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Guest Post: Too Much Of A Good Thing Is Not A Good Thing
Submitted by David Galland of Casey Research
Too Much Of A Good Thing Is Not A Good Thing
I am beginning to feel a bit like one of the French unfortunates stumbling through the fog in the Ardennes, circa 1914. Except that, instead of Germans full of deadly intent coming at me in the gloomy forest, it is a flock of black swans.
As it was for the French in the Ardennes, the number of problems – then Germans, now black swans – is becoming overwhelming.
Consider just a little of what we as investors, and as individuals looking forward to retirement in accommodations more commodious than a shipping box, must contend with:
- The Euro-Stone. Despite all the bailouts and bluster flying about Europe, the yields in the wounded “piiglets” of Greece, Portugal, etc. have failed to soften to more tolerable levels. Worse, yields in the fatter PIIGS of Spain and Italy are hardening. This is of no small import to the German and French banks, which together are owed something like US$2 trillion by the porkers. At this point, it is becoming clear that the eurozone’s systematic flaws doom the euro to continue trending down until it ultimately takes its place in the pantheon of failed monies.
- The Yen Has Lost Its Zen. This week the Japanese government again began intervening in currency markets because, remarkably, the yen has been pushed to highs against the dollar. This in a nation with a government debt-to-GDP ratio that is better than twice the also horrible ratio sported by these United States.
That ratio ensures that Japan’s long struggles will continue, burdened as it also is with the aftermath of the deadly tsunamis and the ongoing drama at Fukushima. Adding to its woes are the commercial challenges it faces from aggressive neighbors, and maybe worst of all, the demographic glue trap it is stuck in, with fewer and fewer young to pick up the social costs of the old. Toss in the waterfall plunge in Japan’s much-vaunted savings rate – formerly a big prop keeping Japanese interest rates down – and the picture for Japan is anything but tranquil.
- China’s Crucible. There are many reasons for being optimistic about the outlook for China, including a large and hard-working populace. But there is one overriding reason to expect a big bump in the path to China’s emergence as the world’s reigning economic powerhouse.
Simply, it’s a capitalistic country with a communist problem.
Now, in the same way that some people believe in leprechauns or any of dozens of other magical beings, some people believe that an economy can be successfully commanded just as a captain commands the crew of a Chinese junk cruising along the coast. It’s a fantasy.
While the comrades in charge have done quite well – largely by getting out of the way of natural human actions – they are fast reaching the limits of their ability to navigate the shoals. As I don’t need to tell you, China is a massive country, with hundreds of millions of people capable of every manner of human strengths and frailties. But if they share one interest, it is in a job that allows them to keep their rice bowls full and a roof over their heads. Said jobs don’t come from government dictate – at least not on a sustainable basis – but rather by the messy process of free-wheeling commerce… and the more free-wheeling, the better.
In the July edition of The Casey Report, guest contributor James Quinn discusses the very real challenges facing China, not the least of which is that in the latest reporting period, official Chinese inflation popped up to 6.4%. Even more concerning was a 14% rise in the price of food.
Scrambling to keep employment high while also keeping inflation low, the Chinese government is throwing all sorts of ingredients into the mix – building ghost cities, raising interest rates, stockpiling commodities, clamping down on dissent, hacking everyone – but in the end, the irrefutable laws of economics must prevail. And so the Chinese government will have to atone for the massive inflation it unleashed in 2008, and for the equally disruptive misallocations of capital that are the hallmark of command economies.
While the blowup in China will wreak havoc in world markets, including many commodities, a bright side for gold investors is that the country’s rising inflation should help keep the wind in the sails of monetary metal. It’s no coincidence that the World Gold Council’s latest data show investment demand for gold in China more than doubling in the first quarter of this year.
- Uncle Scam. Then there is the United States. Casey Research readers of any duration know the fundamental setup… The political avarice that dominates both parties… The fear and greed of John Q. Public and his steady demands that the government do more… The scam being run by the Treasury and the Fed to provide the funny money to keep the government running… The cynical attempts by certain politicians to stoke a class war… The cellars full of toxic paper at the nation’s financial institutions… The outright corruption and deceit of the various government agencies as they twist and torture the data to fool the people into supporting them in their scams.
But there’s a growing problem: An increasing number of people and institutions are coming to understand just how intractable the problems are. This has resulted in a steady move into tangible assets – gold, especially – that are not the obligation of any government. And it’s not just individuals and money managers moving into gold, but central banks as well. That is an absolute sea change from the situation even a few years ago.
Meanwhile, with the Treasury unable to borrow since May, a backlog in government financing needs has built up. Which begs the question: With the Fed standing aside (for the moment), where is the government going to find all the buyers for the many billions of dollars worth of Treasuries it needs to flog in order to keep the scam going?
If I were a conspiracy theorist, I might look at the sell-off in equities this week, triggered as it was by nothing specific, and see a gloved hand operating behind the curtain. After all, nothing like a good old-fashioned stampede out of equities to send billions chasing after “safe” Treasuries… which has been exactly the case this week.
Regardless, with the crossroads for hard choices now behind us, the global economy finds itself at the top of a long hill… with no brakes.
From here on, it will increasingly be every nation for itself – meaning a return to competitive currency devaluations and, in time, exchange and even trade controls.
And we will see a return of the Fed to the markets. On that topic, I will once again trot out a chart from an article by Bud Conrad that ran in The Casey Report a couple of years back.
I do so because it shows what I think is a very strong corollary between what occurred in Japan after its financial bubble burst and what is now going on here in the U.S. (and elsewhere). As you can see, as a direct result of the Japanese central bank engaging in quantitative easing, the Japanese stock market bounced back strongly. But then, when the quantitative easing stopped, the market quickly gave back all its gains.
(Click on image to enlarge)
If I had the time and the resources to whip up a chart overlaying the quantitative easing here in the U.S. of late versus the equity markets, I would. But I don’t, and so will delve into that fount of all information – the Internet – and grab a chart constructed by someone else (in this case, Doug Oest, managing partner of Marquette Associates – thanks, Doug!)
As one can readily see, the Japanese experience is indeed a corollary to what’s happened here, with QE pushing the stock market higher. Conversely, until the Fed comes back in, equities could be in for a rough ride. Likewise, when the Fed returns with the next round of QE, stocks could put in a very nice rally.
(Click on image to enlarge)
Some conclusions:
- The Fed will have to roll out another round of quantitative easing. And it will likely have to once again provide swap lines to the European central banks as it did in 2008 – though this time around, a belligerent Congress is watching the Fed’s every move, so it may not be able to move as quickly as it would have otherwise. In the end, however, given there is less than nothing being done on the front of fiscal policy, it will fall to the Fed to once again ride to the rescue. But it will do so on a lame horse.
- A delay by the Fed to act could help the Treasury, at least temporarily. Per above, the U.S. government has to move a boatload of paper by the end of this year. If it wants to avoid the dire consequences of having to pay out higher yields in order to attract sufficient buying, it will have to find a lot of demand in a hurry. Should the Fed sit on its hands a bit longer, especially in the face of the escalating euro crisis, the resulting turmoil in global equity markets could provide the necessary demand to clean up the backlog and keep the U.S. government operating.?(In July’s Casey Report, Bud Conrad dissects the situation and comes to some startling conclusions… and an emerging profit opportunity.)
- The return of the Fed may signal the beginning of the end. In the face of broad weakness in the global economy and in most commodities, the fact that gold has held up so well is a clear indication that there has been an intrinsic change in the gold market. Barbarous relic no more, it has clearly been returned to its longstanding role as sound money – unique and increasingly valued when compared to the fiat competition.
This role will only become more crucial as the world’s desperate nation-states fire their currency cannons in the war to remain viable. The Fed’s return to Treasury markets will be, in the rear-view mirror of future history, seen to be a seminal event – the beginning of the end of the current fiat monetary system.
Simply put, too much of a good thing is too much of a good thing. And make no mistake, the decades of operating under a fiat monetary system have been a very good thing for the political classes and their pandering cronies.
Those good times are coming to an end.
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Art and music, my way:
http://www.youtube.com/watch?v=XLco5ISptdA&feature=related
ORI
PS: In fact, in my world, science in the service of art is how it should be.
Another cheap US propaganda example.
When you trade, you trade and blabla, this is not a ponzi scheme.
The question is: can Ponzi schemes built on/around trading? The answer is yes. Focusing on the trade part is useless as trading does not exclude the possibility of Ponzis.
When you trade, you trade and you might also at the same ponzi and ponzi.
Possibly, with the nature of this US world order, in which money is debt, and production capacity that is not sustainable, trade might have been nothing more than a Ponzi.
Your comment made no sense. I am dumb but slewie's comment made total sense. Try again for us clowns, clown.
t.y., vic.
An_A sez: "When you trade, you trade and you might also at the same ponzi and ponzi." yep. then again, you might not. he seems to think, like ORI, that the yen carry trade is in itself a ponzi. maybe they are correct, but personally, i do not think this is true.
and: "Possibly, with the nature of this US world order,.." yes, maybe we can say there is some order to the world and the US has its place near the bottom or the top depending on perspective, and that for all central banks and banksters, money = debt. however, this is not a US invention. we kicked a little ass back in the 1930's and 40's and won a big fuking game/war from what i've been told. and yes, we did go off the gold "standard" for int'l redemption of the USD in 1971, too.
but money, even today, does not hafta be debt for you, me, or An_A, or anyone else. you don't hafta go into debt to have money, do you? and, if you wish, you can trade yer genuine US green stamps for other stamps or for...gold and silver. anyone. anywhere. anytime the stores/dealers are open. if you don't like the game, don't play it! if you don't like the markets, don't play in them. if you don't like debt, don't borrow. too simple? too complicated?
and he accuses ME of propaganda? and blahblahblah?
it's not my fault that people need food, clothing, transportation, shelter and healthcare and education. each is responsible for 1 person. don't "forget" to take that responsibility. if you have kids, did someone else decide that for you? i doubt it.
people act like the don't have choices, but that, in itself, may be a rather poor choice, sometimes. there are a lot of great actors around. they act like they know what they are talking about. they act like they know what to do. and some of them are very convincing.
anyone can be mistaken. and, when we are learning new things, we don't understand them. yet. no exceptions. and, we all know different stuff in different ways; sometimes we don't understand words the same way, and things can get pretty confusing.
yes, there are ponzi's, but you are not required to participate in them, in general. you can opt out of social security for reasons of conscience, or at least you could in 1979. yes, we hafta participate in some really weird shit, sometimes, and we all would like to be more fair and maybe someone can do something about that, sometime soon.
i don't like ponzi schemes either. also in 1979 there was the "circle of gold" club, here in california. it was a chain letter. gold was illegal. the chain letter was based on gold. people who played early made tons of "money" and people who played late got ponzied. but no one forced anyone to play! you could still buy real gold jewelry, without the chain letter! the whole freaking bay area was going ape-shit over gold! the hunt brothers were afoot, and the economy was pretty fuked up, too! this was the biggest and best chain letter anyone had ever experienced. but it was still a chain letter ponzi. people were throwing $1000 bills at this thing like they were matches!
hell, i thought the wheels were coming off in 1971! they had to. but, they re-fied and we just kept on rolling, straight to hell!
dude, if you think i'm spouting propaganda for the US +++ US, you're welcome to your opinion. then again you might get your little toy-boy ass kicked here, too. actors don't do too well when they hafta do two paragraphs, and when they're also not very good actors, in the first place!
I understand your points but also other people have good points on their side. You can choose not to participate in any ponzi schemes but you still will be affected when those things go down the drain. Printing money as a result of mortgage collapse affects everybody isn't it? Just one example.
If we talk about carry trade which is mostly play for big boys also screws up the whole nations when they have to unwind them, can you not participate in after effects of that and exclude yourself?
i was tring to answer the question i am posing to K_luv, below.
ORI = yes. slewie = no. ORI posed it as an "obvious" ponzi scheme, which sounds great, rhetorically, but, isn't true. it is just another line of ORI's bullshit, as far as can tell, with my limited understanding. even if it may have consequences like a ponzi scheme, to some, that does not make it a ponzi scheme!
does: "it's mostly 4 big boys" make it ponzi scheme? or does "when they unwind them it screws up whole nations" mean it meets the definition of a ponzi pyramid chain letter-type scheme? no, of course not. we can fuk things up by other ways than ponzi; just b/c something may have neg. consequences here, there, or everywhere does not mean it is a ponzi scheme.
that is what i'm saying, to ORI, and anyone else who wants to listen to me. that's really my point. that's all. it is a trade, not a ponzi. ORI described it incorrectly, imho, and i called him on his muddled thinking and bullshit. and, if i'm wrong, would somebody please, take my argument apart and show me why i'm wrong.
if you want to back ORI, fine. just say why it is necessarily a ponzi and show me where i'm wrong, ok? and if you're not able to do so, you might hafta come to terms with the fact that ORI is not correct, here, with his daily excuse to advertise on zH, which today = "crop circle craziness and thoughts" which, hopefully is more cogent than what he did, here.
have you taken the choice to not pay your taxes and if so how has that worked for you....pls in two para or less............
oh and after that one how did your payment not bring forth the ponzi you claim as your choice to avoid.......again 2 or less.
is not the tax supported ponzi worldwide and if so the choice would be............
it seems you may be incapable of complex thought, or just afraid of it.
why don't you just figure stuff out for yourself?
ORI said the yen carry trade was a ponzi.
i disagreed with him and took the time to explain why, as fully as i was able, at the time, but also that i might not be "right" about everything.
now, you are "begging the question" and wondering whether i paid into soc sec or not. my point was simply that, at least in 1979, people were not required to pay the "tax" if they objected due to conscience. so, if you think soc sec is a "ponzi" simply opt for moral reasons if this is still an option, today. they had a form; maybe they still do. it sure isn't an issue for me, anymore, b/c i dealt with it 42 years ago(!) and i'm trying to help people who may be seeking alternatives. jeeez, dude/tte, if someone is self-employed, this might help, but maybe you don't even understand why that would be true. how would i know?
k_luver, try this, ok?
Question: is the yen carry trade a ponzi scheme?
yes or no, and why do you think so?
write as many paras as it takes for you to answer the question as best you can, and post it. let's see what you think, ok?
maybe you could see what ORI said. did he argue well? why is what he said a good answer?
personally, i thought he was talking outa his ass. again. and i tried to explain why.
that's all. no biggie.
Considering the reluctance governments have shown to work on the fiscal side of economies, monetary policy must have come as a savior of sorts.
Across most of Europe, US and to lesser extent Aust/Asia governments have been unwilling to openly admit the current consumer economy is unsustainable.
There is now close to no gurantee tax payers can rely on current tax contributions to compensate for their future pension, health or security costs.
I'd be amazed if the world doesn't slip back into a global recession. Perhaps then, we might have a proper discussion on reinventing sustainable economies.
“we as investors, and as individuals looking forward to retirement”
There are no investors in the markets anymore.
There are only gamblers and slaughter cattle in some stage of grading, prepping or butchering.
Oh.. then there are those who have already been slaughtered and are just slowly being roasted.
Yup. Only 10% of average daily volume is ever held for longer than intraday. 75% is program trading, aka silicon wafers trading with other silicon wafers
I am certain I recall that some time in about 2009, ZH began using the term 'STUPID' as its acronym (instad of PIIG); for the life of me I can't find the bloody reference.
Here's a good thing (the last two stanzas of Chesterton's "Secret People") to try to give some idea why the downtrodden of the UK have taken it upon themselves to loot a little (as many people did during the Blitz; almost 5000 were convicted)...
http://www.youtube.com/watch?v=y6WaZ0MEt5Q
http://www.youtube.com/watch?v=4-0pOcY9YWU
http://www.youtube.com/watch?v=rv8Y7wuGEsk&feature=fvst
O God of Earth and Altar,
Bow down and hear our cry,
Our earthly rulers falter,
Our people drift and die,
The walls of gold entomb us,
The swords of scorn divide,
Take not thy thunder from us,
But take away our pride.
(G. K. Chesterton; English Hymnal)
Greetings. I am a new member and this is my first post. Apologies I have nothing economic to say other than I am glad gold held its horses the past two days ... too up too fast is not good. Also wanted to see that my avatar pic worked...my beloved now-deceased english cocker Julie ... used to call her Jubispupper ...
Sorry to hear about your dog. I sure love mine.
all animal lovers are welcome!
but you understand this is fight club! we are here to share and educate each other and maybe even make a difference in the world!'
start with some James Grant.. he is one of the best of the best.
http://www.youtube.com/watch?v=m_WWGvxxvvs&feature=feedu
and here is 5 minutes of how to fix our Country.. no really, its that easy ala' JFK.
http://www.youtube.com/watch?v=qoVlcWvxffc&list=FLjAWptc6azYo&index=5
if Bill Still does not move you?? we will need to beat you up a lil!
Hey JW,
Thanks so much for the links. Great iistening. My favorite commentators are James Dines and Gerald Celente. I am up for any fight. Have been preparing for the future since 2007! Stay in touch.
Jubispupper in CO
Welcome to ZH. It seems like things have calmed down a bit here without the junk buttons. Your doggie avatar is a good one. Our two dogs are just barely over a year old and they are rescue dogs, siblings male and female, found soaking wet in a parking lot. They are great dogs. Our last dog was a rescue as well and Sally was with us for almost 10 years before she just plain wore out. I think somehow they know that they are appreciated and they return the favor.
Some things (and people and pets) in this world are more important despite our collective delusions about priorities. There's a chance that people re-tune their values to something resembling sanity
I Pray You are Right!
I Pray that another Kent State type Murder does NOT! Take Place!
But?? reality is a Bitch and the Government is well on its way to going well beyond to far.
Lets hope no American Children are hurt by the Nazi Pigs with License to Harass.
Lets hope those Children are protected in the event the Nazi Pigs get out of hand!
we are almost at the point where "We the People" will start Policing the Nazi Pigs! Almost!
I share your hope. And your doubt. But as always, the greatest changes start small. With those who get it
From your mouth to omnipotent ears (but put a hedge on).
My condolences as well. Don't know what I would do without my Cha Cha. Regards CI
Offensive to compare current investment/speculation uncertainties to trench warfare...and these days, no chance of paper cuts even.
However, all good points but misses the inflation angle in China and how it affects wages growth...which in the absence of any other credible explanantion seems to be Bernanke's plan. Force China to break the peg and end wages arbitrage between Cina and RoW...the only way we will see the needed jobs growth in the US is for the multinational corps to return.
Estimates of 5 years to effective wages parity between China and US, and no doubt the poorer parts of Europe, means it is a race between achieving the repatriation of jobs (if this is the plan) and the end of the financial system...a close call.
Not only is there a wages arbitrage w/China, also an environmental one. It seems lop-sided to me in this global era to agree to environmentally conscious restrictions in our back-yard yet buy products from China where that costs is eliminated...in terms of trade restrictions I can see a targeted environmental levy on imports ... to "level the playing field" and save the planet, and jobs. This would also accelerate the 5 year parity estimate, to say, 3 years as a clear trend...in time for 2015 and the $12,544 Golden Angel. A very close call indeed.
Estimates of 5 years to effective wages parity between China and US,
You're dreaming. There is nothing free about these markets. There is nothing fair about the conduct of trade. There is nothing balanced about the vested intererests protecting the status quo
http://www.zerohedge.com/news/paradoxical-framework-restoring-american-labor-force-much-more-qe
http://www.zerohedge.com/article/china-forecast-reach-wage-parity-us-five-years-new-manufacturing-golden-age-coming-us
I totally disagree with the articles, due respect. The notion that powerful interests making mountains of money by rat fucking the public are just going to roll over and play dead is ludicrous.
Powerful interests have been known to rat-fuck other nations...as long as the opportunity to continue to make mountains of money exists, therefore what we are talking about is not mutually exclusive. Also, at some stage the multi-national corps will get sick of having all their technology stolen by their Chinese partners or having stolen it, their Chinese partners won't need them anymore.
I think that legislation will be brought to bear to influence capital flow, if not environmental then maybe instead of the much anticipated tax holiday how about a (cue the Black Swans) tax surcharge on foreign profits...the age of Financial Repression is upon us:
http://www.imf.org/external/np/seminars/eng/2011/res2/pdf/crbs.pdf Carmen Reinhardt knows a bit how these things work.
the recent vancouver conference (agora?) reports also mention this theme from 1 or more of the speakers, there. not sure which one(z) offhand
sure, more taxes would be nice! however, the military/corpo-fascist interests which have "captured" the goobermint might prefer to use our taxes to grease their interests, rather than tax themselves, doncha think? as a matter of fact, certain billionaires are already laying the groundwork to completely r-r-rip us off in the council of foreign relations and the new, un-stoppable "super congress" now that they've laid all their gambling losses on us and indebted/indentured us for 300 years.
then again, maybe we shall choose not to cast ourselves as victims in this drama, take off the "kick me" signs, and wait and watch while they decide what tune they would like for the ultimate dance with The People. even the "super congress" puppets can't be that fuking styooopid as to keep pretending they can't figure out where the wealth which has been plundered from us, on their watch, is sitting
one of the nice things abt the "freezing" of the assets of "bad" guys, like the moQ (legitimate (?) libyan goobermint head of state), is that when it is the rich, financial repressing folks' turn to play the role of villain, , they will dicover what it is like to awaken one fine morning to discover that nothing is normal, anymore and virtually all of their hired guns have switched sides, b/c they're not "bad" guys!
or, we can just teach the worthless shitheads a new, fun dance! either way is fine, with me. what the hell do i care?
as david g. sez, right here in this essay, some in congress are actually starting to smell the coffee around the "debt problem"
they can either get the goobermoint under control and repatriate the stolen wealth for the LEGITIMATE purposes of our social contracts, OR they can continue to kick the can down the road. the problem with that, as bill bonner has pointed out, is that when you get down the road, there's that fuking can, again!
so, i do hope our elected leaders are beginning to understand how outraged people are becoming about this never-ending bullshit. if you've sold out so many times that you no longer have the POWER to control the goobermint you promised to run honestly, if we elected you to leadership, b/c you leased it out, or privatized (sold) it, hey, shit happens. and shit gets fixed, too.
BiCheZ!
nothing gets fixed , you just create a different set of problems.
the math will not lie and you are broke.
mebbe. not kicking the can down the road may = other problemz, but they will be not be from kicking the can down the road.
being broke is not the same as trying to manage way too much debt for the level of income. you may be "right" but so what?
and what do you suggest? do nothing? or write 20 words and pretend you are saying something cogent, again?
maybe i should inform you that often, one gets "broke" b/c one spent too much "money", so the "set of problems" might be addressed by spending less money?
too complicated for you, still, douchebag?
Well said, Slewie. But reality doesn't work with some people.
Paradox 1.
“The Yen Has Lost Its Zen. This week the Japanese government again began intervening in currency markets because, remarkably, the yen has been pushed to highs against the dollar. This in a nation with a government debt-to-GDP ratio that is better than twice the also horrible ratio sported by these United States. “
So in theory, the US could go on for many years to come, with ease. Hence calling the end to any debt splurge would be a completely arbitrary fiat phenomenon. How long have the japs been at this now…20 yeas now?
Paradox 2.
“As one can readily see, the Japanese experience is indeed a corollary to what’s happened here, with QE pushing the stock market higher. Conversely, until the Fed comes back in, equities could be in for a rough ride. “
Indeed they could, but the credit markets are still ticking over, and when the sell off in equities is supposed to be broadly credit related, it kind of confuses me. Is this not meant to be the “grand awaking” sell off - where we all realise that all the debt cant be paid off and all that crap and we end up being up to our necks in gold…or is it just a run-of-the-mill slowdown/recession being priced in? And didn’t the writer previously mention all the ways in which Japan was completely and utterly different to the US? i. e. notsunamis, Fukushima’s, no demographic glue trap, no waterfall plunge in savings rates or aggressive neighbours etc. ?
Paradox 3
"A delay by the Fed to act could help the Treasury, at least temporarily.
Per above, the U.S. government has to move a boatload of paper by the end of this year. If it wants to avoid the dire consequences of having to pay out higher yields in order to attract sufficient buying, it will have to find a lot of demand in a hurry. Should the Fed sit on its hands a bit longer, especially in the face of the escalating euro crisis, the resulting turmoil in global equity markets could provide the necessary demand to clean up the backlog and keep the U.S. government operating."
So the fed does not even need the Euro crisis to drive down yields, all it needs is any old crisis, even an American crisis will do! anywhere a crisis, a tea bag crisis, a 10 year yields at record lows after S&P downgrade crisis. So if they act or don’t act now, it wont matter, the greater the instability in the world the cheaper the debt.
Paradox 4
This paradox is intentionally left blank.
Good points all, but the big difference between the Yen and USD is that the dollar is the WRC. The rest of world is not likely to put up with the USD going banana republic on them while 3 billion people still have 6% growth rates to attend to.
So the end game results in the crumbling of confidence in fiat.
With a worldwide depression and its population exhausted from currency wars.
Gold bugs & zerohedge readers sense victory ... as the world apparently comes to its senses and embraces a 'hard' currency resistant to inflation and manipulation.
What, you think the banking families who own the Fed,BOE, Deutsche bank (ECB/EU really) havn't wargamed this countless times. Rest assured they intend to land on their feet no matter what.
Who ever gives up power & control unless their very life is at stake?
You're ignoring something...they were the first into gold. That way they let the fiats/countries/politicians fight among themselves. And no matter the outcome, they will land on their feet. Gold....same as it's always been
I’ve been contemplating exactly that ever since Congress supposedly came to terms on the debt debates. It’s amazing when you think about it. All that talk about how much new debt to create while never once even asking the question, “at what price?” Put another way, would there ever be long term market conditions (>90 days) such as high interest rates or lack of demand for Treasuries that would affect the rate of debt being issued? The concept should not be out of the question. We have already seen the U.S. Treasury delay plans to sell back some of its AIG and GM holdings due to market conditions that it considered unfavorable. Should things be any different when they are issuing new debt? Personally, I hope they do find a way to keep driving down interest rates and driving up Treasury prices for a bit longer. I’ve still got a few more to sell before the end of the year.
"I’ve been contemplating exactly that ever since Congress supposedly came to terms on the debt debates. It’s amazing when you think about it. All that talk about how much new debt to create while never once even asking the question, “at what price?” "
Go ahead, tell me then...what price? you price it, dont ask eveyone else what price it should be, you price it, ballbag, Take as long as you need. Take a few decades off work, then come and tell me. "what price?"
Treasury prices/interest rates are "protected" by the banking industry. They've gone all-in on the US government. What choice do they have?
The US has (thus far) provided political support for the ongoing looting of the planet by the financiers, and if the US falls off the top of the heap, it's probably going to result in global warfare, when everything will be reconfigured. Global conflagration is just too unpredictable to make 5/10/30 year investments.
There seem to be two long-term possibilities...
1) The rest of the world falls into complete chaos and the US eventually finds a way to seize assets and help pick up the pieces, enforcing some reimagined global-trade regime through force, a la post-WWII, or
2) The US falls into complete chaos and there's neither sufficient liquidity (due to "loss" of the comfort of USD as global currency) nor "brute force" to ensure petty kings and dictators don't think they're powerful enough to challenge global financial interests.
If you were thinking about outcomes to choose from like those, which side would you bet on? Which side CAN you bet on?
It may even be *impossible* to get rich at the craps table while the casino is being bombed.
+1
Instead of posting endless rants about how gold is the only trade in town, something we've known for 11 years now. How about just publishing one unique pinned post that lists the combined reasons that can bring gold down. Here's my shot at it :
1 - Debt to GDP from major economies (US, EU, Japan, China) below 90%.
2 - Deficits at sustainable levels (US, EU, Japan).
3 - Economic growth that you can actually see (US, EU, Japan).
4 - Controlled leverage and sustainable credit growth (oximoron?).
(and/or)
5 - Prevailing liquidity.
I guess item 5 alone can bring down gold, as it happened in 2008. I'm leaving out especial cases as bullion take downs of gold thru derivatives and 100 paper contracts to 1 gold bar, excessive margin raising etc etc..
Finding Atlantis or some secret cave in the Tajmahal with 5 million tons of gold isn't taken into account either.
You forgot
1-Talking Unicorns
2-Flying Piigs
3-Science finds out that global energy demands can be met by trapping rainbows
I thought the skittle shit rainbows that came out of the flying unicorns asses were the answer to energy woes?
did someone mis-lead me, again?
I am such a romantic!
sucker I am and I hope and pray always will be!
No, silly. It was puppy kisses....dang that misinforming MSM
I'm not sure I'm tracking here. "Prevailing liquidity" can "bring down" gold as in 2008.
High in early 2008 around $US 1k.
Today, bumping up against $1.8k.
I guess I don't understand "bring down".
have you looked at the 10/20/30 year gold chart lately? #1= very doubtful. #2=never happen. #3=history. #4= what do you think? #5=flip a coin. Finding Atlantis will come before any of the "hopium" you are dreaming of. Gold was, is, and always will be the only Zerohedge trade in town, but thanks for the day dreams.
You are probably right, all or most of those things would bring down the "price" of gold. That is precisely why I am buying hand over fist.
nulla avaritia sine poena est
Gold will see $1000 again before it hits $3000.
Don't think so. Deflation or not, the DXY would have to punch through 100 for that to happen. Not likely
They're gonna drop a new currency on our asses. Gold:Dollar matters not.
When they drop a new currency on us, anyone without gold will have to accept whatever crumbs are thrown their way for their entire net asset value.
Those who have control of the measuring stick have complete and utter control of taxation.
Living under a gold standard would be great because it exerts some control over goverrnment spending.
BUT moving into a gold standard puts everyone at the mercy of the most ruthless people in the world, politicians and bankers, and they are currently in a desperate position.
Gee, I wonder what they will do? They are buying gold and destroying their paper balance sheets to kick the can. What are their other options to holding onto power other than putting us on a gold standard and ramping the price of the gold in their vaults. They have no other options.
From here on, it will increasingly be every nation for itself – meaning a return to competitive currency devaluations and, in time, exchange and even trade controls.
This is dead on. And impoverished states will act as impoverished citizens - a sort of condoned looting of foreign trade partners. I just wonder when it gets violent...
No, they cannot hold onto power if they wait for fiat to get to zero. They will make the switch before then. When? Put yourself in their place. If gold goes vertical, they no longer have an incentive to wait. If fiat drops vertically, the value of the loans they have out there drops to zero. Kicking the can is all about a controlled aquisition of gold. If the situation becomes unstable, they will make their move and announce victory in our time. Bernanke will be called Maestro II by a mainstream media that doesn't understand that a gold standard where the central banks hold most of the gold means that everyone else is a pauper. They write the history books. They always win. They will win this time too. They will not wait for an unstable situation to unseat them from power.
Read more: http://www.businessinsider.com/metros-with-high-foreclosures-2011-8#ixzz1UsKPIZv1 In the face of serious deflationary (and deleveraging) we will continue to see the Fed pusing on the string as well as QE'ing in some fashion...probably financial repression Rogoff and co-authors wrote about. UberBullish for the yellow metal.Piss and moan all you like ZH'ers,
The answer to the problems is Clear and Simple,
Boycott Chinese goods .
The Western peoples boycott of Chinese products would evaporate the agenda of the Banksta Gangsta Agenda in a matter of months,
Simply refuse to purchase any product that is Made,Assembled,or have parts or materials fron the Commie god overlords,
It has worked before, to some degree, do you remember "Buy American"
bumperstickers in the 1980's?
How many injection molded trash can's with matching hat stands do you really need in your office?
How many shrink a lot t-shirts and sweaters and crappy tires and alarm clocks can you live without?
STARVE THE BEAST.
if you get a call center in Bangladesh,demand to talk to a supervisor,
tell the supervisor you can not understand their English and demand a
competent English speaker,you will get one eventually,
With passion for your country,spread the word, China is NO,India is NO.
Do not do business with them!
Spend a few extra $ to buy American,at home and at work, whenever you can,
Be Prejudiced, without shame,It is Your Grandkids or Chairman MaoBammas pick one, do not buy their STUFF.
Spread the word to your friends and relatives,neighbors,strangers,
Do not buy their STUFF.
It is not about Silver and Gold so much,(But get as much as you can)
But STARVE THE BEAST! Just say NO! to...................................
Coffie makers and bed spreads with matching pillows and bed ruffles,
No tents or automotive air freshners or teflon coated ladels.
Make it hip through E mails and conversations and enlightend opinion
to Starve this ARMY OF SCUM.
Buy American or do not buy, SHRIVELL the beast.
Don't ask me what I really think.
answer.. is not China's 1,200% Leveraged Renminbi that is pegged to the U.S. Dollar nor the trade deficit! China is an importer like the U.S. now!
here is the answer..
http://www.youtube.com/watch?v=qoVlcWvxffc&feature=feedf
Uploaded by bstill3 on Aug 12, 2011
Unveiling a new 6-Step pathway to free ourselves from the shackles of the national debt system.
Interesting approach to the financial mess...this guy has a point. My only concern is that isolationism leads to war! Just like rampant oligarchy play! There has to be a concert of nation states to discuss the same thing that this guy talks of in the video in terms of individual State representations deciding on optimal federal money supply level. This has to be done in similar fashion amongst nation states to discuss what 'fair' trade is from each country's perspective. The UN structures, now freed from cold war east-west standoff should be an ideal place for these economic/trade discussions. Just as the ILO is for labour issues. Or the OCDE for regional issues. The banks and the speculative HFs would thus be completely out of the loop as they are the very manifestation, the direct progeny, of fractional reserve banking and ZIRP type monetary inflation that feeds the speculative beast.
I am only pushing Exectutive Order 11110..
the rest may or may not work..
but talking the power away from banks to print money..
share holders of the Federal Reserve earn 6% returns on every dollar created.
Big Banks / Wall Street Banks are the Share Holders..
so "We the People" bail out Wall Street and then they earn 6% on all the monies printed to carry us forward? great work if you can get it!
and then we have as well an energy crisis.. that NO ONE is talking about!
here ----------> http://www.youtube.com/watch?v=wYuLjGQQ-jg
I've worked for twenty years in the energy industry. If you've seen my previous posts, I have written my view on this here at ZH as the biggest issue facing the world, after the financial crisis. Energy is the Medium to long term challenge which will be game changer; but first the financial mess has to be addressed. Pronto.
when I say NO! ONE!!
I dont mean us, here..
we talk about it..
I mean corporate owned cable news networks!
I mean the sheep who run around blindly! consuming things and buring fuel to cumsume things they dont really need..
those people! not us people.. and forgive my writing! more often than not I am speaking to the new comers who just read and dont post.
or..
maybe I am fishing.. you will be able to understand if I am talking about us or them.. or if I am fishing for them..
Be well! Keep Up the FIGHT!!
So we boycott China...
No more iPods, iPhones, iMacs...
Apple stock.... (greater than Exxon) toliet...
Answer: Black Swan.
Bringing all those jobs to America? An idea.
Walmart would die too. What a sick little interdependent mess.
Boycott Chinese goods--agree. Buy American? Buy a Ford, perhaps. Those cars are engineered to fail IME. Perhaps you could put together a list of about 10 items made in America that are safe to buy, eg,
1) F14 fighter
2) Bradley tank
3) congressman
4) election
5) etc
Consider just a little of what we as investors, and as individuals looking forward to retirement in accommodations more commodious than a shipping box, must contend with:
Your Jobless Retirement plan:
Rule 1) Stop complaining ! You don't Need a Shoebox or Retirement !
Rule 2) There will be NO Retirement.
Rule 3) Since there will be NO Retirement - you don't Need a Shoebox,
since your anatomical remains will be cremated and used to produce green Fuel and Energy,
once your use-by date has expired.
Hey all, been reading ZH for about a year, and I'm just now getting an account. This site should be mandatory reading, I've learned so much in the past year from the articles and your comments.
I'm sitting on enough numismatic silver to buy an island if what I expect to happen happens - lol. Never would have even considered it a few years ago, now I'm kicking myself for going all in at $22 when it could have been $10.
@IQ - you need to go drink an American beer and go easy on the carriage returns, :-)
where in alaska are you sitting by the way? ps. i appreciate your good taste on all of my comments too.
I only drink American beer!
and you will soon be off to your Island with your mountain of Silver,
I also was a reader of the "Fight Club" for about a year before I dare enter with far greater intellects than my own, but each injection of thought,opinion, observation appears to evolve it further.
It is an entity of this computer age that is upon us, it is a chunk of Awesome in a central controliverse,
1 Do not talk shit about my typing.
2 First night at fight club,you have to fight.
3 You are more full of shit than a Christmas turkey.
this links for you,Grizzly Adams.
http://www.youtube.com/watch?v=R4oa83eCUCI off to silver floating island.
Step 1 - Hilarious - given the obvious.
Step 2 - Check
Step 3 - Check, but not about the Silver - lol.
Oh and Dr Doolittle has the gayest pants I've ever seen in my life. But they were probably from a London tailor which explains everything, lol.
Silver vs. gold
Better buy both. I bought a lot of gold but recently started adding silver. Silver hasn't popped yet, but it will. More importantly, you have to eat, and cashing in a $20k gold eagle could be a little difficult. As one ZH reader pointed out, in the post Soviet era, flashing one of those would invite a gang visit to your home.
Gold: Central banks are not stacking silver, but they are buying gold. At a time when liquidity is a problem, central banks and governments are putting money into gold. This is the only long term action with no immediate benefits I see them taking. The price of gold can be ramped as high as they need to bail themselves out. Not so with silver. Sky high silver prices would destroy whole industries. Also, silver will be late to the party. They won't let go of silver prices until gold goes vertical because it would kill JPM.
I'm not saying don't buy silver, I just picked up some more myself, Im just saying my core holdings are in gold because that is where the powers are going.
I feel like I came to late to the party to get in on Gold and I only had low 6 figures to roll the dice with.
...
What's it got left - 100%, 200%? If it hits 300% I'm gonna be giving my little girls shotguns and putting them on watch to cover our obscene food stores because no one will be able to afford a $14 loaf of bread anymore. I have a twisted part of my brain that kind of hopes it gets that ugly for about 6 months just to make people despise what the welfare state and banksters have done to us, but since I have little girls, I keep that fantasy in check - lol.
I got on Silver for several reasons -
1) Gold doesn't get destroyed in the manufacturing process - Silver does so the global supply gets eaten on a daily basis.
2) The Mined Supply available globally can't keep up with demand (because of all the uses of Silver in manufacturing) except for a proposed alaskan gold/silver mine called Pebble, which won't ever get permitted as long as Alaska is a part of the USA.
3) It has far to correct on the upside just relative to the gold price that's out there right now, so I figure / hope silver's good for 10 maybe 12x... before I can't stand it and bail.
4) I went numismatic because Uncle Sham can suck it if they think I'm reporting anything. Let em' come to my island - lol.
As has been pointed out by others, your first night requires you to fight. Get it on.
not enough of a simple thing is terrible...
here's t.s.e. reading a poem tse
edit: it's the wasteland...
Watch that last step; it's a doozy.
Waste is a terrible thing to mind.
When all major currencies are printed into Zimbabwe extinction, the value
of gold will priced in oil and other commodities, and in the few remaining
viable world currencies. When people say gold is going to $5000 or $10,000,
that will only be true for a brief moment. The price of gold in dollars or yen or
Euros will start to rise at an increasing rate very soon as the Fed will be bailing
out all the U.S. and European banks and buying all the treasuries. World money
printing, including China, U.S., Japan and Europe will reach levels soon that
will dwarf previous monetization. Commodities will become the new world
currencies led by gold and 'silver'.
"When all major currencies are printed into Zimbabwe extinction, the value
of gold will priced in oil and other commodities, and in the few remaining
viable world currencies. "
All well said except for the above quote. Central bankers are not powerful because they can print. Central bankers are powerful because they control the measuring stick. They know most people don't understand the difference between real and nominal dollars, and don't realize inflation is just another word for taxation. They will never, ever, give up this power. Control of the measuring stick IS power.
They will price their gold for you, thank you very much, and they have no intention of tying their hands by linking it to a basket of commodities.
Human nature is not going to change when we change into a new monetary system. They intend to keep us saddled and stupid.
seriously...short the market...make some money, lose some money...i don't care...wer're in a supercycle people...tell your grandbabies...
It's a mistake to have kids in this messed-up world. I wonder if there's a way I can give mine back?
Teach kids to fight the extant system: look at fucking islam --you build an ideology and you'll have plenty of people popping out little people to fight for thousands of years.
Don't be a sycophantic corporate ninny--realize that a better world is only going to be formed with blood and suffering; character is the hammer that'll forge a better society. People these days are soft-spoken and spineless. They're the products of corporate meddling over generations--their minds have been molded to ensure that the corporation will thrive.
Gotta have a reformat and understand that this illusion of freedom that's so dearly held by Americans is worthless: "Freedom" to them is the freedom to be led along by big corporations.
Big Corporations are no better than big government. Fight government all you want-- you're still going to get ruined by corporations that'll shape your life whether you like it, or not.
Spengler said that, in the final analysis, blood triumphs over money.
literally or metaphorically; the blood line over the money line in corporate plays (family oligarchy business vs market capitaism), the blood ideology over the money ideology (ethnocentricism over cosmopolitanism...multiculturism).
It is true that the American empire has led like all empires to bringing different countries and ethnic groups into the world Oligarchy that now runs the Market, driving force of world capitalism, now in the hands of Oligarchs (happy few), not the general public as originally imagined by Adam Smith.
I GET THE FEELING IN TOMORROW'S WORLD THE KHADAFFI FAMILY IS OUR FUTURE MODEL OF OLIGARCHICAL CLIQUE, LIKE THE MEDICIS OR HAPSBURGS OF OLD. THEY OWN THE COUNTRY AND THE SOVEREIGN FUND, LIKE THEIR SAUDI/QATARI COUNTERPARTS.
This is what the Bush family has tried to build now in the US of A. This is what we see in EU as well with Berlusconi and other Oligarchs, as in Russia and in Communist-capitalist China with its hand picked elite oligarchs. If world capitalism is in the hands of 0.01% of the nation, why do we need a market, as there is no middle class to invest, no free market as its all rigged, and central planning by Oligarchs in their select transnational meetings decide the fate of how the global pie gets split up between nation states of sheeple : Who wins and who loses on basis of local RM/Food resources and international labour rate/productivity arbitrage.
What a simple neo feudal world we are now moving to. The only impediment? The desire of developed countries to hang on to this demoded notion of individual free will and people's democracy. It will all blow away with the winds of global change being churned up by the destructive play of financial mayhem at the expense of nations dissolved in sovereign debt...So hope and bet the Oligarchs.
"Evil" corporations are metaphors for "evil" capitalism by marxist posers who don't have a clue, don't own property, and don't pay taxes. If you don't like the evil corporation that made your computer it's easy enough to set it on fire and not come back.
"marxist posers"
puh-leeze. I don't go around seeking tidy little labels to place on my thoughts, and attempt to conform to those labels. So please don't fall back on the marxist ad hominem drivel.
I'm not a big fan of capitalism--and you're pretty damned myopic if you think capitalism is moreso good than bad; the problem with these popular ideologies (even, *gasp* communism) is that they operate on the assumption that their "darling" focus group is incapable of doing wrong.
We know that's not the case. We know that most people will develop negative characteristics when allowed power [over others]; control.
It's about time something new is developed that doesn't have to adhere strictly to the outdated ideas of dead men.
Edit: Think about the electronics we use to access the web, anyway: you think those chinese workers ever envisioned themselves making electronics for lazy ass westerners to use mindlessly? You love your job, I'm assuming? You wouldn't want your life any other way? --What's stopping you from your ideal life? Think about it. Fuck compromise and brainwashing yourself into thinking that your life of compromise is the life you really wanted all along.
The problem with society is that we suppress the best human traits and we encourage the worst out of people; yet, we mouth empty words in attempts to fool ourselves that this isn't the case.
Society needs an overhaul.
The only question left unanswered is why all those "good corporations" have been fleeing to "marxist posers" paradise for 20 years now. It's easy to label everything to suit you convictions isn't it?
Now now , you must leave them to their soundbites.
Children need to believe in their fantasy it's how they make sense of their place in the world.
Oh, teach me the ways of the world; you're so awesome with your omniscience and self-assuredness.
Because they'll work for less: greater profit margins for 'capitalists' when communists-in-name-only are wiiling to supplant other workers. I don't understand why this stuff is so difficult for you people. I know corporations are considered persons -- but how the hell is it a "label" placed upon someone else? People love to grab labels to call themselves. Tell me where in my posts did I call any specific person anything resembling a socio-political label, or accuse them of being part of any ideology?
Take care to read my posts again, please. http://www.youtube.com/watch?v=c6j8EiWIVZs
note: my interest isn't very much in particular individual(s): I like staying on the macro level. I really couldn't really care less about what any one of you thought of yourselves, or what you believed in. As I said: my interest is in groups and group behavior. I am hardly bothered to ever "discuss" anything with "individuals" because I usually have to end up explaining, or teaching them something about relativism: I am not here to enlighten anyone specifically, or really discuss anything with anyone, except on rare occassions. I am here to observe, act as a sponge, and stand on a soapbox and fucking preach to everyone, but no "one."
and if you do not understand what the FUCK I am saying yet, here it is, plain and simple: I love reading my own words.
"I love reading my own words." maybe because of that you have not noticed that I'm on your side.
Precisely, RF.
Check the value of your assets against one another using John Exter;s Invesrted Pyramid of Assets
http://lonerangersilver.wordpress.com/2011/06/08/john-exter%E2%80%99s-in...
Er, he put an awful lot of worthless paper lower on the pyramid than they deserve. Why are diamonds and real estate rated so poorly, but corporate bonds, minis, Tbills, and FRNs listed as better assets. I don't agree with this at all. And where is silver? Certainly silver should rank just as the second best asset next to gold. Other than a statement that everything is valued with respect to gold, this pyramid misses the mark, buy a wide margin.
thanks for that...just outstanding.
considering that he died five years ago and that these ideas were widely published for years before his death, too, and that we've only suffered thru about 100 of these "reminders" of exter's pyramid in the last six months, good for you!
fr wiki: Exter was born in 1910 and graduated from the College of Wooster (1928–1932). He then went to the Fletcher School of Law & Diplomacy and in 1939, to Harvard University for graduate work in economics because of his interest in understanding the causes of the Great Depression. (sound familiar?) Between 1950 and 1953, Exter was the founder governor of the Central Bank of Ceylon. In 1953, he became the division chief for the Middle East at the International Bank for Reconstruction and Development. In 1954, the Federal Reserve Bank of New York appointed him vice president in charge of international banking and precious metals operations.
that was almost 60 years ago!
Exter was a member of the Council on Foreign Relations, (think he knew the rockefellers?) the Committee for Monetary Research & Education, the Mont Pelerin Society, and the Pilgrims of the United States.
yes, he considered gold to be the most reliable value and fiat comes where? why? is it just a coincidence that right after nixon took down the gold standard in 1971, he took early retirement? all thru his banking carrer, we had a gold standard under bretton woods.
Exter left the New York Fed in 1959 to join First National City Bank (then the world’s second largest bank) as a vice president. (and...): As an international monetary adviser for the bank’s International Banking Group he had special responsibilities for relations with foreign central banks and governments. In 1972 he took early retirement to become a private consultant.
you & jovil go ahead and choose your heroes, boner-boy; see where they lead you.
The cynical attempts by certain politicians to stoke a class war…
The cynical attempts by politicians came long after the class war was started by the elite. and long after it was noticed by the people.
From here on, it will increasingly be every nation for itself – meaning a return to competitive currency devaluations and, in time, exchange and even trade controls.
Bring on the trade controls!
Simply put, too much of a good thing is too much of a good thing. And make no mistake, the decades of operating under a fiat monetary system have been a very good thing for the political classes and their pandering cronies.
Those good times are coming to an end.
I'm eagerly awaiting those good times coming to an end.
when the "pushing class war" is trotted out you can bet the author feels he is protecting his class and feels he is of the class worth protecting.
always and eternal the betters wish to deny what is human nature.
GO and catch a falling star,
Get with child a mandrake root,
Tell me where all past years are,
Or who cleft the devil's foot,
Teach me to hear mermaids singing,
Or to keep off envy's stinging,
And find
What wind
Serves to advance an honest mind.
If thou be'st born to strange sights,
Things invisible to see,
Ride ten thousand days and nights,
Till age snow white hairs on thee,
Thou, when thou return'st, wilt tell me,
All strange wonders that befell thee,
And swear,
No where
Lives a politician true and fair.
I wonder if anyone on the net has done some serious calculations about mass starvation in a real and lasting crisis. It seems that scenario is likely, yet no one is writing about it. I have no background in that subject, other than eating food myself, so I'm somewhat ignorant on where the breaking point is where food and maybe water are not readily available for most in the U.S.
Anyone read something on the subject and care to share what we would be facing, other than cats and canibalism?
Everything I have read says the shelves go bare in 3 days. Inasmuch as people in Japan were rummaging through empty stores just 3 days after the earthquake, I would have to agree with this assessment.
People will run out of food very quickly. If electricity goes out, most people don't know how to preserve the food in their refrigerator. That means the pantry is their only source of food. I give that one week before they feel the pinch, two weeks before they resort to whatever is in there and sit down to a ketchup sandwich. Three weeks and even the condiments and four year old can goods are gone.
Food doesn't get disributed properly in a panic. A lot of it is destroyed or horded. People wouldn't last a month before they had to take to the streets, and that would lead to riots and roving gangs leaving the cities. In fact, the big cities would see riots well before a month. Probably in a week or so.
The problem is there are so many possible disruptions to our efficient society that could cause such a scenario. There are just too many millions crowded into the coastal areas, and they are completely dependant upon everything going exactly as planned.
it's Just Time for Just In Time
"...other than cats and canibalism?"
Considering 45 million people are on food stamps... I can't think of any good scenarios besides that. I doubt those people will acquire the capacity to grow their own food within the time frame necessary to feed themselves before starvation. That alone should scare the hell out of you.
You can read up on the desperation in North Korea or the Horn of Africa and extrapolate. Americans are pretty obese and so could likely last longer than most.
G-20. BINGO. The Great Intervention (TGI). Size probably about $5T.
Exactly, if things get too crazy, G-20 Bingo, they change the monetary system and put us on a standard that will fix the insolvent balance sheets of all the troubled banks and treasuries.
Gee, now I wonder what that standard will be...?
A paper standard? Naw that wouldn't instill confidence and solve anything
A commodities based standard? No they couldn't ramp the prices of those commodities to make them solvent without destroying whole industries.
A silver standard? No, they aren't stacking silver in their vaults
It is either a tungston standard, or something else they are hording in their vaults. Gee, maybe it's something they are buying?
I might see things to simple and be horribly wrong , but too me it seems most observations are not applicable anymore.
Too me it seems like since 2008 , a lot has been done to not pop the derivatives bubble.
Even wiki states the trading of derivatives accounts for 11 times the global GDP , taking into account nobody knows exactly how big this thing is, it seems safe to assume
it is much bigger then wiki states.
Then there are the HFT algo's trading this toxic sh*t , with very few people really knowledgeable about what is going on.
The only evidence of acknowledgement of this issue is to see the whole world scramble to cover up this mess when it seems there is weakness in a TBTF bank , it seems the reason it is called TBTF.
Does any solution adressed have any meaning at all when there is a shadow economy/banking system multiple times that of the real one ......?
I wonder if this issue is being adressed at all , maybe by slowly trying to deflate it behind closed curtains or is the scene being set to just push the reset button again, ending up with the wealthiest people on the globe
still being left with the biggest piece of the resource pie (as they do with say...gold) and still pulling the strings.
And at #1556667/juwes: Look at the starvation in Africa , there can be argued a great deal for the reasons , but all the excess money going into commodities for a safe haven have helped the prices go up quite a bit overthere , 25 year´s ago there was a trade surplus of food ....
Also the news yesterday mentioned we exported inflation to India making them have 9% of this great exportproduct of western nations, i would guess a lot of not so rich people are not very happy about that
In the west S will hit the F before real famine , look at London ....here you have CNBC mentioning Apple taking over from Exxon as the biggest compagny on the market and the next channel shows London youth looting
for Iphones......go figure :(
So in order not to lie here deader 'n a doornail like Japan, do we do TWO more QEs before the Nov. election or just ONE??? Gotta goose it up for Obummer ya know....
I would love to hold the Fed and Wall Street responsible for this dynamic that we observed last week, everyone buying up Treasuries and driving interest rates even lower. However, I think this gives the power elite far too much credit for creativity. More likely it is just the result of investors and fund managers reacting to perceived risk in the same drone way they have been doing for years without thinking much about what is really different this time around. How sick is that? It’s like begging the wolf trainer for protection from his vicious pack after he just cut off your arm and Fed it (pun intended) to them.
Nonetheless, there does seem to be only two ways that the Fed can actually deliver on its promise to keep interest rates low through 2013:
Piggy back on stock market malaise while it lasts by essentially doing nothing and saying nothing. This is driving things in the Feds favor short term, so why change it?
Keep buying up the Treasury market and expanding the Fed balance sheet with funny money ala QE3, QE4,…..QEn.
The second process is the only one the Fed really has control over. So, of course there will eventually be QE3 once the stock market stops beating the crap out of itself and the S&P settles in at around say, 900?
RM has been pointing to the Euro banking ponzi and its inevitable collapse. When asked about the US financial ponzi he agreed it was huge, but stated that financial exposure of US banks is much lower than in EU to debt.
To develop this viewpoint he then stated two NON financial views of why the US system is more solid : 1° USD is reserve currency, implying that FED can print ad nauseum, and flood world liqidity with USD. The world has to live with it as its their reserve currency; including petrodollars, commodity dollars and the Yuan-peg which means there is no other viable alternative today. 2° If push comes to shove and the financial system crashes, the US has the nuclear arsenal to impose its will on the world.
These are two powerful arguments which allow much latitude to US PDs and HFs to rob the world (as RM avowedly does as well) on the basis "they are more ponzied than us". Agreed, but the debt triangle in the US economy is so huge that inspite of EU fragilitiy, if the Germans back a common front against US speculative play, it could lead to a USD and US economy collapse before the Euro tanks, with the concomittant help of Japan/Russia/China.
I am talking of the US deficit, the US debt, the FED debt, the shadow banking debt, the OTC derivative gross exposure held by PDs. All in trillions.
This race to bottom is now INEVITABLE, the lines are drawn and the US Oligarchs have put ALL their eggs into the FED supported ponzi of the WS assets market.
God help the capitalist world and may those who lead the ponzi fry in his hell. That is if you believe in that sort of thing.
Otherwise get ready for a deep slide down to nowhere except a dark place where Jules Verne took his goose named Gertrude.
+1
Agreed. It always keeps coming back to that debt thing, doesn't it.
methinks that the trump card has been, is and will be that the German gold sits under the bedrock in Manhattan. period. stop. end of story.
"I am beginning to feel a bit like one of the French unfortunates stumbling through the fog in the Ardennes, circa 1914."
Circa 1940.
If you think that TPTB don't know what is going on and are losing control, you are missing the big picture. This is all part of their plan. They aren't stupid and they understand human needs and frailities and are using them against the current structure. This is all part of a plan to crash the system and out of the ashes create a worldwide system that they control more fully. Now there are pockets that are problematic to them, so this crash will take care of them and in the end the people will beg for the implimentation of TPTB's new system. And it will be gladly provided. Beg for your cage, sheeple. Here it comes.
We now have the remote possiblility of someone running for President that's NOT pre approved by the Bilderburg, Neocon, BIS, cabal. Dr. Paul is waking them all up.
And.....minor, but I think the writer meant May 1940 in the Ardennes.
Schlieffen plan had the germans slurping in the frogs on the german's left flank while the main effort was through BeNeLux. But the plan lost on insufficient forces to complete the right flank penetration.
- Ned
{I'd say schwerpunkt, but I can't spell it ;-) }
{{there's a von Moltke chocklate cake junior thingie on his dying bed last statement that was ignored}}