:55 | Link to Comment MarketWatchTerrorist
MarketWatchTerrorist's picture

For me it's simpler than all that.  I desire freedom, and all Western nations are set up to deny me that freedom.  These so-called "third world nations" are too poor to run the sort of high tech surveillance based police state that exists in the Anglosphere and most of Europe (and the obvious players like Russia, China, Iran, North Korea, etc., although some of them rely more on low tech surveillance "see something, say something").

 

Most of us exist in the world where we exchange our labor for an income.  Many on this site are at a level where our knowledge and skills merits a fairly sizable income in the West.  Therefore, we are reluctant to leave the "first world", despite the police state we see calcifying around us.  Moving to the "third world" generally requires income from the first world or starting a business in an alien culture with a foreign language etc.  It's a tough sell to actually leave the "first world" altogether unless you are independently wealthy.

 

My compromise is to leave the anglosphere, which is too authoritarian for my tastes and try one of those "crazy" European countries with legalized prostitution, decent privacy laws, no TSA, etc.

Mon, 12/12/2011 - 01:35 | Link to Comment Seer
Seer's picture

Remember this: nothing ever stays the same.  What might look good today won't necessarily look good tomorrow.  Those Europeans have a lot of history, history that (unless you were born there) didn't include you.

Tensions will rise everywhere.  Racism and nationalism are always planted in the minds of the people.  Something to consider...  It's always on my mind: my wife is dark-skinned; the 2nd Amendment provides me with some sense of relief.

Sun, 12/11/2011 - 00:08 | Link to Comment chindit13
chindit13's picture

If you haven't already moved and set yourself up in a community, it's too late.  Best to try to make do where you are.

You think the people in Vancouver like to see all those Chinese moving in, even if they are modest and well behaved?  What will the "Third World" feel about a sudden influx of fat Westerners?

Everybody hates everybody in the best of times.  In bad times, everybody needs a scapegoat and that scapegoat is usually someone just different enough to be identifiable.

Sun, 12/11/2011 - 01:05 | Link to Comment BigDuke6
BigDuke6's picture

This is why europe could get nasty.. they have a habit of going a bit nuts...

Sun, 12/11/2011 - 02:14 | Link to Comment JOYFUL
JOYFUL's picture

 

Agent defaults' intuitive grasp of the real situation has provoked some alltime highs and lows on the ZH radar.  

If you haven't already moved and set yourself up in a community, it's too late.  Best to try to make do where you are.

Absolute truth, and clearly spoken by someone who left in  time.  The most important aspect of making a successful leap out of the EuroAmerikan boiling pot is to develop the ability to integrate oneself into their new surroundings. 

It's a long process, er, no, make that a long and hard process, deconditioning from the default superiority complex all of us are prey to as westerners, at the same time as learning how to step out of the Chaplinesque frames through which 'the natives' view all of us whiteys...become a real person within a real society in other words. 

Second most important step: developing realistic and sustainable lifestyle expectations- no more airconditioned condo to Audi to the yacht bullshit...get a piece of land, go long cows, chickens, goats, sheep and horses.  Find the one or two people who you will be able to count upon to watch your back. Wake up in the morning with a host of small chores and minor crises to deal with...feel the sun shine down without the cloudly haze of chemtrailed barium aluminium glazing it. Watch you kids pick up new languages in a flash, and learn how to stay proud of their own bloodline while respecting others.  Be real again.

 

Third world countries are shit holes because of the people. 

What can you say to that?  Nothin much.  But I think it would be a fun project to develop a TV sitcom called "Dead Enders." Yup, I suspect that we are just too close to the end game for even those with the means to get out to be able to do so in time to weather the transition before things get tough all over.  But even if you can't get out, start living like you are in a third world country. It will make it easier to survive the jackasses who will make it into a "shithole"

 

Sun, 12/11/2011 - 02:31 | Link to Comment BigDuke6
BigDuke6's picture

Its all to do with your brainpower as to how you 'integrate'

2 examples

the smart way - Indian doctors (a very mobile subtype of person) coming to a western country where they corner certain specialities and then keep them that way for themselves and kin.

not so smart - the ordinary brit to the Costa del Sol in Spain where its 'bacon and eggs and 5 pints of lager Manuel!!  Dont u speak english or wot?!!?!'

Mon, 12/12/2011 - 01:36 | Link to Comment Seer
Seer's picture

I couldn't have elucidated this any better!

Sun, 12/11/2011 - 02:25 | Link to Comment Mary Wilbur
Mary Wilbur's picture

Africa has all kinds of attractive places to live.

Sun, 12/11/2011 - 08:40 | Link to Comment agent default
agent default's picture

Do tell, we should have a thread about possible places to move to when TSHF for real.

Sun, 12/11/2011 - 11:53 | Link to Comment Dr. Kananga
Dr. Kananga's picture

I've heard Argentina is looking better and better each day. They blew off their debts and rebuilt.

Canada? The banks there may soon have some problems with their off-book liabilities, plus you need a squeeky-clean criminal record (as in none) and provide evidence of a useful and honest employment history in order to meet their immigration requirements. This would prove to be a grave hurdle for most people over 21 in the US.

Sat, 12/10/2011 - 19:01 | Link to Comment SwingForce
SwingForce's picture

You should question WHY? if there really are "rich Chinese" they aren't buying Gold?

PS who pays taxes?....Call for Jeff Immelt, at the front desk, Mr. P W Immelt ha ha!

Sun, 12/11/2011 - 02:23 | Link to Comment Mary Wilbur
Mary Wilbur's picture

The biggest purchasers of gold are the Chinese and the Indians.

Sat, 12/10/2011 - 18:22 | Link to Comment PulauHantu29
PulauHantu29's picture

20 Million Pesetas = 1 Euro

Sounds about right.

Sat, 12/10/2011 - 18:31 | Link to Comment agent default
agent default's picture

Scary thought: In the end it could end up 1:1.  Who will the Germans export to once the periphery withdraws and implements capital controls, and have no illusions about this, import tariffs, which I suspect will be particularly high for Germany and the remaining Euro members?  They are also up to their ears in debt, and once they lose their EU markets, they too will go down.  And when the core of the Eurozone feels real pain, Merkozy will get the ECB to print.  Bernank style.

Sat, 12/10/2011 - 18:42 | Link to Comment Global Hunter
Global Hunter's picture

I don't make predictions because the TPTB have been doing a magnificent job of keeping all the balls in the air since the tsunami and Fukushima and have surprised me with their resiliance, but I don't think they'll find the legal or political cover to print in time. Just a hunch

Sat, 12/10/2011 - 21:25 | Link to Comment RiverRoad
RiverRoad's picture

How about in time for Obummer's reelection?

Sat, 12/10/2011 - 21:48 | Link to Comment JR
JR's picture

The problem is they keep adding balls.

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