Bernanke And Draghi Are Not Trying To Save Our Economies

 

Home Forums The Automatic Earth Forum Bernanke And Draghi Are Not Trying To Save Our Economies

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  • #5673

    TheTrivium4TW
    Participant

    ilargi post=5332 wrote: But yes, in a bigger sense: no, in the end central bankers have no control over economies.

    Hi Ilargi, please resist any visceral response this post may generate and simply consider the ideas and logic presented. If I’ve presented it in a sub par way, the ideas and logic should not be diminished. IMHO, this is a very important concept that is a requirement for identifying the real villain class in this tragedy. On to the post…

    While your stated belief is technically correct when viewed in a vacuum, the real world doesn’t operate in a vacuum.

    Using an analogy, It’s like a chess player focusing solely on an out of position rook near his king and remaining unconcerned because the rook doesn’t have much power by itself.

    Except the Queen and the other rook are positioned for the check mate.

    Only combining all the pieces, in context, reveals the true power of the “chess master” class – the power the Art of War trained “chess master” class has set out to conceal.

    “Know your enemy.”
    ~Sun Tzu

    In the same way, central banks don’t operate in a vacuum. There are people that ultimately control them. These people have interests.

    These people have control over other assets, like, say, mega banks and multinational corporations… even governments to a large degree.

    The central banks are an important piece in their game of “chess,” but to think that the central / mega TBTF bank controllers don’t have other assets in play, all furthering their agenda, is to miss an key element of reality that unlocks much understanding, IMHO.

    In that context, the context in which we actually live, the controlling Money Power has TREMENDOUS power over national economies.

    “Whoever controls the volume of money in any country is absolute master of all industry and commerce.”
    ~James A. Garfield

    These people exert more control over the volume of money than any other group. And legislation. And regulation and oversight.

    They can break Section 2A of the Federal Reserve Act and blow criminal bubbles and hide it from the common person.

    Since depressions are caused by the preceding bubble – they can create depressions as well. They can pass legislation with no penalties and tell the foolish public they’ve passed a “law” (got FinReg?)

    They can create debt based, fraudulent monetary systems that are engineered to bankrupt society – and keep it out of the news or education system.

    In every western nation.

    Debt Money Tyranny v4 (Simplified with contextual quotes and resources on a second page)

    https://kvisit.com/SveSaAg

    They can control the very education systems of society.

    They can take the law of the land, for example, the Constitution, and shred it in broad daylight while pretending to uphold it.

    They can pervert unalienable rights into state sanctioned privileges.

    They can claim the right to murder you – no trial, no evidence, no nothing.

    And they do. And they control our economy to a large degree. And they control our government.

    And they are lawless criminals who hate freedom and the little person doing well.

    I get this isn’t a comforting thought process, but the evidence supports it.

    Also keep in mind that military and the police state is financed by the Federal Reserve – and they aren’t doing it because they think it will be turned against them. They are doing it because they are very sure that the interests that control the Federal Reserve also control the United States military and the expanding American police state.

    The Money Power has an IMMENSE AMOUNT of control – and central bank policy is just one of many pieces they manage on the “grand chessboard.”

    “This Act establishes the most gigantic trust on earth.…When the President signs this Act, the invisible government by the Money Power, proven to exist by the Money Trust Investigation, will be legalized.…The money power overawes the legislative and executive forces of the Nation and of the States. I have seen these forces exerted during the different stages of this bill.…” (Congressman
    ~Charles A. Lindbergh, referring to the act which established the Federal Reserve. Congressional Record, Vol. 51, p. 1446. December 22, 1913.)

    “We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it.”
    ~Congressman Louis T. McFadden in 1932 (Rep. Pa)

    “As soon as Mr. Roosevelt took office, the Federal Reserve began to buy government securities at the rate of ten million dollars a week for 10 weeks, and created one hundred million dollars in new [checkbook] currency, which alleviated the critical famine of money and credit, and the factories started hiring people again.”
    ~Eustace Mullins

    “A great industrial nation is controlled by it’s system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world– no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.”
    ~President Woodrow Wilson

    “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.”
    ~Henry Ford

    #5674

    davefairtex
    Participant

    Trivium –

    I respect entirely what you say – about their power and control over the levers of government and finance. Whether these levers can actually work the way they used to at this point in time, that’s my question.

    To return to business as usual, we have to find people willing to borrow perhaps an additional 4 trillion US per year, every year. I believe there is great willingness among the powerful to make this happen, but The People are not going along with the plan, simply because they either can’t qualify, or don’t want to increase their debt load any further.

    Traditional levers are interest rates. Clearly, they aren’t working, which is why we’re seeing money printing. That works, but only to a point, and not nearly as efficiently as private borrowing does. And money printing doesn’t create any new debt slaves, so its not ideal.

    Something might eventually break loose, but as of right now, things aren’t looking too promising along that line. To me, as always, it’s about odds, not about absolute statements – but I’m not seeing any signs that the folks in control have really effective levers at this point.

    #5677

    p01
    Participant

    @thetrivium4tw

    The obvious conclusion is that there’s something very wrong with the industrial thingy, and all credit related nuances are simply consequences of that paradigm, as Steve from Virginia never fails to pinpoint on his blog.

    #5680

    Hi Trivium

    I agree with Dave, I think the TPTB have been pushing the ponzi envelope as far as they can, and of course, it becomes increasingly less stable and more difficult for them to control. Yes they can influence it, but cannot predict the outcome as well.

    Couple more things:
    1. I think TPTB is a useful concept, but in practice the, what we can see as a unified PTB is probably just the emergent behaviour of a lot of sociopathic types at the top working within the growth paradigm.
    2. As much as they, as a group, have an emergent agenda, I think they have largely lost control of the vehicle of the economy and are probably searching for ways to post-justify it. i.e. they did it “on purpose”.

    I think the problem now is that there is no “steady state” paradigm to take over now that we are running on fumes as far as resources goes. If humankind were to save ourselves, “no growth” is the kind of austerity we need. Not the type of austerity that funnels our remaining wealth to those who need it least.

    Now whenever I say that the main problem is our growth paradigm, all emerges from that, I get glazed looks from my friends

    #5682

    Adam Goodwin
    Member

    @Carbon

    “Now whenever I say that the main problem is our growth paradigm, all emerges from that, I get glazed looks from my friends”

    I agree with you. Most don’t understand that growth cannot be sustained on a finite planet. They often think technology is the way to get around a lack of resources–we’ll go mine the moon when we run out here. Or we’ll engage in some sort of chemical alchemy with nanotechnology to create the materials we need. It’s just a fundamental disconnect with the laws of thermodynamics. What a shame.

    But here’s the rub: the growth paradigm is just a symptom of the problem, and not the problem, itself. Why do we all insist that we need to grow, turn a profit, expand our income source? There’s something more sinister behind that, then just a ‘human nature’ inclination to grow. For me, it’s the practice of usury that’s got us here. Charging interest on money exchanged, establishing that practice as legitimate within the bounds of coercive law and acceptable social practice, and allowing it to permeate all of our ‘commonsense’ is the systemic leverage point that makes growth seem not only natural, but inevitable. It’s constantly focusing our productive energies towards the future, bringing into being the liabilities of riches yet to be earned. At its core, usury is a feeble attempt to break the second law of thermodynamics by creating something from nothing (or something that does not yet exist). And I say it’s ‘feeble’ because we are now seeing how the social reality of usury is colliding with the material reality of the end of growth. Social realities are changeable–we just renegotiate our relationships with others. Material reality is not changeable.

    I see a lot of tough negotiating in our future.

    #5683

    jal
    Participant

    My parents were motivated to seek a better life for themselves and for their children.

    WE ARE ALL motivated to seek a better life. Those that succeed are the cause of exponential growth.

    Nobody wants austerity for themselves.

    #5684

    pipefit
    Participant

    ilargi said, “And all that is going to run off the tracks in spectacular fashion, be it tomorrow or the day after, because you can’t run an economy forever on money that no-one has worked for.

    Bernanke is willing to throw in another trillion or so – or two- dollars in taxpayer money,…”

    LOLOL!!! You contradicted yourself in consecutive sentences. You had it right in the first sentence quoted above, when you correctly pointed out the USA dollar is garbage, created out of nothing. You can stack a house of cards only so high.

    They aren’t using ‘taxpayer money’ for QE3. They are running a cash deficit of $1.3 trillion per year, and GAAP deficit of over $5 trillion per year. ‘Taxpayer money’ is gone the instant it hits the government coffer.

    You are probably right about the ‘run off the tracks’ comment, but it reminds me of the dot-com bubble. The nasdaq bottomed at 1250, I think, a few years before the boom. I thought for sure it had topped out at 3000 in late 1999. But I was flexible enough to buy some tech stocks at nasdaq 4000 for that last 1000 plus point ride. Good luck.

    #5686

    LOLOL!!! You contradicted yourself in consecutive sentences.

    No I didn’t. You just don’t understand what I write.

    They aren’t using ‘taxpayer money’ for QE3.

    Oh, is that so? Who’s going to pay then? I’ve written a million times about future tax revenues being used for today’s debts.

    You are stuck with the idea that the USD is toast, and blind to what will happen until it actually is. I have done more than enough to explain why you’re wrong. You read with blinders on. Hammer meets nail.

    #5687

    Professorlocknload
    Participant

    Great thread here, all.

    I might add, “money” is at the heart of the matter here. IMHO, the central banks of the world, to create cartels over the creation/control of “money”, have removed all money from the system, for safe keeping, and replaced it with their own scrip, ie; “Federal Reserve Notes”, (credit?)

    The real money has been pulled from the system to protect it from foreign and domestic scrutiny/leakage (truth telling?). In this way, near absolute control is asserted over the value of these money substitutes. The value of real money, such as gold, is very hard to rein in and control, because it appears throughout nature, though in limited doses, and is encompassed in varying nation states (among other reasons less relevant to this exhibit.)

    Economic “growth” in it’s true sense is not simply the expansion in the quantity of new scrip and the maintenance of it’s velocity through the system. It is the creation of new real wealth through productivity and efficiencies. This is not what we have experienced since the establishment of central banks. On the contrary, the store of real wealth, AU, has been removed from the equation to pave the way for alternative intervention and control. An artificial economy was created, as it were. At this point, in fact, aside from public dissent, gold is most likely, at least among apparatchiks within the banking system, considered the premier “Enemy of the State” for the above reasons.

    Growth, expansion? Well, the iou dollar “Fed Reserve Note” has expanded in quantity “decreased in value?” from AU= 1/32 of an ounce to AU= 1/1750 of an ounce, just over the last 5 decades, or so. There, IMO, is the “expansion” we have witnessed since 1913. All denominated in credit, which is all a dollar is today. (FRN Note?)

    Resources of course, have not expanded at the same rate because they are not scrip, and cannot be printed. Waste of paper=waste of resources? Well, priced in gold, have most industrial commodities and materials increased in value? Gas in my neck of the woods is now $4.50. About the same as in 1963…about a silver quarter then and now. Honest money knows no bonds, maybe? On a parallel, as a scorecard of central planning, which form of wealth storage has performed best?

    Just as Chanterelle mushrooms cannot be grown in captivity, neither can Free Association based Market Economies. The kind that raise all ships, through mutual benefit. (as opposed to constantly recurring title waves, each sparing a few well placed vessels, but sinking the remainder.)

    Even people don’t perform well in captivity. For proof, just look around the world.

    #5688

    TheTrivium4TW
    Participant

    Hi Dave,

    davefairtex post=5369 wrote: Trivium –

    I respect entirely what you say – about their power and control over the levers of government and finance. Whether these levers can actually work the way they used to at this point in time, that’s my question.

    The first thing we have to gauge is what they expect to happen. The well financed and sponsored narrative is that they only know inflation and think that they can inflate forever.

    That doesn’t pass the smell test anymore than the lie there were “quants” with “models” that showed housing going up forever against flat incomes – remember that lie? Or how about the first “fat finger” in Wall Street history that occurred at the same time Congress was voting to cap the size of the Money Power’s mega bank “chess pieces?”

    The problem with this view is any 5th grader who paid attention to exponential growth knows this can’t happen any more than one can throw a ball up in the air and it can evade the laws of gravity.

    I’m not saying these people can defy natural law, what I’m saying is they know how to manipulate natural law and use it to screw the rest of us while lying and laughing the whole time.

    The con is simple.

    1. Control the definition of money and credit so that money flows to your interests while you sleep. Debt Money Tyranny is engineered to do exactly this:

    Debt Money Tyranny (PDF)
    https://www.keepandshare.com/doc/4638354/debtmoneytyranny-4-pdf-110k?da=y

    2. Debt based monetary systems must grow or else the victims will go bust en masse. They don’t make it too obvious, so they direct growth and eventually blow bubbles to buy up assets for pennies in the follow on collapse. Of course, they lever up to the hilt in advance of the bubble to rake in the cash used to buy up society for pennies – privatizing public roads, water supplies, energy, parks, military, etc…

    3. Seize control of government in order to make their front multi-nationals mega corporation TBTF&J. When everything collapses, they can’t fail… and can lie about their balance sheet and buy up all the other insolvent companies for pennies.

    4. Before the collapse becomes obvious to all, they would want to loot trillions in cash from society and dump trillions in cash onto society.

    Can we say “Quantitatively Easing” the losses and bad assets of the oligarch class at the expense of everyone else?

    No, they will never tell you what they are doing. They are con men and women. While naivety is cute, it leads to trouble at national levels… like democide in far too many cases.

    I know, this time is different. Isn’t it always? How’s that working out?

    What are they doing?

    Exactly that.

    But they can’t tell you that! They need a narrative, no matter how absurd.

    The jobs narrative is completely absurd and fake – they are actually de-industrializing America at breakneck speed while lying to the ignorant populace.

    I’ll address that bad con job in my next posting (this is getting long).

    #5689

    Professorlocknload
    Participant

    And the S&P looks rosy, indeed!

    https://pricedingold.com/charts/SP500-1880.pdf

    #5690

    Synchro
    Member

    Illargi said

    “A really deep recession, the one we say is coming means that most people who hold gold will be forced to sell it, to pay off debt, buy essentials etc. It means you would need to be rich, $1 million bare minimum, to sit on your gold for 10-15-20 years without having to touch it. After that, gold will hold its long time value again. But not in the meantime.”

    So, I’m not sure what you mean by not in the meantime.

    I believe you have been saying that it is preferable to hold cash, rather than gold, for some time now. I’m thinking that that is not a good decision based on history.

    Nicole said this, in her Lifeboat article, posted Nov. 30, 2008.

    2) Holding cash and cash equivalents (i.e. short term treasuries) is vital as purchasing power will be in short supply. Cash is king in a deflation.

    And in the same post, she also said the following:

    Metals will hold their value over the long term as they have for thousands of years, but you may have to sit on them for a very long time, so don’t by them with money you might need access to over the next few years.

    So, I’m not sure what you mean by a very long time. On December 1, 2008 (the closest trading date to Nov. 30, 2008), gold closed at $778./oz.
    Gold closed today (9/19/2012) at $1774./oz.

    On the other hand, according to the US government CPI-U index, from 2008 to now, inflation has reduced the purchasing power of the US dollar by 8%. (And that is using US Government statistics for inflation, which are notoriously skewed low compared to the real world.)

    So, if I had $1000. on December 1, 2008, and simply kept it in cash, it would have $920. in purchasing power today.

    However, if I had taken that $1000., and purchased gold instead, I would have $2280. in purchasing power today. Based on the fact that most people would rather have $2280. than $920., Illargi, would you be willing to reconsider your advice from nearly 4 years ago?

    #5691

    TheTrivium4TW
    Participant

    jal post=5378 wrote: My parents were motivated to seek a better life for themselves and for their children.

    WE ARE ALL motivated to seek a better life. Those that succeed are the cause of exponential growth.

    Nobody wants austerity for themselves.

    jal, yes, societal greed does play a role.

    But the main driver of growth is our monetary system.

    Let me create a storyline that will explain the dynamics:

    1. Debt Money Tyrant Bankster
    2. Society.

    Let’s assume Society needs $20 to run their economy. The Bankster lends $20 to society and charges 5% interest. At the 1 year mark, $21 is owed from Society to the Bankster.

    Society was only given $20 and Bankster didn’t give them any more.

    Society is now bankrupt and hands over collateral to the Bankster – toll roads, public water companies, public power companies, parks, etc…

    That’s quick and dirty and… pretty obvious.

    Bankster doesn’t want to steal $20 worth of stuff, so they lend another $20 out to Society. It has the same problem, but the first $20 can now be paid off and the day of reckoning is pushed back a year.

    Wash, rinse, repeat until Society hits debt saturation and exponential Societal debt growth peaks and saturates society with debt and its carrying costs.

    That’s why they can’t keep prices stable (an expected result of following their true mandate) and have to inflate.

    A steady state system would lead to a bankrupt society in short order… so if you don’t get on that treadmill and grow, you don’t just do without, your family goes into poverty and dies of hunger.

    I’ve flow charted the dynamics here:

    Debt Money Tyranny (Download PDF)

    https://www.keepandshare.com/doc/4638354/debtmoneytyranny-4-pdf-110k?da=y

    KeepAndShare is a PDF hosting website.

    BTW, it is possible for Society to pay their debt back – they have to earn that $1 in interest from Bankster by working for him or selling their stuff to him (Art of War level neo-slavery with Bankster as covert, but very real “Master”).

    Review that chart again… as bad as interest is, bailouts are even worse. Society gets the 100% of the debt while Bankster gets $100s of the proceeds of the debt.

    Showing up at your home on January 1st, pointing a gun at you, marching you to your ATM machine, forcing you to extract $15k from your account, taking the money and leaving you to pay back the debt is too obvious – even for a “consumer.”

    So they use the Fed as an intermediary. The Fed takes on trillions in worthless trash and everyone assumes it doesn’t affect them.

    Think of a bomb in the form of a birthday cake with a lit fuse that looks like a candle… Sun Tzu “war is deception” and “the best warriors never have to fight” to a “T.”

    But it will.

    And it will be wicked, wicked, wicked when it does.

    #5692

    TheTrivium4TW
    Participant

    Synchro post=5385 wrote: Illargi said

    “A really deep recession, the one we say is coming means that most people who hold gold will be forced to sell it, to pay off debt, buy essentials etc. It means you would need to be rich, $1 million bare minimum, to sit on your gold for 10-15-20 years without having to touch it. After that, gold will hold its long time value again. But not in the meantime.”

    So, I’m not sure what you mean by not in the meantime.

    I believe you have been saying that it is preferable to hold cash, rather than gold, for some time now. I’m thinking that that is not a good decision based on history.

    Nicole said this, in her Lifeboat article, posted Nov. 30, 2008.

    2) Holding cash and cash equivalents (i.e. short term treasuries) is vital as purchasing power will be in short supply. Cash is king in a deflation.

    And in the same post, she also said the following:

    Metals will hold their value over the long term as they have for thousands of years, but you may have to sit on them for a very long time, so don’t by them with money you might need access to over the next few years.

    So, I’m not sure what you mean by a very long time. On December 1, 2008 (the closest trading date to Nov. 30, 2008), gold closed at $778./oz.
    Gold closed today (9/19/2012) at $1774./oz.

    On the other hand, according to the US government CPI-U index, from 2008 to now, inflation has reduced the purchasing power of the US dollar by 8%. (And that is using US Government statistics for inflation, which are notoriously skewed low compared to the real world.)

    So, if I had $1000. on December 1, 2008, and simply kept it in cash, it would have $920. in purchasing power today.

    However, if I had taken that $1000., and purchased gold instead, I would have $2280. in purchasing power today. Based on the fact that most people would rather have $2280. than $920., Illargi, would you be willing to reconsider your advice from nearly 4 years ago?

    Synchro, I don’t think you understand the TAE message and this leads to your question.

    TAE isn’t about making short term trades.

    It is about preparing for what we should expect to be the Greatest Depression ever. While the rattling of that event in America is has begun, it hasn’t fully manifested itself for much of the country.

    TAE says it will and you want to be ready.

    1. Gain control over the necessities of life (including building positive community).
    2. Read #1 again.
    3. Read #2 again.

    If you have extra, and few people will, then metals can be used to bridge the collapse. That is, if the Money Power fascists don’t use their government puppet to seize it. Again. Deja vu all over again.

    I read an article where a Greece man stated (paraphrased) – “what good is having a home and a bunch of stuff when you can’t eat?”

    I think the article was on TAE, but I can’t recall for sure.

    My main point is that very powerful criminals are in charge – a topic that is not popular to discuss in some circles. That’s fine, until it isn’t.

    You see, those short term treasuries or that rolled over cash could be stolen by these Money Power fascists as well. Using their “government” powers, of course.

    At some point, the fascists have to be exposed publicly and en masse – something that far too many people avoid doing at almost all costs.

    So the TAE winners (those that follow their advise and make it through) will get their version of fascism – and I believe you ain’t seen nothing yet of the evil that be unleashed on a population.

    #5693

    SteveB
    Participant

    Synchro post=5385 wrote: However, if I had taken that $1000., and purchased gold instead, I would have $2280. in purchasing power today. Based on the fact that most people would rather have $2280. than $920.

    Only if you sell the gold today. Are you going to sell it today (and perhaps buy something of real value, like insulation) or hold onto it until after its price drops back down below $778/oz., perhaps in a single day?

    The choice for most people is not between $1000 and $2280, but between $1000 and much less than that (like a few hundred $) after the ‘crash’.

    My choice was to cash out my IRAs, pay the penalty and taxes, and then pay off all remaining credit card debt after divorce. A few years since, my new wife and I paid off our mortgage with other savings and added passive solar glazing, thermal mass (tile), a wood stove, and insulation to our house, then bought about 40 cubic yards of finished compost (over time) and 15 semi-dwarf fruit trees and half a dozen berry vines/bushes and planted out our quarter acre on top of the former lawn and car garage site. Egg-layers to come next spring. Maybe honeybees the following year. We got shovels and trees as wedding gifts. We’re debt-free, sharing the surplus, loving life, and prepared to lose our jobs.

    Oh, and we’re selling what physical gold we have by the end of the year.

    #5695

    TheTrivium4TW
    Participant

    Carbon waste life form post=5375 wrote: Hi Trivium

    I agree with Dave, I think the TPTB have been pushing the ponzi envelope as far as they can, and of course, it becomes increasingly less stable and more difficult for them to control. Yes they can influence it, but cannot predict the outcome as well.

    Couple more things:
    1. I think TPTB is a useful concept, but in practice the, what we can see as a unified PTB is probably just the emergent behaviour of a lot of sociopathic types at the top working within the growth paradigm.
    2. As much as they, as a group, have an emergent agenda, I think they have largely lost control of the vehicle of the economy and are probably searching for ways to post-justify it. i.e. they did it “on purpose”.

    I think the problem now is that there is no “steady state” paradigm to take over now that we are running on fumes as far as resources goes. If humankind were to save ourselves, “no growth” is the kind of austerity we need. Not the type of austerity that funnels our remaining wealth to those who need it least.

    Now whenever I say that the main problem is our growth paradigm, all emerges from that, I get glazed looks from my friends

    I agree with you and Dave as well. I disagree with the idea, though, that this is all they know or want. They want a deflationary collapse after they’ve maximized their looting of the treasury and the amount of debt they offload on society. You can rest assured that $40,000 million a month to banksters in return for their worthless 2nd mortgage MBSes is part of the looting operation… so it is still under way.

    1. I don’t understand the mechanics of how the Money Power interoperates – and probably never will. It is enough to know they exist and they operate, on one level or another, to control major societal institution. It doesn’t even matter who these people are, other than when it is time to throw these criminals in jail. Reverse engineering some of their modus operandi reveals them to be masters of psychology, sociology and economics, though. They use economics to control the lower levels – people do what they get paid to do and this crowd controls the most money to use as payroll.

    2. IMHO, there’s no way they don’t know they didn’t break Section 2A by promoting the biggest bubble in human history – after all, they lie about their mandate to cover it up! How do they know to lie if they don’t know they broke the law?

    https://www.keepandshare.com/doc/3324744/wmdebt-graph-3-79k?da=y

    Lindbergh knew the deal over 100 years ago…

    “The new law will create inflation whenever the trusts want inflation. From now on depressions will be scientifically created.”
    ~Congressman Charles A. Lindbergh, after the passage of the Federal Reserve act 1913.

    https://www.ourrepubliconline.com/OurRepublic/Author/112

    People have trouble figuring this out because they believe the sponsored narrative – Bernanke is trying to help the economy…

    No, Bernanke despises you and the rest of us. He hates us and thinks we are trash. He serves the Money Power and his job is to transfer our wealth to his over lords without us waking up to their program.

    Debt Money Tyranny is known to this Money Power class and it is knowledge withheld from the common person victimized by it.

    Debt Money Tyranny

    https://www.keepandshare.com/doc/4638354/debtmoneytyranny-4-pdf-110k?da=y

    The whole thing was a fraud from the get go.

    Guys like Ben Franklin, Thomas Edison, Thomas Jefferson, Andrew Jackson, james Garfield, Abraham Lincoln, Cahrles Lindbergh, Sr., Henry Ford, Louis T. McFadden all knew these banksters were criminal con artists.

    They aren’t idiots. They are cold blooded murderous, criminal tyrants.

    Poverty murders about 20 million a year – a number that would make Hitler, Mao, Pol Pot and Stalin envious.

    WHO drives the fraudulent monetary system that is the basis for poverty?

    WHO finances the governments to loot their citizens and rip their financial faces off – if not their very face?

    WHO?

    The Money Power.

    #5696

    Synchro
    Member

    Trivium4TW said:

    TAE isn’t about making short term trades.

    And I am not about short term trades either. Far from it.

    My point is — protect your ongoing savings by protecting your purchasing power as much as possible.

    If you have eliminated your debt (or never acquired any in the first place) then you should be saving money regularly.
    However, the value of the US dollar is undergoing continuous, ongoing decline.

    In 1971, the US went off the gold standard. Today, according to government CPI data (which is skewed to understate real world values), it takes about 5700 dollars to purchase what 1000 dollars did in 1971.
    The US Dollar has declined in purchasing power by about 83% in the last 40-some years, and your dollar is today worth 17% of what it was worth back then.

    In 1971, just before taking the US off the gold standard, the official gold exchange rate was $42./oz.
    Today, it is $1774./oz., or 4220% of what it was back then.

    My point is, that if you are saving your money for an uncertain future, why would TAE suggest you keep those savings in cash, which is continuously declining in purchasing power, when you can keep it in gold, which is not?

    #5697

    sangell
    Member

    So we turn the Central Banks of the world into what Bill Gross called ‘the place where bonds go to die’ and print more dollars to replace the dead debt only, instead of putting those dollars into the hands of the real economy, the Central Banks give them to the financial embalmers who prepare more bonds and debt for the mortuary.

    How else can it be when new money is used simply to fund current consumption in the form of transfer payments to the non productive and zero sum speculation on the commodity and stock exchanges by the major banks. As real economy is starved of investment, as incomes stagnate and joblessness grows there is less and less real wealth available to support the growing pile of debt so more of this debt must be shipped to the Bernanke, Draghi, Shirikawa and King financial funeral parlor.

    #5698

    My point is, that if you are saving your money for an uncertain future, why would TAE suggest you keep those savings in cash, which is continuously declining in purchasing power, when you can keep it in gold, which is not?

    Because in a deflation, cash is definitely king, and gold is definitely not.

    #5700

    Synchro
    Member

    ilargi post=5393 wrote: My point is, that if you are saving your money for an uncertain future, why would TAE suggest you keep those savings in cash, which is continuously declining in purchasing power, when you can keep it in gold, which is not?

    Because in a deflation, cash is definitely king, and gold is definitely not.

    Hold cash at your own risk and peril.

    Cash will expire worthless after its Best By date. Why?

    All fiat currencies fail after a rather limited lifespan.

    According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

    https://georgewashington2.blogspot.com/2011/08/average-life-expectancy-for-fiat.html

    In a global economic catastrophe, the Euro, the Yen, the Pound, the Renmibi, and yes, even the almighty US Dollar will become as worthless as all of their failed predecessors.

    Gold has retained its value over time:

    In one of the earliest recorded financial transactions, in Babylon during the reign of Hammurabi, a clay tablet stipulated the price in gold for an order of bread — the equivalent of 500 loaves for an ounce of gold.

    Today, 6000 years later an ounce of gold will still buy you — 500 loaves of bread. I’m wondering how much bread the US dollar will buy you in 6 years, much less 6000.

    #5702

    davefairtex
    Participant

    So many great comments. I’ll choose this one to reply to.

    Synchro –

    My point is, that if you are saving your money for an uncertain future, why would TAE suggest you keep those savings in cash, which is continuously declining in purchasing power, when you can keep it in gold, which is not?

    The famous continuous decline of USD purchasing power, which we could track back to 1913, is all because of money printing from credit growth that has gone uninterrupted except for one instance – the 1929 crash. During credit bubble pops and resulting deflation, the USD purchasing power actually increases, flying in the face of 100 years of steady inflation.

    Currently the Fed is trying to engineer a back-to-benign-inflation move (Trivium doesn’t think so, but I’m going with Occam’s Razor – they mean exactly what they say regarding inflation) through occasional money printing and extremely low interest rates. Normally home rates at 3.5% for 30 years would bring buyers out of the woodwork and drive housing prices straight up. All it has done is inject a gentle bounce into the home price decline curve, and there’s not a lot of room for mortgage rates to drop.

    I see four possible outcomes:
    1) “Goldilocks Deflation” – government-spending-driven inflation alongside private credit deflation, with judicious Fed monetization and extremely low interest rates. The last 4 years. AKA “lost 2 decades” in Japan.
    2) “Deflationary Financial System Collapse” – where TAE thinks we must inevitably end up.
    3) “Return to BAU” – where the Fed & government think we can go with enough Goldilocks Deflation
    4) “Hyperinflation” – what happens with too much monetization.

    Gold will do ok in Case 1, and very well in Case 4.
    Case 2 – in my mind, jury is still out. Normally I’d agree with TAE here using price movements observed when deflation takes hold: gold futures prices curl up and die when deflation threatens. Anyone who seriously watches market prices would not dispute this claim. However there is Armstrong’s theory about serious government financial repression and how physical gold (as an international black-market alternative currency) will do well in that environment, but we need more repression before we can state one way or the other.
    Case 3 – gold would likely drop since hyperinflation risk is then off the table, but I don’t assign a very high likelihood for this outcome.

    In our Goldilocks Deflation, the price of gold has alternately gone up and down, based on the amount of deflation or inflation at a given point in time. We popped to 1900 during the last round of monetization, only to drop slowly to 1550 once it was withdrawn.

    There are a number of events that could tip us into a deflationary crash transmitted via Credit Default Swaps. To mention a few: a disorderly sovereign bankruptcy, a true anti-euro government in one of the big countries, a bank run in one of the PIGS, any sort of military action (civil war, coup) in an EZ country – the interventionists are keeping the boat afloat, but only just barely. Any unanticipated Black Swan and it sinks. And to my mind, the pressures on the populations from austerity policies will most likely bring about one of these Black Swans in the fulness of time. I can’t imagine Spain handling 20 more years of this.

    If you watch carefully you can see how commodity instruments perform when deflation starts to bite – when there is no money printing, and institutions start to reduce leverage on their balance sheets. This happened last October/November. Institutions start selling off futures contracts of all types, and that includes gold, and the CCI components drop across the board. And the buck starts to rally. If you project that forward through an actual deflationary crash, things look ugly, all except for the dollar which looks quite good.

    So for Case 2, my only question is can physical gold rise above the rest of the commodity complex through its capacity as an international alternative black-market currency in a time of great financial repression – Armstrong’s case. If not, the price of gold will suck along with everything else in the CCI and cash will be king right up until the reflation event occurs ending the deflation.

    That’s very a long-winded way of saying, I don’t know, but I feel that in Case 2 gold most definitely has price risks identified by TAE that are not acknowledged by the vast majority of goldbugs out there.

    #5703

    synchro

    That is exactly what we say. Why would you repeat it as a criticism then?

    The problem is that you skip over the deflationary period, and that will be an expensive omission. Gold will not hold its own when everybody has to sell whatever they can, including their gold, just to survive. Once all has been sold, gold will return to its historical value. But unless you have enough other things to sell, you won’t be able to wait that long. As I’ve said a zillion times, it depends on how bad you think the depression and deflation will be. We say: think Tulip bubble, South Sea bubble, but on a global scale. There has never been a bubble as big as we have now, and we think that is reason enough to be very careful. All fiat currencies return to the nothing they come from, but not all at the same time. The USD is the reserve currency, and it will rise hugely, simply because most debt is denominated in it and debtors will need it to pay off what they owe. It’s not really rocket science, is it? But if you want to move all you have into gold, by all means do be my guest. And if you’re lucky, this will be just another run of the mill garden variety depression, and you’ll come out of it with great fortunes. I see that as a big gamble, and I think there’s been enough gambling lately. But, yes, there’s a vast majority of finance sites out there who proclaim, and profit from, gold as being endowed with messianic qualities. Not this site.

    #5705

    Professorlocknload
    Participant

    Ilargi says;

    “Once all has been sold, gold will return to its historical value.”

    I read that as the dollar will return to it’s intrinsic value. Matter of perception.

    I’m with you in that we are in an unraveling at present. If it becomes deflation, proper, fear alone will most likely put a floor under gold. The dollar, on the other hand, is backed by a nasty military industrial complex, insuring it’s status as reserve fiat, in the short term, and as long as it is expedient for TPTB. Accept it’s value or walk the plank, as it were.

    That said, I never thought I would find myself in Gvt backed bonds and PM instruments at 50-50, as I have these past several years. This position grates on itself.

    Debt, unless of the self liquidating variety, is poison in any environment, so I stay out of it. I live an “austere” but comfy life Sure, a “Lender I be” as a place to park liquid assets at present. My deflationary ego, thanks to TAE, and others.

    My inflationary side tells me to keep a finger on the trigger of the bond side of this thing, because gold’s track record is substantially longer than the Federal Reserve System’s Magic Buck. My point here is, your position on deflation is credible, no doubt, but ctrl-p is inevitable. Bond and FX markets are forward looking as an understatement, and can move with lightening speed, but by the time the average blog reader gets the news, it’s over.

    With a multi thousand year track record of wealth preservation and safe haven, I wouldn’t be inclined to diss gold too much. Especially knowing the Fed will not sit tight and allow it’s own destruction by deflation, any longer that it takes to electronically credit every account, EBT, Mastercard in this nation with “Whateverittakes”, to the sound of chopper rotors.

    So, deflation it is, with stops as tight as my old Army Uniform.

    Nano-seconds! That’s fast! As fast as putting a couple disposable bucks on FAZ one night (leveraged short banks) , and awaking to the news TARP was passed! Still hurts. Also, be advised, this info won’t be televised until after the close on a Friday night. By the open on Monday, the coffers will have been looted.

    Caveat Emptor, boys and girls, and don’t be found without a chair when the tunes stop. Most gold coins seem to outlast the empires that minted them,so…?

    #5706

    SteveB
    Participant

    Professorlocknload post=5400 wrote: Most gold coins seem to outlast the empires that minted them,so…?

    So buy gold if you’re out of debt, flush with cash, employed, healthy and relatively young. Otherwise the empire will probably outlast you if not the gold. If you’re not there now, you probably have a few months to get there.

    #5710

    Golden Oxen
    Participant

    What a great thread this has developed into, lots of good insights.

    It would seem that a combination of cash, gold and silver would be the better or safer stash for what lies ahead. Play it safe, diversification has always been the key to wise investing, it will most likely play out as well in a survival stash.

    #5711

    Viscount St. Albans
    Participant

    Ilargi said:

    A really deep recession, the one we say is coming means that most people who hold gold will be forced to sell it, to pay off debt, buy essentials etc. It means you would need to be rich, $1 million bare minimum, to sit on your gold for 10-15-20 years without having to touch it.

    $1 million for 10 years = $100,000/year budget
    $1 million for 20 years = $50,000/year budget

    I live in Silicon Valley, arguably one of the most expensive areas in the United States, and my household (consisting of 2 people, myself included) spends about $55,000/year. And looking at our expenses, I see plenty of fat we could trim if we chose to do so.

    In the deflationary scenario that you’ve been describing at TAE, $1 million “bare minimum” for 10 years seems like a pretty high number.
    It is even, arguably, high for 20 years.

    How did you arrive at that number?
    What expenses are you imagining in a deflationary scenario that would require a yearly household budget of $50,000-$100,0000?

    Also, in the past, when asked about the duration of deflationary crash, Stoneleigh has often said that it lasts until the sovereign bond markets fracture. And she has often indicated that one is reasonably safe in US Treasuries for another ~2 years post initiation of the crash (hence the emphasis on short duration, i.e. 3-month Treasuries). This advice implies a timeline of intense deflation for ~2 years before the US Treasury Market is broken and the restrictions on money printing are lifted.

    How did you go from ~2 years to 10-15-20 years?

    Is Stoneleigh in agreement with you on this point?

    Are you basically saying: Deflation could last 2 years or 20 years before the US Treasury Market is broken, we (TAE) are really not sure which one? Or, we don’t really care, that’s not our focus. Your mentioning 10-20 years does seem to imply a timeline.
    Either way, a difference of 2 years of deflation vs. 20 years of deflation does seem rather relevant to the planning of the average Joe on the street. Because, if you’re budgeting for one outcome vs. the other, a 10-fold variation is pretty large.

    #5712

    Jack
    Member

    Hi Folks
    What do you folks think of this.
    city of bristol launches its own currency
    https://uk.finance.yahoo.com/news/bristol-launches-currency-help-high-100022735.html

    #5714

    davefairtex
    Participant

    Viscount Said –

    Are you basically saying: Deflation could last 2 years or 20 years before the US Treasury Market is broken, we (TAE) are really not sure which one? Or, we don’t really care, that’s not our focus. Your mentioning 10-20 years does seem to imply a timeline.

    An excellent question, if phrased slightly challengingly. 🙂 I too would like to understand the scenario that’s attached to that timeline – and what the possible branches might be.

    We can always draw from history to see what’s happened before. In the case of 1929, from the time of the bubble pop to the bottom was 4 years. Now there were a whole lot of defaults happening that helped to clear the debt overhang during that period (and we have chosen can-kicking instead) but the turning point of that deflation involved a deliberate reflation event – FDR’s 45% devaluation of the buck/revaluation of gold.

    In the debtor nations of that period, they did a default on their sovereign debt and a devaluation (they left the gold standard). The longer they waited to default, the longer time they put off their recovery. Since the US was a creditor nation, we couldn’t default, so we simply devalued.

    We can guess that a similar thing will happen in this case. After the crash, presumably after some amount of defaults, we’ll have the bank holiday and the massive (50%) devaluation, and possibly even the sovereign default too. One would expect that to happen within a few years of the crash, if history is any guide.

    One might consider picking up some gold immediately prior to this event. But as the good Professor said, it won’t be advertised in advance, it will be announced over a weekend, and after a two week holiday we’ll find out that our cash will have half the purchasing power of what it had previously.

    #5715

    Synchro
    Member

    This is all a very enlightened discussion with some great points being made, and intelligent contributions all around.

    Personally, I would be quite interested in further extrapolation of the timeline possibilities. It would be great if Illargi/Stoneleigh could flesh out several likely sequences of events, with the logical triggers, for different scenarios. (If this happens, then the following timeline plays out; if that happens, then the alternative timeline likely occurs; etc., etc.)

    One thing that skews the thinking of most of us, is that we tend to be American-centric. It’s important to realize that there are major regions today (think India/SE Asia regarding gold, and China regarding silver) which have thousands of years of history using precious metals currencies during extended periods of economic turmoil. These regions may likely experience the looming economic debacle quite differently from how Americans will.

    My feelings regarding the inflation/deflation debate are that there will be many examples in which both will be occurring simultaneously, both within a given region, as well as across several different regions, as well as between differing commodities, products, and services. I’m not married to the belief that for any period of time, or any locale, it’s got to be either one or the other.

    In effect, there may likely be some various and sundry monster economic hybrids that arise, and which in all likelihood, there exist historical examples to be found that can illustrate this.

    #5717

    davefairtex
    Participant

    Synchro –

    Personally, I would be quite interested in further extrapolation of the timeline possibilities.

    I’m playing around with that right now. I’ve laid out my personal favorite four scenarios in more detail, and I’m working on the triggers that have to occur to move us from one state towards another. Furthermore, I’m curious about possibly detecting these triggers automatically. For instance, the famous Bond Vigilantes – what data changes when they make an appearance? And how might it differ in the Eurozone vs. the US?

    Likewise, posting charts of critical financial data (US long rates, the USD index, etc) labeled with important watershed events (QE2 ends, ECB LTRO announcement, LTRO-2 execution, QE3 starts, etc) might help see where things are headed.

    Your comments about different regions experiencing this differently is a great point too. Not only about the different cultural treatment of precious metals, but creditor and debtor nations will likely have different experiences during this time too. Same goes for nations inside the eurozone and those outside. The US being a debtor this time around will likely mean some dramatic differences from 1930 – but I don’t know what they might be!

    After all is said and done though, I’d guess that TAE (and a good chunk of the readership here) isn’t so interested in the nuts and bolts of this sort of thing. As I understand it, TAE’s main focus is helping the bulk of humanity on how to survive what they see as the likely outcome and discussions like this may well be just wasted energy to them.

    When different people I respect have wildly different outlooks and probabilities of outcomes, it makes me uncomfortable! So I guess this is just my effort to make sense of it all. And I’ve never really seen anyone with any particular viewpoint lay out the cases in a clear, if-then sort of way that lets me understand what must (likely) transpire before things either explode (in either direction), or get better.

    Perhaps I need to make my own site! After all Ash went spiritual on us and made his own place…I guess I could go all analytical and make mine!

    #5718

    p01
    Participant

    Viscount St. Albans post=5407 wrote:
    I live in Silicon Valley, arguably one of the most expensive areas in the United States, and my household (consisting of 2 people, myself included) spends about $55,000/year.

    I usually comment on the less than one percenters (globally you are < 1%) except very briefly and with a lot of cynicism as to their delusion of being special, but:
    If you know the predicament, have the financial means, and probably the right age, why are you still not on your homestead?
    Stoneleigh always said if you can afford it, get a head start, so I really don’t understand your confusion in this matter.
    Or you probably will be the one to help others in the community, that must be it.

    #5719

    TheTrivium4TW
    Participant

    The human mind repels the unknowns, therefore, we often latch on to false “knowns.”

    We really don’t know the details of the future.

    As for Ilargi’s $1 million comment, I don’t think he meant it to be taken as literally to the dollar or out of context of everything else he has been saying.

    Even so, people with $10 million may find themselves wrecked by what is coming if they are tied to the societal false narratives.

    This kind of deflationary bust isn’t about slowly lowering prices. It is, as I view it, all about…

    1. Massive unemployment for the long term.
    2. Massive debt defaults / Money Power corporate front asset stripping.
    3. Bank failures and depositor wipe out.
    4. SS failing and busting the elderly.
    5. Pensions collapsing and wiping out the public union class.
    6. Investment values collapsing.
    7. Markets collapsing (many things you won’t get at ANY price!).
    8. Massive social upheaval and lots of violence.
    9. Money Power financed police state crack downs on liberty the world over. The police state and the 1.6 billion in bullets is being purchased by the Money Power (Fed issuing debt to purchase) in order to ensure they get to keep their criminally gotten “goodies” once the average “consumer” is busted and realizes it is time to become a “citizen.”

    Nasty times lay ahead.

    Real nasty.

    #1 Get control of the necessities of life.
    #2 Read number #1
    #3 Read Number #2

    If you must, gamble with the leftovers – because everything is a gamble when a criminal MOney Power oligopoly is running anarchist over a passive, brain washed population mass that, frankly, loves their servitude so long as they get bread and circus with it.

    When the bread and circus ends, though… that’s when the police state and 1.6 billion, with 100s of millions of hollow points comes into play.

    And those that think the media isn’t fake… why are they straw manning and reporting on only 174,000 of the 1.6 billion?

    DHS Purchases 200 Million More Rounds of Ammunition

    https://www.infowars.com/dhs-purchases-200-million-more-rounds-of-ammunition/

    Establishment Launches Straw Man Over Government Bullet Purchases

    https://www.infowars.com/establishment-launches-straw-man-over-government-bullet-purchases/

    BTW, the only reason the government can afford these munitions is because they knelt before the controllers of the Federal Reserve System and were allowed to buy the munition on credit.

    IOW, the Federal Reserve controllers believe these bullets will serve their interests and are worthy of financing.

    Make a Debt Money Tyrant mad – *think* about that.

    Long. And hard.

    PS – hollow points are illegal internationally and are too expensive for training. Shredding the organs of domestic entities is all that’s left as a purpose for such ammunition.

    PSS – The Money Power has no influence… anyone can take a 1.4 billion ammunition purchase and have the entire MSM reporting about “kook” “conspiracy theorists” that think 174k rounds is “suspicious.”

    No influence my rear end! Propaganda so thick it would make Goebbels blush!

    #5720

    skipbreakfast
    Participant

    davefairtex post=5413 wrote: Synchro –

    Personally, I would be quite interested in further extrapolation of the timeline possibilities.

    I’m playing around with that right now. I’ve laid out my personal favorite four scenarios in more detail, and I’m working on the triggers that have to occur to move us from one state towards another.

    Perhaps I need to make my own site! After all Ash went spiritual on us and made his own place…I guess I could go all analytical and make mine!

    I’m very interested in your conclusions, dave! Thanks for the Armstrong link. I’d not read his stuff yet. Insightful, I think. Though murky in places too.

    #5721

    Viscount St. Albans
    Participant

    TAE:
    Do you think deflation lasts another 2 years or another 20 years?

    Stoneleigh has said at various times mentioned: 1-2 years until the US Bond Market cracks (shorter times for European periphery and core).

    Ilargi has mentioned recently 10-15-20 year time horizons until gold would be useful. That seems to imply a 10-15-20 year deflationary period.

    These distinctions matter: If 2 years, then I begin to transition to hard goods in another 1.5 years. If deflation lasts 20 years, then I begin to transition to hard goods in another 15 years. 1.5 years vs. 15 years.

    If you don’t know and/or don’t care — then please say so.

    #5722

    Synchro
    Member

    Viscount St. Albans post=5417 wrote: TAE:
    Do you think deflation lasts another 2 years or another 20 years?

    This is a crucial question for all of us that follow you, Illargi.

    We would like either you or Stoneleigh to step up to the plate and address this. It is critical for many of us who listen to you both, as to how we plan to move ahead.

    Please.

    #5723

    Viscount St. Albans
    Participant

    Earlier, I commented:

    If you look through the archives, you’d be amazed the number of small market dips over the last 3 years that led her to warn of imminent market collapse.

    It’s pretty much like clockwork.

    Steve B requested……..And Ilargi (referring to me) responded

    Examples/links would help to evaluate the data, 

    They always fail him/her.

    ————-

    JULY 1, 2010 1:02 PM
    Stoneleigh said…
    “The financial markets are leading the way lower, and the real economy will follow. I think we’re likely to see a market cascade event at some point this year.”

    My comment: Some historical context
    S&P 500 = 1022.
    On July 1, 2010 when Stoneleigh made this comment, The S&P500 had fallen ~18% over the previous 1.5 months. July 1, 2010, in fact, marked the low point for the market for all of 2010. The market rallied for the rest of the year and ended 20% higher.
    ———————————————————-

    WEDNESDAY, AUGUST 10, 2011
    Stoneleigh said…
    “The rally of the past two and a half years continued longer than we had anticipated, but on balance of probabilities it is now over, and we are entering the next phase of the credit crunch……With the dramatic end to the rally (and a loss of over $7.8 trillion in mere days) comes the end of the complacency it engendered. Fear is in the ascendancy once again”

    My comment: Some historical context
    S&P 500 = 1180
    On August 10, 2011, when Stoneleigh made this comment, the S&P500 had fallen ~ 12% over the previous 2 weeks. August 10, 2011, in fact, was very close to the low for the year. Within 1 week from this comment, the market began to rally for the rest of the year and ended the year 6% higher. The rally extended further into 2012 and reached a new nominal high on March 8th 2012 (20% higher).
    ——————————————————-

    MONDAY, JUNE 18, 2012 9:16 PM
    Stoneleigh said…
    “The ending of extend-and-pretend is ushering in a new era of fear and uncertainty which is rapidly evolving into the next phase of the on-going credit crunch.”

    My comment: Some historical context
    S&P 500 ~ 1340
    On June 18, 2012, when Stoneleigh made this comment, the S&P 500 had fallen ~5% over the previous 3 months from its temporary nominal high in March 2012. Since making that comment, the market has rallied ~9% to reach a new post-financial crisis nominal high (S&P 500 = 1472).
    ———————————————————–

    WEDNESDAY, JULY 18, 2012 3:18 PM

    Stoneleigh said…
    “I have no reason whatsoever to change my view of reality. Nothing I said hinges on the specifics of timing.”

    #5724

    davefairtex
    Participant

    Viscount –

    Fascinating recounting. All these times were immediately prior to an intervention. 1st example: QE2, 2nd example: ECB LTRO, 3rd example: Dragi’s “I’ll do anything” speech followed up a month later by the latest round of money printing.

    I think if anything, this lays out TAE’s underestimation of the ability of the interventionists ability to keep the game going. The forces of deflation are there, exactly as they say, but the folks in charge keep finding new ways of changing rules and/or printing money until the problem is made to vanish once again.

    Of course until a good chunk of that debt is defaulted upon or nominal incomes rise to make it sustainable, these forces remain in place. How long can this go on? As you have pointed out, a good deal longer than TAE expected.

    It brings to mind Keyne’s quote: “Markets can remain irrational a lot longer than you and I can remain solvent.”

    #5727

    skipbreakfast
    Participant

    davefairtex post=5420 wrote: Of course until a good chunk of that debt is defaulted upon or nominal incomes rise to make it sustainable, these forces remain in place. How long can this go on? As you have pointed out, a good deal longer than TAE expected.

    It brings to mind Keyne’s quote: “Markets can remain irrational a lot longer than you and I can remain solvent.”

    Now Dave…you’re talking like a true trader here. It’s a bold prediction Stoneleigh made, but was never about a timing certainty, rather a timing probability at the moment. This is very early days. Seriously, if finance all falls apart in a year or two, will we look back in 10 years and say Stoneleigh was so wrong because she was off by 24 months? This is a major, life-changing, SOCIETY-changing, history-changing economic turning point here (if financial collapse can ever even be reduced to a single “point” in time at all).

    The prediction that financial trouble is imminent is important for people to take it seriously. It could have happened at any time. It still could. Eventually, the heat might be off. Eventually maybe we can relax and say we dodged a bullet and TAE was “wrong”…but almost everything is WORSE since those calls were made, don’t you think? More QE means things were not fixed with QE1 and QE2. In fact, if QE3 turns out to be bigger, I would say that things are much worse. How long can they print? Longer than we expect? Sure. How long is too long. Depends on the individual. I’m comfortable standing on the sidelines for a couple of years. I’m not a trader. But I do not believe any government can print to the degree that is necessary to suddenly fix half a century of credit addiction.

    All I’m saying is, even if the big credit event happens in 2 years, in the scheme of a 50 year credit bubble, Stoneleigh won’t have been off by much.

    Unfortunately, we’re in a truly complacent lull at the moment. According to market reactions, QE has apparently worked. But we’re not out of the woods.

    People shouldn’t mistake the lack of obvious collapse for the lack of CATASTROPHIC RISK. We’re still in unprecedented times here. I’m still inclined to be very careful. And as Stoneleigh has argued, being very careful and staying on the sidelines is really only about losing some opportunity costs. That’s fairly priced insurance, in my opinion.

    Not saying there isn’t money to be made in the dying days of this economy. Who knows how long the disease will last. Doctors give patients 2 months and they last 2 years. It doesn’t mean they’re not gonna die. Who you gonna bet on?

    #5728

    Synchro
    Member

    davefairtex post=5420 wrote: Viscount –

    How long can this go on? As you have pointed out, a good deal longer than TAE expected.

    It brings to mind Keyne’s quote: “Markets can remain irrational a lot longer than you and I can remain solvent.”

    In an interview on CNBC this morning, Ray Dalio (Founder/CEO of Bridgewater Associates, and one of 2012 Time magazine’s 100 most influential people in the world) had this memorable quote:

    “Southern Europe faces a 10-15 year managed depression.”

    I believe that is a succinct analysis of not just Southern Europe, but of what is happening in the entire industrialized world. Japan started it 20 years ago, and the rest have just drifted into it during the last 5 years. It is exactly what Bernanke, Draghi, and the rest of the central bankers KNOW they are doing — Managed Depression.

    How long can they manage it . . . . well, that would be the $64,000. question, would it not? Most interestingly is that they have managed it this long.

    Five years ago I read Kunstler’s The Long Emergency, shortly after it was first published. After my first reading, I placed the emphasis on the title word Emergency. After I read it the second time, I placed the emphasis on the title word Long.

    John Micheal Greer (the Archdruid Report) has also stipulated many times that this devolution is going to be a grinding, drawn-out process. Yes, there will be stair-step drops along the way, but it is not going to be like plunging off a cliff, but more like bouncing off one boulder to another down a steep slope.

    The good news is that this gives us all a bit more time to acquire our homesteads and prepare our families for what lies ahead.

    #5729

    Golden Oxen
    Participant

    @ Reply Synchro, Sir I believe you are in error about having to move your family

    If the world ends in a slow whimper rather than a sudden bang you will not have to go anywhere. However please don’t take my statement to mean you will be able to live off of your 401k, or a stock portfolio my friend.

    Riding a bicycle will probably turn out to be the greatest thing for our health, as well as a steady diet of green tea and home grown veggies.

    Not what I call heaven either, but it beats hiding out with the polar bears me thinks.

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