Infinite Unknown

See also:

- Japan bribes small nations with cash and prostitutes to gain support for the mass slaughter of whales

- Japan Mulls Monetisation of Public Debt And Yen Devaluation By 30 Percent

- Analysts: Risk of Japan Going Bankrupt is Real

My $80,000 Says Deflation Will Only Get Worse

Naoto Kan may get the state dinners and the motorcades, but he no longer runs Japan. Economist Masaaki Shirakawa does.

If anything is clear since the drubbing that Prime Minister Kan’s Democratic Party of Japan took earlier this week, it’s that politicians are passing the buck to the central bank. Expect Bank of Japan Governor Shirakawa to feel more pressure to boost economic growth than ever before.

You may think you have seen this movie before. You haven’t. Increased reliance on the BOJ will end badly for the world economy.

It’s now entirely possible that, come September, Japan will have its sixth leader in four years. Speculation is growing that a power struggle could nudge Kan out of a job he assumed just five weeks ago. That would be a blow to investors. Kan is the only leader in 20 years who has talked seriously about ending Japan’s debt-fueled-growth insanity. Continue reading »

Tags: Bank of Japan, Deflation, Economy, Global News, Japan, news, Politics

- EURO ‘COLLAPSE‘ COULD DRAG EUROPE INTO CONFLICT (Express):

THE euro is on the verge of a collapse that could drag Europe into conflict, billionaire financier George Soros warned yesterday.

The veteran investor said massive budget cuts proposed by Germany could destabilise the European Union by dragging down its neighbours’ economies.

He said: “German policy is a danger for Europe. Unfortunately, a collapse of the euro and the European project cannot be ruled out.

“That would be tragic because then Europe would be threatened by the sort of conflicts between states that have shaped European history.”

And of course the Germans would be to blame for this!

So step up Germany and follow the plans of the elitists to loot the taxpayers (everywhere) until there is nothing left with unconstitutional bailouts and quantitative easing.

Legendary investor George Soros has called on Germany to leave the euro unless it is willing to embrace a growth strategy, describing Berlin’s austerity doctrine as a threat to democracy and political stability in Europe.

George Soros tells Germany to step up to its responsibilities, or leave EMU

“German policy is becoming a danger that could destroy the European Project. A collapse of the euro cannot be excluded,” he told the German weekly Die Zeit.

“Unless Germany changes policy, its withdrawal from the currency union would be helpful for the rest of Europe. At the moment Germany is pushing its neighbours into deflation: this threatens a long phase of stagnation, leading to nationalism, social unrest, and zenophobia. It endangers democracy,” he said.

Mr Soros saw the political effects of wage cuts first-hand during the Great Depression, and narrowly survived the Holocaust as a Jewish boy in Nazi-controlled Budapest. He has since dedicated much of his wealth to philanthropic works promoting freedom and pluralism (ROFL!) across the globe, mostly through Open Society institutes.

Philanthropic works: Top billionaire club in bid to curb overpopulation (Times)

His comments reflect growing alarm in influential circles on both sides of the Atlantic over the 1930s-style policies of wage cuts and debt-deflation being imposed up the Club Med bloc, Ireland, and parts of Eastern Europe by the EU authorities, at the behest of Berlin. Continue reading »

Tags: Bundesbank, Debt, Deflation, Economy, EU, Euro, G20, George Soros, Germany, Global News, Politics

- Renaissance 2.0: Lesson 1 - Revisiting American History - Financial Empire

- Renaissance 2.0: Lesson 2 - Revisiting Economics 101 - Debt

- Renaissance 2.0: Lesson 3 - Revisiting Civics 101 - Ownership

- Renaissance 2.0: Lesson 5 - The Emerging Global Empire - The New World Order

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Added: 26. March 2010

Lesson 4 (part 1) - The Culture of Empire moves into a deeper dialogue about the empire system we’re caught in. Part 1 addresses our wealth illusion, freedom illusion, exponential growth, inflation/deflation, and bankruptcies.

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Added: 26. March 2010

Lesson 4 (part 2) - Part 2 focuses exclusively on the issue of scale. As the debt-based empire grows, the scale of our system grows causing all sorts of problems related to the loss of meaning, community, freedom, and agency.

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Added: 27. March 2010

Lesson 4 (part 3) - Part 3 focuses on the issue of velocity. The velocity of money is a standard economic concept, but economists ignore the issue of human velocity caused by the system, which results in the loss of rest, joy, delight, and deeper issues.

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Added: 27. March 2010

Lesson 4 (part 4) - Part 4 focuses on the rise of narcissism, increasing pathology and oppression, and how the financial empire eventually replaces government

Tags: Banks, Debt, Deflation, Economy, Environment, Fed, Federal Reserve, George Soros, Government, Inflation, Politics, Society, TV, U.S., Wall Street

See also:

- Mike Krieger: Goodbye Disneyland! - The Neo-Feudalistic, Gulag Casino Economy Has Already Begun

Presenting the latest terrific analysis by Michael Krieger, formerly a macro analyst at Bernstein, and currently running his own fund, KAM LP, who joins Willem Buiter and everyone else left with a gram of prudence, in realizing that this is nothing more than the “last dance.”

“History is a set of lies agreed upon.”
- Napoleon Bonaparte

Most people prefer to believe their leaders are just and fair even in the face of evidence to the contrary, because most people do not want to admit they do not have the courage to do anything about it.  Most propaganda is not designed to fool the critical thinker, but only to give moral cowards an excuse not to think at all”
-  Michael Rivero

Every man gotta right to decide his own destiny, And in this judgment there is no partiality. So arm in arms, with arms, we’ll fight this little struggle, ‘Cause that’s the only way we can overcome our little trouble. -  Bob Marley, Zimbabwe

A Thousand Words On Conventional Wisdom

Conventional wisdom.  Many market analysts define conventional wisdom in relation to what direction the market is going to head in the future, but I think this is an utter mischaracterization of the concept.  For example, someone that is bullish on the market right now is likely to see conventional wisdom on stocks and the economy as overly bearish after ten years of no returns for U.S. equities.  In contrast, someone that expects a market collapse will say that everyone is a cheerleader and that the “conventional wisdom” after such a huge rally is for stocks to continue to go up.  This is not how I would describe conventional wisdom and all is does is drag the debate into the intellectual gutter.  Rather, to me conventional wisdom is more the “zeitgeist” of the financial and economic community at any given time.  Zeitgeist is defined by the Merriam-Webster dictionary as:  the general intellectual, moral, and cultural climate of an era.  In this sense an “era” will generally mean a lengthy period of time, several decades or perhaps even more extended periods.  That said, what is interesting is that every cycle in the global economy seems to bring forward distinct “mini-zeitgeists” that the experts create to justify market movements or give credence to economic dogma.

When I define conventional wisdom in this manner what I have found is that I almost always disagree with conventional wisdom.  Two very interesting recent periods were fall 2007-July 2008 and then mid-2008-early 2009 period.  In the first period, it was clear to me that decoupling was impossible because the U.S. was too large and it was clearly on the verge of collapse and, more importantly, that China and the U.S. were joined at the hip in a Keynesian economic Frankenstein that would not be easily severed.  Despite what I thought was pretty obvious at the time, conventional wisdom was that the BRICS had decoupled and all would be well.  Rather than seeing the commodity surge as the flight out of the dollar due to the distinct money policies of the U.S. Fed and everyone else, the rally was seen as evidence of decoupling.  This is mainly because conventional wisdom tends to view rising assets as a signal of prosperity.  I believe this was and is generally due to a misunderstanding of economics (we are all taught mostly rubbish in schools) and a shocking ignorance of the global financial system, how it really works and who/what is pulling the levers.

Continue reading »

Tags: Bonds, Bubble, Central Bank, China, Commodities, Deflation, Dollar, Economy, Europe, Fed, Federal Reserve, Global News, Gold, Keynesianism, OECD, Oil, Politics, Quantitative Easing, U.S., Yuan

“The US Has No Way of Avoiding a Financial Armageddon,” Says John Williams.

John Williams, who runs the popular counter government data manipulation site Shadowstats, has thrown down the gauntlet to deflationists, and in an extensive report concludes that the probability of a hyperinflationary episode in America over the next year has reached critical levels. While the debate between deflationists and (hyper)inflationists has been a long and painful one, numerous events set off in motion by the Bernanke Fed (as a direct legacy of the Greenspan multi-decade period of cheap and boundless credit) may have well cast America as the unwilling protagonist in the sequel of the failed monetary policy economic experiment better known as Zimbabwe.

Williams does not mince his words:

The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.

And even as Bernanke continues existing in a factless vacuum where he sees no asset bubbles, Williams takes aim at the one party almost exclusively responsible for the economic carnage that will soon transpire:

The crises have been generated out of and are centered on the United States financial system, triggered by the collapse of debt excesses actively encouraged by the Greenspan Federal Reserve. Recognizing that the U.S. economy was sagging under the weight of structural changes created by government trade, regulatory and social policies — policies that limited real consumer income growth — Mr. Greenspan played along with the political and banking systems. He made policy decisions to steal economic activity from the future, fueling economic growth of the last decade largely through debt expansion.

The Greenspan Fed pushed for ever-greater systemic leverage, including the happy acceptance of new financial products, which included instruments of mis-packaged lending risks, designed for consumption by global entities that openly did not understand the nature of the risks being taken. Complicit in this broad malfeasance was the U.S. government, including both major political parties in successive Administrations and Congresses.
As with consumers, the federal government could not make ends meet while appeasing that portion of the electorate that could be kept docile by ever-expanding government programs and increasing government spending. The solution was ever-expanding federal debt and deficits.

Purportedly, it was Arthur Burns, Fed Chairman under Richard Nixon, who first offered the advice that helped to guide Alan Greenspan and a number of Administrations. The gist of the wisdom imparted was that if you ran into problems, you could ignore the budget deficit and the dollar. Ignoring them did not matter, because doing so would not cost you any votes.
Back in 2005, I raised the issue of a then-inevitable U.S. hyperinflation with an advisor to both the Bush Administration and Fed Chairman Greenspan. I was told simply that “It’s too far into the future to worry about.”

Indeed, pushing the big problems into the future appears to have been the working strategy for both the Fed and recent Administrations. Yet, the U.S. dollar and the budget deficit do matter, and the future is at hand. The day of ultimate financial reckoning has arrived, and it is playing out.

Looking at the events over the past year demonstrates that Williams is not just being a drama queen.

Effective financial impairments and at least partial nationalizations or orchestrated bailouts/takeovers resulted for institutions such as Bear Stearns, Citigroup, Washington Mutual, AIG, General Motors, Chrysler, Fannie Mae and Freddie Mac, along with a number of further troubled financial institutions. The Fed moved to provide whatever systemic liquidity would be needed, while the federal government moved to finance corporate bailouts and to introduce significant stimulus spending.

Curiously, though, the Fed and the Treasury let Lehman Brothers fail outright, which triggered a foreseeable run on the system and markedly intensified the systemic solvency crisis in September 2008. Whether someone was trying to play political games, with the public and Congress increasingly raising questions of moral hazard issues, or whether the U.S. financial wizards missed what would happen or simply moved to bring the crisis to a head, remains to be seen.

More on the impending timing of the complete economic collapse of the US financial system: Continue reading »

Tags: Alan Greenspan, Ben Bernanke, Bubble, China, Congress, Debt, Deflation, Depression, Dollar, Economy, Fed, Federal Reserve, GDP, Gold, Great Depression, Hyperinflation, Hyperinflationary Depression, Inflation, John Williams, Obama administration, Politics, Treasury, U.S., Weimar Republic, Zimbabwe

“If the Fed continues to apply monetary stimulus and subsidy into this system, without a significant reform, the dollar will eventually “break” and the real economy will temporarily collapse. This will result in the mother of all stagflation.”

In my opinion the US dollar will collapse, the real economy will collapse, the stock market will collapse, but not only temporarily, unless you see time from the perspective of an oak tree.

Stagflation would be great. It rather looks like a hyperinflationary depression to me.

Let’s see.

German miracle in the US?!:

“The traditional solution has been a military conflict, which stifles dissent against the government while generating artificial demand sufficient to energize the productive economy. It is a means of exporting your social misery, official corruption, and fiscal irresponsibility to another, weaker people.”

“One only has to look at the “German miracle” of the 1930’s to see this progression from artificial stimulus, to domestic seizure of assets, to scapegoating and aggressive wars of acquisition, as described above. But this progress out of economic depression had made Hitler and Mussolini the darlings of Wall Street and the international financiers. Indeed, Time Magazine had even named Hitler their “Man of the Year” for this economic miracle, even though it was a fraudulent house of cards.”

Maybe that is what Obama’s  ‘change’ is all about.

We are living in interesting times. That’s for sure.

As part of their program of ‘quantitative easing’ which is another name for currency devaluation through extraordinary expansion of the monetary base, the Fed has very obviously created an inflationary bubble in the US equity market.

(Click on images to enlarge them)

Why has this happened? Because with a monetary expansion intended to help cure an credit bubble crisis that is not accompanied by significant financial market reform, systemic rebalancing, and government programs to cure and correct past abuses of the productive economy through financial engineering, the hot money given by the Fed and Treasury to the banking system will NOT flow into the real economy, but instead will seek high beta returns in financial assets.

Why lend to the real economy when one can achieve guaranteed returns from the Fed, and much greater returns in the speculative markets if one has the right ‘connections?’

The monetary stimulus of the Fed and the Treasury to help the economy is similar to relief aid sent to a suffering Third World country. It is intercepted and seized by a despotic regime and allocated to its local warlords, with very little going to help the people.

By far this presents the most compelling case for a deflationary episode. As the money that is created flows into financial assets, it is ‘taxed’ by Wall Street which takes a disproportionately large share in the form of fees and bonuses, and what are likely to be extra-legal trading profits.

If the monetary stimulus is subsequently dissipated as the asset bubble collapses, except that which remains in the hands of the few, it leaves the real economy in a relatively poorer condition to produce real savings and wealth than it had been before. This is because the outsized financial sector continues to sap the vitality from the productive economy, to drag it down, to drain it of needed attention and policy focus.

At the heart of it, quantitative easing that is not part of an overall program to reform, regulate, and renew the system to change and correct the elements that caused the crisis in the first place, is nothing more than a Ponzi scheme. The optimal time to reform the system was with the collapse of LTCM, and prior to the final repeal of Glass-Steagall, and the raging FIRE sector creating serial bubbles.

These injections of monetary stimulus to maintain a false equilibrium is in reality creating an increasingly unsustainable and unstable monetary disequilibrium within the productive economy. As the real economy contracts, the amount of money supply that the economy can sustain without triggering a monetary inflation decreases, and in a nonlinear manner. This is because the money multiplier does not ‘work’ the same in reverse, owing to the ability of private individuals and corporations to default on debt.

Ironically, with each iteration of this stimulus and seizure of wealth, the dollar becomes progressively weaker because there is a smaller productive economy to support it, even if there are less dollars, despite the nominal gains in GDP which are an accounting illusion. This has been further enabled by the dollar’s status as reserve currency backed by nothing since 1971, which has created an enormous overhang of dollars in the hands of other nations.

Continue reading »

Tags: Bubble, Credit Crisis, Debt, Deflation, Depression, Dollar, Economy, Fed, Federal Reserve, Hyperinflation, Inflation, Monetary Base, Ponzi schemes, Quantitative Easing, S&P 500, Stagflation, U.S., Unemployment

September 12, 2009

Tags: Debt, Deflation, Dollar, Economy, Fed, Federal Reserve, Gold, Hyperinflation, Inflation, Peter Schiff, Politics, Stock Market

The Crony Capitalist Bailout Nation

The starting point for all analysis of the ongoing bailout orgy that is currently being used in crony capitalist fashion to transfer wealth from our middle class to the Illuminati and their transnational conglomerates is whether these bailouts are authorized by the US Constitution. The answer is a resounding NO!!!

Nothing in the Constitution could ever be interpreted in any manner that would in any way allow the conversion of our quasi-capitalist republic into a Marxist-fascistic police state, which is the last thing our Founding Fathers had in mind.

How can our government simply hand over fiat money created out of thin air, which in itself totally violates the provisions in our Constitution dealing with the issuance of money, to whoever they deem to be too-big-to-fail?

The very idea of such targeted bailouts violates every precept upon which our nation was founded, and our Constitution in no way allows the bailout of any private person or business entity, especially where this creates special privileges to be given to a chosen few “anointed” entities at the expense of our citizens in general.

Regulation of interstate commerce does not mean doling out crony capitalist bailouts, which amount to nothing short of the implementation of feudalism under the Puppet Master oligarchs of our Shadow Government.

Continue reading »

Tags: Bailout, Banks, Barack Obama, Ben Bernanke, Bob Chapman, Bonds, Citigroup, Constitution, Debt, Deflation, Dollar, Economy, Fascism, FDIC, Fed, Federal Reserve, George Orwell, Gold, Goldman Sachs, Government, Hyperinflation, Illuminati, New World Order, Obama administration, Police State, Politics, U.S., Wall Street

Tags: Bonds, Bubble, Debt, Deflation, Dollar, Economy, Fed, Federal Reserve, Keynesianism, Marc Faber, Politics, Stock Market, U.S., Unemployment

Special guest, Paul Craig Roberts.

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Tags: Bank of America, Banks, Ben Bernanke, Bonds, British Airways, China, CIA, Congress, Debt, Deflation, Dollar, Economy, Fed, Federal Reserve, Fraud, GDP, Goldman Sachs, Google, Government, Henry Paulson, Honduras, Hugo Chavez, JPMorgan, Max Keiser, Obama administration, Paul Craig Roberts, Politics, U.S.