Financial topics

[aedens]

Exactly - resource to generate competitive returns without being extinguished. The FED papers say we are to stupid to understand there policy.

[Higgenbotham]

So we have useful small retailers going out of business and useless unprofitable empty bank branches that are open for business supported by stealth confiscation. And we have people who have been burned and are articulating why this is happening who clearly understand the disconnect. And the electronic devices speeding up the freight train as it heads for the brick wall.

Oh, and I forgot to say once again, Welcome to the Soviet Union (circa 1987?).

[aedens]

Yep, And we passed debt to gdp ratio. For every percent over they should be cut 25 percent wages from Obama to both Houses instantly.
At 105 percent there working for nothing so they can actually feel reality. Yea 1987 feels about correct.

Fire, water, and government know nothing of mercy. - Latin proverb

May be close, In January 2011, motor gasoline taxes averaged 48.1 cents per gallon and diesel fuel taxes averaged 53.1 cents per gallon

[OLD1953]

Yet we still can't find any reason to drop the ethanol subsidy, not with gas at 3$, not at 4$.

We are reaching that point of being the village of Ben Tre, where the village must be destroyed to save it from the VC.

Insanity reigns, and we are still trying to live the dream. Over a certain size, you cannot be allowed to fail. Otherwise, you must be protected.

I don't object to bridge loans for manufacturers when the banks are simply dead in the water, but I do object to giving money away, then giving away more money to replace the money given away, then arranging for the FED to take over worthless paper and pretend they were paid back with real money. That is nothing but a shell game allowing the banks to have access to funds they use to acquire real property at no cost to themselves. This may lead to sound banks, but what use sound banks in an unsolvent country? At least GM acknowledged the debt.

[aedens]

Sums up the end game collapse from debasement. When inflationary's traction over run Joe Sixpack
since less is more, the hard choices will be impossible to miss except for the those who did it to them.
http://www.zerohedge.com/news/albert-ed ... ket-emerge

Some understand the dilemma and purchase accordingly but in a world of shrinking real per capita income thanks to Ben Bernanke, who is skimming income from the citizens to the banks via ZIRP and inflation targets, and others, there are fewer who can or will. The effect of supporting insolvent banks can be small retailers going out of business. I talked to a strip mall owner with vacancy who understands this connection. H

Exactly what we are seeing in Mich also. The local customer base are very dependable in support tho.

[vincecate]

Sums up the end game collapse from debasement.

Hyperinflation is a very common end game collapse when government debt and deficit get out of control. Deflation in a pure fiat currency has never been an end game collapse.

http://pair.offshore.ai/38yearcycle/#hyperinflation
http://www.dollardaze.org/blog/?post_id=00107&print=1

[OLD1953]

I certainly hope John's thought of our bonds failing while our money soars in value is incorrect. That would do maximum damage to the US, a Chinese dream for sure.

I note Europe is now predicting recession, while the market falls at the open, doubtless it will bounce. The total disbelief that stocks can ever drop in value will suddenly flip to "never trust the markets" and we'll see no market for a decade or more. Dividends will then pay more than anything else, and nobody will want them.

Hmm, I note that gas is up on the possibility of a chance of a rise in oil prices due to the possibility of something happening in Iran that might possibly reduce crude supplies perhaps a month or more in the future. Ah, for the good old days when prices rose on an actual shortage, rather than speculation of the possibility of a shortage. But remember, speculation will be good for us. Someday. Eventually. About the time hell freezes over, given past practice. If speculation actually only moved to create liquidity in markets, then how could a speculator make money? Anyone want to take a crack at that? Logic would say that speculation would always be a money losing proposition over time, given that speculators have to pay to make their trades. Somehow, they don't all seem to be on the soup line. And logic also says there are not enough arbitrage opportunities to create this much "wealth".

When a sliver of steak suddenly weighs a pound, when the potatoes all have bad spots and the veal is all tough, I figure someone at the market is rigging the scales, sorting the potatoes and buying old cattle but selling it for veal. In other words, logic says there is some cheating going on. I see no reason why similar logic does not apply to the world of finance and speculation. Speculators losing a lot of money makes news because its man bites dog, it doesn't happen that often. It's bad enough when the bankers play with excessive speculation for years, then get the people to suffer for their losses, but it's worse when the speculators grasp at the essentials of life and force the public to pay for their losses as their front companies go bankrupt but the CEO "employee" laughs all the way to the bank. (Yes the milk thing has me extremely irritated.)

I do believe we are in the first leading edge of the collapse of the speculators for this generation. And the level of the collapse will be fantastic, and much of what we find out about the leading lights of our time will be astonishing. The "private" investment markets will be shown to be full of lies and errors, and we will see the true rot of the system exposed.

[Higgenbotham]

http://www.zerohedge.com/news/albert-ed ... ket-emerge

Excellent article.

Edwards, like Janjuah, sees no point in trying to provide policy recommendations as there is nothing that can fix the system now - implicitly it is too late, as the Keynesian end-game has taken us too far. We had a chance with Lehman in 2008 to reset the system and to bring it to a sustainable footing; it is now too late with everyone dodecatuple all in on a faulty system.

There may have been a small chance even as late as last year but I see the chance now as effectively zero. And I don't see a new bull market to higher highs in decades or centuries. In my opinion, the stock market averages will cease to exist (go to zero). After the collapse, it may be possible to buy stock in private deals and things like that, but not as it's done today - casino style.

[Higgenbotham]

Sums up the end game collapse from debasement.

Hyperinflation is a very common end game collapse when government debt and deficit get out of control. Deflation in a pure fiat currency has never been an end game collapse.

http://pair.offshore.ai/38yearcycle/#hyperinflation
http://www.dollardaze.org/blog/?post_id=00107&print=1

We're seeing classic evidences of end game hyperinflation building to where, even if there is severe deflation for a spell like seen in Weimar (which is still likely), the end game can/will be a catastrophic hyperinflationary collapse of the world financial system (in this crisis period). My current plan is to get out of the system by year end.

[John]

> I certainly hope John's thought of our bonds failing while our
> money soars in value is incorrect. That would do maximum damage
> to the US, a Chinese dream for sure.

It's actually a lot worse for China than for us. It means that their
remnbini currency and their reserves of US Treasuries (and euro-based
assets) all become worthless, resulting in starvation, social unrest,
civil war, and hyperinflation.

John