Debt Rattle Jan 3 2014 – Dr. Doom Is On Xanax


Home Forums The Automatic Earth Forum Debt Rattle Jan 3 2014 – Dr. Doom Is On Xanax

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
  • #10191

    Marjory Collins Blowing horns on snowfree Bleecker Street on New Year’s Day January 1 1943 I’m not entirely sure that new year’s predictions are inter
    [See the full post at: Debt Rattle Jan 3 2014 – Dr. Doom Is On Xanax]


    Could it be Dr. Doom has better sense than to fight the Fed?

    Maybe his strategy is to live to fight another day?

    Certainly all the permabear stopped clocks will be right again for their usual brief moments in the grand timeline scheme of things, but won’t this just hasten the next reset? Beside, to who’s advantage are drawn out deflationary depressions? Wouldn’t we think the general psychology would lean to digging out of the negative and moving toward the positive?

    With durations that can’t go any shorter, maybe it’s time to test the waters again? Capital preservation (cash/securities) has been a “lose less” tactic for the faint at heart, but pales next to the gains made in equity prices the nattering nabobs insisted would be at 666 S&P by now. Not to mention RE gains in over sold markets. Numbers which simply penciled out to excellent ROI’s at the bottom.

    Might be the important distinction in surviving these things is separating the what “is” from the way we think it “should” be.

    To summarize, bet or fold, but you’re going nowhere trying to hold up the game, because the cards are already dealt.


    Professorlocknload – “Beside, to who’s advantage are drawn out deflationary depressions? Wouldn’t we think the general psychology would lean to digging out of the negative and moving toward the positive?”

    Karl Denninger would argue there has already been a tremendous “positive” realized by the top 10%, especially the top 1%. Shakespeare said, “Heavy hangs the head that wears the crown.” I’d add: Heavy hangs their robes, yachts, and offshore bank accounts as well. These guys are dripping in positives; it’s a wonder they can stand upright.

    “[See chart at link below]. That’s across the entire economy. And it tells you that across the entire economy for 30 years there has been no net economic benefit in real terms for the people in this economy.

    Now you might look at that chart and note that the slope is downward from 1980 to the present in the light blue. But if your prescription is to raise that blue area, you have a problem because in order to do so at a rate sufficient to recover what was lost over that 30 year time period you’d have to roughly double it and then hold it there for 30 years. That is, you’d have to double wages and yet not produce any more monetary inflation in doing so.

    Do you think that’s possible? I don’t.

    So what’s the other alternative? Reversal of the previous inflation. Of course “economists” call this “deflation” and claim it’s bad, but it’s not. You only want things to be expensive if you’re a seller, and sellers are in the minority. They do, however, happen to be that same 10% and 1% quoted above.

    There is no “answer” to be found in redistribution of wealth or any such nonsense so long as you allow those very same someone’s (that top 1% and 10%) to issue all the monetary inflation they want in the form of unbacked credit. They can — and have — simply used that to steal back any attempt to tax away or “redistribute” their income.”

    He goes on to blast J. Bradford Delong, Professor of Economics, Berkeley:

    “In other words, he’s very familiar with the data presented in that chart.

    But he doesn’t discuss it — not once. There is no reference to the quantity of credit (and thus the “supply of money-like things”) in the economy, because as soon as you bring that into the discussion what has gone wrong becomes immediately apparent, the people responsible are also immediately apparent, and the solution is likewise immediately apparent.

    And if the people were to understand this widely they might come to the (very-justified) conclusion that all of the above was and is an intentional act of fraud, not an accident or some “random” event.

    They might call for indictments and prosecutions, they might be willing to back that demand up, and they might include those who have been dishonest with them in those Administrations, including Mr. DeLong, in the list of people to be tossed in the dock.”


    Seems to me that both politicians and “journalists” are now just shoveling BS into all available fans, just to see how far it will fly. Connections to “reality” are apparently unremunerative.

    All here might be interested in a little bit of perhaps real journalism at the NYT:

    A few choice factoids in there- but not many surprises. Should it result in oiling guillotines? Sure. Will it? Nah.


    Greenpa – that was an excellent article. Last year I compiled a bunch of articles re commodities speculation and how it was forcing prices up. It was eye-opening, but I’m sure barely scratched the surface: warehouses full of aluminum (filled to the rafters) in Detroit and New Orleans by Goldman Sachs, copper stockpiled in China and Hong Kong, oil just sitting in tankers. No, no driving prices up here (sarc)! And all the same familiar thieves, just different markets. The academics who protect and defend these scum deserve some real jail time too.

    This is an interesting article that Karl Denninger wrote re Bernanke’s last lies. He goes over how Bernanke drained $125 billion out of the banking system from September 19 and 24, 2008:

    “In the year leading up to the crash you watched while the economy built seven dollars of debt for every dollar of advancement in GDP. That very same year when you pronounced that subprime was likely to be contained you knew damn well what was going on because this is your data, not mine and you had it before I or anyone else did.

    You in fact knew, factually that the American consumer had been falling behind since 1980 on a continual basis, with only a quarter or two (in the early 1990s) where income from all sources, including government transfers, kept pace. You knew damn well that this was all a game of pulling forward tomorrow’s demand into today and that like all exponential functions it had to eventually end.

    You may not have known exactly when it would end, but you were utterly certain that it would, because mathematically it had to. You did not lift a finger to stop it before the crash, you did not take one regulatory action to uncover and stop the fraudulent issuance of credit to people who could never have paid back what was lent to them and you did exactly nothing to shut down the securitization fraud machine upon which all of this exponential increase in credit issuance rested.

    Then when things got dicey you claimed to be providing liquidity to the system while in fact you were draining it. You factually drained $125 billion out of the banking system over the space of four business days from 9-19-2008 to 9-24-2008.

    What happened during those days Ben — and in the days that followed?


    These are facts published by your own institution and not subject to dispute.”

    Karl said, “The media’s unwillingness to hold you to account for this crap, up and down the line, along with the government, leaves them all standing as willing and intentional co-conspirators in these lies.”


    Here is the article Karl wrote on September 24, 2008:

    “Note that this is an intentional drain of “slosh”, or liquidity, from the banking system. $125 billion in the last four days drained?

    You wouldn’t be trying to intentionally cause a bank failure or two to bolster your call for the $700 billion “bailout” plan, or perhaps intentionally lock the short-term credit markets, would you, Ben?

    If the market has a liquidity crisis, why would you be intentionally draining reserves from the banking system? Don’t you think you ought to explain that to Congress?”

Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.

Sorry, the comment form is closed at this time.