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Visualizing The True Cost Of The First Bank Bailout: $3.5 Trillion And Rising At Over $1 Trillion Every Year

Tyler Durden's picture




 

In his latest letter to clients (which we will present shortly), Diapason's Sean Corrigan has one chart that explains beyond a shadow of a doubt what the true cost of the (First) Great Financial Crisis, the failure of Lehman, and the bailout of the US financial sector, is. The premise is ridiculously simple: the chart below compares the trendline of US debt before and after the Lehman from September 2008, and the rescue of everyone else who unlike Dick Fuld, was in Hank Paulson's good graces. What is immediately obvious is that US debt is currently $3.5 trillion higher than where it would be had America's banks not received a rescue. That is Sean's conclusion. It is however incomplete. The truth is that this is a proportional increase which if extrapolated into the future, means that every year the US will incur well over $1.2 trillion each and every year as a result of bailing out the banks. That is the true cost to Americans regardless of what Tim Geithner may claim. But note how we said First. Unfortunately, the Second Great Financial Crisis, that of bailing out insolvent sovereigns, is currently and process. And when all is said and done, the global cost in terms of new "trendline" debt will be many more trillions in incremental debt every year. And despite what economic voodoo theories say, near infinite debt always ends in near infinite pain. It will this time too. Guaranteed.

 

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Fri, 10/21/2011 - 11:10 | 1797143 Careless Whisper
Careless Whisper's picture

The Careless Whisper Mid-Morning Update

 

Disney (DIS) and Boeing (BA) Set To Run Commerce Dept

http://www.washingtontimes.com/news/2011/oct/20/obama-pick-owed-millions...

Mexico To USA: Stop Dumping Mexican Criminals On Mexico

http://latino.foxnews.com/latino/news/2011/10/21/mexico-to-us-stop-leavi...

China Police Looking For Occupy Shanghai Protesters

http://shanghaiist.com/2011/10/21/shanghai_police_hunting_down_occupy.php

Apple's Siri Uses Female Voice In USA, Male In Britian

http://www.guardian.co.uk/lifeandstyle/the-womens-blog-with-jane-martins...

Home Prices Fall 20% In Palm Beach County Year Over Year

http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2011/...

4,000 Pounds Of Weapons Grade Jamaican Purple Urple Siezed; No Arrests

http://www.miamiherald.com/2011/10/20/2463843/nearly-2-tons-of-marijuana...

EU To Make Ratings Downgrades Illegal

http://www.spiegel.de/international/europe/0,1518,792970,00.html

Guggenheim Museum Sells Interior Paint

http://www.guggenheimcolorbyfpe.com/store/pc/home.asp

VIDEO: Goes Viral In Hours; Bachmann Does Gaga

http://www.youtube.com/watch?v=uZRccAbMIbY

Fitch Upgrades Ford

http://www.detnews.com/article/20111020/AUTO01/110200467/1361/Fitch-upgr...

Hertz To Employees; No Praying On The Job

http://www.cbsnews.com/8301-201_162-20123683/hertz-fires-muslims-for-not...

Fri, 10/21/2011 - 11:17 | 1797182 scatterbrains
scatterbrains's picture

You forgot Citi not trying to feel the love today bitches!

Fri, 10/21/2011 - 11:33 | 1797254 Pladizow
Pladizow's picture

"The issue which has swept down the centuries and which will have to be fought sooner or later, is the people versus the banks" - Lord Acton 1834-1902.

"Are we there yet?" - Bart & Lisa to Homer - http://www.youtube.com/watch?v=raNM0UvR_Bo

Fri, 10/21/2011 - 12:34 | 1797433 Quixotic_Not
Quixotic_Not's picture

"Are we there yet?" - Bart & Lisa to Homer

A very direct, apropos comment that speaks to the human nature based paradigm of "arrival".

Everyone wants to arrive at there place in the Ponzi, to fully enjoy their piece of the Ponzi pie, fully realize there American dream, there endless supply of free lunches...

Even at this late stage in the bankster/politeer game, there are sheeple trying to reform BIG government to meet their ideologies, mindlessly following each other over the cliffs of ignorant bliss, still!

Witness the Tea Party and OWS movements that, instead of throwing out an utterly corrupt, completely useless political party duopoly, are attempting to unCORRUPT the (D) & (R) Free Crap Empire™, throwing darts at the BIG government dartboard that has been hidden from public sight for at least three generations now...

They aren't concerned with TRUTH, only their own personal demons, and as long as THEY THINK someday THEY MIGHT arrive, ending the .GOV system that has looted the planet since WWII is doable, they just have to get other people to believe in THEIR totalitarian solutions!

We don't need to just to readjust the (D) & (R) Free Crap Empire™, a little here and there, we need to arrive at FULL STOP, cleanse the apparatus and restart OUR government.

Unfortunatley, there's a reason it's called average intelligence, and there's also a reason that RAPE, PILLAGE, PLUNDER and MURDER continues unabated...

Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience. ~ John Locke 1690

Until the brainwashed electorate realize that to stop the banksters, and their politeer brethren, you MUST END the Ponzi, nothing will change!

There is a solution, and it's the same solution that established the USofA and ended, what was at that time, the BIGGEST Ponzi on the planet - The Divine Right of Kings:

The state of nature has a law of nature to govern it, which obliges every one: and reason, which is that law, teaches all mankind, who will but consult it, that being all equal and independent, no one ought to harm another in his life, health, liberty, or possessions ~ John Locke 1690

Keep It Simple Stupid (KISS)

 

Fri, 10/21/2011 - 12:53 | 1797524 Quixotic_Not
Quixotic_Not's picture

And the moment that I, or anyone else, posts an AMERICAN solution to the crisis, TPTB @ ZH un-sticky the thread...

Perfekt!

Fri, 10/21/2011 - 13:26 | 1797646 Lord Blankcheck
Fri, 10/21/2011 - 13:29 | 1797654 SRV - ES339
SRV - ES339's picture

So what action have you taken to address the situation, other than diss those that have?

OWS has broken the inertia... a very important step, and short of an all out revolution (I'm guessing you're not up to participation in that either), all we can expect at this point. 

Fri, 10/21/2011 - 17:20 | 1798627 Seer
Seer's picture

If I could have I would have given you more than my allowed quota of a single green arrow.

We must, however, also understand the impact of GROWTH itself.  The banking industry is but an extreme extension of the ramifications of rampant growth; clearly we've seen how ugly things can be; but, just dumping this element still leaves us with the core issue...

Fri, 10/21/2011 - 18:37 | 1798886 StychoKiller
StychoKiller's picture

The slope of that next leg up on the chart WILL require ropes and pitons!  Govts, banks, Ignorati, please let me introduce you to Exponential functions!

Fri, 10/21/2011 - 13:06 | 1797568 Pitchman
Pitchman's picture

Pladizow: Right you are.

The chart and commentary s all fine and good (really bad) yet the true cost must take into account the $14 Trillion ++?? in guarantees and backstops which represents untold $ Trillions in opportunity costs or money withdrawn from funding future growth.  Zero Hedger's please provide an analysis of this.

OH: And then there is the other shoe.

- Inflection Point

 

Fri, 10/21/2011 - 11:33 | 1797243 Unprepared
Unprepared's picture

 

But, but, but ... the NPV(bailout CF) assuming a required rate of return of 0% is higher than the economic opportunity cost of lost campaign and lobbying donations due to lower bankers’ bonuses.

The rational political decision is easy to make.

Do not argue.

 

Fri, 10/21/2011 - 11:34 | 1797255 adr
adr's picture

Fitch upgraded Ford because they shipped 100k Explorers to dealer lots that won't sell last month.

Fri, 10/21/2011 - 11:11 | 1797146 redpill
redpill's picture

BUT BUT BUT PHILLY FED PHILLY FED!

Fri, 10/21/2011 - 11:11 | 1797147 samsoro
samsoro's picture

you mean $3.5 trillion (not billion) in the main text

Fri, 10/21/2011 - 11:21 | 1797198 Ruffcut
Ruffcut's picture

Yes should be T as in TREASON.

Fri, 10/21/2011 - 11:34 | 1797258 Dr. Richard Head
Dr. Richard Head's picture

Interstingly enough the left right divide was so prominate that Obama, McCain, and Bush ALL supported this effort of unbridled theft that Obama and McCain voters were busy arguing over bullshit on the edges of the problem. 

The force is strong in the media.

Fri, 10/21/2011 - 11:42 | 1797295 scatterbrains
scatterbrains's picture

They're gonig to need a new wedge. Guns and abortion is getting old. What will it be I wonder?

Fri, 10/21/2011 - 11:48 | 1797316 Dr. Richard Head
Dr. Richard Head's picture

It's already playing out - OWS versus Tea Party. Battle royal bitchez.  I am going to sit that one out of course. 

Fri, 10/21/2011 - 12:24 | 1797438 Temporalist
Temporalist's picture

Well kind of...it's more of the "Class Warfare" theme they are throwing out.  That is why everyone on all sides have said it.  It's obvious.  Dems think they are lower class even though they claim to be the educated elite and Reps think they are the wealthy class that needs to care about taxes when they are mostly lower middle class blue collar.  They don't even know where they really stand so pitting them against one another will be as easy as always.

Fri, 10/21/2011 - 12:37 | 1797464 Woodyg
Woodyg's picture

Funny but one of the creators of the tea party- not the coopted koch brothers version - said he agreed with the OWS.

Hell many tea partiers are down at the protests -

The main problem is it doesn't fit neatly into your 2 parties against each other flawed paradigm.

Both parties are Captured.

Fri, 10/21/2011 - 14:57 | 1798072 earleflorida
earleflorida's picture

the OWS have already cannibalized the TP's

Fri, 10/21/2011 - 11:12 | 1797148 bigwavedave
bigwavedave's picture

Trillion with T Byler 

Fri, 10/21/2011 - 11:22 | 1797205 flacon
flacon's picture

"T" as in Teats, or "B" as in Boobs... Same difference...does it even matter any more?

Fri, 10/21/2011 - 12:32 | 1797451 s2man
s2man's picture

... pretty soon you're talking about a lot of money.

Fri, 10/21/2011 - 13:49 | 1797763 Zero Debt
Zero Debt's picture

No worries, just 0.003 quadrillion. Ctrl+P

Fri, 10/21/2011 - 11:13 | 1797153 jekyll island
jekyll island's picture

To Hell with the Sovereigns, the Fed just allowed BAC to put us taxpayers on the hook for $1 trillion.  WTF???  Europe is just a headfake, the Fed is about to bail out TBTF's all over again.  

 

 

 

Fri, 10/21/2011 - 14:39 | 1797977 L G Butz PhD
L G Butz PhD's picture

Yes, more SAD news. Saw that too on the blogs, but did it make MSM yet?

Fri, 10/21/2011 - 11:16 | 1797154 DormRoom
DormRoom's picture

USD-YEn collapsing.  Japan's gonna go into a deep recession, agitating sovereign default risk.  How's the world going to handle that crisis.

U.S kicking can down the road, facillated EZ crisis.  EZ kicking down the road, may bring huge trouble for Japan.   Everyone is kicking the can down the road, hoping someone else blows up.    

Fri, 10/21/2011 - 11:16 | 1797172 buzzsaw99
buzzsaw99's picture

the joo bankers don't give a rat's ass about the japs. fuck 'em.

Fri, 10/21/2011 - 11:24 | 1797199 Fukushima Sam
Fukushima Sam's picture

Things are looking up in Japan.  They have a whole new market exploding for decontamination services.  This is bullish for the Japanese economy!

http://ex-skf.blogspot.com/2011/10/decon-bubble-in-fukushima-contractors...

"If blasting with power washer does decontaminate, I am pretty sure Russians, Ukrainians, and Belarusians have done that long time ago."

Fri, 10/21/2011 - 11:14 | 1797159 LawsofPhysics
LawsofPhysics's picture

The debt is a fraud, pass the hopium pipe.

Fri, 10/21/2011 - 11:14 | 1797160 PaperBear
PaperBear's picture

"US debt is currently $3.5 billion higher than" ?

Shouldn't that be trillion ?

Fri, 10/21/2011 - 11:14 | 1797161 Duuude
Duuude's picture

 

...regardless of what Tim Geithner may claim...

 

Fri, 10/21/2011 - 11:16 | 1797167 carbonmutant
carbonmutant's picture

Amazing linearity....

Fri, 10/21/2011 - 11:46 | 1797310 oak
oak's picture

It is only a slope change, wait util 2015, there might be another steep chnage.

Fri, 10/21/2011 - 11:16 | 1797168 msorense
msorense's picture

This is what media shills like Erin Burnett are trying to hide from the American public.  Instead of informing them of the true cost of the bailouts they do the American public a complete disservice.  She sure found the stupidest protestor - I think anyone who reads this blog regularly would have been able to put her in her place.

Fri, 10/21/2011 - 11:36 | 1797271 mjk0259
mjk0259's picture

She probably 'interviewed' 6 and picked the worst one to broadcast. Anyway, protestors are doing their job just by pointing out that the system is not working. They should not be expected to understand more than that.

Fri, 10/21/2011 - 14:35 | 1797952 trav7777
trav7777's picture

that's exactly how news works.

Even "respected" sources like 60 Minutes do it...for example, in a hatchet piece on polygraphs, they did 19 poly examiners and only ran with the 3 that supported their agenda.

Fri, 10/21/2011 - 11:38 | 1797273 tickhound
tickhound's picture

Engaged to Citigroup banker...

She is not in the service of the public therefore her job isn't to inform you.  She's in the service of her current and former employers... Goldman Sachs, Citi, NBC/GE, CNN.

She actually believes what she says...

She has become quite the symbol for what is wrong in our economy, how it functions, who it benefits, and sadly who we choose to celebrate.

Watch her get shouted down at OccupyVegas.  She is obviously rattled... 

http://www.youtube.com/watch?v=USN6YNaLJRk

 

Fri, 10/21/2011 - 12:13 | 1797382 tickhound
tickhound's picture
A look into Erin's soul... and her "heart" from Men's Health mag just a few years ago. http://www.menshealth.com/best-life/schedule-saving-travel-tips   EIGHT WAYS TO IMPRESS ME - Erin Burnett 1. Pack Your Bags

Any guy who can plan a trip to an exotic locale, such as Mongolia, Mozambique, or Papua New Guinea, would impress me.

 

2. Buy Me a New Atlas and Globe

 

You could unlock my heart by allowing me to dream up my next trip. I love to travel, and hope to eventually set foot in 100 countries. I have many more to go.

 

3. Do Something Special for My Parents

 

 

Family is important to me, so round-trip business-class tickets to Australia and New Zealand for my parents would earn you big points in my book.

 

4. Relax Me

 

Yoga keeps me calm, so I'd be impressed if you thought to send a yoga instructor to my apartment for private sessions.

 

5. Help Me Work Out

 

Finding an exercise bike at my door would be great for rainy days when my Raleigh M80 mountain bike and I are stuck indoors.

 

6. Edify Me

 

Reading is a passion of mine, so a gathering with a couple of my favorite authors, especially Jared Diamond (Guns, Germs, and Steel) and Robin McKinley (The Blue Sword) would make for an exceptional evening.

 

7. Please My Palate

 

Hiring a personal chef to prepare meals for the few nights a week I am home would be unforgettable.

 

8. Send Me Packing

 

A man who recognizes the importance of my time with the girls is a keeper. A long weekend spa getaway for my sisters and me would be perfection.

 

ALL 8 ways include BUYING HER SHIT.  The perfect shill for debt financed consumption.

Fri, 10/21/2011 - 12:32 | 1797452 Momauguin Joe
Momauguin Joe's picture

Stupid cunt. She needs the man; the man doesn't need her.

Fri, 10/21/2011 - 13:04 | 1797473 Quixotic_Not
Quixotic_Not's picture

Marie Antoinette also believed in what she said when she exclaimed Let them eat cake!

She too was a whore representing the ruling elite of her nation, the House of Bourbon, how did that work out for her?

"Fear is the foundation of most governments; but it is so sordid and brutal a passion, and renders men in whose breasts it predominates so stupid and miserable, that Americans will not be likely to approve of any political institution which is founded on it."  ~ John Adams

Fri, 10/21/2011 - 12:05 | 1797376 ImNotARobot
ImNotARobot's picture

Erin Burnett is certainly a shill, but a damn hot shill. 

Fri, 10/21/2011 - 13:03 | 1797560 davepowers
davepowers's picture

would edify Erin Burnett

would not edify Erin Burnett

 

pole of the day ;)

Fri, 10/21/2011 - 11:16 | 1797169 Tic tock
Tic tock's picture

with numbers like these, cannot anyone, Republicans', the President, the Joint Chiefs, stand up to Bernanke? - is this not a clear and present domestic threat?

Fri, 10/21/2011 - 11:35 | 1797264 Woodyg
Woodyg's picture

Sorry but all three named above have been bought off for decades.

Fri, 10/21/2011 - 11:16 | 1797173 GeneMarchbanks
GeneMarchbanks's picture

After the second bailout that chart goes parabolic. Not too far off now.

Fri, 10/21/2011 - 11:18 | 1797184 baby_BLYTHE
baby_BLYTHE's picture

When the money stops flowing down to the man on the street, the blood starts flowing in the streets- Gerald Celente

Fri, 10/21/2011 - 12:16 | 1797408 centerline
centerline's picture

I enjoy watching Celente interviews.  He is very animated.  He is also going to be proven correct.  Unfortunately.

Fri, 10/21/2011 - 11:19 | 1797188 Manthong
Manthong's picture

Geez, when will people finally understand that financially, they are all dead men walking?

Fri, 10/21/2011 - 12:17 | 1797413 centerline
centerline's picture

Yup.  We are all zombies now.  The wealth (as defined by the current, ridiculous system) has already been vaporized.  What we are currently witnessing is only the recognition of this truth.

Fri, 10/21/2011 - 11:19 | 1797191 WineSorbet
WineSorbet's picture

And nobody gives a shit.  They just see the stock market rise and look at me like I'm nuts when I try to explain what's really going on.  I'm DONE!

Fri, 10/21/2011 - 11:27 | 1797228 Caviar Emptor
Caviar Emptor's picture

Stock market has not kept pace. Think about this: we haven't exceeded the 2007 peak, let alone the 2000 peak, yet the buying power of a dollar in 2000 was nearly twice what it is now (crude prices were nearly 4X less!). Factoring that in you can see that the value of an investment in stocks is a loser in real terms. And by the way, 2000 is roughly when the Gold bull run began, exactly tracking the loss in dollar buying power

Fri, 10/21/2011 - 11:44 | 1797304 Pure Evil
Pure Evil's picture

But, but, but....

MillionDollarBonus said we should be buying up the retail and financials!

http://www.zerohedge.com/news/es-soars-hope-qe3-non-lite-expectations-takes-out-100-sma

Fri, 10/21/2011 - 11:34 | 1797257 No Mas
No Mas's picture

That's because you and the ZH Sheeple are nuts!!  What happened to all the doom and gloom predictions here about earnings?  I remember in Nov 2010 the Tyler Durdens spoke of $10 loaves of bread!  For christsakes sheeple, your meme is wrong.  Did you ever stop to evaluate you position on things?  You've been wrong for so long it would seem an easy thing to do.

Get used to this stuff.  The markets are going to be fine.  The OWS idiots will form yet another socialist party and fade away.  The banks are going to do just fine with the foreclosures.  The sun will come up tomorrow on 9% unemployment and absolutely nobody that matters will give one good damn.

So when the market is up and people look at you like you're nuts, it is because you are nuts!

Fri, 10/21/2011 - 11:40 | 1797291 jdelano
jdelano's picture

Some men you just can't reach.  Take your sunshine happy bs elsewhere.   

Fri, 10/21/2011 - 11:55 | 1797339 LawsofPhysics
LawsofPhysics's picture

By all means, go "all in" then.  Show some balls and make a call.  Tell us all, where will the market and that loaf of bread be one year from now? 

Fri, 10/21/2011 - 11:20 | 1797197 Thunder Dome
Thunder Dome's picture

LIQUIFY!

Fri, 10/21/2011 - 11:27 | 1797225 flacon
flacon's picture

Belgium's plan to wash its dead down the drain: Bodies would be dissolved in caustic solution... and flushed into the sewer

Read more: http://www.dailymail.co.uk/news/article-1292778/Belgium-considers-proposals-dissolve-bodies-flush-sewage-systems.html#ixzz1bQkLHiiW

Fri, 10/21/2011 - 12:08 | 1797379 Manthong
Manthong's picture

Doesn't sound very halal to me.. kind of like being buried at sea, except with acid.

Might be a good business opportunity selling self-immolation protest supplies.

Fri, 10/21/2011 - 11:24 | 1797201 MeetTozter
MeetTozter's picture

The Banks contribution to the $3.5TT needs to be reduced by the cost of the new multiple off-the-books wars we are waging

Fri, 10/21/2011 - 13:28 | 1797657 Alex Kintner
Alex Kintner's picture

Wars and all the Stimulus $$ spent.

My question is what about all the worthless MBS that the taxpayers now hold thanks to socialized losses. Are those MBS counted as assests and valued at 100 cents on the dollar. Would love to see a real accounting of all the crap forced down the mouth of the taxpayer.

Fri, 10/21/2011 - 11:22 | 1797204 monopoly
monopoly's picture

Yes, agree, the question is when does that happen. This could go on and on and on...until it stops.

Fri, 10/21/2011 - 11:23 | 1797210 Caviar Emptor
Caviar Emptor's picture

First let me say It's good to own Gold. It's the place to be. Ironing out the wrinkles of day-to-day trading, the value of gold is following Sean Corrigan's trendline nicely. Add to that the risks inherent to the 2nd Great Financial Crisis (Sovereigns) and gold will be on steroids. Not just because of the quadrillions that will be printed and the effect that has on the buying power of individual currencies, but also because of the political fallout and ensuing turmoil where nobody can know who will be winners and losers, where the landmines are buried and how the world will look in the next 2 years, let alone 5 or 10. 

Fri, 10/21/2011 - 11:24 | 1797212 Dr. No
Dr. No's picture

Assuming a linear expansion of debt is flawed.  Debt must grow exponentially in order to sustain the current economic growth rates.  Therefore the 3.5T growth above the trend line is consistent and expected.  More to come.

Fri, 10/21/2011 - 12:23 | 1797432 Truffle_Shuffle
Truffle_Shuffle's picture

Dr. Albert Bartlett….”the greatest shortcoming of the human race is the inability to understand the exponential function”. 

Fri, 10/21/2011 - 12:40 | 1797471 Seer
Seer's picture

So stupidly easy that even a child could understand.  Yet, here we are...

As others have stated, I found it to be the most important video I'd ever seen.  It's the Red Pill.

Dr. Albert Bartlett, Joel Salatin and Thomas Jefferson, three folks most responsible for influencing my pursuit of farming.

Fri, 10/21/2011 - 13:19 | 1797619 Truffle_Shuffle
Truffle_Shuffle's picture

Joel is an inspiration and a must go to source for any sustainable farm endeavors.  I came across Dr. Bartlett, Michael Ruppert's Collapse, Food, Inc. and Zeitgeist all the same weekend around 2 years ago.  Needless to say, my life has never been the same.   

Fri, 10/21/2011 - 11:25 | 1797213 vegas
vegas's picture

Guaranteed pain and with it a gold price that eventually will become the shadow economy. Hyper-inflation is a slow inexorable process that only manifests itself at the very end - way too late for feckless politicos to do anything about it.

Greatest bubble ever will in retrospect be the US Treasury market. Giving money to governments at these rates is absurd. Only later will p[eople finally figure this out. As always, ZH is ahead of the curve.

Fri, 10/21/2011 - 12:39 | 1797469 Quinvarius
Quinvarius's picture

Treasuries are merely  the mechanism by which the Fed gives free money to the Treasury and some skim to bankers.  There is no market there.  I don't know if there ever will be.  What is abusrd is that they pay any interest at all.  That is no longer their function and it works against the current intent of the people weilding the Treasury tool.  The interest rates on Treasuries are a mandate by the Fed, the same as any other rate they are responsible for setting.

If the Treasury market was a market, I would agree they are in a massive bubble.  But I think they are not a market and cannot be valued in public beyond the grift they give to bankers.

Fri, 10/21/2011 - 15:28 | 1798204 Seer
Seer's picture

But... just what IS a "bubble?"  Isn't it something that represents an outline of something that is supported by something that cannot endure the natural forces against it?  In the case of a balloon it's a threat from the inside -too much pressure- and a threat from the outside -being pricked from an external source, both result in the "outline," the general shape of what we associate a balloon as (nearly always that of being inflated) being decimated (perhaps irrevocably so).

It is IMPOSSIBLE for all existing interest to be repaid along with all debt.  As dubious as it is, and it's IS quite dubious, debt at least has a trail and a claim (though it's basically a slave claim).  "Interest," however, has NO accountability, the debt for it does not exist: yes, it can be put down in books as future recoverables/profits, or whatever, but it never existed as (dubious) money in the first place.

It is absolutely IMPOSSIBLE for this system to continue.  And since Treasuries are part of the system they too won't continue.

That which cannot last forever, won't!

Fri, 10/21/2011 - 18:46 | 1798912 Rearranging Dec...
Rearranging Deckchairs's picture

My trip to Costco today convinces me that massive inflation is already starting to show itself.

Other than gold I think bullets, high quality metal tools, golf clubs, metal baseball bats, pitch forks and machetes are the perfect hedge.

Fri, 10/21/2011 - 11:27 | 1797224 slewie the pi-rat
slewie the pi-rat's picture

coffee and dr copper are both up 5% today!

causation, right? 

Fri, 10/21/2011 - 11:27 | 1797230 Schmuck Raker
Schmuck Raker's picture

Revenge Of The Nerds Part-QE3: Bernanke's Quest

Fri, 10/21/2011 - 11:29 | 1797239 Caviar Emptor
Caviar Emptor's picture

$3.5 Trillion = Corporate Welfare State. 

Fri, 10/21/2011 - 11:30 | 1797242 Woodyg
Woodyg's picture

Basically enough for Universal Health Care - but we can't have both a decent health care system that is all inclusive AND bail out the predators and kleptocrats.

Just so people understand languauge:

Socialism = Universal Health Care

Fascism = bailing out the vampire squid

At least there are true benefits associated with the Universal Health Care such as Every Other Industrialized Country has.

1. 50% savings on cost of health care
2. Longer and healthier lives
3. Increased competitiveness of our businesses which would no longer have to cover employees
4.bankrupt the jackals running the true Deah Panels - the health insurance corps - cutnoff their blood money

Fri, 10/21/2011 - 11:40 | 1797288 mjk0259
mjk0259's picture

Plus the reduction in stress from not wondering how/if your insurance company is going to get out of most of your bill almost every time you use it for something other than a doctor visit and how you can possibly afford to retire when the projected cost of insurance is more than most people could possibly save.

Fri, 10/21/2011 - 15:37 | 1798248 Seer
Seer's picture

Was just talking to my wife about that the other day: she came from Canada and is now seeing how "efficiently" our sick care system [doesn't] work.  I was telling her that it's not worth my time (time is the only thing you cannot get more of!) to try and utilize a complicated plan (I'm at least fortunate enough that I have a choice[?]), that simpler would be better.

It was the first time that I tried to make heads or tails out of my existing plan.  And talk about convoluted!  That's what they all try to do, make things complicated so you view them as actually doing something, adding "value!"  My wife and I are likely of at least "average" intelligence, yet it was a bit of a struggle understanding just how it all was supposed to work.  I cannot imagine what it's like for others who cannot warp (yes, W A R P!) their heads around these things.  Seems pretty clear why people can go on shooting rampages...

Fri, 10/21/2011 - 11:44 | 1797301 Payable on Death
Payable on Death's picture

Aw come on. "50% savings in health care". Don't be an idiot. Nobody believes health care costs will decline under govenrment control. What some people (rightly) believe is that their personal cost will decline because someone else will pay for it. We got Obamacare because (incrementally) of the Bush tax cuts--took many people off the tax rolls and made them infinite demanders of things they don't have to pay for.

The rest of your comments also show the intellectual depth of, well, Woody Guthrie.

Fri, 10/21/2011 - 11:56 | 1797345 Woodyg
Woodyg's picture

You are a DEFEATIST - funny but every other developed country can do it but the USA can't?

Defeatism defined.

Obama care is nothing more than corporate welfare - give me a freakin break!

Yo're probably the same guy that continually writes some dumb " people are too concerned watching Dancing with the Stars to get off the couch"

And then bitch about Occupy Wall Street where they are putting thwir money where their mouth is and walking the walk.

You've obviously given up - why attempt to pull people down to your defeated life.............

Either that or your are PROFITING off the sicknss and misery of others - even more unchristian and quite pathetic.

Fri, 10/21/2011 - 12:20 | 1797424 Payable on Death
Payable on Death's picture

On the contrary, I'm not defeatist. I'm exceptional. We can do better than socialized medicine.

You haven't addressed my point: government will not reduce the cost of health care. (ADVICE: rationing by waiting is a poor answer.)

P.S. I am symapthetic with OWS. They see the oligarchy. Too bad you don't see the government half.

P.P.S. Life is good.

Fri, 10/21/2011 - 12:45 | 1797477 Woodyg
Woodyg's picture

What part of Every Other Country Can Do It don't you understand?
But the USA can't - sounds defeatist to me -

Quit with the clitches - although it plays well with the bumpersticker mentality.

So people should just accept No Coverage if they are unlucky enough to have a pr-existing condition or lose their jobs?

You do know that an extreme lack of empahy you are exibiting is the very definition of a Sociopath.

I'm hoping we bring back the 90% tax on extreme wealth the usa had for generations - i'm sure you'll be one of those people crying like o'reilly - "we"ll leave the usa if that happens"

We coildn't get so lucky than outsource some of our sociopaths.

Fri, 10/21/2011 - 13:14 | 1797599 Payable on Death
Payable on Death's picture

Empathy does not make right. I will not confuse your intent with your results. The welfare state has harmed, for example, the black community. Watch this: http://www.youtube.com/watch?v=FhgAPKY7R_I

My beef isn't ultimately the waste of tax dollars. It's that your empathy has caused this young man to not be a man. He is empowered by the empathy of others to "Be me". What a waste. Worse, he is also empowered to exploit the woman he sometimes lives with. She is the one I feel most sorry for. She receives money for being unemployed, unmarried, and a mother--so she is. And, then she is expected to host roving men--who don't have their own living quarters, even though they've been paid for. The results of empathy are clear. The support of others is often not helpful.

It's a matter of degree, and we've long ago reached the tipping point. The question before the country is: "Does the government exist to give you money, or to protect your freedom?"

Fri, 10/21/2011 - 13:34 | 1797666 Woodyg
Woodyg's picture

My freedom to be raped and gouged by a corrupt health care system that only exists based on legalized monopolies?

That freedom?

Your welfare state is a Corporate Welfare State - where in the name of 'helping' the poor the corporations profit thru the Capture of the political system.

You get the both of best predator worlds - blame the poor while the rich kleptocrats and corporate predators make out like bandits.

The Health Care system is the same as the banking system - run by monopolists who have convinced many like you that there is No Other Way.

Which many many other countries proveis wrong.

Besides what part of the Highest per capita spending on health care coupled with #50 in life expectancy do you not understand.

And yet you say it's the best we can do.

Pathetic defeatism -- go tivo your dancing with the stars

Fri, 10/21/2011 - 14:44 | 1798004 Woodyg
Woodyg's picture

One more point -- how is #50 in the world Exceptional?

At twice the price?

I think you might have the wrong word there buddy.

Fri, 10/21/2011 - 15:58 | 1798348 Seer
Seer's picture

"We can do better than socialized medicine."

Who is "we?"  And, can you provide a real-world example?

Further, it seems (yes, I'm making the wild assumption that) you ASSUME that it would be based in capitalism.  Sorry, but capitalism relies on interest, and interest is a practice of exponential growth- FAIL!

NOTE: I'm NOT advocating "socialized" medicine, I'm just someone who believes that logic needs to be applied before ANY "solution" can be put into practice.

"I am symapthetic [sic] with OWS. They see the oligarchy. Too bad you don't see the government half."

Did I miss that the person you're responding to is somehow part of OWS?  (sorry if I did) Seems like you're trying to make a connection between govt supporters and OWS this way.

Fri, 10/21/2011 - 14:52 | 1798036 malek
malek's picture

You are ignorant or stupid.

you said on "50% savings in health care": every other developed country can do it but the USA can't?

Oh really. Compared to what and when. Examples please.

One example I can give: In Switzerland the health insurance costs rose from 1996 to 2006 by 8% annually, way above inflation.

Fri, 10/21/2011 - 16:00 | 1798369 Seer
Seer's picture

8% means that in just over 8 1/2 years the cost would double.  There's that pesky exponential function again!  Oh, but "growth" is good!

Fri, 10/21/2011 - 13:53 | 1797782 zerozulu
zerozulu's picture

Education and health should be government’s responsibility.

If I am sick and cannot be a productive member of the society. It is not I, who is a looser. It is country’s loss. If I am failed to provide excellent education to my kids or need to work over-time for my kid’s education and fail, it is not mine but country’s loss.

This may be against the sprit of capitalism but hybrid is what we need.

Fri, 10/21/2011 - 16:07 | 1798403 Seer
Seer's picture

Why should it be measured on a country level?

But... think about all this a bit more and just as you see the "other side" as missing the BIG PICTURE, you too are missing the BIG PICTURE.

There are not enough resources in a limited resource-based world to allow for perpetual growth, no matter HOW we do it.  Wanting great education or health care for everyone is noble, but, given the actual finiteness of this planet it's not possible.  Capitalism is supposed to "allocate" resources, but, unfortunately, it relies on continued expansion (FAIL).  Socialism is the same (FAIL, though perhaps less efficiently, more slowly).  Communism is the same (FAIL, though perhaps less efficiently, more slowly).  Maybe it's time to act like adults (rather than bickering children) and start asking the tough questions?

Fri, 10/21/2011 - 11:53 | 1797329 DOT
DOT's picture

You may be on to something here kido:

1. Bullshit

2. Bulshit also

3. Big Bullshit

4. mostly Bullshit.

 

 

With enough Bullshit all our problems are solved !

How long have you worked for OFA ?

Fri, 10/21/2011 - 12:15 | 1797404 Woodyg
Woodyg's picture

1.  Every other developed country in the world spends between 8 and 11% of gdp on Universal Health Care -  we spend over 17% And have one of the largest gdp's per capita in the world.  So it is around 50% savings.  Math must not be your strong suit.

2. The usa is # 50 on the World Life Expectancy list -  and we spend the most per capita for bad results.

3. How can you even say that taking The Health Care expenses from businesses woldn't lower their costs -  that's just idiotic.

4. The health care industry decides All The Time what to cover -  took an acne drug when you were a teenager -  that cancer is a pre-existing condition -  no treatement for you -  THAT occurs All the freaking time -  THAT is a DEATH PANEL.

One thing i'll give you is you don't let something as inconsequential as the FACTS get in the way of your failed ideology.

Fri, 10/21/2011 - 12:41 | 1797456 Payable on Death
Payable on Death's picture

3. Geez man. Get a clue. You can't "take" the cost. It has to be paid by someone. For example, if the government pays, they must get the money from taxpayers. Proponents of Obamacare claim cost savings to businesses and then demand higher taxes on corporations. Not too bright...

Fri, 10/21/2011 - 12:50 | 1797496 Woodyg
Woodyg's picture

For christ sakes get up To speed - obama care is nothing more than corporate welfare.

If the cost of health care goes from 17% down to 11% and everyone is covered and lives longer (as occurs in every other developed cpuntry) then there is a 6% of gdp savings.

Peoplenare already paying the 17%

Math must not be your strong suit - either that or you are blinded by ideology.

Fri, 10/21/2011 - 17:27 | 1798653 Seer
Seer's picture

"then there is a 6% of gdp savings."

Well, OK, this isn't exactly true.  The 17% still circulates, it's just that the hypothetical 6% "savings" doesn't go to the medical insurance folks (or the like).  BUT, there is NO increase or decrease unless that 6% "savings" is shown to go toward "productive" activities (such as manufacturing, and only really if that finds its way as an export can it then really ADD anything).

Fri, 10/21/2011 - 16:14 | 1798437 Seer
Seer's picture

I don't want Obama-care either.  I also don't want to agree with anyone who is unable to quantify anything via sound mathematics: the person that you responded to provided fairly clear math; if you cannot refute it then all that you babble on about is merely rhetoric- I suggest that you arm yourself better than just "govt = bad."

P.S. I'm a proponent of ZERO GOVT (and am anti-corporatocracy), in which case spare trying to label me as a Statist.

Fri, 10/21/2011 - 11:30 | 1797245 Dick Darlington
Dick Darlington's picture

Trichet would call this zstability.

Fri, 10/21/2011 - 11:34 | 1797259 Fix It Again Timmy
Fix It Again Timmy's picture

Honey badger doesn't give a shit...

Fri, 10/21/2011 - 12:18 | 1797414 Dumpster Fire
Dumpster Fire's picture

Cuz he toking up

Fri, 10/21/2011 - 11:37 | 1797276 DavidC
DavidC's picture

It will this time too. Guaranteed.

Yes, it's just taking a damned long time - I guess the utter desperation of the banks and politicians can go on longer than anyone expects (well, when you control the printing presses it's going to be inevitable).

DavidC

Fri, 10/21/2011 - 11:38 | 1797280 Caviar Emptor
Caviar Emptor's picture

Will the price of oil keep doubling every 5 years? 

Gold has kept pace and exceeded for this and quite a number of other reasons. Oil is only one of many things that keep eroding the buying power of the dollar and all paper assets. 

And if we bail out all the bad paper that the banks are holding, then the buying power will drop off even more precipitously. And since the rat poison has infected every major global currency, gold is the only life preserver in a stormy sea. Stay afloat, buy a life-preserver. 

Fri, 10/21/2011 - 17:29 | 1798660 Seer
Seer's picture

"Oil is only one of many things that keep eroding the buying power of the dollar and all paper assets."

No, it's money printing (inflating the money supply) that's resulting in eroding the buying power of the "dollar!"  (well, yes, the "value" of oil may also be increasing based on its increasing scarcity)

Fri, 10/21/2011 - 11:39 | 1797286 Jones79
Jones79's picture

is it true that the only new (i.e., non-extrapolatable) contributor to the national debt since the crisis is the bailout of the banks?  If so, the study is fine; otherwise, it's not fine.

Fri, 10/21/2011 - 11:40 | 1797287 Jones79
Jones79's picture

is it true that the only new (i.e., non-extrapolatable) contributor to the national debt since the crisis is the bailout of the banks?  If so, the study is fine; otherwise, it's not fine.

Fri, 10/21/2011 - 11:43 | 1797299 Mark123
Mark123's picture

Um, what about the cost of Fannie, Freddie, Ginnie and FHA....all lurking out there and fully backed by the good ol' taxpayers.  This would add a few more $'s to the cost.

Fri, 10/21/2011 - 11:53 | 1797330 Joe Davola
Joe Davola's picture

Apparently 'we made money on the deal' doesn't mean what I thought it did.

Fri, 10/21/2011 - 11:54 | 1797336 unununium
unununium's picture

Aw... I thought from the headline somebody finally traced the risk-weighted return on TARP funds to calclulate the true size of the taxpayer-funded bailout.

In other words, suppose we had let the banks fail and used the $700B to buy stocks after the ensuing 90% decline.  That'd make a dent in the national debt.

Instead we gave those gains to the banks.

 

 

Fri, 10/21/2011 - 17:49 | 1798729 Seer
Seer's picture

"Instead we gave those gains to the banks."

Wasn't it free money that was given to the banks, not "gains?"

If you mean "possible" gains from stocks, then yes, that could be a point.   However, it's really a zero-sum game at this point- doesn't matter, there's no way in hell we can correct this.  The System itself cannot operate without debt, and as soon as we cash in all debt the system would die!  Yeah, we could restructure all we want, even get rid of the Fed, but as long as it's all about fractional banking we're going to eventually hit a wall.

Fri, 10/21/2011 - 11:56 | 1797337 Pure Evil
Pure Evil's picture

The WS banks have to somehow come up with the money to get Obammy re-elected.

One trillion in deposits backing up $53 trillion of derivatives over at BAC certainly ain't gonna do it.

Fri, 10/21/2011 - 13:38 | 1797706 Woodyg
Woodyg's picture

The oilybomber or romney? Both are rolling in the corporate cashola.

Both are bought and paid for

Both will continue thenkleptocratic monopolistic business model so dear to the vampire squids controlling both parties........

Hence the rise of both the tea party and the OWS crowd.

Their model of divide and conquer is alive and well.

Fri, 10/21/2011 - 17:52 | 1798739 Seer
Seer's picture

I'm thinking that none of this will get corrected as long as their are idiots running around who think that this is a partisan issue...  Sigh, you're a long-time ZH member and you still haven't figured it out!  Fucking Darwin Award to you...

Fri, 10/21/2011 - 11:55 | 1797344 PulauHantu29
PulauHantu29's picture

Saving the financial system is very different then Bonusing/Rewarding the people who caused it.

 

Fri, 10/21/2011 - 17:57 | 1798750 Seer
Seer's picture

Not sure about that...  If you nix their bonuses/rewards they'd jump ship and you'd lose track of them come time to oil up the guillotine.

Let the rats go and we'd still have a leaky boat (which would probably attract yet another batch of rats).

NOTE: none of these people "caused it," it's been built in from the beginning.  All these people did was expedite the failing of the system.

Fri, 10/21/2011 - 11:59 | 1797351 marcusfenix
marcusfenix's picture

hey guys, off topic but just a reminder-

the world is coming to an end (again) today...

that's right, our friend Harold Camping is dead certain this time, so you may want to get out that bucket list and start checking things off ...

Fri, 10/21/2011 - 12:00 | 1797355 goldfreak
goldfreak's picture

But, but Erin told us that the government made money with the bailouts

Fri, 10/21/2011 - 12:16 | 1797407 TheAkashicRecord
TheAkashicRecord's picture

Erin didn't mention that TARP and "bailouts" are not synoymous terms.  TARP is a very small percentage of the total bailouts.  Some things, I'm not sure how to quantify.  For example, exceedingly low interest rates are an indirect subsidy to banks, but how do you quantify that sort of "bailout" or QE, Operation Twist, and the variety of other acronyms that have been nothing but attempts to buoy asset prices?

I think ...

If the banks can get emergency credit at near 0% rates, what would the cost of credit been if they had to get credit at MARKET rates?  That is the first step, then you would have to take the difference between the two with consideration to the total amount of money loaned.  

Also banks are earning interest on excess reserves (still don't understand that, if they want banks to lend, which they say, why are the giving them an incentive to NOT lend)? ... 1.6 trillion of excess reserves, this is another subsidy for banks.  They are only getting paid .025% on these reserves, but that amounts to 4 billion dollars.

Fri, 10/21/2011 - 12:31 | 1797436 goldfreak
goldfreak's picture

she said bailouts without any qualification

Fri, 10/21/2011 - 18:05 | 1798774 Seer
Seer's picture

"why are the giving them an incentive to NOT lend"

The "incentive" is in requiring them to actually have reserves on-hand.

The entire point of this exercise has been to allow the books to not generate numbers that would result in wide-scale bank closures.  I'd thought that folks here understood that taxpayers were thrown under the bus in order to save the banking system.  I suspect that the books will be verified as being compliant ONE MORE TIME, and that after this time there will be an allowed increase in mark-to-fantasy in order to allow loans to be made.

What we're also seeing is that "interest" was always going to fail because it really isn't on the books as debt.  Money to pay "interest" never was created in the first place (unlike the instant creation of money/debt).  I think that the System is finding that it cannot escape the pull of math into the black hole...

Fri, 10/21/2011 - 12:02 | 1797365 hedgeit
hedgeit's picture

There is always a lot of excellent information disclosing the truth about the headlines released in the media on this site, and I appreciate this.  However, just as important and even more important (as we all know) is the perception and market participants interpretation of these events.  Obviously, reality has not helped us make money over the past 2 1/2 weeks, but it seems that concensus interpretation (right or wrong) would have. I think it would be great to always have a sidebar with "likely consensus" with how an issue is likely to be interpreted, for balance.

Fri, 10/21/2011 - 12:14 | 1797399 Mark123
Mark123's picture

The market is trading in a range....unless you are really lucky you would not have made money either going long or short for the last 2 months.

 

Question is, which way is this going to break?  At any time the central banks can pull the plug on this market if it suits their purpose - keep that in mind.

 

The way I see it the only way it makes sense to use this market to protect your wealth is if the central banks can engineer significant inflation. 

Fri, 10/21/2011 - 14:30 | 1797937 Alpha Monkey
Alpha Monkey's picture

So, you're saying buy gold?

Fri, 10/21/2011 - 12:06 | 1797377 Mark123
Mark123's picture

This market is like trying to make money playing poker in an insane asylum with inmates while heavily sedated.

 

Easy.

Fri, 10/21/2011 - 12:16 | 1797411 tempo
tempo's picture

Who are the 1%...Lets start a poll to guess the top 100 riches families in the US. Of course there are the Kennedys Buffett, Gates, Soros, Rockerfellers, Kocks; but could Rush Limbaugh, Bush, Clinton, Kerry, McCain, Hannity, O'Rilly be on the list of the richest 100 families???

The fastest growing type of debt is unsecured, subprime student loans. Did you know Student loans now exceeds $1 trillion growing at $1 billion per year.

OWS and Tea Party pressure will pass a simple admendment within 12 months allowing for Student loan bankruptcies which will be kill our only remaining growth industry.

Fri, 10/21/2011 - 12:23 | 1797435 centerline
centerline's picture

Umm, the college education industry is not growth - unless you are talking about growth of debt.  It is a bubble.  No one is going to change the rules on bankruptcies there.  It would open the floodgates to debt destruction.  The system thrives on debt.  Rather, you will see greater restrictions on bankruptcy in general.  More punishment for defaulting.  Debtor's prisons per se.  Desperate systems are not going to make this easy on the serfs.

Fri, 10/21/2011 - 14:29 | 1797931 Alpha Monkey
Alpha Monkey's picture

Who needs debtor's prisons when people can be indefinitely detained without cause on suspicion of anything?  Go america, all the framework is in place, it's time for them to close the trap.

Fri, 10/21/2011 - 12:19 | 1797421 batterycharged
batterycharged's picture

LIES! Didn't you know the US government made money on the bailout?

Sincerely

Erin Burnett

Fri, 10/21/2011 - 13:35 | 1797693 SRV - ES339
SRV - ES339's picture

Beat me to it... what an airhead, and no wonder the public at large is so clueless!

Would anyone have an email address for her or maybe a producer? I'd like to send a link and request a formal correction!

Fri, 10/21/2011 - 12:30 | 1797447 Temporalist
Temporalist's picture
Juncker Says Crisis Missteps Give Euro Area ‘Disastrous’ Image

“We’re not really giving a great example of a high standing of state governance,” Juncker, who leads the so-called eurogroup, told reporters in Brussels today before a ministerial meeting. He said divisions between Germany and France aren’t the only obstacles to an agreement on tackling the debt crisis.

“There isn’t just a problem between Germany and France,” Juncker said. “Germany isn’t the only country with a parliament; others have them too.”

 

http://www.businessweek.com/news/2011-10-21/juncker-says-crisis-missteps...

Fri, 10/21/2011 - 12:51 | 1797505 NotApplicable
NotApplicable's picture

To infinity, and beyond!

Meanwhile keep telling yourself, "There is no inflation. There is no inflation. There is no inflation..."

My wife is not in a very good mood anymore after returning from the grocery store.

Fri, 10/21/2011 - 13:09 | 1797535 Pitchman
Pitchman's picture

That is all fine and good (really bad) yet the true cost must take into account the $14 Trillion ++?? in guarantees and backstops which represents untold $ Trillions in opportunity costs or money withdrawn from funding future growth.  Zero Hedger's please provide an analysis of this.

OH: And then there is the other shoe.

- Inflection Point

 

Fri, 10/21/2011 - 13:26 | 1797644 bugs_
bugs_'s picture

let it burn

Fri, 10/21/2011 - 13:40 | 1797714 mannfm11
mannfm11's picture

Tyler, there won't be a sovereign bailout.  There is going to be a reset. 

Fri, 10/21/2011 - 18:56 | 1798941 Rearranging Dec...
Rearranging Deckchairs's picture

I think the only sane thing to do is take your wealth/ investments off the grid. So long as you only deal in small amounts there is no paper record that ties you to buying or selling your gold coins. I did it a few months ago to pay off some bills and was shocked. I mean in high school we used to read books about farmer peasants keeping gold coins and burrying stashes of them and now I know why. 

With interest rates so freakin low, the very real threat of frozen accounts and bank runs why would any average joe keep savings in the bank especially BOFA?  In the stock market? you gotta be kidding me. In treasuries ? are you freakin kidding me? 

Its time to be ready for the tremendous challenges and opportunities ahead. Be heavy in cash. Its liquid and if it starts falling in value rapidly you can go out and buy something intrinsically valuable or trade it for a currency thats not collapsing etc. If you're money is in the market, money markets, treasuries or at the bank it will take you so long to get access to it that you won't be able to protect its value in any way.That's how fast hyperinflation can set in.

 

 

 

 

Fri, 10/21/2011 - 19:03 | 1798960 Seer
Seer's picture

"Be heavy in cash. Its liquid and if it starts falling in value rapidly you can go out and buy something intrinsically valuable or trade it for a currency thats not collapsing etc."

Be careful to assume that you'll get a jump on trading flaming bills for something useful: you do warn of this by saying "That's how fast hyperinflation can set in."

It's really about finding assets that one can be productive with.  Any "investing" in the Wall Street vernacular, is pretty much a dead end: not only do people not have the money anymore, but the services and products that we've been accustomed to are pretty much at their end-of-life stage (say good bye to McMansions, Hummers, iCrap etc.).  I doubt that I'll ever become "rich" with my farming adventure; all I know is that I just want to be able to survive (my charter is to try and feed as many people as possible).

Fri, 10/21/2011 - 21:42 | 1799313 ZeroAffect
ZeroAffect's picture

+2013

Do NOT follow this link or you will be banned from the site!