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Here’s your economics quiz for the day:

Question 1– What do you think would happen if you put $3 trillion into the financial system?

a–Stock prices would rise

b–Stock prices would fall

c–Stock prices would stay the same

Question 2– What do you think would happen if you put $3 trillion into the economy? (Via fiscal stimulus for infrastructure projects, extended unemployment benefits, food stamps, etc)

a–Activity would increase and the economy would grow

b–Activity would slow and the economy would shrink

c–Activity would stay the same, so growth would remain unchanged

If you picked “a” for both questions, then pat yourself on the back because you got the right answers.

Now try to answer this one, last “bonus” question:

Question 3– If adding money to the financial system boosts asset prices, and adding money to the economy boosts growth, then why did the Fed add $3 trillion to the financial system expecting the economy to grow?

Is the Fed confused about how the economy works? Is the Fed confused about how the financial system works?

Probably not. There’s probably some other explanation altogether, after all, why would someone put gas in their radiator when the gas-tank is empty. That’s not going to provide fuel for the engine, is it? The same rule applies to stimulus. The only way stimulus can work is if its put where it’s needed. And we can now say with 100 percent certainty, that the Fed’s stimulus wasn’t put where it was needed which is why it hasn’t worked.

How do we know that?

Just take a look at GDP. Second Quarter GDP came in at a dismal 1.2 percent even though interest rates are still locked at near-zero and the Fed is still recycling the cash from maturing bonds into more government debt.

Do you know what 1.2 percent GDP means?

It means that spending is weak, business investment is anemic, personal consumption is in the toilet and credit growth is kaput. It means that the economy has basically stopped breathing, been taken off the respirator and is being rushed to the morgue for embalming before rigor mortis sets in. It means that the people who are assigned the task of managing the system either don’t know how the system works or have an ulterior motive for the policies they’re using.

So, which is it? Is the Fed a moron or a liar?

Now we’ve all heard the expression, “The definition of insanity is doing the same thing over and over again, and expecting a different result”.

Well, the Fed has been doing the same thing for the last seven years — dumping money into the financial system while predicting stronger growth. That would seem to suggest that the Fed is insane, but is the Fed insane?

No, in fact, the members of the FOMC are extremely-bright, well-educated professionals who have a solid grasp of the economy and the many intricacies of the financial system. These are smart guys, real smart. So, maybe they have an ulterior motive. Maybe that’s why they’ve stuck with the same failed policies all these years.

But if they have an ulterior motive, then what is it? What are they trying to achieve?

The easiest way to answer that question is by simply following the money. We’ve already seen that QE and zero rates have done nothing for growth, so –the question is– where have these policies had the greatest impact?

Why, the stock market, of course!

Did you know that the Dow Jones Industrials (DJIA) bottomed on March 9, 2009 at 6,507. As of Thursday (9-15-16), the Dow finished the day at 18,211 nearly three times higher. The same goes for the S and P 500 which slipped to 676 in March 2009, but rebounded to 2,147 as of yesterday afternoon. Then there’s the Nasdaq which fared even better bouncing back from an abysmal 1,268 in 2009 to a lofty 5,249 yesterday.

Now if stocks rise due to fundamentals, then that’s just great because it means the underlying strength of the economy is driving prices higher. But if stock prices rise because the people who are supposed to be the referees (The Fed) are gaming the system by printing up trillions of dollars and sticking it in the financial markets so their crooked friends can send their kids to Ivy League schools and drive around in Lamborghinis, then it’s not so great.

When the Fed pumps liquidity directly into the financial system, that liquidity cannot accurately be called “monetary stimulus”. It’s not stimulus anymore than if the Fed put a billion bucks into your fledgling-Podunk landscape business. It’s a subsidy, a gift, a handout. Even so, $3 trillion is a lot of money, enough money to light a fire under stocks and send them into the stratosphere. Which it has. But let’s not kid ourselves, stocks didn’t triple because production, earnings and growth are all going great-guns. That’s not it at all, in fact, they’re all unusually weak. Stocks are in record territory because the Fed’s relentless interventions have kept them elevated, which has propped up the insolvent banking system and generated gigantic profits for Wall Street.

And while rising stock prices don’t necessarily prove that the Fed has an ulterior motive; identifying the people who benefit from those inflated prices certainly does. After all, who owns stocks and bonds?

We can break these people up into three separate groups; The pretty rich, the very rich and the filthy rich. These are the people who own stocks and who benefit from the Fed’s policies.

So what does this tell us about the Fed’s “full employment, price stability” mandate?

ORDER IT NOW

It tells us its baloney. It tells us its public relations-hype designed to bamboozle the sheeple who can’t see what’s going on right beneath their noses.. It tells us the Fed has a secret mandate to assist the profit-accumulation process for the Kleptocrat class of ivy league moochers. (Wall Street) It tells us that the Fed’s real job is implement the policies that best facilitate the upward distribution of wealth. It tells us that the Fed’s so called “independence” is a complete and utter fraud and that if Janet Yellen or any of her meat-puppet-colleagues on the FOMC ever veered as much as a centimeter to the left of her corporate marching orders– they’d find themselves wrapped in plastic-sheeting and gasping for air at the bottom of the East River in a pair of cement booties.

The whole idea that the mousy Ms Yellen is calling the shots for the world’s most powerful financial institution is the most ridiculous thing I’ve ever heard. Does anyone actually believe that rubbish?

Yellen is a public relations invention, a small but critical part of a larger charade that is intended to conceal the manner by which the vast bulk of the nation’s wealth is transferred from one class to another. Let’s call it The Great Central Bank Policy Swindle, because that’s what it is. The Fed is merely an apparatchik agency that keeps its thumb on the scale to make sure all the loot goes to its bloodsucking constituents. That’s how the system works. Here’s a little background from an article at the WSWS:

“A new report issued by the Swiss bank Credit Suisse finds that global wealth inequality continues to worsen and has reached a new milestone, with the top 1 percent owning more of the world’s assets than the bottom 99 percent combined.

Of the estimated $250 trillion in global assets, the top 1 percent owned almost exactly 50 percent, while the bottom 50 percent of humanity owned collectively less than 1 percent. The richest 10 percent owned 87.7 percent of the world’s wealth, leaving 12.3 percent for the bottom 90 percent of the population.” (“Top 1 percent own more than half of world’s wealth“, World Socialist Web Site)

But it’s not just the fact that half of everything is owned by a handful of obscenely-wealthy, money-grubbing loafers. This same voracious crew of miscreants is pulling down the lions-share of the yearly income too. Check it out:

“The census data also reveals that income inequality in America remained virtually unchanged from 2014, with the wealthy in the top fifth of the population taking in about half of all household income, while the bottom fifth earned only 3.4 percent.” (“Despite increase in 2015, US household income still lags behind pre-recession levels“, Kate Randall, World Socialist web Site)

So –not only do the plutocrats own half of everything on planet earth– their share of the booty is actually increasing every year. Nice, eh?

The point is, none of this is accidental. These outcomes are the direct result of policy, the Fed’s policies. And the Fed is not alone either. This greatly-accelerated class war is a now global phenom. Just look at this tidbit I picked up from an article at CNBC:

“Data from JPMorgan shows that the top 50 central banks around the world have cut rates 672 times since the collapse of Lehman Brothers, a figure that translates to an average of one interest rate cut every three trading days. This has also been combined with $24 trillion worth of asset purchases.” (“QE Infinity: Are we heading into the unknown?“, CNBC)

$24 trillion!

$24 trillion represents the biggest freaking bank heist in human history, and what do we have to show for it?

A big fat nothing, that’s what! All the data is sagging and global growth has slowed to a crawl. It’s like all the dough that was supposed to strengthen the fictitious recovery just vanished into thin air. Poof!

So why hasn’t that $24 trillion had more of an impact? Why isn’t their more inflation, more activity, more spending, more consumption and more growth???

It’s because everywhere the global bank cartel has its tentacles, the same policies of austerity and QE have been adopted. (Japan, UK, EU, US etc) Everywhere you look it’s caviar and Dom Perignon for the investor class and thin gruel and table scraps for everyone else. Everywhere economies are being gutted, looted, hollowed out by financial parasites who seek greater gain by holding down wages, slashing benefits and retirement, and eviscerating standards of living for ordinary working slobs while the big money honchos are living the life of Riley. Everywhere it’s starve the beast but gorge the rich.

This is political economy writ large. Trump is right, the Fed is the most political institution in government. It IS the government, and it has an absolute stranglehold on the economy.

Is it any wonder why owners of wealth are no longer using their money to invest in future production or growth or retooling or building factories or anything. Instead, they’re buying back their own shares, issuing fat dividends on droopy earnings, and shrinking their businesses in the relentless pursuit of short-term gain.

This type of destructive behavior didn’t just appear out of the ether. Heck, no. The Fed’s easy money policies created irresistible incentives for this reckless, suicidal behavior. That means the Fed is 100 percent responsible for the fragile condition of the financial system and the ginormous asset-price bubble that’s headed lickety-split for the powerlines.

But now it’s all coming to a head. Now all the bigtime global institutions (IMF, BIS, WTO, OECD) are warning that a “Hard Rain’s a-gonna Fall” and that the day of reckoning may be at hand. According to a recent report by the Organization for Economic Co-operation and Development (OECD), GDP-per-capita will grow only 1% in 2016, “which is half the average in the two decades preceding the crisis.”

As it happens, the OECD report is no more apocalyptic then the others, it’s just more explicit in what it expects to transpire. Here’s more on the report from Wolf Street:

“Financial instability risks are rising, including from exceptionally low interest rates and their effects on financial assets and real estate prices.”…

Share prices have risen significantly in recent years in advanced economies, notably in the United States. By contrast, the growth of profits for non-financial companies has recently slowed to a modest pace, following a post-crisis recovery…

A reassessment in financial markets of interest rates could result in substantial re-pricing of assets and heighten financial volatility even if interest rates were to remain below long-term averages….”

(“OECD Warns Fed, BOJ, ECB of Asset Bubbles, “Risks to Financial Stability,” Pinpoints US Stocks & Real Estate “, Wolf Street)

Okay, let’s summarize: The global economy is slowing, corporate profits are tanking, monetary stimulus has lost its mojo, and financial instability risks are rising.

Oh, and did you catch the part about “a substantial re-pricing of assets”. That’s financial jargon for “a crash”, a big, thundering, cataclysmic, earth-shattering CRASH. The author is simply stating the obvious, that Central Banks have brought us to the brink of another gut-wrenching downward spiral followed by another excruciating financial crisis.

And it’s all by design, the unavoidable result of the Fed’s destabilizing, wealth-shifting policies.

How many times are we going to go through this drill before we disband the Fed and start from scratch?

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. He can be reached at fergiewhitney@msn.com.

(Republished from Counterpunch by permission of author or representative)
 
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  1. Diogenes says:

    “How many times are we going to go through this drill before we disband the Fed and start from scratch?”

    When the financial system implodes, the economy collapses and the people revolt, most likely in the aftermath of a global war or hyperinflation or worldwide depression, that’s what it will take. Be careful for what you wish for. Nevertheless the smart money can only postpone this inevitable calamity until confidence in the capitalist system collapse in the moneyed classes. It’s coming.

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  2. OutWest says:

    Changing the economy and changing the value of money sort of look like the same thing. They’re not.

    Read More
  3. Andevro says:

    What’s a regular guy like me to do? How does one protect themselves, or, at least, minimize the damage? This is scary stuff. Mr. Whitney any advise?

    Read More
    • Replies: @jacques sheete

    What’s a regular guy like me to do? How does one protect themselves, or, at least, minimize the damage?
     
    That, my friend, strikes me a s one of those eternal questions. What I mean by that is that there probably is no good answer and certainly it's nearly impossible to give advice, especially of a specific nature.

    For myself, I try to gather all the info I can and make up my own mind. It's probably not a good idea to listen to some guru in any case. I've found what works for me is to have faith that things usually work out with a little effort on my part. Develop and trust your own resourcefulness.

    Other than than that, I've found it useful to avoid self destructive behavior such as chasing after the latest fashions and other useless ephemera, and debt. For me, that's pretty much as good as it gets, and anything better is gift.

    I agree with you that it can be scary stuff, but my reading of history is that it's pretty much always been that way to some degree.
    , @dc.sunsets
    One man's answer:
    1. cultivate "living small."
    2. get out of debt. debt in a deflationary economy (or any chaotic financial situation) is catastrophic. (The alternative is to go into debt to your eyeballs with the idea of trying to keep what you glommed onto as you eventually stiff your creditors and are cut off from borrowing for perhaps the rest of your life.)
    3. cultivate a Zen-like acceptance that you can't change the world, you can only change yourself.
    4. be the best version of yourself you can muster.
    5. Get a handgun, plenty of ammo, a good holster and gun belt, and practice, practice, practice.
    6. Realize that just like the old joke about not needing to outrun the bear, you need not outdistance everyone, only those who seem intent on volunteering for trouble by remaining oblivious.
    7. have enough cash on hand to pay the essential bills for a while. In chaotic times, cash really is king, even if it comes with its own hazards for possession. Loose lips sink ships.

    This antebellum condition could have ended any time in the last 21 years, but it didn't. No one knows the timing. Don't assume SHTF is right around the corner. It may be here this year, or it might be another 10 or 20 years. No One Knows.
    , @mtn cur
    Start investment clubs to buy fertile valleys, surrounded by well forested, defensible ridgelines and rivers and then learn to love your neighbors.
  4. Kiza says:

    I have a question for Mike and for other commenters: when the CRASH happens what will be the reaction of the Fed?

    Do you think that when somebody has given himself a right to print and enjoy money that he will ever stop?

    Final question: who do you think controls NSA, FBI, CIA and the rest of the alphabet soup with rising budgets and especially the US military?

    I rest my case.

    Read More
  5. It’s all a problem of voodoo semantics. The opposite of growth is non non-growth: it is sharing. Ergo: evil, taboo,
    unnatural, unholy!

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  6. For several decades I’ve been listening to various FED Chairs go before Congress and tell them that monetary policy can only do so much, fiscal policy is needed, but monetary policy is all the FED has.

    Congress, and only Congress, has the fiscal power and responsibility. Congress is deadlocked.

    The FED has pushed its authority to, if not beyond, its limit.

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  7. The owners of the Fed will not be taken by surprise that is for sure. The Powers That Be [TPTB] have already schooled themselves in think tank studies by academic prostitutes and insiders feeding various scenarios and variables into the matrix. They have a bunch of canned responses to events that lead us over the tipping point. Divide and conquer being one, another is just to quietly abandon ship early dressed as Mother Teresa and her followers. The sheeple have no plan and lots of trust, they are toast. The elite don’t give a damn about those useless eaters, we may in today’s terms call them deplorable. Others without a coherent plan are going to get burnt but maybe not toasted – roasted though, should one of the planned defrauding melt down scenarios include nuclear exchanges. TPTB will be on another continent in a different hemisphere where they have deluded themselves that they are safe.
    Maybe they will do a ‘bail in’ the fashion that Lloyds did when they had some long tailed asbestos claims coming home. Invite any of the public at large with any redeemable assets to be fellow share holders in the Fed as they pump and dump. The Fed then may then be allowed to go bust but the former owners will be safely out of it. We who have an inkling of what is going on are as school kids playing with chess masters, perhaps it is best just to not play them at their game? Our fellow citizens in denial are as sheep to the slaughter.

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  8. Anonymous says: • Disclaimer

    Something escapes my understanding, Whitney.
    Why do you write on trivia, instead of facing our real problems?

    “If we broke up the big banks tomorrow,” Mrs. Clinton asked the audience of black, white and Hispanic union members, “would that end racism? Would that end sexism? Would that end discrimination against the L.G.B.T. community?,” she said, using an abbreviation for lesbian, gay, bisexual and transgender. “Would that make people feel more welcoming to immigrants overnight?”

    At each question, the crowd called back with a resounding no.

    USA 2016, a LOL-country.

    Read More
    • Replies: @Alfred1860
    We've reached the point where most of the population is so stupid that logic and sound reasoning are no longer useful tools for persuasion. There won't be any meaningful change until this cohort dies out.
    , @utu
    “If we broke up the big banks tomorrow,” Mrs. Clinton asked the audience of black, white and Hispanic union members, “would that end racism? Would that end sexism? Would that end discrimination against the L.G.B.T. community?,” she said, using an abbreviation for lesbian, gay, bisexual and transgender. “Would that make people feel more welcoming to immigrants overnight?”

    That's exactly the reason The Owners love diversity and multiculturalism. They invented it. First with slavery. Divide et impera works like a charm. Every time.
  9. Miro23 says:

    Another aspect of rising asset prices is the general “Feel Good Factor” that helps hide the spectacular growth US inequality, where 120.000 families ( 0.1%) now have the same wealth as the lower 90% of the population combined (even something the British and Russian aristocracies didn’t manage) – with plenty of 0,1% members being recent arrivals thanks to outsourcing and QE finance.

    To anticipate the situation, with FED stimulus stalling, the next step could be debt removal by Austerity, Write-Offs or inflation.

    However, one thing is for sure, that the insiders who made $ billions on the way up will be the first to exit since they’re not planning to take losses or participate in Austerity or Write-Offs. That leaves the interesting question of inflation, with the advantage (from their POV) that the public is completely unprepared for this variant.

    The FED may say said that it has “learnt its lesson” and dump $ directly on the US public as a “stimulus bonus” (e.g. an account credit of $10.000 for every US adult) that would feed straight into demand, economic activity and accelerating inflation.

    At this point the 0,1% would presumably exit their stocks and bonds and head into foreign currencies and real foreign assets while the $ headed towards wastepaper value, which is pretty much what German (actually mostly racially non-German) Weimar speculators did when they saw hyperinflation coming. Happily (for them), they came out the other side with their wealth enhanced -returning their money to Germany and buying up German assets for peanuts.

    There is a similar racial aspect in the U.S.

    Jewish Americans are 2% of the American population but have obtained (from the 1980′s onwards) through racial patronage, most of the top FED and Treasury positions (Janet Yellen, Stanley Fisher, Benjamin Bernanke, Donald Kohn, Jack Lew, Sarah Bloom, Stuart Levey, Alan Greenspan, Lawrence Summers, Robert Rubin, Samuel Bodman, Stuart Eizenstat) and have close connections to the Wall St./merchant banking/hedge fund beneficiaries of Bubble Finance, with the suggestion that QE, ZIRP, the aggressive removal of Glass Steagall, SEC approval of 30:1 leverage and full $ bailouts of their speculative positions in 2008 were policies designed to channel a large part of the$ Billions in rentier gains to themselves rather than the public, so they would probably also be the first to exit the US$.

    Just assuming that past actions may be a guide to future actions.

    Read More
    • Replies: @another fred
    One aspect of the lack of assets of the 99% is the fact that many no longer bother to save or accumulate assets because they rely on Big Sis to take care of them.

    It is a two way street. I'm not saying it is a rose garden, but the preferences of people have a fair amount to do with it. Some people have a fair amount of cash flow through their hands without bothering to put any to the side for a rainy day, especially the young.

    There are a lot more people eating at fast food joints than there are eating Dave Ramsey's beans and rice.
    , @interesting
    "the insiders who made $ billions on the way up will"

    will be bailed out on the way down.....
  10. @Miro23
    Another aspect of rising asset prices is the general "Feel Good Factor" that helps hide the spectacular growth US inequality, where 120.000 families ( 0.1%) now have the same wealth as the lower 90% of the population combined (even something the British and Russian aristocracies didn't manage) - with plenty of 0,1% members being recent arrivals thanks to outsourcing and QE finance.

    To anticipate the situation, with FED stimulus stalling, the next step could be debt removal by Austerity, Write-Offs or inflation.

    However, one thing is for sure, that the insiders who made $ billions on the way up will be the first to exit since they're not planning to take losses or participate in Austerity or Write-Offs. That leaves the interesting question of inflation, with the advantage (from their POV) that the public is completely unprepared for this variant.

    The FED may say said that it has "learnt its lesson" and dump $ directly on the US public as a "stimulus bonus" (e.g. an account credit of $10.000 for every US adult) that would feed straight into demand, economic activity and accelerating inflation.

    At this point the 0,1% would presumably exit their stocks and bonds and head into foreign currencies and real foreign assets while the $ headed towards wastepaper value, which is pretty much what German (actually mostly racially non-German) Weimar speculators did when they saw hyperinflation coming. Happily (for them), they came out the other side with their wealth enhanced -returning their money to Germany and buying up German assets for peanuts.

    There is a similar racial aspect in the U.S.

    Jewish Americans are 2% of the American population but have obtained (from the 1980's onwards) through racial patronage, most of the top FED and Treasury positions (Janet Yellen, Stanley Fisher, Benjamin Bernanke, Donald Kohn, Jack Lew, Sarah Bloom, Stuart Levey, Alan Greenspan, Lawrence Summers, Robert Rubin, Samuel Bodman, Stuart Eizenstat) and have close connections to the Wall St./merchant banking/hedge fund beneficiaries of Bubble Finance, with the suggestion that QE, ZIRP, the aggressive removal of Glass Steagall, SEC approval of 30:1 leverage and full $ bailouts of their speculative positions in 2008 were policies designed to channel a large part of the$ Billions in rentier gains to themselves rather than the public, so they would probably also be the first to exit the US$.

    Just assuming that past actions may be a guide to future actions.

    One aspect of the lack of assets of the 99% is the fact that many no longer bother to save or accumulate assets because they rely on Big Sis to take care of them.

    It is a two way street. I’m not saying it is a rose garden, but the preferences of people have a fair amount to do with it. Some people have a fair amount of cash flow through their hands without bothering to put any to the side for a rainy day, especially the young.

    There are a lot more people eating at fast food joints than there are eating Dave Ramsey’s beans and rice.

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    • Replies: @Miro23
    That's another aspect - there's the idea of people getting the health, financial condition (or government) that they deserve.
    I can say for example that the Swiss take their democracy very seriously and are active participants at all levels, obliged by law to study opposing views and engage in open debates. The result is that their democracy works for them and not for special interests - but it does require time and commitment.
    , @interesting
    "because they rely on Big Sis to take care of them"



    AS OPPOSED TO THE FED TAKING CARE OF THEM........I CAN'T READ ANY MORE OF THIS SHIT.....IT'S LIKE THIS GUY WAS ASLEEP IN 2008.
  11. Miro23 says:
    @another fred
    One aspect of the lack of assets of the 99% is the fact that many no longer bother to save or accumulate assets because they rely on Big Sis to take care of them.

    It is a two way street. I'm not saying it is a rose garden, but the preferences of people have a fair amount to do with it. Some people have a fair amount of cash flow through their hands without bothering to put any to the side for a rainy day, especially the young.

    There are a lot more people eating at fast food joints than there are eating Dave Ramsey's beans and rice.

    That’s another aspect – there’s the idea of people getting the health, financial condition (or government) that they deserve.
    I can say for example that the Swiss take their democracy very seriously and are active participants at all levels, obliged by law to study opposing views and engage in open debates. The result is that their democracy works for them and not for special interests – but it does require time and commitment.

    Read More
  12. @Anonymous
    Something escapes my understanding, Whitney.
    Why do you write on trivia, instead of facing our real problems?

    “If we broke up the big banks tomorrow,” Mrs. Clinton asked the audience of black, white and Hispanic union members, “would that end racism? Would that end sexism? Would that end discrimination against the L.G.B.T. community?,” she said, using an abbreviation for lesbian, gay, bisexual and transgender. “Would that make people feel more welcoming to immigrants overnight?”

    At each question, the crowd called back with a resounding no.

     

    USA 2016, a LOL-country.

    We’ve reached the point where most of the population is so stupid that logic and sound reasoning are no longer useful tools for persuasion. There won’t be any meaningful change until this cohort dies out.

    Read More
    • Replies: @utu
    "We’ve reached the point where most of the population is so stupid that logic and sound reasoning are no longer useful tools for persuasion. There won’t be any meaningful change until this cohort dies out."

    I love it. I will print it out. Thanks! However you do not need to persuade them with logic. You must manipulate them. To do it you need first get power to have means. A military coup is the only other option or the lost war with occupational government.
    , @Lurker

    There won’t be any meaningful change until this cohort dies out.
     
    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.
  13. I don’t know if he’s being sensational, or is truly ignorant.

    The Fed can’t do those nice examples of fiscal stimulus he starts with.

    Congress has to do them.

    Read More
    • Replies: @Wally
    So you are saying that The Fed did not distribute trillions?

    No worries, your NFL games are still on.

  14. Do you know what 1.2 percent GDP means?

    No one does, because it’s just a rough measure of activity, not prosperity. Hurricanes, floods, and smoking are good for GDP. As the Fed turns over debt, that is lots of financial activity and boosts GDP, but is nothing more that computer activity and nothing real is produced. Lower interest rates produced many billions of dollars in mortgage refinance GDP activity, but no real product was produced.

    Also note that official population growth in the USA is .77 percent a year, so GDP growth per person is less than half the overall 1.2 percent GDP growth rate.

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  15. utu says:
    @Anonymous
    Something escapes my understanding, Whitney.
    Why do you write on trivia, instead of facing our real problems?

    “If we broke up the big banks tomorrow,” Mrs. Clinton asked the audience of black, white and Hispanic union members, “would that end racism? Would that end sexism? Would that end discrimination against the L.G.B.T. community?,” she said, using an abbreviation for lesbian, gay, bisexual and transgender. “Would that make people feel more welcoming to immigrants overnight?”

    At each question, the crowd called back with a resounding no.

     

    USA 2016, a LOL-country.

    “If we broke up the big banks tomorrow,” Mrs. Clinton asked the audience of black, white and Hispanic union members, “would that end racism? Would that end sexism? Would that end discrimination against the L.G.B.T. community?,” she said, using an abbreviation for lesbian, gay, bisexual and transgender. “Would that make people feel more welcoming to immigrants overnight?”

    That’s exactly the reason The Owners love diversity and multiculturalism. They invented it. First with slavery. Divide et impera works like a charm. Every time.

    Read More
  16. utu says:
    @Alfred1860
    We've reached the point where most of the population is so stupid that logic and sound reasoning are no longer useful tools for persuasion. There won't be any meaningful change until this cohort dies out.

    “We’ve reached the point where most of the population is so stupid that logic and sound reasoning are no longer useful tools for persuasion. There won’t be any meaningful change until this cohort dies out.”

    I love it. I will print it out. Thanks! However you do not need to persuade them with logic. You must manipulate them. To do it you need first get power to have means. A military coup is the only other option or the lost war with occupational government.

    Read More
  17. edNels says:

    It sure is weird how rare it is to hear the simple obvious said. And very well said Mike!

    Now if stocks rise due to fundamentals, then that’s just great because it means the underlying strength of the economy is driving prices higher. But if stock prices rise because the people who are supposed to be the referees (The Fed) are gaming the system by printing up trillions of dollars and sticking it in the financial markets so their crooked friends can send their kids to Ivy League schools and drive around in Lamborghinis, then it’s not so great.
    Yeah that’s not very… in the spirit of fair game or wtf!

    Yeah that’s not very… in the spirit of fair game or wtf!

    The whole idea that the mousy Ms Yellen is calling the shots for the world’s most powerful financial institution is the most ridiculous thing I’ve ever heard. Does anyone actually believe that rubbish?

    It’s a strange thing how hordes of people will believe the most outlandish rubbish, like in the story of the Emperor, so what if the little gal, was really a little guy. What a funny looking dude that would be!

    How’d ya like to meet that beast in dark alley?! But there isn’t anything funny about what is developing, because those Rich are only a fraction of .01% and the rest are headed for the Meat grinder!

    @ #7 above Aaron Russo, good namesake there. One word from your comment triggers me to recall Geo Green. who said about the same thing visvise Equador, in the Southern Hemisphere being a place to flee to, if one doesn’t get a ticket to join the Elites in there underground cities they have planned and prepared to ride out the nuclear winter etc. Right?*

    Read More
  18. Greg Bacon says: • Website

    There’s no legit reason why Americans should pay interest to private bankers on the money we borrow from ourselves.
    If the FED can print money out of thin air, so could the US Treasury and save Americans a trillion or so a year in interest fees.

    But if you think the banksters, who control the WH and Congress are going to allow that, you’re mistaken, they’d take us to war with Russia before giving up their death grip on our throats.

    Read More
  19. polistra says:

    The Fed did NOT expect the economy to grow, and the Fed is NOT clueless. Bugsy Bernanke TOLD US directly and openly in 2008 that he was running QE solely to raise share values. No mystery, no secret.

    Economists and politicians and financial media have been telling us a lie ever since, but there’s no reason to listen to the lie. In this case DeepState was perfectly honest about its intentions.

    Read More
  20. Lurker says:
    @Alfred1860
    We've reached the point where most of the population is so stupid that logic and sound reasoning are no longer useful tools for persuasion. There won't be any meaningful change until this cohort dies out.

    There won’t be any meaningful change until this cohort dies out.

    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.

    Read More
    • Replies: @The Alarmist

    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.
     
    The important thing is that they merely vote correctly in each election. That takes little to no intellect.
    , @dc.sunsets

    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.
     
    1. You may underestimate how many Americans are already populating Idiocracy.
    2. Idiocracy is not a comedy.
  21. The next crash will probably usher in political instability. So you had better factor this into your strategy for survival.

    Read More
    • Replies: @Greg Bacon
    The next (planned) crash of those Wall Street TBTF casinos is around the corner, they first need Herr Hillary to steal the WH so the planned demolition can proceed.

    When it does happen, we'll be told that the FED can't engineer the 'rescue' this time, as the amount involved is too big, as if there were a limit on printing money out of thin air.

    We'll be told that the IMF will step in and magically issue 100 TRILLION in SDR--Special Drawing Rights--a new con, that will replace the old Federal Reserve note, which you now have to turn in at 10 cents on the dollar or keep them for toilet paper.

    But the TBTF banks must be saved at all costs, and damn the Republic.
  22. @Andevro
    What's a regular guy like me to do? How does one protect themselves, or, at least, minimize the damage? This is scary stuff. Mr. Whitney any advise?

    What’s a regular guy like me to do? How does one protect themselves, or, at least, minimize the damage?

    That, my friend, strikes me a s one of those eternal questions. What I mean by that is that there probably is no good answer and certainly it’s nearly impossible to give advice, especially of a specific nature.

    For myself, I try to gather all the info I can and make up my own mind. It’s probably not a good idea to listen to some guru in any case. I’ve found what works for me is to have faith that things usually work out with a little effort on my part. Develop and trust your own resourcefulness.

    Other than than that, I’ve found it useful to avoid self destructive behavior such as chasing after the latest fashions and other useless ephemera, and debt. For me, that’s pretty much as good as it gets, and anything better is gift.

    I agree with you that it can be scary stuff, but my reading of history is that it’s pretty much always been that way to some degree.

    Read More
  23. TheJester says:

    I’ve read a number of books on the history of the Federal Reserve Bank. Of interest, as a quip, the Fed historically used to say, “You take away the punch bowl when the economy (a.k.a. Wall Street) starts heating up ….” Now, the Fed routinely pours vodka in the punch bowl and hands out bottle of scotch to anyone on Wall Street who wants one.

    There could be no more concrete evidence of collusion between the Fed and Wall Street in the looting of the national economy than QE, zero interest rales, and the trillions they are throwing at Wall Street.

    A question: Is there no interest in the common good in the Fed and on Wall Street … or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.

    Read More
    • Replies: @edNels

    A question: Is there no interest in the common good in the Fed and on Wall Street … or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.
     
    A farmer told me that sometimes they get an animal that is too smart to be managed, usually a specially smart and dangerous bull. He will be culled. Seems to me if the animals in a feedlot knew what was in store for them, they would bust the fences and run down the freeway.

    Well there may be more than one answer, I don't think they are ''aliens'' they're not acting smart enough. But a different species, maybe. Like the Morlocks in HG Wells story Time Machine. They evolved/devolved from humans into a Troglodyte cannibal that preyed on the nice people called Eloi.

    They are cannibals already, so when they go live below ground in the special cities, then they will be free to loose all skin pigment, see in the dark, and be a completely new species of parasites.
    , @dc.sunsets
    The very existence of central banks is a reflection of the desire for people in general to live beyond their means. This is an age-old part of the boom-bust history of mankind. It is natural, and cannot be tamed.

    We're in this credit bubble because people in general are living in a once-in-300-years mass mania. The last one was in the early 1700's (John Law's Mississippi Scheme and the ensuing South Sea Bubble in France and England, respectively.) England experienced a 64 year bear market on the London Stock Exchange in the aftermath, and it ended around the time of the American Revolution, the beginning of the end of Britain's empire.

    Humans are social animals; we herd. The herding behavior follows a fractal pattern. We're currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism, of a structure that goes back to 1784. The ensuing bust (dead ahead, but the timing remains unknown) will be commensurately large, with commensurately massive social/political effects. I think the USA will break up.

    Eventually the Fed will be seized by Congress. That's my guess. Then it will be Katy Bar The Door, as printing banknotes might hit Zimbabwean proportions.
  24. “So, which is it? Is the Fed a moron or a liar?”

    Why can’t it be both?

    Read More
  25. @Lurker

    There won’t be any meaningful change until this cohort dies out.
     
    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.

    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.

    The important thing is that they merely vote correctly in each election. That takes little to no intellect.

    Read More
  26. edNels says:
    @TheJester
    I've read a number of books on the history of the Federal Reserve Bank. Of interest, as a quip, the Fed historically used to say, "You take away the punch bowl when the economy (a.k.a. Wall Street) starts heating up ...." Now, the Fed routinely pours vodka in the punch bowl and hands out bottle of scotch to anyone on Wall Street who wants one.

    There could be no more concrete evidence of collusion between the Fed and Wall Street in the looting of the national economy than QE, zero interest rales, and the trillions they are throwing at Wall Street.

    A question: Is there no interest in the common good in the Fed and on Wall Street ... or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.

    A question: Is there no interest in the common good in the Fed and on Wall Street … or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.

    A farmer told me that sometimes they get an animal that is too smart to be managed, usually a specially smart and dangerous bull. He will be culled. Seems to me if the animals in a feedlot knew what was in store for them, they would bust the fences and run down the freeway.

    Well there may be more than one answer, I don’t think they are ”aliens” they’re not acting smart enough. But a different species, maybe. Like the Morlocks in HG Wells story Time Machine. They evolved/devolved from humans into a Troglodyte cannibal that preyed on the nice people called Eloi.

    They are cannibals already, so when they go live below ground in the special cities, then they will be free to loose all skin pigment, see in the dark, and be a completely new species of parasites.

    Read More
    • Replies: @utu
    "is too smart to be managed, [...] He will be culled." - You just got to Talmud w/o knowing it.
    , @TheJester

    Well there may be more than one answer, I don’t think they are ”aliens” they’re not acting smart enough.
     
    I can think of another explanation. The ((( aliens ))) used to keep a low profile, given the hard lessons of history. However, starting in the 1960s, their progressive increase in wealth, power, and control became so great that they no longer fear exposure. "We own the Federal Reserve, Wall Street, the MSM, most global corporations, and the Federal government. What are you going to do about it? You're powerless; you're the animals in the barnyard. The farm belongs to us ....!"
  27. utu says:
    @edNels

    A question: Is there no interest in the common good in the Fed and on Wall Street … or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.
     
    A farmer told me that sometimes they get an animal that is too smart to be managed, usually a specially smart and dangerous bull. He will be culled. Seems to me if the animals in a feedlot knew what was in store for them, they would bust the fences and run down the freeway.

    Well there may be more than one answer, I don't think they are ''aliens'' they're not acting smart enough. But a different species, maybe. Like the Morlocks in HG Wells story Time Machine. They evolved/devolved from humans into a Troglodyte cannibal that preyed on the nice people called Eloi.

    They are cannibals already, so when they go live below ground in the special cities, then they will be free to loose all skin pigment, see in the dark, and be a completely new species of parasites.

    “is too smart to be managed, [...] He will be culled.” – You just got to Talmud w/o knowing it.

    Read More
  28. @Andevro
    What's a regular guy like me to do? How does one protect themselves, or, at least, minimize the damage? This is scary stuff. Mr. Whitney any advise?

    One man’s answer:
    1. cultivate “living small.”
    2. get out of debt. debt in a deflationary economy (or any chaotic financial situation) is catastrophic. (The alternative is to go into debt to your eyeballs with the idea of trying to keep what you glommed onto as you eventually stiff your creditors and are cut off from borrowing for perhaps the rest of your life.)
    3. cultivate a Zen-like acceptance that you can’t change the world, you can only change yourself.
    4. be the best version of yourself you can muster.
    5. Get a handgun, plenty of ammo, a good holster and gun belt, and practice, practice, practice.
    6. Realize that just like the old joke about not needing to outrun the bear, you need not outdistance everyone, only those who seem intent on volunteering for trouble by remaining oblivious.
    7. have enough cash on hand to pay the essential bills for a while. In chaotic times, cash really is king, even if it comes with its own hazards for possession. Loose lips sink ships.

    This antebellum condition could have ended any time in the last 21 years, but it didn’t. No one knows the timing. Don’t assume SHTF is right around the corner. It may be here this year, or it might be another 10 or 20 years. No One Knows.

    Read More
    • Replies: @another fred

    This antebellum condition could have ended any time in the last 21 years, but it didn’t. No one knows the timing. Don’t assume SHTF is right around the corner. It may be here this year, or it might be another 10 or 20 years. No One Knows.
     
    While I agree that "no one knows," we have learned more about how these things approach. I recommend the work of Didier Sornette to you.

    Major disruptions require major stress to build in a system and in natural systems those stress give signs. It is quite chaotic, but not entirely random. Once imbalances have risen high enough it takes little to trigger the event.

    https://www.ted.com/speakers/didier_sornette

    https://www.amazon.com/Critical-Phenomena-Natural-Sciences-Selforganization/dp/3540308822/ref=asap_bc?ie=UTF8

  29. @TheJester
    I've read a number of books on the history of the Federal Reserve Bank. Of interest, as a quip, the Fed historically used to say, "You take away the punch bowl when the economy (a.k.a. Wall Street) starts heating up ...." Now, the Fed routinely pours vodka in the punch bowl and hands out bottle of scotch to anyone on Wall Street who wants one.

    There could be no more concrete evidence of collusion between the Fed and Wall Street in the looting of the national economy than QE, zero interest rales, and the trillions they are throwing at Wall Street.

    A question: Is there no interest in the common good in the Fed and on Wall Street ... or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.

    The very existence of central banks is a reflection of the desire for people in general to live beyond their means. This is an age-old part of the boom-bust history of mankind. It is natural, and cannot be tamed.

    We’re in this credit bubble because people in general are living in a once-in-300-years mass mania. The last one was in the early 1700′s (John Law’s Mississippi Scheme and the ensuing South Sea Bubble in France and England, respectively.) England experienced a 64 year bear market on the London Stock Exchange in the aftermath, and it ended around the time of the American Revolution, the beginning of the end of Britain’s empire.

    Humans are social animals; we herd. The herding behavior follows a fractal pattern. We’re currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism, of a structure that goes back to 1784. The ensuing bust (dead ahead, but the timing remains unknown) will be commensurately large, with commensurately massive social/political effects. I think the USA will break up.

    Eventually the Fed will be seized by Congress. That’s my guess. Then it will be Katy Bar The Door, as printing banknotes might hit Zimbabwean proportions.

    Read More
    • Replies: @another fred

    We’re currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism...
     
    I think there is very little of either trust or optimism, what there is a sense of being trapped and fear of what might happen.


    The Purse Seine by Robinson Jeffers

    Our sardine fishermen work at night in the dark
    of the moon; daylight or moonlight
    They could not tell where to spread the net,
    unable to see the phosphorescence of the
    shoals of fish.
    They work northward from Monterey, coasting
    Santa Cruz; off New Year's Point or off
    Pigeon Point
    The look-out man will see some lakes of milk-color
    light on the sea's night-purple; he points,
    and the helmsman
    Turns the dark prow, the motorboat circles the
    gleaming shoal and drifts out her seine-net.
    They close the circle
    And purse the bottom of the net, then with great
    labor haul it in.

    I cannot tell you
    How beautiful the scene is, and a little terrible,
    then, when the crowded fish
    Know they are caught, and wildly beat from one wall
    to the other of their closing destiny
    the
    phosphorescent
    Water to a pool of flame, each beautiful slender body
    sheeted with flame, like a live rocket
    A comet's tail wake of clear yellow flame; while outside
    the narrowing
    Floats and cordage of the net great sea-lions come up
    to watch, sighing in the dark; the vast walls
    of night
    Stand erect to the stars.

    Lately I was looking from a night mountain-top
    On a wide city, the colored splendor, galaxies of light:
    how could I help but recall the seine-net
    Gathering the luminous fish?
    I cannot tell you how
    beautiful the city appeared, and a little terrible.
    I thought, We have geared the machines and locked all together
    into inter-dependence; we have built the great cities; now
    There is no escape. We have gathered vast populations incapable
    of free survival, insulated
    From the strong earth, each person in himself helpless, on all
    dependent. The circle is closed, and the net
    Is being hauled in. They hardly feel the cords drawing, yet
    they shine already.
    The inevitable mass-disasters
    Will not come in our time nor in our children's, but we
    and our children
    Must watch the net draw narrower, government take all
    powers--or revolution, and the new government
    Take more than all, add to kept bodies kept souls--or anarchy,
    the mass-disasters.
    These things are Progress;
    Do you marvel our verse is troubled or frowning, while it keeps
    its reason? Or it lets go, lets the mood flow
    In the manner of the recent young men into mere hysteria,
    splintered gleams, crackled laughter. But they are
    quite wrong.
    There is no reason for amazement: surely one always knew
    that cultures decay, and life's end is death.

     

  30. @Lurker

    There won’t be any meaningful change until this cohort dies out.
     
    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.

    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.

    1. You may underestimate how many Americans are already populating Idiocracy.
    2. Idiocracy is not a comedy.

    Read More
  31. Rehmat says:

    Well – a $3 trillion investment would certainly make billionaire Tom Perkins very very happy because he thinks he is treated like Jews at the Auschwitz.

    In 2014, owner of the Venture capitalist Tom Perkins compared America’s rich to Nazi persecuted Jews. In a letter to the Wall Street Journal, Perkins likened the Occupy Wall Street (OWS) movement to Kristallnacht (the Crystal Night), a Zionist myth which gave birth to the notorious Haavara (Jews transfer to Palestine) Agreement.

    “I would call attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich,” said Perkins in the letter.

    In March 1952, Nahum Goldmann, president of the World Jewish Congress (WJC) demanded $500 million from German Chancellor Konrad Adenauer (married to Jewish Helene Scharfenberg) as reparation payment for the damage done during the Kristallnacht rampage. When Adenauer asked Goldmann for his justification for this enormous request, Goldmann replied: “You find the justification yourself! What I want is not the justification but the money.” With some arm pulling from Washington, WJC got the money. Since then, Jewish Lobby never stopped blackmailing the successive German governments. So far, they have collected over $93 billion from German taxpayers…..

    https://rehmat1.com/2014/02/02/perkins-rich-american-jews-facing-holocaust/

    Read More
  32. mtn cur says:
    @Andevro
    What's a regular guy like me to do? How does one protect themselves, or, at least, minimize the damage? This is scary stuff. Mr. Whitney any advise?

    Start investment clubs to buy fertile valleys, surrounded by well forested, defensible ridgelines and rivers and then learn to love your neighbors.

    Read More
    • Replies: @jacques sheete

    Start investment clubs to buy fertile valleys, surrounded by well forested, defensible ridgelines and rivers and then learn to love your neighbors.
     
    Nah, that's not how the big boys do it. Ya just pay some suckers to waltz in and seize the land, then you set up a government to reign them in. ;)
  33. @dc.sunsets
    One man's answer:
    1. cultivate "living small."
    2. get out of debt. debt in a deflationary economy (or any chaotic financial situation) is catastrophic. (The alternative is to go into debt to your eyeballs with the idea of trying to keep what you glommed onto as you eventually stiff your creditors and are cut off from borrowing for perhaps the rest of your life.)
    3. cultivate a Zen-like acceptance that you can't change the world, you can only change yourself.
    4. be the best version of yourself you can muster.
    5. Get a handgun, plenty of ammo, a good holster and gun belt, and practice, practice, practice.
    6. Realize that just like the old joke about not needing to outrun the bear, you need not outdistance everyone, only those who seem intent on volunteering for trouble by remaining oblivious.
    7. have enough cash on hand to pay the essential bills for a while. In chaotic times, cash really is king, even if it comes with its own hazards for possession. Loose lips sink ships.

    This antebellum condition could have ended any time in the last 21 years, but it didn't. No one knows the timing. Don't assume SHTF is right around the corner. It may be here this year, or it might be another 10 or 20 years. No One Knows.

    This antebellum condition could have ended any time in the last 21 years, but it didn’t. No one knows the timing. Don’t assume SHTF is right around the corner. It may be here this year, or it might be another 10 or 20 years. No One Knows.

    While I agree that “no one knows,” we have learned more about how these things approach. I recommend the work of Didier Sornette to you.

    Major disruptions require major stress to build in a system and in natural systems those stress give signs. It is quite chaotic, but not entirely random. Once imbalances have risen high enough it takes little to trigger the event.

    https://www.ted.com/speakers/didier_sornette

    https://www.amazon.com/Critical-Phenomena-Natural-Sciences-Selforganization/dp/3540308822/ref=asap_bc?ie=UTF8

    Read More
    • Replies: @another fred
    By the way, I do not share Sornette's optimism. I don't think he knows (or faces) quite enough about human nature. He acknowledges that the future will be painful, but I don't think he understands (or faces) the reality of some of the weapons coming on line and their effects.
  34. @another fred

    This antebellum condition could have ended any time in the last 21 years, but it didn’t. No one knows the timing. Don’t assume SHTF is right around the corner. It may be here this year, or it might be another 10 or 20 years. No One Knows.
     
    While I agree that "no one knows," we have learned more about how these things approach. I recommend the work of Didier Sornette to you.

    Major disruptions require major stress to build in a system and in natural systems those stress give signs. It is quite chaotic, but not entirely random. Once imbalances have risen high enough it takes little to trigger the event.

    https://www.ted.com/speakers/didier_sornette

    https://www.amazon.com/Critical-Phenomena-Natural-Sciences-Selforganization/dp/3540308822/ref=asap_bc?ie=UTF8

    By the way, I do not share Sornette’s optimism. I don’t think he knows (or faces) quite enough about human nature. He acknowledges that the future will be painful, but I don’t think he understands (or faces) the reality of some of the weapons coming on line and their effects.

    Read More
  35. Greg Bacon says: • Website
    @Epaminondas
    The next crash will probably usher in political instability. So you had better factor this into your strategy for survival.

    The next (planned) crash of those Wall Street TBTF casinos is around the corner, they first need Herr Hillary to steal the WH so the planned demolition can proceed.

    When it does happen, we’ll be told that the FED can’t engineer the ‘rescue’ this time, as the amount involved is too big, as if there were a limit on printing money out of thin air.

    We’ll be told that the IMF will step in and magically issue 100 TRILLION in SDR–Special Drawing Rights–a new con, that will replace the old Federal Reserve note, which you now have to turn in at 10 cents on the dollar or keep them for toilet paper.

    But the TBTF banks must be saved at all costs, and damn the Republic.

    Read More
    • Replies: @another fred

    as if there were a limit on printing money out of thin air.
     
    Michael Pettis has an interesting blog post about "thin air."

    http://blog.mpettis.com/2015/10/how-to-spend-thin-airs-endogenous-money/

    ...and damn the Republic.
     
    The Republic was poisoned in the period between the "Great Society" debt, Nixon closing the gold window, and the Humphrey-Hawkins Act. After those three events the death of the Republic has been just a matter of time and nature running its course.
  36. @dc.sunsets
    The very existence of central banks is a reflection of the desire for people in general to live beyond their means. This is an age-old part of the boom-bust history of mankind. It is natural, and cannot be tamed.

    We're in this credit bubble because people in general are living in a once-in-300-years mass mania. The last one was in the early 1700's (John Law's Mississippi Scheme and the ensuing South Sea Bubble in France and England, respectively.) England experienced a 64 year bear market on the London Stock Exchange in the aftermath, and it ended around the time of the American Revolution, the beginning of the end of Britain's empire.

    Humans are social animals; we herd. The herding behavior follows a fractal pattern. We're currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism, of a structure that goes back to 1784. The ensuing bust (dead ahead, but the timing remains unknown) will be commensurately large, with commensurately massive social/political effects. I think the USA will break up.

    Eventually the Fed will be seized by Congress. That's my guess. Then it will be Katy Bar The Door, as printing banknotes might hit Zimbabwean proportions.

    We’re currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism…

    I think there is very little of either trust or optimism, what there is a sense of being trapped and fear of what might happen.

    [MORE]

    The Purse Seine by Robinson Jeffers

    Our sardine fishermen work at night in the dark
    of the moon; daylight or moonlight
    They could not tell where to spread the net,
    unable to see the phosphorescence of the
    shoals of fish.
    They work northward from Monterey, coasting
    Santa Cruz; off New Year’s Point or off
    Pigeon Point
    The look-out man will see some lakes of milk-color
    light on the sea’s night-purple; he points,
    and the helmsman
    Turns the dark prow, the motorboat circles the
    gleaming shoal and drifts out her seine-net.
    They close the circle
    And purse the bottom of the net, then with great
    labor haul it in.

    I cannot tell you
    How beautiful the scene is, and a little terrible,
    then, when the crowded fish
    Know they are caught, and wildly beat from one wall
    to the other of their closing destiny
    the
    phosphorescent
    Water to a pool of flame, each beautiful slender body
    sheeted with flame, like a live rocket
    A comet’s tail wake of clear yellow flame; while outside
    the narrowing
    Floats and cordage of the net great sea-lions come up
    to watch, sighing in the dark; the vast walls
    of night
    Stand erect to the stars.

    Lately I was looking from a night mountain-top
    On a wide city, the colored splendor, galaxies of light:
    how could I help but recall the seine-net
    Gathering the luminous fish?
    I cannot tell you how
    beautiful the city appeared, and a little terrible.
    I thought, We have geared the machines and locked all together
    into inter-dependence; we have built the great cities; now
    There is no escape. We have gathered vast populations incapable
    of free survival, insulated
    From the strong earth, each person in himself helpless, on all
    dependent. The circle is closed, and the net
    Is being hauled in. They hardly feel the cords drawing, yet
    they shine already.
    The inevitable mass-disasters
    Will not come in our time nor in our children’s, but we
    and our children
    Must watch the net draw narrower, government take all
    powers–or revolution, and the new government
    Take more than all, add to kept bodies kept souls–or anarchy,
    the mass-disasters.
    These things are Progress;
    Do you marvel our verse is troubled or frowning, while it keeps
    its reason? Or it lets go, lets the mood flow
    In the manner of the recent young men into mere hysteria,
    splintered gleams, crackled laughter. But they are
    quite wrong.
    There is no reason for amazement: surely one always knew
    that cultures decay, and life’s end is death.

    Read More
    • Replies: @another fred
    The Purse Seine was written between 1935 and 1938.
    , @dc.sunsets
    Disagree. There has to be trust of a sort, or else interest rates would reflect distrust...and they don't. Yet.

    I do concur with the notion (I'm guessing you'd agree with) that this is the biggest game of Chicken ever. Hanging in, not flinching, is landing people in RICHIE RICH land. Of course, they will only stay rich if they can cash out their chips before the flinch.

    Given the difficulty of this conceptually, I still think most rich people today will take the biggest losses when this stupid game ends. No wonder they're donating to Clinton; they think that she's the Agent of Continuity, and they're frankly too ignorant to realize just how little control anyone has over all this.

    Everything that has a beginning has an end. Life is birth, childhood, adulthood, old age and death. I just try to make the most of the time I've got. Grandkids make it worthwhile.
  37. @another fred

    We’re currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism...
     
    I think there is very little of either trust or optimism, what there is a sense of being trapped and fear of what might happen.


    The Purse Seine by Robinson Jeffers

    Our sardine fishermen work at night in the dark
    of the moon; daylight or moonlight
    They could not tell where to spread the net,
    unable to see the phosphorescence of the
    shoals of fish.
    They work northward from Monterey, coasting
    Santa Cruz; off New Year's Point or off
    Pigeon Point
    The look-out man will see some lakes of milk-color
    light on the sea's night-purple; he points,
    and the helmsman
    Turns the dark prow, the motorboat circles the
    gleaming shoal and drifts out her seine-net.
    They close the circle
    And purse the bottom of the net, then with great
    labor haul it in.

    I cannot tell you
    How beautiful the scene is, and a little terrible,
    then, when the crowded fish
    Know they are caught, and wildly beat from one wall
    to the other of their closing destiny
    the
    phosphorescent
    Water to a pool of flame, each beautiful slender body
    sheeted with flame, like a live rocket
    A comet's tail wake of clear yellow flame; while outside
    the narrowing
    Floats and cordage of the net great sea-lions come up
    to watch, sighing in the dark; the vast walls
    of night
    Stand erect to the stars.

    Lately I was looking from a night mountain-top
    On a wide city, the colored splendor, galaxies of light:
    how could I help but recall the seine-net
    Gathering the luminous fish?
    I cannot tell you how
    beautiful the city appeared, and a little terrible.
    I thought, We have geared the machines and locked all together
    into inter-dependence; we have built the great cities; now
    There is no escape. We have gathered vast populations incapable
    of free survival, insulated
    From the strong earth, each person in himself helpless, on all
    dependent. The circle is closed, and the net
    Is being hauled in. They hardly feel the cords drawing, yet
    they shine already.
    The inevitable mass-disasters
    Will not come in our time nor in our children's, but we
    and our children
    Must watch the net draw narrower, government take all
    powers--or revolution, and the new government
    Take more than all, add to kept bodies kept souls--or anarchy,
    the mass-disasters.
    These things are Progress;
    Do you marvel our verse is troubled or frowning, while it keeps
    its reason? Or it lets go, lets the mood flow
    In the manner of the recent young men into mere hysteria,
    splintered gleams, crackled laughter. But they are
    quite wrong.
    There is no reason for amazement: surely one always knew
    that cultures decay, and life's end is death.

     

    The Purse Seine was written between 1935 and 1938.

    Read More
  38. @Greg Bacon
    The next (planned) crash of those Wall Street TBTF casinos is around the corner, they first need Herr Hillary to steal the WH so the planned demolition can proceed.

    When it does happen, we'll be told that the FED can't engineer the 'rescue' this time, as the amount involved is too big, as if there were a limit on printing money out of thin air.

    We'll be told that the IMF will step in and magically issue 100 TRILLION in SDR--Special Drawing Rights--a new con, that will replace the old Federal Reserve note, which you now have to turn in at 10 cents on the dollar or keep them for toilet paper.

    But the TBTF banks must be saved at all costs, and damn the Republic.

    as if there were a limit on printing money out of thin air.

    Michael Pettis has an interesting blog post about “thin air.”

    http://blog.mpettis.com/2015/10/how-to-spend-thin-airs-endogenous-money/

    …and damn the Republic.

    The Republic was poisoned in the period between the “Great Society” debt, Nixon closing the gold window, and the Humphrey-Hawkins Act. After those three events the death of the Republic has been just a matter of time and nature running its course.

    Read More
    • Replies: @dc.sunsets
    I'm part way through Pettis' treatment you linked, but I want to simplify things a little.

    I consider Say's Law to be inviolable in an honest system. For you to enter the marketplace to BUY, you must first have PRODUCED.

    Product is defined by that which can be sold at a profit to a willing buyer.

    Bank credit (out of thin air) is essentially script. It allows the borrower to enter the market to buy without any prior production. Bank credit in this regard has exactly the same effect as counterfeit money.

    I know the idea is that borrowers sometimes use that ability to buy (from nowhere) to purchase capital equipment and increase production (and create jobs.) This is beside the point, a red herring. In any economy above subsistence, excess capital is available as savings. These savings can be borrowed and interest paid. Only when savings doesn't compete with fiat credit is savings treated honestly.

    The addition of bank credit simply pulls more demand forward from the future. That is ALL it does. It increases current consumption (and possibly investment) above what is naturally sustainable.

    A credit bubble like what we've had is simply the aggregate of a rolling, growing volume of promises to pay in the future, all of it pulling more and more and more consumption (and possibly investment) into the present.

    All consumption is in the present. It is literally impossible to consume that which has not yet been produced, so debt issuance does not "consume the future."

    Now that the compound growth of those IOU's is a massive rock being pushed up an incline, we're starting to see that artificially stimulating investment simply is the effect of growing roses in Fargo, ND in January in a greenhouse. Expand the greenhouses enough, and eventually the bill for all that heat comes due. What happens when the heat is cut off (credit growth cannot be rolled forward and higher)?

    The lights go out, and all that artificially stimulated capital investment and consumption withers and rots and dies.

    The bust will reveal just how little organic demand exists for an unimaginably large fraction of the world's economy.
    , @jacques sheete
    Dear people, there never was a republic (res publica). It was always a res oligarchica.

    "The Constitution looked fairly good on paper, but it was not a popular document; people were suspicious of it, and suspicious of the enabling legislation that was being erected upon it. There was some ground for this. The Constitution had been laid down under unacceptable auspices; its history had been that of a coup d'état.

    It had been drafted, in the first place, by men representing special economic interests. Four-fifths of them were public creditors, one-third were land speculators, and one-fifth represented interests in shipping, manufacturing, and merchandising. Most of them were lawyers. Not one of them represented the interest of production — Vilescit origine tali. (the dice were loaded from the start)"

    Albert Jay Nock, Liberty vs. the Constitution: The Early Struggle
    [Excerpted from chapter 5 of Albert Jay Nock's Jefferson]
    https://mises.org/library/liberty-vs-constitution-early-struggle

    mises.org/daily/4254

     

  39. gwynedd1 says:

    Our economy runs on cash flows from assets. When they grow it causes a boom however rising asset prices tend increase the cost of using them. So the inevitable bust happens. The bigger the boom , the bigger the bust. Worthless land never has negative equity. The best spot in town might be a 100 million dollar asset , but with 200 million in liability, its financially worse than worthless.

    The boom is also as big as the bust. If that 100 million dollar asset went bankrupt, it would cause the asset to be flush with 100 million in equity. It could and would allow either debt free operation or finance 100 million in equity.

    However the Fed prevented the bust, so its nothing but this slow grinding economy with very little cash flow. Our assets have little equity and cannot create cash flows.

    Read More
  40. Boris says:

    If adding money to the financial system boosts asset prices, and adding money to the economy boosts growth, then why did the Fed add $3 trillion to the financial system expecting the economy to grow?

    Congress would block any stimulus spending, so you can’t do that.

    Since you are caught in a liquidity trap, the problem is that people expect deflation, so they hoard cash, which causes more deflation, which causes more cash hoarding, etc. Using QE allows the fed to signal that interest rates will be low not just in the short term, but in the mid to long term as well. It’s not the best strategy–too much QE and you get high inflation.

    Is the Fed confused about how the economy works? Is the Fed confused about how the financial system works?

    Sounds like you are the on who is confused.

    We’ve already seen that QE and zero rates have done nothing for growth

    This is profoundly stupid. Who said that QE should result in 4% GDP growth? QE is keeping deflation at bay. You don’t even understand what’s going on at a basic level.

    But this is a perfect article for Unz. It checks both dumb and conspiratorial.

    Read More
    • Replies: @dc.sunsets
    Once deflation sets in you can't create credit money any more. QE will be a waste of time unless central banks monetize more debt than exists in the entire world.

    All roads lead to rising interest rates, sooner or later.

    Once rates start to rise, the leverage across the Bond Ocean will result in declines in wealth value measured with 12 zeros.

    All roads thus lead to deflation of credit-money. I suppose the Fed could try printing a few trillion dollar banknotes, but I think they'd be a laughingstock afterward.

    PS: the only thing keeping deflation at bay is mass psychology, over which the Fed has no control whatsoever (protestations to the contrary notwithstanding.) Watch the T-bill rates. They moved up to .25% forcing the Fed to raise the discount rate. If they break out toward .50 or higher, this thing will well and truly reveal how powerless is the Fed.

  41. @another fred

    We’re currently in the final wave up, a massive asset mania fueled by pathological levels of trust and optimism...
     
    I think there is very little of either trust or optimism, what there is a sense of being trapped and fear of what might happen.


    The Purse Seine by Robinson Jeffers

    Our sardine fishermen work at night in the dark
    of the moon; daylight or moonlight
    They could not tell where to spread the net,
    unable to see the phosphorescence of the
    shoals of fish.
    They work northward from Monterey, coasting
    Santa Cruz; off New Year's Point or off
    Pigeon Point
    The look-out man will see some lakes of milk-color
    light on the sea's night-purple; he points,
    and the helmsman
    Turns the dark prow, the motorboat circles the
    gleaming shoal and drifts out her seine-net.
    They close the circle
    And purse the bottom of the net, then with great
    labor haul it in.

    I cannot tell you
    How beautiful the scene is, and a little terrible,
    then, when the crowded fish
    Know they are caught, and wildly beat from one wall
    to the other of their closing destiny
    the
    phosphorescent
    Water to a pool of flame, each beautiful slender body
    sheeted with flame, like a live rocket
    A comet's tail wake of clear yellow flame; while outside
    the narrowing
    Floats and cordage of the net great sea-lions come up
    to watch, sighing in the dark; the vast walls
    of night
    Stand erect to the stars.

    Lately I was looking from a night mountain-top
    On a wide city, the colored splendor, galaxies of light:
    how could I help but recall the seine-net
    Gathering the luminous fish?
    I cannot tell you how
    beautiful the city appeared, and a little terrible.
    I thought, We have geared the machines and locked all together
    into inter-dependence; we have built the great cities; now
    There is no escape. We have gathered vast populations incapable
    of free survival, insulated
    From the strong earth, each person in himself helpless, on all
    dependent. The circle is closed, and the net
    Is being hauled in. They hardly feel the cords drawing, yet
    they shine already.
    The inevitable mass-disasters
    Will not come in our time nor in our children's, but we
    and our children
    Must watch the net draw narrower, government take all
    powers--or revolution, and the new government
    Take more than all, add to kept bodies kept souls--or anarchy,
    the mass-disasters.
    These things are Progress;
    Do you marvel our verse is troubled or frowning, while it keeps
    its reason? Or it lets go, lets the mood flow
    In the manner of the recent young men into mere hysteria,
    splintered gleams, crackled laughter. But they are
    quite wrong.
    There is no reason for amazement: surely one always knew
    that cultures decay, and life's end is death.

     

    Disagree. There has to be trust of a sort, or else interest rates would reflect distrust…and they don’t. Yet.

    I do concur with the notion (I’m guessing you’d agree with) that this is the biggest game of Chicken ever. Hanging in, not flinching, is landing people in RICHIE RICH land. Of course, they will only stay rich if they can cash out their chips before the flinch.

    Given the difficulty of this conceptually, I still think most rich people today will take the biggest losses when this stupid game ends. No wonder they’re donating to Clinton; they think that she’s the Agent of Continuity, and they’re frankly too ignorant to realize just how little control anyone has over all this.

    Everything that has a beginning has an end. Life is birth, childhood, adulthood, old age and death. I just try to make the most of the time I’ve got. Grandkids make it worthwhile.

    Read More
    • Replies: @TheJester
    Yes, it is a game of chicken and the Wall Street racketeers have the advantage. Given their insider information, ready access to market trends, and managing reckless risks with counter positions via derivatives, Wall Street will have bailed out before the rest of us even read about it over morning coffee. That's part of the excitement in working on Wall Street: Make your millions and leave the peasants holding the empty bag.

    I firmly believe with a good deal of evidence that the Wall Street game is fixed by insiders.

    The real game is, "Pump ... dump ... and clean up!"
     
    The best evidence (avoiding reference to SEC fines levied against the guilty) is that the same players on Wall Street always seen to be the ones who survive and benefit from the cycles. There is an occasional misfire, but that risk is increasingly covered by government bailouts as we move to a post-Soviet style economy where Wall Street's profits are privatized and losses are socialized.
  42. @another fred

    as if there were a limit on printing money out of thin air.
     
    Michael Pettis has an interesting blog post about "thin air."

    http://blog.mpettis.com/2015/10/how-to-spend-thin-airs-endogenous-money/

    ...and damn the Republic.
     
    The Republic was poisoned in the period between the "Great Society" debt, Nixon closing the gold window, and the Humphrey-Hawkins Act. After those three events the death of the Republic has been just a matter of time and nature running its course.

    I’m part way through Pettis’ treatment you linked, but I want to simplify things a little.

    I consider Say’s Law to be inviolable in an honest system. For you to enter the marketplace to BUY, you must first have PRODUCED.

    Product is defined by that which can be sold at a profit to a willing buyer.

    Bank credit (out of thin air) is essentially script. It allows the borrower to enter the market to buy without any prior production. Bank credit in this regard has exactly the same effect as counterfeit money.

    I know the idea is that borrowers sometimes use that ability to buy (from nowhere) to purchase capital equipment and increase production (and create jobs.) This is beside the point, a red herring. In any economy above subsistence, excess capital is available as savings. These savings can be borrowed and interest paid. Only when savings doesn’t compete with fiat credit is savings treated honestly.

    The addition of bank credit simply pulls more demand forward from the future. That is ALL it does. It increases current consumption (and possibly investment) above what is naturally sustainable.

    A credit bubble like what we’ve had is simply the aggregate of a rolling, growing volume of promises to pay in the future, all of it pulling more and more and more consumption (and possibly investment) into the present.

    All consumption is in the present. It is literally impossible to consume that which has not yet been produced, so debt issuance does not “consume the future.”

    Now that the compound growth of those IOU’s is a massive rock being pushed up an incline, we’re starting to see that artificially stimulating investment simply is the effect of growing roses in Fargo, ND in January in a greenhouse. Expand the greenhouses enough, and eventually the bill for all that heat comes due. What happens when the heat is cut off (credit growth cannot be rolled forward and higher)?

    The lights go out, and all that artificially stimulated capital investment and consumption withers and rots and dies.

    The bust will reveal just how little organic demand exists for an unimaginably large fraction of the world’s economy.

    Read More
    • Replies: @another fred
    Reply to #42.

    I essentially agree but there is a fly in the ointment.

    As in the poem I posted, many governments have taken on the burden of "guaranteeing" the welfare of their citizens - and there are one hell of a lot of those citizens walking around. In my 70 years the population of the world has tripled (approx 2.5X in the US), yet in the "first world" there are fewer farmers, fewer real producers, fewer people responsible for their own well being.

    In 1929 this nation consisted of about 60% farmers or people who were directly involved in farming, only 10% urban. Now we are 90% urban.

    The government cannot "bankrupt" out of the guarantees it has made. When a "first world" government fails its citizens are mostly helpless, there are few who can "root hog, or die." If 18-wheelers do not deliver food to grocers that they can go in and get (with "something", probably a plastic card) they starve. If all they can do to get something to eat is submit to Leviathan, they will submit to Leviathan. In fact, after missing a few meals they will scream for Leviathan to "Do Something!"

    As Le Chatelier says, a system under stress will react in a direction to relieve the stress. I understand that there are people prepared to hold out for a while, I know some, but even 10 million deaths in the streets would not relieve the stress in this country from a complete breakdown of commerce.

    First Leviathan, then WAR, then life will go on.

  43. @Boris

    If adding money to the financial system boosts asset prices, and adding money to the economy boosts growth, then why did the Fed add $3 trillion to the financial system expecting the economy to grow?
     
    Congress would block any stimulus spending, so you can't do that.

    Since you are caught in a liquidity trap, the problem is that people expect deflation, so they hoard cash, which causes more deflation, which causes more cash hoarding, etc. Using QE allows the fed to signal that interest rates will be low not just in the short term, but in the mid to long term as well. It's not the best strategy--too much QE and you get high inflation.

    Is the Fed confused about how the economy works? Is the Fed confused about how the financial system works?
     
    Sounds like you are the on who is confused.

    We’ve already seen that QE and zero rates have done nothing for growth
     
    This is profoundly stupid. Who said that QE should result in 4% GDP growth? QE is keeping deflation at bay. You don't even understand what's going on at a basic level.

    But this is a perfect article for Unz. It checks both dumb and conspiratorial.

    Once deflation sets in you can’t create credit money any more. QE will be a waste of time unless central banks monetize more debt than exists in the entire world.

    All roads lead to rising interest rates, sooner or later.

    Once rates start to rise, the leverage across the Bond Ocean will result in declines in wealth value measured with 12 zeros.

    All roads thus lead to deflation of credit-money. I suppose the Fed could try printing a few trillion dollar banknotes, but I think they’d be a laughingstock afterward.

    PS: the only thing keeping deflation at bay is mass psychology, over which the Fed has no control whatsoever (protestations to the contrary notwithstanding.) Watch the T-bill rates. They moved up to .25% forcing the Fed to raise the discount rate. If they break out toward .50 or higher, this thing will well and truly reveal how powerless is the Fed.

    Read More
    • Replies: @Boris

    Once rates start to rise, the leverage across the Bond Ocean will result in declines in wealth value measured with 12 zeros.
     
    Surprisingly, you're not wrong. But economy is better better off even with the hit because you are out of the trap.

    Pretty much the same problem with stimulus spending. But you can spend that on things you know you will need--upgraded infrastructure, etc, so it's a safer prospect.
  44. Disagree. There has to be trust of a sort, or else interest rates would reflect distrust…and they don’t. Yet.

    Fair enough since it’s subjective, but I think the trust you refer to is that they will print enough to pay the debts and keep society from falling completely apart, not that there will be a positive return. I believe that myself, and There Is No Alternative beyond hoarding gold, which few can afford to do.

    Zero Hedge has a post on that today.

    http://www.zerohedge.com/news/2016-10-13/where-will-money-go-when-all-three-market-bubbles-pop

    The wheels will keep turning because they must turn or most cannot eat – until war comes that reduces the population in the cities. Governments have a lot of resources yet in their bag to keep the wheels turning, they just don’t have much to do with a free market economy.

    Read More
    • Replies: @dc.sunsets
    What makes "money" unique is that it's the only medium whereby a gain is not taxable.

    Unless one inherited Grandpa's stash of gold from 1932, it's well known what one's basis is for gold, land, etc. Small-timers might be okay, but anything short of a full reset will have tax consequences for a gain.

    This is part of why dollars will be the medium of exchange for anything short of the Zombie Apocalypse. Gold will be part of barter, and if barter emerges, I'd rather have a stockpile of common cartridges or toilet paper, tampons, rubbers and lipstick.

    I see no alternative to a collapse in the wealth value of debt. This should coincide with the largest collapse in the money supply ever recorded. People will be desperate for dollars to pay for gas, food, heat, rent, winter coats, condoms, tampons, lipstick and such. I suspect even the stockpiles of ammunition now in people's basements will eventually make it to flea markets and be sold off for 10 cents on the dollar.

    The effect should be 1) surviving claims on dollars (including banknotes) should experience a massive gain in purchasing power, and 2) despite prices collapsing, the shrinkage of wealth should render stuff even LESS affordable than now for the vast majority of people.

    Only once the crisis has run its course will TPTB respond, and of course wrongly. I have little doubt they'll blame the crisis on a "shortage of money" and will try the Zimbabwe Option. Then, for certain, will be a good time to buy up gold, land, art, stocks of surviving companies, etc.

    Or a bomb shelter. No one can predict how bad things might get.

    Of course I could be wrong. I've expected this all for quite some time, and so far no good.
    , @dc.sunsets

    Governments have a lot of resources yet in their bag to keep the wheels turning
     
    Political systems only have what people give them. Political systems are the ultimate parasite, they produce nothing endogenously. The credit bubble allowed the political system to grow to a Blue Whale-sized tapeworm. The collapse of the bubble will render much of the FedGov meaningless.

    What did the government of the USSR have when the Berlin Wall fell and eventually Gorbachev left office? The center lost legitimacy on a spontaneous basis. I think the same thing may well occur in the USA.

    What Uncle Sam has is inertia. A vast amount of it. I agree with you that this is a major force today, and will be so tomorrow and perhaps a few tomorrows after that....but this thing is approaching an unstable node.

    Much of what we see today could be gone quite soon and something as different as the lunar landscape emerge in its place.

  45. TheJester says:
    @edNels

    A question: Is there no interest in the common good in the Fed and on Wall Street … or, are they an ((( alien class ))) of racketeers who could care less about the country and its citizens? I digress; I have answered my own question.
     
    A farmer told me that sometimes they get an animal that is too smart to be managed, usually a specially smart and dangerous bull. He will be culled. Seems to me if the animals in a feedlot knew what was in store for them, they would bust the fences and run down the freeway.

    Well there may be more than one answer, I don't think they are ''aliens'' they're not acting smart enough. But a different species, maybe. Like the Morlocks in HG Wells story Time Machine. They evolved/devolved from humans into a Troglodyte cannibal that preyed on the nice people called Eloi.

    They are cannibals already, so when they go live below ground in the special cities, then they will be free to loose all skin pigment, see in the dark, and be a completely new species of parasites.

    Well there may be more than one answer, I don’t think they are ”aliens” they’re not acting smart enough.

    I can think of another explanation. The ((( aliens ))) used to keep a low profile, given the hard lessons of history. However, starting in the 1960s, their progressive increase in wealth, power, and control became so great that they no longer fear exposure. “We own the Federal Reserve, Wall Street, the MSM, most global corporations, and the Federal government. What are you going to do about it? You’re powerless; you’re the animals in the barnyard. The farm belongs to us ….!”

    Read More
  46. Wally says: • Website
    @Henry Barth
    I don't know if he's being sensational, or is truly ignorant.

    The Fed can't do those nice examples of fiscal stimulus he starts with.

    Congress has to do them.

    So you are saying that The Fed did not distribute trillions?

    No worries, your NFL games are still on.

    Read More
    • Replies: @another fred
    In case H. Barth is not around:

    The FED provides monetary stimulus. The Congress controls the public fisc, the purse. Fiscal policy is the domain of Congress (with spending bills starting in the House).

    Fiscal policy refers to spending by the government out of public funds.

    Yes, there is a lot of sleight of hand going on, but that does not erase the difference between monetary policy and fiscal policy.

    For example, the FED cannot spend money to build a road or buy an aircraft carrier, that is the domain of Congress.
    , @Henry Barth
    Only Congress can create REAL stimuli for an ailing economy. The Fed can't.

    Don't watch NFL. You may return to your Eustace Mullins, though.
  47. why are you asking these stupid question in the beginning of this article?

    ARE LEADERS, THE FED AND OUR GOVERNMENT DO NOT CARE ABOUT AMERICANS!!!

    ALL THEY WANT IS STRIFE, CONFUSION AND THE POPULACE ARGUING AMONG EACH OTHER SO THEY CAN LOOT THE COUNTRY TREASURY……WHY DO YOU THINK THE DISGRACED WELLS FARGO “LEADERS” ARE WALKING AWAY WITH MILLIONS AFTER COMMITTING FRAUD!!!!!!!

    DAMN I’M IN A SHITTY MOOD TODAY!

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  48. @Miro23
    Another aspect of rising asset prices is the general "Feel Good Factor" that helps hide the spectacular growth US inequality, where 120.000 families ( 0.1%) now have the same wealth as the lower 90% of the population combined (even something the British and Russian aristocracies didn't manage) - with plenty of 0,1% members being recent arrivals thanks to outsourcing and QE finance.

    To anticipate the situation, with FED stimulus stalling, the next step could be debt removal by Austerity, Write-Offs or inflation.

    However, one thing is for sure, that the insiders who made $ billions on the way up will be the first to exit since they're not planning to take losses or participate in Austerity or Write-Offs. That leaves the interesting question of inflation, with the advantage (from their POV) that the public is completely unprepared for this variant.

    The FED may say said that it has "learnt its lesson" and dump $ directly on the US public as a "stimulus bonus" (e.g. an account credit of $10.000 for every US adult) that would feed straight into demand, economic activity and accelerating inflation.

    At this point the 0,1% would presumably exit their stocks and bonds and head into foreign currencies and real foreign assets while the $ headed towards wastepaper value, which is pretty much what German (actually mostly racially non-German) Weimar speculators did when they saw hyperinflation coming. Happily (for them), they came out the other side with their wealth enhanced -returning their money to Germany and buying up German assets for peanuts.

    There is a similar racial aspect in the U.S.

    Jewish Americans are 2% of the American population but have obtained (from the 1980's onwards) through racial patronage, most of the top FED and Treasury positions (Janet Yellen, Stanley Fisher, Benjamin Bernanke, Donald Kohn, Jack Lew, Sarah Bloom, Stuart Levey, Alan Greenspan, Lawrence Summers, Robert Rubin, Samuel Bodman, Stuart Eizenstat) and have close connections to the Wall St./merchant banking/hedge fund beneficiaries of Bubble Finance, with the suggestion that QE, ZIRP, the aggressive removal of Glass Steagall, SEC approval of 30:1 leverage and full $ bailouts of their speculative positions in 2008 were policies designed to channel a large part of the$ Billions in rentier gains to themselves rather than the public, so they would probably also be the first to exit the US$.

    Just assuming that past actions may be a guide to future actions.

    “the insiders who made $ billions on the way up will”

    will be bailed out on the way down…..

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  49. @another fred
    One aspect of the lack of assets of the 99% is the fact that many no longer bother to save or accumulate assets because they rely on Big Sis to take care of them.

    It is a two way street. I'm not saying it is a rose garden, but the preferences of people have a fair amount to do with it. Some people have a fair amount of cash flow through their hands without bothering to put any to the side for a rainy day, especially the young.

    There are a lot more people eating at fast food joints than there are eating Dave Ramsey's beans and rice.

    “because they rely on Big Sis to take care of them”

    AS OPPOSED TO THE FED TAKING CARE OF THEM……..I CAN’T READ ANY MORE OF THIS SHIT…..IT’S LIKE THIS GUY WAS ASLEEP IN 2008.

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  50. @another fred

    Disagree. There has to be trust of a sort, or else interest rates would reflect distrust…and they don’t. Yet.
     
    Fair enough since it's subjective, but I think the trust you refer to is that they will print enough to pay the debts and keep society from falling completely apart, not that there will be a positive return. I believe that myself, and There Is No Alternative beyond hoarding gold, which few can afford to do.

    Zero Hedge has a post on that today.

    http://www.zerohedge.com/news/2016-10-13/where-will-money-go-when-all-three-market-bubbles-pop

    The wheels will keep turning because they must turn or most cannot eat - until war comes that reduces the population in the cities. Governments have a lot of resources yet in their bag to keep the wheels turning, they just don't have much to do with a free market economy.

    What makes “money” unique is that it’s the only medium whereby a gain is not taxable.

    Unless one inherited Grandpa’s stash of gold from 1932, it’s well known what one’s basis is for gold, land, etc. Small-timers might be okay, but anything short of a full reset will have tax consequences for a gain.

    This is part of why dollars will be the medium of exchange for anything short of the Zombie Apocalypse. Gold will be part of barter, and if barter emerges, I’d rather have a stockpile of common cartridges or toilet paper, tampons, rubbers and lipstick.

    I see no alternative to a collapse in the wealth value of debt. This should coincide with the largest collapse in the money supply ever recorded. People will be desperate for dollars to pay for gas, food, heat, rent, winter coats, condoms, tampons, lipstick and such. I suspect even the stockpiles of ammunition now in people’s basements will eventually make it to flea markets and be sold off for 10 cents on the dollar.

    The effect should be 1) surviving claims on dollars (including banknotes) should experience a massive gain in purchasing power, and 2) despite prices collapsing, the shrinkage of wealth should render stuff even LESS affordable than now for the vast majority of people.

    Only once the crisis has run its course will TPTB respond, and of course wrongly. I have little doubt they’ll blame the crisis on a “shortage of money” and will try the Zimbabwe Option. Then, for certain, will be a good time to buy up gold, land, art, stocks of surviving companies, etc.

    Or a bomb shelter. No one can predict how bad things might get.

    Of course I could be wrong. I’ve expected this all for quite some time, and so far no good.

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  51. @another fred

    Disagree. There has to be trust of a sort, or else interest rates would reflect distrust…and they don’t. Yet.
     
    Fair enough since it's subjective, but I think the trust you refer to is that they will print enough to pay the debts and keep society from falling completely apart, not that there will be a positive return. I believe that myself, and There Is No Alternative beyond hoarding gold, which few can afford to do.

    Zero Hedge has a post on that today.

    http://www.zerohedge.com/news/2016-10-13/where-will-money-go-when-all-three-market-bubbles-pop

    The wheels will keep turning because they must turn or most cannot eat - until war comes that reduces the population in the cities. Governments have a lot of resources yet in their bag to keep the wheels turning, they just don't have much to do with a free market economy.

    Governments have a lot of resources yet in their bag to keep the wheels turning

    Political systems only have what people give them. Political systems are the ultimate parasite, they produce nothing endogenously. The credit bubble allowed the political system to grow to a Blue Whale-sized tapeworm. The collapse of the bubble will render much of the FedGov meaningless.

    What did the government of the USSR have when the Berlin Wall fell and eventually Gorbachev left office? The center lost legitimacy on a spontaneous basis. I think the same thing may well occur in the USA.

    What Uncle Sam has is inertia. A vast amount of it. I agree with you that this is a major force today, and will be so tomorrow and perhaps a few tomorrows after that….but this thing is approaching an unstable node.

    Much of what we see today could be gone quite soon and something as different as the lunar landscape emerge in its place.

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    • Replies: @another fred

    Much of what we see today could be gone quite soon and something as different as the lunar landscape emerge in its place.
     
    I believe the Defense Production Act of 1950 (and knock on exec. orders and amendments) gives a pretty clear picture of what will take its place. I do not believe any densely populated (civilized) people will accept anarchy for long. It took a while for Russia to crystallize around Putin, or France around Napoleon, but we have laws on the books that give our Federal Government more legal power than Hitler had.

    We will have little chaos before order is imposed. IMO, only a war that reduces the population will displace that Leviathan.
  52. @Wally
    So you are saying that The Fed did not distribute trillions?

    No worries, your NFL games are still on.

    In case H. Barth is not around:

    The FED provides monetary stimulus. The Congress controls the public fisc, the purse. Fiscal policy is the domain of Congress (with spending bills starting in the House).

    Fiscal policy refers to spending by the government out of public funds.

    Yes, there is a lot of sleight of hand going on, but that does not erase the difference between monetary policy and fiscal policy.

    For example, the FED cannot spend money to build a road or buy an aircraft carrier, that is the domain of Congress.

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  53. @dc.sunsets

    Governments have a lot of resources yet in their bag to keep the wheels turning
     
    Political systems only have what people give them. Political systems are the ultimate parasite, they produce nothing endogenously. The credit bubble allowed the political system to grow to a Blue Whale-sized tapeworm. The collapse of the bubble will render much of the FedGov meaningless.

    What did the government of the USSR have when the Berlin Wall fell and eventually Gorbachev left office? The center lost legitimacy on a spontaneous basis. I think the same thing may well occur in the USA.

    What Uncle Sam has is inertia. A vast amount of it. I agree with you that this is a major force today, and will be so tomorrow and perhaps a few tomorrows after that....but this thing is approaching an unstable node.

    Much of what we see today could be gone quite soon and something as different as the lunar landscape emerge in its place.

    Much of what we see today could be gone quite soon and something as different as the lunar landscape emerge in its place.

    I believe the Defense Production Act of 1950 (and knock on exec. orders and amendments) gives a pretty clear picture of what will take its place. I do not believe any densely populated (civilized) people will accept anarchy for long. It took a while for Russia to crystallize around Putin, or France around Napoleon, but we have laws on the books that give our Federal Government more legal power than Hitler had.

    We will have little chaos before order is imposed. IMO, only a war that reduces the population will displace that Leviathan.

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  54. @mtn cur
    Start investment clubs to buy fertile valleys, surrounded by well forested, defensible ridgelines and rivers and then learn to love your neighbors.

    Start investment clubs to buy fertile valleys, surrounded by well forested, defensible ridgelines and rivers and then learn to love your neighbors.

    Nah, that’s not how the big boys do it. Ya just pay some suckers to waltz in and seize the land, then you set up a government to reign them in. ;)

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  55. @another fred

    as if there were a limit on printing money out of thin air.
     
    Michael Pettis has an interesting blog post about "thin air."

    http://blog.mpettis.com/2015/10/how-to-spend-thin-airs-endogenous-money/

    ...and damn the Republic.
     
    The Republic was poisoned in the period between the "Great Society" debt, Nixon closing the gold window, and the Humphrey-Hawkins Act. After those three events the death of the Republic has been just a matter of time and nature running its course.

    Dear people, there never was a republic (res publica). It was always a res oligarchica.

    “The Constitution looked fairly good on paper, but it was not a popular document; people were suspicious of it, and suspicious of the enabling legislation that was being erected upon it. There was some ground for this. The Constitution had been laid down under unacceptable auspices; its history had been that of a coup d’état.

    It had been drafted, in the first place, by men representing special economic interests. Four-fifths of them were public creditors, one-third were land speculators, and one-fifth represented interests in shipping, manufacturing, and merchandising. Most of them were lawyers. Not one of them represented the interest of production — Vilescit origine tali. (the dice were loaded from the start)”

    Albert Jay Nock, Liberty vs. the Constitution: The Early Struggle
    [Excerpted from chapter 5 of Albert Jay Nock's Jefferson]

    https://mises.org/library/liberty-vs-constitution-early-struggle

    mises.org/daily/4254

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    • Replies: @another fred
    Fair enough (after 1865), but the government did not have the ability to control all the niches in which people could go about their lives undisturbed, and it sure as hell didn't have the laws/court decisions that gave it the power.
    , @Ace
    Nock isn't persuasive. The Constitution doesn't favor shipping, manufacturing, or land speculation, for example. It was hands off everything and any kind of business could be created and prosper.
  56. @dc.sunsets
    I'm part way through Pettis' treatment you linked, but I want to simplify things a little.

    I consider Say's Law to be inviolable in an honest system. For you to enter the marketplace to BUY, you must first have PRODUCED.

    Product is defined by that which can be sold at a profit to a willing buyer.

    Bank credit (out of thin air) is essentially script. It allows the borrower to enter the market to buy without any prior production. Bank credit in this regard has exactly the same effect as counterfeit money.

    I know the idea is that borrowers sometimes use that ability to buy (from nowhere) to purchase capital equipment and increase production (and create jobs.) This is beside the point, a red herring. In any economy above subsistence, excess capital is available as savings. These savings can be borrowed and interest paid. Only when savings doesn't compete with fiat credit is savings treated honestly.

    The addition of bank credit simply pulls more demand forward from the future. That is ALL it does. It increases current consumption (and possibly investment) above what is naturally sustainable.

    A credit bubble like what we've had is simply the aggregate of a rolling, growing volume of promises to pay in the future, all of it pulling more and more and more consumption (and possibly investment) into the present.

    All consumption is in the present. It is literally impossible to consume that which has not yet been produced, so debt issuance does not "consume the future."

    Now that the compound growth of those IOU's is a massive rock being pushed up an incline, we're starting to see that artificially stimulating investment simply is the effect of growing roses in Fargo, ND in January in a greenhouse. Expand the greenhouses enough, and eventually the bill for all that heat comes due. What happens when the heat is cut off (credit growth cannot be rolled forward and higher)?

    The lights go out, and all that artificially stimulated capital investment and consumption withers and rots and dies.

    The bust will reveal just how little organic demand exists for an unimaginably large fraction of the world's economy.

    Reply to #42.

    I essentially agree but there is a fly in the ointment.

    As in the poem I posted, many governments have taken on the burden of “guaranteeing” the welfare of their citizens – and there are one hell of a lot of those citizens walking around. In my 70 years the population of the world has tripled (approx 2.5X in the US), yet in the “first world” there are fewer farmers, fewer real producers, fewer people responsible for their own well being.

    In 1929 this nation consisted of about 60% farmers or people who were directly involved in farming, only 10% urban. Now we are 90% urban.

    The government cannot “bankrupt” out of the guarantees it has made. When a “first world” government fails its citizens are mostly helpless, there are few who can “root hog, or die.” If 18-wheelers do not deliver food to grocers that they can go in and get (with “something”, probably a plastic card) they starve. If all they can do to get something to eat is submit to Leviathan, they will submit to Leviathan. In fact, after missing a few meals they will scream for Leviathan to “Do Something!”

    As Le Chatelier says, a system under stress will react in a direction to relieve the stress. I understand that there are people prepared to hold out for a while, I know some, but even 10 million deaths in the streets would not relieve the stress in this country from a complete breakdown of commerce.

    First Leviathan, then WAR, then life will go on.

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  57. @jacques sheete
    Dear people, there never was a republic (res publica). It was always a res oligarchica.

    "The Constitution looked fairly good on paper, but it was not a popular document; people were suspicious of it, and suspicious of the enabling legislation that was being erected upon it. There was some ground for this. The Constitution had been laid down under unacceptable auspices; its history had been that of a coup d'état.

    It had been drafted, in the first place, by men representing special economic interests. Four-fifths of them were public creditors, one-third were land speculators, and one-fifth represented interests in shipping, manufacturing, and merchandising. Most of them were lawyers. Not one of them represented the interest of production — Vilescit origine tali. (the dice were loaded from the start)"

    Albert Jay Nock, Liberty vs. the Constitution: The Early Struggle
    [Excerpted from chapter 5 of Albert Jay Nock's Jefferson]
    https://mises.org/library/liberty-vs-constitution-early-struggle

    mises.org/daily/4254

     

    Fair enough (after 1865), but the government did not have the ability to control all the niches in which people could go about their lives undisturbed, and it sure as hell didn’t have the laws/court decisions that gave it the power.

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    • Replies: @jacques sheete
    True, but it was set up for the advantage of the rich few and that it would evolve into the mess we have today was pretty much predicted by the anti-federalists.
  58. Boris says:
    @dc.sunsets
    Once deflation sets in you can't create credit money any more. QE will be a waste of time unless central banks monetize more debt than exists in the entire world.

    All roads lead to rising interest rates, sooner or later.

    Once rates start to rise, the leverage across the Bond Ocean will result in declines in wealth value measured with 12 zeros.

    All roads thus lead to deflation of credit-money. I suppose the Fed could try printing a few trillion dollar banknotes, but I think they'd be a laughingstock afterward.

    PS: the only thing keeping deflation at bay is mass psychology, over which the Fed has no control whatsoever (protestations to the contrary notwithstanding.) Watch the T-bill rates. They moved up to .25% forcing the Fed to raise the discount rate. If they break out toward .50 or higher, this thing will well and truly reveal how powerless is the Fed.

    Once rates start to rise, the leverage across the Bond Ocean will result in declines in wealth value measured with 12 zeros.

    Surprisingly, you’re not wrong. But economy is better better off even with the hit because you are out of the trap.

    Pretty much the same problem with stimulus spending. But you can spend that on things you know you will need–upgraded infrastructure, etc, so it’s a safer prospect.

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  59. FKA Max says:

    And while rising stock prices don’t necessarily prove that the Fed has an ulterior motive; identifying the people who benefit from those inflated prices certainly does. After all, who owns stocks and bonds?

    Jewish people stood out in a third trajectory in which people invest early in life in high-risk, high-return assets such as stocks and bonds and build wealth quickly while putting less emphasis on homeownership. About one-third of Jews followed this path, compared to no conservative Protestants, 7 percent of mainline Protestants and 4 percent of Catholics.

    https://researchnews.osu.edu/archive/relgwlth.htm

    Religion and Wealth: The Role of Religious
    Affiliation and Participation in Early Adult
    Asset Accumulation

    LISA A. KEISTER,
    Ohio State University

    Researchers have documented extreme inequalities in wealth ownership, but the
    processes that create these inequalities are not well understood. One important
    contributing factor that attracts little attention is religion. This study explores the
    relationship between religious participation, religious affiliation, and patterns of
    wealth accumulation. I argue that religion affects wealth ownership indirectly by
    shaping demographic behaviors. I also argue that religion directly influences wealth
    accumulation by identifying valuable goals, by providing a set of competencies that
    direct strategies of action, and by contributing to social contacts that provide
    information and opportunities that can enhance wealth ownership. The findings
    suggest that Jews enjoy tremendous gains in wealth ownership, while conservative
    Protestants accumulate relatively little wealth.
    In contrast, mainline Protestants and
    Catholics are indistinguishable from each other and from the general population.
    The results demonstrate the importance of family processes in shaping wealth
    accumulation, and they underscore the importance of culture in shaping economic
    behavior and ultimately in creating social inequality.

    https://ai2-s2-pdfs.s3.amazonaws.com/bc63/0f5cba7112e94faed0bb3ab307be8f51db16.pdf

    Do you have to be smart to be rich? The impact of IQ on wealth,
    income and financial distress

    Jay L. Zagorsky

    https://www.gwern.net/docs/iq/2007-zagorsky.pdf

    Financial distress is least for people with an
    IQ score slightly higher than average (100). Among
    those in the lower and upper portion of the IQ test score
    distribution, a higher IQ score increases distress.
    The title asks,“Do you have to be smart to be rich?”
    If IQ test scores are an accurate measure of intelligence and if
    intelligence is relatively fixed from teen years to adulthood
    then the results indicate the answer is no. Being more
    intelligent does not confer any advantage along two of the
    three key dimensions of financial success. Since intelli-
    gence is not a factor for explaining wealth, individuals with
    low intelligence should not believe they are handicapped
    in achieving financial success, nor should high intelligence
    people believe they have an advantage.


    How Jews Became Smart: Anti-”Natural History of Ashkenazi Intelligence”

    R. Brian Ferguson Department of Sociology and Anthropology, Rutgers-Newark

    http://www.ncas.rutgers.edu/sites/fasn/files/How%20Jews%20Became%20Smart%20(2008).pdf

    What about those at the pinnacle, did they need high IQ’s? No doubt, it took cunning to see good opportunities. But other personality factors besides intelligence could lead to fortune.
    One could even keep this with a psychological Darwinian orientation by suggesting that risk taking, or aggressiveness-both traits often claimed to have genetic bases-led to great profit.
    Yet more then any individual qualities, the most important factors leading to greater financial
    success were possession of capital, social connections, and political patrons.
    And let us not
    forget luck–circumstances that lead to a huge payoff, or sudden ruination.

    – p. 35

    But it wasn’t just religious affiliation itself that had an impact on wealth accumulation. The study found that people who regularly attended religious services tended to be more wealthy.

    “It seems strange – why should it matter whether you go to church in terms of building wealth?” Keister said. “But going to religious services may be another opportunity, especially for Jews, to be indoctrinated with beliefs that help build wealth. Also, it is a social network issue – a church or synagogue can be a good place to meet people with investment tips or money to loan for a new business.”

    https://researchnews.osu.edu/archive/relgwlth.htm

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  60. @Wally
    So you are saying that The Fed did not distribute trillions?

    No worries, your NFL games are still on.

    Only Congress can create REAL stimuli for an ailing economy. The Fed can’t.

    Don’t watch NFL. You may return to your Eustace Mullins, though.

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  61. nsa says:

    Yellen….Bernanke……Greenspan…….Volcker……..Miller (goy – replaced after only 9 months)……Burns…… Anyone spot a trend? Some dastardly jooie baiting bigots actually claim these public spirited citizens just create money and credit out of thin air, and distribute it amongst their tribal friends and relatives. Imagine that.

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  62. @another fred
    Fair enough (after 1865), but the government did not have the ability to control all the niches in which people could go about their lives undisturbed, and it sure as hell didn't have the laws/court decisions that gave it the power.

    True, but it was set up for the advantage of the rich few and that it would evolve into the mess we have today was pretty much predicted by the anti-federalists.

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  63. Paul C. says:
    @Greg Bacon
    There's no legit reason why Americans should pay interest to private bankers on the money we borrow from ourselves.
    If the FED can print money out of thin air, so could the US Treasury and save Americans a trillion or so a year in interest fees.


    But if you think the banksters, who control the WH and Congress are going to allow that, you're mistaken, they'd take us to war with Russia before giving up their death grip on our throats.

    Spot on.

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  64. Junior [AKA "Jr."] says:

    Great article, Mr. Whitney. I especially liked the Dylan song reference, as will be painfully obvious by the end of this Dylan tangent that I call a post. ;)

    It truly is the biggest heist in human history. They know exactly what they’re doing.

    So, which is it? Is the Fed a moron or a liar?

    Now we’ve all heard the expression, “The definition of insanity is doing the same thing over and over again, and expecting a different result”.

    Well, the Fed has been doing the same thing for the last seven years — dumping money into the financial system while predicting stronger growth.

    “The (Money)pump don’t work because the vandals took the handle.”

    The song “Subterranean Homesick Blues” seems apropos as well considering that when the shit hits the fan the thieving bastards will most likely head underground into a subterranean stronghold to wait it out. Back underground, from whence they slithered and are longingly feeling homesick about slithering back to. My guess is that they’re gonna go subterranean under a mountain in the alps of conveniently “neutral” Switzerland, where the nimrods run their banking cartel out of, probably somewhere near their modern day Tower of Babel in Basel.

    The central bank of all the central banks, the Bank of International Settlements(BIS), is in Switzerland. It’s their headquarters. Mountainous. Easily defended. So called, “Neutral”. Switzerland. That’s where the evil bastards are gonna hole up. Hell, I know that’s where I would go if I were a troll with a horde of stolen gold to hide and a fan spray of shit to avoid being hit with. They’ve done it before(WW2). They’ll do it again(WW3). Switzerland.

    But I digress. Back to Mr. Zimmerman’s ode to excessive precipitation, “A Hard Rain’s a-Gonna Fall”, that was referenced in the article.

    The whole idea that the mousy Ms Yellen is calling the shots for the world’s most powerful financial institution is the most ridiculous thing I’ve ever heard. Does anyone actually believe that rubbish?

    “Where the executioner’s face is always well hidden.”

    But now it’s all coming to a head. Now all the bigtime global institutions (IMF, BIS, WTO, OECD) are warning that a “Hard Rain’s a-gonna Fall” and that the day of reckoning may be at hand.

    Oh, what did you see, my red-white-and-blue-eyed son?
    Oh, what did you see, my deplorable young one?
    I saw 50 stars on a flag being extinguished by a light-blue hexagram
    I saw a herd of sheep that think they’re free people
    I saw globalist wolves huffing and puffing to blow down a 20 trillion dollar house of cards
    I saw a privately owned printing press call itself Federal
    I saw the letters NWO hide behind the letters MSM
    I saw the re-incarnation of Boss Tweed come back as an old hag in a pantsuit
    And it’s a hard, and it’s a hard, it’s a hard, it’s a hard
    And it’s a hard rain’s a-going to fall

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  65. You can never create real growth by printing money and spending it.
    Whether it is infrastructure spending or food stamps or juicing stock markets, the idea that growth can be created from nothing is a fraud.
    Ultimately all you do is debase the currency and create inflation.

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    • Replies: @edNels

    You can never create real growth by printing money and spending it.
     
    Never's a long time.

    Printing money isn't so bad, if the Gov. would just do that, less interest on that created money, to the private banks. Or, pay the interest to itself, (increase the pay for Congress again, for doing a good deed, that always needs to get paid!)

    If the Gov. would just create and print some money and disperse it to the people… the folks, you and me… instead of the Cronies, and the Folks would indeed Spend that mullah, and that would be a big boost to the Econ.
    Creating some money for the peeps like a Guaranteed Income, a base support so the Detroiters can make their God Damned Water bills and ON and ON!

    Start Creating and Printing some government money, straight and neat, that will indeed get Spent: SPENT down on Main street USA. instead of Invested by Ebenezer Scrooge Cronies.
    Scrooge, extremely selfish guy, too frugal, didn't want to spend a dime.
    , @utu
    What do you mean by growth? You can build pyramids, aircraft carriers, Manhattan projects by printing money and in the process the growth will occur. People will buy houses, get married have children.
    , @Miro23

    You can never create real growth by printing money and spending it.
    Whether it is infrastructure spending or food stamps or juicing stock markets, the idea that growth can be created from nothing is a fraud.
    Ultimately all you do is debase the currency and create inflation.
     
    That's not 100% true. If you have a good project that can return the capital and pay interest then the bank /FED or whoever can create the money, make the loan, and it's a good investment, like opening up the West in the 19th century, rebuilding Europe after WW2 or developing new technologies like electricity, motor transport, internet etc.

    The problem is that QE is a bad investment that just feeds into speculation, covering government deficits or Middle East wars. These $ trillions will never return the capital "invested" to the US public (who ultimately hold this debt) and probably not even the interest.
  66. edNels says:
    @David Jensen
    You can never create real growth by printing money and spending it.
    Whether it is infrastructure spending or food stamps or juicing stock markets, the idea that growth can be created from nothing is a fraud.
    Ultimately all you do is debase the currency and create inflation.

    You can never create real growth by printing money and spending it.

    Never’s a long time.

    Printing money isn’t so bad, if the Gov. would just do that, less interest on that created money, to the private banks. Or, pay the interest to itself, (increase the pay for Congress again, for doing a good deed, that always needs to get paid!)

    If the Gov. would just create and print some money and disperse it to the people… the folks, you and me… instead of the Cronies, and the Folks would indeed Spend that mullah, and that would be a big boost to the Econ.
    Creating some money for the peeps like a Guaranteed Income, a base support so the Detroiters can make their God Damned Water bills and ON and ON!

    Start Creating and Printing some government money, straight and neat, that will indeed get Spent: SPENT down on Main street USA. instead of Invested by Ebenezer Scrooge Cronies.
    Scrooge, extremely selfish guy, too frugal, didn’t want to spend a dime.

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  67. utu says:
    @David Jensen
    You can never create real growth by printing money and spending it.
    Whether it is infrastructure spending or food stamps or juicing stock markets, the idea that growth can be created from nothing is a fraud.
    Ultimately all you do is debase the currency and create inflation.

    What do you mean by growth? You can build pyramids, aircraft carriers, Manhattan projects by printing money and in the process the growth will occur. People will buy houses, get married have children.

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  68. Art says:

    No man living or dead, has hurt America more than Bubbles Greenspan. Junk bonds, savings and loan, internet, and homes bubbles are his responsibilities. With each bubble his tribe became wealthier.

    He shifted America’s wealth from established long-term corporations to greedy money hungry Jews – end of story.

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    • Replies: @another fred
    If you want someone in finance/economics to blame, you might look at Paul Samuelson. He was instrumental in convincing JFK and LBJ to start "Keynesian" stimulus in a healthy economy and started this credit cycle going.

    Nixon didn't help, but he was faced with a choice of triggering a deep recession or closing the gold window and took the easy path. After the Humphrey-Hawkins Act was passed the Fed was locked into this course.


    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Von Mises
     
    After the Humphrey-Hawkins Act was passed "voluntary abandonment" was not an option. I do not agree with those who say the "final and total catastrophe of the currency system" will mean collapse of the US. "There is a great deal of ruin in a nation."
  69. […] one’s best viewed at the original article but here’s some of […]

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  70. Miro23 says:
    @David Jensen
    You can never create real growth by printing money and spending it.
    Whether it is infrastructure spending or food stamps or juicing stock markets, the idea that growth can be created from nothing is a fraud.
    Ultimately all you do is debase the currency and create inflation.

    You can never create real growth by printing money and spending it.
    Whether it is infrastructure spending or food stamps or juicing stock markets, the idea that growth can be created from nothing is a fraud.
    Ultimately all you do is debase the currency and create inflation.

    That’s not 100% true. If you have a good project that can return the capital and pay interest then the bank /FED or whoever can create the money, make the loan, and it’s a good investment, like opening up the West in the 19th century, rebuilding Europe after WW2 or developing new technologies like electricity, motor transport, internet etc.

    The problem is that QE is a bad investment that just feeds into speculation, covering government deficits or Middle East wars. These $ trillions will never return the capital “invested” to the US public (who ultimately hold this debt) and probably not even the interest.

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  71. TheJester says:
    @dc.sunsets
    Disagree. There has to be trust of a sort, or else interest rates would reflect distrust...and they don't. Yet.

    I do concur with the notion (I'm guessing you'd agree with) that this is the biggest game of Chicken ever. Hanging in, not flinching, is landing people in RICHIE RICH land. Of course, they will only stay rich if they can cash out their chips before the flinch.

    Given the difficulty of this conceptually, I still think most rich people today will take the biggest losses when this stupid game ends. No wonder they're donating to Clinton; they think that she's the Agent of Continuity, and they're frankly too ignorant to realize just how little control anyone has over all this.

    Everything that has a beginning has an end. Life is birth, childhood, adulthood, old age and death. I just try to make the most of the time I've got. Grandkids make it worthwhile.

    Yes, it is a game of chicken and the Wall Street racketeers have the advantage. Given their insider information, ready access to market trends, and managing reckless risks with counter positions via derivatives, Wall Street will have bailed out before the rest of us even read about it over morning coffee. That’s part of the excitement in working on Wall Street: Make your millions and leave the peasants holding the empty bag.

    I firmly believe with a good deal of evidence that the Wall Street game is fixed by insiders.

    The real game is, “Pump … dump … and clean up!”

    The best evidence (avoiding reference to SEC fines levied against the guilty) is that the same players on Wall Street always seen to be the ones who survive and benefit from the cycles. There is an occasional misfire, but that risk is increasingly covered by government bailouts as we move to a post-Soviet style economy where Wall Street’s profits are privatized and losses are socialized.

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  72. @Art
    No man living or dead, has hurt America more than Bubbles Greenspan. Junk bonds, savings and loan, internet, and homes bubbles are his responsibilities. With each bubble his tribe became wealthier.

    He shifted America’s wealth from established long-term corporations to greedy money hungry Jews – end of story.

    If you want someone in finance/economics to blame, you might look at Paul Samuelson. He was instrumental in convincing JFK and LBJ to start “Keynesian” stimulus in a healthy economy and started this credit cycle going.

    Nixon didn’t help, but he was faced with a choice of triggering a deep recession or closing the gold window and took the easy path. After the Humphrey-Hawkins Act was passed the Fed was locked into this course.

    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Von Mises

    After the Humphrey-Hawkins Act was passed “voluntary abandonment” was not an option. I do not agree with those who say the “final and total catastrophe of the currency system” will mean collapse of the US. “There is a great deal of ruin in a nation.”

    Read More
    • Replies: @Art
    I do not agree with those who say the “final and total catastrophe of the currency system” will mean collapse of the US.

    The Zionist money machine is currently moving from holding "money in the form of dollars" to owning stocks. When the collapse happens - they will own most of main street America.

    p.s. It is getting late in the money cycle. There are too many dollars floating around - only big loans by big banks to national governments can sook up the excess. (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)
  73. Art says:
    @another fred
    If you want someone in finance/economics to blame, you might look at Paul Samuelson. He was instrumental in convincing JFK and LBJ to start "Keynesian" stimulus in a healthy economy and started this credit cycle going.

    Nixon didn't help, but he was faced with a choice of triggering a deep recession or closing the gold window and took the easy path. After the Humphrey-Hawkins Act was passed the Fed was locked into this course.


    “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.” Von Mises
     
    After the Humphrey-Hawkins Act was passed "voluntary abandonment" was not an option. I do not agree with those who say the "final and total catastrophe of the currency system" will mean collapse of the US. "There is a great deal of ruin in a nation."

    I do not agree with those who say the “final and total catastrophe of the currency system” will mean collapse of the US.

    The Zionist money machine is currently moving from holding “money in the form of dollars” to owning stocks. When the collapse happens – they will own most of main street America.

    p.s. It is getting late in the money cycle. There are too many dollars floating around – only big loans by big banks to national governments can sook up the excess. (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)

    Read More
    • Replies: @another fred

    (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)
     
    The loans will be "paid" with fiat money. What will change is that they will deal with the fact that they have to stop the exponential growth of debt/money (or else - hello Zimbabwe and they know that won't work).

    That will be on the backs of people as there is no other way to pay for it (even if you confiscate every penny of wealth from the 1%, that will not balance the books).

    Whatever the new currency system is, I doubt it will be vulnerable to as much political intervention as the current "system". It will not be possible to get all nations to agree on a system (producers have different interests from consumers and debtors from creditors) and the attempt to impose a system will lead to a breakdown in cooperation (such as it is). Then war.

    So it goes

  74. @Art
    I do not agree with those who say the “final and total catastrophe of the currency system” will mean collapse of the US.

    The Zionist money machine is currently moving from holding "money in the form of dollars" to owning stocks. When the collapse happens - they will own most of main street America.

    p.s. It is getting late in the money cycle. There are too many dollars floating around - only big loans by big banks to national governments can sook up the excess. (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)

    (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)

    The loans will be “paid” with fiat money. What will change is that they will deal with the fact that they have to stop the exponential growth of debt/money (or else – hello Zimbabwe and they know that won’t work).

    That will be on the backs of people as there is no other way to pay for it (even if you confiscate every penny of wealth from the 1%, that will not balance the books).

    Whatever the new currency system is, I doubt it will be vulnerable to as much political intervention as the current “system”. It will not be possible to get all nations to agree on a system (producers have different interests from consumers and debtors from creditors) and the attempt to impose a system will lead to a breakdown in cooperation (such as it is). Then war.

    So it goes

    Read More
    • Replies: @Miro23

    "... or else – hello Zimbabwe and they know that won’t work."
     
    Won't work for who? Germany's Weimar financiers came out of the other side of the 1932 hyperinflation better off then they went in. They returned with their $ and bought up great chunks of German industry and major city real estate at fire-sale prices.

    Also, the Republic's unpayable government debt evaporated.
    , @Art
    Whatever the new currency system is, I doubt it will be vulnerable to as much political intervention as the current “system”.

    The most import thing about any currency system is – “who has the money” – is it distributed to everyone or do a few control the system?

    Banking and currency systems should be owned by its users – not bankers. The ideal system would be regional currency systems controlled and owned by its users. Regional growth would be controlled by the regional populace. Local transactions would happen in the local currency. Inter currency transactions would be denominated in gold.
  75. Miro23 says:
    @another fred

    (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)
     
    The loans will be "paid" with fiat money. What will change is that they will deal with the fact that they have to stop the exponential growth of debt/money (or else - hello Zimbabwe and they know that won't work).

    That will be on the backs of people as there is no other way to pay for it (even if you confiscate every penny of wealth from the 1%, that will not balance the books).

    Whatever the new currency system is, I doubt it will be vulnerable to as much political intervention as the current "system". It will not be possible to get all nations to agree on a system (producers have different interests from consumers and debtors from creditors) and the attempt to impose a system will lead to a breakdown in cooperation (such as it is). Then war.

    So it goes

    “… or else – hello Zimbabwe and they know that won’t work.”

    Won’t work for who? Germany’s Weimar financiers came out of the other side of the 1932 hyperinflation better off then they went in. They returned with their $ and bought up great chunks of German industry and major city real estate at fire-sale prices.

    Also, the Republic’s unpayable government debt evaporated.

    Read More
  76. Art says:
    @another fred

    (Of course only the guns of state, forcing taxpayers to pony up can pay back the loans.)
     
    The loans will be "paid" with fiat money. What will change is that they will deal with the fact that they have to stop the exponential growth of debt/money (or else - hello Zimbabwe and they know that won't work).

    That will be on the backs of people as there is no other way to pay for it (even if you confiscate every penny of wealth from the 1%, that will not balance the books).

    Whatever the new currency system is, I doubt it will be vulnerable to as much political intervention as the current "system". It will not be possible to get all nations to agree on a system (producers have different interests from consumers and debtors from creditors) and the attempt to impose a system will lead to a breakdown in cooperation (such as it is). Then war.

    So it goes

    Whatever the new currency system is, I doubt it will be vulnerable to as much political intervention as the current “system”.

    The most import thing about any currency system is – “who has the money” – is it distributed to everyone or do a few control the system?

    Banking and currency systems should be owned by its users – not bankers. The ideal system would be regional currency systems controlled and owned by its users. Regional growth would be controlled by the regional populace. Local transactions would happen in the local currency. Inter currency transactions would be denominated in gold.

    Read More
  77. Sam J. says:

    During the housing crisis the FED gave fortunes to the bankers at zero interest. I’m betting they own just about everything now. We know they gave them $16 trillion and I’ve read analyst that say the amount was closer to $29 Trillion. At $29 Trillion and 300 million Americans we could have given a zero interest loan for every family of four of $386,666. Housing crisis solved and the economy would have roared with all that cash going into people’s pockets.

    They’re all scratching each others back while looting us. Selling off public assets for pennies then charging us a fortune to get back what we had already.

    The whole FED system is a rip off. They create money from nothing and we owe them the principle and interest. A minutes thought would tell you that we can never pay off the debt as all money is created with debt. So if we had no debt we would have no money. Next they’re going to move the scheme up to a global level with SDR’s. Same game, same defects, same rip off.

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  78. Ace says:
    @jacques sheete
    Dear people, there never was a republic (res publica). It was always a res oligarchica.

    "The Constitution looked fairly good on paper, but it was not a popular document; people were suspicious of it, and suspicious of the enabling legislation that was being erected upon it. There was some ground for this. The Constitution had been laid down under unacceptable auspices; its history had been that of a coup d'état.

    It had been drafted, in the first place, by men representing special economic interests. Four-fifths of them were public creditors, one-third were land speculators, and one-fifth represented interests in shipping, manufacturing, and merchandising. Most of them were lawyers. Not one of them represented the interest of production — Vilescit origine tali. (the dice were loaded from the start)"

    Albert Jay Nock, Liberty vs. the Constitution: The Early Struggle
    [Excerpted from chapter 5 of Albert Jay Nock's Jefferson]
    https://mises.org/library/liberty-vs-constitution-early-struggle

    mises.org/daily/4254

     

    Nock isn’t persuasive. The Constitution doesn’t favor shipping, manufacturing, or land speculation, for example. It was hands off everything and any kind of business could be created and prosper.

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  79. Anonymous says: • Disclaimer
    @The Alarmist

    Meanwhile, large numbers of new arrivals have demonstrably lower IQs than the existing population.
     
    The important thing is that they merely vote correctly in each election. That takes little to no intellect.
    Read More
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