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Economy Title: Counterfeit Economies Facing Waves of Insolvency, Bonds the Ultimate Malinvestment [The Downward Spiral Continues] The Mayan calendar points to the end of the world coming in December. It may not end on that date but major disruptions can be anticipated. CENTRAL banks have fully uncorked the printing presses to meet the waves of insolvency set to STRIKE the banksters, public servants and the elites. Transferring your wealth to themselves and their something for nothing societies to PAY for their moral and fiscal insolvencies. There is an incredible number potential crisis in the short term (3 to 6 months); any one could spark a major financial, economic and political crisis by themselves. Taken together they practically GUARANTEE it. Fat tails and black swans loom. They really are only black swans and fat tails to Keynesian economists, for those of the Austrian camp they are PREDICTABLE and INEVITABLE! Look at this litany of UNFOLDING CATASTROPHES from a recent Financial Times: Collapsing economies, capital flight from weak to the strong (target 2 sends the funds right back to the failing central banks), planned tax increases and mandatory spending cuts, and chronic current account and BUDGET deficits. You must understand that the US fiscal cliff was the ONLY answer for politicians who need someone else to blame for what MUST come to pass. So they did the deal and now can point to each other with no one specific to blame. My opinion: the spending cuts need to be retained and all government spending must be frozen. The government does not need any more money for INVESTMENTS (spending). Nothing in government happens by accident, if it happens you can be certain it was planned that way. --Franklin Delano Roosevelt Now lets look at the greatest BLACK swan of them all, one far from the headlines but the HEART of the currency and financial system EXTINCTION event (courtesy of www.zerohedge): This is the face of TOXIC assets being financed by central banks, $10 trillion dollars since 2006, a doubling or tripling to follow! This is the face of central bank balance sheets BEFORE QE to infinity, the pace is now set to explode higher. Globally most major economies are in FREE Fall so Central bank cannons (money printing out of thin air) are fully engaged in the US, Eurozone, Japan, Switzerland and the UK. Battles are raging between Bankrupt financial systems and their elite owners versus Mother Nature, Darwin, and history. In the developed world economies are in free-fall in REAL terms. As income, wealth creation and tax receipts crumble under the socialist governments in power policies, the printing press is being substituted. The public is told it is to protect them and revive the economies when it is actually the greatest theft in history as elites use the main stream media, misinformed citizens and a printing press to transfer wealth from the public to themselves via financial repression in so many ways. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, Undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. --Ben Bernanke September FOMC You must understand that they have created a hurdle: LOWERING UNEMPLOYMENT. Which money printing and asset purchases will NEVER yield to: so the money printing will never end. Take a look at this chart for the Harvard business schools PROSPERITY AT RISK study from January 2012: Respondents point to Americas tax code, political system, K-12 education system, macroeconomic policies, legal framework, regulations, infrastructure, and workforce skills as the greatest current or emerging weaknesses in the U.S. business environment. --Prosperity at risk, Harvard 2012 Notice that the government is IN CHARGE of the areas of greatest concern? Look at the deep overview these business leaders gave into the various impediments to growth created by the public serpents and their CRONY CAPITALIST masters have created in the United States. "Let us control the money of a country, and we care not who makes the laws." -- Amschel Rothschild, original head of the House of Rothschild. The ECB is another one of his childrens possessions and Mario Draghli is his EMPLOYEE in his role as a director of the Bank of international settlements (central bank to central banks). The conversion developed worlds citizens from FREE MEN to as DEBT SLAVES continues to unfold. Not since the days of slavery have there been so many people who feel entitled to what other people have produced as there are in the modern welfare state, whether in Western Europe or on this side of the Atlantic. -- Thomas Sowell The Spanish government will surrender to the money printers or be torn apart by their constituent something for nothing citizenry. As for the Eurozone the warblers in the press are reporting the preparations being made to RESCUE Spain and Italy once they have surrendered sovereignty through a memorandum of understanding with European commission in Brussels, IMF and the ECB. Spain and Italy are in the financial emergency room with euro 550 billion PLUS in new debt and old that must roll by the end of 2013. Chance of this happening without ECB support? NONE! Their financial death is assured and the ECB and European commission is trying to figure out the maximum amount of HOT AIR that can be deployed to substitute for REAL money. The money to fund the Spanish Bank bailout was only an illusion. No money was being sent, just more promises to pay known as BOMBs
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bonds. More unpayable promises to pay to replenish imaginary reserves with more imaginary reserves. Illusions on top of illusions, Unpayable and inextinguishable debts piled on top of each other, IOUs denominated IOUs and called assets and wealth. When the PUBLIC WAKES UP the real crisis BEGINS. The crisis of an epidemic of insolvency. Met heads up by the printing money OUT OF THIN, now to infinity! Now the whole deal is off the table as the AAA core of Germany, Finland, Belgium, France etc., are now reneging of the July summit agreement to RESCUE the Spanish banking system. Look at the most recent report on Non-performing loans in the Spanish banking system courtesy of www.zerohedge.com : (Authors note: This is NOT Doom and GLOOM, it is the greatest opportunity in HISTORY. Invest properly for this outcome and Prosper, invest looking in the REARVIEW mirror and your wealth will be irreparably DAMAGED. Volatility is opportunity for the prepared investor. As it is priced in and markets ZOOM higher or LOWER to price in collapsing economies and money printing huge opportunities are created. Is your portfolio structured to thrive? The greatest transfer of wealth from those that hold it in paper and financial assets to those that dont is UNDERWAY. Restoring fiat currencies to sound money and absolute return alternative investments with the potential to thrive in all market (up, down and sideways) conditions is what I do. If you have an interest in learning more and working with Ty: CLICK HERE). Canarys in the COAL mine. Please take notice that George Soros, Jacob Rothschild and John Paulsen have recently made huge new purchases of GOLD while at the same time they have taken profits on a lot of their equity positions. What do they know that we dont? What would their ACTIONS rather than their words SIGNAL? Can you say the big boys are out at the top (stocks) and in at the bottom (GOLD)? PROBABLY. Now add Bill Gross at Pimco and Ray Dalio at Bridgewater associates singing the praises of GOLD. Every major hedgie in the world is looking at themselves and saying: DO I HAVE GOLD IN THE PORTFOLIO? Do you smell something about to happen? Look at this BULL MARKET in central banks gold holdings: A man who is used to acting in one way never changes: he must come to ruin when the times, in changing, no longer are in harmony with his ways -- Machiavelli This statement is the death knell for socialists throughout the developed world. Current leaders are DOOMED to FAILURE. Socialists who are doing what they always have done throughout history: SPREADING MISERY WIDELY as their policies destroy the incentives to produce, save, and create wealth. Punishing those that do so and rewarding those that dont in exchange for political support in exchange for theft and redistribution of the property of others at the end of a government gun. IT IS A TIME TESTED RECIPE for FAILURE and evolving dictatorships as market economies collapse. See Cloward PIVEN strategy, google it, read it and weep. This is what is being done THROUGHOUT the developed world, dictatorships loom. Poverty is the parent of revolution and crime. -- Aristotle Mother Nature is demanding that the developed world RETURN to creating wealth rather than consuming and destroying it. Survival of the fittest as Charles Darwin observed, whether we like it or not the spoils of success go to those that are the strongest/fittest: mentally, militarily and economically. The developed world is weak in those respects and ignore the lessons of history. So they are doomed to repeat it. It was how the developed world was built prior the Bretton woods II, now we must return to that economic model. An economic plan based on the production of wealth rather than the consumption of it. Producing wealth produces demand. Just ask the Chinese or the Germans who produce wealth and increase demand by doing so. In order for wealth creation to happen the crisis must escalate in pain to the point that the powers that be will FORCED to embrace freedom rather than control over others. Leaving humans free to build and accumulate wealth that they can keep. Just ask Deng Xiao Ping how that works after he had an epiphany To get rich is Glorious China has risen from a backwater to the worlds second largest economy in just two short decades! Nothing is more upsetting to me than the rush into the Bomb
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Bond markets and cash by global investors. These ARE NOT the safe havens that are perceived to be. They believe money is still a store of value, no it is: Insanity in individuals is something rare but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzche LET ME BE CLEAR: you cannot store wealth in paper for the foreseeable future. In real terms the DELEVERAGING has barely occurred. Sure there are small pockets that have begun the deleveraging process but the REAL market clearing event of BAD DEBT is in the future. That is why QE to infinity is now official policy. As I said earlier a Tsunami of bad debt is about to strike. And credit markets are the most net long they have been since 2008 (chart courtesy of www.zerohedge.com ): Bond market sentiment is euphoric and at levels which precede denouements. Everybody is RECORD long bonds since 2008 at a point of deep insolvencies within the banking and sovereign financial systems. US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941. -- Niall Ferguson Now lets look at the leading indicator for when the slaughter of the innocents will begin and it is the velocity of money from a previous edition of TedBits: -- Vladimir Lenin This moment approaches
In closing: The decision to inflate their way out of the bad debt and toxic assets HAS BEEN MADE. Now it is only a question of how much to print and which toxic assets should be sent to the TOXIC WASTE DUMPS now known as CENTRAL BANKS balance sheets FIRST. The list will begin small and expand rapidly as toxic waste and bad debt goes to die. The bomb
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bond markets are under direct ATTACK as the insolvent governments and the banks take the route of the soft default of the printing press. With the public IN AT THE TOP of a 3 decade mega BULL. Many people believe Romney will stop the printing press. NO WAY, we are below the event horizon, withdraw the monetization and the insolvencies will make Lehman brothers a walk in the park. In fact, any REAL accounting of the bad debt in the financial system would instantly VAPORIZE the balance sheets of the biggest banks in the world. Complacency reigns in many markets; volatility is at levels that have preceded MAJOR attitude adjustments/corrections among investors. Take a look at this look at stock, commodity and currency volatility: Near RECORD LOWS across the board! Notice the difference from previous QE episodes? QE normally is applied when blood is running in the streets. Now it is being applied during a relatively quiet period. Obviously BLOOD is spilling (or about to be spilled or both) but WE cant see it but the Federal Reserve and other central banks CAN. Please notice that low volatility is always followed by high volatility. It has always been so and always will, it is the nature of markets and human nature. Now we see that the net longs in the stock market (courtesy of www.zerohedge.com ) are at levels seen prior to market crashes as investors lean on the central bank puts protection with superhuman belief: And the hedge funds (courtesy of www.zerohedge.com) are similarly complacent and UBER BULLISH: (Authors note: This is NOT Doom and GLOOM, it is the greatest opportunity in HISTORY. Invest properly for these outcomes and Prosper, invest looking in the REARVIEW mirror and your wealth will be irreparably DAMAGED. Volatility is opportunity for the prepared investor. As it is priced in and markets ZOOM higher or LOWER to price in collapsing economies and money printing huge opportunities are created. Is your portfolio structured to thrive? The greatest transfer of wealth from those that hold it in paper and financial assets to those that dont is UNDERWAY. Restoring fiat currencies to sound money and absolute return alternative investments with the potential to thrive in all market (up, down and sideways) conditions is what I do. If you have an interest in learning more and working with Ty: CLICK HERE). Public servants in the United States, UK and Japan need not do the structural changes (reduce regulations, taxes, money printing and restore private property) required in the PROSPERITY AT RISK study since the central banks will print the money without them doing the reforms to Restart growth. Draghli will fold before its over, the STRUCTURAL reforms will never be implemented except in main street media headlines. Look no further than this excerpt from A RECENT SPEECH BY Richard Fisher of the Dallas Federal from Senator Chuck Schumer speaking to Ben Bernanke at a recent finance and banking committee meeting: Chuck Schumer, told Chairman Bernanke, "You are the only game in town." I thought the chairman showed admirable restraint in his response. I would have immediately answered, "No, senator, you and your colleagues are the only game in town. For you and your colleagues, Democrat and Republican alike, have encumbered our nation with debt, sold our children down the river and sorely failed our nation. Sober up. Get your act together. Illegitimum non carborundum; get on with it. Sacrifice your political ambition for the good of our country--for the good of our children and grandchildren. For unless you do so, all the monetary policy accommodation the Federal Reserve can muster will be for naught." Well said Mr. Fisher! The despicable senator from New York, nothing more than a Benedict Arnold to our country and our futures. The prosperity at risk study outlines the demise of the United States economy and competitiveness. In every category businesses are TURNING AWAY from the United States and choosing our competition. Capital is VOTING with its FEET (either leaving the US or not coming here), and it does not augur well for future economic growth. So the demise of REAL wealth creation will accelerate . In the Eurozone some of the countries have surrendered their financial sovereignty and many are resisting, but the vise of insolvency marches along. Dont worry THEY WILL PRINT THE MONEY! Some will pay by surrendering freedom, others will get the FRESH cash for FREE.
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#1. To: Capitalist Eric (#0)
lol
Thank you. You again confirm what I had long suspected; your intellect is as deep as the nearest mud-puddle. Putz.
When it started with the Mayan Calendar I got bored. I scanned the bottom a bit and there is probably some good information in there. Thanks for taking the time to post it with all those charts and everything.
Fixed. Putz.
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