• Tim Knight from...
    10/23/2014 - 16:06
    Way back on August 30, I did a post called Past Fear, Present Fear, which offered up an analog of the VIX  I followed up on October 9th with my Moment of Truth post, which was...
  • Pivotfarm
    10/23/2014 - 18:39
    I challenge the central banker, manager, trader, and investors to manufacture and financially engineer a safer and better alternative to the USD.

Guest Post

Tyler Durden's picture

Guest Post: About That $20 Trillion In Public Debt...





In only three more years you're talking $20 trillion in public debt for the USA and a GDP going nowhere fast. Add to this that demographics are not encouraging and taxes of all sorts will have to rise. Cuts will be symbolic because the political pain will be unbearable. Without productive new investment, then debt service soon outstrips income growth and the economy enters a death spiral of declining productive investment, ever expanding debt and ever higher debt service costs.

 
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Guest Post: A Primer For Those Considering Expatriation





A growing number of Americans are frustrated with the way in which their economy has been managed and are becoming increasingly concerned about future measures the government may take to keep its coffers full. A question that is arising with increasing frequency is: does expatriation offer a viable protection to those concerned about a more financially-intrusive US system? The short answer is 'yes' but while it does offer a solution to ending one's obligations to pay US taxes - it's important to understand that it's not suitable for everyone. Mark Nestmann gives a great nuts and bolts breakdown of what's involved and what the benefits and risks are

 
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Guest Post: What Is President Obama So Afraid Of?





Quietly, and with little fanfare, President Obama signed a “National Defense Resources Preparedness” Executive Order on Friday. As the name suggests, the order intends to shore up the country’s national defense resources in advance of a national emergency. To be fair, this is not the first time that such an order has been written. President Obama’s order, however, takes things much, much further.This is all playing out with nearly perfect historical precision. Time and time again throughout history as once great empires accelerated their declines, governments have taken steps to protect their interests against the people. In the past, they have imposed curfews, disarmed the population, curtailed civil liberties, and declared national emergencies, usually against some great faceless enemy from abroad who threatens their way of life. As it turns out, though, our great faceless enemy is not some mythical boogeyman living in a cave, nor some angry brown person who hates us for our freedoms… but the very people within the system who’ve taken an oath to ‘support and defend the Constitution of the United States against all enemies, foreign and domestic.’ Have you hit your breaking point yet?

 
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Guest Post: Temporary Backwardation: The Path Forward From 2008





The March silver futures contract first entered backwardation on Mar 9 and with a few zigs and zags has not only remained there but has gone deeper and deeper in. The April gold future just entered backwardation today. We shall see what the coming days bring for the April gold future, but the fact that backwardation has occurred at all is significant. The fact that it is now a “normal” occurrence since fall 2008 indicates a deep pathology. Backwardation means that anyone who has gold or silver could simultaneously sell the metal and buy futures contracts to recover their position, and make a profit. The market is tight. The metal is out there, but obviously those who have it in an unencumbered form are not able (retail) or willing (others?) to take this backwardation bait.

 
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Guest Post: The One Chart That Says It All





Depending on debt to fuel nominal growth leads to an economic death spiral. Sometimes one chart says it all. Charted against consumer credit, the S&P 500 (SPX) collapsed after the 2000 dot-com bubble burst and has been tracing out a descending channel since then. The Fed's injections of liquidity via trillion-dollar purchases of toxic mortgages and Treasury bonds does not funnel money into productive investments--all it accomplished was to further incentivize speculative churning and financialization to enriched the few at the expense of the many. So sit back, tighten your seatbelts and enjoy the death spiral ride, brought to you by the Federal Reserve and your elected servants of the financial Elite.

 
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Guest Post: Bernanke: The Man, The Legacy And The Law





Fed chairman Ben Bernanke is covered in a long profile by Roger Lowenstein in the Atlantic. The sympathetic account takes the reader blow-by-blow through the criticism that he has received from virtually all quarters during his tenure as Fed chair. What Lowenstein hones in on are the reviews and criticisms of Bernanke’s performance in “resurrecting the economy” — the interest rate policy, his interpretation of the dual mandate, quantitative easing, Operation Twist, etc. But for a piece that clocks in at 8,287 words, Lowenstein pays scant attention to the emergency actions taken to save the financial system itself.

 
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Guest Post: The Ascendence Of Sociopaths In US Governance





How did we get here? An argument can be made that miscalculation, accident, inattention and the like are why things go bad. Those elements do have a role, but it is minor. Potential catastrophe across the board can't be the result of happenstance. When things go wrong on a grand scale, it's not just bad luck or inadvertence. It's because of serious character flaws in one or many – or even all – of the players. So is there a root cause of all the problems I've cited? If we can find it, it may tell us how we personally can best respond to the problems. In this article, I'm going to argue that the US government, in particular, is being overrun by the wrong kind of person. It's a trend that's been in motion for many years but has now reached a point of no return. In other words, a type of moral rot has become so prevalent that it's institutional in nature. There is not going to be, therefore, any serious change in the direction in which the US is headed until a genuine crisis topples the existing order. Until then, the trend will accelerate. The reason is that a certain class of people – sociopaths – are now fully in control of major American institutions. Their beliefs and attitudes are insinuated throughout the economic, political, intellectual and psychological/spiritual fabric of the US.

 
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Guest Post: The Predatory State of California, Part 2





Everyone who believes the government is "here to help disadvantaged people" needs to wake up and ask what kind of government we have when due process has been replaced with "legal" looting. R.T. reported the income in question on his 2006 Federal and Arizona tax return. Wouldn't common sense, not to mention common law, suggest that the state of California should be required to ask the citizen who now resided in another state if the income in question had been reported in that state? How about notifying the citizen of the state's claim and his/her rights to present facts relating to the state's claim? There was no due process. How can this be legal in a nation that is nominally governed by rule of law? First the state steals the $1,343 and authorizes its parasitic predatory bag-"person" Wells Fargo Bank to steal another $100 for handling the state's theft. A week or two later the citizen is notified of the theft as a fait accompli. Now the onus is on the law-abiding citizen to attempt to reclaim his own money from a distant, all-powerful Kafkaesque state agency. How can this be legal in a nation supposedly operating under rule of law? Let's be very clear about what happens here in America on a daily basis...

 
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Guest Post: What Kind Of Power Should Government Have Over Your Life?





The concept of government power is a strange and complex cipher.  The existence of governments has always been predicated on assumptions of necessity, but few societies have ever truly considered what those necessities might be.  What is government actually good for?  What do they do that is so important?  And, what happens when a government fails in the roles and duties that a culture deems vital?  We tend to view government as an inevitability of life, but the fact is, government is NOT a force of nature, it is a creation of man, and it can be dismantled by men just as easily as it can be established. In America, many people see government as an extension of the Republic, or even the source, and an animal that feeds at the behest of the common citizen.  An often heard argument against the idea of drastic change or even rebellion within the establishment system is the assertion that the government “is us”.  That it is made of Americans, by Americans, and for Americans.  That there is no separation between the public, and the base of power.  This is, of course, a childish and fantastical delusion drawn from a complete lack of understanding as to how our system really operates today.  How many people out there who make this argument really believe at their very core that they have any legitimate influence over the actions of the state?  I wager not many…    At bottom, to cling to the lie that the government as it stands is a construct of the people is an act of pure denial designed to help the lost masses cope with underlying feelings of utter powerlessness.  

 
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Guest Post: Global Market Needs Canada's Crude





Canada's natural resources minister told delegates at the International Energy Forum in Kuwait that his country was on the cusp of becoming an "energy superpower." Canada ranks No. 6 in terms of global oil production, but much of its crude exists in the form of oil sands. European leaders are considering a measure that would classify oil sands as an environmental issue, prompting Canada to threaten to take the issue to the World Trade Organization. With the U.S. political system in a deadlock over Canadian crude, the Ottawa government is now working to convince the international community that the global market is in jeopardy if polices "discriminate against oil sands."

 
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Guest Post: Apple Succumbs To Battery Chemistry?





In light of the news that Apple is issuing a dividend with the stock flirting with all-time highs, it might be a good time to assess where Apple is with its two products, the Iphone and the Ipad. There is no arguing with the success of these products, but that is not the real story that needs addressing. The real story for Apple is battery chemistry and much like the automakers it fails.

 
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Guest Post: Why We May Not See 4% GDP Growth For A Long Time





gdp-realvspotential-032012For a third year in a row mainstream economists and analysts are once again planting the seeds of hope for a return to stronger GDP growth.  The White House, if you look at their budget estimations, are banking on it as part of their long term deficit reduction plan.  Unfortunately, it is highly unlikely that we will see growth in the economy return to 4% for a very long time.   Currently, the deficit between real GDP and the CBO's estimated potential GDP, is at the greatest deviation on record.  However, that data point really doesn't tell us much other than the economy is currently operating well below its potential level.  While most economists will point to the likely culprits of employment, wages, industrial production and consumption as the problem, which is correct, those issues are byproducts of the 50-Trillion pound Gorilla that sits quietly in the corner.  That seemingly invisible Gorilla is simply - debt.

 
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Guest Post: Welcome To The Predatory State of California--Even If You Don't Live There





Every once in a while an event crystallizes the stark reality behind the lacy curtain of propaganda and artifice. Here is one such event. Correspondent R.T. is a retired accountant who has resided in Arizona since 2001. Prior to 2001, he resided in California. On March 14, he received a letter from the California Franchise Tax Board (the agency that collects income taxes) claiming that he owed $1,343 for the tax year 2006. This was the first notification he'd ever received of this claim. This was an interesting claim given that R.T.:

  • Did not reside in California in 2006
  • Did not file a State income tax return in California in 2006
  • Did not have any outstanding tax issues with California in 2006
  • Did no business in California in 2006
  • Owned no property in California in 2006

 

 
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Guest Post: How To Cripple The Real Estate Market In Five Easy Steps





If you were head of Central Planning (howdy, Ben!) and were tasked with crippling the real estate market, here's what you would recommend.

  1. Choke the market and banking sector with zombie banks.
  2. Have the central bank (the Federal Reserve) buy up $1 trillion in toxic, impaired mortgages.
  3. Lower the rate that banks can borrow from the Fed to zero, and then pay the banks interest on all funds deposited at the Fed.
  4. Try to prop up the housing market by giving poor credit risk buyers loans with only 3% down.
  5. Load young people up with the equivalent of a mortgage in student loans.

OK,let's see how our Organs of Central Planning are doing: check, check, check, check, check: a perfect score! they're doing everything possible to cripple the real estate market. Do they care? Of course not; the only goal is to keep the zombie banks alive, regardless of the cost to the nation. Great work, Ben, Barack, Timmy and the rest of the gang at Central Planning: thanks to your policies, the real estate market will never clear and therefore it can never be restored to health.

 
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Guest Post: Asleep At The Wheel





Americans have an illogical love affair with their vehicles. There are 209 million licensed drivers in the U.S. and 260 million vehicles. The U.S. has a higher number of motor vehicles per capita than every country in the world at 845 per 1,000 people. Germany has 540; Japan has 593; Britain has 525; and China has 37. The population of the United States has risen from 203 million in 1970 to 311 million today, an increase of 108 million in 42 years. Over this same time frame, the number of motor vehicles on our crumbling highways has grown by 150 million. This might explain why a country that has 4.5% of the world’s population consumes 22% of the world’s daily oil supply. This might also further explain the Iraq War, the Afghanistan occupation, the Libyan “intervention”, and the coming war with Iran. Automobiles have been a vital component in the financial Ponzi scheme that has passed for our economic system over the last thirty years. For most of the past thirty years annual vehicle sales have ranged between 15 million and 20 million, with only occasional drops below that level during recessions. They actually surged during the 2001-2002 recession as Americans dutifully obeyed their moron President and bought millions of monster SUVs, Hummers, and Silverado pickups with 0% financing from GM to defeat terrorism. Alan Greenspan provided the fuel, with ridiculously low interest rates. The Madison Avenue media maggots provided the transmission fluid by convincing millions of willfully ignorant Americans to buy or lease vehicles they couldn’t afford. And the financially clueless dupes pushed the pedal to the metal, until everyone went off the cliff in 2008.

 
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