Professorlocknload
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The thread that keeps on giving! Love it!
Do we really believe Stoneleigh and Ilargi possess the clairvoyant powers to be able to draw a timeline with which we may all front run every twist and turn of this whirlwind, and sail off into the sunset rich? Do Draghi and Bernanke really have this tornado under their confident control? If so, why did they let it get this far?
Having run a business, and other assorted gauntlets of life, I have come to accept that crisis knows no script. And successful reaction to crisis depends pretty much on ones ability to improvise, and some luck. In the trades, we call it being able to think on ones feet). Which then depends upon ones critical thinking skill set, and maybe a rabbits foot.
Stoneleigh and Ilargi most definitely excel in the former department.(Maybe they carry a shamrock, I don’t know?) Mike Shedlock is another analytical thinker, as well. What they have been, and are offering here is a big heads up. A storm was spotted by them first on the horizon, and is now making landfall. Like any storm, it not only makes unpredictable swings in direction and intensity, but can actually feed on itself. These things are processes, not events, and develop a life of their own. These perceptive thinkers are the notice to mariners. All ships must handle the storm in their own way, under their own individual circumstances.
As others here have noted; that the “Authorities” will serve their own best interests as this otherwise unpredictable chain of events unfolds, is a given. We must simply out maneuver them. Though they radiate an illusion of deity, they put on their pants one leg at a time, like us. The difference is we can travel light, they must drag with them the entire bureaucratic entourage.
A little gold, a few hand tools, shelter, multiple skills, a little cash, fishing gear, some camaraderie with the like minded, keeping a clear mind, oh, and about that rabbits foot;).
But….NO FEAR!
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…?
And the S&P looks rosy, indeed!
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.
“It’s almost worth the great depression to learn how little our big men know.” Will Rogers
Some bar stool psych.
On recognizing crisis, look around.
On surviving crisis, look within.
On changing the system, take up political science, or as our host suggests, torch twirling, (my preference as well, in light of the failure of the ballot box.) Right to redress? It’s not there just to use up words. But I like to remind myself, mobs can become mindless, as can electorates, so an eye on the exit is warranted. (The main reason governments must be kept as small and as local as possible, to limit the damage caused by a mob/banksters/whomever, takeover ?)
My nickles worth on debt vs. default. Do whatever it takes to get back here;
” Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.” Polonius (Shakespeare)Then, don’t look back. Or any farther forward than your next couple steps. The farther into the fog of the future you attempt to peer, the more illusory the vision, the less surefooted one becomes.
All of the above recognized, and a little game of chance is still desired, go for it. Place your bets, keeping in mind human action/reaction is pretty hard to quantify.
As an aside, I don’t believe I’ll wager the $20 gold piece I inherited from my Grandfather. It is said it will still purchase the same basic accoutrements it did back in his day. I would like to pass it down to see if it will still do so in the hands of a grand kid, in whatever nation/system that kid may reside 😉
The shrink is out.
Concise and to the point there, Ilargi. One must know his “foe” to understand his predicament, and to develop a strategy. Anyone who believes that a government, politician, bank icon,corporate CEO or mob leader should “do more” to improve ones lot in life is passing the buck. It is the individual, critical thinker who takes responsibility for his own destiny, in light of adversity, who will stand maximum chance of contentment when the final hand of life is played.
That said, of course these psychopaths are in it for themselves, just as are most all politicians (as opposed to statesmen?) And the same could be said for any “collective” too. Mobs are always seized by the few manipulators, to be directed toward their own agenda. This is why I think it wise to be suspicious of anything popular. Humm, individual liberty, what a concept.
Seems this entire mess could be considered caused by those who simply recognized a means of reaping maximum profit, exploiting the general populace’ penchant towards greed and immediate gratification, at the expense of future security and comfort. Took two to Tango? As both factions joined in the collective frenzy of their peers, society became polarized as networks of creditor/debtors, at the expense of the prudent individuals who understood the age old (old age?) benefits of deferred gratification.
It sure is enjoyable to live the good life on other peoples money (stored/earned wealth), until, of course, it runs out. Now what? The status quo isn’t sustainable, and real austerity (living within our means) is avoided like the plague. As irresistible force encounters an immovable object? I doubt that. The laws of nature will eventually overcome the forced compliance of servitude, crowd mentality and social engineering.
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.” Charles Mackay.
Leading to;
“Prediction is very hard, especially about the future.” Yogi Berra
Caveat Emptor! But don’t despair! Feel privileged in being granted, by nature, the sense and ability to follow your own path in finding peace amidst the storm, one by one, so that others may benefit from the observation that it is possible. In my estimation, a well adjusted society is comprised of millions of free thinking individuals, not a one minded collective.
Again, Ilargi and company, thanks for your diligence, against all
odds 😉A “well found” acquaintance once remarked, “My old man told me at a very young age, that if I wanted to live a long and happy life, stay away from doctors, politicians and preachers.” Point taken, and it has worked for me so far. Guess I’m just suspicious of the supernatural, having observed the unintended consequences of such “faith” in it, and other, “polishing solutions” for the rough edges of life.
I suppose, if my soul ever wanders from within and becomes lost, I can always summon “outside” assistance in relocating it.
Ken, I agree, it’s all confusing. The way I read it, the Federal Reserve is owned by it’s member banks. These banks also, for the most part, own the Congress and the members of the Executive Branch. Thereby, also being highly influential in the selection of the Judicial and Military hierarchy. Enter also, their direct control over the corporate means of finance and welfare. It’s a closed loop. This ol’ boy had it down many moons ago;
“I believe that banking institutions are more dangerous to our liberties than standing armies…” Thomas Jefferson
Only thing I would add is “Standing armies are also, indirectly, banker owned and operated” but he probably knew that.
Now, keep in mind, that statement was made back before Thomas had an SUV to fill up.
Couple lessons I’ve gleaned over the years. A. The worlds banking systems are in it for themselves. B. Love ’em or hate ’em, BUT DO NOT FIGHT THEM! For the very currencies the world operates on are solely owned by them. Case in point? Read what it says at the top of the President side of a dollar bill.
All said, I don’t for a second believe they would ever passively allow deflation to take root, in a digital age of finance/credit/money creation. It’s as simple as crediting every EBT, ATM, Social Security account, Checking account, Master card and American Express card with a $50,000 “rebate”, and free kibbles for Rex. I’ll also add here, I believe we are in the developing stages of von Mises “Crackup Boom.”
In their (TPTB) eyes, I would surmise, the more they “print” the higher precious commodity prices rise, the more “deadwood” is taken out of the consumption markets, leaving what’s left to the “essential personnel” of the world, ie. governments and friends of governments.
In light of my rantings above, I suggest many pundits have the cart before the horse these days, in that, I see rampant inflation first, then, as all systems break down, deflation, in the sense that the currency and it’s creators are dethroned, and some other wild, man made ruling concoction is enthroned. Wash, rinse, yada, yada.
May we only hope the bankers don’t deploy “their” ICBM’s in this process.
If the Fed is going to buy $40 billion a month in MBS debt, then burn it, just for starters, why should one not buy all the non perishable golden tulips one can? In a centrally planned system, where the planners own the medium of exchange, and set it’s value, with the assistance of the biggest military on earth, deflation is a pretty far fetched concept. These sociopaths are many things, but they are not suicidal. They will prevail, until there is nothing left outside their “compounds” to reign over (Crackup Boom). Then it’s off to their private islands and foreign retreats to regroup.
Deflation, indeed. Everything I need to get by is on an inflationary trajectory. Gas, tires, mechanic rates, plumbers shop rates,food, rent, electric, clothing, shoes, haircut, bus fare, water bill and even a few things I don’t need like sales taxes, property taxes, revenue bond attachments…Oh, but I will get a new high speed rail, with it’s northern most terminal located in the thriving metropolis of Merced, 250 miles to the south of me, and terminating another 300 miles to the south of that, in “cosmopolitan” Bakersfield. Ha, and they say California is broke! The glass and steel skyscrapers have begun construction, to house another massive bureaucratic institution. Jobs, jobs, jobs. This project will provide so many shovel ready jobs, well, just imagine the prosperity that could be gotten by replacing those shovels with tea spoons.
Is it all bad? All the time? If inflation/credit expansion is the destruction of currency and savings, and deflation is the revaluation of them, how is deflation so destructive? Could it be that maybe it’s time we live within our means again? Sure, it might cause the loss of a few credit created baubles, but I just don’t see it as the end of civilization. These adjustments from “nirvana” back to reality have happened many times through human history, and it seems progress always results after the chaos.
But then, I suppose fear of loss is a powerful driver of emotion. Good news of any sort is a hard sell these days. Still, in the end, the Phoenix will rise, no?
Golden O, ah yes, I remember those nickel cups of joe, and the two bit gas. And cruising out to Marty’s in my brand new $1600 VW Bug for a 15 cent hotdog. I also remember my first paycheck back then, $48 bucks after taxes for a 40 hour week on the pic and shovel.
Now the coffee is a buck, six bits, the hotdog is $1.55 at costco, just filled the $20K Camry with $4 gal gas the other day. Could have used my pre 65 quarters and gotten it for around two bits a gallon still, but I think I’ll save those for a hotdog someday. Seems to me, my foreman’s last weekly check came out around $1200 take home 8 or so years ago when I retired. All relative?
You stirred interesting memories with your comments. Inflation is a given in any fiat currency system. The illusion of ever increasing “wealth” is what keeps it all believable for the participants, and profitable for TPTB. I recall, on military leave to Tokyo, back around the late 60’s, I exchanged greenbacks at around 360 yen to the dollar. Japan seemed to be rolling along just fine back then. Would the US economy cease to exist at, say, $7 to the Euro? The Pound? The whatever? Or would it be forced to regroup, as would the other currencies, to new realities? And the infrastructure would still be standing, for the most part. Granted, those on a fixed income would suffer, but those still in the workforce would eventually be compensated. Lest no ticky no laundry for the elite.
Don’t misunderstand, I loathe dishonest money. Guess that’s why I have made it a point to save honest money all these years. That said, I remember, as you most likely do as well, since we’re both old as dirt 😉 , around 1975-6 my lumber supplier putting up a chalk board so prices could be adjusted daily. I had to insert clauses in my contracts “pending price increases in materials and fees.” When buying tools, it sure paid to reach as far back in the shelf as possible in hopes of finding an older one which missed getting marked up. Oh, the good ol’ days.
How does this end? (Deflation/repudiation is how it should, BUT), well, no one here, or anywhere else can see the future. If they could, they would have ALL the money by now, no? However, if past performance of TPTB is any indication, I’d place my bets on devaluation, do not pass go, do not allow deflation at any cost. What are their choices? Walk the deflationary plank, in the case of the former, or ride the ship down at the helm, in an inflationary whirlpool, hoping for a stick save. Having read “Human Action” and other works by von Mises, enough years ago to have put my faith in real money, I would venture we are headed for devaluation, on a grand scale, most likely already on track and barreling down on us as we write. It is ours to decide whether this will result in the “Crackup Boom,” or might there be one more round of the absurd pulled off by the owners and operators of the currency which passes for money among the unenlightened?
Would I invest my future based on what some blog recommends? Hell no, I’ll invest my future in myself, not the schtick of someone whom I don’t even know. And hopefully, my heirs will inherit a basket of something useful with which to start anew, not a heap of someone else’s debt.
Sorry this got so wordy, but I think I’ll cash in a 1963 half cartwheel and take the wife to a matinee 🙂
Can we even imagine the chaos if all the “debt” was allowed to be marked to market at once?
Could it be that the debt is being consolidated (purchased) by the central banks and held back from market clearing, long enough to allow the devaluation of the West’s currencies, and restructuring of it’s finance systems, to gain traction, whereupon it will be gradually released, to be paid back in cheaper dollars, euros, yen, ruples, dinars, stock certificates, in a tightly controlled long term procedure? In the various nations “national interests,” mind you. Maybe the “debt” has been locked down, as it were?
Bond markets are much larger than equity markets. That said, how have the worlds equity markets done over the past 4 years priced in gold?
As a side amusement, I ran across a comment on the infamous Zero Hedge recently, referring to the one and best solution to the EZ crisis. Simply require the worlds central banks to put all reserves in AAPL 😉
Now that article is a walk through complexity! Maybe even on a parallel with the causes of this whole “snollygoster” orchestrated mess.
As for capitalism as it is practiced, I see no semblance of real capitalism in this bazaar hybrid of fascist/corporatist power brokering insanity that is somehow sold as a “Market Based” system.
Yesterday, down at the local farmers market, negotiating the price of misc. viddles, well, I left with the feeling I had just experienced Capitalism in it’s best and purest form. The same way I ran my business for 44 years, without a single need for any outside judicial intervention. Luck of the Irish, maybe, but offering value for value might have had something to do with it.
The grand daddy of all bailout Funds is already in possession of the ultimate banking license. https://thelibertyclub.net/emry.pdf
Yes, SteveB, I include that simplification in the “lesson” segment of Ash’s article, as well. Some folks use the banking structure as a clearing house, while other, more trusting ones use the system as a wealth storing facility. I, like Mark Twain, would be, to paraphrase, “More concerned with the return of my capital, then the return on my capital.” Not much has changed since his day, eh?
To take my viewpoint another step, at least in the short period one’s funds are at risk in the banking monolith, as clearing device, they are “insured” by the FDIC, an acronym who’s last letter stands for what?
Now, imagine the stunned looks on the faces of those less suspicious of the profit creation process, when the uninsured, unbacked, unreal Mutual Fund Industry crashes and burns. An industry, it has been said, which consists of more “Funds” than there are stock issuing entities on the exchanges. Do we sense a dollop of Ponzi financialization (fictionalization) here?
I never had the advantage of a formal collegiate edumication, but, boy howdy, have I paid some tuition in life 😉 My adopted street thesis is simple too, “Fool me once, shame on you. Fool me twice, shame on me.”
Well, pipefit, there were also a freight car load of prognosticators who predicted financial Armageddon upon the subprime meltdown. And here we are at Dow 13,000, full restaurants, the heaviest traffic I’ve seen in years (at least here in the West), none of my friends or family are out of work, and the republicans tell us we’re in a depression, while the dems say everything is clover. Guess we won’t know what is REALLY going down here, for several decades, after it’s all declassified. To Wit; https://www.zerohedge.com/news/fed-gold-price-manipulation
Who’d a thunk it back in ’71?
The above considered, I’m no longer a participant in these insane “markets”, and am waiting patiently for the next set of meticulously engineered revelations.
What more could I add to Jimmy BB’s comment, other than, when this website goes dark, the nerve will have been hit.
Not to worrry. As long as there are Central Banks, government pension plans will be 100% funded. This system is a closed loop. This investment by CPP is, of course, backed by the full faith and credit of the Central Bank and the Taxpayers of Canada. We, here in The Peoples Republic of California won’t be outdone by Canada. We have Cal PERS to do the job of speculating on any wild scheme that some hot shot finance promoter can sell.
To prove we are equal players of the Hubris card, the omnipotent Governor of this state has just pledged his signature on the High Speed Rail to Nowhere project, knowing it’s ultimate cost will amount to well over $68 Billion, while simultaneously declaring a budget deficit crisis. Go figure?
