Monday, 18 April 2011

Scary

Watched a programme on CNN last week. It promised a no holds barred investigation of the US deficits and broader problems with the dollar. Various banking and political bigwigs appeared, together with high-profile MSM talking heads. They talked as if resolving these issues was a simple matter of reducing spending a bit and increasing taxes a teeny weeny bit. They all seemed agreed on this.

I found it scary.

You may like to refer to the post I wrote a few months ago ‘Thoughts on collapse’ in which I traced out the – to me – inevitable collapse in the dollar’s value, and with it its demise as a reserve currency. I outlined the horrific consequences of that for Americans. Worse than the Great Depression of the thirties.

Yet all the pols, journalists and bankers on the show seemed unaware. A bit like the German Finance Minister in mid-2008 who blithely dismissed the US banking collapse as not affecting Europe. In this post (Help! Nobody knows anything!) at the time I wrote “it was thus with a distinct chill I heard their Finance Minister a week ago smugly say that the financial markets meltdown was a US problem and wouldn’t affect Europe. This foreboding was reinforced as I listened to Angela Merkel yesterday on TV, when it became clear that she hadn’t a bulls notion about what was going on. Unless something was, as the man said, lost in translation, she didn’t understand not even the basic concept of derivatives.”

We now know of course, all too horribly well, that my fears were well justified.

Which brings me to the point of this post: Surely be to God the people on the show I referred to, and their peers, surely they must realize that the game is up, that the USA is at the edge of the precipice? If the situation is blindingly obvious to me, and commentators on this and many other blogs - and in fact to anyone who takes the trouble to look - why isn't it being reported round the clock on every MSM channel? Why doesn’t the President declare a State Of Emergency? He does it if a bloody storm blows up in the Gulf, for Chrissake, but not for a potential societal breakdown.

Are the powers-that-be secretly looking after their own affairs, stocking up the lifeboats and preparing to jump ship at the appropriate time? Or, like the German ‘leaders’ three years ago, are they hopelessly deluded? Are they as ignorant of basic realities as GW Bush was in relation to the Iraq adventure, when three months after the invasion Condi Rice explained to him there were such things as Sunni, Shia and Kurds?

I don't know the answer to that question, but I do know I find it scary. Honestly.

60 comments:

Franz said...

Great article Savant, and I'm just as baffled by you about the elements at play here: Stupidity? Incompetence? Malice? Knavery?

The best explenation I can come up with ist that of a collective hubrisitc cognitive dissonance which has gripped the United States (and to a lesser degree the rest of the world). Everybody instinctively realizes that this episode of money printing will somehow end badly. However, most people, and especially our dear leaders choose to belive that ignoring the problem will eventually make it go away.

One society which lived through a bad, bad circle of cognitive dissonance followed by a rude awakening is that of the Rapanui on the Easter Islands.

One day the leaders of the Rapanui decided that an all out effort should be made to erect huge stone statues, a.k.a. the Moai. The people were told that once the work was finished, the god Makemake would make the Moai able to move about and do all the work.

So all other work - such as the production of food - was neglected in order to erect the mostest and tallest Moai possible. The end was predictable: The god Makemake ramaindes absent, the Moai did not commence walking & working and the Papanui suffered an awful famine.

At some point there must have been Rapanui who thought to themselves: "This will end badly." Apparently they burried the thought within themselves or spoke out and were dismissed as heretics by the rest of the population.

Somehow the financial bubbles which now succeed each other so swiftly strike me as digital, binary Moai statues and the people at the top subconsciously eager to to bring about an Easter Islandesque conclusion to the whole mess.

As Ayn Rand said: "You may choose to ignore reality, but you can't choose to ignore the consequences of ignoring reality."

I just hope that the conclusion will come while I'm still young enough to cope with the things life chooses to throw at me.

youfammism said...

I've been working to understand where the US dollar rests. The more I read, the more I fear. Personal planning to protect my family (as best I might) is my goal.

What will the MEDIA do to discredit the messenger and tamp the facts down? The MEDIA has said little about the coming collapse and purposely ignore the warning signs. I don't believe the MEDIA will report anything that stands to jeopardize Progressive policy.

Does anyone know what is the signal the dollar is done as the world currency?

Steve Mac said...

The consequences of what the current administration in Washington is doing are inevitable: a head-on collision with national bankruptcy. But many still live in a dream state willing to accept the mellow-toned assurances of those in the governing class, particularly Barack Obama, that they have everything under control.

It would behoove all of us to come face-to-face with reality.

Franz said...

@ youfammism

A sure sign that the dollar is finished is the financial equivalent of the "philosopher's stone" and the key to untold riches. I would not trust anybody claiming to posses it.

That being said, I have made an observation shortly after today's announcement by S&P that the USA is on monetary probation, which I believe is worth sharing.

Intuitively you would think that a major rating agency saying in effect that "the dollar is toast" would drag the dollar index (DXY) down immediatly and substantially. The opposite happened.

The only explenation that I can come up with is that the dollar has become a carry trade currency, much as the Japanese yen. That means that Investors have borrowed such vast amounts of dollars that bad news and the ensuing liquidation of trades lead to a dollar spike. Much as happened to Japan when the Yen skyrocketed after the quake in March.

A carry trade currency is not to be confused with a reserve currency. While reserve currencies are inherently the most stable of fiat moneys, carry trade currencies tend to be those associated with abysmally low interest rates und faulty underlying economics.

So perhaps, the Dollar is indeed no longer the "real" reserve currency it was just a couple of years ago.

If I am correct in my assumption, one piece of practical advice follows: Be aware that bad news for the USA could lead to further counterintuitive dollar spikes and then a subsequent deteoration of the exchange rate. Hence, do not invest in precious metals if you are not able to handle a temporary 10% to 30% decline, as the metals tend to trend inversely to the dollar.

If you are overlevered in your personal investments, you might get wiped out due to random dollar spikes on bad-news days even though your basic thesis of long term devaluation was entirely correct.

So - be careful out there!

P.S. I am aware that the Finnish news has a lot to do with the relative dollar strength, but that certainly does not explain all of what transpired today re the DXY.

awakened said...

Thanks Franz. That's a very lucid and indeed fascinating piece of info. One thing's certain, only the Illuminati or their equivalents know what's going on. The rest of us are toast.

Anonymous said...

The dollars true value can be measured against gold,
And against gold its falling like the proverbial brick.

Anonymous said...

Franz - re the S&P evaluation....Aren't these the same guys who told everyone
that bank issued bundled mortgage securities were triple A rated?

Who in their right mind would ever trust anything these manipulato­rs have to say?

They say whatever will make them or their clients the most money.

We're being gamed again.

The US public be d@mned.

Franz said...

@ Anon 21:26

You are absolutely right with regard to S&P's abysmal record.

However, what they choose to say or not to say is still huge news, for the reason that many institutions, including most pension funds, are stipulated by their charters to heed the ratings of S&P et al.

Were S&P to downgrade US debt from AAA to AA, many fund managers would be forced to dump treasury bonds in huge quantities.

The Fed could hide the fact by buying up the bonds, but the long term inflationary effect of buying you own debt is well known.

P.S. What makes me suspicious about S&P's action is its timing. It almost appears as though some of the financial bigwigs have decided to pull the rug of support from under Barry and wrap it instead around the slender shoulders of the new golden boy Paul Ryan and his brand new deficit proposals. So indeed it seems as though John Q Public is being manipulated.

Anonymous said...

Help! Nobody knows anything!

The economic disaster in a nutshell ... or in this instance, a cannon shell ... 'cause it's all blown up in our faces.

Top notch post, Savant. Damn, I wish I'd known about this site three years ago.

I did not know "Gazooba's" Merkel was from East Germany. Which may explain her rather touching faith in the power of the state to fix all the bad things ...

Cheers,
Uncle Nasty

Joe Hubbard said...

Is the debt downgrade any surprise?

No non-governmental company in the world could survive with the legerdemain of the US government.

The time draws near to face reality.

Simon Q said...

For US residents.

A small amount of cash on hand.

Enough food and water for your family for 4 weeks.

Weapons to defend yourselves until law and order is restored.

I see all of this coming.

Anonymous said...

@Franz

Everybody instinctively realizes that this episode of money printing will somehow end badly.

It's not money printing. It's credit.

Intuitively you would think that a major rating agency saying in effect that "the dollar is toast" would drag the dollar index (DXY) down immediatly and substantially. The opposite happened.

The only explenation that I can come up with is that the dollar has become a carry trade currency, much as the Japanese yen.


S&P is never ahead of the market. News doesn't move markets, except possibly for very brief periods of time. News lags markets. The best S&P will ever do is confirm a trend. Like the mass of investors, S&P will be wrong at both tops and bottoms, precisely because when they talk, the mass of investors listens.

The customer is always right, and the customer is a rationalizing ass.

There is simply no MONEY in being a Cassandra.

9/11 marked a market LOW, for Chrissakes; and nobody can pick it out of the background in a weekly chart with time and price omitted. Use any statistical method you want, you will not find any special distinction between pre-9/11 and post-9/11.

Almost every financial headline is post hoc nonsense.

john said...

Franz hit the nail on the head when he suggests "malice'. This is being manipulated for the goals of the shadow government[s] of the west. The US is just the biggest, but the others are doing the same thing. Total financial collapse and the masses scream "Oh save us great god of government!" Then they have the 'mandate' to collapse the currencies, create one world money, and one world government. There will be much suffering, and not few deaths, but "they" could care less. it works out better for them.
Hang on my friends.

RegThe Hedge said...

I'm not going to say much on the world meltdown because it's all been said before. I will say this though.
Does anybody remember the very few people screaming about the housing bubble? Many years before the collapse anybody who cared to look could see what was coming. I regularly pulled my hair out in frustration at all the shills and idiot followers shouting about how theres nothing wrong. I found it hard to understand how so called smart people and leaders could be so thick.
Now dont let the crowd fool you for this upcoming collapse. They are not smrters than you. Eather that or they have a vested interest and cognitive disenance has clouded their thought process. If you believe the collaspe is coming and youve come to that conclusion throigh rational and logical thought based on the facts then dont assume the government or anybody else is smarter than you. Prepare for it.

Clogheen said...

anon 0.55. Your post is compelling but I dont understand it! Does that make sense? Could you elaborate on the point you make and it's significance? This is a genuine question.

Thanks.

Anonymous said...

I'm really worried. I'm at retirement age, have built up a good pension fund of almost €1 million and have about half of that in fairly liquid cash. I know I'm well off compared to most but I fear I'll wake up some morning and find the currency has been destroyed, inflated away or whatever.

I just dont know what to do. I know Reg said to a similar question that you should see a 'financial advisor'. But these are the very fuckers who landed us in this mess and by the way, I'd have a pension fund 3 times what it is if I hadn't listened to thie 'impartial advise'!!!!

Hector Grey said...

I think Rge the Hedge has nailed the explanation. It's just like the property bubble when everyone fell for it. And THAT is the scary bit.

Franz said...

@ Anon 0:55,

it is interesting that you make the distinction between money printing and credit. I would argue that in a fractional reserve system such as ours, the act of lending by a central bank is the very process of "creating" money. There is certainly a time lag between the initial credit binge by the central bank and the process of printing little paper pieces with stunning amounts of zeroes on them, but one follows the other as night follows day.

It seems strange, but money creation these days has nothing to do with ponderous royal mints and such. Money creation (colloquially known as printing) litteraly is the mere act of creating digital entries in the accounts of banks with access to the Fed's discount window.

As to S&P, I have made it clear in another post that I don't believe them to be timely in their actions, competent nor even sincere. However, trillions of investments still hinge on their ratings. If you choose to ignore that, you do so at you peril.

I have come to believe that financial news is indeed gibberish, very much like the articles in the Pravda pre-1989. However, they still give away the actions and intentions of the pigmen, just as the Pravda did for the Politburo. For this reason, I try to stay up to date.

Californian said...


Are the powers-that-be secretly looking after their own affairs, stocking up the lifeboats and preparing to jump ship at the appropriate time?


That may be.

Consider how elites in the West
have consistently sided against their own citizens when it comes to such issues as mass third world migrations into the European and North American heartlands.


The best explanation I can come up with is that of a collective hubrisitc cognitive dissonance which has gripped the United States (and to a lesser degree the rest of the world).

And consider other cognitive dissonance, the way in which millions of people in the Western world advocate such things as open borders and multicultism which lead to the degradation of quality of life. Yet they can not see the connection between their advocacy and rising crime, welfare etc.

Then again, there have been such extraordinary delusions and madness of crowds in the past. But with the globalized media system, the effects go beyond any single country or continent.

Of course, we have the Internet to provide some reality and perhaps counterbalance things...if we are active enough.

Croesus said...

Don't forget too that all the MSM is owned by huge corporations. They're no longer 'news' outlets, they're there to make money and to get across a message tht suits the corporations that own them. Net rezult, believe nothing they say unless independently confirmed.

RegThe Hedge said...

Anon who is at retirement age. (I wish people would add a name).
I advised a relative not to buy a house in 2007. I advised another not to buy in 2008. One did and one didnt. The one who didnt patted herself on the back for being so clever. The one who did has lost nearly a half million and counting. He blames me for knowing and not stopping him from buying. I have stopped offering advise at least in financial matters. That is why I suggested going to two or more advisors.
Franz, what do you think of German property for low risk, low yield stable gain?

Franz said...

@ Uncle Nasty

Chancellor Angela Merkel is Stalin's belated revenge on West Germany. When other women do their hair in the morning, Ms. Merkel conceals her lizard features behind a human mask.

Her whole cabinet is comprised of sodomists, cripples, crooked lawyers and - the worst of the bunch - more "strong women" in her own mold.

She has financially and morally bankrupted the nation and has thus set the stage for the far left (The Greens and the former East German Communist party) to take over.

Interestingly her Stasi (East German Inteligence) files never saw the light of day, much like Prez Barry's birth certificate. For certain, she was a very good and convinced communist before 1989. After that she shamelessly ingratiated herself with the Christian Democrat party and scarcely ten years after, took it over. The rest is history.

I know it must pain you to be governed by this Zuma fellow. Let me tell you however that a lizard in pantsuits as supreme autocrat is not all it's cracked up to be.

Anonymous said...

Don't forget too that all the MSM is owned by huge corporations

The Irish Times and The Guardian are owned non-commercial (He! He!) trusts and are therefore outside corporate influence

Franz said...

@ Reg

Thankfully the German people never wholly bought into the notion of a FIRE (Financials, Real Estate)economy being viable in the long term. For that reason housing prices have never taken of to bubble valuations.

From what I hear, houses and farm land in the countryside are still rather cheap and represent good value. Especially Scandinavian cooperations seem to snap up whole regions on the cheap and build industrial farms there.

In the big cities there are disquieting sights to be seen. For the first time in my life there are see-through office towers with no tenants whatsoever. So I would stay away from commercial real estate, no matter what the promised returns are.

If I was thinking about investing in Germany, I would rather look to alternative energy companies. The Greens are set to take over in the next election and will most likely funnel bales of cash toward their friends from the windmill builders association.

I freely admit to being the worst stockpicker in the world, but right now that whole sector of the German economy looks rather promising.

Croesus said...

Ok, the IT and the Gruaniad are exceptions, but the rest are big corporations. The one consistent thing they have is that they won'toffend the powers-that-be. That's why the American MSM can without skipping a beat transition from fawning on Bush to fawning on Barry.

Franz said...

@ The Svant and other Irishmen

I have just seen this documentary:

http://www.youtube.com/watch?v=A5zXU1bQ3tQ&feature=player_embedded#at=501

Towards the end of the first part a chap claims that the Irish are having "emigration wakes" for people who are fleeing their debts in Ireland.

My question: Is Ireland as fu***d as this documentary claims? Just half as fu***d would be bad enough.

One observation I have to add to our nice collapase chat: Of all Europeans those of eastern extraction strike me as best suited to handle difficult times.

A couple of days ago I met a real pretty Hungarian lady in her late 20s. "What a doll", I thought to myself. However, when our conversation turned to food (always a favorite topic of mine) she casually told me that her parents taught her to slaughter, skin and cook rabbits. I was really impressed. I'd make a wager that less than 1% of German women of her generation have those skills. Certainly not the pretty ones.

Also, Polish men seem to measure their manhood by their ability to fix machinery with some rudimentary tools and duct tape as opposed to defining themselves through the latest iGadget in their posesssion. An attitude which seems full of practical wisdom to me.

It appears as if the Eastern Europeans have - for the first time in their history - a leg up on uns Westerners.

Anonymous said...

ThaaaaanKEW!

God, it's nice to be proven right ... again

http://the-classic-liberal.com/iraq-war-oil/.

Secret memos expose link between oil firms and invasion of Iraq

Plans to exploit Iraq's oil reserves were discussed by government ministers and the world's largest oil companies the year before Britain took a leading role in invading Iraq, government documents show.

The minutes of a series of meetings between ministers and senior oil executives are at odds with the public denials of self-interest from oil companies and Western governments at the time.

Five months before the March 2003 invasion, Baroness Symons, then the Trade Minister, told BP that the Government believed British energy firms should be given a share of Iraq's enormous oil and gas reserves as a reward for Tony Blair's military commitment to US plans for regime change.

The papers show that Lady Symons agreed to lobby the Bush administration on BP's behalf because the oil giant feared it was being "locked out" of deals that Washington was quietly striking with US, French and Russian governments and their energy firms.

The minister then promised to "report back to the companies before Christmas" on her lobbying efforts.


All my life I have never been anti-capitalist, but that's changed.

Cheers,
Uncle Nasty

Anonymous said...

We had a copy-and-pass-it-around joke in South Africa in the eighties, that we called the New Simplified Income Tax form.

You had one box marked "A" which said "How much did you earn last year?"

And the instruction: "Send us the amount indicated in Box "A".

If you're living (you call this living?) in the UK, life is about to become much simpler.

I didn't say better ... I said simpler.

Socialist Government Increasing its Control in Britain

by Ian Mosley

An article on CNBC** reports: “The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and pay the employees by bank transfer. The proposal by Her Majesty’s Revenue and Customs (HMRC) stresses the need for employers to provide real-time information to the government so that it can monitor all payments and make a better assessment of whether the correct tax is being paid. Currently employers withhold tax and pay the government, providing information at the end of the year, a system know as Pay as You Earn (PAYE). There is no option for those employees to refuse withholding and individually file a tax return at the end of the year. If the real-time information plan works, it further proposes that employers hand over employee salaries to the government first.”


**Original article expired; link here:

http://www.davidduke.com/news/general

Ok, the article is from September last year, but don't think it wasn't serious ...

Cheers,
Uncle Nasty

Anonymous said...

Uncle Nasty - are you sure that article isn't from April 1st instead?

Anonymous said...

Once again, the usual suspects dig the holes, we fall into them ...

Again and again and a-fucking-gain.

http://hat4uk.wordpress.com/

A bit:-

MALICE IN GOLDMANLAND

How Blankfein persuaded Goldman investors that down was up


The world is full of conspiracy theorists and Leftists just desperate to believe that Goldman Sachs exists solely to screw the ordinary citizen. But they are so, so wrong: Goldman Sachs exists to screw everyone that isn’t a senior executive at Goldman Sachs. And that includes the shareholders.

Year on year, the bank’s first quarter revenue from trading for customers was down 22%. But profit for common shareholders fell 72%, due largely to a $1.64 billion charge to buy back $5 billion of preferred shares from Warren Buffett’s Berkshire Hathaway.

That’s a Light Brigade of a charge. But Mr Buffett, you see, has a brain – and lots of money. Common shareholders don’t have that much money, so they took nearly three times the hit that the firm did.

Goldman Sachs – the largest investment bank in the US – posted a profit to common shareholders of $908 million, or $1.56 a share. During the comparable period last year, it earned $3.3 billion, or $5.59 a share. That’s a Pacific Ocean of a drop. But in this latest quarter, Goldman set aside $5.23 billion for employee compensation.


And once again I ask the obvious questions; The who the what and the where ...

Everyone knows who the fuckers are, they know what they look like and where they live.

Why do they still have their kneecaps?

Just asking,
Uncle Nasty

awakened said...

No big surprise about the Iraq scandal. All goes back to the nototious meeting Cheney had with the oil companies just after Bush's 'election'. Hundreds of thousand dead, yet nobody brought to book.

Croesus said...

I think it's irrelevant what figures GS present. It's all smoke and mirrors geared to having the top execs maximize their take.

Anonymous said...

Just to lighten your load a little. A very little.

You'll laugh! You'll cry! You'll fill your pants! Go here:-

http://www.wvwnews.net/index.php

Scroll to:- "World Collapse Explained in 3 Minutes"

It's old , but relevant -- and it only takes three minutes.

Enjoy,
Uncle Nasty

Anonymous said...

Simon Q said...

"For US residents.

A small amount of cash on hand.

Enough food and water for your family for 4 weeks.

Weapons to defend yourselves until law and order is restored."

Good advice. But that's only a 30 day plan. What's coming down the road here in the US is much more serious.

I'm golden for the first 30 days after the dollar collapses. A year later though I'm in a world of hurt.

patrick

Anonymous said...

Franz said...

Great article Savant, and I'm just as baffled by you about the elements at play here: Stupidity? Incompetence? Malice? Knavery?

I am inclined to go for all four and more.

Take a look at this:-

Asylum seekers burn buildings at Sydney detention centre

http://tiny.cc/wz5ur

LATEST: Negotiators are still talking down a handful of protesters from the rooftops of Sydney's Villawood Detention Centre after a night of wild riots.

At least three buildings were set alight in the protest which began about 10pm (local time) yesterday and involved up to 100 immigration detainees at the height of the drama.

By daybreak, immigration spokesman Sandi Logan said firefighters had contained the fires and although three or four people remained on the roof, the situation was otherwise in hand.

A dining room, a computer room and medical centre have all been destroyed.

"CLIENTS"

Mr Logan, who called the detainees "clients", condemned the "appalling" behaviour of protesters who pelted firefighters with tiles, furniture and timber as they arrived to put out the fires.


One thing that has always pissed me off no end are the South Africans who, even now, live in denial of the reality of the situation in South Africa and spend their lives sucking up to the new kids on the block.

... and here we have Australia, who does not have to make the same grievous mistakes falling into the same trap.

This is the Australia who kicked the shit out of the ragheads at Cronulla a few years back -- now taking this crap without a word of dissent.

The answer is so simple. round up the stirrers, cuff them -- cuff them a few times more to show willing, then fly them back to the Lebanon -- and slap the Lebanese govt. with the bill.

If they're not Lebanese, tough tittie. Not your problem ... their problem.

Third world problems demand third world solutions. What's so hard about that?

Cheers,
Uncle Nasty

Anonymous said...

Something of interest ... the life and all-too-brief anti-zionist career of Justice Goldstone

http://tiny.cc/wrg9v

"Darkness At Noon For Richard Goldstone
John Graham on April 19, 2011 —

Those fortunate enough to live in countries where questioning the Holocaust is not illegal will have noticed the irony of the stance Israel and her apologists seem pleased to take up in the aftermath of Judge Richard Goldstone’s recent groveling in the Washington Post (Reconsidering the Goldstone Report on Israel and war crimes Friday, April 1, 2011).

Just as the Holocaust deniers argue that there is no documented line of command from Hitler himself to the WW2 atrocities against Jews, so Goldstone’s extremely limited concession:

While the investigations published by the Israeli military…have established the validity of some incidents that we investigated in cases involving individual soldiers, they also indicate that civilians were not intentionally targeted as a matter of policy.

This of course gives the green light for Israel’s defenders to happily claim that the Israeli Government was not responsible. Not, it should be noted that blood was not deliberately shed by Israeli soldiers. The historically-minded will see a difference between the proportion of German and Israeli High Command archives in the public domain.

Goldstone’s Breaking brings another historical parallel to mind: the Soviet Show Trials of the 1930s. These of course featured devastating confessions from the accused, often so absurd as to completely defy credibility. Many observers overseas were deeply puzzled by the extent of the reversals involved. The Goldstone charade chillingly echoes these events – for understandable reasons, as Kevin MacDonald has pointed out.


Goldstone was another hebraic lefty shitweasel who was intsrumental in the white-anting of any possibilty of an equitable Black/White political solution in South Africa.

So nice to see him grovel as his real masters crack the whip.

Your parents must be so proud, Richard.

Cheers,
Uncle Nasty

Anonymous said...

Fractional reserve system...debt precipice...

Well, the bankers created that money out of thin air - they can make it disappear into thin air!

JP

Franz said...

To use the parlance of our times: Shit just got real.

Yesterday the Chinese announced that they would "diversify" their currency holding away from the Dollar. Overnight their state-run oil company Sinopec announced an export ban on everything crude related (into the Dollar denominated world market). The Dollar Index (DXY) answered with a precarious slide below the 74s.

It seems as though my observation from earlier in the week has a kernel of truth to it: Every spike in the worth of the Dollar is followed by a renewed, relentless decline. Concurrently the prices of all "real" things such as Metals and commodities go absolutely ape.

I fear though that this slide into hyperinflation won't go in a straigt line. A straight line would allow the little guy to save some of his purchasing power by moving into "real" (as opposed to paper) assets as well.

However, the pigmen don't like the sight of the little guy securing a spot on a life boat. Positively loathe it.

That being as it is, I suspect there will probably be another engineered - looking at you Ben - market takedown, maybe even as severe as 2008. By driving the prices of "real" assets down once more, the pigmen will shake out the weak hands among the owners of gold, silver and commodities. Maybe such a thing will even happen in 2011.

Once the population at large has given up the idea of saving itself by owning real things, has sold their gold at the bottom, the powers that be will happily let the renewed hyperinflationary festivities commence.

These days one has to be really nimble just to defend the purchasing power of ones savings. I fear it won't get any easier in the years to come.

Robin Corkery said...

You may be interested in MSNBC's
picture of an "Irish guardsman"

Robin Corkery

Bruce said...

When we default you will see Chinese oils workers, miners, and other energy related workers showing up in the USA. They will live in separate autonomous communities apart from us, just like they are doing in Africa.

We are destined to be a resource of the Chinese with our population being irrelevant. In order to create a new world order, the largest pool of free thinking people has to be destroyed.

nemesis said...

I see the underground economy will become the new economy. Barter and labor exchanges are already becoming vogue. Starve the parasite is the new paradigm. AVoid paying your taxes.

wascator said...

I have stopped arguing with idiots; collapse is inevitable if our path does not change immediately and decisively, I am of the believe that there may not be enough sensible, informed citizens to make any difference. Get your lawn chair and a Diet Coke, and watch the fun.

Anonymous said...

Mr Obama, Sir? Your boss in on the line ...

Every now and and then, after I publish another anti-RSP screed, a poster, usually anonymous, will appear like a small puff of methane in a crowded elevator, and say something like: "here goes Uncle Nasty, the shithead, blaming the jooooz, again. It's always the Joooz -- always the Joooz!!"

Well, here's the interesting thing. Almost invariably, whatever I publish is a quote .... and usually straight from the mouths of the guilty.

Like this one:-

http://tiny.cc/3mdsg

"The Ashkenazi chief rabbi of Israel, Yona Metzger, told congregants in a Sabbath sermon that if U.S. President Barack Obama seeks reelection, he must release Jonathan Pollard, Israel Radio reported on Sunday.

In the sermon delivered at Yeshurun Synagogue in Jerusalem on Saturday, Metzger told said there was a feeling that many American Jews that had supported Obama in the last election were disappointed in him, in no small part because of Obama's indifference to Pollard.


Now .... tell me once again, how the joooz are not running the US govt.?

Conspiracy? What fucking conspiracy? It's all blowing in the wind where everyone can see it.

Isn't it wonderful? Just as you begin to run low on ammunition, your target pops up right next to you and hands you belts and belts of the stuff ...

Cheers,
Uncle Nasty

Anonymous said...

All I can say is:- Thank God I know nothing about finances ... 'cause if I did, I think this would scare the poo-poo out of me ...

http://www.chrismartenson.com/blog/breakdown-draws-near/56594

Do you know that China's real estate market has crashed and burned? A few quotes:-

(Reuters) - The world's banks face a $3.6 trillion "wall of maturing debt" in the next two years and must compete with debt-laden governments to secure financing, the IMF warned on Wednesday.

Many European banks need bigger capital cushions to restore market confidence and assure they can borrow, and some weak players will need to be closed, the International Monetary Fund said in its Global Financial Stability Report.

The debt rollover requirements are most acute for Irish and German banks, with as much as half of their outstanding debt coming due over the next two years, the fund said.

and:

Greece's Public Debt Management Agency paid a high price to sell €1.625 billion of 13-week Treasury bills at an auction Tuesday, amid persistent speculation that the country will have to restructure its debt.

The 4.1% yield paid by Greece, which means it now pays more for 13-week money than the 3.8% Germany currently pays on its 30-year bond, is likely to increase concern over the sustainability of Greece's debt-servicing costs ...

and -- if you're looking to China to bail us out:-

If Spain is hoping for a rescue by China, it had better get their cash, and soon. As noted here five weeks ago in "Warning Signs From China," a slump in sales of homes in Beijing in February was certain to be followed by a crash in prices. I just didn't expect things to be this severe only one month later:

Beijing March New House Prices Plunge 26.7% M/M

BEIJING (MNI) - Prices of new homes in China's capital plunged 26.7% month-on-month in March, the Beijing News reported Tuesday, citing data from the city's Housing and Urban-Rural Development Commission.

Housing transactions in major Chinese cities monitored by the China Index Research Institute (CIRI) dropped 40.5% year-on-year on average in March, a month when home buying typically enters a seasonal boom period.


Are we having fun, yet? As wascator said:- Get your lawn chair and a Diet Coke, and watch the fun.

Order a pizza or two, while you're at it ... on credit.

Cheers,
Uncle Nasty

Anonymous said...

nemesis said...

I see the underground economy will become the new economy. Barter and labor exchanges are already becoming vogue.

Correct me if I'm wrong, but wasn't the major financial turnaround in the Reich based on barter?

just askin'
Uncle Nasty

Franz said...

@ Nemisis

Well stated Sir. I would add though, that we should also attempt to starve not only the state, but the corporate welfare queens as well.

Most global coperations only exist because they have an "in" (read payoffs) with national governments und thus are almost exempt from taxes, are allowed to hide losses in a second set of books and merrily engage in wage arbitrage.

Look no further than McDonalds for a company in bed with the governing class. In the USA they are now exempt from healthcare (getting their back scratched by Obama) and in return have gone "365 Black" (How does that scratch feel, Mr. President?).

Luckily we have a very savvy butcher in my hometown, catering to people with irregular work schedules such as myself. The man has started serving fast food consisting of quality beef produced in our region and served by two middle aged white ladies behind the counter.

Ever since I tasted a burger there, I haven't gone back to the Asylum seekers behind the counter of the local McDonald's franchise.

I'm as convinced a free markets guy as they come. As such ignoring, boycotting and ultimately starving corporate/political vermin in favor of local businesses seems like a logical choice to make, which I emphatically recommend to others.

There is no such thing as "too big to fail" in a free market.

OCCLUDED said...

I'M BEGINNING TO THINK THIS BARTER/BLACK ECONOMY THING IS LOOKING BETTER BY THE DAY. KEEP IT SMALL AND LOCAL. FRANZ - ARE YOU BASED IN GERMANY?

Franz said...

@ Occluded

My sometimes faulty use of Shakespeare's idiom and frequent allusions to Germany probably gave me away, didn't they?

Don't get me wrong with respect to localizing the economy. When some country is clearly good at what they are doing - as Japan is with everything camera-reladed - I'll gladly buy from them.

Germany as a whole relies on the idea that those products which we make well are going to be bought overseas.

What I object to are organizations such as General Electric and Siemens. I'm not able to discern anything at which these folks are really good at (except creative book-keeping). Yet these companies continue to reap in billions through contracts awarded by their friends and cronies in the political class.

Take the example of Tom Enders, currently CEO of Airbus. You would think, that a guy in that position would certainly be an engineer by training. Wrong. By education a historian, he spent the bulk of his career weaseling about in various sub-comitees in the German government. Then he is "given" the top job at Airbus. And even though every new devellopment during his reign is essentially botched, nobody thinks of giving the top job to somebody more competent. Why? That, I wonder about.

The best story about Airbus is the devellopment of the military transporter A400m. They built the whole thing, installed the turboprop engines and only afterwards discovered that engines cause vibration. That was after every screw and bolt in the plane had come loose and the whole thing was falling apart.

If the corporate welfare queens are permitted to continue their incompetence, protected from bothersome competition by their political friends, we will live to see our living standard drop to Soviet levels. Right to the point where brand new cars only have three wheels because the guys at the factory couldn't be bothered to install a fourth.

As far as I am concerned, the most important issue next to immigration reform is the introduction of competition and free markets. We ought to give them a try. We haven't done so in decades.

Anonymous said...

A question for Franz or Reg:-

Please go here:-

http://hat4uk.wordpress.com/

Scroll down to: ANALYSIS: China – how its low-tax economy will doom globalism

And tell us what you think?

A quote or two:-

The Chinese population stands at just over 1.3 billion people, but only 26 million pay any income tax. So although the income tax cut approved by by the country’s legislature yesterday should become law this year, its effect – despite a hike from £225 a month to just over £300 tax-free allowance – will be near homaeopathic economically. The Beijing Government almost certainly did this to increase its popularity rather than calm wage inflation….although it is worried about inflation, most of that is coming from food price rises – and a worrying degree of runaway speculation. (Hence the recent edict about bank lending on property…which was swiftly circumvented by developers borrowing more from abroad).

In percentage terms, China is thus by far the biggest low-tax economy on the planet: even the rates themselves start as low as 5%, and hardly anyone pays the top rate of 45%. But that doesn’t mean what it usually does: chiefly, it reflects the fact that 98% of Chinese are living at or slightly above what we in the West would regard as abject poverty.


Any comment?

Uncle Nasty

PS Interesting coincidence: a buddy of mine was one of the first South Africans to travel to Mainland China and told me that Tsingtau breweries brewed and sold 26 million bottles of beer ... dally.

Sounds like a LOT of booze, until one realises that it's equivalent to one bottle sold for every 30 Chinese. Not what I'd call a raging piss-up.

Ah, the economies of scale.

Croesus said...

I'll give you one comment Unlce Nasty. I watch these things closely and I'll tell you this. Nobody in the 'West' or the commentariat knows what's REALLY going on in China in economic terms, or how to interpret it. I have a gut feeling that something awful is going down there and it's just waiting to explode. A bit like East Germany, which the CIA and all the Serious People deemed to be the 8th biggest economy in the world. We know how accurate that was!

Franz said...

@ UN & Croesus

I wouldn't know why low income taxes in China should be a problem. For the first century of it's existence the USA didn't have such a tax and did just fine.

Funny thing, the income tax. Once it is introduced, politicians get their hands on exponentially increased funds. Yet still, somehow, the problems of debt and deficits arise.

I think Croesus is on to the 18 trillion pound elephant in the room. The Chinese real estate market shows troubling signs of bubble-go-pop-syndrome. Little wonder, if you look at these photos from last year: http://www.dailymail.co.uk/news/article-1339536/Ghost-towns-China-Satellite-images-cities-lying-completely-deserted.html

Eimear said...

What I cannot understand, and I know this is the ultimate in unsophistication: Take this example of a small self-contained island with one bank. The bank lends money to a few people who build large houses for themselves and can't pay it back.

The island will go on much as it did before, except that part of the general public's savings have now been lost. Not fair, but it doesn't really change mcuh in terms of the ONGOING LIFE OF THE ISLAND. Just that a large number of people have lost some of their savings, and a few others have bigger houses.Annoying and unfair but I can't see how it brings down the whole system. The current situation to me is no different, just that the scope is immeasurably larger.

I know I must be wrong, but I just can't see how.

Anonymous said...

@ Franz

Keynes designed deficit spending to solve one particular problem.
Politicians thought it could be used for all.

Anonymous said...

Eimear said...

The island will go on much as it did before, except that part of the general public's savings have now been lost. Not fair, but it doesn't really change mcuh in terms of the ONGOING LIFE OF THE ISLAND.

And here is where a financial ignoramus (myself) makes a semi-educated guess. The savings have been misappropriated, yes. The mansions have been built, yes.

The big difference? All the money spent in building the houses has been now spirited away ... offshore. The islanders remain, and the houses remain.

But the building contractors, along with the suppliers of the cement, tiles, golden bathroom fittings and AGA stoves skipped back to the mainland -- with the money.

The islanders are now stuck with stealing each other's laundry to survive ... and half a dozen mansions that don't belong to them anyway. All the islanders can do with the mansions is sit on the well-manicured pavements and gaze at them on Sundays while eating their stale sandwiches.

I willingly await correction.

Uncle Nasty

Eimear said...

Thanks for that Uncle N. But I should have said that - for the sake of our argument - the island was fully enclosed. No offshore frolics. I say this because we're trying to understand the INTERNATIONAL meltdown in terms of a reductaio ad absurdam, so to speak, by confining it to an island. So?????

Corkonian said...

I'm with Eimer on this. Like, nothing's been destroyed, the money is still there even if other bastards are after getting it by dubious means. Why does that all mean that the economy must crash?

Franz said...

@ Eimear

I think there is one fallacy in your argument. You assume that the same sociopaths & money junkeys who previously robbed the inhabitants of your island of all their possessions will be able to say: "Enough is enough".

If things were so, we would be ruled by the Spanish Empire. At one point after the discovery of the Americas and the exploitation of the gold and silver mines there, they had virtually all the money in the world.

Instead of consolidating control they managed to squander this great fortune in a series of wars and financial defaults.

So where are the Kings of Spain now? The Roman emperors? The French Kings? The Czars?

Sociopaths can't quit. If there are no little people left to rob, they'll begin to fight amongst themselves. The very behavior which has enabled them to grab power and with it the riches of the world carries within itself the root of self-destruction.

In 2007 things were going good for our overlords. Yet only one year later they had overreached to such an extend that their whole edifice was in danger of coming down - not to mention the fallout from the Goldman-Gambinos rubbing out the Lehman-Profacis.

Nobody can predict the future. However, at this time and place, I can state with absolute confidence that we will live to see huge upheavals in the spheres of finance and politics.

Anonymous said...

Knavery? Stupidity? Malice? Incompetence? Taking the piss? You decide.

Family of 12 Asylum Seekers Land in UK—and Are Handed a £6,000-A-Month Home Paid For by You.

I begin to think that the powers that be are trying to provoke a response. The lefties are trying to see just how far they can push, before provoking a backlash ... or am I merely confusing arrogant stupidity with actual malice?

A quote:-

A family of 12 asylum-seekers is being put up in a vast house costing taxpayers nearly £1,500 a week, it has emerged.

The Ethiopian couple and their ten children are receiving a staggering £1,460 a week in housing benefit alone.

The jobless couple will also be eligible for other handouts such as unemployment and child benefits, which could potentially add up to an additional £1,300 a week.

Council officials, who refused to give further details of the case, found the family a mini mansion after they arrived in London from Africa in the past few weeks. It was not revealed whether the family is suspected of entering the UK illegally before claiming asylum.

The couple receive a weekly sum of £1,462.90, according to the council’s housing benefits claims department, meaning that the family will cost taxpayers £76,000 in housing benefit alone if allowed to stay in the property for 12 months.

The couple would realistically have to be among the nation’s top earners on wages of £230,000 before tax to afford to spend the same amount of money on rent or a mortgage.


I personally think the loony left are rubbing everyone's noses in it.

Because they can.

Cheers,
Uncle Nasty

J Bull said...

Re the Ethiopians, whatever the reason, it cant go on. That borough is almost bankrupt anyway. Sit back and enjoy the forthcoming calamity!

hooker said...

Now they've put the final nail in the coffin of the dollar. Bernanke doesn't raise interest rates.