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What $US10 trillion buys you today
You’d think US$10 trillion would buy you a lot. Sadly with today’s inflation it doesn’t buy much. Yes, it might buy you half the annual economic output of the EU or the US. Yes, it might buy you all the real estate – every square inch – of land in Australia and New Zealand (both commercial and residential). But it doesn’t buy you peace of mind.
Proof?
US$10 trillion has been spent by central banks to resuscitate world economies and move those economies from crisis to growth.
It didn’t work. Unemployment is still shockingly high in Europe, growth is dying everywhere (including China) and nothing – nothing – lasting has been achieved.
Oh and Greece and the whole Euro area are in existential crisis.
As I said, US$10 trillion doesn’t buy you much these days.
Next time let’s spend it on something worthwhile. Diamond encrusted guillotines for every fractional reserve banker in the world today. I reckon that would cost around $50 million, given the repeated use guillotines achieved in the French Revolution. Are you telling me that’s not better value?
Food contamination
I have been predicting economically-induced food debasement and food contamination problems throughout the Western world for at least three years, on this very blog. Indeed, just in recent months!
And now Australia has been hit – shock horror! – with a major food contamination scare involving Hepatitis A in imported frozen berries from China. Why? Apparently because Chinese businesses are trying to “save money” by putting human faeces directly into soil used for growing food! Yum YUM!
Unsurprisingly this isn’t a good idea from a food hygiene/food contamination perspective.
No one predicted these kinds of issues arising in Australia. No one points out this is inevitable due to perverse incentives embedded within our current monetary and economic system. These things apparently just “fall from the sky” as random events.
That’s complete bullshit. I predicted them here on these pages. There will be more scandals and crises. It is inevitable. It is part of the monetary system. It is part of the perverse incentives inherent in a system that produces paper-pushers and computer desk jockeys trading paper rather than encouraging (and providing reasonable financial returns to) real people producing real stuff (like real food).
David Graeber calls this the glorification of do-nothing paper shuffling and I agree.
When you have this kind of completely screwed up monetary system there will inevitably be created more and more psycho-nerd autistic bankers on the one hand, and fewer and fewer real, caring farmers on the other.
These are economic problems with economic causes and economic solutions, not random events or problems amenable to political solutions.
Solve the money problem and you solve resource allocation problems and you solve the food crisis. That crisis is here. And it’s going to get much, much worse.
In the madness that is locked in to the stupidity of the mainstream, no one can hear you scream.
I know correlation isn’t causation, but do these graphs look suspiciously similar to you?
OK I admit defeat
OK this insane QE is completely out of hand.
Stocks and bonds are being bought directly by central banks around the world. The US Fed stops QE only for its colonial slave Japan to take up the task on its behalf on the day US QE ends. This will never end.
The mainstream story is that Europe is in a slump because they didn’t try QE. Rubbish. Most of the “benefit” of QE flowed to European banks if you look at the numbers.
What does this mean for investors? Well, in the short term, stocks and housing are still good bets despite insane valuations and low yields because the monetary mandarins will clearly do everything in their considerable power to prop them up.
Inequality is a major short and long term issue. Food is a major long term issue. Water is a major long term issue.
But who is looking at the long term? Not me!
There may be a God
Now that Krugman is out of Princeton perhaps the Fed will be out of the US? Too much to hope for….
I have despised this guy for years. Finally he’s getting the ostracism he so richly deserves.
Trust
In 5 years of watching this chart (daily) I have never – never – seen this:
What does this suggest?
First, see those tiny little movements before today? That’s called MANIPULATION.
Second see that big jump today? That’s called “When the ball can no longer be held under water by the biggest manipulators in the world aka the central banks.” There’s no news that would cause the jump. It’s just that the ball is getting too big to hold under water anymore.
I said this would happen eventually. When trust breaks.
Sadly the Chinese don’t trust each other. They will end up trading in gold and silver. And their idiotic rehypothecation-ponzi-lying will (ironically) bring down the Western monetary system. Why? Because the West lies but only strategically on the big matters. Small people don’t lie day to day. So Nixon can close the gold window and people continue trusting the system for another generation. It’s been 43 years since August 1971 when the gold window was closed.
In China everyone lies. Big and small. No one can be trusted. So the game blows up much quicker in China. That’s why to survive people will ask for gold in China. And that’s why the game will end, even if the Chinese government and the West don’t want it to.
When (not if) China blows up what are the consequences?
But what are the consequences?
A lower $A. A housing bust in Australia.
I’ve been waiting for the next 2008. It’s gotta come. With the system we have it’s inevitable every 5 years or so. So we’re overdue.
Looks like China is going to be the “blow up” candidate this time around.
Ayn Rand
OK, she was a little kooky and doctrinaire, but she had insights and was a clear thinker. To quote Ayn Rand:
When you see that in order to produce, you need to obtain permission from men
who produce nothing; when you see that money is flowing to those who deal not in
goods, but in favors; when you see that men get rich more easily by graft than
by work, and your laws no longer protect you against them, but protect them
against you, you may know that your society is doomed.
We are DOOMED.
The terrible “twos”
Bitcoin is around 2 years old and is going through the same growing pains any 2 year old endures.
Mt Gox has blown up. But note – Bitcoins are still trading at reasonable prices on other exchanges, which is quite surprising given the publicity over Mt Gox.
And note that Mt Gox apparently ran a fractional reserve system. So even with Bitcoin the gremlins and shysters appear.
What to do?
1. Be careful what exchange holds your bitcoin, just like being careful about which bank holds your cash.
2. If you have substantial holdings of savings in bitcoin, I’m amazed. You don’t have better places to park and grow your money? Like a Caribbean island?
Bitcoin will still be around. Just like fiat money is still around. It’s “true” value (after the attacks and the government propaganda and the hysteria have died down) is yet to be determined.
The lesson?
Never buy in the middle of a bubble. Buy at the beginning or at the end. Bitcoin looks good value now. So does Argentina. So does Ukraine.
UK property and Australian properties do not.
The quintessential “politician”
Am I crazy or is the whole world crazy?
How often have I been screaming that fractional reserve banking creates perverse incentives to concrete over precious arable land for suburban homes? How often? How often have I predicted environmental disaster – not because of climate change – but because of insane banking practices? How often?
Well, here it comes. How maddeningly predictable.
Every time fractional reserve banking has gotten out of control there have been dust bowls. Why? Because fertile land was concreted over for speculative land development which then takes decades to re-balance.
I want to die before there’s a full blown environmental crisis because I won’t be able to take it when all the commentators blame capitalism or climate change when that’s not the real cause.
Oh, and by the way – flooding in London in 2014 and Brisbane in 2011 was substantially caused by over-development, leaving stormwater to flush down poorly planned sewage systems, rather than be soaked up on farmland where the water used to find its proper home.
I hate the stupidity of the majority. They deserve to die but they won’t, they will continue to steal from the productive minority until all the farmland is bitumen-fucked to death.
Gold is coming back. Big time.
Who is laughing now, eh?
Gold has been best asset to hold since QE Taper. It will be the best asset to hold when the world goes Greek. You can take that to the insolvent bank.
Work in government. Then run.
The best strategy when living at the end of a fiat money cycle has always been the same – get as high up in government as you can. Put your savings in a farm far far away. When the whole economy blows sky high because your (and your fellow parasite’s) bloodsucking on tax proceeds kills the host, run.
Exhibit 1 – End of fiat money. Tick. Washington (and Canberra) biggest median incomes in the US (and Australia). Tick. Washington by far the most optimistic people in America. The parasite is happy but the host is dying. How long will that last? As long as China doesn’t pull the gold pin, that’s how long.
The Likeness of God
I am posting the most succinct and eloquent summation of this blog I could possibly write. Pity I did not. Read it and weep my friends, read it and weep…
The Likeness of God is to Create not Consume. Ingenuity and innovation are hallmarks of our human creativity. Curiously, those marvelous characteristics unique to mankind, which have delivered the most astoundingly advanced technological productivity gains ever conceived, are now fast displacing a multitude of relatively menial jobs previously attended to by human beings, who having been anchored to unsatisfying and unfulfilling laborious routines, were less able to enjoy the free time and space certainly required to become more creative enlightened beings themselves.
Surely, the simple answer to our current macro economic dilemma, namely low growth with vanishing jobs, is to once again call upon our God given human ingenuity and innovation, so as to quite simply redesign and rearrange the furniture in our grand house more adeptly. If we so choose, we can freely create more, we can joyously labor less, and we no longer must be slaves to the degradation of excess consumption. See how that works?
A word of caution, getting there will not be plain sailing and rather tempestuous I’m afraid. Change will be vigorously opposed and resolutely resisted, particularly by those who have attained much power, privilege and affluence, as they have been conditioned to measure and value their own success, sense of significance and acquired tenure in the presently established order of society. They will understandably do all in their power to defend and cling onto an organized societal system and set of values, where they have clear vested interests and which has seemingly served them so well, no matter how obviously clear it is that the world around them is increasingly becoming unglued before our very eyes. The desperation of the QE monetary policy dependency itself, is but a misguided manifestation of the dangerous hubris and arrogance that puts forth and fiercely holds on to an obtuse refusal to acknowledge and accept the reality of the inevitable change in the winds that is now howling so vociferously upon us.
Purposely degrading this Nation’s hard earned reserve currency status, which was so honorably passed on to us by previous generations who built this great country from the ground up with their virtuous and industrious blood, sweat and tears, only to then implement a disgraceful monetary policy that deliberately steals from future unborn generations in order to facilitate living standards beyond our means, so as to sustain an unearned, undeserved and unprincipled culture of grotesque illegitimate debt financed over-consumption, can only be characterized as a deplorable unconscionable abomination of Biblical proportion.
We physically finite mortals just so happen to inhabit a physically limited globe also made up of finite resources, inevitably, the days of unlimited growth and excess mass consumption must be expeditiously put behind us. To artificially sustain this decadent overindulgence via unsustainable debt financing is absurdly short sighted lunacy which borders on sheer insanity. Either we adapt or we die, same as it ever was.
This free choice which has been divinely granted to us is entirely ours to make.
Genocidal Economics
It should be a new subject taught in all Ivy League colleges. Particularly wherever Bernanke and Krugman go to teach.
Or Genocide Economics.
Take your pick.
Bad Idea 2014: Have Your City Host an Event
Melbourne has died over the last two decades as a functioning flourishing city. It goes from “event” to “event” like a circus roadshow, with the cronies and hangers-on partying and getting drunk on public funds, while the middle class collapses on mortgage repayments, drug addiction or casino gambling.
This is a simple story repeated over and over. It’s just that Melbourne’s brain dead politicians always do the dumbest shit, in the most inane way possible.
Here is the academic answer to why one-off events in your city is a bad idea:
I’ve long hated this sort of boosterism practiced by chambers of commerce and economic development corporations. Behind all the localized rah-rah stuff is nothing more than a bunch of politicians and local corporatists lobbying for prestige products that do nothing to improve the local economy, but instead cost many millions of dollars for heavy-handed policing imposed on a city where local businesses do not benefit, and are in fact made worse off by the heightened security and tax bills.
Quite so.
Pity Melbourne (and Greece) didn’t get the message earlier.
Now I understand!
I was wondering why there were seismic shifts in the tectonic plates. $A down. Emerging markets pummelled. Stocks plummeting.
China’s credit fuelled boom is collapsing. See here.
Economists like to say there is a “disorderly” breakdown at the end of a credit-fuelled boom. I like to say the Ponzi scheme stops and the shit hits the fan when everyone realizes asset prices are about to collapse and someone is going to be left holding the bag (of debt).
China is about to collapse.
OK, well it all makes sense if that happens. US bonds will go up. Gold will go up. Everything else will die.
Simple.
I was wondering what was going on. Now I know.
Back to sleep everyone….
2014 – The Year of the Chicken Coming Home to Roost?
I know 2014 is supposed to be the year of the Horse, but I’m beginning to suspect it’s the year of the Chicken Coming Home to Roost.
Tick.
QE to the coke-snorting Wall Street bankers still around $75 billion a month (making it over $16 trillion in central bank support to bankers – enough to feed every poor child in the world since 2008), resulting in the biggest government intervention in world history, distorting every market in the world, causing surpluses and deficits in markets everywhere.
Tick.
World fucked by Fukushima. Government politicians oblivious to reality and butt-covering bureaucrats blind to their own madness.
Tick.
This is a recipe for another wild ride in 2014.
Hold on tight. Currencies are going to go everywhere. Where this ends up nobody knows. But the shit is close to hitting the fan and when it does, duck for cover.
People don’t want to know, so the game continues until it all falls apart
If you’re on a train and the train driver can’t see two feet ahead of himself, get off that train.
Our “leaders” cannot see one foot in front of themselves, let alone 2.
QE is a joke. The economy is most manipulated in world history, arguably more manipulated than Soviet Russia in its heyday. Surpluses (iPhones, drugs, hookers, fiat money) are everywhere. Deficits (arable quality land, quality food, gold and silver) are everywhere.
This cannot end well. We are too far down the rabbit hole to get out now.
But no one wants to know.
Fukushima nuclear disaster means decades of human disaster on a scale unprecedented in human history
How long have I been screaming about the cover up? How long have I been saying this is worse than Chernobyl?
Note: I am basing these conclusions on the science and reputable academic reports. Not on hysteria. The simple fact for anyone who knows anything about spent fuel rods is that if the water doesn’t keep cooling those highly toxic spent fuel rods and they go into meltdown then the emission of plutonium and other highly radioactive substances could damage life on the planet for hundreds of years. Hundreds of years.
Let me be clear about the implications should this 50/50 situation turn bad:
1. West Coast US will be depopulated as people suddenly realise thyroid cancers and health issues are skyrocketing. Bald eagles are already falling from the sky.
2. Fish will be off limits. How many people eat fish? Tuna is already down 95%. A whole food chain is being destroyed as the human population continues to explode. How does that work in the long term? Answer – it doesn’t. Poverty and starvation rates have to increase. Crime and lawlessness will have to increase. Greece 2.0 around the western world, especially West Coast US.
3. Economic growth will crash as people realise the implications for the whole of the west coast of the US. And Japan. People will try to emigrate. To Australia. To Argentina. Anywhere to get away from the risks.
This is all so predictable. It’s slow because the cover up is so massive. But as it leaks out, so will the population.
Best article of 2014
Anyone can blow a bubble. The question is can you provide a framework for sustainable growth?
The two are incompatible.
The idiot central planners can’t see that making billionaires on Wall Street is not the same as wealth creation. Or feeding the population.
Any government can make a group wealthy. Zimbabwe did that.
Few governments can create an environment where general wealth increases sustainably. Singapore. China. Australia.
Who else in today’s world?
Not many.
Bitcoin as barometer
The huge volatility in Bitcoin is not a sign of the volatility in Bitcoins as such – it is a sign of the volatility of fiat money which can be created out of nothing with zero effort.
In this world, some suckers work. Others counterfeit.
The counterfeiters know they counterfeit, so they buy selectively and they buy long term assets to avoid being caught.
Bitcoin has no futures market and no derivatives market, so fiat pumpers have to buy to control.
That is what is pulling Bitcoin this way and that. Fiat pumpers buying and dumping.
Where will it go? I don’t know. Am I buying? On the dips, yes.
Bitcoin could go anywhere
I’ve been interested in Bitcoin for 12 months. It’s not easy to buy in Australia but it is possible. Is it easy once you do invest? Yes. Is it money? I think so. Is it worth investing in? As I said when it was $200 (it’s now $800) yes. Why? Because unless the government shuts down the internet it will “work” as secret money.
Drop Dead Fed
The US Fed is turning 100 on December 23.
I will burn a small effigy of Alan Greenspan in tribute to its destructive power.
For more background on this Satanic Institution, I refer you to this comprehensive history, describing how it destroyed countries and facilitated wars.
As Ron Paul aptly states:
It is no coincidence that the century of total war coincided with the century of central banking
Don’t make me laugh
Central banks are apparently trying “shock and awe” to wake markets up.
Don’t make me laugh.
It’s so obvious what they do. Which is to lower interest rates and print more e-money.
That’s all they do. That’s all they ever do.
CO2 emissions, brought to you by your friendly idiotic government official
Smoke blankets Sydney again.
At least some of this is caused by “backburning”. Backburning means green trees are being burnt in the hope that by burning them fewer trees are burnt in future. Better for government officials to get in first and have the fun rather than mother nature. Mother nature is uncontrolled. Government fire authorities always know best and never make mistakes. Rather like the Pope with matches.
Unfortunately that has resulted in weeks of choking smoke haze throughout the metro area of Sydney.
These fires are causing “hazardous” conditions in Sydney.
Where is the screaming about CO2 emissions? Where is the screaming about pollution?
Not a word. Because if government does it, it must be good. If the private sector was doing this, they’d go to jail.
No one has suggested an obvious practical alternative to this yearly bushfire madness – allow private industry to cut down and utilize sections of the bush each year without having to back-burn. It would save on CO2 emissions. It would allow clearing of undergrowth thereby removing excessive fuel for bushfires in future years. It would also make money. It would also sequester CO2 in furniture or wood chips or mulch or whatever, rather it being burnt and contributing (massively) to the existing pollution problem, with no economic value being created alongside this insane activity.
Why is no one suggesting this? Is it because the insane greenies think massive bushfires every three years where thousands of animals get burnt to death is preferable to allowing humans to “exploit” the bush?
With this kind of logic at the highest levels of government I know, deep in my bones, the human race is doomed.
Where to invest now?
I haven’t done a “where to invest” for a while so just to clarify:
1. Real estate. If the government wants you in real estate, with low interest rates and subsidies (and open doors to foreign investors) why not join the Ponzi scheme until it collapses?
2. Cash.
3. Selective stocks. If you must gamble.
4. Bitcoin.
5. Gold and silver.
6. Farmland.
7. Food and water.
The last three will do nothing for 10 years then explode. So don’t expect 10% gains. Expect nothing. Then everything, all of a sudden.
Why is gold down?
Because the Western Central Banks are selling.
But that can’t continue forever….
All the signals point to the same conclusion. The system is breaking down. The towers are falling. The paper mache structures have withered. The derivative machinery has been jammed. The confidence in the paper based system has vaporized. Nobody can foretell when the new system will arrive, but its description can be offered in rough terms. It will be from a Global Currency Reset, with a vast redemption of USTreasurys, a lost USDollar global currency reserve, and discredited sovereign bond backbone for all major currencies. It will feature a Gold Trade Standard, with trade settled on a net basis with gold bullion, supported by gold intermediary bankers. It will rely upon Gold Trade Notes that serve as Letters of Credit. It will see a massive Gold Trade Central Bank, whose embryonic form is noted in the BRICS Bank. Expect the bank to function as a processing plant at a later date, to convert USTBonds into Gold bullion. The same bank will process UKGilts, EuroBonds, and JapGovtBonds into Gold Bullion. The de-centralized system will be trade based, not bank based. Trade rules will dictate banking rules, to displace the Anglo banker hegemony. The New York and London offices, even the Swiss offices, will attempt to continue their sabotage. But they can only win delays. See the tactics exerted upon the G-20 Meetings. The BRICS initiatives and formal progress are led by Russia & China. They cannot be stopped, mainly because they attempt survival by establishing the next chapter’s architecture.
The Grand Paradigm Shift is in progress. My sources indicate that the 5000 metric tons of Gold bullion moved from London to points East between April and July 2012. The flow eastward never stopped. The pace has continued. The Gold bullion continues to be shipped in enormous staggering volume. The Gold Community has only a rudimentary comprehension of what is happening in the clandestine shipment of gold. The pillars of the community seem either unaware or unwilling to report anything but the supersized Chinese purchases through the Hong Kong window, the Indian demand, and the Turkish demand. My belief is they lack insider contacts on the phenomenon movement of gold by the White Dragon Family and their Triad escorts. The agreements have already been made on the new Gold Trade Settlement system with its newly imposed Gold Trade Standard. They have agreed on a $7000/oz gold price, with a similarly exalted silver price of at least $250/oz. Decisions have been made final. The implementation is slow but steady. The game is over. The King Dollar is dead. All that remains is the funeral, the war in its wake, and the retaliation from the Satanic fortress and its legion of diabolical subjects.
Not so Cabo!
Some readers might believe that my public warnings are exaggerated, as a national condition is described with hyperbole. Not so, Cabo!! The American citizens have seen their home equity largely depleted, long regarded as their inflation hedge. Now they have none. The same citizens have seen their pension plans largely depleted, long depended upon for future retirement income. The same citizens have seen their Social Security Trust Fund ransacked, long depended upon for basic future financial support. The same citizens have been treated like criminals for association with Occupy Wall Street, the billyclub wielded by the FBI. The same citizens have been subjected to a long list of Executive Decrees, which gut their civil liberties and bill of rights, long regarded as the bastion of freedoms. The same citizens have been victimized by banker fraud, protected by the Too Big To Fail mantra. The same citizens have been exploited by the military industrial complex in predatory wars and narcotics vertically integrated business, their bodies mere cannon fodder, their coffins filled with heroin, the suicide rate extreme among soldiers due to stress and rape. The same citizens were recently exposed to false flag events in Syria, where the chemical weapon perpetrator is a US ally with home on the Persian Gulf. The same citizens are now exposed to chemtrail toxic atmospheric lacing and Pacific radiation, thus the air and water gradually unfit for habitation and nourishment. So conclude the exaggerations are perhaps on target. Beware the Warsaw Factor mixed with the Stockholm Syndrome, which will not be explained. Do the research. The safety valves are gold & silver ownership and a ticket off the USS Titanic. The golden lifeboats are in short supply. Actually they have been in short supply for two years, their shortage more acute with each passing month.
Will this sociopath and publicity whore ever shut up?
Infuriating that this lizard still can lie in the sun and bask in the rubble of the global destruction he has wrought without being hauled before an International Court of Economic Crimes.
Signs of doom
Apparently oarfish washing up on the beach are a sign of earthquakes or “doom”. It’s more likely overfishing and/or pollution are causes of the death of oarfish – and clearer, more direct signs of “doom”.
Leaving that idiotic myth to one side, I have more direct signs of doom that are screaming at me everyday:
1. QE 4EVER
3. CRIMINALS IN BANKING LET OFF THE HOOK
4. FUKUSHIMA, SHOCKING POLLUTION OF THE SEAS, OVERUSE OF WORLD RESOURCES
You don’t need oarfish washing up on beaches to know that we are doomed.
2020 Speculator 